Passion or Money?
by Bruce Wade on 28/07/09 at 8:24 am
5 comments
I have chatted to two different business owners recently who have both started their businesses on huge cash flush loans. The first begun his business on R40 million and was able to pay it back within 18 months. The second begun her venture with a sponsor business with a turnover of R10 million a month and an already recognized brand. She turned R8 million in the first year and won an Old Mutual startup business award.
Both had the opportunity to think big and to be able to risk big, resulting in huge rewards at the end of the day. This is always very different when you are risking next month’s school fees to pay for an advertising campaign or new staff salaries that may or may no bring in any rewards.
My advice to business owners has always been to follow the passion and not the money. Follow your passion and the money will come. Follow the money and often the passion will fade. Develop your business around your own strengths and passion builds a solid foundation that will stand against any storm. And lets face it most storms we as small business owners face are self-esteem issues and not financial. Oh! and by the way both the business owners mentioned above are not very happy people today.
Bruce Wade is a survivor of the corporate and NGO world, author, speaker, business owner and entrepreneur, Bruce now runs the Entrepreneur Incubator; a member based organisation dedicated to serving those in the trenches of business through coaching, mentoring and leadership education. View more articles by Bruce Wade.
Tags: advertising
Fred
Jul 28th, 2009
Welcome to the fold Bruce – : )
A great first firing shot. I agree with your sentiments whole-heartedly.
[Ideate readers are encouraged to check out Bruce’s other writing at http://www.hep.co.za and http://www.ei.co.za
Fred
Jul 29th, 2009
How about following the money to pay for the passion? The big idea I have for my own business requires significant sums of money to get started properly. When lenders look at how much of my own money I can bring to the table, they’re bound to get cold feet. I’m thinking of starting a different business with lower start-up costs to rack up entrepreneurial experience and (hopefully) enough capital to be taken seriously. Bad approach?
Bruce
Jul 29th, 2009
I attended a talk by Colin Thornton, founder of Dial A Nerd, who started his business in 1998 on just R5000. His story is of passion and building a business from the ground up. Today he has 130+ staff and branches across SA. His lesson to us was to keep it focused and real, each time he digressed from the main plan he got into trouble.
Fred
Jul 29th, 2009
Should have mentioned: I would be a first mover in the field I am thinking of. I’d hate to start on a shoe-string budget and have some copycat with deeper pockets come and mopup market share!
Gareth Cotten
Jul 31st, 2009
@Fred – I think your approach of starting a smaller business first is the way to go. Not only will it give you a good shot at making some of the money to fund your bigger business, but like you say, the experience you gain from doing it will be priceless.
I always shudder when I see people launching straight into big businesses, and taking on masses of debt to get started. Yes, some of them pull it off, but many don’t. Starting a business with less money makes you think that much more creatively and actively, as you have fewer resources to throw around. Starting one with a huge chunk of cash is bound to make you lazy, as you know that you can afford to make more mistakes – so you are less hard on yourself, and don’t adopt a lean, efficient approach to running the business…