I’m sure you’re wondering if I’ve lost my mind. Why on earth would you want to read an article telling you exactly how to kill the business that you’ve worked so hard to build, nurture, and grow? The answer is that it’s useful to take a step back from all the hard work we do to make sure we’re not inadvertently doing things that damage our companies. Here’s a look at what not to do:
- Turn your hobby into a business. Just because your friends tell you that your spicy barbecue sauce is the best they’ve ever tasted, that doesn’t mean you have to find a way to profit from it. There’s a difference between a hobby – something you do to relax and release energy – and a passion – something you do to create energy. While successful businesses thrive on passion, they can also destroy the pleasure that we take in our hobbies. Not everything you enjoy needs a business plan.
- Get rich quick. You may be thinking, “Isn’t that the point?” The fact of the matter is that the best way to get rich is by investing your time and energy in your passion and organically growing your business, rather than chasing what you think is the next trend in an attempt to cash in and get out. Isolate your passion and nurture it, rather than trying to work in a field just because you think it’s the next big thing.
- If things are going south, work harder. By the time most businesses fail, the entrepreneurs who started them are absolutely exhausted. Instead of trying to add hours to the day or taking time away from family and friends, spend you time finding ways to work more efficiently. If you can automate aspects of your business, you’ll be working smarter, rather than harder, leaving you time to enjoy the fruits of your labor.
- Nurture the weak. I’m constantly amazed by how many companies cater to the least lucrative (and most difficult) clients, at the expense of building business with the big customers – you know, the ones who keep the lights on. Rather than trying to squeeze an extra few bucks from the reluctant spenders, commit to cultivating your heavy hitters and providing them with excellent service. You can’t please everyone. Why not please the ones who are the most valuable?
- Measure revenue from the top line. Yes, it’s essential to bring money into your business, but that’s only part of the equation. You could land a million dollar contract tomorrow, but if your expenses eat up $990,000 of it, your bottom line is only $10K. Focus on what’s left after you’ve paid your staff, covered your other expenses, and paid yourself. That’s what you’re really earning.
- Focus on your wallet. When you realize that every single business decision you’re making is based on money, it’s time to take a step back. Successful businesses make money, but they do it by working with passion and ensuring that their customers are satisfied. Steve Jobs didn’t build innovative products just to make money (though he certainly did profit.) He wanted to introduce elegant, functional solutions for everyday problems. Remember why you started your business and work to leave a positive impression on your community.
There will never be a shortage of businesses in trouble, and savvy entrepreneurs will learn from the mistakes of others. Make sure you’re not sabotaging your own success.Tags: business tips, Finance, Mondays with Mike, Money Management, Product Management, Startup