I went to an entrepreneurial seminar the other day on how to become a passive investor in your own business. Scott Fritz was the guest speaker. At the end of the presentation, he handed everyone his book, The 40 Hour Work Year.
I took it home that night and read it cover to cover. Even though the book was almost exactly what he talked about at the seminar, I felt that it had a few good takeaways that I would share.
In the book and at the seminar, Scott Fritz talks about his childhood and his first memories of being an entrepreneur. I think we all have those memories. I remember at one point in my childhood, I had a paper route and at another, I partnered with my grandfather and we had a dog-walking service. Although neither of these businesses were lucrative, they still inspired me to start and create my own business.
Scott Fritz talks about how he started to live a 40-hour work year. He said it didn’t start off that way. He worked for 60+ hours a week in the beginning when he and a partner opened up a PEO business. PEO stands for Professional Employer Organization, a company that offers human resource and employee administration outsourcing services.
His prerequisites for starting a business was that the business needed to have five components: annuity income, service business, low barrier to entry, strong cash flow and be scalable to reach a national market. He goes on to tell the reader that within a couple of months, he landed a big client and was on his way to changing his lifestyle from the 60+ hour work week to the 40-hour work year.
The way he started to back out of his business was that he developed a “mindset philosophy,” which is a guideline on how he defined his life and decision-making process. The three key points are:
• Enjoy Life (first and foremost)
• Make Money
• Do Deals
When he was working in his business, he had people constantly coming into his office asking for advice. He decided to set a rule that the only way people could talk with him is if something were of the utmost importance. He found that the knocking on his door stopped and his staff started to figure things out on their own. After that, he talks about structuring processes and sticking with commitments.
The book is chock-full of good information, along with worksheets to help you figure out the direction in which you want to go. The book is an easy read and is only 112 pages long.
The other takeaways I got from the book include:
- If you are hiring a sales person or any staff for that matter, don’t be concerned with the annual salary. Break the salary down month-to-month and see if you can cover the salary on a monthly basis.
- Mr. Fritz also suggests that you have processes for everything, including hiring, screening and selection.
- He had his staff put together standard operating procedures on their jobs so that if a staff member were to get a promotion, someone could easily fill his/her shoes.
- Lastly, he suggested creating the top five priorities for the first, second and third year of business. Most people just “wing” it in business. But Mr. Fritz really had structured processes that he followed.
The other day I was talking with a group of entrepreneurial friends and I told them that if I take away one or two points from a book or a seminar, then I’m happy. It’s when I don’t learn anything that I become unhappy. This book made me happy. It was interesting to see someone go from nothing to being able to enjoy life and not just focus on his work.