Congratulations! You started a business. Woo freakin’ hoo for you.
Why? Why did you do it? Did you open a music studio because you love music, or a clothing store because you love clothes? Did you open a dry cleaner because you like clean clothes? (No, no one does that – they open a dry cleaner to MAKE MONEY!) But if you answered yes to the previous questions then please, please, please do yourself a favor and hire a business manager or general manager.
You will absolutely need someone to help you take the emotion out of the day to day tough decisions. There are crappy decisions that will have to be made every single day. Hiring and firing. What expenses to cut. Going with another provider to get better service or more affordable products. And yes, marketing decisions. We’ve seen too many businesses struggle or fail simply because they couldn’t separate their dream from reality. You WILL have to market your business if you want to stay around. Snap out of it and face facts… businesses are started to make money (and hopefully profit) – because unless you’re some trust-fund baby with endless amounts of cash – you’re not gonna last unless you make money. So when someone asks you, “Why did you start your business?” Your answering better be a resounding, “To make lots of cash!”
There’s nothing wrong with being passionate about the service or product you sell. As an owner, you definitely should have some enthusiasm. But just like every parent thinks their child is amazing and perfect, you may not be able to see flaws in your company, or make decisions with your head rather than your heart. When you find that unbiased person that you trust, take a deep breath and really listen to their perspective. On the flip side, you want to avoid hiring people who are too close to your heart. We talked with a friend who told us this story:
“I once hired a young man who had been my student for years. It was impossible for me to consider firing him, even though his results as an employee were not at all acceptable. I kept seeing him as a student and so we just kept training him over and over again. It wasn’t until someone compared him to a “normal” employee that I could even realize I was biased.”
Here are some ways to keep your distance:
- Have monthly bench-mark meetings off the premises to measure results without distractions. Getting out of the facility or office will let you see the forest instead of the trees.
- Ask your CPA to compare your Balance Sheet with others in the same industry. Without breaching confidentiality, he/she can give you an idea of how you stack up.
- Make sure you analyze financial results and not feelings. Maybe that client who really bugs you also spends more money in your store than anyone else; do you really want to lose him? Maybe you really love the way that inventory looks in your store, but since no one has bought any of it for months, it could be time for a fire-sale.