Lessons After One Year in Business.

One year in business and here are the prevalent problems and lessons I’ve learned (the hard way!)

PROBLEMS

#1 Pain: Collecting money owed on time. Cashflow!

I have $6,500 owed that may end up putting me out of business (have to go to work to pay that money off!).

Solution: Ongoing problem but I will not take on work without deposit and iron clad service contract now. Have lawyer on stand-by for amounts owed. I tend to be a nice guy but have become disabused of anyone that owes me money – and make this clear to them!

#2 Pain: Hard to hire reliable people.

Solution: Get people to see the potential of this business and get them to work on spec (I get paid, you get paid (see problem #1) AND get a share of the pie). If someone isn’t willing to put their neck on the line like you, why work with them?

#3 Pain: Losing my FOCUS.

I took on work that was not very profitable just to pay immediate bills and recently found out I may have lost ½ my yearly income because I was distracted.

Solution: As “republican” as it sounds, I ask myself when doing ANYTHING, is this putting money into my pocket or taking it out. If putting it in, when? I then spend 80% of the day on that and 10% on stuff not making money but still necessary, and 10% on future endeavors that will put big bucks in pocket. I am a futurist and can spend 100% on future pipe-dream endeavors instead of focusing on the bottom line.


MOST VALUABLE LESSONS I LEARNED

#1 Valuable Lesson: Marketing. Give people an aspirin to their worst headaches, not just solutions to their problems.

Explanation: What sells more? Vitamins or Viagra? Solve a person’s WORST PAIN, find a way to profit from it and you are guaranteed millions. Talk to people about their worst pains every day. I can literally start 20 businesses in a depressed economy just by listening to people’s most burning pains.

As an example, I recently talked to a guy that owns a chain of local pizza stores. He had a HUGE pain. The government was forcing him out of his most profitable locations in order to run a highway through them. I thought to myself, this is one guy that needs my rental agent services BAD. There are about 1000 businesses that will be going through the same pain right along this 3 mile stretch. WHAT AN OPPORTUNITY all based off a 5 minute talk with the pizza guy!

#2 Valuable Lesson: Making money from the aspirin.

Explanation: When starting out, it’s good to give people a deal but remember you are taking their pain away and if they don’t want to pay a reasonable price, someone else with a worse headache will! It takes experience (maybe about 1 year) in order to gain the confidence and guts to say either NO to a potential customer or “I want more money”. I’ve turned down HUGE contracts because I knew I wouldn’t make any money and more importantly it would be taking time away from the contracts that would make me tons of money with very little effort.

#3 Valuable Lesson: Finding the Magic.

Explanation: One of my business partners tells me, “It was absolutely magical watching you begin this business. You could do no wrong.”

But I did! I ignored the magic.

Admit to yourself what that magic is and DO NOT LISTEN TO ANYONE that you should be doing something else. Not even your logical self. Go on results and listen to your gut.


SUMMARY

Well, after year one, I am just about breaking-even so the small business statistics are correct. I made one MAJOR mistake in January by taking on renovations work just to pay the bills at the end of the month. My management part of the business was going thru a seasonal hyper-growth period AND I MISSED IT because I had to finish reno jobs. I focused on some really bad unrealistic clients that pretty well cost me $10,000 directly while I could have been off making $20 to $30K in Jan and Feb.

My greatest “wins” have been in Marketing. I can pretty well sum up a successful business concept in one sentence. “Provide enough people with the aspirin to their worst headaches that no one else is providing AND make huge profits doing so.” If a business does not meet this criteria, I can almost guaranty it is out of business when the capital dries up. When I tell my target audience the pain I can take away, they are practically ripping money out of their pockets. I just have to work the profit part more now. I know I have the experience now to do this after this year.

All in all though, I WOULDN’T CHANGE THIS BUSINESS EXPERIENCE FOR ANYTHING!

(Note: Notice I said “experience”. I read books all the time but the most valuable lessons and wins come from going out there and doing it. DO IT NOW! is the most powerful 3 words ever.)