What is the job of a business owner and how should it change over time?
Time
Time, the most precious commodity in the world. Once spent, you can never get it back.
Return on time, learning too late that its too late to undo the habits that spent your time rather than invest it.
Spending, once done is done. Investing, done once and smartly, yields ongoing returns without too much additional effort.
Given this, what is your job as a business owner? And, how and when should it change over time? Knowing and understanding this now will yield massive dividends in the future.
Most business owners spend 15-20-30 years building their businesses. The same business owners spend 30-60 hours engaged in a sale to exit their businesses, and, should they succeed, seldom get the price they want. It leaves most with a realisation that what they’ve spent their time doing over the years of building their business, could have been better invested now understanding the end game. Hindsight makes us all wiser, but what is the value of that wisdom if you have no time left to implement it?
Foresight might hold the answer to winning the insight you need today to ensure that you change your mindset, practices and habits to invest time rather than spend it.
Business Evolution
The best way to evaluate this is by understanding the natural progress that any business goes through in its development.
There are 5 stages professed by academia which include start, grow, prime, maturity and decline. Whilst interesting, they may not be that useful to understand what we should be doing and when to ensure the best investment of time available to us.
A better starting point would be to understand the end game and then build towards it. From an Aurik point of view, we believe that to be the successful creation of your business into an Asset of Value.
A business built this way offers 3 criteria including income growth, capital growth and independence from you. It is what makes a business salable and for any business owner who has invested deeply and consistently in their business, is essential to ensure a return on time, risk and effort. In fact, essential to secure a pension and legacy of wealth as the final reward.
6 stages of progression to build an Asset of Value
In relation to an Asset of Value, there are 6 stages of progression that any business goes through. Traversing these stages of development can take a business owner anywhere from 7 years to never. Many land up successfully moving from the first to either the next 2 or even 3 stages before they end their tenure in the business itself. It is for this reason that 94.6% of business started, fail to sell.
In each stage above, I have indicated the average revenue numbers that should be achieved, the time invested, the objective and the behaviour of the business owner to transit from that stage to the next.
Cycles
Completing the cycle is essential to repeat the cycle since this act is what takes a business from one level to its next. In a 30-year career as a business owner, repeating this cycle at least 5 times is both possible and necessary to secure a handsome, clean payout when you finally exit. Failing to do so always leaves money on the table for a buyer and compromises both your return on time and risk.
So, 3 questions remains in play – why do you do what you do, what are you doing now, what should you be doing tomorrow? What if you don’t get it right? Well, that question is already answered by the stat: 94.6%.
How are you spending your time, daily, weekly, monthly, annually in building your business? And in that, are you doing what you should be doing to ensure that you are building an Asset of Value? If not, why not?
FIND OUT MORE
To gain a deeper understanding of how building an Asset of Value could generate more revenue, profit and time for you, Join Pavlo Phitidis for a 60-minute session on 10 February. Register here
