My mentor once told me the story of a guy who requested an Uber to get to point B. In the Uber, the rider starts a conversation with the driver and upon asking how the driver got into the Uber driving business, the driver starts saying: “I left my job because I wanted to be my own boss”. Right now, no-one tells me what todo or what time wake up”. Before the driver could say any more, the rider says: “my guy, turn left”.
The Uber driver clearly didn’t understand the difference between a small business and a large one.
A small business:
is a business that cannot survive without the founder.
You can tell if you’re running a small business if
- you are the only employee
- or where, if you have a handful or employees you are the ‘key man’. For example:
- If you’re starting a medical practice/law firm/graphics design/handyman business, you’re going to be the doctor/lawyer/designer/handyman doing the work there to bring in the revenue of the business
- If you’re not the one doing the actual work, your continued presence at the business is necessary for the company to continue to be a going concern because in your absence, there is:
- theft of time/money
- no one who understands the supply chain / distribution channels and can manage the workforce/external stakeholders well enough to keep the business going.
- or where, if you have a handful or employees you are the ‘key man’. For example:
- Even if you could delegate what you do to someone else, your business is not making enough revenue to be able hire someone who does what you do, and replace you at the same salary they would get if they were doing it in a much larger company while still allowing you to make a profit
- medium or large business
Conversely, a medium or large business:
- is one which is making enough revenue to allow you to hire someone else to run the business much better than you can at a competitive market-based salary;
- and others to do the actual work much better than you can at a competitive market-based salary;
- with the business continuing to make a profit.
One of the worst reasons for starting a small business is because you want to get rid of the boss and be your own boss. That’s because, you can get rid of your boss, but you can be worse off in the end. Because, even though you’re your own boss, you’re now working for an idiot.