Thursday, April 21, 2011

Show Me The Money. . .

This article was written by Barry McKinley, SCORE Orange County Management Counselor

clip_image002[1]I recently heard an athlete interviewed on TV and he was asked, “Were you surprised to find yourself in the points lead?” The athlete promptly answered NO, and continued to say “if I didn’t think I was capable of being number one I would have never started the season!” I wonder how many people in business don’t think that way!

My experience in both business and now in mentoring is that many new start-ups as well as established companies concern themselves with items that will not make them any money. It is almost like they are afraid to pull the trigger! “There is an old saying that is very fitting, “Draw, Aim, Fire” but many people “Draw, Fire, Aim” which doesn’t work because you certainly miss a lot of the time. . . the same if you ”Draw, Aim, Aim, Aim” which is when you are afraid to fail so you don’t pull the trigger. Failure is good –smart business people learn and move on. Any business person who has not failed certainly has not taken any risks or conveniently has a very short memory. “The bigger the risk---the bigger the reward!”

If you follow the normal business guidelines of establishing a business plan, doing sales and expense projections, doing testing of marketing ideas, projecting required cash and establishing funding for your business. You have now completed the “Draw & Aim” phase of your business.

I recently worked with a client who had spent probably days if not a week developing many different “Mission Statements”. This was going to be a one person business and then they would hire employees as the company grew. The “Mission Statement” should have been ---“Do Your Plan” and then “Go Make Money”! Another client who has an excellent medical product and has spent years and millions of dollars developing it only to now to be facing the reality of running out of money. This cash shortage has been going on for over two years and the product could have been marketed over two years ago, and started to generate cash. Instead the owner wants to develop phase two, three and four before introducing Phase One! Unfortunately like so many good ideas they fail before they even get out of the ‘starting box’! Did Apple wait to have four phases of the IPod ready before they introduced Phase One? Absolutely not! They developed an excellent product and allowed the market to do some of the field testing and to dictate to them what the next product would be.

When I was in business I tried to run every potential task through my simple check and balance system. I asked myself will this task make me money now or in the future. Is the return worth the effort? Will I benefit some other way from doing this task? If the answers were negative then I would ask myself what is the value in doing this. Many business people mistake busy work for productive work.

As cold as it may sound, if you can’t “Show Me the Money”, don’t waste my time!