There are 3 types of business owners: Freelancers, Entrepreneurs and Founders.
Only 1 of these 3 business owners will be profitable AND stress-free.
From an administrative standpoint these are all pretty similar. They each have to own their own corporate entity, they each file their own taxes, they each have to find their own customers, handle their own sales, deliver their own services or products – yet, the opportunities for financial success for each of them are NOT the same.
Which are you?
A Freelancer spends their time almost exclusively working for another company fulfilling all the work themselves. Outsourcing their work to another employee or service would be frowned upon.
They often put in 60+ hours a week into their work, their further education and training and then any leftover time is spent networking to ensure they have another “JOB” once this current contract ends.
The interesting part about this is, no one forces a Freelancer to be a Freelancer. The effort it takes to get a job as a Freelancer is similar to the effort it would take to sell a service as a brand. However, a brand would have the ability to outsource parts of the work as needed, would be able to manage multiple clients at once, and would have the ability to scale and grow.
An Entrepreneur is most often trying to build a business from the ground up. They’re doing most of the work themselves and many try to build some form of online presence to increase their reach. They market themselves as an “expert”, an “influencer” or an “authority” on a subject hoping to gain more followers which they can turn into customers.
The problem with most Entrepreneurs is that they often end up doing everything in their company themselves. While they’re not technically a Freelancer, their business is often completely reliant on their own efforts and the sales, marketing, and deliverables all come from them. In short, the harder they work, the more work they have to do. This leads to burnout, fear of success, and self-doubt about what they’re doing.
A Founder has developed a brand and they understand that their business is NOT themselves. They develop systems and processes to allow the brand to grow itself, and as the company expands, their work typically decreases as employees and processes handle the deliverability, lead generation, and sales.
The key factor that separates these 3 is often branding.
Often Freelancers and Entrepreneurs focus on something called Personal Branding. This is where you build a business around yourself as the Brand. Often, you’ll see company names like “John Doe Consulting” or “Jane Doe Attorney at Law”. While it is possible to make a significant income doing this, it’s often going to come at the cost of your most valuable resource… TIME.
(Note: Time is your most valuable resource as it’s the one thing you can’t get back.)
When you have a Personal Brand, the thing you’re advertising is YOU. Your customers and clients want the best thing your company has available – namely YOU. This means that as your company grows, the demand on your personal time becomes higher and higher and this can lead to burnout, stress, and sometimes the desire to end the business…
… this is where it gets really messy, because no one can purchase your company when your brand is YOU! Think about it. No matter how big your company is, if your company is based around your name, you can’t sell it. You can sell the client list and maybe break down some other assets for sale; however, without a complete business, you’re going to be selling all your hard work at a discount.
So ultimately, it’s rare for Personal Brands to be sold. It does happen from time to time, but these are often the exceptions and not the rule. Therefore, a Profitable Brand is very rarely a Personal Brand, yet freelancers and entrepreneurs still continue to build Personal Brands day after day, because it is less initial effort and they don’t know any better.
It’s worth noting that less initial effort is rarely easier in the long run.
While all 3 of these different people are business owners, it’s typically only a Founder that has the foresight to create a Profitable Brand.
A Profitable Brand is one that is built with a clear blueprint to grow and scale. The core concept is simple and should meet the following criteria.
- The Brand should exist in its own right and not be based around an individual person.
- As sales increase the company should become more profitable.
- The Brand should have multiple products that serve the ideal customer.
A Founder knows this. When a Founder creates a company, they build it with the idea that it could be sold in the future. That doesn’t mean that they will sell it, but it’s built specifically in a way that it could be sold, which actually means it’s built in the right way for growth.
First, they create a brand that their customers can identify with. Something that isn’t based around an individual. Instead, it’s based around an idea, a concept, or a result. This way the customers understand that they’re buying into the company instead of buying the business owner. This allows the Founder to run the company rather than be run by it.
Next, they look at their pricing and make sure that each individual sale makes more profit the more they have. For example, if you sell your own time by the hour, then your profitability goes down as you get better at your job.
For example, if you’re a freelance cleaner who gets paid by the hour, the faster you do your job, the less you get paid. So, no matter how many sales you make, your profit stays the same.
On the other hand, if you sell your services by the result – we work until the place is clean. Then more efficient you work, the more places you can clean.
Lastly, a Founder knows that they need more products to sell to each customer beyond just the core offer. If we continued with the cleaning service example above, the cleaner could sell robot cleaners or other products to maintain the place between visits to increase their profitability per client.
A company that can exist in its own right without a specific individual staying within the company, that increases in profit as sales increase, and that has multiple products creating different revenue streams is highly sought after by investors because it’s a company that has been built to be easy to run and grow.
You’re rarely going to find an investor who is willing to buy a Freelancer’s business, but a Founder who has built their business in the right way will be swamped with people eager to take it off their hands.
While the Founder may not want to sell their business, having it built correctly means they will have more free time, less stress and they will find that generating profit and running their company easier and enjoyable.
The real question is who do you want to be?
If while reading this you’ve realized that you’re a Freelancer or an Entrepreneur and you want to make the shift to becoming a Founder, then we’d like to offer you some help with shifting direction towards becoming a Founder.
This is where the S.M.A.R.T. Blueprint gives you a clear simple step-by-step foundation to build a real company that is designed for growth, profitability, and scale. This allows any Freelancer or Entrepreneur to transform themselves into a Founder with just 5 simple steps.
You can apply to join the S.M.A.R.T. Blueprint Program by CLICKING HERE.