The pyramid scheme of business (& why small business owners are awesome)

Years ago, I was meeting with one of my best administrative team members when she told me that she was thinking about leaving to start her own business.

She was frustrated watching my so-called success and the success of the agents in my real estate brokerage. She didn’t want to be locked into a salaried job and wanted more opportunity.

I understood exactly where she was coming from because I had been in the same situation a few years earlier working full-time as a CPA.

I decided to try and help her make the best decision about what do to by explaining how things really worked. I started by telling her that every traditional business is really a pyramid scheme. More importantly, the perception of this pyramid changes depending on who’s actually looking at it.

I drew this pyramid on our large whiteboard:

I explained that her perspective of this pyramid is that I was at the top of the pyramid as the owner of the business.

I was enjoying all the fruits of everyone’s labor. The admin team supported the sales agents. The sales agents supported me. I just sat back and enjoyed life.  🙂

Next, I drew this second pyramid…

I explained that this was my perspective when looking at the same exact pyramid. Instead of being at the top, I was actually at the bottom of the pyramid.

The upside down pyramid was a more accurate description of how things really worked, and this is because small business owners carry the entire weight of the business on their shoulders.

As small business owners, we’re responsible for…

… generating all of the marketing, leads and new client applications.
… legally for all the actions of our salespeople and our other employees.
… payroll, medical insurance and the 401k for the business.
… the ongoing overhead expenses of the business including rent, utilities, furniture, E&O insurance, licensing, taxes, etc.

Up until this point, she would tease me about the big, dark circles under my eyes. I was usually up at 4 am every day. The reason why I didn’t sleep very much is because of this upside down pyramid… because I felt immense responsibility for everyone and everything in the business.

As a small business owners, we have to provide for our families AND we also have to provide for the families of those employed by our businesses.

There were many times when building that particular business where there wasn’t enough money to cover payroll because of the timing of the business’s cashflows. I had to figure out a way to get money (which included borrowing on several occasions) to cover payroll. Yes, I borrowed money to pay my employees. I did this because they didn’t sign-up for the risk I had agreed to assume when starting the business.

The risk I assumed when I put the pyramid on my back and started my journey. This is the same risk you take every day in your small business.

This is why my hat is off to every small business owner.

I salute YOU!

I really do because I SEE your pyramid. I SEE and UNDERSTAND that you’re carrying the entire weight of your business on your shoulders. I understand the pressure you’re  under 24/7. I also know that you don’t sleep very well because of this massive responsibility and that few people really “see” what you go through on a day-to-day basis.

Your employees don’t see this reality. They only see the first pyramid.

Hell, your spouse probably doesn’t truly understand this second pyramid either.

The only ones who can actually see the real pyramid are business owners who’ve hoisted and carried a pyramid of their own!

 

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