Do you own a business? How do you use your earnings? How can you use that income to generate even more income?
If you run a business, you may be tempted to save your income for a rainy day (or to put in your pockets). However, the authors of Who Not How say that you’ll actually make more money, and faster, if you use that money to invest in hiring more employees.
Here is why you should invest in employees rather than saving your money.
Investing in Personnel Creates More Money, Faster
According to the authors of Who Not How, investing in employees optimizes your rate of income and expansion. Investing in high-quality personnel kickstarts an ever-expanding cycle of growth for your business ventures.
Because you’ve invested in experts, the authors explain, you’re now efficiently producing stellar results, effectively elevating your business and validating your decision to hire experts. Your personnel will continue to optimize and improve the process they’re engaged in, generating better results faster and further improving your income. They won’t need your help to do it, so you’ll reclaim your time.
(Shortform note: Once you kickstart this cycle of growth, you’ll inevitably need to expand your team to keep up. Team growth can become difficult to handle; you’ll inevitably hit a stumbling block once your team grows to between 25 and 40 people. At this point, it becomes impossible for one leader to manage every employee or for each employee to see the whole picture. You’ll need to set up management structures and autonomous teams and change the way you communicate.)
As for what to do with that time, Sullivan and Hardy explain that you personally generate the most revenue when you commit your time to generating revenue. In other words, hire personnel to free you from every possible task—from cleaning your house to buying your shoes—and instead prioritize tasks that make you money.
(Shortform note: You may take this as a recommendation to spend your reclaimed time working, but that’s not the case at all—when you work as much as you can, as most entrepreneurs do, you actually decrease your productivity. Instead, use your reclaimed time to rest more and maximize your ability to be creative and decisive: Aim to work a maximum of six hours a day, primarily in the mornings, and take frequent, small vacations. Doing so gives you time to clarify your vision and reignite your purpose—which, as an entrepreneur, is the most important part of your job.)
Don’t Save Money—Spend It to Solve Problems
As your resource pool increases, the authors suggest you continue to ask, “Who can solve this problem for me?” and don’t allow yourself to return to a cost-focused mindset. If you find yourself worrying about cost and feel tempted to stop spending so much money on personnel, remember that cost-effectiveness usually only causes more problems. Indeed, the authors explain that money is valuable primarily because you can spend it to solve problems. According to them, the optimal solution to any problem will always be the same: Find the right person to solve the issue and pay them to do so. Don’t do it yourself and don’t cheap out.
- For example: If your sink clogs, you may be capable of fixing it—but you’re also capable of breaking it further. Investing in an expert plumber saves you time and prevents further damage.
(Shortform note: As Sullivan and Hardy point out, having money is useless; its value is determined by how you spend it. Research shows that one of the most valuable ways you can spend it is in improving your quality of life. When you can pay someone else to spend an hour hunched under your bathroom sink or staring at your emails, you get to spend that enjoying the blissful flow-state of doing what you do best or enjoy most, instead.)
———End of Preview———
Like what you just read? Read the rest of the world's best book summary and analysis of Dan Sullivan's "Who Not How" at Shortform .
Here's what you'll find in our full Who Not How summary :
- Why you should stop trying to do everything yourself and just hire someone
- Why minimizing cost should not be the primary goal
- How you can reclaim your valuable time at work and home