Ways to do Small Business

One of the biggest differences between self-employed people or Mom-and-Pop businesses and big business owners is how they each view the cost of doing business. For simplicity sake, I will refer to self-employed people or Mom-and-Pop business models as “small business.”

In my experience, small businesses tend to be very cost-consciousness, whereas big businesses tend to be very value-conscious. There is an enormous mental difference in that small business often will, for lack of a better term, freak out when they have a large expense. The big determination when considering a purchase or expense is centered on how much it costs and the reaction behind that is a very emotionally driven one. In a big business, by contrast, the main consideration with an expense is methodical and unemotional. It is about being able to factor in return ratios and return-on-investment calculations to better justify expenses. Once those factors are calculated, the expense happens. It is a straightforward decision.

The core lesson to learn for a small business owner is how to turn an expense into an investment. There are two things to consider:

Focus on the reason why you are spending money

Figure out a way to make that expense work for you in some new or dynamic way

By doing these two things, you are halfway to thinking like someone running a business and not a person who has a business running them.

Another lesson for a small business owner is to learn how to be able to spend big dollars in order to make big dollars. Most entrepreneurs say they want to make bigger dollars, but sticker shock on a specific item or a specific investment makes them shy away. Suddenly, they cannot afford the investment. The confidence to make big money is backed up by the confidence to spend big money.

Let me explain what happened to me. Seven years into my business career, I found myself writing checks in excess of $750,000 every year. These were regular expenses, not expenses that were predicated upon my making income.

I had to make a mental shift and understand that I have to be able to spend money in order to make more money. I had to understand as well, that I need to spend money to be able to create opportunities and to be able to drive value in the marketplace. I needed to feel comfortable spending the money and get used to writing those checks when times were good and when times were bad. Finding the value to be able to make that statement has kept me big.

It is the same window you can go through to begin thinking like the Toyota’s and the GE’s that make billions of dollars, but have to spend billions of dollars. The way you get to $21 billion in profit is that you probably have to spend way more than that.

To take your business from operating with a small business mentality to a big business mentality, you need to go through that cost window. Think about the nature of large costs, divorce yourself from the emotions, and see spending money necessary for your business as an operational force so you are able to write that check without making excuses.

Shifting from a small business to a big business mindset is not always easy. Confident Solutions Coach can help you make the mental leap and create the business systems and operational foundation you need to get to that big business level of success.