About this episode
Simplified Explanation: Owning a business gives you more freedom, more time flexibility, more satisfaction, and more opportunities to make a difference in the world. It also brings more frustrations, more hours to work, more risk, and more stress. It is not for everyone. But, when your company is making more money than you are spending to run it, you are making a profit, which is a great motivator for business owners.
Real Life: Not everyone wants to own a business. It is incredibly stressful at times, and takes extra work; but those who do it can make a lot more money, so much so that they may have to quit their day job. This is always a gamble for business owners/managers and entrepreneurs.
The difference between these two is that entrepreneurs are those who start businesses or invent products. Business managers are those who take businesses that already exist, and use their skills to make money. There is a greater return on the business if you start from nothing (where an entrepreneur starts), as opposed to someone coming into an already successful business and trying to make it better, or sustaining the success it already has. The entrepreneur definitely takes on more risk, but both are essential for growth. An entrepreneur usually wants to get something started and running successfully, and then pass it off to someone else to manage. This allows them to start something else they are passionate about. They create exit strategies that allow them to exit with a good amount of money, or hand it over to someone to manage, while collecting a paycheck over a long period of time.
For example, say I own John’s Super Conductors. I know I can get to $1,000,000 worth of sales each year. When I hit that number, I have two options, 1) I sell the company for $8-15 million dollars; or 2) I hand it over to a manager that can do better than I can at this level of revenue, and I collect $500,000 a year for the next 10-20 years, as a constant paycheck. Either way, you make your money. Some would say, why keep it and worry about it?
Read about this in future Debt Free Millionaire Business books.
As stated before, a business is much more than selling a product or providing a service. Successful companies usually have staff, pay rent and utilities, deal with marketing and sales, and R&D (research and development). Information on these products could fill a library of books, so I will break it down to the most important points.
Human Resources (staff or team): Every successful company has more than just the creator. If that person is to be successful, then they need to delegate their responsibilities to people who are better at a task than they are. This is called the 80/20 rule. 20% of what you do makes 80% of your company's revenue. If you can locate your 20%, then the creator needs to do that, while his team takes care of the other 80% of what he does. Then each of them should find their 80/20 breakdown. To manage a
