Stop Learning Expensive LessonsAug 10, 2022
me now that i've started a business? That's the question i asked one of my mentors, Mr. Ned Clark over 20 years ago. Mr. Clark was one of my best friend's father. He was a banker and he was in the banking industry for decades. I wanted some advice, so I asked him out to lunch and we had a great meeting, but at the end of the meeting I asked that question, "What's the number one thing you could tell me to do now that I'm in business?" And his answer was, "grow slowly." I call that the most expensive lesson I ever learned. I should have taken his advice but I didn't. We had a DNA testing company and I was growing pretty steadily until we decided to franchise. When we franchised it went off like crazy. We were putting franchises in Florida and New Jersey and Seattle and Los Angeles. We had to support these franchisees, so what we did was up our expenses. Our head count went up and we added support staff and and sales people. It's a lot like when you go to a casino and all you ever talk about is your winnings - you never mention the losses. Well, in business your expenses are your losses and they add up. And if they exceed your revenues you're either going to go out of business or you're going to have a tough time getting back to profitability. So I want to talk with you about the three things that will help you maintain a profitable, sustainable business.
#1 - Keep your head count as low as you can. I get it sometimes it's uncomfortable not having enough people to service everybody correctly, but you always want to have fewer people than you need at the beginning.
#2 - We really have to look at your products. Of course they have to be in demand, but they also have to be profitable. It's really exciting to sell a product that is in high demand and people want it, but if you're losing money on the product you're going to be out of business soon. So, so have a profitable product that you're selling.
#3 - Install systems and processes. And make sure they're followed by everybody.
So, in the end, ask your smart mentors questions and follow their advice. I sure wish I would have. Here's a little bit of advice - as you grow, your company grows.
Keep Growing - SLOWLY!