Welcome back! You’ve made it to Part 2 of the What Not To Do As An Entrepreneur series. In Part 1, we covered decisions to avoid when determining whether to work with others. By the way, did you know that it takes an adult about 21 times to hear something and retain it? To help you out, here’s a rapid recap of Part 1: do not co-own; there can only be one CEO, do not get desperate and make impulsive decisions, do not hire the cheapest; do not hire based on price period, and do not do all the work yourself.
Today, we are talking about the topic on every entrepreneurs’ mind: money! We are going to get real about when to save and when to spend. Think: big money, no whammies!
Do not go too big, too soon.
Notice that I’m not saying: don’t get too big, too soon. You can get big and blow your business up—please do! But, don’t go too big, too soon—this was my first lesson as a new entrepreneur.
When I started Be Inspired Salon in 2010, I was looking at spaces that were about 1600-1800 square feet which is the traditional size for a salon. Looking at these big and beautiful spaces, my imagination was running wild with #salongoals. But, the main problem with my big dreams was that I only had one other employee—what would I do with all that space?!
So, I took a step back to re-evaluate and found a different space that was 750 square feet—a lot smaller than the average! I am very grateful that I didn’t go too big, too soon because good things came in that small package. Fast forward to 2013—we were able to expand our salon, double our working space, and increase our profits by 838%! Start small, blow it up, and then go big!
Do not build it, until you’ve sold it.
When I built my salon, I knew we could sell what we offered, because I had already sold my services to a huge clientele. On the other hand, my software company—Meet Your Stylist—started in the other direction.
My salon had been using the Meet Your Stylist software with amazing results, so I assumed that other salons would love it as much as me. But, I quickly learned that not every salon owner is like me—nor thinks, and takes action like I do. Essentially, I was shocked to find out that most salons do not budget for marketing and advertising; let alone know how to execute, manage, and track their return on investments.
I definitely wish that I would have sold the Meet Your Stylist software before building it. Here’s another example you may be able to relate to. Let’s say you want to create a 12-week training program of some sort. Instead of building the program, in hopes of people jumping on board; first, sell the program! You can build the content after or as you go. It’s possible, and it will save you time and heartache.
Do not avoid investing in advanced education.
The law of thermal nuclear dynamics is unavoidable. You’re either growing or dying; you cannot stay the same—harsh, but true. Think about working out. If you don’t work out for a month, your lattes will catch up with you, and you will not maintain. To make sure you are always growing and getting better, invest in seminars, conferences, webinars, podcasts, books, classes, anything you can get your hands on! And, I believe you value what you pay for.
In 2012, I felt like I hit a wall in my business. I knew that I didn’t know everything. Although I was great at marketing, I didn’t know much about cash flow forecasting. At that point, I was ready to learn more and my teacher appeared—funny how that happens. At a BNI Meeting of local professionals, I heard an excellent speaker who was a business coach, and I knew that I needed to learn from him!
So, I invested in a business coach. This was no easy decision considering the steep price tag, but I needed it. It was that same year we had an 838% increase in profits!!! Yes, that number is correct. I never knew that we could earn over $1 million in revenue in just 1,150 square feet. I sincerely recommend that everyone invest in a business coach! You know what your strengths are, and your coach can help fill in the gaps.
Do not avoid paying yourself.
As an entrepreneur, you have to build your wage into the budget! If you don’t, why are you doing it at all? Yes, we all have a passion, but we need something sustainable. The point of being an entrepreneur is to make money while you sleep.
For example, I am physically present at my salon about four hours per week. When I am not there, I am watching the numbers, schedules, and building up our team from the behind the scenes. ActionCOACH founder Brad Sugars said that an entrepreneur is someone who can walk away from their business for three months and it will survive and thrive without you. Obviously, it won’t start this way, but that needs to be your end goal.
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We all have a money story; what other tips can you share with our community—comment below! You’ve almost made it to Part 3 where we get real about Being The Boss—you don’t want to miss these tips. See you soon!
