On the Business

Start a business from nothing and try to make it to year five. Most don't. Three balances decide it: working on the business vs. in it, investment vs. profit, and your people vs. your customers vs. what both cost.

Books

People

Run the company

Standing decisions. They hit today's numbers.

Ledger

How the model works

You pick an industry, your schooling and how much to borrow against your house. Then the clock advances day by day, stopping when something needs your call. New issues arrive about once a week. The game lasts five years.
The central rule: only you can grow or improve the business. Selling, implementing improvements, coaching, recruiting and deal hunting happen only in weeks you spend on the business. Weeks working in it bring in revenue and protect the crew, but nothing gets bigger.
Cash is not profit. Customers pay on their industry's terms (restaurants and shops get paid on the spot; contractors wait months), payroll goes out every other Friday, and rent, insurance, the supplier account and loan payments hit on the first.
You also have to live. Your household costs come out of your personal savings every month. Pay yourself too little and you go broke at home; pay yourself too much and the business starves.
The bank only lends against collateral: a share of receivables under 90 days old, and 75% of a building you own less its mortgage. Overdrawn with no room left, you put in your own money, factor receivables, stretch the supplier, or miss payroll and lose.
Hiring starts with a resume. Average stint, certifications and specifics separate the solid from the weak; $400 of reference calls cuts through a nice-looking page, and a recruiter surfaces stronger candidates but polishes the occasional dud, for a fee of 25% of first-year pay due only on a hire. Every hire then costs a training fee and some of your time, a lot in the trades and consulting, very little in a restaurant or shop. A manager runs about ten people; past that he burns out. Everyone not under a manager reports to you, and each direct report past four slows your growth work.
Burnout comes from demand outrunning staff. Burned-out people call out, slip and quit. First-year people are the flight risks. Raises, bonuses, benefits and vacation all keep people, and all cost money.
Slow stocks run underneath everything: reputation follows how you treat customers over months, not days; your workers' comp mod follows injuries for years; supplier and bank relationships follow how you pay; market wages drift upward; equipment ages. Nothing jumps the day you pull a lever. That's the point.
Customer satisfaction falls when you turn work away, raise prices, send weak or fried people, or lose accounts. It drives how fast you can sell.
Rates follow the economy with a lag, lower in downturns. Real estate moves the other way. Fixed mortgages lock the payment; variable starts cheaper and resets monthly.
You can get sick for up to two weeks, more often on long hours, low energy, no vacation, or a new family on the same hours. Any week you're out, everything that runs through you runs 15% worse.