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Member News: C.C. Eship / NACCE Journal Fall/Winter 2010

Money Business

Wednesday, November 3, 2010   (0 Comments)
Posted by: Matthew Montoya
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By André Taylor
Entrepreneur and Author

There isn’t an entrepreneur who doesn’t think about money, just about all the time. How do I make money in this business? Will this new product make any money? Is this product, service, marketing campaign (fill in the blank) worth the money? Should I use my money for this or that?

Entrepreneurs recognize these familiar thoughts, yet when entrepreneurship is taught in college classrooms, the fear, phobias, and uncertainty an entrepreneur typically feels about money are rarely explored. In textbooks and lectures it all seems quite simple. Money is borrowed, raised, invested, paid, counted, and collected. It isn’t worried about. When a new entrepreneur feels the typical entrepreneur money anxiety, has problems sleeping at night, and despite best intentions can’t seem to pay Paul even after robbing Peter, the entrepreneur often thinks, "This can’t be right,” or worse, "I’m a failure.”

But there’s a secret to this money business…

Until goodwill is developed, market acceptance gained, systems are in place, and owner and staff have the right mindset, money will be an issue. I’ve found what entrepreneurs think about money and its link to the business early on will positively or negatively define the business for years to come. With that in mind, I have a few suggestions for educators wanting to help entrepreneurs win the money game.

Lesson One: Money and the Business

Every Entrepreneur Bootstraps – There is only one thing that makes a business. It’s called a customer. No customer, no business. But many entrepreneurs are under some notion that the business begins with tons of investment capital from cheering throngs of investors. Even when there’s an angel investor, venture capitalist, or other funder, there must be ample evidence the business is going to succeed – hence the need to not waste time contemplating the ultimate investor and get busy, going out and getting that customer. Tell your students that selling something is what matters at the end of the day. The first money lesson for a business is that customers matter. Many happy customers mean more money. Learn this lesson and you’ll avoid big problems down the road.

Lesson Two: Money and the Entrepreneur

Invest in Money Education – Few of us learned positive lessons about money growing up. When an entrepreneur begins pursuing the business of making money full time, they’re often dealing with conflicting thoughts about money. If you’re an entrepreneur and you believe money is "hard to come by,” "doesn’t grow on trees,” and that people who make lots of money are untrustworthy, or that money is "not what matters,” you’re in trouble.

You’re probably going to have difficulty asking for money, asking for your price, and going all out to get money into your company. You’re probably going to see money as an "uphill battle.”

Every entrepreneur needs to examine and work on their money philosophy. Tell your students they must learn money basics. Start with how to count – without a calculator. Familiarity and comfort with numbers is key. Then tell them to give time to understanding money psychologically. Successful entrepreneurs expect to make money and don’t feel guilty about it.

Lesson Three: Money and People

Money Does Buy You Love – A big problem for entrepreneurs is getting the right people on board. In the early days you generally don’t have money to hire superstars, so we roll the dice, try to inspire our workers with our plans, or simply pray for the best. As entrepreneurs we need to get every cent out of what we spend on people. But there’s a reality your students need to know.

Entrepreneurs are always going to spend money on people who don’t stick around. Your staff and vendors don’t care about "your vision,” or the opportunities coming. It’s purely a money thing. If the road is hard early on, and it looks like money is drying up, they’ll be shopping for another job on your dime. So your student entrepreneurs must consider what they spend on people to be investments to help them define their "system,” advance a specific project, or get over a hurdle. Teach them not to get mad when the kid they’re grooming chooses to work elsewhere. They simply must get somebody else. Entrepreneurs must learn that "they’ll” love you only as long as you’re paying them.

These lessons are not tough. They’re not cruel. It’s simply business. A healthy attitude about money is one of the most valuable assets for the entrepreneur.

André Taylor is an entrepreneur, consultant, and author of the book "You Can Still Win!” He’s chief executive of Taylor Insight, a New York-based leadership development firm, serving entrepreneurs and entrepreneurial companies.

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