This is a guest post by Steve Rice from Karmic Kappuccino.
I suck at running a business! But Iâ€™m becoming a better entrepreneur.
How?Â By doing it.
I am much better than I was a few years ago.
Why? Because I bankrupted my business. (Is it bankruptcy if it was never solvent in the first place?)
You do not have to do it the way I did. Here are three basic lessons that I learned that I am applying to my new business.
They are common sense, and they are nothing particularly â€œnewâ€ or â€œflash-in-the-panâ€ but that is probably one of the reasons they work!
1. Make Your Business Pay (from the start)
2. Focus, Focus, Focus
3. Lead Your Tribe!
LESSON ONE: Make Your Business Support Itself
As an entrepreneur, it is easy to look at the world through rose-colored glasses. We always see the â€œglass half full,â€ and that is important; however, this trait can also lead to the destruction of our company.
So, dream as big as you can. Attempt as wildly as you dare, but make the business pay for itself. This principle is loosely based on advice from finance guru, Dave Ramsey. He says that a business is just a hobby until it makes money.
Making money means cash in hand AFTER all expenses and capital outlays have been accounted for (net gain).Â Just because you had $200 in revenue (gross), does not mean you made money.
I know this sounds silly and even simplistic, but I ran a massage therapy clinic â€œhobbyâ€ for two years this way, hoping that if I kept feeding it cash, it would magically become a business and start feeding me.
It is a lot more fun to run a business that is making money. Believe me!
LESSON TWO: Focus, Focus, Focus
Creative, big-picture types (i.e., me) tend to like to wing it. Our motto is â€œflying by the seat of my pants.â€
Flexibility is essential to running a successful business, but so is focus. There will be plenty of occasions that will require you to wing it. Do not buy into extraneous distractions, which could devastate your productivity and profits.
You have to focus on 3 main things in business:
- Your Mission
- Your Message
- Your Market
Look, maâ€¦I alliterated! (Sorry, my momâ€™s an English teacher, so these things happen sometimes)
You must know your mission! Know your â€˜whyâ€™.Â This makes it so much easier to filter opportunities that will come to you which may become distracting to your purpose.
Without clarity, I noticed that I sometimes struggle with business decisions. I feel guilt, stress or uncertainty.Â A clear sense of mission alleviates those pressures. (It also keeps me from jumping when the flash of a new opportunity catches my eye, just because it is new and â€œshinyâ€).
Know your message. What are you saying to the market and why? Be clear about how you are communicating your mission. Be able to articulate your message to those who are looking for it.
As an entrepreneur, this is vital. A million people may be exposed to your brand; but if you cannot effectively connect to them, they will move on, even if your message is one that will serve them better than someone elseâ€™s.
Connect to your market. This is essential and should go without saying. Most of us spend all (or most ) of our time trying to connect to our market. This is what we traditionally think of as â€œmarketing.â€ These efforts are ineffective, however, if we have not focused on the first two elementsâ€”mission and messageâ€”sufficiently.
LESSON THREE: Lead the Tribe
Notice, I didnâ€™t say, build a tribe. For far too long, this is what most businesses have doneâ€”attempted to build a tribeâ€”through coercion, manipulation or bribery.
In Tribes, Seth says, â€œEveryâ€¦tribe is a movement waiting to happen, a group of people just waiting to be energized and transformed.Â A movement is thrilling.â€ (p. 5)
Why was President Obamaâ€™s 2010 election so thrilling to millions of people? It was because they felt like part of the tribe. He, better than anyone in recent memory, was able to energize and transform the tribe into a block of willing voters.Â (This is not a political analysis, but merely as sociological one)
Seth wraps up his discussion of leading a movement with these words: â€œAll thatâ€™s missing is leadership.â€
So, let me ask youâ€”have you connected to your tribe? Are you providing them the leadership for which they are longing? You can do this! It isnâ€™t rocket science, but it takes guts!
TAKE AWAY: “Just Do It!”
You are not just an entrepreneur, you are a leader! Remember to convert your business from a hobby by making it support itself from the beginning. Even if your products arenâ€™t 100% perfect, ship them out the door. Jump into the market place with ideas and solutions. Be willing to learn as you go.
Focus, like a bulldog, on your mission and your message. And be sure to show up for your tribe. We are waiting to join your ranks. We are ecstatic with the thrill of your potential. Come lead us as only you can!