Starting a business and becoming
successful is often part of the American
But there is a difference between
starting a business and building a
Many businesses fail within the first
few years of existence due
to the lack of planning for the long-term.
There is not enough vision and there is not
enough done to strengthen the business
properly from the ground up.
If you want to start a business there is
an easy way to get a better understanding
of why some businesses fail and others
don't. When starting a business think about
it similar to building a house.
right it is protecting you against any kind
of storm or danger of the outside world and
will last for a long time.
It offers shelter and protection.
For you and your business that could be
translated to that you want to have a business
that is able to weather economical ups and downs
(=storm) and that will provide income to pay the
bills (shelter and protection).
When building a house there are several
different steps you need to follow to have
the house build.
You know you want a house,
but you got to pick a location and get an
architect to plan everything out. In the
business world that would be: you know you
want to start a business, but you have to
come up with a business idea and work out a
The next thing for the house
would be to build the foundation (and
eventually the basement) for the house. In
the business world - you got to build the
initial infrastructure (example: connecting
with vendors, find a manufacturer for your
product, create a sales team, rent office
space, get a delivery truck, etc.).
Once that is in place you able to actually do
business and earn some money. But you are
not completely done yet. You need to build
a frame, put in windows and you also need a
roof on house. For your business this means
that you pay off debt, improve business
processes and get professional help when
needed (example: find a tax accountant,
select a payroll service, etc.).
Once the house is build you probably want
to fill it with furniture and make it
livable for the future. Nobody wants to
sleep on the floor, right.
Again translating this to the business world it
could mean that you invest money you earned
back into your business.
You buy machinery
instead of leasing it. Eventually you buy a
building, hire more staff, develop more
products, move into new markets, build up a
high cash reserve, and buy other businesses
and so forth. This is often the step where
winners and losers separate.
money into the business is a key factor for
If you go and spend all the money
on your own salary to buy things you have
nothing to go back to when the economy
slips into a recession or if disaster
The successful business owner has build up
a cash reserve or can borrow money from
bank - securing loans with the assets of
Going back to building a
house this pretty much matches the same
You pay off your mortgage and have
equity available to eventually borrow
against when emergency arises. Emergencies
do not include paying off credit cards to
use them again or to buy a car.
Financially responsible you should be looking at the
long term and not finance short-term goods
with long-term debt.
If you want a business that is getting
big results right
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