Wednesday, November 3, 2010
Posted by: Matthew Montoya
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?
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.”
a secret to this money business…
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.
Money and the Business
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.
Money and the Entrepreneur
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.
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.”
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.
Three: Money and People
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.
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.
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.
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.