Those that have answered it (properly), usually end up succeeding.
Those that don’t/can’t answer it, usually don’t succeed. The end up floating along in the zone of mediocrity or become part of the alarming business failure statistics.
So what is the question?
What do I want?
Seems simple enough. You might be feeling a bit underwhelmed, like you’ve click on some bait. But stay with me. Often things that seem simple are the most difficult.
Because most people have no firm idea of why they are in business, and what they want to achieve. They have vague answers like;
- I don’t want a boss,
- I want more flexibility,
- I can do it better than competitors/my current boss
- I want to make more money
The problem is when you scratch a little deeper you come up empty. If you ask how much money do they want to make in 5 years. Most will say “more”. Fine. But is that $1,000 more? $100,000? $500,000?
Most people don’t want to put a specific number on it because;
a) they’re embarrassed to tell anyone what they want – in case they fail (or seen as greedy)
b) they the don’t actually know how much money they would need to live the life they want, and
c) they don’t want to “limit” themselves. They don’t want to settle for $500k p.a when they could get to $5mil…..(I suspect the number of people getting to $500k, knowing they could have got to $5mil if only they didn’t limit themselves is infinitesimal).
So let’s take this money part of it. Because, well, I’m an accountant – I do money.
If you think you can make more money by being in business, than being an employee (and investing along the way). Tell me how.
How are you going to make more money? How many sales are you going to need? What price point? Who are your customers? What will they buy from you? How many times per year? Where will you find them? How will you get them to buy from you? How many staff will you need? What size premises? What is your expected net profit margin? What is your breakeven point? What investment do you have to make in time and money to get to this level of $$$.
Now take this profit number, subtract the wage/super that you could get being an employee. Now take that number and divide it by cost of this business investment. That is your return on investment as investor. Now compare that ROI to the ROI of other possible investments like property, shares, cash etc.
Is the return more than you could get elsewhere? What risk is associated with this level of return?
I’d hazard a guess that most business owners don’t know the answer to these questions. And the ones that do, you could call “switched on operators”. They’re the ones that crush it. They know their stuff, they know which direction they’re going and get on with it.
The ones who don’t know these answers, zig and zag. They take what comes, a sale is a sale is a sale right? I’ve got cash in the bank, I can pay the bills. I must be doing ok.
My question is always – did you go into business to “do ok”, to just pay bills?
I know I didn’t.
There’s two main reasons as I see it;
Small business risk is > than S&P 500 business risk.
If you’re willing to bet the house, to bet the families financial future on this idea, you should bloody well know this inside out.
If you can make the same money being an employee, and investing what you have in your business in property or shares or both – that have less risk. You’d want to have some really compelling reasons why you’re in business for yourself.
And knowing the answer to “What do I want?” makes business so much easier.
Think about it. If you know who your customers are, what they want, what they don’t, what their price point is, what level of quality/value they want – you know;
- where to aim your marketing,
- the brand voice you need,
- the level of quality you need to provide, and
- ultimately how you are going to make money.
In other words you’ll know your business model. And that friends, dictates everything you do in business and whether you’ll succeed or not.
Firstly I want to set your expectations here.
You probably won’t know what you want straight off the bat – and even if you do, things change.
As you and your business get older, you evolve. You might want to go in a slightly different direction. So it’s important that you revisit this and keep asking yourself the question.
If you’re doing this for the first time, come back to it next week and do it again. Then revisit it in a months time, then each quarter, then every 6 months, then make it an annual process. You don’t want to be “pivoting” every month, but you need to do this until you’re happy with what you’ve got as answer and your business is achieving what your saying you want. (If it’s not – what are you going to do about it?)
So how do you answer it? Well, here’s how I do it;
Close your eyes, imagine yourself in 15 years sitting on the beach, enjoying a coffee/tea in the early morning quiet. The sea is calm, the waves gently crashing with a pink sky overhead. It’s a quiet moment to yourself and you start to reflect on the last 15 years in business. You’ve achieved everything you wanted – you couldn’t be prouder of what you’ve built.
Describe that business…..
Hopefully by now I’ve convinced you that this really is the hardest, and most important question in business. If you can get a clear, coherent answer to this – that is in line with your values, then it is going make your business journey a lot easier and more successful.
Knowing what you want, and then how you are going to achieve it (hello strategy), is what separates those that achieve, and those that don’t.