When most people think of parenting, they think of kids, and rightly so. Some may even think of their pets. But not many people think of their business. It sounds far-fetched, but maybe once I’ve explained, it won’t sound as bizarre as it does now.
A business idea must be conceived, brought to fruition, and tended to for growth and expansion. And unfortunately, the mortality rate of businesses is high. According to Inc, a whopping 96 percent of businesses don’t make it to 10 years old.
Granted, ten years is a long time; but even within a year, the failure rates are high. According to the U.S. Small Business Association, during a ten year study from 2004 to 2014, only 78.5 percent of new establishments survived the first year.
More than halfway into my 11th year of business, I should (and do!) feel more than a little proud that we have beat the odds. But how did we do it? How does a business boasting Third World roots survive to see its 11th year in a First World country?
It’s all in how I parented the business. And here’s how you can make it to that elite 4 percent, too.
Be an Honest Parent
Many kids from this generation and before grew up believing in Santa Claus before superior reasoning, or a family member, burst their bubble. I never lived under that illusion.
From the very beginning, my mother told me there was no such thing as Santa Claus and that it was her and my father who worked hard to put presents beneath the tree every December.
She then followed up that honesty by educating me on the cost of rent, utilities, groceries, and even the property taxes. By the time I was a preteen, I knew what her salary was, how the money was spent, and how best to save.
This kind of parenting is useful in business. Yet, many owners are not honest about revenue and expenses. This is often due to poor bookkeeping and cash flow management. The end result is an over-dependence on credit, which is swiftly followed by debt.
Be honest about what your business can afford, and how. Don’t become entangled with expenses and financial obligations you can’t keep up.
There is no Santa Claus for businesses. Everyone who gives wants something in return. And debt is always a greater cost than mere numbers.
Give your Business Responsibilities
One of the biggest reasons businesses fail is the obvious one: capital. Many business struggle to maintain a proper balance of revenue to expenses. And even big businesses struggle with cash flow problems.
That makes what I’m about to say that much more bizarre.
If you want your business to grow,
teach it responsibility by giving it bills to pay.
Many entrepreneurs juggle other jobs with their business, or even a full-time career. Since their expenses are covered by income from their “day job”, the business is relieved of the duty to pay the mortgage, health insurance, and phone bill.
This allows owners to redirect most of the profits back into the business for expansion and growth. They may even invest more money from their income into the business to speed up the process.
This is a wonderful idea, of course, but the end result is that many business owners then quit their jobs never fully understanding how much money the business needs to make in order to shoulder its own responsibilities.
Health insurance and retirement payments, for instance, are no longer shared expenses with an employer. It’s all on you – or your business – to make it happen. And if it never got the practice, then a business owner may learn the hard way.
Another benefit of giving responsibilities to your business is that it reduces complacency. It’s easy to become complacent about late or unpaid invoices, when your mortgage gets paid anyway, and food is in the fridge.
It’s a whole other story when the business is in charge and can’t pay it. You’d be surprised how much more efficient you become at sales, budgeting, and debt recovery when the business is responsible for satisfying your basic needs.
Don’t Neglect your Business
All businesses would thrive if we had unlimited time to pour into it, but there is no such thing as unlimited time.
Most of us have, at some point or other, neglected our business. This usually happens when school, a full-time job, or family obligations start to play tug-of-war with our time.
Even so, it’s important to make time to turn that side job into a career. Don’t let days turn into weeks and months since the last time you completed an assignment, checked your emails, or invested in PR and marketing.
Like anything else in life, in order for something to grow, it requires quality attention to assess its needs, and nurture its strengths. Failure to do so means “social workers”, in the form of competitors, will soon rush in to take your clients.
Neglecting the business does not necessarily mean neglecting the entire business, altogether. Even neglecting a certain aspect of the business can cost you in the long run.
For instance, many owners may forget the Facebook or Twitter page, put off filing taxes, or skip the sales process because they hate “selling”. This is no way to ‘parent’ a business. Even the ‘dirty diapers’ need changing.
Don’t Over-Indulge the Business
A business and a child share one main vice in both kinds of ‘parents’. That shared vice is the tendency to spoil, via over-indulgence.
Yes, I know. I said a business needs lots of attention. But if it’s the only thing getting attention in your life, the rest of your life will suffer.
Many of us base our lives around our career and professional goals. However, there are other aspects of equal importance to our happiness. Business owners should take care to prioritize their health and key personal relationships with family, friends, and spouses.
There are many stories of wealthy men losing half their wealth to disgruntled wives, who also took the kids. There are stories of kids who favor one parent over the other, because one was always working, and never around.
Career goals are important, and do provide us with a sense of gratification, and an income, that allows us to live full, stable, and comfortable lives. However, no one lies on their deathbed, reflects on their life and thinks:
I should have worked more often, and spent less time with the people I love.
Even wise parents of actual children know that sometimes it’s important to put the kids to bed, and have a couples’ night, or a night alone.
Balance is key.
Focus on Value-Adding Expenses
Wise parents also understand that while parenting cannot dictate their entire lives, it does dictate their budget. Every purchasing decision is weighed against whether or not it will be beneficial to the family and its current expenses.
The same should be done with a business. Most businesses are frugal in the early offset, but once the money starts pouring in by the thousands and millions, they become more liberal with spending. If owners are not careful, this can get out of hand.
Every expense from company funds should be matched against the company’s needs, and its vision. Spending just for the sake of spending is always a bad idea. Try to ensure that most – if not all – spending is an investment and provides value to the business.
It may seem like a great idea at first, to loosen up the reigns when the money comes in, just because the business can afford it. But remember, even millionaires go bankrupt.
Budget, save, and spend wisely.
Do you need help parenting your business? We have consultants at the ready to help with all the tough tasks that distract you from focusing on doing what you love. Shoot us an email for more information.
About Alexis Chateau
Alexis Chateau is the Founder and Managing Director at Alexis Chateau PR. She is an activist, writer, and explorer. Follow her stories of trial and triumph at www.alexischateau.com.