Business Lessons Learned from Experience

Part of the Kenno's Blog series.
By Ken Brown
Editor, You Can Learn Series
August 12, 2008
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Exciting Tips If You Want to Start a Business or Grow a Business

When we are young we act impulsively and are so excited to be in the game that we sometimes make bad decisions. We spend money impulsively and don't save enough for a rainy day. If we want to start a business or grow a business then we need to keep our money. What would experienced business people tell us about succeeding?

Who do you go to when you have a tough decision to make? Do you talk with your grandfather or dad? Do you have a mentor that can help you noodle out the right choice?

Lessons from Businesses that Have Survived Multiple Generations

Inc magazine recently had some great profiles of businesses that have survived multiple generations. I think most of the companies were started in the mid 1800's. They were still being run by the same family that originally created the business.

It was an interesting read as they had to survive the great depression. The companies weren't always in the same industry they started in. When industries change sometimes you have to be flexible and find new opportunities. The follwoing is a quote from the article that really struck me.

The most important thing I have learned from the fourth generation is that their almost fanatical committment to financial conservatism is very valuable when the business and industry are faced with challenges. "A big cushion of cash is a tremendous advantage."

I have been contemplating this quote for a week now. It is so very true for business and also for families and home budgets. Have you ever gone through a challenging time in your life? Maybe you lost a job? Your spouse lost a job or you wanted to change careers to a lower paying career. Or you wanted to go back to school?

How did you handle the lost of income? Did you have a store house of money in the bank to ride the wave until a new opportunity presented itself? Were you in over your head just barely surviving before the problem cropped up?

Troubles With a Dot Com Start Up Company

A few years back my wife and I were working for the same company. It was a start up company with an opportunity to make it big. The company needed sales. Revenue was dropping off and our business to business model was drying up like a small pond during a hot dry summer. Our sales people were talking the talk, but they weren't walking the walk and a recession was beginning.

Our potential customers were holding off on spending the million or so dollars needed for our software. Things were at the breaking point and our CEO knew that he needed to reduce costs. But, it was a small company and the people involved were like family to him. So, he was hesitant to just put them out on the street.

A Bold Decision and 35% Salary Reduction

The CEO made a bold decision. Instead of reducing costs by laying people off he decided to reduce everyone's salary. We were all relieved to hear that we weren't going to be out of a job until he told us how much money we were going to have to give up to make it happen. We all were going to give up 35% of our salary.

Of course, we all said, "we are programmers, it will be easy to find a new job." But, the market for programmers was not good. Motorola and Lucent had been laying off workers in the Chicago area and there was a glut of unemployed desk jockies sending out resumes.

This was rough for a number of workers. Mary and I had moved into a new home a couple of years previous. When we were looking at homes the mortgage company kept telling us they were willing to give us more money than the size home we were looking at. They wanted us to upgrade another $100,000. But, we knew our spending habits. We held our ground. We didn't want to be at the mercy of a large mortgage.

Our daughter was at a marrying age and we wanted to give her a nice wedding. We were about ready to start doing some serious traveling and that required money.

Learned Some Serious Lessons

The 35% cut in pay only lasted 6 months until the CEO was able to get some venture capital to keep us afloat. At that time he took us back to our full salary. But, we learned some serious lessons. We survived, but we learned that the house wasn't that necessary. We were fully prepared to sell the house and move back into a more affordable home. We learned the importance of a nest egg to handle being off work for 6 months or more. We learned to live within our means and if we can't pay cash for something right now, then we can't afford it.

The 6th generation family members learned something from their forefathers that started a business and kept it going for over 150 years. One of the things they learned was:

We only own two things. We own our inventory and we own our reputation.

Reputation. Merriam Webster dictionary defines it as, "Overall quality or character as seen or judged by people in general. A place in public esteem or regard : good name."

When you cheat customers they remember you. When you take care of customers and do what is right they also remember you. And they will come back and take care of you. When you are faced with a couple of choices and one of those choices is dicey at best, then choose the high road. You might lose a couple of bucks, but you will retain what is much better than money. Your reputation and good name.

Control Costs, Control Costs, Control Costs

As business persons we need to remember that we can't control everything. So we have to control the things we can. That includes controlling costs. Brian Tracy in the audio cassette program, "Fast Track to Business Success", say's, "Control costs, control costs, control costs. Do everything you can everyday to control costs."

As you start earning some money in your online business your first inclination might be to buy that fancy car you've always wanted. I would say, "hold off on that purchase - you aren't ready yet." So often we want to show the signs of success before we have earned them. Can you pay cash for the car right now? If there is an immediate down turn in the economy or specifically your industry can you ride it out for 6 months or 2 years? Is there a capital expenditure that may be expiring soon that will require an outlay of cash?

Is It a Business or a Hobby?

I have a brother that for years has run a paper route. He has earned a nice additional income to help his family have some of the nicer things in life. The only problem is he only took the cash earned and used it for living expenses. He never treated the route as a business. He never budgeted and saved for new tires and brakes. He never figured the car would ever break down. The car broke down often. It needed new fuel filters, oil changes and mufflers. But, it was always a struggle for him because these things were never "expected" or planned expenditures.

I challenge you today to plan for the future. Plan for the unplannable future. If you want to do business from a position of strength then save your money. In my twenties I worked for the US Postal Service. At the post office I was assigned to there was a full time janitor named George. Now George never seemed to have much ambition. But, the truth was that George was a prolific saver. Many times the Postmaster would have to ask George to cash his checks. He just kept them in a locker at the office. If he needed some money he would grab a check and cash it. George was very frugal and would eat at friend's homes. He never married and even though he could afford any car he wanted he drove a station wagon that was 20 years old. We all estimated his total assets at over one million dollars.

Saving Money Makes You Confident

You don't have to be that frugal, but you may want to live on 25% less income than you do today. Try it. You will develop great confidence when you pay cash for things. You will be confident when you go out to eat and don't worry about going over your charge card limit on a $25 meal. You can make some really exciting decisions when you have 6 months of workable income in the bank. I just had a friend, William, where I work today that made the jump to being his own boss. He has some exciting software ideas and because he has been saving and planning last week he made his dream come true.

Make Your Dreams Come True

Take it from the lessons learned through experience and see if you can make your dreams come true!

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Ten steps to make your blog successful. Ten Cash generating traffic busting blog techniques. Here is a list of ten things you must do in 2008 to make money on the internet. If you are wondering why you are floundering with little internet cash then you must read this article. If you aren't doing these ten things then you are leaving Internet money on the table. Why would you want to walk away from easy cash?

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We Arrive in Santiago de Compestela Spain

We walked for Thirty Three days straight

We have arrived in Santiago. We walked for 33 straight days. Some days were 12 milers and as many as 18 miles or more in one day. We reached our destination. We decided not to rush to reach the city. Mary had accidentally banged her knee on the table at the restaurant the night before and it was a little tender.

Day 31 Palas de Rei to Ribadiso

We have walked 31 days to Santiago de Compostela

Today we started early because we had reserved a room at an albergue and we had to get there by 2pm or we lost the reservation. Mary set a blistering pace in the dark morning mist. Sunrise is at 8 am but this morning we had clouds and fog so it was darker than yesterday. The path through the city was okay but then leaving the city it became more difficult.

Three days of walking left in our Camino

We only have 66 kilometers to Santiago

We have walked for 30 days with only 3 days till we reach our destination of Santiago de Compostela. It has been an amazing journey. We are in the Galicia region of Spain known for the rain it receives. Well we are extremely lucky because the weather has been beautiful for walking. It starts out cool in the high 40s but then warms up to the low to mid 70s. With plenty of sunshine.

We arrived in Sarria

Five walking days to Santiago

Today we started late at 8 am. We were almost the last people out of Triacastela walking the Camino.

Ocebreiro to Triacastela

Only 6 days remaining on the Camino de Santiago

We are sitting in a restaurant in the little village of Triacastela on day 27 having tapas. It was a short 12 miles that were mostly down. Tomorrow we hope to go to Sarria.

Views from Astorga Spain

From Leon to Astorga on the Camino de Santiago

We visited Leon, Spain yesterday and then we walked 35Km today. Leon was wonderful. Today we walked in rain for the first time. We went 35 KM yesterday for no other reason than we could.

Walked 17 Miles Today

Today we walked 17 miles on the Camino

Today we are sitting at the albergue in Terradillos de las Templarios. We are at the halfway point in our journey. We have walked over 250 miles or 400 kilometers. I truly didn't think we would be able to do this. Mary has been a real trouper walking through bad knees and the pain of shin splints.

Finished a Third of our Camino Experience

We have walked a Third of the way to Santiago

Today finds us in Ages, Spain only 14 miles from Burgos. We are quite excited that we have managed this distance. We hoped we could but we had doubts especially those first few days where we hurt so much.

The Path to Najera Spain

Eight Days of Walking

We have been walking for 8 days now. It has been interesting, tiring, painful, fun and a real learning experience.

Walking Through the Pyrenees

Walking Through the Pyrenees

Mary and I started our journey to Santiago Spain. The first day we started in Saint Jean Pied de Port in France. The goal was to arrive in Roncevalle, Spain before nightfall.

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