Are you wondering how to do business effectively?
Today I was sitting over the projects I have in progress or that need to be significantly improved so that they can survive given the situation on the market.
They are mostly small e-shops in the USA.
I was thinking about my beginnings in business and how my priorities have changed over those many years.
In the past, my direction, goal and a kind of imaginary driving force was that I would “look good on the outside.”
I would drive new cars, have a top-notch office, ideally as many employees as possible, so that when a customer came in, we would look “like we were doing well.”
I think this is a big MISTAKE made even by more experienced entrepreneurs.
It certainly was for me.
In any case, I had to go through this in order to create new values for myself and realize that what I used to consider success is no longer such a success for me today.
Today I have a lot of experience and simply do not need or chase these “castles in the air.”
I know that it is possible to do business effectively.
I work only in the online world, mostly without employees or just with virtual assistants or smart software, and I also do not need to drive around in expensive cars just so that I and my brand look a certain way.
Everything can be done sensibly so that it makes sense and works well.
Especially in today’s uncertain times, when many industries are outright collapsing and disappearing.
Anyway, why am I writing this?
Surely everyone who is starting some kind of business or trying to make a major change in life has come across the author of the book Rich Dad Poor Dad, Robert Kiyosaki.
If you haven’t, read it; it is something of a foundation :).
Personally, my favorite book is Cashflow Quadrant.
Rich Dad tells the son of Poor Dad a story about a village without water.
It is my favorite story and essentially captures all my mistakes in the beginning.
And yes, I was not aware of them back then.
So, listen.. . I mean, read:
“Once upon a time, somewhere there stood a picturesque little village. Life in it was just like a fairy tale, except for one thing.
If it did not rain, the village had no water of its own.
To solve this problem once and for all, the council members decided to announce a competition for supplying the village with water every day.
Two interested parties came forward who wanted to take on the task, and the council signed a contract with both of them.
They felt that a little competition would keep prices down and ensure a sufficient supply of water.
Ed, the first of the men to sign the agreement, immediately ran out, bought two galvanized buckets and began running back and forth to the lake, which was about a mile away.
As he brought water from the lake in his two buckets from dawn to dusk, he immediately began earning money. He poured the water into a large concrete reservoir that the village had built.
Every morning he had to get up even earlier than the other inhabitants, to make sure that a sufficient amount of water would be available when needed.
It was hard work, but Ed was happy that he was earning money and that he had secured one of the exclusive contracts for this service.
The second successful applicant, Bill, disappeared for a while. For months there was no sign of him, which Ed was happy about because he had no competition.
He was making all the money.
Instead of buying two buckets and competing with Ed, Bill drew up a business plan, started a company, found four investors, hired a manager to run the business, and returned six months later with a construction crew.
Over the course of a year, his people built a huge stainless-steel pipeline connecting the village to the lake.
At the grand opening, Bill announced that his water was cleaner than Ed’s. Bill knew that people had complained about Ed’s dirty water.
He also announced that he would supply the village with water twenty-four hours a day, seven days a week. Ed only carried water on weekdays… he did not work weekends.
Bill also announced that he would charge 70 percent less for his better quality and more reliable supply. The village rejoiced and immediately rushed to the tap of Bill’s pipeline.
In order to compete with Bill, Ed lowered his price by 75 percent, bought two more buckets, fitted them with lids, and now carried four buckets on each trip.
To provide better service, he hired his two sons to help him on the night shift and on weekends.
When the boys went off to college, he told them:
“Hurry up, because one day this business will be yours.”
For some reason, neither of the boys returned after graduating from college. In the end, Ed had problems with his employees and the unions.
The unions demanded higher wages and better benefits, and wanted their members to carry only one bucket.
Bill, on the other hand, realized that if his village wanted water, other villages would certainly want it too.
He revised his business plan and set out to sell his system for fast, high-volume, inexpensive supplies of clean water to villages all over the world.
He only earns a cent for every bucket of water delivered, but there are billions of those buckets every day.
Regardless of whether he works or not, billions of people consume billions of buckets of water, and all that money flows into his bank account.
Bill built a pipeline that brings him money and villages water.
Bill lived happily ever after, while Ed worked hard all his life and constantly struggled with financial difficulties. And the bell rang…”
I could completely see myself as the inefficient workhorse Ed.
When I started in business, I had to do everything myself.
Just like a small child, it was me, me, me and me, and I was simply the best and no one else could do it better.
Or, when I happened to let someone else do something, I still did not properly check whether they had really done everything thoroughly and exactly as I had instructed them.
A big mistake.
Now I laugh when I think back on it.
I should point out that I see this behavior in a great many entrepreneurs around me, which is why I am writing this :).
How many times did I fail to assign a task to a colleague, or complete it myself, because “I will do it best.”
Even if I delegated it to two colleagues who work at only 60% of my own capacity, they would still complete 120% of my work, and in addition I would be able to focus on other, often much more important things and tasks.
I still remember the words of an acquaintance of mine:
When he asked me: “When do you drive a car?”
I answered: “When I am driving and looking ahead.”
Acquaintance: “Wrong, you drive a car only when you have it under control.”
And it is the same with a company; you only run it “if you have it under control.”
Although it is a simple and essentially cheap phrase, there is incredible power and truth behind it.
Simplify everything and, above all, get started!
In conclusion, I want to tell you to simplify everything.
How often we come up with incredibly complicated models and scenarios, even though things can be done very simply.
And above all, get started; whatever you are doing, do it, even if it is not perfect right away.
The important thing is to start.
It is great to think everything through in detail and program extensive systems, e-shops and other nonsense, but if you do not start—if you do not start making money—you will either abandon the project sooner or later or go bankrupt.
I have seen it many times: ambitious people work on a new business/project for months, they are excited, then a year passes, two years, and eventually they either run out of money or burn out and close the project without ever actually launching it.
To be honest, it happened to me too..
That is all for today; sometime I will continue talking about these things and my experiences.
Does anyone have similar experiences with the mistakes in business that I mention above?
Share them in the comments :).
