Develop an Owner’s Mindset
Do you think of your business as a business, with you as its owner? Or do you treat your business as a job, with you as an employee? Too many mortgage and real estate professionals like you treat your profession as a job and not a business, and it’s hurting your long-term success.
You may not think the distinction is important, but I’ve experienced first-hand that the difference can be striking. This distinction changes how you think about spending your money and your time. It alters your future and redefines your success. Here are the key benefits of a business owner’s mindset vs. a business employee’s mindset and the steps you can take to create this mindset for yourself.
I’ve had three mental shifts that have helped me create an owner’s mindset for my business. The first has to do with money, the second has to do with time, and the third has to do with heart.
Mindset Shift #1: Invest in Your Business
When you have an employee’s mindset, all income you make flows to you personally. It all goes into your personal wallet. All expenses are also yours. Any bill or expense you have, you pay for it out of your personal back pocket.
Now this may not seem a big deal to you, but the distinction here is quite important because we naturally think of personal and business expenses in different ways. It’s much easier and more natural to see business expense decisions as investments. They are a cost of doing business and often have a payout in the future.
We naturally think about personal and business expenses differently.
Personal expense decisions, however, are made through a different lens. They are expenses that we feel we have complete control over. We feel a duty to limit unnecessary personal expenses because we are always thinking of the opportunity cost of spending that money. It’s money we can’t spend on a weekend away with family, on groceries, or on our kids’ birthdays.
When we’re paying all business expenses out of our personal pocket, we compare a $1000 business expense with our mortgage payment or our two car payments. We don’t view that expense as an investment; we view it as a sunk cost.
However, when we make business expense decisions with an owner’s mindset, we tend to view them against the extra income they will bring in, or against the time it will save us to do other money-making activities.
Remember, not all business investments bring in direct income. Some business investments do, like advertising costs. Some business investments, like an assistant’s payroll, save us from spending our time on non-money-making activities. And some tackle both, like the cost of professional content marketing services.
Take writing this exact article, for example. It may not make me money right now. To some, it may seem like a poor way to spend my time. But I know that this article is an investment in the long-term growth of my business. All of the articles on this blog help rank our website in search engines, increase our brand awareness, grow our readership, and nurture our relationships with you, our readers.
I know that this article is an investment in the long-term growth of my business.
The entire time he was building up Wine Library to $60 million, Gary Vaynerchuk only paid himself $47,000/year (skip to 1:28 in this video). He knew that every penny he took from the business for his personal use was that much less money he could use to make more money for the business in the future.
By the same token, however, he also knew when to use money for the growth of the business. He might only have paid himself $47k per year, but he also had no problem buying a fan a signed jersey from his favorite sports team.
Mindset Shift #2: Be in Business Forever
Imagine for a minute that you knew you would live to be three hundred years old. Imagine how that would change your decisions and your point of view. You wouldn’t have to rush anymore. You could take the time to do things right.
Maybe you’d take the time to save up and buy a house in cash. Maybe you’d try to lose weight by changing your lifestyle instead of popping a pill or going on a crazy diet. Maybe you’d wait to have kids and travel more instead.
When we know we have time to do something, we tend to make better, longer-lasting decisions.
Now imagine that you will be in the mortgage/real estate business forever. Imagine that the things you do today will affect your business 2, 5, 10, 15 years from now. How will you do things differently?
For me, when I started acting like Top Left Creative would be around forever, it changed my perceptions of the things I did.
I’m much less concerned with getting quick wins at the expense of more long-term and sustainable activities. I’m okay writing this article knowing that one day—maybe 2 years from now—this article will lead to us gaining a new client. If I needed this article to make me money today, or even 2 months from now, I may not even write it because what would be the point?
Having the owner’s mindset of being in business forever is especially important when you believe in and practice content marketing. Because content marketing is a long-term, sustained approach. It’s about creating and nurturing relationships over time with valuable information.
I’m much more willing to nurture and grow my relationships over time because of my owner’s mindset.
If a potential client isn’t ready to transact with me today, that’s okay.
Because I know that I have the permission to nurture a relationship with every person who adds themselves to my email list. And I know that, over time, if I provide enough valuable and useful information that these relationships will grow, and eventually some of them will turn into customers.
If I were only concerned with today’s wins—if I didn’t have the owner’s mindset of being in business forever—these future relationships wouldn’t be nurtured and wouldn’t grow. And they certainly wouldn’t turn into clients down the road.
Mindset Shift #3: Have a Giver’s Heart
As an employee, we often think in terms of what the company can do for us: how much can we make, what benefits can we receive, how well are we treated? Someone with an employee’s mindset also thinks this way about their clients: what can they do for me, how can they make me money, or make me look good?
When you have an owner’s mindset, you think in terms of how you can give to your clients.
Because without clients you have no business. Their success is your success. Their growth is your growth. And their referrals are your next clients.
Let’s use this article again as an example. This article provides no real benefit to me. After all, this is all stuff I already know. But I am taking the time to put my thoughts into a blog post because I want it to bring value to your life and your business. I want you to have an owner’s mindset. I also want you to know that your success matters to me, whether or not it brings me a single dollar.
This is what it means to have an owner’s mindset. And this is the core of content marketing and why it works.
These three mental shifts have dramatically changed the way I view my business and my clients. And they can do the same for you. It’s time to start treating your mortgage or real estate business as just that: a business. One in which you are the owner with an owner’s mindset. Invest in your business, be in business forever, and have a giver’s heart.
So how do you actually go about creating an owner’s mindset? How do you progress from employee to owner? Here are some very actionable steps—steps I took myself to help develop my own owner’s mindset.
Create an Entity
A great way to start thinking of your business as a business is to actually make it one. When you create an entity like an LLC or an S-Corp, you now have the ability to separate your business and personal income and expenses. There’s something that happens in the mind when you separate business and personal income and expenses. They suddenly become distinctly different.
I am not a tax expert, so you’ll want to consult a professional on the differences between the two (or any of the other options available).
Put Yourself on a Salary
Another way to further separate yourself from your business is to put yourself on a salary. You can do this figuratively by simply transferring a set amount of money to yourself at specified intervals, or you can do this literally by signing up with a payroll service. (Even if you’re on payroll through your company, having a set amount that you pay yourself still makes sense.)
I personally use Gusto (referral link) for our payroll services here at Top Left Creative. It’s very inexpensive—only $25/month plus $4 per employee or contractor.
There are numerous tangible benefits to payroll with Gusto (or other companies who might offer this service).
- They automatically deduct your taxes which, for a self-employed individual, is like having a built-in savings plan for tax time.
- They automatically pay your quarterly tax bills and create all of your year-end paperwork.
- If you do have employees or contractors you pay, they each get an online portal to go in and look at their pay stubs and reports.
Aside from the tangible benefits of having yourself on a salary, there are the intangible benefits of what it does to your thinking.
- It’s one less thing to think about.
- It’s more separation of business and personal expenses.
- It adds further credibility to your work.
Like I said, whether or not you actually put yourself on payroll or not, this is a very actionable and practical step to help develop your owner’s mindset.
Have a Plan
As Benjamin Franklin supposedly once said, “If you fail to plan, you are planning to fail.”
All successful businesses have a plan in place. They know where they are going and what their purpose is. In order to establish an owner’s mindset for yourself, you need to take your business and create a plan for it.
Some important questions to ask yourself are:
- What is your purpose? (PS, we HIGHLY recommend Gary Keller’s book “The ONE Thing” to help with this answer.)
- What is your Unique Selling Proposition?
- Who is your target market?
- What ways will you market to them?
I would not go so far as to say that you need to spend hours and hours creating a formal business plan like they teach in college. It can be much simpler and still be very impactful.
Have a Budget
A brother to the plan, your business should also have a budget. Businesses who succeed have budgets. They operate with a profit and reinvest those profits back into the business.
Here’s the thing about a budget: it can be a very powerful tool that allows you to maintain control of your spending. I’ve also noticed that it’s helped give me permission to spend money on things I know are needed and appropriate—things I wouldn’t have otherwise wanted to spend money on (especially if I was spending out of my personal accounts).
This has been one of the most impactful things I have done to help treat my business like a business and create my owner’s mindset. It’s made expenses like advertising, marketing, and even SaaS products we use seem appropriate to have.
The budgeting tool I use is called You Need a Budget (referral link). YNAB is great for one main reason: it takes your stationary budget that simply records income and expense events and turns it into an actionable plan for how you use your dollars.
The Mindset of a Business Owner
It’s so important for your business that you create an owner’s mindset for yourself. There are three main mental shifts that help turn you from employee to business owner. The first is to invest in your business. Don’t just take all income and pay all expenses from your own pocket.
Second, make sure you act as though your business will be around forever. This will help you choose and implement healthy, long-term strategies that will work for your business well into the future.
Third, have a giver’s heart. Don’t just give value because it’s what people say you should do or because you want something in return. Change your mindset. Give because you want to give. Give because you want to see your clients succeed.
These three shifts in your mindset will completely change the way you look at and run your business. It did for me and it can for you, too. All you have to do is give it a shot.
Great advice! …and I just ordered that book. Thanks C!