分类： 其他平台
2013-10-22 15:43:46
Most entrepreneurs are naturally gifted towards sales or operations, but rarely both. The ones gifted in operational knowledge get stuck at $1 million because they have sold to all of the people they know or can easily contact, but they are more likely to be profitable at this point. The ones gifted in sales have blown through the $1 million dollar mark headed towards $5 million but their hair is on fire, they are about out of funding resources, and are most likely losing money with the belief that the next dollar in sales will make them profitable.
Both entrepreneurial types need to begin by learning a simple lesson. The operationsgifted entrepreneur needs to find a way to create sales. The salesgifted entrepreneur needs to get operations under control and exercise financial discipline not every sale is a good sale. The true challenge for both is that the $1 million sales mark is the first major time in the business cycle when they must hire infrastructure talent in advance of being able to easily afford it. This challenge is made worse by having to truly delegate to this new key hire. They may come with experience, but there is that nagging thought that if they were so experienced, were they available? If they show skill but have limited experience, you are turning over your precious business to someone who may risk your reputation and limited capital.
Welcome to the reason why entrepreneurs deserve the profits of their success!
The 5 Steps to Break Free of the Black Hole
Step 1: Drive to 15% pretax profit by the time you get to $1 million in revenue.
It always sounds great to glorify the success stories of the entrepreneurs that threw caution to the wind, grew like crazy and then figured out how to fund it. Unfortunately, you don hear the stories of how many more businesses fail by growing fast and unprofitably. Unless an investor or buyer can figure out how to get your fastgrowing business profitable, you are of no interest to them, beyond picking up the pieces of your impending bankruptcy.
Step 2: Include the owner marketbased wages in your calculation of profit.
If you get to 15% pretax net income, it is only real if you are paying yourself a marketbased wage and are able to meet your living expenses off of your net pay. This means there are no distributions being taken out of the business except for covering the taxes on your business profits (assuming you are an S corporation or an LLC).
Step 3: Take no distributions of aftertax profits until you have met your growth goal.
The easiest way to measure this is to build your company cash balance to at least 2 months of operating expenses and have nothing drawn on your line of credit. This is what I refer to as your capital target. 4: Build your team using the Cap concept.
