3 Steps to Starting a Small Business

Sometimes I get bothered by how so many people try to complicate everything. So, I am not going to give you 10 or 12 steps about this and that. I like to keep things simple. Lets discuss 3 steps that are essential in a profitable business, mission, team and leadership. If you master these 3, you will find everything else you need to know along the way.

Mission, what is the goal of the business. Is the goal of the business aligned with your personal mission. Example, If your personal mission in life is to help people with their health and to live disease free. Your business mission could be something like, open a franchise company that sells quality organic food at a fair price within the next year that will produce $80,000 positive cash flow per year and give back to the community.

That would be your goal when you are looking for the right business. Then once you own it your business mission could be, offer quality organic food at a fair price while educating and giving back to the community.

 

Team, the one with the best team comes to victory. It is impractical to do anything of significance by yourself. Especially when starting a business, there are too many things to do and not enough time. If you are not computer savvy does it make since to spend all your time building a website. Outsource the parts of your business you are not an expert on and focus your time on that which you are good at.
Some team members you may need are mentors, mastermind groups, CPA, business brokers, attorney, insurance agents, web designers, merchant account managers, property managers, title agent, realtors to name a few.

Leadership, “Life’s battles do not always go to the strongest or fastest man but soon or late the man who wins is the man who thinks he can” Napoleon Hill. I started with this quote because the most important trait of a leader is his belief in never giving up when his mission is true. A leader must display integrity, responsibility, courage and compassion.

The one trait a business owner needs is the ability to lead. If you are not a leader, good because leaders are not born they come out of the person that has failed and does not give up, relentless. They come from that person who says, it is my fault and I accept responsibility. No person with a victim hood mentality can be a leader. They come from the person who takes action despite fear. What is there so bad to fear anyway? You should fear, Regret, at the end of a long life, when you say I should have.

Do you really think you are Diversified?

Do you think you are an investor? You may be surprised to find out that you are not, and maybe many of you are. My point is most people have a retirement account like a 401k,TSP,Roth IRA and maybe a brokerage account to invest in stocks or you buy some mutual funds. Most people would say you are divesified, I say you are not and I will explain why I think so.


Your stock broker or online broker or bank are always talking about diversification, right. Do you know what true diversification is? No worries if you do not know, because most of your brokers and firms don’t either. If they do know, they will not tell you. Why, because if they tell you what true diversification is you probably wouldn’t turn all your money over to them.

First of all you have to understand there are approximately 4 different asset classes. A business be it online, brick & mortar or franchise. Real estate as in residential, commercial or maybe raw land. Paper is also an asset class, examples: stocks, ETF, mutual fund, your retirement account etc. Finally you have commodities like gold, silver, oil, corn, etc. So, when your broker is telling you to diversify and that he has spread your risk by setting up a well diversified portfolio for you, he has only spread your money over one asset class (paper) and that is not true diversification.

I think, that is why the true entrepreneurs like Jim Rogers, Bill Gates and Henry Ford believe in focusing not diversifying. If you are investing and do not understand diversification in relation to the asset classes, that my friend is a recipe for disaster. If you’ve made mistakes, good, everyone has, but the minute you try to blame or say, well it’s not my fault my broker told me this, you will have learned nothing from that priceless gem, called a mistake.

Also an asset class doesn’t necessarily mean it is an asset, it can be an asset or it could be a liability, but that is for another discussion.