Wednesday, April 15, 2009

Business vs System

The other night, I had the opportunity to browse through an interesting concept. Well, the concept is pretty simple actually. It's about the difference between a self-employed person and a business owner.

So what will be the definition of a self-employed person? Logically it would mean, a person that owns the business. For example, a burger seller by the road side is a self-employed person. The more burger he sells, the more income he will receive. Is that right? Let's say tonight he sells 200 of his burgers at RM3.50 each. Tonight alone he will earn RM700. Pretty ok for a few hours work eh? Let's further assume that he work 6 nights a week and sells and average of 200 burgers per night. What will be his income? If my calculation is correct, his income will be about RM16800. (200 x 3.5 x 6 x 4= 16800). I'm pretty sure his operating cost would be low as he is pressumably operating on his own.

From the scenario above, I can safely assume that the more effort he puts in his burger business, the more income he will get. However, what will happened if he does not sell his burgers for 2 nights in a row? That will be RM1,400 worth of business goin to some other burger owners. Am I right? So, the burger owner needs to stay healthy to ensure his business keeps on thriving and his income keeps on coming in...

There are a lot of other self-employed person examples such as wireman, contractors, small time suppliers, etc...

Now,...what about a business owner? Perhaps, the definition would be pretty much the same as self-employed person except the fact that a business owner owns a system for his or her business. The clearest example of a business owner would be the owner of McDonald's restaurants. Perhaps, the burger owner above can proudly say that he can make a better burger than McDonalds, bla bla bla, but he will not have the luxury of a business owner like the owner of McDonald's. Why? The owner of McDonald can sit down and practically do nothing but will receive a big fat pay cheque at the end of every month as the business that he owns have a system that ensure the business keeps on generating money even though he is not there.

Did any of us ever realised that McDonald's fries taste more or less the same from every different branch? How do McDonald achieve that? One answer...it lies from the business system that they have. The system that they have revolves around every aspect of McD's business starting from the customer order, the supply of materials, the workflow and what have yous... Pretty impressive eh?

Another example of a business owner is Bill Gates. Now, we are talking about THE great Bill Gates. With his business system, he has built a business empire that is so huge that it is quite difficult to think how he could come up with such an impressive 'system'. Obviously by hiring the right people and a strong leadership qualities...

I guess and I think, being a business owner would be the pinnacle of every man's dream that has to be achieved. Of course, saying it is easy but to actually doing it is difficult. We can always learn the theory of management in the universities and colleges, but nothing will prepare us for the real life out there. It's brutal and full of traps if we are not careful...Unfortunately, there are people out there that will take advantage of you if you're not careful in handling different people....

It all basically comes back to what do we want to achieve in life. Be it big or small, everyone must have at least something to look forward to as well as achieving it....The journey matters...and the destination is secondary...

Have a nice day...

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