Colin Sprake says entrepreneurs waste money chasing new opportunities instead of maximizing profit in their existing business. His test: if none of your companies make $1 million in profit, focus on one until it does, then hire managers to run it before starting anything else.
Entrepreneurs chase opportunity. Operators build empires. Think about that. Operators build empires. Let me give you an example of this. I see so many entrepreneurs that go out every single day. They've got a really good business and an opportunity comes their way. And they will always justify the opportunity. But this is a great opportunity. Often the greatest opportunity is to maximize the margins and the profitability in the business you have already. When people say to me, Colin, I run multiple businesses, my first question back to them is, which one of them is making you $1 million a year? And if they say to me, none of them, I say, great, take all of them, choose one, and go make a million bucks a year. When you chase opportunity, most of the time you take money out of your existing company, your operating capital, and you put it into another opportunity. And then all of a sudden that opportunity fails, and now you've got no operating capital for your existing business, and now your existing business starts to fail. First of all, let me know when you're making $1 million profit in one business, Then we can talk about opportunity to chase something else, because then you can hire people to run that business while you go chase the next one. Are you making $1 million right now in your business?
