Pains of Business Owners

[c4yrslf12]

You will sometimes hear people refer to this type as "born with it", which is almost a complete fallacy.

I love your post, and mostly agree. I think we all aspire to have habitual drive, learning, and action oriented success. However, I don't agree with your fallacy of a person not being "born with it."

I think we are.

When a child is born, they don't fear anything. They don't know right, wrong. They are insatiable learners. Everything around them is something they can learn. And they PERSIST regardless.

• How many times does a kid fall down trying to walk? Do you know any adults who are capable of walking but simply never figured it out?
• How seemingly impossible is language, yet nearly every human on this earth can communicate.

The environment we grow up in, the freedom we're given to grow independently, and the habits we form when we are young are likely what provide us a path of success or not.

Now, some people have the best of the best laid before them, and may truly be destined for success because they've never been given much of another option. Others, unfortunately, don't have that. They have to reprogram their mind.

In the society we have now, the eldest generation is likely the hardest working--that was life. The next generation is more assumptive--pensioners began to expect things. Millennials.. who knows, but I'm going to say they are living in a society now which breeds the poorest of mindsets.

These environments all create different daily habits, both personally, and professionally.

 

[Juice]

[Vomited quick outline below that I intend to get back to.]


(My experience with offline businesses. Running, investing, and on boards plus friends in the ring. Sample of ~60 businesses.)

0-3.5 mill (U.S. dollars)
Cash Flow Management and systems
How to move and manipulate money becomes a skill when you hit above $100k. Unless, you have less than 5 employees. Entrepreneurs do not turn this over fast enough. When they do, it is often out of desperation and usually to the wrong person. It should be on the top 5 list.

Systems are talked to death. The talking needs to die. More doing and WITHOUT the exceptions. Small biz is in love with "the exception to the rule" while large corps are lovers with "This is the rule! NO exceptions." Both carry the Aidz virus.

Best to start before the 3rd customer. Small feedback loops. Short daily morn and night talks about fails/wins and corrections.

4-7 Mill
Acquiring/managing talent, core focus, Five Monkeys experiment, Leadership clashes, Actionable meetings with "employees" missing

7.5-10 mill
Scale or not, Supply chain, Equipment tiers, infighting between departments, reorgs for best personnel, property/office R.E., Meeting waste

No direct exp with over 10 mill yearly rev offline biz.

Internet biz has overlap, of course. That is a problem. Things appear the same and they fucking aren't.

RE: Cash flow I couldn't agree more, I would even extend the biz side to say up to $1M in annual revenue, cash flow is still the bear you need to fight every month. Yes it's going to be very different dependent on industry, but IMHO generally speaking to support the resources you need to run an ~84k/mo business, a big chunk of that money is going out the door one way or another; whether employees, contractors, marketing spend, hosting/infrastructure, etc.

Systems are nice (and a huge PITA to set up) but I would also agree that it's better to find low cost domain experts to deal with the little things, mostly payroll and bookkeeping. That shit sucks. More so, and I wish someone would have told me this, every now and then you're going to have a client that simply doesn't pay you - at least in a service business / agency where the work is delivered prior to payment. There will always be these asshats that even though you had agreed on the work to be delivered and the payments terms, simply won't fee like paying you at the end of the day.

Here's the TIP: If it's less than $10k, continue to send them invoices and make phone calls, but don't bother going after them in court; I promise it will cost you more money than you recover, besides... there's better ways to get even.

Now when it comes to the biggest elements you face when your biz does crest and exceed $10M/year, these become very different problems, so just to expand on @Court Jester 's list:

• HR - becomes a real thing you wish you had taken more seriously sooner. Not only to support your talent acquisition and management process but to support all the new problems and woes that come with a team that is now likely at least 30 people.
• Passive talent acquisition - is a must, the best way to manage this as a manager or executive is to build and tightly manage a virtual bench; a sideline of talented folks you know and respect who you would love the opportunity to work with if 1) the need ever arose for someone of their caliber (and you afford them) or 2) if they were ever to consider new opportunities / leave their current gig.
• An expansion plan - when it comes to growing your line of credit, leaning on business credit/hard assets, and how to grow your RE footprint. None of these things will ever really cross your mind until you're adding a few bodies every month and suddenly realize that the 60k SF of space you have now, with no contiguous expansion option, you're going to outgrow in ~3 months, and you don't have a lease out or lease conversion option to relocate to a new building PLUS you've just spent ~$300k on tenant improvements/build-out of your current space.
• A serious plan to generate new business - I'm talking more than marketing. This is not a tactical thought exercise, this is the 50k foot view strategic vision that NO business owner gives as much time, as often as they should. This is finding new and creative ways to vertically grow your business while thinking how you can horizontally expand into new markets. How do you find leads/consumers you can bolt on to operations you've invested so heavily in under your existing roof. Where are there industry partners or acquisitions that add tech, talent, customers, or brand awareness where you need it most.
• An operations plan - People seem to often get to this point in their business and start getting caught up in an exit plan, and while it's nice to think about those big 7 figure liquidity events, that's a fools' game at this point. Instead think about how you are going to tighten up the chain of command in your organization, how your Director of Ops or COO can instill the management principles you've built your company on down to the farthest reaches of the organization; instill ownership thinking to the men and women on the ground floor whether that's cleaning houses, in the warehouse, or on the front-lines of the phone room.

Anyway, hope in some small way that's helpful or evokes some thought.

 

[turbin3]

Sorry in advance for the multi-quote post, c4yrslf12. I don't mean this to come across as attacking you, but simply offering a different perspective on multiple points or concepts.

I love your post, and mostly agree. I think we all aspire to have habitual drive, learning, and action oriented success. However, I don't agree with your fallacy of a person not being "born with it."

I think we are.

The thing is, there is actually a significant amount of scientific data that demonstrates that people aren't "born with it", at least in the sense that most people think. It is true, people can be born with genetic predispositions. These genetic abnormalities, biases, and predispositions can help them excel at certain things, and in other cases can make it significantly more difficult for them to do other things.

I highly recommend the book The Talent Code by Daniel Coyle. Also, I recommend researching the substance myelin and its influence on developing neural memory. People often refer to it as "muscle memory", which is a bit of a misnomer, as the more technically accurate term would be "neural memory" since the "function" resides in the brain. In short, when we perform a task repetitively, our neurons are wrapped with additional layers of myelin, which effectively turns the neuron into a better conductor, helping fire those signals faster, to perform that task more effectively. There is even some science to demonstrate that mental rehearsal of a task can add layers of myelin in a similar manner as actually performing the task, at least to some small degree.

The environment we grow up in, the freedom we're given to grow independently, and the habits we form when we are young are likely what provide us a path of success or not.

Truth. While it is no guarantee or absolute, these factors often play a very significant role, or at least a potential role, in the future success someone may be able to achieve. This is why childhood is so important, and the reason societal influences on children can be so destructive, as they can potentially and in some cases almost irreversibly damage entire swaths of entire generations of children, significantly altering the nature of the societies we live in. In that regard, it is probably necessary for us, unfortunately, to "write some people off" as being beyond all help. Good people always want to try to help, but sometimes the pathologies behind the bad circumstances and situations people find themselves in are entirely a product of their own life's work.

Now, some people have the best of the best laid before them, and may truly be destined for success because they've never been given much of another option. Others, unfortunately, don't have that. They have to reprogram their mind.

There is some truth to this, however I'd offer this addition as well. Just because a person has opportunities, does not mean they've taken advantage of those opportunities. I've known people that have been fortunate enough to have some fairly priceless opportunities in their lifetime, that most people would kill for.....only for them to completely waste the opportunity and really gain nothing from it. Opportunities are not a guarantee.

In the society we have now, the eldest generation is likely the hardest working--that was life. The next generation is more assumptive--pensioners began to expect things. Millennials.. who knows, but I'm going to say they are living in a society now which breeds the poorest of mindsets.

Something you may find interesting is the r/K theory of reproduction in species. Not necessarily in a literal sense, but from a philosophical standpoint. This theory has also been applied to politics as well, which is quite interesting and really goes a long way towards explaining some self-destructive behaviors, at least IMO. In short, the theory is there are 2 basic types of beings within a species. There is the "r" type, which is typically equated with rabbits, and the "K" type, typically equated with predators like wolves. The r types reproduce rampantly, invest poorly in their offspring, do not plan for the future, do not conserve, and generally have no camaraderie among their peers. K types are typically more conservative, invest more in their offspring, plan more effectively for the future, have a higher degree of camaraderie, and generally tend have a greater degree of other positive attributes.

Along with these theories, there is also the theory that with reproduction and generations of a species, there is a natural expansion and contraction that occurs, causing many things to become cyclical. Some think that there is a tendency for several generations to decline in their behavioral traits, before finally improving again with some future generation. For example, you have an older generation, that may have had very few choices, were effectively forced to sink or swim in the harshest sense of the phrase. Their offspring may end up having it much easier, and likewise with their offspring's offspring. At some point things will devolve to a point again, where in some manner or another it becomes sink or swim, and the cycle begins again. Ultimately, it all leads back to the habits we develop, which define our lives.