In this episode, we explore the essential principles that can make or break a business venture. Learn the 5 keys to success in business and how these keys also serve as potential pitfalls. Some key takeaways include understanding the business aspects, identifying your role within your enterprise, mastering financial insights, and seeking guidance from mentors or coaches. Listen in to understand why success often hinges on continuous learning, staying humble, and being open to expert advice. Whether you're a budding entrepreneur or an experienced business owner, this episode offers valuable insights for building a thriving enterprise!
And we are back. How's everybody doing out there in podcast land today. Welcome to today's show. And let's jump right in. I wrote an article, uh, four or five months ago, it was published in Forbes magazine and it was called the five keys to success in business. And coincidentally, these are also what I call the same five keys to failure.
Now Forbes and their infinite wisdom decided to change my title before it was published. And today it's called why do so many business startups fail and ways to set yourself up for success. Personally, I like my title better, but Hey. Who's going to argue with Forbes magazine. They have a little more experience in this than I do.
Anyway, in that article, I talked about business startups and the fact that the U S census Bureau tells us that 450, 000 new businesses start every month, not every year, that's every 5. 4 million new businesses start every year. They also state that 50 percent of those will fail in less than five years, and 70 percent will never see year 10.
That is a huge failure rate. By the way, I also own a small chain of restaurants. Restaurant failure rate is twice that speed. I think it's 50 percent in the first year. Business failures are staggering. So the question is, Why are all these businesses failing? And as you know, I do coaching and consulting for businesses all the way up to Fortune 500 companies.
And what I have found is that most businesses do not fail for what we call technical or mechanical reasons. Most fail because the owner just doesn't know how to run a business. And to use an example in my book, I talk about Joe, the plumber. And by the way, that's the dropout multi manner book. That was a wall street journal, bestseller and Joe, the plumber.
And my example, we have this guy named Joe, right? Joe works for a plumbing company. And Joe's making 50 bucks an hour working for the plumbing company. The plumbing company bills Joe out at 150 bucks an hour. And Joe does this for years. But one day Joe wakes up and he says, you know, why am I only getting 50 bucks an hour when they're charging 150 an hour for my time, I am going to quit my job and I'm going to start my own business.
And so Joe quits and he starts essentially Joe's plumbing. Now, here's what we know. We know that if Joe's plumbing ends up failing because it follows. The statistics that the U. S. Census tells us. It will not fail because Joe doesn't know how to be a plumber. Joe is clearly a good plumber. Joe's plumber, Joe's plumbing will fail because Joe doesn't know how to run a business.
And that. Is why most businesses fail. It's not for the technical. It's not for the mechanical. It's not because they don't know what they're doing in whatever it is they're selling. It's simply because they don't know how to run a business. So with that in mind, I came up with what I call the five keys to success in business, right?
Things that Joe needs to know or Joe needs to learn.
So if you are first starting out, here's what you need to know. You need to know that you have no idea what you're doing. That's number one. And I'm not talking again about the technical side. Joe knows how to plumb. If you're a chef, you know how to be a chef. You know how to cook. That's not what we're talking about here.
What I'm talking about is you need to understand the business side. Things like paperwork. Things like banking. Estimated payments on your taxes. Matching taxes. How about marketing and sales? That's business. You understand labor costs as it relates to revenue. How about customer relations and a hundred other things that can trip you up?
This is what we call the business side of business. And you need to understand how that works. If you're going to succeed, if you're going to succeed, because if you don't, you better find someone else to bring in as either a partner or an employee that does know those things before you have created such a mess in your business.
That's something or anything can eventually take you down. So rule number one, understand what you don't know and get some help, a mentor or a coach or hire a professional manager, whatever you want to do, but get some help. Number two, if you are starting out or if you are already in business and you are not growing like you want.
You're not as profitable as you want. Here's a little secret. You, my friend are probably the problem. It's probably not your business. It's probably you. You are probably not making the right decisions about how to grow your business. And here is the reason why, and I'm going to be redundant here. But the reason is because you don't know how once again, if you've never built or scaled a business successfully, you just don't know how, unless you have experience in growing a business, unless you have failed enough.
to learn your personal filter, which is in your subconscious making decisions day in and day out without you even realizing it. Your personal filter is just guessing on what to do. Now I have another episode I did called the personal filter, so I'm not going to go into the details. But if you're interested, you can go back and find that episode and learn more about what that personal filter is.
The quick and dirty here, you don't know how to succeed because you've never done it. You don't know the correct decision making process because you've never done it and most of what you're doing is just a guess. Business is both an art and a science. The science is the actual work. The rest is an art form.
So how do you fix this? Okay, so okay, Brian, you've told me I don't know what I'm doing. How do I fix it? Well, same answer I gave you a few minutes ago. You need to bring in a mentor or a coach to help you learn how to make the right decisions, or just to tell you what to do so that you do make the right decisions.
You need to find somebody who is 10 to 20 steps ahead of you and get their help. You need to borrow their success filter until yours is up to speed. We talk about borrowing someone else's filter in the other episode. Rule number two, hire a mentor or a coach. Yes, I know it's redundant, but it is that important.
Business lesson number three, and this is a big one. You need to figure out who you are in your business, but even more importantly, you need to figure out who you're not. Okay. Now if you're self employed and it's just you and the company, then you're everybody and you're good for now. But if you really want to build something big, if you want to scale, if you want to build intrinsic value, If you want something that you can eventually sell, you can't do it alone.
And chances are you may not be acting in the correct role in your company. Too many people think they started business. I'm the entrepreneur. I'm the CEO. Just because you have started a business does not make you a CEO. By the way, a CEO is a managerial, uh, tasked job. Okay. I did another episode again called the four personalities.
You should go back and listen to that one. So you fully understand what I'm talking about. Basically your business should have four personalities. It should have an entrepreneur. It should have a manager, it should have a salesperson, and it should have a specialist. That's the person who does the actual work.
Now, as an example, I find that most people who start businesses are specialists. They're like Joe the plumber. Joe was a specialist. He was a plumber. But he started a business, but Joe was still the plumber. Joe was not the CEO. He's not the manager, probably not the salesperson. Joe needs to do what Joe is good at and bring other people in to backfill.
Where he is not. The challenge is, again, most people that start businesses are not CEOs and they are not entrepreneurs. Sales people, as an example, are terrible managers. Entrepreneurs are great sales people. Technicians are terrible CEOs. Okay? You can't be everything. Figure out who you are, figure out who you're not, stick with that, and then backfill.
That person can either be a partner or it can be an employee, but either way you need to bring them in or you will not grow. You will not build value. You will not build something that somebody else is going to want to come in and buy at some point someday. So number three, check your ego. Get really honest with yourself.
Find out who you are and who you're not, and then bring in the talent you need to grow. Number four, oh my gosh. This is huge. You need to know your numbers. You would be shocked at how many people own companies. And I'm talking zero to 50, 60, 70 million in revenue who don't understand how to analyze a profit and loss statement.
They don't know their numbers. I've said this in so many podcasts and I'm going to say it here again. You need to track your numbers and you need to understand what your PNL is telling you weekly. At the very least monthly, you need to understand every cost, every revenue dollar, every percentage on every line in your PNL.
In fact, I did another podcast once again, called your magic crystal ball. You need to go back and listen to that one. Your PNL is a crystal ball. It will allow you to time travel into the future of your business and tell you how your business is going to do. So many businesses fail because they have no idea what's going on.
In fact, one of the, one of the things I hear from entrepreneurs all the time is, Well, I'm not good with, with the numbers. Okay. Well, you have two choices. Either get good with the numbers or find somebody who is good with the numbers and bring them into your organization. Because if you don't, you're probably going to fail.
And I love this story. I had a guy come to me. I own a little chain of restaurants and he had been in my restaurants, found out who I was and he came to me and he said, Hey man, can I, can I have 10 minutes of your time? And I said, yeah, sure. I'll meet you, uh, next week. But before we meet, he told me he had a restaurant.
He wanted to talk to me about building restaurants. I said, before we meet, I need you to read my book. And he said, okay, no problem. Well, the next week came around and I came out to sit down with this guy at one of my restaurants up in Sugar Hill, Georgia. And we sat down. I said, how you doing? And he said, well, I almost didn't come today.
And I said, why not? He said, well, because I read your book and I know the first question you're going to ask me. I said, okay, what question is that? He said, you're going to ask me for my numbers. And I said, you are exactly right. Because until we know what you have today, until we know how it's been performing historically, there's absolutely nothing I can say to you and no way I can help you unless we know what's going on and your numbers tell the story.
I said, are you telling me you don't have PNLs on your business? And he said, no. I said, how are you operating? I said, are you making money? And he said, I don't know. I said, okay, I don't understand what that means. You don't know if you're making money. I said, did you pay your taxes last year? He said, I filed a tax return.
I said, did you pay any taxes? He said, no. I said, okay, so you're probably losing money. I said, how much money did you take out of the business personally last month? And he said, nothing. I said, well, how are you paying your bills? Your business has been around for two, two years and you're not taking any money out.
How are you paying your bills? He said, well, my wife has a good job. I said, okay, let me get this straight. You called me and said that you have the best burrito shop in the state of Georgia And you want to build it into the next chipotle and then you sit down with me and you tell me that you don't even have A pnl since the day you started but you want to go and ask me to help you raise money Now we are five minutes into this conversation and I said I got to tell you This and not trying to be mean but this is a waste of time I said you go do your pnls for the past two years and when you have them done you call me And then we'll sit down and we can have a discussion on how to help you.
And he said, okay. And he left. That was a year ago. I've never heard from him since. And that business has since gone. All right. You can't be in business for two years and not know what your numbers are. You can't be in business for a year, six months. You shouldn't be in business for 30 days if you don't know what your numbers are, because if you don't, you are just guessing at everything you do.
You have no idea what's going on and you are probably going to fail. Rule number four, track your numbers like a maniac. And if you're not good with numbers, you better learn how to be good with numbers or hire somebody who is get a mentor, get a coach, find somebody that can help you before it's too late.
Okay. Number five, and I'm going to use another story here. Number five goes back to, you need to hire a coach or a mentor to help you. You need to bring somebody into your business and in your world who are. Who have been there and done that, who can help you make decisions because of their experience, not because of your guesswork, okay?
The problem we have as entrepreneurs sometimes is our ego gets so big that we think that either A, we have to know everything, or B, we already know everything. And everything that we think, eh, it's gotta be right, because I thought it. And that just unfortunately isn't the case. And I'll give you, uh, a quick example.
I wrote my last book. It's called No. Psychology of Sales and Negotiation. And I remember I took it to the publisher after it was done, and I sketched out a, a, uh, cover for the book and sent it to her. And she sent it back, she said, this cover isn't going to work. And I said, yeah it is. I mean, I've already got two best selling books.
This is the cover I want to go with. And she said, Brian, this cover is not good. It's not any good. It sucks. And we proceeded to argue for about two minutes. About why I wanted to use my cover and her telling me that it wasn't going to work. And suddenly it dawned on me as a guy who sits here and preaches to people day after day that you need to bring in somebody that knows more about this than you do.
It suddenly dawned on me that this woman had probably published a hundred books, I don't know, five hundred books, and I'd published two. And I said, you know what? You're right. I apologize. You know more about this than I do. And we went with her cover. And by the way, It was awesome and the book hit number three on Wall Street Journal, okay?
I don't care how good you are how smart you think you are if somebody else is in the room that is better at Whatever it is you're trying to do you need to listen to them. So rule number five hire a coach It can be a relational coach a technical coach or a tactical coach and those are three different things by the way But bring in someone to help you see the bigger picture.
So that's it for today. Everything I talk about is in my books, the dropout multimillionaire and know the psychology of sales and negotiation. You can find all my information on my website, which is brianwillmedia. com the books, social media, podcasts, guest appearances. There is also an intro masterclass to sales and negotiation based on my last book.
Uh, this is a course that I've taught for 20 years. In fact, Uh, I've taught probably over a thousand people this course. It has done billions of dollars in sales and products and services, and you can get the intro to that class for free. If you go to my website, brianwellmedia. com, go to the coaching tab, go down to the, uh, the training class tabs, click on training class, go to sales and negotiation tab, click on that, there is a coupon code.
If you will enter the word sales, S A L E S, that will get you the class for free. You can have it. Take the class. Come back. Drop me a message. Let me know what you think. Hopefully it'll help. Alright? So, have a great day, and as I always end my podcasts, here's what you need to remember. People say all the time, well, I, I wanna do that, or I wanna, I can't believe you've had this much success, or I'd like to be able to do that.
Listen, you gotta be in the game to win the game. So go get in the game.