Hey now, welcome to another edition of the Inside BS Show. We are live on LinkedIn every day at the 11 o'clock hour. So please be sure and join us there.

We are also on the podcast. We drop a new episode every morning at 6am. Sign up wherever you get your podcasts.

And you can also find us on YouTube doing shows several days a week, at least every Tuesday and Thursday. Join us on YouTube by just typing in my name, Dave Lorenzo. If you want to find out about other great live events, you've got to subscribe.

Go to getinsidebs.com, enter your email address, you'll get daily updates, and you'll also be invited to exclusive subscriber-only events that won't cost you a penny, but that you only find out about if you join and subscribe at getinsidebs.com. Okay, today we're talking about the three mindsets of a business owner. That's right, three different types of mindsets that you have as a business owner. The first is the job mindset.

This is where you're finding something for you to do every day. You make a lot of money, more money than you thought you'd make, but it's still a job. These businesses tend to be highly dependent on you, the business owner.

Everything goes to and through you for a decision, for the start of something, for the initiation of a new approach to marketing or business development. You are doing way better than you would if you worked for somebody else, but you can't help it, you still got a job. The reason we call it the job mindset is because it's completely dependent upon you.

Now, it's really hard for you to sell this business, almost impossible, because everything relies on you. There's nothing that can be done without you at this point. These businesses tend to do less than a million dollars in annual revenue.

If everything goes through you, there's a pretty good chance that sales is driven by you, there's a pretty good sense that service delivery is dependent on you, that's what holds you back. The minute that you hire somebody to do sales and remove yourself from that process, you're taking steps in the right direction. But the job mindset keeps your business, by and large, below a million dollars.

Businesses that go from a million to, say, five million in annual revenue are businesses where the owner has an ownership mindset. Now this mindset is exactly what Michael Gerber, the author, talked about in his wonderful book, The E-Myth. He tells the owner to focus on working on the business and not in the business.

I get that, and it's great. So you hire somebody to run sales for you, and you have a half dozen to a dozen salespeople on your team. You hire somebody to run operations for you, and that person takes care of the day-to-day.

You hire someone to handle your finances for you, and that person does a great job managing the finances and helping you make decisions based on real-time, actionable financial data. But you are still the person who makes all the big strategic decisions. Sure, you can take a week or two weeks off.

You can step out of the business for a period of time in case there's an emergency that you need to address. But ultimately, you probably are still signing the checks. You probably are still making all the big strategic decisions.

You probably still have not hired a CEO to run the business full-time. These businesses end up between one and five million in annual revenue, and they still require a lot of hand-holding from you, the owner. These businesses can be sold because you, as the owner, can teach another owner to do what you're doing.

You'll probably still need to be involved for a year, maybe as long as three years, to make sure that any key relationships you have with staff are still there, with any key relationships you have with customers are still there. But you can sell this type of business. Now, the third type of business mindset that is critical, that you should aspire to get to, is the investor mindset.

The investor mindset is one where you're building the business to eventually be sold. It doesn't have to be sold for 10 years or 15 years, but whether you're starting today or you started 10 years ago, eventually the business will be sold. So you're building the business with that mindset.

The reason this company exists, Exit Success Lab, is because we want all of our owners that we work with thinking about the business as an investment, even family businesses. We do a tremendous amount of work with family-owned and family-operated, multi-generational businesses, but even family businesses should be structured as investments that can be sold. Why? Because that gives you the most options when you're ready to step out of the business.

You don't have to sell, but the business is worth more because you can sell it. You can get more if you want to go borrow from a bank. What's good for a sale is good for the day-to-day operation of a business overall.

So here's what the ownership mindset looks like. You have key players on your management team who are at aspirational levels. They're at levels higher than the business is currently doing.

So if you're an ownership mindset business owner, you are going to hire a head of sales for a company that's doing $20 million a year in annual revenue, even though you're only doing five. You're going to pay a premium for that person. Why? Because a $20 million person is going to be like a caged animal.

They're not going to want to be in a business that's only doing $5 million. They're going to find the right people and push those people to get to $20 million and beyond because that's the kind of person they are. If your business is doing $5 million, your operations person has to be capable of handling $30 or $50 million.

They have to have run a $30 or $50 million business. Why? Are you concerned that they're going to be bored? Well, you got this salesperson who's chomping at the bit. They're going to go out and find the business for you.

So you need an operations person that can handle that level of business. So you get a $30 or $40 or $50 million operations person. Then you're going to get a CFO who's going to keep a lid on everything.

That CFO should be a $50 million CFO. They should be the kind of person that can handle getting financing for new equipment, that can handle negotiations with capital providers and banks, that can handle teaching everyone in the business about key performance indicators and managing to the key performance indicators. And then you are going to find a $100 million CEO to oversee the whole thing.

Why the $100 million? And you're going to overpay them. You're going to give them a stake in the business. You're going to get them to put some skin in the game.

Why? Because the $100 million CEO will elevate everyone and he or she will know when that $20 million salesperson is at its limit, they're going to go find a $75 million or a $100 million salesperson. They're going to know when the operations person is at their limit and they're going to find somebody to do that job. They're going to speak the same language as your CFO and they're going to be on the same page and they're going to together know when it's time to grow via acquisition and you as the owner and the chairperson of the board are going to oversee the whole thing.

Thanks for joining me on this episode of the Inside B.S. Show. Until tomorrow, here's hoping you make a great living and live a great life.