Tom Steiner – You could get an MBA from the University of Chicago, you could just jump in and hope it works and fix things on the fly, you could research your business until you know everything there is to know and grow old before you launch. By knowing these three simple secrets you have some of the most important tools to run your business the way it should be run.
Everyone who wants to start their own business has a list of reasons why they want to do it. According to Inc. Magazine, these are the top ten reasons to run your own business:
- You Control Your Own Destiny
- You Can Find Your Own Work/Life Balance
- You Choose the People You Work With
- You Take on the Risk – And Reap the Rewards
- You Can Challenge Yourself
- You Can Follow Your Passion
- You Can Get Things Done – Faster
- You Can Connect With Your Clients
- You Can Give Back to Your Community
- You Feel Pride in Building Something of Your Own
Though these are great and noble reasons to start a business, this list and just about every other list on the internet does not mention the number one reason why anybody should start a business. In fact most of the articles about starting a business never mention the biggest reason to go into business.
Tom’s Secret Number 1
The first reason anybody should go into business is to make money.
It is OK to make money. A noble heart can have all the good intentions in the world. However, they cannot go very far if they don’t have the resources to keep their business going. Without money, you cannot make your own schedule, give back to the community, connect with your clients, etc. All the good intentions in the world will not replace money when it comes to running your business.
Job one is to make your business sustainable. Once you are sustainable, that is have a positive cash flow and a strong net income, then you can think about the altruistic reasons you started your business. Simply put, you need to make money and enough of it.
Tom’s Secret Number 2
85% of running a business is common sense. The rest should be in your business plan.
From the moment you decide to start a business to the grand opening to the hiring and firing of employees and beyond, you will be faced with having to make decisions. Making the right decision is often hard to do. You are often faced with having to make decisions on the fly or at the most inopportune time. Under the best of circumstances, some decisions about your business are hard to make. Making a rash decision can have an impact that could affect your business for a long time, especially if it damages your reputation, image, or your credit.
When it comes to making decisions about your business you should stop and think about the following questions:
- Is this good for my business?
- What impact will this decision have on my overall business?
- What are the short and long term effects?
- How much will it cost?
- If it costs money, where will it come from?
- If there is not money in the budget, what will I give up that is in the budget and how will that affect my business?
- Does this decision fit in with my plans?
- Why am I doing this?
There are a lot more questions you might want to ask yourself about the decision you have to make. Making choices under pressure can lead to disaster. Not following your plan or being pressured to make a decision can also lead to disaster.
As a business person, you will meet people everyday that will want you to make one decision or another. Some of these people will try to pressure you into making an immediate decision with out time to think things through. If this is the case, just ask yourself, do I want to do business with a person like this? Anyone that does not respect your need for time to make a decision about the well being of your business really doesn’t deserve your business.
Common sense may even dictate that you seek outside help in the way of your accountant, lawyer, or other trusted person, like your regional ISBDC counselor, to make the proper decision. Take advantage of the experts in your corner. That is why you hired them. I have always felt that a good lawyer and accountant that are well versed in the needs of a small business are worth their fees in gold.
Tom’s Secret Number 3
Think of money is a tool. Take care of it.
Every industry has its set of tools. Every business has one tool in common, money. Taking care of your tools is an important part of running your business. A good example of this would be a carpenter. They use and rely on their tools being sharp, square, straight and properly set up. If their tools are not in good working order, it makes their job harder if not impossible. Using tools that are not in good working order, or using them improperly can cause damage, injury, and unprofessional results.
Neglecting the tools of the trade is probably one of the worse things that anyone can do. Imagine if the carpenter left his tools out in the rain and they rusted. How would he be able to effectively do his job with rusty tools? In your business you need to take care of one of your most important tools, money. If you don’t take care of it, no one else will.
So there you have it.
You need to make money to do the things you want to do and that is OK.
Common sense says that you should not rush into a decision and that you need to understand the ramifications of your decisions. Remember secret number 1 as one of the reasons for a decision.
Use your money wisely. Use secret number 2 to help you keep your tools in good shape and ready to work for you when you need it.
To bring it around full circle, common sense and using your money wisely will make the money you need so you can do the things you want to do.
Tom Steiner is a Business Advisor for the East Central ISBDC, an organization with the mission to create a positive and measurable impact on the formation, growth, and sustainability of Indiana’s small businesses by providing entrepreneurs expert guidance and a comprehensive network of resources. Tom can be reached at email@example.com.