“Owning a non-controlling portion of a wonderful business is more profitable, more enjoyable and FAR less work than struggling with 100% of a marginal enterprise.” – Warren Buffett, 2020 shareholder letter
After building, managing, killing, and resurrecting one business with over $100M in sales, the quote above from Warren Buffett hit me hard.
We get confused along our business journey because we’re not clear on what we’re after.
Should we run the business we built?
Should we sell it?
Should we hire someone to run it?
Is there a better use of our time and money?
Let’s begin with clear definitions, and then discuss the real goal of building a business.
Entrepreneur
Most people define an entrepreneur as someone who builds a business and later runs it if it’s successful.
I define an entrepreneur as a person who risks time, money, or both, to bring a product or service to market.
Just because you start a business doesn’t mean you have to run it in the beginning or once it’s off the ground.
CEO
Most people define a CEO as the person in charge of running a company, often the founder in smaller companies (for example, those with less than $100M in annual revenue).
I define the CEO as the highest-level employee in a company, tasked with fulfilling the owners’ goals, typically to maximize long-term profits.
The CEO is just an employee. He or she is a high-level employee but still receives compensation for performing specific duties within a business.
You may build a business and decide to be its CEO, but you don’t have to. You can hire someone else for that role, much like you can hire someone else to respond to customer support tickets.
The real goal: Business owner
A business owner is someone with an economic interest in a business. He or she receives a proportionate share of the value created by the company.
Isn’t that our real goal in building a company?
Sure, we might find fulfillment and purpose in our work at the company, but we could find purpose elsewhere.
We want to own something that makes us money.
An entrepreneur, CEO, and business owner are three distinct roles. They might be filled by the same person, or they might not.
Getting what you want out of a business starts with getting clear on these three roles.
Once you know what you really want to be, you can get what you want much more easily.
Build a business that runs without you
Whether you’re neck-deep in running your business or you’re just getting started, there’s a specific 5-step process to build a business that runs—and thrives—without you.
It’s not about building systems or documenting “SOPs”.
Get the full Replacement Protocol in my latest YouTube video here:
Once you watch that video, it would be a HUGE help if you liked it and dropped a comment below (I’ll be reading all of them), because that helps YouTube share this message with more people.
On your side,
Matt