Here are the common mistakes service-based business owners make with running their venture.
You've hustled to grow your business to six figures, possibly even seven figures, and you're working 50-, 60-, even 80-hour workweeks, stuck in the day-to-day weeds doing whatever it takes to push forward.
At some point, you're wondering when things start getting easier and how to get there.
You can build a service-based business to multiple six figures through grit and determination, but it can seem impossible to reach seven figures (and continue to grow without burning out).
From helping dozens of businesses double their revenue in 90 days at 2X, I've seen enough to tell you the common mistakes that entrepreneurs make and how to avoid them.
Here are the top seven challenges service-based business owners face and how to overcome them that I share in my new book, From 6 to 7 Figures.
1. You (the CEO/founder) are the bottleneck
Are you the primary person making the day-to-day decisions, giving approvals, making the sales calls, responding to support emails and so on?
If you want to build a business that gives you time freedom, money and growth, then you need to remove yourself as much as possible from the day-to-day tasks. And specifically for most service-based businesses, that means in fulfillment.
Otherwise, your business will never scale beyond yourself and will always be limited by how much time and energy you put in every day. This is the type of mistake that traps entrepreneurs into the 60-80 hour workweek "hamster wheel."
To overcome this, you need to either eliminate, systemize or delegate these tasks so that it no longer requires your attention to be resolved.
2. You lack cash flow
Business growth requires an investment in people, inventory, ideas, projects, and all of this requires cash.
The bad news is, so many service-based businesses aren't nearly as profitable as they think! With scope creep, bad hires, not optimizing expenses and the up-and-down variability of income, most entrepreneurs struggle to ever get ahead financially.
If you want to grow at scale, you need to pay attention and focus on growing cash flow. What I recommend is to review your top financial numbers every week. You can do this by yourself or with the top executives and partners on your team.
Some of the key metrics I review weekly include:
- The cash balance in all business accounts
- Forecasted revenue for this month
- Open A/R (accounts receivable – money owed to us)
- Total revenue received this week
Knowing your numbers allows you to make strategic decisions, grow your cash flow and invest that back into your business.
3. You lack systems
When you're starting out or still growing at the six-figure level, you can get away with not having systems, but to scale to seven figures and beyond, you absolutely need to have systems in your business. Systems allow you to:
- Get more done, more consistently and efficiently
- Reduce mistakes and avoid issues
- Cut costs and increase profits
- Delegate more effectively
The good news is: that one, you're already doing all of the work. Now you just have to turn what you're doing into a process, and, two, you don't have to create all the systems by yourself. Start having your employees document the processes for the tasks that they do as well.
This will allow you to standardize everything, delegate more effectively and set your business up to grow without having to constantly muscle it.
- You don't have an irresistible offer Most entrepreneurs are too bland with their messaging and positioning. They are too similar to other offerings, and, as a result, get lost in the sea of competition.
To take your service-based business to new heights, you need an irresistible offer that makes it a no-brainer for your ideal prospects to work with you.
A few elements include:
- Pain: You understand your ideal customer's pains and challenges, and communicate these so they see that you understand them and can address these issues.
- Value: The perceived value and outcomes of your service is substantially higher than the price, making your offer a no-brainer for what they get.
- Differentiated positioning: You have strategic positioning for your company and offer showing to your ideal target audience that you are different and substantially better than any alternative.
- Social proof: You have the social proof, examples, and testimonials to have others show your value and benefits (instead of just you).
Improve your core offer with each one of these four, and it'll make a profound impact on your sales conversions!
5. You're stuck in the weeds
If you're stuck working "in" your business, being pulled in a bunch of directions, you won't be able to focus on growth!
And as CEO, growth is a key part of your role. Task by task, systemize and delegate so that you can free up your precious time to take your company from six to seven figures.
At 2X, we teach the XDS system to help executives remove low-level tasks from their plate:
- X: Cut out
- D: Delegate
- S: Systemize
Implementing this methodology will help you free your time and focus on high-level, strategic activities that drive your company forward.
6. You aren't separating personal and business expenses
This is a mistake that gets a lot of business owners in trouble.
When personal and business expenses mix, it's hard to know exactly what's coming in and what's going out, which makes it very difficult to plan ahead to grow your business.
Separating your finances will make it much easier to do budgeting, accounting and planning. And, most importantly, doing this protects your personal funds from the worst-case scenario if your business goes south.
Create a business savings, checking and credit card account and have incoming revenue go directly to your those accounts. Pay yourself a salary, and create a budget and plan for how much of the profits to invest back into the business.
If you haven't done so already, get this handled today. It's simply too important and too risky not to.
7. You have too many offers
It might seem logical to create multiple, separate offerings to attract more clients, but it's the exact opposite of what you should be doing.
With multiple offers come multiple fulfillment processes and systems. Essentially, you're creating two (or more) businesses at the same time.
Instead, what you should do is hone in on one offer, and keep improving on it over time. Keeping it simple and staying focused is what will help you scale.
As a business owner, it's easy to rely on the same habits, routines and mindset that helped you get to where you are today.
In the beginning, it can be necessary to hustle and grind your way to six figures. Those long workweeks are needed to put out fires, especially when things don't go 100% according to plan. But that's precisely what's stopping you from getting to the seven-figure level.
After getting to a certain point in your business, you need to shift from the operator mindset and step into the business owner role. There's a huge difference between spending a majority of your time on executive-level activities and simply making sure the gears keep turning on time.
So stop having your business built around you, start focusing on cash flow, systemize your operations, improve your core offering, and get free from the weeds. You'll soon be on the fast track to seven figures and beyond.