Entrepreneurs have 90% of their attention focused on the top few lines of their income statement rather than on cost cutting. That is one of the true distinctions between an entrepreneur and someone who simply owns a business. Not that cost cutting isn’t a sensible idea.. but the problem with it is – it doesn’t have the potential to make or break you!
The big question to ask yourself, is – if your expenses are e.g. 30K a month – what is the maximum you can gain by cutting your expenses? 30K of course! Now look at the top line – your gross revenues – what is the maximum you can gain by increasing that number? It is limitless, right? So that is where true entrepreneurs put the lion’s share of their attention.
An entrepreneur is not defined as “one who owns a business”. Many business owners are far from entrepreneurial. They are very risk averse and avoid as much as possible re-investing their income to improve their profitability. Many are proud of the fact that they spend very little e.g. on marketing. While this may be ok if they are generating lots of new business without the need to do so, but very seldom is this the case.
They spend very little, if anything on e.g. staff training, even though their staff have the capacity to greatly increase their revenues. Even investing in their own leadership skills is something they cannot envision getting a return on.
True entrepreneurs understand risk & how essential it is to their success. They can visualize the ROI on the investments they make before they make them. They also understand that not every investment will pay off but by continuing to invest, they know they will learn how to make better investment decisions. They understand that these lessons learned will enable them to win out over their competition.
Entrepreneurs know that money is to be used to make more money. That is its purpose. Over conservation of money results in too little expansion and growth. Many business owners have this backwards – they say they will invest in the business when they make more money. That is like saying – make me muscular and I will go to the gym and lift weights! Wrong sequence! One must be willing to spend first in order to generate more income & growth.
Success, as we know, leaves clues. Look at any successful person who is still in growth mode, and ask yourself – did they go out on a limb? Are they afraid to spend money? Do they reinvest in their business? Modeling success is a great way to not wind up spending your life reinventing the wheel!
Of course, there are other traits that make one an entrepreneur, but this is one that if missing, reduces many practice owners to being merely employees of their practice.
So take stock– what kind of entrepreneurial investment could your practice benefit from right now? Marketing? Staff training? Additional staff? Technology? Leadership training?