Business is Relative

By May 30, 2017Financials
financials

Speed is relative. If you’re on a train going 60 miles per hour riding a bike at 10 miles per hour, it only feels like you’re going 10 miles per hour relative to the train. If you looked out the window though you’d realize you’re really going 70 miles per hour relative to the ground. I experience this every time I go skiing. The first hill always seems very steep and I feel like I’m going too fast. The second run I’m more comfortable. By the third run I’m probably going faster and steeper than the first run but it’s starting to feel normal. This same thing happens in business because your business is relative.

There’s a time in almost every entrepreneur’s life where they wonder if anyone would ever pay them. The first customer to pay you is always exciting. That first $1000 feels like a lot of money. The second $1000 is still pretty exciting, but by the time you’ve got a whole group of people paying you suddenly each additional $1000 has less and less of a rush. They’re relatively small increases once you’re up and running. After a while, what was once uncomfortable becomes comfortable and you stop noticing these relative changes in numbers. $10,000 a week suddenly becomes a consistent part of your life. Then $15,000, $20,000 and so on. You don’t notice it as much. It still makes your stomach churn to think about what $100,000 a week would look like, but that’s only because it’s still a relatively big jump. But, before long even that will become normal.

The same goes for expenses. The first $1000 purchase you make with your business credit card weighs on you. You ask yourself “Will I ever make enough money to pay this back?” You work hard, and you do. The second time you pull out that card you still feel it a bit, but not as much. And after a while, you’re buying and paying back $1000 bills without too much thought. This can be the dark side of this phenomenon. You stop paying attention to the details. You don’t sweat the small stuff and because you’re actually taking on increasing amounts of risk without the same fear that you can have the wheels suddenly fall off the business.

It’s important to be aware of the different speeds of your business. When you’re uncomfortable with the speed going on the sales side know that you’re going to get used to these new sales numbers soon. If you’re cruising along comfortable with your company spending each month just check that you’re not already going very fast or that you’re still checking in on those expenses with the same rigor you did when you started. At the end of the day, the amount of money in your bank account is hopefully higher relative to what you started with.

Will MacMillan

Author Will MacMillan

Pulling from more than 15 years of entrepreneurial experience, Will helps professionals develop their skills to overcome challenges. Whether it’s designing processes or building learning management systems, Will has a knack for bridging gaps in skill development to help businesses grow to the next level.

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