Blog - The Secret to Every Business Owners Success
After only 16 months of providing affordable bicycles to the community, The 2nd Mile Bike Shop (a small, local used bike shop) has not renewed their lease and has closed its doors for good. It happens all of the time. In fact, according to Bloomberg, of every 10 small businesses 7 will survive their first year, 3 will still be open after 3 years and only 2 open after 5 years.
One must ask, why? Common logic says that the business was in a bad location, or margins just weren’t high enough or maybe that the company just didn’t “speak” to its customers.
While these may all be true I have an explanation that is as common sense as you can get. If you, the business owner, can apply it I am sure you will see more success within your business. I can also guarantee that you will not find it in any article on Forbes, Yahoo or Bloomberg, either.
Would it shock you to hear that almost every business is getting stolen from? What’s even worse is that the primary thief is most commonly (you guessed it) the business owner. But how, why? Why would a business owner steal from his or herself?
Let’s say you own a furniture store. You have just moved into a new home and are ready to refurnish with a new couch. Assuming that you are married, where are you and your wife going to buy your furniture- your store, or somewhere else? Well you are going to support yourself and shop at your store, of course!
However, you and your wife will be very tempted to avoid checking out at the register at the front of your store. In fact, you are likely going to take the couch straight out the back door, load it up into the truck and head home to enjoy.
You must resist this temptation! It still amazes how many business owners are out there and unable to resist the temptation of stealing from themselves. Imagine the amount of loveseats, armoires and coffee tables that will have to be sold just to get back to even from the furniture you stole! The hit could be tremendous.
How tremendous you ask? Let’s take a quick look.
Let’s say that couch cost you $1000 and sells for $1200 making you $200 in gross profit. Not bad. However, since you stole the couch you are now going to have to work your tail off to get back to even. Just consider, if you take home that one couch, you have to sell 6 to make up for it! This isn’t even factoring in all the money you have borrowed to begin the company, the land you have leased, the employee’s you have paid, etc. into the profit margins. Do that and the calculation could be more like 12 or 15 couches to get you back to even! Detrimental, you see. What impact would this have on your business?
Now, this is not prohibited to a select business category. The same goes for dental care, salon owners, grocery store owners, etc. If you choose to shop at your own business you absolutely MUST pay for what you buy or else you risk imploding.
This same model also applies to your finances. Why steal from yourself? If you have saved for years to purchase a car and finally make the purchase why not begin repaying yourself for the car? This is called growing your wealth by definition and is available for anyone to do (if you can defeat Parkinson’s Law as described by economist Nelson Nash).
This same economist uncovered a process that uses an age-old product to grow wealth by definition. This process isn’t easy, in fact we wrote an entire blog describing the 3 concepts that make this process difficult. However, if you (the business owner or individual) can conquer the temptation of stealing from yourself success will be knocking on your doorstep. Will you open the door?