Brent Beshore's Permanent Equity Playbook to Run a Company
Essential lessons from Brent Beshore's Permanent Equity playbook on how to run a company.
Brent Beshore, the founder of Permanent Equity, provides a wealth of insights on managing companies through his annual letters. His philosophy is rooted in long-term thinking, valuing people, and maintaining a strong organizational culture.
This post delves into the core principles of Brent Beshore's management playbook, highlighting the importance of building a talented team, aligning roles with personal strengths, managing risks effectively, and fostering a culture of patience and meaningful relationships. By exploring these insights, you will learn invaluable lessons on how to run a company, including the significance of embracing a long-term perspective, the critical role of people in business success, the necessity of resilience in facing challenges, and the profound impact of prioritizing health and well-being for sustained leadership.
These lessons, drawn from Brent’s extensive experience and unique philosophy, offer a comprehensive guide for anyone looking to manage or invest in small to medium-sized businesses effectively.
TL; DR
Build a Team of Talented Individuals: Delegate tasks to those more capable to focus on strengths and create a robust organization.
CEO's Role and Personal Fulfillment: Align one's role with passions and strengths to enhance personal fulfillment and effectiveness.
Challenges and Risk Management: Understand the unique challenges of managing small companies and emphasize resilience and effective risk management.
Think Long-Term, Be Patient, and Avoid Debt: Adopt a long-term perspective, avoid quick wins, and maintain financial stability by avoiding debt.
People Are the Key to Business Success: Foster strong, supportive relationships within the team and with partners to ensure long-term success.
Embrace Fear and Love: Overcome fear-driven behaviors and embrace love, authenticity, and meaningful relationships to cultivate a positive organizational culture.
Your Health Comes First: Prioritize personal well-being to ensure sustained leadership and draw parallels between managing personal health and company health.
Build a team of talented individuals
Brent emphasizes the importance of building a team of talented individuals. By delegating tasks to those more capable, he and his team members can focus on their areas of strength. This creates a robust organization where each person operates within their "zone of gifting".
I started hiring people more talented than me to do all of the things that I either didn’t like doing or wasn’t great at. And they started hiring talented people.
—BRENT BESHORE
CEO's role and personal fulfillment
Brent says that the value of aligning one's role with their passions and strengths. As CEO, his focus is on serving the team, building culture, recruiting new team members, spending time with potential investors and partners, structuring deals, advising on operations, and planning the future. This alignment leads to greater personal fulfillment and effectiveness in his role.
As CEO my days are now primarily spent at the intersection of what I love to do and where I’ve been given talents.
—BRENT BESHORE
Challenges and risk management
Managing small companies comes with unique challenges and risks. Brent acknowledges these difficulties and emphasizes the need for resilience and effective risk management. He believes that while it is difficult to buy and operate one company, it is exponentially harder to manage multiple companies successfully​.
Doubling market share and bolting on your five competitors sounds great in theory until your warehouse manager steals to support a hidden addiction, the government informs you that you’re under investigation, or a whole division gets poached by a competitor.
—BRENT BESHORE
Think long-term, be patient and avoid debt
Permanent Equity's approach is characterized by a long-term perspective, and focusing on building meaningful relationships. Brent advocates for patience and a willingness to invest time and effort into understanding and improving businesses, rather than seeking quick wins​. They also avoid using debt in their acquisitions, which helps maintain financial stability and reduces the pressure to sell companies quickly to meet debt obligations.
We’re in the business of doing weird and hard things that have the potential for outsized return.
—BRENT BESHORE
People is the key to business success
Brent emphasizes the central role of people in business success. By fostering strong, supportive relationships within the team and with partners, Permanent Equity ensures long-term success and a positive working environment.
People are the centerpiece—the purpose and the participants. And our business, like almost all businesses, will thrive, plateau, or fail based on the people who join us, those who leave us, and the nature of their collaborations during our time together.
—BRENT BESHORE
Embrace fear and love
Permanent Equity emphasizes overcoming fear-driven behaviors and embracing love, authenticity, and meaningful relationships. This approach encourages a culture of openness and trust, which is essential for long-term success. Brent’s reflection on these themes underscores the importance of a positive organizational culture.
A mask is a great way to talk about how we all cope with fear. Fear drives us into two main modes: self-protection and self-promotion.
—BRENT BESHORE
Your health's first
Brent’s personal journey of improving health highlights the importance of well-being in effective management. Addressing emotional and psychological reasons for overeating, adopting a consistent exercise routine, and making healthier food choices are parallels to managing a company’s health by addressing fundamental issues, maintaining discipline, and making sustainable choices.
The hardest part of compounding is to be around for it. And even if you survive it doesn’t matter much if you can’t enjoy it. The key is both lifespan and healthspan.
—BRENT BESHORE
Summary
Brent Beshore's Permanent Equity playbook provides essential lessons for effective company management. Key principles include building a talented team, aligning roles with personal strengths, and fostering resilience and effective risk management. Brent advocates for a long-term perspective, avoiding debt, and prioritizing strong, supportive relationships within the team. Emphasizing personal well-being, he draws parallels between managing personal health and a company’s health. These insights offer valuable guidance for managing or investing in small to medium-sized businesses, focusing on long-term success and a positive organizational culture.
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