3 Minute Monday
I got asked what the biggest mistakes of my business career were on a podcast this week.
I’ve never even thought about that before so it took some time to think through.
My answer was probably quite unsatisfactory…
“Being honest, we’ve not made many mistakes at all.
It’s basically been a solid, steady-away growing operation since 2006.
No massive catastrophes, no bankruptcies or lawsuits.
… but actually, maybe the lack of failure highlights some lessons to take away.”
I love when the penny drops during an episode like that.
One of the beautiful things about having rigorous conversations 5 nights a week is that you’re constantly linking new ideas together and getting fresh insights.
So here are three lessons I realised from reflecting on my career as a business owner:
Lesson 1 – If you aren’t failing, you might not be taking sufficient risks.
You can negate almost all chance of failure by reducing the pace you expand at to a very slow rate of growth and avoiding most new opportunities that aren’t dead certs.
The penny that dropped was that my lack of failure could be an indication OF a failure – insufficient aggression.
We had certain periods where we could have cornered huge chunks of the market if we’d just thrown the kitchen sink at expansion but didn’t.
We were the hot thing at the time, but decides not to capitalise on the trend.
This meant we didn’t ever over stretch ourselves but also left a lot of opportunities on the table for competitors to pick up.
Lesson 2 – You can probably put the price up.
Every small business owner knows the bumhole-tightening terror which onsets when you consider a price increase.
I was adamant that moving from a £2.50 to £3 or £5 to £6 entry price was going to be the end of the business.
No one would come, no one would bother paying blah blah.
By fearing price increases, we disproportionately held onto & grew our share of the market by always focussing on providing value for the customer.
But this was obviously at the detriment of our bottom line.
And when we eventually DID put the price up, no one even noticed.
Except for us and our accountant.
If you have a successful, ongoing business, you can almost certainly increase the price you’re charging, especially for your best selling items.
Lesson 3 – Delegation is required to scale.
Another classic small business owner mistake.
You still see the entire operation as your baby so you never let go of micromanaging every element of it.
“It’s quicker for me to do it than to instruct someone else, them do it incorrectly and then me have to correct it.”
This argument is so compelling because the first order effect is true.
First order effect: you save time & frustration by doing the task yourself.
Second order effect: the staff never learn how to do the tasks that are routine in the business.
Third order effect: you can never retract yourself away from these tasks to focus on higher level challenges.
Which limits your growth personally and commercially.
Your primary goal as a business owner is to focus your time on the tasks which ONLY you can do and outsource, delegate or ignore everything else.
Important > Urgent when Urgent can be given to someone else.
If you’re the head coach, owner, accountant, head of HR, marketing department AND customer service rep you will be swallowed up by the Urgent and never contribute to the Important.
Start a portfolio of documents that explains how to do “X” for every task in your business.
Each time you encounter a task which someone doesn’t know how to do, add another document to the portfolio.
Eventually you’ll have an operation manual for the entire business.
So, there’s some lessons for you.
We could have expanded more aggressively, increased the price and delegated more.
All that being said, the #1 rule in business is to never be fully out of the game – bankrupt, in jail, reputation ruined etc.
“Move fast & break things” is a great maxim… until you break something which can’t be fixed.
By being risk-averse, me & my business partners have avoided those risks of ruin & flourished for 14 years in an industry where the average is probably less than 4.
That solid base now permits us to take on more objective risk with less relative concern, because our finances, reputation, track record, customer base etc are all much bigger.
This is all very much influenced by your personality.
I’d happily sacrifice 20% of profit for 80% more peace of mind.
And it’s worked out pretty well for me so far.
This week’s upcoming episodes:
Chris Voss – The Ex Head Of Hostage Negotiation for The FBI gives us his best communication & negotiation tips. Phenomenal insights and amazing stories. Don’t miss this one.
Reeves Wiedeman – The catastrophic demise of WeWork over the last 2 years has been like watching a slow motion car crash, Reeves has all the juicy gossip.
Not sure, maybe John Roa on Silicon Valley or Massimo Piggliuci on how to live a stoic, happy life. It’ll be #bde no matter.
THINGS I’VE LEARNED
Where the word Quarantine comes from.
The practice of quarantine as we know it began during the 14th century in an effort to protect coastal cities from plague epidemics.
Ships arriving in Venice from infected ports were required to sit at anchor for 40 days before landing.
This practice, called quarantine, was derived from the Italian words “quaranta giorni” which means “40 days”.
Society has never been so old, and also never had so long to live.
The average age on earth is higher than it’s ever been.
The average lifespan is also higher than it’s ever been.
The mind is built for having thoughts, not holding thoughts.
The key insight from David Allen’s Getting Things Done productivity framework.
Your mind is a great decision maker but a crappy library.
Store things to remember in a place you trust.
Leave your brain free to choose between options, rather than recalling them.
The Appreciation Offer
One of my favourite life hacks from this year.
Similar to Gas Your Friends Up and Tell Your Friends When You Miss Them.
Message a friend, family member or content creator you care about & ask what you can do to make their lives better or easier today.
“I appreciate having you in my life, just wanna offer a favour, is there anything I can do?”
Review their business on TripAdvisor, give them a lift to the airport, supply some ideas for their kid’s birthday party, whatever.
It builds great connections, obviously makes people indebted to you and is just a nice thing to do.
I’ve loved doing this during 2020. The pleasant shock you get in response is very gratifying.
Maybe that’s because people think I’m a dick though. Unsure.
Ya boi’s still tryna hit 100k on YouTube. Go hit Subscribe please – https://www.youtube.com/modernwisdompodcast