RANDOM THOUGHTS #133

Steve Cole muses: Just thinking to himself about life, culture, and business:

YOUR COMPANY IS A BUSINESS;
YOU HAD BETTER ACT LIKE IT

Your company may well be based on your great idea for an innovative product or service, but get real.
   
Your company is not a religion, a commune, a crusade, or a movie. It's a business working in the real world with real money, real laws, real taxes, real risks, and real rewards. If you sit around the house talking about a great idea for a business, you can say (and think about doing) anything at all. Actually start a business, and reality says you have to play by the rules. (I had a friend who once said, over dinner, he wanted to start a business so that he could use interviews with possible employees to find dates. OK, that's fun to say over dinner. Do that in the real world with real people -- and real lawyers are going to smack you with real lawsuits.)
      
If you run out of money, it's over. You won't get to keep the money and leave the bills behind; your vendors are not that stupid. (They'll be sure you're personally on the hook for the money.) Nobody owes you a paycheck just because you had a great idea that deserved to work. If you don't do it right, you lose and so does everyone who trusted you, invested in you, sold you something on credit, did you a favor, or loaned you some equipment. If they are smart (and people who have money often are), they will make sure you cannot escape from paying them. (I once had a gentleman offer me a business deal. Part of his sales pitch was to explain that he had created a corporation for his end of the deal so that if things went bad he would not have to pay me. Do you think I signed the deal?)
        
If you have never run a business, you do not know how to run a business. Learn to run one before you spend a bunch of money launching one. If you own a business and never had any formal business education, then get some. The simple answer is to go to a college bookstore and buy the basic books on business, accounting, and marketing. Read them. There are tons of really great business books in any bookstore.
 
 BONUS: WHAT DO YOU WATCH ON TV?
        
If you own a business and your answer is "American Idol, The Voice, and X-factor" then you're not doing it right. You are in fact doing your business a disservice.
     
You always need to be learning how to make your business better. Case studies of other businesses help you do that. So watch Kitchen Nightmares, Restaurant Impossible, Bar Rescue, Hotel Impossible, Tabitha Takes Over, Shark Tank, Restaurant Stakeout, Dragon's Den, and/or Tabitha's Salon Takeover. I know that you don't run a restaurant or a hair salon, but you run a business and some parts of every business apply to every other business. What are they doing that's good, that's bad, or that's just stupid? (Are you doing something equally stupid and just never noticed it?) What can they (and you) do better? (Just watching somebody else's business on TV trains you to spot what's right and wrong in your own business.)
      
Here's one thought. On Restaurant Impossible, the heroic chef arrives to rescue the failing owner and always asks: "What are your food costs?" Few of them know, and those that do usually have a food cost that is too high. Take two key points from this:
    
First, if you don't have easily at hand the key financial numbers for your business, you're going out of business.
      
Second, if the bigshot TV star is coming to save your bacon, maybe you should watch one of his shows ahead of time, see what he's going to ask, and have the answers ready for him so you don't look like an idiot on national TV. (Before you go face a potential investor or loan officer, maybe you want to think about what they're going to ask and get the answers ready?)
        
And just another note, every one of those restaurant or bar makeover shows checks the kitchen to see if it's clean. None of the failing owners spend the night before the expert arrives cleaning the kitchen. Is it any wonder why they're failing?

BONUS: FAILURE ALWAYS COMES DOWN TO LEADERSHIP
  
One thing you will notice on the business makeover shows is that failure of the company always results from a failure of leadership. Sometimes the leader doesn't care, or doesn't know, or just let's things keep going bad without changing them.
     
I learned this in military school: An army of rabbits let by a lion is going to kick the ass of an army of lions led by a rabbit. (An army of lions led by a jackass isn't going to do any better. The other day on Restaurant Stakeout I saw a restaurant that was an army of lazy rabbits led by an even lazier rabbit.)
     
A leader who won't make a decision, won't learn, won't take a risk, takes a risk he did not calculate, doesn't know where his people are or what they're doing, doesn't know what resources he has or how they're being used must eventually fail.