Once, a powerful executive went on vacation—his first in fifteen years. As he was exploring a pier in a small coastal fishing village, a tuna fisherman docked his boat. As the Fisherman lashed his boat to the pier, the Executive complimented him on the size and quality of his fish.
“How long did it take you to catch these fish?” the Executive asked.
“Only a little while,” the Fisherman replied.
“Why don’t you stay out longer and catch more?” the Executive asked.
“I have enough to support my family’s needs,” said the Fisherman.
“But,” asked the Executive, “what do you do with the rest of your time?”
The Fisherman replied, “I sleep late, fish a little, play with my children, take a siesta with my wife, and stroll into the village each evening, where I sip wine and play guitar with my friends. I have a full and busy life.”
The Executive was flabbergasted. “I’m a Harvard MBA, and I can help you. You should spend more time fishing. With the proceeds, you could buy a bigger boat. A bigger boat would help you catch more fish, which you could sell to buy several boats. Eventually, you’d own an entire fleet.
“Instead of selling your catch to a middleman you could sell directly to the consumers, which would improve your margins. Eventually, you could open your own factory, so you’d control the product, the processing, and the distribution. Of course, you’d have to leave this village and move to the city so you could run your expanding enterprise.”
The Fisherman was quiet for a moment, then asked, “How long would this take?”
“Fifteen, twenty years. Twenty-five, tops.”
The Executive laughed. “That’s the best part. When the time is right, you’d take your company public and sell all of your stock. You’d make millions.”
“Millions? What would I do then?”
The Executive paused for a moment. “You could retire, sleep late, fish a little, play with your children, take a siesta with your wife, and stroll into the village each evening to sip wine and play the guitar with your friends.”
Shaking his head, the Executive bade the Fisherman farewell. Immediately after returning from vacation, the Executive resigned from his position.
I’m not sure where this parable originated, but the message is useful:
business is not necessarily about maximizing Profits.
Profits are important, but they’re a means to an end: creating value, paying expenses, compensating the people who run the business, and supporting yourself and your loved ones. Dollars aren’t an end in themselves: money is a tool, and the usefulness of that tool depends on what you intend to do with it.
Your business does not have to bring in millions or billions of dollars to be successful. If you have enough profit to do the things you need to do to keep the business running and make it worth your time, you’re successful, no matter how much revenue your business brings in.
Sufficiency is subjective—how much is enough to continue what you’re doing is a personal decision. If your financial needs are meager, you don’t need that much revenue to keep going. If you’re spending millions of dollars on payroll, office space, and expensive systems, you’ll need much more revenue to maintain Sufficiency.
The more quickly you can reach the point of Sufficiency, the better the chance your business will survive and thrive. The more revenue you generate and the less money you spend, the quicker you will reach the point of Sufficiency.
Once you reach the point of Sufficiency, you’re successful—no matter how much (or how little) money you make.
Reading book: http://www.amazon.com/The-Personal-MBA-Business-ebook/dp/B0046ECJ8M