This is a simple law of nature, but one which is very handy:
Every Business has One of Four Problems: Employees, Capital, Machinery, or Inventory
That’s it.
Some businesses have more than one of these problems. Problems aren’t necessarily bad, but the problems do need good solutions if the enterprise is to flourish. If mismanaged, employees will shipwreck you. So will mismanaging your capital, machinery, or inventory.
It’s something to consider when planning a business venture. If you can solve these problems, and if you can locate customers and market successfully to them, the business might do very well. There’s more to life than running a business, but a business can be a good way to finance your life, and lots of people enjoy the challenge.
The astute reader will say, “Oh, but what about personal services businesses?” For example, dogwalkers and bookkeepers and barbers and lawyers. These businesses do not necessarily require any significant amounts of employees, nor capital, nor machinery, nor inventory.
In these cases, you are selling your time, and time is the only commodity in the entire universe which is absolutely limited to you. You are not obtaining the leverage afforded by employees, capital, machinery, or inventory, so in this case the best plan is to (a) earn a lot of money for your time, relative to your needs; (b) enjoy the thing you are doing; and (c) stash away and invest for a rainy day.
Knowing this important secret of the universe, go forth and prosper.
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