A vetern entrepreneur explains why you have to know where you want to be before you let your company take you there.
Norm Brodsky is a veteran entrepreneur.
Business can take you almost anywhere--but do you really know where you want to go?
Every year about this time, most of us who run businesses sit down with a calculator and try to figure out where our business is going and how it will get there. It's an important exercise, and yet it gets an awful lot of people into trouble. Why? Because they focus on their business plan before they've figured out their life plan, and the life plan must come first.
Many of us, unfortunately, come to that realization fairly late in the game, after we've already taken our lumps. If you'd asked me 10 years ago what I wanted to do, I would have answered without hesitation, "Take my business to $100 million." What else I might do with my life, and why I wanted a $100-million company, I never even thought about. I was simply determined to have one.
And I got my wish. Granted, my life was crazy. I had no time for my family. I never took a vacation. I wasn't doing a lot of the things I most enjoy. Still, I did have my $100-million business--for a while. The problem was that I'd made a disastrous acquisition. The company started hemorrhaging cash, and the next thing I knew, I was in Chapter 11.
It took three years, but I eventually brought the company out of Chapter 11. The experience was one I will never forget and hope never to repeat. Like most such experiences, however, it was incredibly educational. Among other things, it forced me to go back and ask myself why I was in business in the first place.
These days, that's the first question I ask people who come to me looking for advice.
I'll give you the example of Mike, who called me up last year after reading one of my columns. He said he wanted to grow his business, and he had to hire some salespeople, but he didn't know if he could afford the expense. Would I help him come up with a plan? I agreed to meet with him.
It turns out Mike has a family-owned trucking business, which hauls containers to and from the ports around New York City. The company has been in operation for 32 years and does about $1.7 million a year in sales. Mike said he wanted to take it to $10 million or so in 5 years. My question was, "Why?"
He gave me a funny look and said, "What do you mean?"
I said, "Listen, let's forget about business. Business is just a means to an end. The question is, What's the end? Where do you want to go in your life? Where do you want to be in 5 years from a family standpoint? What do you want to earn? How much time do you want to take off?"
Mike didn't have answers to those questions. He hadn't given them much thought. People seldom do. He had to discuss them with his wife. He had to talk with other members of his family.
In the end, he decided that what he really wanted was to double his salary. He and his wife have two kids, and their house is too small. He'd like to earn enough to afford a bigger one. He said he'd also like to take some time off now and then. Nothing much--maybe two or three weeks a year. As it was, he worked every day and took few, if any, vacations.
I said, "Well, then, you don't want to grow your business to $10 million in 5 years. You probably don't have the money to do it in any case, but if you did, you'd wind up working 18 hours a day, seven days a week, and you'd never see your family."
Understand, if Mike had given me a different set of personal goals, I would have given him a different response. Some people, after all, really are driven to grow their companies as fast as possible, and they're willing to sacrifice plenty of things in the process--including their families. I don't try to argue with people like that. They won't listen. I know: I used to be one of them.
But Mike isn't one of them, and so we were able to come up with a new business plan that will allow him to get what he wants. Now he's shooting to do $3 million in sales in 5 years, and he's not hiring any new salespeople just yet. Mike himself will be making sales calls. It turns out that he enjoys selling, and he's good at it. He just hasn't been able to do much of it, because he's been needed in the office.
But he has a brother who's been driving a truck full-time. With a little training, the brother can cut back on his driving and take over some of the office duties, freeing Mike to go out and sell. So instead of spending $50,000 a year on a new salesperson, the company will be spending $10,000 a year on a part-time truck driver to fill in for the brother, and Mike will be able to focus on the areas where he can have the biggest impact.
It's a reasonable plan with attainable goals. But, most important, it will help Mike have the kind of life he's looking for. That's what business can do for you--provided you keep it in its place.
Norm Brodsky is a veteran entrepreneur and the CEO of CitiStorage, in Brooklyn, N.Y. This column was coauthored by Bo Burlingham.