Planning for generic business success is like trying to use the “Rhythm Method” for birth control. Sure, it feels good in the moment, but the odds are you’re going to end up with a lot of expensive mistakes. Every company is different and requires different skills and tools to succeed. Moreover, as businesses change, the requirements for success change.
With all of that being said, there’s a few things that remain pretty universal. Here’s three that I think are pretty important. P.s. You’ll never believe the painful second truth!
Be willing to suffer.
This is not an easy journey. You’ll have unbelievable highs and incredible lows, and those lows are unbelievably lonely. To help navigate the emotional journey that is inevitably coming, get in the habit of doing hard things – things that challenge you, that make you uncomfortable, that make you even a little miserable. Chase those things now when the stakes are low. Get used to the feeling. Get used to working through it. You don’t want to be hit with that feeling for the first time when your entire business is on the line.
Know your three major financial statements and how they fit together.
I work with a lot of clients, many of which run seven-figure businesses, that did not understand the difference between a profit and loss statement and a statement of cashflows. Some of you are chuckling because this seems basic, but many of you are cringing to yourself because you don’t quite understand either.
The issue generally comes with inventory-based businesses where the company is growing quickly and the firm needs to buy inventory to keep up with growth. When the bank account decreases month over month, the business owner incorrectly assumes they are not profitable, when in fact they are quite profitable, but have a negative cashflow due to an investment in inventory.
“Solving the wrong problem creates new problems.”
Why is this important? Because you will draw the wrong conclusions if you don’t understand these statements. If you’re not profitable, you need to cut costs or increase sales. If you have negative cash flow, you likely just need a bank loan or investment. Solving the wrong problem creates new problems.
Make a 100% commitment to direct feedback.
When you are unhappy, voice it immediately and directly. Don’t waste time with compliment sandwiches where you give your employees a nice thing, then the actual negative thing you want to discuss, and then another good thing so their feelings won’t be hurt. That’s a setup for failure. They leave feeling like they are winning. They are not, but you didn’t really tell them that and now it is your fault. You created a lose-maybe win-but probably lose scenario.
“Be over-the-top direct. That creates a win-win.”
Be over-the-top direct. That creates a win-win. Instead say something like, “You are not performing to my expectation for this reason. Here’s what I need you to do in order to meet my standard.”
One of two things will happen. One, you’ll find out they are a good and motivated employee who wants to get better but needs feedback from you, in which case, awesome! All will be right with the world. Or you’ll find out they hate you and the organization and they will quit or blow you off and dare you to let them go. In that case, they leave your organization and you can bring on people who believe in your way of doing business. Either way, your problem is solved and everyone involved will be a lot happier as you continue to build the culture you want for the success of the firm.
Nick Palmisiciano holds an MBA from the Duke University Fucqua School of Business and a B.S. in Mechanical Engineering from the United States Military Academy at West Point. He was awarded the Entrepreneurial Organization’s Veteran Entrepreneur of the Year Award in 2015. As a Cub Scout, he earned the Bobcat, Wolf, Bear, and Webelo Badges. The Wolf Badge was his favorite. He stepped away from a successful corporate career to launch one of e-commerce’s leading patriotic sportswear sites, Ranger UP, which opened the door for Amazon’s #1 indie film and a top crowdfund performer, Range 15, then parlayed that experience into the launch of digital marketing firm Diesel Jack Media.
© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.