Watch out or you could fall into the entrepreneur's trap. What is it? How close are you to falling into it? If you want the answers to those questions and so much more, you need to join us on this edition of Your Daily Dose of Dave here on the Inside BS channel. Hey now, I'm Dave Lorenzo.

I'm the Godfather of Growth. And today we're talking about the entrepreneur's trap. And if you're wondering what that is, I'm afraid you're in danger of falling into it, my friends.

So there's three stages of entrepreneurship. And these are my stages of entrepreneurship. You'll not find these in any textbook.

Stage number one is the tactician or the technician who's interested in going out on his or her own, forging a life for him or herself. And declaring their independence. You no longer want to work in corporate America.

You want to be the kind of person who takes advantage of our capitalist society. And you want to strike out on your own and grow. Well, congratulations.

Go for it. You're going to be part of the engine that makes our world function. Because entrepreneurs are 90% of the economy.

But you as a tactician or a technician are good at your craft. You're good at manufacturing the widgets. So let's take somebody who's an accountant.

You're a good accountant. Or somebody who's a lawyer. You're a good lawyer.

Or somebody who's great at painting houses. Or somebody who's great at fixing air conditioning, heating, and ventilation systems. Or somebody who's a great managed service provider.

You're great at helping people with their IT systems. You're going into business because you're great at that. And you've built a better mousetrap, so to speak.

You've got a competitive advantage that makes you different, better, faster, stronger than everybody else who does what you do. So now you're hanging a shingle and you're going out to tell the world how great you are and why they should hire you. As soon as you get your first client, you're going to be distracted as an entrepreneur.

Because as soon as you get your first client, you've gotten back into widget manufacturing mode. As an accountant, you're focused on looking at their books and helping them clean up their financials. And every minute that you're looking at their books and helping them clean up their financials, you're not out finding the next client.

Same thing for lawyers. Same thing for roofers. The minute you get your first roofing job, you're calling your suppliers, getting the supplies in order, renting the trucks, finding the workers.

Then you're hopping up on the roof, helping your workers see what they need to do. You're into the day-to-day. You become or you fall back on your tactician, your technician roots.

By the way, why do I keep using this tactician and technician interchangeably? Because a technician is somebody who's focused on doing a specific job. A tactician is very tactical. They're focused on doing individual things.

That's not what a CEO does. A CEO is strategic. A CEO focuses on the big picture.

But you're a tactician. That's stage one. You can break free of that when you realize that your job is to spend as much of your time as possible getting new customers.

You're the roofer. You got your guys. You train them.

They know what to do. Maybe you worked on half of the roof with them, and you say to them, okay, finish this other half of the roof. I will come back and check on you at five o'clock today.

Then you go out and sell from 10 o'clock in the morning until five o'clock in the afternoon so you can get the next client that they can work on. Otherwise, after that roof is done, you're going to lay your guys off until you find another client again. You can't do that.

A business will not survive if you only sell when you have no work because that gap between clients will kill you. How are you going to eat? How are you going to staff a job if you have to lay people off after every job is done? The way to break free from that tactician track is to focus as much of your time as possible on selling, hire people who can work independently at least half the time so that you can go out and sell. Now, that's the first level.

You go out on your own. You become a tactician. You get your first job.

You do the job yourself. You get your second job. You do the job yourself.

You get your third job. You do half the job yourself. You have your crew do the other half of the job, and you go out and find the fourth job while they're finishing up that second half of the third job.

That's the tactician. The second level up is a level that I call the E-myth level. And the E-myth level is a type of business that the business owner realizes he can't get caught in the day-to-day so he creates systems and processes so that the business can run as often as it can without his or her involvement.

And this is patterned after the famous book by Michael Gerber titled The E-myth. And Michael Gerber teaches business owners, entrepreneurs, to build businesses based on systems and processes so the business can run without them. And this frees the business owner up then to go out and find more work.

Even if the business owner is sharp and they bring on a sales team, they're developing systems and processes for their sales team, but the business owner still finds a way to be involved in the business on a day-to-day basis. So while this business owner is a little bit more strategic in creating systems and processes, they still are at least 50% tactical. So they're still caught in a trap in a way.

This business will be bigger than the tactician's business, than the technologist's business, but the business owner is still going to have a hard time going away for more than a week or two. They're still going to have a hard time stepping out of their business for any length of time because people and systems and processes are still dependent upon them to make things happen on a day-to-day basis. Then there's level three.

And level three I call the investor. When the CEO, when the business owner, when the entrepreneur becomes the investor, that CEO, entrepreneur, business owner has a dispassionate view of the business. They view the business as an investment that must produce dividends on a regular basis and can be sold at some point for a windfall profit.

When you view your business as an investment, you know that none of it can be dependent upon you ever. And you build it so that the minute that something is built, it is completely free of your day-to-day involvement. You can leave this business for long periods of time and it flourishes because it is an investment that runs without you.

In fact, there's a CEO who runs the business because it's an investment. You meet with that CEO maybe weekly, maybe monthly, and the CEO updates you on the progress of the business. But the overall strategy for the business and the day-to-day operations of the business are within the purview of the CEO.

So what are the keys to achieving this investor level of business ownership as quickly as possible? Well, as a tactician, you need to focus at least 50% of your time on sales and marketing. You heard me give you the roof for example. Get your guys to finish the second half of the roof by themselves while you go out and find more roofs for them to work on.

As the E-myth CEO or the E-myth entrepreneur, you focus 80% of your time on growth and you have your company running that 80% of the time without you. So you go in for two or three hours a day, but then you spend eight hours a day or 10 hours a day doing strategic stuff. So 50% of your time that is not spent doing the business stuff is spent doing sales and marketing.

And the other 30% of your time is spent creating strategic alliances as the E-myth CEO, you're spending 20% of your time on the day-to-day operations and 80% of your time growing. And of that 80%, 50% is sales and marketing, 30% is strategic alliances, 30% you're out creating strategic partnerships with people that help you grow. That's as the E-myth CEO or the E-myth business owner.

Then when you become the investor, 100% of your time is spent growing the business because you have a CEO who handles the strategy, you have a CEO who handles the day-to-day, you have a CEO who's responsible for running the business. As the investor, you can spend 50% of your time thinking about organic growth initiatives, creating a new sales model, entering a new market, creating new marketing plans or working with your marketing team or your CEO's marketing team to create new marketing plans. And then you spend the other 50% of your time on acquisitions, on growing through strategic acquisitions.

So 50% of your time as an investor can be spent on organic growth, 50% of your time can be spent on acquisitions. I know a lot of investor owners who spend 100% of their time on acquisitions and they let the CEO focus on the organic growth component. But this is the entrepreneur's trap.

The entrepreneur's trap is when you get to three years or five years or 10 years or an entire lifetime of a business and you're stuck at the tactician level or even at the e-myth level. What happens to that business owner who's stuck at the tactician level? Well, the business closes because there is no business without you doing the work. This happens to a lot of accountants, happens to a lot of lawyers, happens to a lot of independent consultants.

There's no business without you, you don't have a business you can sell, you're a tactician, you're a technician. Now, even if you get to the e-myth level and 50% of your time is spent on sales, 30% on strategic alliances, so the 80% of your time is spent on growth, you're still needed 20% of the time in that business. So you can sell the business because it can run 80% of the time without you but you're gonna have a workout and you're not gonna get the full multiple that you should get for the business because it can only run 80% of the time without you.

But as the investor, you've already created a platform, as the investor, you're already buying other businesses, as the investor, you are an attractive business for private equity. You are an attractive business for someone who's looking for a turnkey opportunity, you're going to get the highest multiple because your business can completely run without your day-to-day involvement because it does. And if you don't wanna sell, you've got a great business you can leave to the next generation.

Whether that's a generation within your organization that will buy you out or a generation within your family that will take over the business. But if you're the investor entrepreneur, you have something of value. Your business is an investment.

So armed with this knowledge, as you start your entrepreneurial journey, your goal should be to get to the investor stage because it gives you the most options. That's what Nicola and I do with Exit Success Lab. Exit is in our name because if you're doing this right, you can exit your business at any time and you can exit it with the most options for you to create the maximum return on the investment you've made.

But we have to get you to investor level first. So if you're a tactician, technician, give us a call today because we'll prevent you from having a heart attack, we'll prevent you from having a stroke, we'll reduce your stress level. If you're an E-Myth business owner, well, congratulations on getting to that level.

If you're ready to go from good to great, we are ready to help take you there. That's what we do. If you find yourself in the entrepreneur's trap, we are your solution.

I wanna thank you for joining me today for your daily dose of Dave. My name is Dave Lorenzo. I am the Godfather of Growth.

We'll be back here again tomorrow at 6 a.m. for another edition of our show. Until then, I'm Dave Lorenzo. And here's hoping you make a great living and live a great life.