For many people, ego is the biggest barrier to joining to becoming a business owner because they immediately disqualify opportunities that they view as beneath themselves. Let me illustrate:
A real life example
Recently, I met a friend (we’ll call him Chris) at the gym to play a game of racquetball. It seems that whenever I play racquetball, the conversation eventually leads to business opportunities-it is my version of the golf course. After a few games, we began discussing the various business opportunities that he was considering purchasing.
He told me about a pool cleaning route that generated about $100,000 in annual profits. The current owner was burned out (figuratively and literally) and wanted to unload it. He was a nice guy, covered in tatoos and light on formal education. Because he wanted to unload it quickly and he trusted Chris, he was willing to sell the route completely owner financed.
From Chris’ perspective, this represented a (basically) risk-free opportunity. He could acquire the business and pay the seller off from the pool route profits. In fact, he argued, he could even hire some young guys from his church to do most of the work and he would still end up with $50,000 in profit-for very little work while providing a good opportunity to the teenagers of his church. AND, he went on to describe that since he wouldn’t be cleaning the pools, he could focus on growing the business and he could sell it down the road for a substantial premium. He could even keep his day job if he wanted to. This all sounded very appealing to Chris. But….
Ego as barrier to entry
Did I mention that Chris had several years of experience working for a large multinational corporation that manufactured parts for the US aerospace industry and he had his bachelors degree in business? In short, Chris’ ego told him that he is above pool cleaning, even if he wouldn’t be doing the actual cleaning.
Instead, he was leaning towards purchasing a fast-food franchise that would require significantly more investment of time, money, & risk assumption. But, in his mind, owning a franchise restaurant was more prestigious and would be a more palatable dinner party topic.
I’m not sure which opportunity was a better fit because we didn’t sit down to develop an acquisition strategy, but a few things were very clear:
He never seriously considered the pool route opportunity because of his ego
There is nothing inherently more prestigious about fast food than pool cleaning, but the fast food business had a name that his friends would recognize and respect
This ego barrier represents a HUGE opportunity
The Opportunity: Use Ego To Your Advantage
Ok, so you have an ego, so what? You’re not alone. In fact, every single person reading this post has an ego that limits them in one way or another. Even in prison, inmates prey on groups that they view as inferior. You need to understand this important principle. If your ego is preventing you from getting into an industry, it is also preventing your potential competitors. Ego, as it turns out, is a wonderful barrier to entry.
More important is the ego of your friends, family, and community. Why don’t they all see and seize the opportunities that surround them? Ironically, those with the biggest egos are also the most highly qualified to lead the very businesses that they disregard.
Chris did not take the pool route offer. But if he had, his leadership skills and experience prepared him to lead any business endeavor successfully. Right or wrong, if a potential customer is considering hiring company XYZ with the tattoo-covered, slang-tainted pool route owner, or Chris, there is simply no contest. Chris could have DOMINATED his market. He could have achieved scale and eventually turned the pool route into a regional player from an office on the 10th floor. He had the training in foundational business principles and other issues that company XYZ’s owner hadn’t the slightest ideas about.
Don’t get me wrong, company XYZ’s owner can also be very successful and I will be the first to sing the praises of any entrepreneur. However, it isn’t difficult to argue that Chris is better prepared to lead and grow a company beyond just a small pool route. So here’s the paradox: the more formal education and training you have, the bigger your ego, the more you will shine among your competitors, the more qualified you are to lead a small business, the more likely you will be successful, but that same big ego will prevent you from ever considering many of the opportunities in which you’ll shine and succeed.
In the book, “The Millionaire Next Door”, by Thomas J. Stanley, Ph.D, finds that around 80% of all millionaires are college graduates. However, many of these same millionaires own businesses similar to the pool route opportunity. They understand that it’s better to be a big fish in a little pond and they use ego to their advantage.
The takeaway? You need a strategy
Of course, nobody wants to clean pools their entire life. The beauty of business ownership is that you’re in control. You can grow the business to a point where you have managers and staff to do the work that you don’t want to do and grow your wealth in the process.
Now, don’t go out and buy a pool route until you are sure that it is a good fit for you in your market and that you have a long-term strategy to turn it into an enterprise.
Remember, every time that voice in your head says, “you’re above that opportunity”. That same voice is in the heads of all your potential competitors. Use this to your advantage.