The Biggest Misunderstanding
This is fairly common not only in our industry/profession but in many industries.
A person starts his own business in our industry with a lot of enthusiasm. He builds a certain AUM and then hits a growth barrier. He hires more people, adds technology, and hits another growth barrier. I will explain what a growth barrier is in a Future Post.
The best part is that he believes that he has built a solid business just because he has managed to accumulate an AUM of Rs.100 Crore or for that matter even Rs.500 Crore.
The reality is that he has managed to build a good book of business that leads to an income. This is very different from building a business. In very simple terms, this gentleman is self-employed. He has replaced his boss with himself.
Thus, the biggest misunderstanding happens when you think that you have built a business when in reality you have managed to build an income for yourself just like any professional.
There is nothing wrong with this approach, but you need to understand this key distinction between being self-employed and being a business owner. This will help you take some meaningful decisions to build value in your firm.
Ask yourself the following questions:
a. Can your firm acquire a client if you are not around for 45 days?
b. Can your firm operate without you for 30 days?
c. Can other people take decisions without you being involved?
d. Do you have team members in HR, Finance, Marketing, and other areas or are you the master of all trades.
There are many more but these 4 should suffice to give you a perspective.
If the answer to 2 of the above questions is a NO, you have steps to take to build a solid and real business.
What are the key steps for you to build a solid and real business?