2 tips from a man who knows

July 4, 2010Post by Laura Humphreys

Just read interview with Wellington entrepreneur Phil Wheelans in today’s DominionPost. Phil set up The Hire Company which has 10 branches nationwide and turns over $18 million a year. The two business mistakes he has learnt from resonated with me and I have been teaching these principles at my seminars for years:

1. Employ key people as soon as you can.

To quote Phil, “I believed I could do the lot myself working 60,70, 80 hour work weeks. I brought in my CEO/CFO adn he’s released me from all the drama in the office and freed me up to do what I’m good at”. Rod Drury of Xero said a simlilar thing to me about his subject recently. He too put emphasis on hiring the people that can do the work – to free the entrepreneur to do what they do best – create the vision and lead the team.

2. Take out your wealth as you go.

Phil Wheelan describes his regret and not taking enough out of his companies as they have grown. This is very common. Most business owners continue to pile all their profits back into their business, investing it all in growth… presumably with the intention of a big fat payback down the track. Common but unnecessarily risky. If you are smart and build your business well, it will pay you back in the future. But just in case something goes wrong and it doesn’t, it is sensible to take some dividends each year as you go… invest that money wisely and watch it grow alongside your business success. Clearly you have to leave enough in the business to fund your plans, but the business can also feed its shareholders along the way.

Sage advice from people who have earned the right to give it.