Lourens Oberholzer — We talk about the first steps to retiring rich and happy. Moving your zero back to zero
With Lourens Oberholzer — Retire Rich And Happy Wills And Estates
In short
A business coaching conversation on why small businesses stall: most are started by a technician who has an "entrepreneurial seizure", at the wrong moment, around the wrong question. Lourens Oberholzer sets out the three personalities inside every small business, three golden questions to test it against, and three systems it cannot survive without — plus why the owner must stop being the asset. The one takeaway: Being good at the work and being able to run the business are two different skill sets, and confusing them is why most technicians struggle once they go out on their own.
Why do most people end up starting a small business?
Because a technician has what Lourens calls an entrepreneurial seizure — the plumber decides he can do it better than his boss and opens his own plumbing business. The trouble is that being a good plumber and running a plumbing business are entirely different skill sets, which is why so many struggle to grow.
When is the wrong time to start a business?
When you need the money. The pressure then forces you into doing the work yourself, so it becomes a "doing business" built around you. The second mistake is asking "what can I do?" rather than what skills you have and how to build a model that leverages other people's effort.
What does "replacing yourself in the business" actually mean?
Not giving up the work you love, but making sure the whole business doesn't rely on you alone. While you are the business, you are the asset and the business never becomes one. Systems let you work on the business instead of in it, and eventually draw income as a shareholder.
What are the three personalities inside a small business?
The technician, who loves doing the work; the manager, who makes sure invoices go out and money is collected, and who wants the business as small and manageable as possible; and the entrepreneur, who sees opportunities and wants growth. Most small business owners are all three at once, which is why they feel schizophrenic.
Is there anything wrong with wanting to stay small?
No — but you have to decide what the business is for. Either it gives you lifestyle income and dies a natural death when you retire, in which case you must save enough separately, or it is an entity built to sustain itself without you, which requires systems and a plan to step out.
What should you do before you start, if you want to do it properly?
Research the business thoroughly, make sure you have capital to survive the tough stretch, and start with the end in mind — decide what the business looks like when "finished", then draw an organogram showing where you fit and where you need help. Failure is usually a planning issue, not a business issue.
How do you deal with an employee who has a serious attitude problem?
By being clear on your business values. Where values are firm, people who don't fit tend to remove themselves; where they are fluid, a bad attitude nestles in. Lourens's own team works to one question — is it in the best interest of the client? — and are trusted to act on it.
What are the three golden questions to ask about your business?
What is my unique selling proposition; is my business scalable; and how do I get the right people to know about it. Without a USP you compete on price and simply hope you're cheapest. Define the "right people" precisely — the client who brings the most money for the least effort.
Which three systems does every business need?
Lead generation, lead conversion and client fulfilment. Word of mouth alone won't sustain a business; you need a defined path for what happens to a lead at each step, a real conversion process rather than quoting and hoping, and a way of delivering on the promises and the USP you sold.
In their words
the reason most small businesses get started by a technician that has an entrepreneurial seizure
being a good plumber and running a plumbing business is not exactly the same thing. It's a completely different set of skills.
you can't manage people, you can only manage systems, because managing people are like herding cats
It's actually so easy in South Africa to be in the top 5% of servicing companies is everybody else is really bad
If you say to a client we will phone you at 10 tomorrow morning, phone him at 10 tomorrow morning. It's not rocket science.
Key takeaways
- Being good at the work and being able to run the business are two different skill sets, and confusing them is why most technicians struggle once they go out on their own.
- Starting a business because you need the money almost guarantees a "doing business" built entirely around you.
- You cannot manage people, only systems — and a standard operating procedure for each role means the business survives when a key person leaves.
- Deciding what the business should look like when it's finished, before you start, is what makes the systems and the organogram possible.
- Depending on one large client for most of your revenue is worse than employment, because the contract can be cut immediately and you have had no time to find replacements.
- A defined USP built around what irritates clients in your industry keeps you out of price-based quoting, because people act harder to avoid pain than to gain.
Show notes
On this episode I chat to Lourens from RRH about amongst other things a fascinating concept called moving your zero back to zero
Frequently asked questions
Why is a side hustle worth having even if you like your job?
Lourens argues everyone should have a part-time or home-based business — not only for income but for the flexibility it gives in managing tax, and because the fourth industrial revolution may remove the job you hold in your late thirties, forties or fifties.
How risky is it to build the business around one big client?
Very. When one client takes 80 to 90 per cent of your revenue and all your time, you become a slave to them with no capacity to find others. David lost his business overnight when a casino-industry client moved the training in-house.
What survival odds does he give new businesses?
Around 80 per cent of small businesses fail within the first five years, and roughly 80 per cent of those remaining fail within ten. He warns particularly against taking a package and pension and pouring it into a business without proper planning.
Which books does he recommend to entrepreneurs?
The E-Myth Revisited, which he calls the entrepreneurial bible, and Built to Sell, which helps you create an entity separate from yourself. David adds What If It All Goes Right by Mindy Audlin, based on the idea of "what if up" rather than "what if down".
Keep listening
Lourens Oberholzer — Retire Rich And Happy Wills And Estates
On this episode I chat with Lourens regarding wills and estates and the importance of updating your will and ensuring you have the right procedures in place in the event of your death. I learned a lot and I'm sure you…
Amanda Rogaly — Baby Yum Yum South Africa's fastest growing baby and child portal
On this episode we chat to Amanda Rogaly about starting up this amazing portal and what her plans are for the future. She certainly is a fire cracker
Denis Vaden — State 5 Coffee and their recent acquisition
On this episode I chat to Denis Vaden about State 5 Coffee and their latest acquisitions and making State 5 mobile. Denis is a great guest and well worth a listen he shares some of his secrets to success and how he ac…
Lourens Oberholzer — Retire Rich And Happy Goals vs Outcomes
On this episode we chat to Lourens Oberholzer from Retire Rich And Happy. We talk about the RRH Forum and New Years Resolutions, why do we not achieve our goals and what can we do to achieve our goals.