What is a successful business?
Defining success in business is an age old argument and typically one is forgiven in seeing successful business as only the large corporations that are turning millions, perhaps even billions in yearly revenue and whilst there is no doubt that the Facebooks, Microsoft and Apples of the world are indeed extremely successful, it is important to define business success on a deeper level.
Business success is often oversimplified by growth rates, financial metrics and profits, however the true measure of success for a business can only be defined by the person setting it up. Not all entrepreneurs set up businesses for the primary reason of making blockbuster net worth, instead they could simply be pursuing a passion, attempting to find the right work life balance and/or trying to make a difference.
A small enterprise that turns over enough revenue and profit to keep the owner in a lifestyle they are happy with is a blockbuster success. Such a business enables the owner to do something they are passionate about and invest time in something they own whilst also generating enough for them to live comfortably. Such an individual may never be a millionaire, may never own a Ferrari, but they will feel fulfilled by investing their time in something they believe in.
An investment banker who works long hours for a significant base salary and bonus may well own a Ferrari, but if they aren’t passionate about what they do then they will never feel fulfilled. This is because assets like sports cars and mansions are something we all think we need, something we may day dream about….But the truth is such assets have diminishing marginal utility. The first time you drive a Ferrari you will feel the buzz, you will think you’ve made it, but the 50th time you drive it the buzz has gone, it is now just a normal part of your life and you will now go chasing the next asset and then the next and the next just to keep feeling the buzz.
So it may be worth thinking less about chasing assets and more about chasing passion. Find what you are passionate about and look to invest your time in that. You may well just find business success or at least personal success.
The story of the Mexican Fisherman and the Harvard MBA
A Harvard MBA was at a small coastal village in Mexico when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna.
Harvard MBA: That’s an impressive haul, how long did it take you to catch them?
Mexican: Only a little while
Harvard MBA: Oh, why wouldn’t you stay out a little longer and catch more fish?
Mexican: Well I have enough to feed my family so I don’t need anymore.
Harvard MBA: But what do you do with the rest of your time?!
Mexican: I sleep late, fish a little, play with my children, take siestas with my wife and stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.
Harvard MBA: I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats.
Mexican: And what then Senor?
Harvard MBA: Well instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.
Mexican: How long would all this take?
Harvard MBA: 15 to 20 years max.
Mexican: And after all of this what would I do?
Harvard MBA: That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!
Mexican: Millions – then what?
Harvard MBA: Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.
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