The Transition
July 6, 2007
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What Does it Take to Transition from Solo Entrepreneur to Remote Control CEO?
I have been thinking a lot about this question as I have been living my own experiment in becoming a Remote Control CEO while here in Hawaii.I have also been working with clients who are working at making the transition to Remote Control CEO and decided to share my observations, learning’s, and overall big picture.
You might be a coach, consultant, or trainer asking the same questions:
- How do I get off the consulting and coaching money treadmill?”
- How do I create value in the marketplace without having to be personally involved?
- How can I create a passive revenue stream?
Beyond The Money Treadmill
Whether you are starting a second act business, planning a mini retirement, or just need a break from the business treadmill to make the transition from solo-entrepreneur to Remote Control CEO you will need to deal with a number of issues. Not the least is how to make money without involving your time, effort, and energy everyday.
Up to now you are probably the only person who has ever generated revenue for your business and delivered your services to your clients. The fundamental assumption in becoming a Remote Control CEO is that you must find a way to create value in the marketplace without your personal involvement on a continual basis.
Yet you are not ready to quit working entirely but need to find a way to get off the “services treadmill” and find a way to make money without always having to trade your time for money. In order for that to happen you need to shift from the Time for Money Business Model to one that is more sustainable.
Making the Transition to a Sustainable Business Model
The fundamental flaw in trading time for money business model that every coach, consultant, and trainer deals with is when you do not work your income stops. When you get your marketing perfected or word gets out in the marketplace of the great value you deliver - you end up on the treadmill of trading time for money.
Once you get on the treadmill of trading your time for money it is difficult to get off because your income comes to a screeching halt. Pretty scary because you do not want to work forever or at least you want to be able to pick and choose when you want to work - at least that would be a good place to start. Which would make more time available so you can to begin moving toward a more sustainable business model.
To make the transition there are a few things that you need to convert and modify so that you open up some of new time and energy.
1) Eliminate the Noise
Most solo entrepreneurs experience a certain amount of noise in their practice. What qualifies as ‘noise’? It is all the interference, racket, or projects that call for your attention. Many of these things are of our own creation.
In my own case, the noise in my life is created through blogging (writing, answering emails etc.), special projects I take on for my clients, and the large variety of podcasts and blogs I read.
- What are the activities you current indulge that could be eliminated without affecting your income and yet open up time on your calendar?
- Who can you talk with who will provide you with realistic feedback to help you identify time wasting activities?
- Where can you go or what can you do to retreat (i.e. vacation) to a place where you will experience a substantial shift in your routine, get in touch with your soul, or experience silence that it creates a new perspective?
2) Understand How You Currently Add Value
Right now the primary way you add value to your customer is through the services you provide. You might have a book or two that you sell but the primary source of income is from the coaching, consulting or training you personally provide.
In order to make the transition and become a Remote Control CEO you first need to identify what specifically it is that creates value, from the customers’ perspective.
- What is it that the customer is really buying when they do business with you?
- What is it that the customers ‘appreciate’?
- What do customers experience as a result of doing business with you? What is different, what changes and how specifically does the change occur?
3) Practice Intellectual Honesty, Apply Logic, Check Assumptions
I have long said that, “The great journey in business is to know yourself well enough that your business and personal life are in alignment.”? which means that business owners need to practice ‘Intellectual Honesty’. As Nelson Fabian says:
“A leader has to have, for instance, a healthy measure of integrity in order to inspire others to follow. Leaders also tend to have a capacity for reflection and a sense of self-awareness. This capacity enables leaders to periodically take stock of their standing, the way in which they are perceived, and the impact that they are having. In addition, it gives them a heightened clarity about what their personal concept of leadership is.” - Journal article by Nelson Fabian; Journal of Environmental Health, Vol. 67, 2004.
Intellectual honesty must extend into every area of the business and in every way holding oneself to a high level of accountability. This includes developing an intellectually honest, logically valid, and reasonably attainable business plan.
All of this requires keeping your thoughts and beliefs relative and in alignment with valid evidence and questioning your own assumptions, not just applying and acting on your assumptions.
4) Business Model Needs to Change
As a solo entrepreneur the main value you bring to the market is “answers” - in one way or another everything you do that creates ‘value’ for your customer is connected to providing them with “answers” in one form or another. Answers to the questions and challenges that haunt them and prevent them from moving forward.
So the big question is, “How do you still provide the ‘answers’ the market wants from you and your company but do it without an ongoing investment of “time, effort, and energy?”
You have to wean your business off of the “trade time for money business model” and generate more cash flow from sources that do not require your ongoing personal investment of “time, effort, and energy”.
5) Create a Business Plan to Prepare for the Remote Control CEO Phase
The need for a business plan should be self-apparent. Just in case, here are my reasons why I think a business plan is especially important. The biggest shift that a solo-entrepreneur that wants to become a Remote Control CEO is to make is adjust the business model.
Changing your business model is like making a major design change to your home or business. It is like converting your Ranch Style home (single story) to a three floor split level. That type of a major design shift requires considerable consideration, rethinking, and planning - the same is true of your business - major shifts in your business model benefit from a thorough business plan.
This is especially true as a solo-entrepreneur. The daily demands of serving clients, maintaining consistent cash flow, and managing your own administration leaves little time to invest in working on making the transition to a Remote Control CEO business model.
6) Escape the ‘Rock Star Syndrome’
One of the most subtle traps that coaches, consultants, and trainers get tangled in is what I call the Rock Star Syndrome. People fall in love with one idea or concept and some notoriety often follows.
Which often happens when your reputation is widely known in a specific industry, you write a book that successfully captures the imagination of your audience, or people are referred to you from people who know you and your work or people read your book and then call you to get more information your coaching or consulting.
Picking the low hanging fruit, is easy to do, but after someone harvests the main crop there is no more low hanging fruit plus it is very difficult to develop a sustainable business around picking up ‘low hanging fruit’ as it is unpredictable.
7) Train a Stable of Consultants or Develop a Range of Products
As a solo-entrepreneur you have two choices either develop a stable of consultants/coaches and train them to do what you do or develop a full range of products to educate, train, and support customers using a self-study approach.
Training and developing a stable of employees to do what you do is a lot of work and so is writing and creating a series of new products. The downside of the product approach is until you actually have products to sell nothing changes.
Hiring employees, even those with considerable experience requires a lot of training, educating, and development before they begin to contribute profits. If they do not work out, you have to start all over again and have lost time and momentum.
Selling your own products takes time to develop a respectable level of income to replace your consulting, training, or coaching work. I like this approach the best because provides the most control and at the end of the day you still own the rights to your products. Plus it allows you to make slow and steady progress without assuming the extra liabilities that come with hiring employees.
E-Learning is still in its infancy and continues to grow as the technology improves. I think it holds a lot of promise for a solo-entrepreneur who wants to make money with less of an ongoing time commitment.
A Lesson in Demographics, Baby Boomers and Planning
July 5, 2007
I am refining my target market and adjusting my Coaching Practice to serve the Baby Boomer Business Owner marketplace and thought this would make for an interesting discussion. Try answering the questions at the end.
As of 2005 50% of the US population of was between age 50-74, (Source: AARP) and in Canada 2001 the baby boomers represented one-third of the total population (source: Statistics Canada).
Understanding the Age Progression Chart
I took the birth curve of the baby boomers and extended it forward to get a sense of the age progression of the baby boom generation. While actuaries would take issue with my methodology because it does not account for mortality it does provide a visual guide to understanding their ages and life style patterns.
Right now baby boomers range in age 40-59 and the baby busters (Gen X, range in between 27-41 years of age whereas, the children of the baby boomers are between 11-26 years of age.
I am a baby boomer (age 51), a third generation entrepreneur, and have been coaching business owners since 1991.
How I See the Baby Boomer Marketplace
I have made a decision to specialize my coaching practice to meet the needs of baby boomers, not only because it represents a significant business opportunity, but because baby boomer business owners have an opportunity unlike any other generation in history. They have the knowledge, experience, and many have the money - now they want the freedom that comes from owning a business. I hear them telling me that they want to own a business because they:
- Need Money: many baby boomers will live 25 years or longer in retirement some into their 90’s. That is a long time and will require a lot of money to be able to live the lifestyle to which they have become accustomed. Owning a business allows them to leverage their experience, stay active, and generate income.
- Personal Expression and Self-Actualization: on the older end of the baby boom (age 59) I hear baby boomers expressing the desire to own, operate, and manage a business. For them, it is as much about self-actualization as it is the challenge, and the opportunity to make decisions - to see their ideas gain acceptance in the marketplace.
- Start a Business: according to the AARP 17% of baby boomer business owners plan to start a business. The challenge for these new business owners is the same as any other, with one exception, they cannot afford to fail or loose money because they plan to use the proceeds from the new business supplement their income.
- Established Baby Boomer Business Owners: there are a huge number of baby boomer business owners who own a business and have a big problem. Their biggest asset is their business. Unfortunately, the cash they planned to use for retirement is trapped within the corporation. They could sell the business, but do not have a successor or a plan to sell the business plus who would they sell it to, a younger baby boomer or Baby Buster (aka Generation X)?
- Share Knowledge: there is another group of experienced business owners who are not ready to hang up their cleats quite yet. These seasoned entrepreneurs want the best of both worlds. They want the thrill of the hunt and the opportunity to make a difference using their business as a tool to make a social impact or statement.
- Buy a Business or Franchise: in many cases buying a business makes more sense than starting a business. Following the release of my book, Tips and Traps When Buying a Business I also released a report titled ‘15 Reasons to Buy a Business versus Starting from Scratch‘. For baby boomers looking to minimize risk and maximize return, buying an existing business makes a lot of sense.
Examining the Baby Boomer demographic would be incomplete without also looking at the impact of the Baby Busters (aka Generation X) and the baby boomers children the Echo Boomers.
The Baby Busters
The Baby Busters were born between 1966-1979 and range in age from 27-41 they are web savvy, mobile, and have the entrepreneurial bug just like the Echo Boomers (baby boomers children). Compared to the size of the baby boom this segment is relatively small.
Wikipedia has some interesting comments on Generation X (aka Baby Busters):
Sometimes criticized as “slackers”, they nevertheless were widely credited with a new growth of entrepreneurship and the resulting dot-com boom. These former latchkey kids may have remembered their self-oriented at-the-office-all-the-time-even-weekends parents, yet who were downsized. Gen Xers in the work-force then were ‘Work Hard, Play Hard’ employees (and business starters): During work hours, they highly productive, competitive self-starters and contributors; but then left the office promptly, to play-hard at the bar/hobby/recreation or secondary job or ongoing education. In some cases, the Play Hard activity then became their first activity; e.g. a successful band gig could go professional, an arts-andscrafts or technical hobby became business start-ups, or an ongoing education became an inter-company transfer/promotion from factory floor to a desk job.
Who are Echo Boomers?
They are the children of the baby boom and are known as Generation Y, the Echo Boomers, or the Millennials (choose your favorite label). They were born between 1977 and 2002. They are increasingly becoming known more and more as the Entrepreneurial or ‘E’ Generation. In The Secret To Recruiting Echo Boomers I document that this net-generation is curious, intelligent, focused, willing to adapt to change, self reliant and confident. They have been told that it will be hard to find jobs and are ready to pursue their dreams via entrepreneurial pursuits.
Change is Constant
Exactly how these generations will pursue business opportunities in the next decade is still up for speculation. Be sure about this, the changes from the Baby Boom will be swift as their numbers increase substantially between now and 2010.
My coaching services are designed to meet the needs of a dynamic market and the unique needs of the Baby Boomers - to maximize return on investment while minimizing the risk and enjoying the business of being in business.
Practical Application
What do you think of my plan and approach to the baby boomer market? What are the challenges and opportunities you see for yourself? What is your biggest concern?
It’s not the driver it’s the vehicle…
July 5, 2007
The time to reinvent your business is now. I wrote about it today:
If your business is sick, sales and profits are down, marketing and advertising not working like it once did, and you find yourself wondering how to turn things around, it might just be that you need to reinvent the business model.
Anything goes, be unorthodox, as long as you understand the customer and your business model works. Via Biz Plan Hacks
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Getting the Price Right
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