A few months ago, I was experiencing a challenge in my business; I had been going back and forth on different possible solutions, but when all was said and done, I felt stuck.
A few weeks into this challenge, I got a call from a friend and fellow business owner. He asked me for my advice on an issue he was having in his own company and wanted my opinion on what the best path forward would be. The answer seemed pretty clear to me, and I guided him the best I could. After about 25 minutes of talking, we hung up the phone.
What makes a business a business?
I can’t count how many times I’ve sat down with people who asked me to sign an NDA because they had a Big Idea that they wanted to share with me, only to discover during our meeting that there is no viable business to back it up. Either it’s not a market fit, or there are similar products out there doing the same thing for a much cheaper price, or the cost of developing the idea would far outweigh the profits gained.
It’s an old story.
Two friends, Joe and Dan, move to a new town. Both being entrepreneurial guys, Joe decides to open a pizza shop, and Dan opens a grocery store.
After a few months, they meet and start chatting about their new business ventures. Joe is distraught. His pizza store is not doing well at all, and he fears he’ll have to close his doors. Meanwhile, Dan’s grocery business is booming. They discussed what led them to create their businesses.
Joe says, “When I was looking to move to the area, I saw that there were no pizza stores in town, so I figured it would be a great opportunity.” Dan responds, “That’s funny, my thinking was just the opposite: I saw that there were a few grocery stores in town already, so I figured there’s probably room for one more.”
He sat across from me in my office, crying.
He had invested $400,000 into his new venture, and it wasn’t working. By the time he came to me to ask for advice, the only thing left to do was stop the bleeding and get out. What made this situation so much more painful was the fact that if this person had sought advice from someone sooner, he may have been able to turn the situation around, or at least cut his losses.
“How do you define growth?”
This is a question I posted recently on LinkedIn—and one I ask often when I’m speaking to audiences of businesspeople. And it always amazes me to see the diverse range of answers I get.