Products or Services

My friends in YEO tend to be people who’ve outgrown a small business. The turnover figure doesn’t really matter, but I’ve noticed an attitudinal cycle.

First entrepreneurs want to be in business. If they are early starters they may start washing cars or mowing lawns.

Twentysomethings often start with a product business. Even if it is a service business it is normally around some product. Selling capuccino, toys, books, computers, candles, SOAP whatever. Yes of course this is a generalisation.

After a while of doing that – providing the entrepreneurial spirit hasn’t been crushed by the forces of mediorcrity – services businesses become attractive. No inventory to count, shrink or go obsolete. A business where attitude is everything. If successful, such second businesses often get to $5 million or more in turnover.

But then the daily grind of client services, professional services, or customer services looms high. The business does not scale well beyond that. Adding another million in turnover adds significant complexity to the business. People can’t manage more that seven plus or minus two subordinates.

Then the entrepreneur dreams of returning to a product business. Sometimes they apply their experience, skill, and wisdom to product development and wake up happy.

I can’t see much further than that. Probably because my experience to date both lifts and limits my vision. You can’t see the next valley from the bottom of this valley.

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