The Owners Model: The New Way to Build a 7 Figure Business by Ryan Daniel MoranThe Owners Model: The New Way to Build a 7 Figure Business by Ryan Daniel Moran

What is the Owners Model?

  1. Create the Vision for a New Company: The first step is to establish a clear and compelling vision for your new company. This vision outlines the company’s purpose, goals, and direction, serving as a guiding framework for all future activities. Be very clear – “What do i want to create over the next 3 years (direction)”?
  2. Find a CEO to Run the Company: Identifying and recruiting a capable Chief Executive Officer (CEO) is crucial. The CEO is responsible for overseeing the day-to-day operations, making strategic decisions, and executing the vision set by the owner. Find the best people to run the company.
  3. Find the Money to Run the Company: Securing the necessary financial resources is essential for launching and sustaining the business. This could involve raising capital from investors, obtaining loans, using personal funds, or a combination of financing methods.
  4. Get out of the Way: Once the vision is set, the CEO is in place, and the funding is secured, you take a more hands-off approach. This means allowing the CEO and the team to work autonomously to achieve the company’s goals. Your role may involve providing guidance and oversight at a higher level. This also frees you up to be creative and start more businesses. Your job is to build new brands.

To say the above in a different way:

Your goal is to build a group of brands by (1) creating concept clarity (2) connect and outsource the execution to a CEO/Crew and (3) manage the cashflow by using other people’s capital to finance the venture – whilst (4) keeping out of the way, so that the best people can do their magic for you!

The Owners Model: The New Way to Build a 7 Figure Business by Ryan Daniel Moran

The Owner’s Model is a strategic approach that leverages the owner’s vision and leadership while entrusting the operational responsibilities to a skilled CEO. By finding the right person to run the company and securing the required funding, the owner can focus on steering the business toward its long-term objectives.

Step 1: Create the Vision

Creating a vision for a new company is a foundational step in the entrepreneurial process. The vision sets the tone, direction, and purpose for the business. Here’s a detailed explanation of this step:

  1. Vision Definition:
    • At the core of this step is defining a clear and compelling vision for your new company. This vision is essentially a mental image of what you want your company to become in the future. It’s a statement that answers questions like “What is the purpose of the company?” and “Where do you see the company in five, ten, or twenty years?”
  2. Mission and Values:
    • Part of creating the vision involves defining the company’s mission and core values. The mission statement articulates the company’s purpose, the problems it aims to solve, and the value it intends to deliver to customers or society. Values are the principles that guide decision-making and behavior within the organization.
  3. Long-Term Goals:
    • Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with your vision. These goals can be financial, operational, or related to the impact the company aims to have on its stakeholders.
  4. Market and Customer Focus:
    • Consider the market you’re entering and the target customers you want to serve. How does your vision align with the needs and desires of your target audience? Your vision should be relevant and responsive to the market.
  5. Differentiation and Competitive Advantage:
    • Your vision should incorporate a strategy for how your company will stand out in the marketplace. What unique value or advantages will your company offer that will distinguish it from competitors?
  6. Communicate the Vision:
    • Effectively communicating the vision to all stakeholders is critical. This includes employees, investors, partners, and, in some cases, the public. When everyone understands and aligns with the vision, it becomes a powerful guiding force for the company.
  7. Flexibility and Adaptability:
    • While it’s important to have a clear vision, it’s also crucial to be flexible and adaptable. Markets, technologies, and circumstances can change, so being willing to adjust the vision when necessary is essential for long-term success.
  8. Inspiration and Motivation:
    • A well-crafted vision has the power to inspire and motivate the team. It gives employees a sense of purpose and a reason to work toward common goals.

Creating a compelling vision is not just about having lofty aspirations; it’s about setting a strategic direction that guides decision-making, motivates the team, and provides a basis for evaluating progress and success. A strong vision serves as a North Star for the company, keeping it on course even when facing challenges or changes in the business landscape.

Step 2: Find a CEO to run the company

Selecting the right CEO is a pivotal decision that can significantly impact the success of your company. It requires careful consideration, a structured hiring process, and a strong focus on finding an individual who can effectively lead and manage the organization while aligning with your vision and values.

  1. CEO Selection Process:
    • Finding the right CEO is a critical task. It involves conducting a thorough selection process. This process may include creating a job description, defining the qualifications and experience required, and potentially working with executive search firms to identify suitable candidates. The process may also involve conducting interviews, checking references, and assessing candidates’ leadership and management skills.
  2. Alignment with Vision:
    • The selected CEO should be aligned with the vision and values of the company that you established in the first step. They should understand and be enthusiastic about realizing the vision you’ve set for the company.
  3. Skills and Expertise:
    • The CEO should possess the necessary skills and expertise to run the company effectively. This includes leadership, management, financial, and operational skills. Depending on the nature of your business, industry-specific knowledge and experience may also be important.
  4. Experience:
    • Consider the candidate’s track record and professional experience. Have they successfully led companies or teams in the past? What achievements can they bring to your business? It’s often valuable to hire a CEO with a proven record of accomplishment.
  5. Cultural Fit:
    • Evaluate whether the CEO is a cultural fit for your organization. They should embody and reinforce the company’s values and culture. A CEO who can establish a positive workplace culture can have a profound impact on the organization.
  6. Leadership Style:
    • Consider the CEO’s leadership style. Does it align with your expectations and the company’s needs? Different situations may call for different leadership approaches, so ensure that the CEO can adapt when necessary.
  7. Delegation and Autonomy:
    • Part of the Owner’s Model is entrusting the CEO with the autonomy to manage the company. Ensure that the CEO is comfortable with this level of responsibility and can effectively delegate tasks and make decisions independently.
  8. Communication and Reporting:
    • Define clear communication and reporting lines between you as the owner and the CEO. Regular updates and reporting structures should be established to maintain transparency and accountability.
  9. Compensation and Incentives:
    • Agree on a compensation package for the CEO that is competitive and motivating. Incentive structures, such as performance-based bonuses or stock options, can align their interests with the company’s success.
  10. Transition Period:
    • Plan for a smooth transition. The owner and the incoming CEO should work together to ensure a seamless handover of responsibilities. This may include a period of overlap where both parties collaborate before the CEO takes full control.
  11. Ongoing Oversight:
    • Even though you’re taking a hands-off approach, it’s essential to maintain some level of oversight to ensure the CEO is working in line with the company’s vision and goals. Regular reviews and check-ins can help in this regard.

Step 3: Find the Money to Run the Company

Finding the money to run your company is a fundamental aspect of entrepreneurship. It involves careful financial planning, decision-making regarding sources of funding, and the ability to attract and manage capital effectively. Your choice of funding approach should align with your business goals, risk tolerance, and long-term vision for the company.

  1. Financial Planning:
    • Begin with a comprehensive financial plan. This plan should outline the estimated costs and capital requirements to start and operate the company. It should cover a range of expenses, including startup costs, operating expenses, employee salaries, marketing, and any other financial needs.
  2. Bootstrapping vs. Funding:
    • Decide whether you will bootstrap the company, meaning you’ll use your personal funds and revenue generated by the business to finance its operations, or if you’ll seek external funding. The decision may depend on the scale of the business and the industry it operates in.
  3. Bootstrapping:
    • If you choose to bootstrap, you’ll need to use your own savings or revenue generated by the business to cover initial and ongoing expenses. This approach can provide you with full control but may limit the company’s growth potential due to budget constraints.
  4. External Funding Options:
    • If you opt for external funding, there are several options to consider:
      • Equity Financing: You can raise capital by selling equity in your company to investors. This could involve angel investors, venture capitalists, or crowdfunding platforms.
      • Debt Financing: Borrowing money through loans or credit lines is another option. This might involve traditional bank loans, online lenders, or other sources of debt financing.
      • Grants and Contests: Some startups explore grants, competitions, and pitch contests as sources of non-dilutive capital.
      • Bootstrapping: Even while seeking external funding, some entrepreneurs continue to invest their own money (bootstrapping) to maintain control and demonstrate commitment to the business.
  5. Pitch and Fundraising:
    • If you’re pursuing external funding, you’ll need to create a compelling pitch or business plan that outlines your company’s value proposition, market opportunity, and financial projections. This will be used to attract potential investors or lenders.
  6. Networking:
    • Building a strong network of potential investors or lenders can be crucial. Attend industry events, join entrepreneurial communities, and leverage your connections to identify funding opportunities.
  7. Legal and Financial Advisors:
    • Consult with legal and financial advisors who can guide you through the fundraising process. They can help you navigate legal requirements, structure investment deals, and ensure compliance with regulations.
  8. Due Diligence:
    • Whether you’re seeking investors or lenders, be prepared for due diligence. Potential investors will scrutinize your business, its financials, and your plans. Transparency and preparation are key.
  9. Risk Mitigation:
    • Assess the financial risks and develop contingency plans. Understand the implications of different funding sources on your ownership and control of the company.
  10. Financial Management:
    • Once you secure funding, effective financial management is crucial. This includes budgeting, tracking expenses, managing cash flow, and ensuring that funds are used efficiently to support the company’s growth.

Step 4: Get out of the Way

In the “Get Out of the Way” step, the owner plays a pivotal role in guiding and supporting the CEO while allowing them the freedom to lead and manage the company. This hands-off approach empowers the CEO to take responsibility for the day-to-day operations, ultimately fostering the growth and success of the business while maintaining a clear path towards the company’s long-term vision.

  1. Delegation of Responsibilities:
    • With the vision set, the CEO hired, and the funding secured, the owner’s primary role shifts from day-to-day operations to strategic oversight. The owner should delegate operational tasks and decision-making authority to the CEO and their team. This shift allows the CEO and team to execute the company’s plan independently.
  2. Autonomy for the CEO:
    • The CEO, as the appointed leader, should be given a significant degree of autonomy to manage the company. They are responsible for making operational decisions, setting priorities, and leading the team. The owner should trust their capabilities and decision-making.
  3. Higher-Level Guidance:
    • The owner’s role evolves into providing higher-level guidance and strategic direction. While not directly involved in daily operations, the owner should remain accessible to the CEO for consultation and support when needed. This may include addressing major strategic decisions, resolving conflicts, or navigating significant challenges.
  4. Oversight and Performance Evaluation:
    • The owner should establish key performance indicators (KPIs) and metrics to track the company’s progress. Regularly review these metrics with the CEO to ensure the company is on track to achieve its goals. Use these reviews to provide guidance and assess whether the business is meeting its strategic objectives.
  5. Problem Solving:
    • While the CEO handles daily challenges, the owner remains available to help address larger, more complex issues that may arise. The owner’s broader experience and strategic perspective can be valuable in resolving major obstacles or making high-stakes decisions.
  6. Long-Term Planning:
    • The owner should maintain a focus on long-term planning and steer the company in the direction outlined in the vision. This could involve identifying new opportunities, exploring expansion, and ensuring the company remains aligned with its original vision.
  7. Maintain Open Communication:
    • Effective communication between the owner and the CEO is vital. Regularly scheduled meetings and open channels of communication ensure that the owner is informed about the company’s progress and any significant developments.
  8. Strategic Decision-Making:
    • High-level strategic decisions, such as mergers, acquisitions, entering new markets, or major capital investments, may still require the owner’s approval. In such cases, the owner’s role is to evaluate these decisions in the context of the overall vision and business strategy.
  9. Adaptability and Learning:
    • The owner must remain adaptable and open to learning. The business landscape can change, and as the owner, being receptive to new ideas and insights from the CEO and the team can contribute to the company’s success.

Similarities to other authors

The above is similar to the concept of working “on” your business, not just “in” your business – introduced by #Michael Gerber in his book “The E-myth Revisited

Additional resources