Welcome to the Owner Institute Newsletter where we talk about getting owners working on and not in their businesses.

In this week’s issue:

• Why growth often means temporary steps backward in freedom

• Finding sustainable sweet spots

• Different types of owner independence at different revenue levels

Quick Hits

1. ✂️The Small Business Administration (SBA) announced plans to cut approximately 2,700 jobs, representing 43% of its workforce, as it aims to return to pre-pandemic staffing levels. Read it here.

2. 🫤High Rents Challenge Small Businesses: Many small businesses continue to struggle with elevated rental costs, forcing some owners to raise prices or relocate. Despite other cost reductions, rent remains a significant financial burden.

Deep Dive: The Owner's Freedom Trap

Why More Revenue Doesn't Always Mean More Freedom

Here's a confession: When I was at $5 million in revenue, I had more freedom than I did at $12 million.

Sounds crazy, right? While we grow our businesses to make more money, most of also want to have more freedom, more flexibility, more control over our lives along with it. At least that's what we tell ourselves as we grind away for years.

But here's the trap nobody warns you about: At certain revenue stages, you actually take steps backward in freedom before you can move forward again.

The Freedom Paradox

I've watched business owners chase growth thinking it's the path to freedom, only to find themselves more trapped than ever. They had more money, sure. But they also had:

• More employees depending on them

• More clients with bigger expectations

• More complex problems to solve

• More systems breaking down

• More of everything except time

At my first company, I hit a pretty good spot after grinding for several years at about $5m. We were making good money and it felt like the team was finally on top of everything. It didn’t last.

The changes I’d put in place resulted in fast growth. A year or two later when we were approaching $10 million, I found myself working 60+ hour weeks again - something I thought I'd left behind at $3 million.

What happened?

The Freedom Curve

What I've learned is that owner freedom doesn't increase in a straight line with revenue. Instead, it’s more like a squiggly line:

$0-$1M: Bootstrapping

You're doing everything. Freedom is minimal at this stage, especially early on, but you’re the only one around for much of this period so there aren’t a lot of other options. But if you bring in the right supporting labor as you grow, you can get to a good place by $750k-1m. You’re essential to everything but it’s manageable.

$1M-$3m: Growing into Crisis

If you keep selling more, eventually the work starts to outstrips your ability to deliver easily. Systems start to break and the team you have is dropping balls. At this stage owners need to consider making their first real management hire-someone who can run a part of the business without the owner’s constant oversight.

$3-5M: The Sweet Spot

Around $5 million, many owners hit a sweet spot once they find that hire or hires that fit. Sometimes it takes a while. I took me 3 years and multiple attempts at the right hire.

Once you get it right though, it takes some pressure off. At this stage you can get systems in place that are good enough and have a small team you trust. Profitability spikes up and your making good money. Work-life balance starts to feel possible.

$5M-$10M: The Backslide

As you grow, complexity increases faster than your systems and people can handle. That great management hire at $3m in revenue isn’t looking so good anymore and you find yourself promoting other promising people who quickly reach their capacity.

Unfortunately, the business can grow faster than the capabilities of the people running it, including yours. Suddenly you're being pulled back into the business. Your calendar fills up. Your phone never stops. You've got more money but less time.

$10-15M+: True Freedom (If You Build It Right)

The key to getting over the backslide is to realize that your team isn’t going to be able to grow quickly enough. You’ll need to replace people in key positions. Now that you are bigger, you can afford and should bring in people with outside experience and expertise.

If you survive the backslide and build the right team and systems, real freedom becomes possible. But it doesn't happen automatically with growth - it happens when you deliberately build a business that runs without you.

Warning Signs You're In a Trap

How do you know if you're in a freedom trap? Look for these signs:

• You're making more money but working more hours

• You've hired more people but have less time

• You've grown your revenue but can't take a real vacation

• Your business feels more complicated than it did a year ago

• You're being pulled back into details you thought you'd escaped

Breaking Free

After hitting this freedom trap at $5-10 million, I realized I needed a completely different approach. Here's what actually worked:

1. Accept that growth creates chaos

Every time you double or triple in size, expect to rebuild about 50% of your systems and your senior team. This isn't failure - it's normal.

2. Look for stability zones

There are revenue levels where you can find equilibrium. Once the system and team have caught up you can stabilize the business again. It’s often good to take a breath at these sweet spots before rushing into the next trap.

3. Build the right leadership team

I spent years promoting the wrong people - some were good for a lower level role but couldn’t learn quickly enough to keep up with the growth or the company. Others were great at their jobs but couldn’t build an effective team under them. The breakthrough came when I hired leaders who could truly build and run their departments without me.

4. Create real systems

Not guidelines or suggestions, but actual systems that work the same way every time, whether you're there or not.

5. Know your freedom goals

Ask yourself: What kind of freedom do you actually want? Time freedom? Financial freedom? Decision freedom? Each requires a different strategy.

The real secret to freedom isn't endless growth - it's building a business that serves your life, not the other way around.

In this episode of Small Business Black Holes, Alan speaks with John Ghiorso, founder of VantaFive venture studio, about identifying high-ROI marketing opportunities and building scalable agency businesses.

They explore practical approaches to marketing strategy, resource allocation, and finding the right expertise for different business models.

What You'll Learn:

• How to identify your most effective marketing channels instead of spreading resources too thin

• Why B2B companies should focus on LinkedIn content, outbound messaging, and community building

• The "Seeking Alpha" framework for selecting marketing strategies that deliver above-market returns

• How to properly test marketing channels with adequate budget and timeframes (5-10K per channel for 3 months)

• Why most agencies hit natural growth limits around specific revenue milestones

• How to find and evaluate specialized marketing agencies that truly match your business needs

• The importance of measuring Customer Acquisition Cost (CAC) to Lifetime Value (LTV) ratios before scaling marketing spend

• Why attempting too many marketing channels simultaneously often leads to poor results across all of them.

Check Out Owner Institute

Want to learn more about building real owner independence and wealth? Check out our programs at ownerinstitute.com.