Speaker 1
Hello to people who come on my Harbor Club are always talking about, and I think it’s the Michael Gerber e-myth thing about working on your business versus working in your business. And people are always kind of saying, “Oh no, no, I work on my business. I don’t work in my business.” And that I’ve always got a really simple test for that, which is what you spend your day doing. And basically I differentiate actually instead of being on your business or in your business, I normally differentiate between customer value and shareholder value. So I think in the early stages of a business, it’s all about customer value. It’s about solving the customer’s problem, creating the processes and the systems inside the organization that can deliver that solution on a regular basis, on a profitable basis, and on a scalable basis. And then I think everybody just gets lost in there.
Speaker 1
So most entrepreneurs you find are still stuck in what I would describe as customer value, which is basically staff and customers. So if your daily interactions are all staff and customers, then you’re working in your business. And people think that just because they’re managing somebody else to deliver those staff and customer solutions, that that’s somehow on their business. It’s kind of not, you’re still stuck in customer value. You’re still on that first rung of the entrepreneurial ladder. And I think that once you get past that first rung, you really do benefit a lot from taking the next step on the entrepreneurial ladder. And the next step is to move to shareholder value. And a good test for that is what are your daily conversations? Because your daily conversations should be joint ventures, mergers, acquisitions, or exit conversations.
Speaker 1
So if you’re talking about joint ventures, mergers, acquisitions, or exits, you’re creating shareholder value, you’re working on shareholder value and therefore, you’ve moved up that ladder. Now that’s not to say that’s for everybody. Not everybody wants to do that. But I find it a hugely thrilling and hugely exciting place to play in. And I also think that entrepreneurs aren’t always the best people to stay in the business over a long period of time.
Speaker 1
We’re very good at starting things. We’re very good at doing those deals, solving problems, being creative. But that can be very disruptive when you get to a certain size. You need some grownups in there to take the business forward and doing the joint ventures, mergers, acquisitions, exits is kind of the fun stuff, it’s relationship-based, it’s running around talking about big visions and ideas and bigger deals basically. So instead of selling a widget for $10, you are selling a company for millions of dollars or you’re buying a company for millions of dollars or you’re doing a huge joint venture.
Speaker 1
So it just kind of keeps the appetite wet and keeps you excited and allows you to play at a bit of a different level. So yeah, my ideal sort of scenario for an entrepreneur is to basically make that transition as soon as the business has enough scale to do so. And then basically you never have to deal with staff and customers ever again. Wouldn’t that be wonderful? So yeah. Are you working on your business or are you working in your business by that definition?
