3% of all business owners make 84% of all private biz income. Why? They’re not covering for unknown weaknesseses.
The #1 Indicator of Success in Early Stage Businesses
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This article was published on December 11, 2009. So far, 5 people have left their thoughts. Share your own thoughts.
Move Quickly
Very few business owners expect their business to support them right out of the gate. More often than not, the expectation to receive income from outside the business gives the owner a false sense of security and a lack of real intentionality to build a business. We assume it’s supposed to be this way, and if we look around at other business startups and some of the really awful advice we get, we’re told it could be 18-24 months before the business even breaks even. So we take that 18-24 month window and use every bit of it, burning through outside money like there’s no tomorrow, and feeling just fine about it because it’s supposed to be this way.
A great friend of mine and fellow business advisor in Virginia, Eddie Drescher, told me about one of his clients who had one fitness franchise open and was about to open another. The national franchise had told him it would take 12 months or so to be profitable because that’s how long it took them.
As this client was about to open his second center, he told Eddie about this timeline. Eddie immediately challenged him, saying, “Who made that rule?” After talking through it at length, they decided to shoot for profitability in the first three months. Instead the location turned a profit in its first month, and stayed close to break even in the following few months. Rather than burning cash for 12-18 months because he was “supposed” to, he intended to do something much better much sooner, and did so.
Speed of Execution
I believe strongly that the number one indicator of success in an early stage business is not how good your product is, or how smart your marketing is, or your uniqueness, or your funding, or any of those traditional ideas of what makes for success. The number one indicator of success in early stage business is simply speed of execution.
Think of that successful six figure sales person you know, or that business owner who seems to turn everything they touch to gold. Almost certainly they are people who, when they get an idea, move on it immediately. Most of us spend way too much time thinking, researching, and planning. We would be better off getting a very basic plan in place and acting on it, and perfecting it as we go.
It’s the subject of my next book, but for now I can’t encourage you enough to just get moving! Stop thinking about starting up, and if you’ve started up, stop thinking that it’s supposed to last until the end of your cash, then magically switch over to funding itself.
Get intentional about getting your business through startup as quickly as you can. And whatever stage of business you’re in, keep Speed of Execution as one of your top business principles. You’ll make more money in less time.
Add Your Own
Thoughts
Rich Anderson
12/12/09
Right on Chuck! Im pickin’ up what you’re throwin’ down!
Chuck
12/13/09
Thanks, Rich. Speed of Execution is a great thing to pick up on! Keep me posted.
GL Hoffman
12/15/09
Chuck,
We need more voices like yours. Well done, and keep at it.
best,
GL HOFFMAN
PamMktgNut
01/11/10
Well said! So true! It’s so easy to get hung up on the things that don’t matter or clients that will never be able to afford your services. Noah didn’t build an Ark in one day and we can’t solve small biz hunger in one year ;)
So happy our paths crossed again! Luv what you’re up to!
Chuck
01/11/10
Pam,
Love your statment – “It’s so easy to get hung up on the things that don’t matter” – it’s such a big reason why we don’t move quickly.
Looking forward to seeing how we can push each other forward this year. Stay warm down there in cold Florida! :)
Paul Hoyt
01/11/10
Chuck, excellent post. We were profitable from the first month of existence because of execution and utilizing an established public sales channel.
Chuck
01/12/10
Thanks, Paul – I love hearing about businesses who don’t bow to the prevailing notion that you should lose money for 12-24 months when you start a business. We get what we intend, not what we hope for. If you “hope” not to lose money up front, you’re not likely to get there. But if you truly intend to go into business profitable right out of the gate, you’ve got a much higher likelihood of making that happen! I might want your story for my next book on Speed of Execution!