My biggest takeaway from this book was that most people start business to create a job for themselves. For example, a person who enjoys baking may start a cake shop. The problem with this approach is that one is working in the business, not on it. The right way to start a business is with a goal of eliminating one’s job. For example, the person above should figure out a way to hire someone else to do baking.
This was a slightly hard lesson to digest because as programmer, I have often dreamed about starting consulting business. Mostly, so that I get to work with more interesting technologies.
The other lessons were:
Establish Processes & Document Everything
Create a business that can be easily franchised. In order for a business to be franchisable, it needs processes and systems. So document and create repeatable processes. You may never want to franchise, but well-established processes will help a business run smoother.
How to choose business
This was another interesting way to figure out what sort of business one should pursue.
- Start with your life’s goal. Of course, life’s goals change but choose something for now. It could be something like spend more time with family and volunteer at homeless shelter. It could be to own a biggest house in the town.
- Now choose your business strategy that will help you achieve your life’s goals. It could be a business that you can sell in a few years for $10 Million. Or it could be a business that can run on its own with minimal involvement from you and generate $100K yearly income.
- Finally, look at business opportunities. The first requirement for any business is revenues. Then see if it aligns with your business strategy. If your strategy is to generate semi-passive income while traveling the world, then pursuing a Silicon Valley style startup is probably not a good idea.
Write Job Descriptions
Another interesting idea presented was to write down all positions you see your business will need eventually. Draw organization chart. Then start hiring for each position. Initially, you will be filling all these positions, from CEO to lowest ranking worker. Your goal should be to work in each position, systemize it, and hire someone else. You should start filling positions at the bottom of chart first, slowly moving up as you systemize each position.
Manage by Delegation
One last point, many first time business owners manage by absenteeism once they hire someone. This usually doesn’t end well as employees then have no idea if they are doing good or not. Before you hire someone, their position should have well defined criterias to measure against. And you should actively review work done by your direct reports.
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