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My last post was about how you’ve got to expand your business in order to achieve wealth, but I also need to make the important point that replication in your business is made much, much easier when the service you provide can be easily performed by unskilled laborers.
Many services require special training, education, and certifications. For example, I have a good friend who is a personal trainer in Cleveland, and he is highly skilled at what he does. He earns a good living, but if he ever desired to expand his business by moving into a managerial role and bringing in other trainers to work for him he could find it more difficult than it would be for, say, a lawn-mowing business owner.
Why? Personal trainers are certified and have devoted long hours to get where they’re at, which means that they are somewhat of a scarcity and expect to earn a good living. In other words, they expect to be paid well and are difficult to replace. One or two trainers quit and it could really effect the business in an immediate and negative way. Lawn mowing techs, on the other hand, are pretty much a dime a dozen. They don’t need any previous training or skills and so they are in greater supply. Therefore they can be hired for relatively low pay and if one quits they are easily and quickly replaced. This scenario sets you, the business owner, up for higher profit margins, less chance of a breakdown in the system, and therefore a quicker rate of company expansion.
As evidence of this phenomenon just take a look at McDonald’s or Subway, which have thousands upon thousands of franchises. Do you think they achieved that kind of growth by hiring highly skilled hamburger flippers and sandwich makers who expect to make a lot of money? Of course not. They’ll hire just about anybody with a pulse because the work is easy to learn and perform, and the pay is therefore pretty low. That means more money in the franchise owner’s pocket, and more money in the corporation’s pocket.
My name is Jeff and I created this blog in 2007 to help and inspire contractors and home service providers. It’s come a long way since then.