I had lunch with a friend today. He is a wealth manager. His clients are wealthy individuals who want to optimise and maximise the return on their assets.
As a business owner, you might not think of it this way, but your business is likely your biggest asset. It’s likely the only asset you spend every day working on. Yet chances are, you don’t think of your business like an asset you invest in every day.
What if you started thinking about your business from the perspective of a wealth manager? Or, work with an external partner who does.
Let’s explore how a wealth manager would serve you.
A wealth manager would meet you and first audit your current portfolio of assets (stocks, real estate, or other assets you own). He or she would discuss your goals, risk profile, etc., and based on their assessment, they would come up with a strategy and plan for achieving your goals. And finally, they would manage your assets and optimize your returns as an ongoing service.
Where I am going with this, you might ask yourself.
Well, this is more or less exactly what I do as a growth consultant. My job, much like that of my wealth manager friend, is to work with clients to optimize the returns on their assets.
In the case of a business owner, however, it is often unclear what the assets are, and how much they are worth. And worst of all, they don’t treat their business like the wealth-building asset that it is (or could be). Most business owners don’t realize that they are investing most of their time, money, and resources into building the one asset they hope will provide most of the returns of their lives.
The wealth manager looks at the assets on a daily or weekly basis. They measure and adjust to optimise returns.
But what about the entrepreneur? How many entrepreneurs truly know their numbers, let alone optimise them constantly for a better return, diversifying and multiplying their asset in the best possible way?
I know some do. But the far majority don’t. And I was one of them. Until one day, I could only sell a fraction of my whole business, because I had not managed my asset like a professional.
As entrepreneurs, we dream of having it all. We want to money, the security, the wealth, the time, the lifestyle, the impact….don’t we?
But unless we are careful, we end up old, tired, and broke.
I see this happen so often, and it is painful to watch.
So what can you do to avoid this tragic fate?
I would start by asking you to think about two questions:
1. What does “the end” look like for you?
What does your business look like when it’s done?
Are you dreaming of an exit? Will you pass on your business to your kids (an idea that only rarely will work out)? Will you hire someone else to run it and enjoy the profits (also not easy, but doable)? What is the end goal when all is said and done?
2. What are you doing consistently to build a sustainable business that delivers more of what you want, and less of what you don’t want?
In the case of most entrepreneurs, this means more money, more time, more security, more freedom, more impact, and more….life.
What most entrepreneurs want less of is stress, constant anxiety, lack of time and money…and missing out on life.
Having worked with hundreds of entrepreneurs personally, I know that the missing piece, the one thing that solves most of these problems is to design a business that can work without you.
This means a business built on systems.
This is about designing your life’s most valuable asset and getting the best possible return on investment. And designing is not the same as operating. You need to get out of operations as fast as you can. You are an entrepreneur, not an operator.
Better yet, start thinking of yourself as an investor as much as you think of yourself as an entrepreneur. Because that’s what you are.
Every day, whether you see it this way or not, you are investing in your business.
So how do you design a business that can work without you look like?
Here are a few clues.
It’s a business that is built on simplicity.
I call it a Simple Company.
Look. For your business to work without your constant presence, obsessing over all the details, correcting errors, and giving it life-support (in the form of your time, money, and constant attention), it will have to be simple and
systematized.
You will need to design your core processes and systems to deliver client results consistently. And, you will have to build a business that other people can operate.
When your business is professionally operated, it not only gives you freedom, it means your valuation just jumped by about 2x. So whether you are planning to step out and exit your business or not, it is one of the best things you can ever do.
So, where do you get started?
The way I approach it goes back to the idea of what I call The Simple Company. Not only is that the name of my company, it is an ideal of a profitable, sustainable company that works without the owner.
The Simple Company is built around three core ideas:
1. It is simplified.
A Simple Company always outperforms a complex company (normal company) because it focuses its resources only on the highest-yielding stuff (the best, most profitable segments, customers, problems, offerings, processes, people, etc.). It achieves More With Less. And it does so by simplifying the whole business.
2. It is systematized.
As mentioned, it runs on systems (as opposed to on the back of the entrepreneur). The more you standardize and build systems around, the more you can automate, delegate, and scale. Build systems for scale, and your life will change. Eliminate that which cannot be standardized or systematized.
3. It scales.
Building on the last point, only a standardized, systematized business can scale. And the way to scale it is to relentlessly improve that which can be improved. There are two main directions here.
The first one is constant optimization. This means making the most of what you already have. For example, if you are currently getting 100 leads per month and converting five at $20k/month for $100k per month, what can you do to increase your conversion? What can you do to raise your price? And how can you get customers to come back and buy more times? And how can you make better margins, and reduce operating costs? These are the only six questions you need to ask to optimize your results, by the way.
The second idea for scaling is about implementing growth strategies. You might enter a new market. You might acquire a company to grow faster. You might expand your client base, or change your positioning. All these strategies will show up in your Money Equation – the six factors that explain how money flows in and out of your business.
We have identified and documented over 100 ways to grow. By systematically working through the main categories, strategies, and tactics, it is almost impossible to stay stuck (I believe it is impossible, actually).
If you’d like to book a session with me to assess the hidden growth drivers in your business, you can book a free session with me.
And if you’d like that sustainable growth, freedom, and a business you can sell for a great multiple, I recommend building a Growth Engine (three core systems that work without you). I have a program for that too, if you are interested. So go ahead and book that call, and let’s see if we’re a good fit.
Book your assessment call here.
Whatever you choose to do, the punchline is:
You’re an investor, not just a business owner or operator.
Manage your asset and your wealth like a wealth manager would – set your goals and build your asset so that it works for you, not the other way around.
Here’s to your wildest, most unrealistic dreams that only you believe in.
You can do it.
Tobias
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