Monday, May 18, 2009

Doing Business Right

I have been thinking about business a lot ever since I started doing business in The Location. I have had my share of struggles in trying to make things run smoothly, work right and be profitable, too. I want things to be profitable for the sole purpose of it being sustainable. That is, I don’t want to have to keep dumping money into an enterprise that is just not working. I want it to make a profit so that it can continue to function on its own.

Perhaps that is part of my problem. Perhaps it isn’t. I don’t know, really. I do know that two out of three enterprises I’ve started have yet to make a profit. Perhaps if I were shooting for large profits rather than just a profit it would make becoming profitable a little easier. I mean, if we shoot for the stars and fall short, we’re still doing pretty good. But if we shoot for a cow pile…well, our chances of success are high but it’s not where we want to be.

One thing I do know: Business people with experience and success (and those who do not have a ministry objective) do not have the mere goal of profitability for sustainability. They want to make good profits. To do otherwise wouldn’t be considered “good business.” So, I wonder, should I be aiming for a higher margin of success even if being rich is not my goal? Would aiming for larger profits actually help me to achieve sustainability a lot better?

One other thing I know: In the business world, people who start businesses that end up being successful in the long run are people who have knowledge and experience in doing what they’re attempting to do. If they don’t, they get people who do to work with them. What that means is that if I am learning as I go (because of lack of knowledge and experience in both business administration and the production of products and services we offer) then I will make a lot more mistakes; it will take a lot longer time; and there is a higher percentage of potential failure.

A football team I follow has just hired a new general manager and a new coach. Both of these men have never held these positions before. They are both “new” to their jobs—doing it for the first time. But they aren’t really doing it for the first time. They do have experience. Even though they have never held the top jobs in coaching and general managing, they have been in the system for a long time. They have been the “second man” for quite a while. They come to their new jobs—not without any experience or idea of what to do—but with plenty of experience in seeing how a successful football club is run. You see, every head coach is a head coach for the first time, sometime. But rarely, if ever, does someone become a head coach without having been an assistant coach for a long time and without having most recently spent time as a defensive or offensive coordinator. No one hires a man off the street—or even a recently retired football player—to be the head coach. Even if that man could eventually figure it out, they don’t want to lose millions on his “learning curve” and the time it would take to learn as he goes. They need more confidence that he will start out with a winning plan.

So, as an entrepreneur who has never ran a successful business or even been the “second man” in a successful business, I have a pretty big learning curve ahead of me. That is okay. But what it means is that I would do well to learn about the right way to do my business. Knowing the product is not enough. Knowing how to produce what we’re selling is not enough. I need to know about all the administrative things I see big successful companies doing that might seem “unnecessary” for a small business like mine. I need to be prepared for growth and have the systems in place to handle it when it happens. Because if I don’t, the business will crash and burn when it can’t keep up.

I have a lot of work to do. I have a lot of study to do.

And I have accepted this. I think sometimes, as Christians, we don’t accept the business challenge ahead of us when we start to do BAM. We make some fatal business assumptions. One is that the business will kind of work itself out. Another is that we don’t really need an MBA or need to know about the things MBA graduates know. Another fatal assumption is: “If this is God’s business he will bless it and make it successful.” We use this kind of blind faith in God’s power to exempt ourselves from due diligence in the task he has given us to do.

One book about BAM that I read said that most BAM enterprises are usually good at business or good at ministry. Less often will they find one that is good at both.

I think this is a challenge to us to well in both business and ministry. If we cannot, perhaps the model isn’t as good as we thought.

1 comment:

  1. Very good- difficult questions to wrestle through for sure. I think you're right about those fatal assumptions, and they don't just apply to business. Thanks.