Tag: Business Books

What’s the difference between an Employee and a Business Owner?

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As I type this I am about 100 metres from the surf. The only thing between me and the beach is a swimming pool! I’m living in a place where most people come on holidays. The reason I mention that is that I spoke to one of the other couples here this morning, and they reminded me about the difference between employees and business people. Let me explain that.

They told me about several local businesses that operate a ‘closed shop’ business. What that means is: they no longer accept new clients. They deal only with their existing clients. I have no problem with being ‘exclusive’, but that is not good business unless you deal with a very high profit business, and you have considered all the options. Let’s look at some different perspectives now.

First, the most obvious one is – clients do not stay forever. They move home, they change jobs, they get married or divorce, and they retire. There are many major life events that will change their needs. They no longer need the latest fashion clothing, maybe now they need baby clothes? Perhaps they no longer need a sports car, they need a practical family car?

Having a closed book of clients means that over time your business will die, unless you can attract the right client at the right time. And that’s not always possible. Is there an alternative?

Of course, there are always alternatives. The right alternative will depend upon why the business owner closed their books in the first place, but let’s use the example that they only want to work three days a week.

Do that, buy all means. If that’s what you want to do, then the very best of luck to you. Just hire or ‘JV’ with someone for the remaining days a week. That way the business is open when and attracting new clients when it needs to be, and the owner gets a supplementary income. It doesn’t matter of the second person isn’t quite as good as you, as long as they are competent they will operate a suitably successful business. They don’t have to be as good or better than you – it could be that if they are they might steal business from you!

That gives you the option of working three days a week, and of opening another outlet. So, maybe one or two days in the original location, and the remainder in the new location. Use your reputation to attract new clients at the new location, and when the time is right add a second practitioner there too. That allows you to work maybe two days a week, and still retain the earning capacity you had when you opened for only three days, all your own efforts and in the one location.

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Where one business is discouraging new clients the second model is much more welcoming, and therefore much more long term.

Now some will be thinking “exclusivity”. I have no problem with being exclusive. Many successful brands are exclusive. Rolls Royce, Ferrari, Aston Martin, and Gucci, YSL and all the others are very exclusive. They still open every day someone wants to buy, though.

Employees think that they will do just enough not to get fired, and normally that are paid just enough so they don’t quit. That is not a good mind set for a business owner.

A business owner has to think “How else can I best serve the needs of my client”, not “How do I get this person to spend their money and go home as quickly as possible?”

One mind set is tuned in to expansion, the other is tuned in to minimal levels.

Let me just ask you a question – which business would you rather do business with? The one that considers you a disruption or the one that truly wants to serve you?

Send us the answer to that question, or ask one of your own, or just give us a comment – use the tag at the top left of the screen to login (or register) and tell us what you are thinking.

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