What is the Purpose of OWNING a Business?
To create the lifestyle we want for ourselves and our significant others/families.
WHAT Lifestyle? – We go into business to create a lifestyle for ourselves and our families, but at best, our families get to enjoy the lifestyle. We bought or started a business and ended up being an employee of ourselves, unable to get off the treadmill.
Most of us are stuck in Survival or Subsistence. How do we get to where we own the business instead of the business owning us?
Each person’s lifestyle is driven by:
How much money your business makes and
How much time you have left over when you finish working.
TIME + MONEY = LIFESTYLE
The Key – MAKE MORE MONEY IN LESS TIME
How do we do this? Ask Mexico.
Something happened in the Mexican farming industry in 1943 that teaches us how to make more money in less time. Something called The Green Revolution. The objective was to produce more food and to have excess to feed the world.
For thousands of years 100% of work-time was focused on schlepping grain and hunting animals – survival was the only focus. Farming changed all that. Suddenly only about 80% of the workforce was focused on survival. For the first time 20% of the workforce could begin to create a lifestyle focused beyond survival, on success and significance. By 1900 the 80% had gone down to 41% still involved in feeding the rest of us (USDA – The 20th Century Transformation of U.S. Agriculture and Farm Policy). But curiously, less than 100 years later, the survival workforce dropped from 41% to 1.9% of population – almost “overnight”.
It took thousands of years to cut the subsistence workforce by 50%, and yet less than one hundred years to cut it another astounding 96%! This is remarkable progress. In a very short time, the world moved from a focus on Survival, through Success, to a focus on Significance. After thousands of years of very little change, how did it happen so quickly?
THE GREEN REVOLUTION
One significant contributor – In 1943, some Mexicans started dedicating a small percentage of their field to learning how to grow better crops, testing seeds, fertilizer, and watering techniques. Productivity went down the first two years, but by the third year, they had greatly increased their yield beyond their expectations. This farming technique was adopted everywhere.
The key to growing more food was the willingness to focus a small portion of the field to developing future growing strategies, working ON their farming, not just IN it. It’s the same key for businesses.
The Green Revolution is based on the strategy of working ON your business, not just IN it. The Mexicans understood that the key was Yield Per Acre – how do I grow more food in fewer acres. For you, the key is Yield Per Hour (YPH) – how do I make more money in less time?
Are you in Hunter/Gatherer Mode?
Most business owners are in hunter/gatherer mode – surviving from one day to the next, not at all focused on creating that lifestyle that brought them into business in the first place.
How do you measure if you are in survival mode? It’s easy. If you leave the business for a few weeks, does it run itself without going backward? If not, you are in survival mode and haven’t fully experienced the Green Revolution in your business.
More Money Doesn’t Get You Out of Hunting and Gathering Mode
I know multi-millionaires who are in survival mode – while their families are out on the boat, they are back at the office working to keep all the money coming in. There is a difference between being rich (having lots of money) and being wealthy (having the ability to choose what to do with my time). We spend so much time trying to get rich that we forget the objective is to be wealthy.
Invest a Small Percentage of Your Time Strategically Growing Your Business
The most successful business owners invest time regularly working ON their business, not just working tactically IN their business. The Mexicans understood that investing a percentage of their time working ON their farming was the only way to grow their yield exponentially.
What percentage of businesses do you think are in Survival Mode?
Think of 10 businesses you know – the owner dies tomorrow, does the business survive? If not, it’s in Hunter/Gatherer mode. I believe overwhelming majority of businesses are stuck in H & G mode.
What percentage do you think stay in Survival mode their entire business life?
Again, the overwhelming majority. Most business owners think it’s normal to live in subsistence simply because there are so many other businesses stuck there, too.
How do you move from Survival, through profitable Success to Significance?
Name a business you know that after a year or a few years noticeably expanded? How did they do it? I’m willing to bet they committed some resources (time and money) to figuring out how to grow. If you want to make more money in less time, you will have to invest a little money and a little of your time now toward your future.
If you decide to work ON your business, not just IN it, you are much more likely to increase your Yield Per Hour, so that you can make more money in less time. It’s all about Yield Per Hour.
Stop Doing Business by the Seat of Your Pants
If you want to increase your Yield per Hour, you need to adopt the business practices of successful business and focus some time working ON your business:
- Get some peers involved in your business. Get into a peer advisory group to get objective input on your business from other business owners. And invest time in these relationships. We have the screwy notion that “community” is only for the neighborhood. It’s just as critical for the successful business, too.
- Block regular time to invest in asking the right questions. Strategic time working ON your business is an investment. Tactical time working IN it is an expenditure. Increase your Yield Per Hour by working strategically, not just tactically.
- Know where you are and where you want to go. He who aims at nothing hits it every time. If you’re wondering why you’re business is in the same place it was a few years ago, it’s likely because you don’t have a clear picture of where you want to go.
- Sow today what you reap tomorrow. “I don’t have time or money to invest working ON my business. When I get a little more ahead I’ll be in a better position to do that.” The overwhelming majority of businesses are stuck in survival mode not because they can’t get out, but because they are making decisions based on where they are right now, rather than on where they want to be.
Yield Per Hour (YPH) – making more money in less time.
The Mexicans understood they needed to commit a percentage of their fields to working ON their farming. As a result cultures have moved from Survival through profitable Success to a focus on Significance.
Are you in Survival? Or are you moving to put in place a business and lifestyle that will create Significance for you, your family, and the world around you? As the old Chinese proverb goes – “The best time to plant a tree is 20 years ago. The second best time is today.”
Commit to the four steps above today, start working ON your business, and get moving toward Significance. Speed of execution is the #1 indicator of success in business.