Success « Systems, procedures, and processes for small business

Making a million dollars

By Brian Phillips

It’s easy to make a million dollars on paper. I’ve done it a bunch of times. All you need is a spreadsheet and a good imagination. On the surface, this may sound silly. It may sound like a complete waste of time and a trip into fantasy land.

But the truth is, making a million on paper is not a waste of time. In fact, it is a crucial part of making a million in reality.

Any long-term endeavor requires a plan. It requires an identification of the goal and the specific steps required to achieve that goal. And for any plan to be effective, it must be in writing—it must be on paper.

Without a plan, life is like—as Forrest Gump would say—a box of chocolates. You never know what you will get. Without a plan you leave your business at the mercy of whatever happens. Without a plan you are simply wandering aimlessly, taking whatever action seems expedient at the moment.

So, making a million on paper is actually an important step. This doesn’t mean that we should engage in wishful thinking or idle pipe dreams. Our plan must be reasonable, carefully calculated, and then implemented. Without action a plan is useless.

Whatever your goal, you should develop a plan for its achievement. If you can’t do it on paper, you probably can’t do it in reality. If you can’t envision what you want and how you will get it, you will ultimately get whatever happens your way. A plan is a road map for your business.

Making a million on paper is not only an important part of planning, it’s also a lot of fun.

Self-interest and your small business

By Brian Phillips

Mark Forster has an interesting post on acting in one’s self-interest. As he correctly points out, this is often taken to mean “do unto others, before they do unto you.” But as Mark explains:

In fact this is the very reverse of acting in one’s own best interests, since it can hardly be thought to be in anyone’s best interests to alienate other people so that they will not cooperate.

The results of confusing acting in one’s own best interests with a narrow mean-spiritedness are disastrous.

Business is a perfect example of this principle. We own a business with the goal of making a profit—we are pursuing our own self-interest. But we cannot achieve this if we charge outrageous rates, attempt to underpay employees and treat them poorly, cheat customers, and engage in other activities that might seem to have short-term “benefits.” The result of such actions is that we will have difficulty getting customers and keeping employees, which ultimately is not in our self-interest.

Acting in our self-interest means looking at the big picture and the long term implications of our actions. A classic example is a college student who faces a choice between studying for an important exam or going out with his buddies. Hitting the town for a night of partying can certainly seem appealing, but if he fails the exam it would harm his grades and could ultimately impact his career.

In business we must often choose between the short-term and the long-term. If we want to truly act in our self-interest–to achieve our long-term goals–then we must recognize when the two might conflict. And we must act accordingly.

Small business success is an attitude

By Brian Phillips

Mike is a plumber. John is an electrician. Both have a reputation for doing good work. Both stay very busy. But that is where their similarities end.

John drives a new van with professionally designed graphics. Mike drives a 15-year old van with a tattered magnetic sign. John wears a polo shirt with his company logo. Mike wears whatever t-shirt happens to be clean that day. John works 40 hours a week, spends his weekends with his family, and takes regular vacations. Mike seldom gets home before 6 PM, works most Saturdays, and doesn’t know what a vacation is. John charges the highest prices in town while Mike is known for his low rates. Mike complains regularly about being underbid by the competition. John doesn’t know what his competition charges.

Mike and John are friends. Neither can understand how the other operates. Mike can’t understand how John gets away with charging such exorbitant rates. John can’t understand how Mike manages to stay in business.

The differences between Mike and John go way beyond the obvious. The differences are fundamental. The differences go to the very core of how they view their business and the world. The differences are philosophical.

To Mike, his business is the means to pay the bills. He views the world as limited in opportunity. He operates much like everyone else in his trade. He finds comfort in the status quo and refuses to take risks. When John tells him to raise his prices, Mike complains that customers won’t pay more.

To John, his business is the means to the type of life he wants to live. He views the world as full of opportunity. He continually looks for ways to differentiate himself. He believes that what was good enough yesterday won’t be good enough tomorrow. He regularly offers upgraded services and products, which his customers love and make him more profit.

Mike is afraid to stand out. He is afraid to act on his own judgment, and thus he embraces the status quo. John wants to stand out, to be different. He has confidence in his own judgment, and the courage to act accordingly.

Mike and John could just as easily be the owners of any small business. Indeed, they have many counterparts in virtually every industry. Their outlook on life ultimately determines what they do with they lives. Those who dream and take action will achieve their dreams. Those who seek to learn and grow will learn and grow.

In the end, each of us gets to choose whether we will be Mike or John. Each of us gets to choose what our business will do for us. Each of us gets to choose what kind of life we will have.

Making a million dollars

Self-interest and your small business

Small business success is an attitude

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