7 Lessons That Got Me From Small Entrepreneur To Investor

For over 14 years, I've been a serial entrepreneur, bootstrapping my way towards successful business exits. Along this journey, I've also been dedicated to helping small businesses grow, scale, and prepare their founders for significant exits.

In this article, I share seven critical lessons that will guide you on your path from entrepreneur to investor. These lessons are about breaking through earning ceilings and realizing that investing isn't just for the already rich—it's a pathway to wealth.

In the next sections, I'll dive into each of these 7 transformative lessons:

1. Get Self-Employed
2. Stop Trading Time for Money
3. Focus on Profit, Not Just Revenue
4. Stop Pouring All Profits Back Into Your Business
5. Avoid an Expensive Lifestyle When Profits Grow
6. Diversify Your Income
7. Leverage Existing Assets

Each lesson is drawn from my personal experience, filled with insights and strategies to help you grow financially and professionally.

Lesson 1: Get self-employed

Choosing to run your own business instead of just having a regular job is a big step for many. But it’s the first one you should take when you want to make more money and get more freedom. Like Tim Ferriss wrote in his bestseller The Four Hour Work Week: “It's not just about making money; it's about having the freedom to do things your way and on your time.”

Back in 2019, I realized that being an employee limited how much money I could make. So, I took the leap into entrepreneurship and never looked back.

Lesson 2: Stop trading time for money

Lots of people get into business by freelancing and selling their time for money. Because you are the boss, you are in charge of how much you make when you work. The downside is that when you don’t work, you don’t make money. It’s a trap most freelancers never get out of. But you should.

So become a business owner and create a business model where your income is independent of the amount of hours you work.

Lesson 3: Revenue is vanity, profit is sanity

In the chase for big revenue goals, business owners start offering a wider variety of services or products. Although it leads to more revenue, it also leads to less profit. Complexity eats profit for breakfast.

Real success lies in increasing profitability. This means simplifying what you offer, focusing on high-margin products or services, streamlining operations and cutting unnecessary expenses linked to complexity.

Lesson 4: Stop pouring all profits back into your business

I've seen countless entrepreneurs who invested all of their profits back into their business for decades. They never realized that ‘your business will always be hungry’. There will always be projects in your business to spend money on: a new product, an extra employee, a strategic rebranding or better software. It never stops, unless you stop it.

In Profit First, Mike Michalowicz advises, “Take your profit first. Run your business on what’s left.” It’s a simple yet powerful shift in thinking. This profit first approach not only secures your personal financial health, but also forces you to be more efficient with the remaining resources.

Lesson 5: Don’t get an expensive lifestyle when profits grow

Private planes, yacht holidays in the Mediterranean Sea, big mansions in the country side and the dream cars in front. Upgrading your lifestyle should be a joyful part of earning more, but not the only part. I’ve met hundreds of successful small business owners making a lot of money, to spend it all.

In Rich Dad, Poor Dad, Robert Kiyosaki sums up this mindset perfectly: "The rich buy assets. The poor only have expenses." When your profit grows, resist the temptation of equally increasing your personal expenses.

Lesson 6: Take profits out and invest it in other assets

Don’t rely solely on your business for income. So instead of spending your profit, invest a part of it in acquiring different assets outside of your business. As Warren Buffett, one of the most successful investors of all time, wisely said, "Never depend on a single income. Make investment to create multiple sources."

The goal is to have five to seven different sources of income. This will include your primary business, but also investments in stocks or real estate, royalties from a bestseller you wrote, or equity in small business you are angel investing in. By building multiple revenue streams, rather than the one coming from your business, you create a financial ecosystem that supports your long-term wealth and freedom.

Lesson 7: Leverage the assets you already have

The most recent lesson I learned on my journey from entrepreneur to investor is, instead of constantly exploring new investments, to look at what assets I already have and ask myself: “How can I put fuel on the assets I built in the last decade,?”

In Secrets of a Self-Made Millionaire, the author emphasizes this strategy: “The true path to financial freedom is to maximize the value of what you already own, rather than stretching to acquire more.” This resonates deeply. It's not just about accumulation; it's about optimization.

Jamie’s story from freelancer to investor

I remember meeting a fellow entrepreneur, Jamie, years ago, when she started freelancing as a graphic designer and how I advised her to transition into owning a design agency and selling scalable services. She instantly broke through her glass revenue ceiling and reinvested everything back into her business the following 2 years.

However, after attending one of my mastermind sessions, she shifted her focus and started extracting parts of the profits to grow her personal wealth. She began investing in stocks and real estate. Today, her diversified portfolio not only brings in substantial passive income but also cushions her wealth against market fluctuations.

She’s now getting her profitable business ready to sell, which will generate a significant amount of cash, which she will consciously invest in assets she is passionate about.

Your Investment Challenge

Now, it’s your turn.

1. Identify how to improve profitability of your business
2. Research an outside investment opportunity
3. Understand the investment and align it with your goals
4. Take a step towards this investment

Take these 4 steps and see how the next 12 months become life-changing.