So I want to address something that comes up all the time. Every single small business owner regardless of their age, gender, education, their industry, the number of years they’ve been in business, why they’d started their business, how much capital they had when they started – all of those things we think matter – struggles mainly with two things: Time and Money (or a lack thereof). In other words: cash flow and capacity. There’s never enough time, there’s never enough money!
If I had more time I could make more money, but if I had more money I could make more time. So what ends up happening is that business owners just circle around and around in a vicious cash flow/capacity cycle. The challenges of businesses are not that there are not enough opportunities in the world – there’s more than enough opportunity, all of us can make way more money than we need doing what we love.
But businesses struggle because of this cash flow/capacity issue, and with the side effects: health issues, burn out, real financial issues and family/relationship issues.
And it’s the mismanagement of the cash flow/capacity cycle and the inability to manage those external factors that ultimately result in a business shutting down. It has nothing to do with opportunity, it has nothing to do with the economy, it has nothing to do with whether a business can or cannot work. So all that said, how do we resolve the issue?
The root cause is that we make bad decisions about how we spend our time and our money. If we understand that we don’t have enough money, (not to live from fear, but to live in reality), and we don’t have enough time, where should our focus be? Again, we have to realize that cash and capacity are two finite resources. Turns out it’s actually very simple. We need to discern on a much higher level what we spend time and money on.
It means that every time we say yes to spending a minute of our time or a dollar of our money, we need to confirm that it’s actually going towards growing our business and if not, it’s a waste and will contribute to the negative cycle and we need to drop it. The truth is, most small business owners manage their money very tightly because they fear the very real ramifications of not having enough, and at the same time they manage their time very poorly. Our solution is usually – and this is true for most business owners – we think we can just work through it, we’ll just work harder and we’ll figure it out – even if we have to stay up all night.
The reality is that if you apply the proper criteria, you can probably stop doing about half of what you’re doing because if you look closely about half of your task list does not actively grow your business.
How do you tell whether an activity is growing your business or not? Primarily its a mindset that is going to help you. Adding this question to the top of your list is going to change the way you do things. Not “When am I going to do this?” or “How am I going t pay for this?” but “Is this going to grow my business?” should be the first question that pops into your mind when you are about to add a task to your already eternal list or spend some money you don’t have.
Your job is not to get busier and do more – your job is to get so clear about what your business is here to do, who you do it for and the scale you want to grow it to, that every time an opportunity comes your way, you can instantly know if you should say yes or no to it. If you can get to the point where you live and breathe and eat and sleep this concept, it will change your life, and your business.
Now what does that mean: “to grow my business”?
Look at every task and ask yourself three questions for each of the activity:
1. WILL THIS GET ME CLOSER TO MY BUSINESS PURPOSE?
2. DOES IT HAVE ANYTHING TO DO WITH MY CUSTOMERS?
3. IS IT IN ALIGNMENT WITH THE SCALE THAT I’M GROWING MY BUSINESS?
So that meeting that you’re going to – does it have anything to do with your customers, your purpose and scale? If the answer is yes to all three, go; if the answer is no, cancel it. That networking event that you’re going to with all your friends because it’s going to be fun – does it have anything to do with your purpose? Will your customers be there? And does it have anything to do with your scale? If the answer is not yes on all three, don’t go.
I bet if you take out your action items list that 50% of the things that you’re planning on doing have nothing to do with growing your business if you look at it truthfully.
ABOUT THE AUTHOR
Nicolay H. Kreidler is an entrepreneur and strategic consultant in the health and wellness space who focuses on turning around distressed businesses and re-positioning them for success.