After running a small business for 25+ years and having at least one side gig since I was 16, I’ve figured out a few things about business, yet still get surprised by how others do things and wonder about their mindsets. I may never know, but I’ll share what I’ve seen and experienced in case you want to know how to run a cash-positive operation with good energy while avoiding common pit falls.
I think much of business is just that, busy-ness: activities people do to pass the time in a positive way while participating in the economy.
Businesses are entities without mortality, yet they do usually function according to the morals, values, sense, and styles of founder’s and leadership’s mindset.
“A fish rots from the head down,” as they say.
Also, “we all find our way by the same North Star.”
Here’s how I think of the business: a set of simple equations:
income – expenses = earnings
deliverables + service = reputation
leadership + staffing = growth beyond than sum of parts
communication + relationships = brand
You can run a successful business with only the first two items. I know, that’s how I did it, and it sustained me for decades until some hotshot business boys who did things much differently bought one of my best clients.
By competing amongst themselves trying to gain more relevance inside the organization, the young guys harmed my little operation (by hacking into some of my business digital properties and trying to gain access to siloed client leads.)
Personal note: At the time, I identified myself with my operation, so the hacking/grabbing was experienced by me as trauma. I wanted to protect all my people, but couldn’t think straight or see the big picture. So, I rapidly dismantled a positive cash flow business in order to keep my clients safe, but they likely just thought I was “dropping them,” which harmed my reputation. Oh well. Live and learn.
These guys had the goal to own an entire sub-sector of an industry. And their outfit made loads of common-sense mistakes, and did not concern themselves with satisfying the first equation by assuring positive cash flow. They were also disorganized and unaware of the importance of a respectful B2B environment – and that women work cooperatively to “win” collectively (my team always did anyway).
Unfortunately these guys also dismantled my team via tools marginalization and ghosting. This did not sit well with me. I felt we were all in it together.
“Do not attribute to malice, what can instead by attributed to ignorance or incompetence.”
It’s taken me years to get past wanting to fight them. Wanting to be understood and seen. Thankfully, my attribution model has changed to the above and I can carry on.
I think these guys were playing. Along with having fun, consuming lots of alcohol and drugs, and doing a reasonable job delivering to the public, they harmed many and hurt some people’s ability to provide for their families. Not cool, but also not surprising.
I have to wonder if some folks try to “win” Business (the concept) by making deals, acquiring stuff, and parlaying bigger pots of money into still bigger pots of money. Finding opportunity and capturing value at the moment of purchase – that’s the way this is often done. Like if you buy a house for $50K less than market value because someone needed to sell and you could capitalize on the deal.
You lock in profit/value right away: $50K in equity.
What you do with that equity is what matters… at least in my book.
While these guys were good at delivery (giving paying customers a decent experience), they did not extend transparent communication to the people who helped them get there. Of course, then they had to shrink their operation as fast as it grew. From one location to three, and back to one again. Leaving lots of people scratching their heads about their brand and reputation.
They also fired the one visionary in the mix and sent the bean counters out to do publicity interviews. Not great. But not everyone understands marketing. The public gets it though.
Relationships always begin “at home,” with the very people who share their energy, time and expertise to help make a business a success to begin with. Never underestimate even contractors. Many are invested.
By example the “big business” outfit ignored emails from key people, and missed meetings in cavalier style, yet still expected those people to perform perfectly in a vacuum of information.
So most quit.
Perhaps some folks see business as deal-making and organizing, which is different than making, doing, or conceiving of getting great stuff and services to people. This style of business is a kind of graft, or copy-cat thing, yet I can’t knock it. Heck, we hired a president who does mostly only “deal making” then puts gold leaf on everything in sight. Forgive me, I digress, and am not impressed.
connections + access to capital = Big Deals
I use the word big deal on purpose here. Simply because someone has larger staff, more access to capital, or a greater number of people “under” them does not make them more important or valuable.
It just means, they found a way to utilize human capital for their own goals.
No big deal.
Totally fine, but it is not the same as taking care of people, making things, delivering anything or earning.