Episode 118: Tinker

Episode 118 – Tinker After many years of mentoring entrepreneurs, I now see more clearly the maturation process of starting and growing a business. Problems however, don’t end when this growth phase ends. Today I will be discussing the various stages of entrepreneurship and how they apply to owning a gym. These stages are the founders stage, the farmers stage, the tinker stage, and the thief stage. Most of this episode is going to cover what to do in the Tinker phase. This is when you enter the realm of success with your first business and you are pondering what to do next! First up is the founder phase. This is when you jump off the big cliff and leap into entrepreneurship. Back in the old day you used to have to quit your job and take massive risks just to get your business off the ground. Now however, entrepreneurship can take many different forms. Side hustles can be built that can make a great living and career. The real founders stage however is more characterized by your feelings, the cashflow you have, and innovation that you have related to your idea. The goal in the founder phase is to break even. For example, when I opened Catalyst, I knew I needed to break even and make a small paycheck to at least feed my family and survive. At this phase you are doing everything yourself because you can’t yet afford to pay someone for miscellaneous services with which you need help with. This stage takes innovative ideas to leverage your time and small cashflow to get started. The second stage is the Farmers Stage. At this point you have some basic systems down and the business is starting to run itself. During this phase you are cultivating your business and determining how to optimize even more systems within your business. Your time towards your business in this stage should decrease to below 40 hours per week. The job here should be an owner NOT a practitioner. The roles within this stage are to move yourself to higher values roles by replacing yourself at the lower value roles. Higher value roles can include sales, marketing, and training for your staff. The third phase of entrepreneurship is what I call the Tinker phase. This phase focuses on optimizing what you already have and how can you turn your business into a cash flow asset and create the perfect day for yourself. When you are at this phase, you should be able to choose whether or not you want to show up that day as the business can run itself. The time spent in the business on a mandatory basis should be near zero. This is the stage where you are moving from a small business to a medium size business. Roughly speaking this is usually characterized by the growth from about 2 million dollars in revenue to about 5 million dollars in revenue. Within the Tinker stage there are four priorities. The first is what is called asset priority. You want to make sure that your business is a true cash flow asset. That means the business runs itself but still pays you. The biggest asset you have is your time and you need that to be freed up to work on the most important tasks. The second priority is leverage. Leverage means how can we best use your time. Is it easier to start a brand-new business or would it be easier to use the niche that you already know and start a new business and serve them? Leaving a niche can be very difficult. Leveraging your audience, clients, and skills is using your tools in the most effective manner. The third tier of decision making is what I call low hanging fruit. This is simply asking yourself, what is the easiest new thing to do? This might be adding a dietician practice to your gym or improving a spreadsheet that you share to another gym. The fourth and final tier is asking what do my best clients want? At this stage you want to say, how else can I serve my clients. You should care enough about your clients that you are willing to solve other problems for them on a continual basis. I hope this episode can act as a gu