The leap from freelancer to CEO is immensely rewarding.
Many of the entrepreneurs we have worked with over the years started providing one service to their clients. They kept their overheads low by either working from home or using their laptop or smartphone at a local coffee shop.
It all starts getting a little tricky when you begin making more than $100,000 per year. At $10k to $20k per month, you can start feeling like your spinning your wheels in the sand and going nowhere.
You start feeling overwhelmed because you are wearing all of the hats and doing all of the work yourself, even though you know you need to get help. The problem is that you can’t maintain this pace forever, and it will start showing in your work.
You now have an essential decision: will you remain a freelancer, or will you leap to Chief Executive Officer? If you choose this new path, the journey will be a bit challenging but immensely rewarding. To do so, you’ll need to change how you think.
Here are a few fundamental principles you need to internalize to go from freelancer to CEO.
1. It’s all about performance and not hours.
CEOs get paid for how well their company and system performs, not how long they spend working. When you are a freelancer, you are trading time for money, and you might find yourself trapped in a house that will inevitably collapse the moment they stop laying bricks.
As soon as the freelancer “you” stops working, the money stops coming in. It becomes more of a job and not a business. What happens is that what a freelancer earns is directly tied to the amount of time they spend working; it prevents the freelancer from living your life, and to be a CEO, you need to change that process.
CEOs don’t think like that; they leverage other people’s time to create money.
The Chief Executive Officer never works for money. They have their work, but the CEO’s income is dependent on how well they have designed their systems, people, and processes. If they have a plan in place that’s streamlined and scalable, the company will make a lot more money as the company and demand for their products or solutions offered grows.
Think of it like this: in the beginning, your business was a system that harvested your time and energy into profit. This is great at a smaller scale, but your time and energy are finite, so at a certain point, you would max out. You would hit critical mass by trying to overextend yourself; that’s when you burn out. It’s not about your work ethic or productivity – it’s how you have (or haven’t) designed your system.
There is no such thing as a direct dollar-per-hour amount that can be attributed to a Chief Executive Officer’s pay because the processes and procedures created are the fruits of their delegating.
CEOs get paid for the results they have generated and not the tasks that they have completed. It would help if you thought of a CEO as a composer of an orchestra. The symphony is their company, and the money they earn is the music to their ears.
2. CEOs know their bottom lines and manage their resources very carefully.
If someone were to ask you what your profit margins are, do you have the answer? What if they asked you about your closing ratio or about how much of your gross revenue is geared towards your operating expenses? Do you know what your average customer value is?
The truth of the matter is that most freelancers don’t know their numbers. Period.
Freelancers typically have their personal and business finances mixed, and to make matters worse, they think that the money they make is theirs to spend and do so with free reign. It would be best if you didn’t feel that we are criticizing here because we used to do the same thing. Almost all freelancers run their businesses like that.
There is one serious problem with that mode of thinking, and it’s called the root of the broke millionaire syndrome.
All CEOs realize that the money the company makes is the fuel for the journey. It’s about steering the ship in the right direction and always looking at their company objectively. And the numbers never lie.
If you don’t know what’s going on in your business financially, it’s like flying a plane with no instrument panel. You’re headed somewhere very fast, completely blind, total disaster.
Knowing your numbers allows you to track the performance against goals, and you can hold yourself and your team accountable. You will be able to spot the weaknesses before they become significant issues. CEOs have to know their numbers; the real question here is, do you?
If you don’t, no worries because I have a fantastic book to recommend; it’s written by Mike Michalowicz and called Profit First as a way to get comfortable with this fundamental aspect of running your business.
3. The CEO’s job is to elevate others to leadership.
Most freelancers are used to doing everything, including solving problems. Freelancers have learned to depend on themselves because let’s face it, most people suck at their jobs.
Let me give you a quick example. In basketball, a freelancer would be the ball hog and live by the saying, “if you want something done right, you have to do it yourself.” There is nothing wrong with this mindset, and initially, it’s a strength because it creates momentum and fast action, leading to results. Here is where the problem arises, in the long haul, the “do it all” approach hurts the freelancer because it doesn’t allow them to delegate work to others.
Freelancers sometimes put too much pressure on themselves, thinking they need to be a superhero, handling everything. The main focus should be to hire superheroes. When you hire and delegate the work, it allows people in the company to step up and make decisions on their own, teaching them to make the right choices based on the values everybody in the company shares.
When you implement this culture, your team will have more worth; they will feel better about themselves. You will create a company where your people will know what to do without asking. They will make important decisions and implement action plans without having to clear every little detail with you. Once you have achieved this, you now can honestly say that you have genuinely created leaders.
Remember that your leaders aren’t perfect and will make mistakes; the difference is that they will take personal responsibility for those mistakes and learn from them.
A great CEO must realize that they are very rarely the best person for the job; they can’t wear all the hats or be everywhere at once. So rather than focusing on doing the work themselves, they have to focus on selecting the right people to delegate the work to and allow them to lead.