1. Ideas are worth nothing.
Every now and then a little neuron inside your head gets excited by a jolt of electricity. This is all an idea is: electricity, confined.
It’s a wonderful feeling but it is important to accept that in this state it is worth nothing.
Turning those brain chemicals into words or ink is the first step of making it worth something, for only when it has the ability to be moulded does it have potential. But potential is still worth nothing.
The step after that is hard. It’s when you spend effort, money or time exchanging that potential value for something real.
The benefit of making this exchange is that irrespective of whether the execution turns into your intended return you always return experience, and that experience is always worth more than the spend.
Ideas are worth nothing, execution is everything.
You can’t get experience from wondering.
2. Money can buy almost anything.
I’ve only been in business for five years but in that time I’ve seen many businesses start and fail. I’ve also seen many businesses start and flourish. I don’t believe start up funding to be the determining factor of success.
It’s a bitter truth because as a start up you feel that money will solve your problems, and in a way money is easy. We all yearn for more capital: “How am I to be seen as legitimate if I’m not driving a nice car?”.
Money is the great skewer of our perception. When a company has money it can buy design, followers, production capabilities, distribution, advertising, branded cars, people who know people etc. and when you see this spend you think “wow… this is success.”
But unless that spend is reconciled with return there is no business. Perhaps a business can survive by gaining new investment as it continues, and it’s worth noting there’s nothing wrong with calculating return and making that risk, but reconciliation must always be considered. Spending money is not earning money.
Money is a fast track, it can’t buy: innovation, class, reputation, relationships.
These are the hardest things to earn and they are also the most valuable.
Never think money will solve your issues.
3. It would be so easy if everything went to plan.
Things happen outside of your control that can affect you greatly. Consider what happens when roadworks start outside your bar, international competition enters the market, your business customers don’t pay their bills, your box maker stuffs up your boxes.
One can only control the controllable.
Controlling the controllable means: responding correctly, over-communicating, switching out poor performing suppliers (and non-paying customers), keeping an eye on the market, being agile.
4. Cash flow is King.
No money, no problems. Because you aren’t in business any more.
In a simple world you sell a product and the customer gives you the money. But in reality, holding stock costs money and there needs to be sales in order to pay bills.
The flow of cash goes from customer to retailer to distributor to producer to supplier. Everyone in that chain needs money to pay their bills, staff, rent, tax etc. or to grow. So for anyone down the line the quicker the money can change hands the better, and for anyone up the line the longer the money can stay the better.
What this highlights is how valuable ‘access to the customer’ is. Consider that time when Facebook muted your business page, making you pay to get access to your customer base. Or when Countdown introduced their home brand popcorn (if you were a popcorn company). Or why a distributor with 1000x accounts is worth a considerable percentage of the revenue.
Cash flow is king. Access to the customer controls the flow of cash. These two points should warrant the need for innovation not only in product, but in process.
5. You are the greatest asset.
When you put effort into something you care about your feelings for it are amplified.
As a result you spend a lot of time thinking about your start up and working on it all the time.
I’m not sure if saying “take time out” is worth anything to you, because when you’re starting up you feel like you can’t. But I can say that five years on I do take time out, regularly. It’s been critical for sticking with it. To be honest, I don’t know what the difference is between then and now.
In a start up, the highs are high and lows are low. Utter despair to ecstasy on a weekly basis.
While the potential for greater monetary return is one reason to start a business, having flexible hours and being able to spend time doing the things you love is another.
Working all the time is contradictory to the goal of living a life you want to live. Manage yourself and enjoy a variety of things. Coincidentally the greatest moments of creativity happen with mental clarity.