General yakety yak
Passion and Profit
Having completed about 15 interviews (I know they aren’t all published), I have to say, some themes are immerging that I have always believed. When you start a business, there are two things that you need to be successful: Passion and Profit.
As you know, being a business owner requires a lot of stamina. Not like the stamina we need in a soccer game, but mental stamina that keeps us going when we have a horrible day. You know the kind of day I mean. You arrive late to the office on a Monday morning because you forgot your phone and you have to drive all the way back home. Then, you finally get to the office to find out that over the weekend, it rained, and water leaked into the warehouse getting several boxes (or whatever) wet, and you need to see if you can save it. Then, an employee calls to say that he won’t be coming in today because he just decided to go back to school, and needs to register for classes today. Then, a customer calls to complain that your guys have not arrived at her house yet, and they were scheduled to be there an hour ago. Does any of this sound familiar. Well, I’ve been there.
Needless to say, it’s days like this that requires Passion to keep you moving forward. There are still estimates to get out. Materials to order. Vendors to contact. And payroll is due. Passion drives us to keep going in the good times and the bad. Passion helps us make one more sales call on Friday afternoon at 6:00. Passion keeps us on the computer on Saturday and Sunday when our friends are watching the game. Passion keeps us moving because we just love to do it all. It is exciting and fun. Do you have Passion for what you do? Would you do what you do if you didn’t make much or any money? Which leads me to my next point…
You need to make a Profit. Did you hear me? You need to make a Profit. As soon and as fast as you can. Otherwise, you have a hobby. An EXPENSIVE hobby. This one was a hard lesson for me and a lot of other business owners to learn. We think if I just sell more. If I just pay for this new ad campaign. If I just can make it to next month…things will turn around. We get into this predicament by buying too many things and not focusing on making a profit. To some of you, this will sound preposterous, and others will know exactly what I am talking about. Let me assure you, tons of entrepreneurs live here, and for a long time.
Profit = Gross Sales – Direct cost – Overhead
Most small business owners forget the Overhead part of this equation. They forget that they need to put gas in the car, pay for their cell phone, pay the accountant, or pay for a new computer. And, I have news for you: if you take a paycheck, that is NOT profit. That is overhead. Cash in the bank is not necessarily a profit. You should be making a profit. Otherwise, you just own a job.
I believe that if you focus on these two things, then you have a really good chance at staying around a while. When you have these two things working, you will be able to handle all of the other things that cause us problems: Payroll, hiring employees, marketing, customer service, etc. If you don’t have passion, you are reduced to just trying to make money. If you don’t have profits, you have nothing to invest into the company to expand, and you don’t get rewarded for all the hard work of owning the business.
Until we meet again: plan, plant, and grow, but don’t forget to harvest.
Passion and Profit
Having completed about 15 interviews (I know they aren’t all published), I have to say, some themes are immerging that I have always believed. When you start a business, there are two things that you need to be successful: Passion and Profit.
As you know, being a business owner requires a lot of stamina. Not like the stamina we need in a soccer game, but mental stamina that keeps us going when we have a horrible day. You know the kind of day I mean. You arrive late to the office on a Monday morning because you forgot your phone and you have to drive all the way back home. Then, you finally get to the office to find out that over the weekend, it rained, and water leaked into the warehouse getting several boxes (or whatever) wet, and you need to see if you can save it. Then, an employee calls to say that he won’t be coming in today because he just decided to go back to school, and needs to register for classes today. Then, a customer calls to complain that your guys have not arrived at her house yet, and they were scheduled to be there an hour ago. Does any of this sound familiar. Well, I’ve been there.
Needless to say, it’s days like this that requires Passion to keep you moving forward. There are still estimates to get out. Materials to order. Vendors to contact. And payroll is due. Passion drives us to keep going in the good times and the bad. Passion helps us make one more sales call on Friday afternoon at 6:00. Passion keeps us on the computer on Saturday and Sunday when our friends are watching the game. Passion keeps us moving because we just love to do it all. It is exciting and fun. Do you have Passion for what you do? Would you do what you do if you didn’t make much or any money? Which leads me to my next point…
You need to make a Profit. Did you hear me? You need to make a Profit. As soon and as fast as you can. Otherwise, you have a hobby. An EXPENSIVE hobby. This one was a hard lesson for me and a lot of other business owners to learn. We think if I just sell more. If I just pay for this new ad campaign. If I just can make it to next month…things will turn around. We get into this predicament by buying too many things and not focusing on making a profit. To some of you, this will sound preposterous, and others will know exactly what I am talking about. Let me assure you, tons of entrepreneurs live here, and for a long time.
Profit = Gross Sales – Direct cost – Overhead
Most small business owners forget the Overhead part of this equation. They forget that they need to put gas in the car, pay for their cell phone, pay the accountant, or pay for a new computer. And, I have news for you: if you take a paycheck, that is NOT profit. That is overhead. Cash in the bank is not necessarily a profit. You should be making a profit. Otherwise, you just own a job.
I believe that if you focus on these two things, then you have a really good chance at staying around a while. When you have these two things working, you will be able to handle all of the other things that cause us problems: Payroll, hiring employees, marketing, customer service, etc. If you don’t have passion, you are reduced to just trying to make money. If you don’t have profits, you have nothing to invest into the company to expand, and you don’t get rewarded for all the hard work of owning the business.
Until we meet again: plan, plant, and grow, but don’t forget to harvest.
2010
So have you set your New Year’s resolutions? How did last years go? I have to be honest, I don’t set resolutions anymore. I realized a while back that I just let myself down, so why bother. Instead, I take a really good look at what I want to accomplish for the year and create a strategic plan. That plan takes into account all areas of my life that I want to see improvement. As and example, a few years ago, I realized that my boys are growing up fast, and I wanted to make them a priority. So instead of just saying that I resolved to spending more time with them. I made a plan for the year of HOW to spend more time with them. So I decided to go on three “vacations” with my family that year, and we planned one out to the Midwest, we spent one weekend up in the mountains, and I spent one week over the holidays with them. I also set aside “special days” with my boys. They would each get one afternoon a month with me to do what they wanted. We went to the park, we went to Chuckie Cheese, we went to McDonalds, and their favorite was to Wendy’s for a frosty.
I do this with business as well. You need to define what you want to do, then create a plan to make it happen. The other thing I did, was to keep a sheet in a notebook that had my monthly goals that needed to happen to accomplish the yearly goal. It was my progress report. So if you want to increase your sales, figure out how much sales you need to do each month to make sure that happens. Then, what activities do you need to do, and how often, to accomplish that monthly goal.
Many people want success, and many people think it just takes one big home run. The reality is, most World Series winners get there by the accumulation of many base hits, accompanied by a few home runs. So, you need to get the little things done, track them, and be persistent and success will come.
Let’s make it a fabulous 2010!
Here we are to stay…
So I have just moved my blog over to WordPress. The original blog was started on Blogger, and due to some suggestions from friends, I am here now. If you want to see where I started, go to : http://denversmallbiz.blogspot.com/
But I think you will agree, this is much better. Let the fun begin.
The Adventure… (originally posted 1-3-2010)
Small business ownership is an adventure. It is appealing to most because of the FREEDOM it promises. Well, I find that ironic. I always told people that owning my own business was great because I got to work whatever 80 hours a week I wanted.
People like Tim Ferriss, author of “The Four Hour Work Week” would look down on that notion, but to be honest, there are very few individuals that can build any lasting and thriving business on any less. If you are thinking about starting your own business, you need to take this into consideration. It is NOT easy. It takes time. It takes dedication. It takes a lot of hard work. AND it takes discipline. I think there are few businesses that make it because they do not understand this. They think it is as easy as reading a How-to book on ________________(you fill in the blank), and they will have a successful business.
I encourage you to read the stories that true business owners tell me. I will be interviewing veterans and rookies. I always love both because you get something different from each one. From the rookie we will see pure optimism, and a take-no-prisoners mentality. From the veteran we will hear wisdom and experience that has been tested by the adventure. Both excite me.
I hope this blog will be an encouragement to some, and a slap in the face to others. We all need both from time to time; I know I have.
So here’s to a new year, and a new decade. It is filled with hope and promise. Let us press forward to meet the challenges that will come, and create companies that thrive, advance, and make us very wealthy.
Happy New Year (originally posted 1-2-2010)
About this time every year, I am ready to get back to work. Too much good food. Too much drinking. Too much making of small talk. I don’t know about you, but I like routine, and I don’t like to deviate from it for too long.
So what is this all about? Why should you read my blog? Well, I am setting out to interview 20 small business owners every month. They will all be from the Denver metro area. They will be from all different industries.
You see, I love talking business with people. I love hearing the stories. I could do this for hours. But I thought I would put some structure to this passion. I want to know how people start their business. Why they started. What do they struggle with. What would they do if they could. Where do they want to go. These are the questions that keep us up at night. Weather you are an aspiring entrepreneur or one that has made the leap and on the side of the mountain. Michael Gerber calls it the entrepreneurial bug.
So weather you are already a small business owner, or would someday like to be, come back and visit often. I will be interview several entrepreneurs each week. If you have questions about what I talk about, feel free to send them to me. if you are a small business owner, and would like to be interviewed for the blog, let me know that as well. I don’t care what size, or what industry. Let’s learn from each other and make 2010 a fabulous year.
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