The Psychology of Business Growth: Why You Can’t Analyze a Business Without Understanding Its Owner

I am receiving many requests to analyze businesses or to determine why some companies do not grow and constantly struggle. Most business owners or entrepreneurs believe their problem is in marketing, with nearly all of them following social media and online marketing buzzwords. However, through my research and investigation, one factor becomes clearly evident: the problem is almost always the entrepreneur or business owner.

The Business Owner: The Critical Factor

You might notice two or more businesses in the same industry, with nearly identical starts, but one grows while the others do not. The market and almost everything else are the same, yet the key difference is the owner or the person running the business. Essentially, the business owner is the most critical determinant of a business’s fate. A great businessman or businesswoman can transform a mediocre business into a great one, while a mediocre businessperson can turn a good business into a total failure. I’ve consistently observed that a business is an extension of its leader or owner – this is absolutely true. You can see all the fears, hesitations, and personality traits of the entrepreneur in the business when you walk into it.

Risk and Growth: The Reality Check

Though entrepreneurs might express a desire to grow their businesses, in reality, they may stop growth when an opportunity arises, intentionally or unintentionally. A major component of any business is risk-taking and venturing into the unknown, which becomes particularly challenging when your decision can change the lives of many people who depend on you. In business, there is no such thing as 100% success planning; there is always an element of the unknown and risk. If it were 100% planning and acting, it would have to be based on clear and exact data available to everyone. Nowadays, hardly any business secrets exist with all the communication, social media, and technology available. Thus, having access to data is something most businesses have, but only a few make the right decisions.

The Distraction Challenge

One of the biggest problems I’ve noticed are distraction and “shiny object syndrome.” The smarter the entrepreneur, the higher the chance of distractions. When you open the door of a business, all kinds of opportunities pop up from everywhere. Many people come to you with great and amazing ideas, and you see lots of opportunities to save or even make money, but unfortunately, these are all distractions. Sometimes, the shiny opportunity is so intriguing that it’s not easy to say no to it. For example, you may be a beauty professional, and before your business is fully grown and established, you start selling flowers or candles because it seems like a great opportunity with huge profit margins.

The Power of Mentorship

In my mentoring sessions, the issue of distraction and lack of focus always comes up as the main cause of business stagnation. That is why any entrepreneur needs a knowledgeable mentor or consultant to help them avoid distractions and push them to focus and grow one line of business. When one line of business is established and a consistent flow of money starts coming to the company, then they should delegate that line to a competent manager and move on to the next line of business. In all my consulting and mentoring sessions, the very first step is to understand the business owner and their mentality, then examine the business. Most of the time, the changes start with the business owner or manager; the rest will follow.