“What in the hell are we going to do!? I just used all our cash to pay off that AMEX bill last week. Now how are we going to make payroll? This is why we hired you, Matt. Fix it.” It was after 10:00 PM on a Thursday. Probably the coldest day of the winter. I had agreed to meet with this client at 4:00 PM and I was exhausted. My new client was trying to make his mismanagement and continued avoidance of accountability my problem. I see this all the time in rookie entrepreneurs who don’t want to take their personal and professional growth seriously.

“Actually. You hired me to get your finances in order. This morning I got your checkbook to balance. And I told you not to pay the entire AMEX balance yet. You know that payroll comes due every two weeks. That’s something I’ve tried to warn you about. Your burn rate is way too high.” 

“Matt. I’ve told you a dozen times. I didn’t go to a fancy business school like you. I don’t know what a burn rate is. If you think it’s too high, then fix it.” At this point, he stood up from behind his desk and, I think, was trying to intimidate me. 

I looked at his business partner, also standing, and asked both of them if this meeting was moved to a standing meeting because I wasn’t informed. 

I ignored his “business school” comment. Some of the best and smartest entrepreneurs I’ve ever met never finished their degree let alone went to a “fancy business school.” For reference, I did get a bachelor’s degree from Judson. However, I learned a majority of business terms from mentors, reading books outside of the classroom, and from watching Shark Tank. I slowly stood up and walked over to their whiteboard.

I took out the green whiteboard marker and wrote the words burn and rate on the board. “I believe in you.” I was switching gears from being their business consultant to their teacher. I truly believe in this client, his business, and what they’re building. They’re hard workers who get a little testy when they feel like someone is talking down to them. I continued, “I know you didn’t finish college because you wanted to start this business. That’s part of what I love about you. You’re driven. Now. What other terms have I used that you don’t understand? I want to make a list, because as your revenue grows past a million dollars a month, there are some basic concepts you really need to know even if you decide to fire me after I’ve stayed at your office well past our 2 hour meeting time slot.”

I drew a line down the middle of the whiteboard so that “burn rate” was on one side. On the other side, I wrote the numbers 1 through 6. I continued, “There are 6 things I want to teach you. If you learn these 6 things, you’ll be lightyears ahead of anyone else you meet in business. Ready?” 

I could tell I had their attention. I truly enjoy it when I get to teach. I’ve found that people are often the most willing to learn when they are feeling extreme emotions like frustration, anger, fear, sadness, and doubt.

“I call this list ‘The 6 Blunders of Rookie Entrepreneurs.’”

Here are the 6 things I wrote on the whiteboard:

1. Not coachable
2. Too Distracted
3. Emotional Decisions
4. Financial Whirlwind
5. No Funnel
6. Revenue Snobbery

After I wrote each term on the whiteboard, I explained each one. And. For the first time since I met these two entrepreneurs, they took notes.

Not Coachable – This is something that’s true in every facet of life. Sports. Education. Parenting. Business. Relationships. Anything. If you don’t learn. If you can’t learn. If you can’t be told anything. If you don’t allow someone who’s got more experience and who has your best interests at heart to help show you things about your situation that you can’t see yourself, then you’re doomed to repeat your mistakes. You have to be coachable. The best athletes, the best actors, the best business people, they all have coaches. They want to grow. They want to achieve. They want to push themselves and be held accountable. You must be coachable to win at business.

Too Distracted – Great businesses aren’t built on accident. They take a tremendous amount of intentionality. A focused leader who can galvanize his / her team. A leader who is distracted is like a captain of a boat lost at sea with no desire to find the map. One who is consistent, gets the team on the same page and moving in the same direction is more important than a fancy business degree. They stick to their plan and encourage others to stay focused too. 

Emotional Decisions – Great business leaders have learned to temper their emotions. They aren’t unemotional, they just don’t allow excitement, anger, happiness, frustration, etc to impact how they view things. They focus on the data to make decisions. They have a process for dealing with their emotions in a healthy way (journaling, visiting a therapist, or talking the decision through with a business mentor.) 

Financial Whirlwind – When you’re taking care of your personal finances, maybe there’s a couple credit cards to pay, a mortgage payment or rent, maybe a doctor’s bill, and perhaps a car payment. It’s simple. When you’re building a business with employees, divisions, vendors, suppliers, the IRS, etc, you need to stick to a financial system that works for you. Don’t get stuck in a financial whirlwind where you make a bunch of financial decisions that impact dozens of other business options in a matter of a few minutes and expect a CFO, Accountant, or a CPA to help you fix your mentality about your finances. It won’t work. You have to be calm and methodical when working on your finances. Not rushed.

No Funnel – Too many entrepreneurs find early success in sales because they are the face of their business and people like to do business with “the owner.” When you’re building a business, building a sales team, and you have a brand, you need to fully understand how your ideal clients find you and why they choose to do business with your company. It needs to shift from “because they like me,” to “because they see the value in our brand.” Document it. Fine tune the funnel. Don’t leave it to chance.

Revenue Snobbery – Don’t take making money for granted. At some point in your business, you’ll need to hire people who can generate revenue because you won’t be able to make it all on your own. You’ll begin to recognize opportunities and monetize them accordingly. Likewise, you’ll need someone that is more junior to you who is willing to learn how to monetize your sales funnel like you do. Figuring out this last step is monumental to business success. 

After I finished my teaching for the evening, I looked down at my watch and noticed it was about 10:30 PM. “Don’t worry guys,” I said as I put the cap back on the marker. “I really do believe in you. Now, I need you to make a decision. If you want to continue to learn, let’s keep working together. If you want to blame others for your decisions, then you’ve made rookie blunder #1. Don’t make the rest of ‘em.” 

Want someone to speak truth into your business? Contact us today. We use our Strategic Approach and our SV Analysis Process to gain a deep understanding of the root causes of your business issues before giving out advice. Contact us to see if this is something that could benefit your business too.