Why this problem of funding retirement on such a scale?
The concept of the ‘division of labour’ has proven that personal effectiveness is greatest when specialising in one task
The same principle applies to SME businesses in today’s business world in which customers increasingly want to buy from specialists
Given this, the only way to create a sufficiently profitable business that will fund a retirement is to build a business that is regarded as specialist – a business that is focussed on one major business opportunity….. and is great at it
The Law of Diminishing Simplicity
But 95% of SME business owners don’t do this and instead subject their business to ‘The Law of Diminishing Simplicity’ – which states that the more complicated your business the harder it will be to scale to significant profitability and valuation – and instead of building a business that specialises they build an unfocussed complex generalist… a business trying to focus on and manage multiple markets, products, and customer types because of a wish to be everything to everyone
They do this because they believe the least risky way to successfully build a valuable business is to have many eggs in many baskets….. but they’re wrong….. in fact, nothing could be further from the truth
Specialists
In an age where customers want to buy from specialists, building a generalist is the most risky and least likely way to create a business that will fund retirement …… because if you can’t present your business as a specialist provider of a bleeding edge solution to one of a customer’s three major pain points then the customers you need to buy from you won’t buy from you
Creating a generalist and focussing on multiple opportunities will make your business less profitable and less valuable than it could be by focussing on a SINGLE OPPORTUNITY
