This Week@Work, if relationships build and grow a business, but you’re not the one who holds those relationships – you’ve got to start building your own.
In the ever-changing landscape of business, where startups can skyrocket or vanish overnight, the journey from small business owner to industry veteran is nothing short of remarkable. What should you do when you’ve built a successful business over two, three, or four decades? Should you retire, or should you continue running the show until the end?
The Essence of a Business
A fundamental principle in business is that it should be designed to operate independently. Your business is a living entity, much like a well-functioning organism. So, what should you consider when you find yourself in your 60s or 70s after dedicating a lifetime to your business? Is retirement the next logical step?
Legacy and Purpose
Contrary to common perception, entrepreneurs don’t typically retire solely for financial gain or out of sheer greed. The decision to retire often arises from exhaustion, health concerns, family matters, or a sense of stagnation. These factors raise a fundamental question: What drives business owners to continue or to step away from their enterprises?
I believe there are deeper motivations that underpin the decisions of business owners. The journey of entrepreneurship begins with an audacious act of courage, often driven by necessity. It involves doing things differently, leveraging your skills and knowledge, and creating something unique that leaves an indelible mark on the world. This is the genesis of meaning in one’s entrepreneurial voyage.
Furthermore, business owners must care deeply about their employees, suppliers, and customers. Being in service to others while nurturing creativity adds profound meaning to one’s life. The fusion of creativity and service forms the very essence of an entrepreneur’s existence.
The Challenge of Letting Go
When a business is well-established and capable of operating autonomously, the thought of retirement may cross your mind. But what comes next? This is a question that every aspiring retiree must confront. The routines, habits, and rituals that have defined your daily life suddenly vanish. Where can you find purpose in the post-retirement phase?
Creating a Vision for Progress
One way to ensure a fulfilling transition is by envisioning your role within the industry. Consider the story of an 84-year-old business owner who, due to a lack of innovation and systematization, couldn’t let go of his business. Had he exited at the zenith of his business’s success and reinvested in nurturing emerging businesses within the industry, he would have continued to make a meaningful impact and maintain a sense of purpose.
The journey of a business owner doesn’t have to conclude with retirement. It can transform into a purposeful existence that fuels innovation and contributes to the industry’s growth. These insights remind us that entrepreneurship isn’t just about creating wealth; it’s about crafting lasting legacies that endure beyond one’s lifetime. So, whether you choose to retire or remain at the helm, your decision should align with your vision for a meaningful and impactful journey in the world of business.
To listen to the full discussion from the show:
Innovation creates something more for the same price, OR the same for a better price. It means you should constantly create, test, experiment, and improve what you already have….even if it works. It’s a practice and mindset and the key to unlocking the excitement your business needs to attract talent, suppliers, and customers and make it more interesting for you.
This Week@Work there are two things that will determine the future of your business.
1. Attitude – the way we see the world determines whether we see opportunities or risk, whether we embrace change or hide from it.
2. Our actions, specifically our unconscious ones, the habits that have helped us to start, build and grow our companies, may be the same habits that are now holding us back from next level growth
Once your business has achieved a ceiling of performance, your time and attention determine your future success. Habits formed whilst building your company will fail its future growth and value.
This Week@Work, purpose is paramount. I visited a successful tea company who now proudly display their original tea sorter (a DIY modified cement mixer!) in their reception area to remind the business about their heritage. In tough times, go back to what you’ve been through and come through to motivate you to get through now, and focus on what needs to come next.
Fuelling Vibrancy in an Economy: Unleashing the Power of Competition, Innovation, Funding, and Talent
Discover the key drivers behind a vibrant economy as discussed on a recent Money Show insert with Pavlo Phitidis and Bruce Whitfield. This highlighted the crucial factors of competition, innovation, funding, and talent and their role in shaping economic landscapes. Here we delve into the main takeaways from the show, exploring how individuals and businesses can contribute to building a thriving economy.
Competition Drives Progress: Competition is the driving force behind growth and progress in any economy. When businesses compete, they are motivated to constantly improve their products and services. This healthy competition fosters innovation and encourages companies to develop groundbreaking ideas and solutions that address market needs.
Innovation and Funding for Success: Innovation is the lifeblood of success in today’s fast-paced business world. It requires adequate funding to thrive. Access to capital is essential for businesses of all sizes as it enables them to invest in research and development, upgrade infrastructure, and expand their operations. Adequate funding also plays a vital role in attracting and retaining top talent.
Talent as the Engine of Success: Talent is a critical driver of success for any enterprise. Skilled individuals with expertise and creativity propel businesses forward. Whether large corporations or small startups, attracting and retaining top talent is crucial for driving innovation and achieving sustainable growth. Nurturing talent within an economy is vital for long-term prosperity.
Roles of Different-Sized Businesses:
Understanding the roles played by businesses of different sizes is key to fostering economic vibrancy.
- Large Corporations: Large corporations focus on distribution, leveraging their extensive networks to efficiently bring products and services to consumers. Their ability to reach a wide customer base and operate on a large scale drives economic growth and stability.
- Medium-Sized Businesses: Medium-sized businesses play a crucial role in new market development. Their agility and flexibility allow them to explore emerging markets, identify untapped opportunities, and pioneer innovative solutions. These businesses drive economic expansion by adapting to evolving market trends.
- Small Businesses: Small businesses contribute to the economy through innovation at the edges. They bring fresh ideas, niche products, and specialized services to the market. Their ability to swiftly adapt and experiment fosters diversity and resilience within the business ecosystem. Small businesses often serve as incubators for innovative concepts that can eventually scale up and benefit the broader economy. Building an Economy: Key Insights: The radio show provided valuable insights on building a robust economy. Here are some key takeaways:
- Take initiative and don’t wait for external forces to improve your circumstances. Start pursuing your entrepreneurial ambitions now
- Medium-sized businesses are the bridge from the large to small enterprises. They can maintain their agility by embracing smart strategies and leveraging contracting and consulting opportunities.
- Set a single destination and adopt a focused approach to navigate challenges and seize opportunities. Learn from past experiences, take ownership of decisions, and leverage acquired knowledge.
- Uphold ethical practices, avoid theft, late payments, and animosity towards competitors. Foster collaboration and continuous learning as part of a healthy business environment.
To listen to the full discussion from the show:
This Week@Work Pavlo’s meetings with long-established business owners left him concerned about their runway to an exit. They have spent their careers focused on operational issues to generate income to sustain the business. Only now are they realising they should have been focused on growth and capital value to secure a profitable exit. What are you spending your time on?
I recently facilitated a business growth workshop for 89 established business CEOs, and the key question that arose was, “How do we get growth in a low-growth economy, riddled with power outages, held back by skills deficits, eroded by inflation, and impeded by gross negligence from the government?” Here are a few approaches to delivering growth across our client base today.
Growth begins with your mindset.
The foundation for growth in any business starts with your mindset. How you think affects how you engage and behave. There are two mindsets:
An operating mindset and a growth mindset. The operating mindset works hard to get growth but often hits a ceiling, building frustration that results in blame and cynicism. It does not yield growth!
A growth mindset works hard and smart. Acknowledging that most of your thinking and understanding is shadowed by not even knowing what you don’t know, or doubt, leads to a curious engagement with insights, perspectives, and new approaches. It helps create a restless and relentless intent to continuously improve, learn, and try new approaches. Across most of the developed world economies, a 64 year old business owner last experienced persistent inflation and interest rate increases at the age of 20. This invalidates much of what individuals experience in traversing the current inflationary and interest rate rises that govern these economies today. If the old dog won’t allow itself to be taught new tricks, it might well perish without a fresh perspective, new insights, and the courage to do things differently.
Growth needs a plan.
To achieve growth, you need a plan that is engineered through design and implementation. There are seven types of growth, each distinct from the other, whose timing and attention are vital. These include organic growth, financial growth, geographic growth, product/service line growth, customer segment growth, acquisition growth, and franchising growth.
Growth must be hunted.
Low growth means that you must grow by outplaying your competitors and eating their lunch. You must also grow by proactively responding to the changes in the status quo governing the problems you solve for your customers, how they behave and buy, seeking opportunities created by corporate outsourcing work to lighten their cost load and become more agile, and from accidental privatization resulting from government incompetence in service delivery.
Growth needs a number.
Tracking, measuring, and achieving growth requires a number to manage your path to success. A company valuation is not luck and prayer; it is primarily engineered, with luck playing a “timing role.” This number allows you to measure and manage your growth effectively.
Growth needs a team.
Your team is crucial to achieving growth, and it is important to ensure that everyone is aware of the growth plan. In over 10,000 surveyed businesses, 95% of employees were unaware of the growth plan, leaving the CEO to do all the heavy lifting. This can result in hitting a growth ceiling because you reach your capacity, and worse, you may fail the business because you burn out.
Growth is intentional and supported by a plan that is brought to life through your strategy, business design, team, and target. The economy’s condition is largely irrelevant when it comes to achieving growth. By adopting a growth mindset, creating a plan, hunting growth opportunities, measuring your progress, and building a strong team, you can unlock opportunities and overcome challenges to achieve sustainable growth in your business.
As an entrepreneur, it’s easy to get caught up in the day-to-day operations of your business. After all, there are endless tasks that need to be done, from managing employees to coordinating with vendors to ensuring that customer orders are fulfilled on time. However, if you want your business to truly thrive and grow, it’s important to shift your focus from working IN your business to working ON your business.
What does it mean to work ON your business? Essentially, it means focusing your time and attention on the strategic initiatives and developments that will drive growth and success in the long run. This includes things like identifying new market opportunities, developing new products and services, and creating scalable systems and processes that can support growth.
On the other hand, working IN your business involves focusing on the day-to-day operations and activities that keep things running smoothly. This might include managing employees, handling customer inquiries, and ensuring that products are delivered on time and on budget.
Of course, both types of work are essential for a successful business. However, if you’re spending too much time working IN your business, you may find that you’re not able to devote enough time and energy to working ON your business. This can ultimately limit your ability to grow and scale your business over time.
So how do you make the shift from working IN your business to working ON your business? One approach is to conduct an ON vs IN audit, which involves creating a spreadsheet to track your time and attention across different business functions and activities.
For example, you might create columns for input functions, activities you perform, minimum time required per activity, frequency per month, and time allocation per month. This can help you to identify areas where you’re spending too much time on day-to-day operations and not enough time on strategic initiatives and growth-oriented activities.
Ideally, you should aim to spend at least 70% of your time working ON your business and at most 30% of your time working IN your business. This balance can help ensure that you’re dedicating enough time and energy to growth-oriented activities, while still ensuring that your day-to-day operations are running smoothly.
To make the shift from working IN to working ON your business, you may also need to focus on simplifying, systematizing, and delegating your business operations. This might involve streamlining your processes, automating routine tasks, and delegating responsibilities to trusted team members.
Ultimately, the key to working ON your business is to build a scalable platform for growth, then focus on driving growth through strategic initiatives and developments. By taking the time to step back from day-to-day operations and focus on the big picture, you can position your business for long-term success and create a lasting legacy for yourself and your team.