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Article Directory :: Business - General Articles
Not long ago, I had a conversation with a gal about her small business.
She'd been in business for about eighteen months, every single one of which she'd lost money in...
Lots of money!
Yet...
She was absolutely convinced if she put more money into her small business (money she didn't have) that somehow (she hadn't a clue how) her business would eventually (she had no idea when) become profitable.
When I attempted to point out the fallacy of her thinking to her, she interrupted me in mid-sentence.
Out of the brief, pretty much one-sided conversation that followed came three "reasons" she had to justify why she needed to keep pouring money into her money losing business...
Each of her "reasons" represented an attitude, a firmly held belief, she had that, although she didn't know it, was standing directly between her and the success of her small business.
Here they are:
Attitude #1 - It takes money to make money.
"Well Tony," she began...
"You do know"...
"It takes money to make money!"
Actually, I don't know that. :-)
Stop and think about it...
If that statement were true, if it really takes money to make money, no one would have any, would they?
In his book, "The Science of Getting Rich", Wallace D. Wattles writes:
"No one is prevented from getting rich by lack of capital. True, as you get capital the increase becomes more easy and rapid; but one who has capital is already rich, and does not need to consider how to become so. No matter how poor you may be, if you begin to do things in the Certain Way you will begin to get rich; and you will begin to have capital. The getting of capital is a part of the process of getting rich; and it is a part of the result which invariably follows the doing of things in the Certain Way."
In other words...
Money is *not* the cause...
Money is the *result*.
Money is the result of "doing things in the Certain Way", as Wallace D. Wattles puts it.
That "certain way" has to do with a combination of thought and action... "constructive" thought and "constructive" action.
I believe it was Albert Einstein who once defined insanity as "doing the same thing over and over again and expecting different results".
In the case of our gal, plowing more money into her money losing business wasn't going to change a thing.
True...
It might buy her some more time.
However...
Without a change in thought and action nothing was going to change...
Not now...
Not ever!
Attitude #2 - It takes years for a business to make a profit.
"And," she continued...
"You also know"...
"It takes years for a business to make a profit!"
Actually, I don't know that either. :-)
Now...
This may be true if you're starting an Amazon.com or a Wal-Mart, but, in my experience, most small businesses are either profitable right from the start or they're not profitable at all.
A number of years ago, I had the good fortune of meeting a man who, at the time, owned some 60 to 80 businesses, had a personal net worth of over $100,000,000 and enjoyed a personal net income of over $25,000,000 a year.
He had two very simple rules he followed whenever he started a new business:
First...
The business had to be profitable within its first 90 days.
Second...
The business had to earn a net profit of at least 24% (I may be off a percentage point or two here, it may have been 25% or 26%).
If any business he started didn't meet those two criteria, he closed it...
It was that simple.
Attitude #3 - It's the economy.
"Besides," she continued...
"You know how bad the economy is right now!"
Wow, where have I been? :-)
She then pointed out a couple of small businesses in the area that had closed up shop in the last year or so.
Unfortunately...
What she failed to notice...
Was that there were several small businesses in the area very similar to hers that were flourishing.
In his book, "The Science of Getting Rich", Wallace D. Wattles also writes:
"If you are now in business, and anybody else in your locality is getting rich in the same business, while you are not getting rich, it is because you are not doing things in the same Way that the other person is doing them."
If you buy into the "it takes money to make money", "it takes years for a business to make a profit" or the "it's the economy" mentality, you may well be overlooking the *cause* of why you're not earning money from your small business.
Remember...
Constructive thought and action are the cause...
Money is the result!
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