Business coach promotes lean approach
Still questioning the wisdom of the bootstrap business approach?
Then read what business coach Bill Dueease has to say about leanness as a strategy for business start-up (and long term operation for that matter) in a recent comment on a previous post.
The purpose of starting and running a business is to make a profit. When entrepreneurs spend money on anything that will not directly increase bottom line profits, then it will be wasted money. Spending money for show is not beneficial. Yet, our famous media, many supposed business pundits, and even VC's are only impressed with the show of size and success. They encourage the thinking that if the owner is driving a new, very expensive car, this can only mean the owner and business is profitable. Another popular "show" measurement is the famous revenue benchmark. Businesses are regularly rated by the size of their revenues. When in truth, only the amount of the profits counts. Smart entrepreneurs focus on the profits and only reveal their successes when they have to. In fact, when you read the "Millionaire's Mind" you will learn that the successful business owners actively disguise their wealth. Being lean is not only smart, but also necessary to profitable successes by entrepreneurs. Keep emphasizing leanness. You are helping any entrepreneur who will listen.
Thanks Bill. Check out more of Bill's advice on his own site The Coach Connection.
March 5th, 2007 at 8:52 pm
Shawn,
Thank you for posting my comments on your special blog. I fully endorse the definition of bootstrapping by Greg Gianforte that you published. The key to success of any entrepreneurial venture is the entrepreneur. Once entrepreneurs fully understand themselves and their business vision they will be able to create the conditions of their business to accomplish their vision on their own terms. This will allow entrepreneurs to fulfill their passions and priorities, maximize their talents and avoid as many of their self imposed obstacles as they can, so they will shine and thrive as the entrepreneur, and their business will also thrive as well.
Business owners create businesses for two general reasons. One is to generate profits. The other is to create time to do what the owner wants to do. Profits are created by keeping the business lean, and extra time is created by the business owner by designing the business to allow the owner to do the parts the owner loves to do, and is very good at performing, and having others perform the other duties the owner rejects.
I believe what you are providing entrepreneurs is the key path to success and focuses on how they can succeed without much initial investment and without the intrusion of outside hindering forces from VC’s and the like.
Keep up the great work.
March 8th, 2007 at 1:42 am
It’s really true. The continuous temptation to spend money unnecessarily has destroyed a lot of businesses; even those that have had experience in management before. I’ve seen it first hand many times.
It’s great to be reminded that we need to cut costs and control spending anywhere we can.
March 10th, 2007 at 5:46 am
Shawn,
Few days ago, I read about “Wobegon Effect” in one of the posts of Business Pundit. According to the post, American companies pay their CEO’s a very large amount of money because they want to keep their CEOs on the top ten highest paid list. This they believe gives a good image to the company. The stink of the matter is, many of these CEO’s do not actually deserve such high compensations. So in a way, this is a waste of money.
May 11th, 2007 at 2:58 am
Exactly ! i am sick and tired of seeing people with ideas like : oh no i started this business because it’s in my destiny to help people. They all want profit either they like it or not.
July 2nd, 2007 at 8:42 am
But Gianforte insists that:
If you look at all start-ups, less than one percent get VC funding. Most are launched with less than $20,000. And some – including Dell – were created with less that $1,000. I personally started my first software company – which was acquired for $10 million by McAfee in 1994 – with a couple of friends and about $5,000 in cash. And I started RightNow Technologies – which went public August 4, 2004 and as of this writing has a market cap of $350 million – at my desk in Bozeman, Montana without any external funding whatsoever until the company was well-established with 400 customers.
November 5th, 2007 at 6:35 am
But Gianforte insists that: If you look at all start-ups, less than one percent get VC funding. Most are launched with less than $20,000. And some – including Dell – were created with less that $1,000. I personally started my first software company – which was acquired for $10 million by McAfee in 1994 – with a couple of friends and about $5,000 in cash. And I started RightNow Technologies – which went public August 4, 2004 and as of this writing has a market cap of $350 million – at my desk in Bozeman, Montana without any external funding whatsoever until the company was well-established with 400 customers.
November 5th, 2007 at 7:26 pm
I think that’s exactly the point. Bootstrapping companies make money. They aren’t in such a big rush to spend it. Cash flow and eventually profit are, of course, key to business success. But the level of unwise spending for appearance sake here is the problem.