I know it's not mother's day, but I'm giving major props to my mom.
My mom is the reason that I've achieved success as an entrepreneur. The lessons she taught me growing up are the reason I've been able to build several multi-million dollar businesses.
I have a massive amount of respect for both mom and dad. They were hard working immigrants, determined to provide the very best for their children.
My parents had it rough. My dad grew up in poverty in Uganda. He would tell me stories about how he could climb up other people's trees and take some of their fruit. When the Ugandan leader Idi Amin expelled the Indian minority from the country in 1972, my dad and his family were forced to find a new nation to call home.
My mom grew up in India on a farm. She was intelligent and industrious, focusing on loving those around her and taking care of their needs.
All my life, my mom has shown me what it means to be an entrepreneur -- taking calculated risk, launching ventures, and, most importantly, caring for others. She is a role model to my sister and me, and a wonderful grandmother to my sister's children.
What was it about my mom that gave me so much entrepreneurial vision and ability? These lessons she taught me during my childhood will help you understand.
Start a business wherever you are, and with whatever you have.
A lot of entrepreneurs get stuck right out the gate. They think to themselves, I don't have what I need to start a business yet.
Well, what do you need to start a business?
- A network? Many entrepreneurs come from nothing.
- Cash? It takes very little money to start a business.
- Investors? See the point above.
- A location? You can start a business anywhere on the planet. Anywhere.
- An amazing idea? Why not start with something un-amazing, and work from there?
When I was eight years old, my mom decided to start a business. She didn't have a lot of cash or a whole lot of time. Besides, she had me and my sister to care for.
What did she do? She started a daycare business right out of our home. Every weekday, a handful of little kids would come over. She would watch them, care for them, teach them, and earn an income doing it.
My sister and I were her first employees. Obviously, during the school year, we weren't home to help, but every night we would the vacuum the living room. My sister operated the handle, and I pulled around the rolling part. Then we would mop the floor and dry it.
Mom wasn't trying to start Amazon or Facebook. Her little business netted less than $100k each year. But mom started with what she had, there in our little house in Orange County.
Most importantly, she was helping other moms to get ahead by giving them the chance to go to work. Most importantly, she was making a positive impact in the lives of dozens of little kids.
Years later, when I was 15, I started looking for a big shot job.I wanted to jump into a C-level role, because that's where the big bucks were.
(Come to find out, local Forbes 500 businesses weren't hiring 15-year-olds for executive positions. Shoot.)
So my first job was at Knotts Berry Farm. It was the typical pick-up-the-trash-and-scrub-the-toilets gig. DId I love it? Of course not! But my mom taught me to start where you're at and with whatever you have.
The money that I earned from scrubbing toilets helped me to fund my passion of starting my own business.
Thanks, mom. Lesson learned.
It's easier to save money than it is to make it.
I watched what my parents did with their money. Thankfully, money wasn't a hush-hush topic in our house. We talked about it. We knew about it. It was okay.
My mom told me, "It's a lot easier to save money than it is to make it."
I didn't understand what she meant at first, but then I saw her model this teaching. She would work hard to make a sum of money. Once she had the money, however, she knew how to save it.
How did she save it? Simple! She didn't spend it!
Obviously, my mom did spend money. She had to. My dad, sister, and I needed to eat! I went with mom to the grocery store, and she would carry a big blue pouch with hundreds of coupons.
When we got to the checkout counter, she would hand over the coupons one at a time. By the time all the coupons were tallied up, mom would save anywhere from 25-50% off the grocery bill!
Whenever I went to the grocery store with mom, I would ask "Can we buy this? Can we buy this?" It must have been annoying! Usually, mom would say "yes" because I was a poor eater and she was happy when I ate. But she would always try and find a coupon if possible and save money.
Often, when I asked "can we buy this," she would tell me, "It's easier to save money than it is to make it."
Years later, I realized how true this was. When your business is making millions of dollars a year, you might feel like you're set for life! But in reality, a multi-million dollar business requires a lot of cost.
I didn't mind spending on business growth, but I was blowing hundreds of thousands of dollars on web hosting. Our hosting cost was the single biggest line item in the business budget. I remembered what mom said about saving money, so I called up my hosting provider and cut a deal.
Instantly, I saved $220,500 a year by threatening to leave to a competitor. Boom! Just like that.
It wasn't because of my negotiating skills or native brilliance. It was because of what mom told me: Hard to make it. Easy to save it.
To this day, I think about that principle all the time. Each of my business keeps ample cash resources that we've saved. It keeps us from getting stressed out if profits take a dip.
One of the reasons why my businesses are so profitable is because I emphasize saving money as much as I do making money.
Count every single penny.
One of the things that mom did every month was count our money.
She wasn't doing this because she loved money like Scrooge. She was doing this because she wanted to know how we were spending our money.
My mom was serious about it. She would sit at the dining room table with receipts and a calculator, doing figures. She looked over our bills. She even counted the change in our change drawer!
She wrote down each cost on a yellow legal pad, with the date, the amount spent, and what it was for.
That was mom. But what about me?
I always wanted to have a lot of money. I thought that people with a lot of money didn't have to count their cash. So I didn't! My businesses were growing. The money was coming in, and I didn't need to keep track of it, right?
Wrong! My business partner and lost a million bucks due to some poor decisions, misplaced risk, and failing to keep a tight grip on our finances.
A few years later, I was still playing fast and loose with the cash, spending on things that I didn't need, and wasting money in so many areas.
It may have taken a while, but my mom's lesson finally came back to me: Count every single penny.
Today, I do the same thing that mom did. I pull out a sheet of paper. Across the top, I write the headings for four columns: Expense, Date, Amount, Notes. I have a separate spreadsheet for each one of my businesses.
Every time I make an expenditure I write down the expense, the date, how much it cost, and any notes.
Forcing myself to write these figures down saved one of my businesses $1.7 million each year. In the process of writing down my costs, I realized that a service provider was overcharging us by 10%. I also realized we were spending $67,000 each month on three extra services that our business didn't even use!
Whenever I write down the "notes" for the expenditure, I have to mentally justify it. In my mind, I think either 1) this is a wise or necessary expenditure, or 2) this is an unwise expenditure. If it's not moving the business forward, it's a waste of money.
If one of my team members has a business credit card, they have to do the same thing in a Google Sheet. Write down the expense. Write down the date. Write down the cost. And write a brief note about it.
When I implemented this practice team-wide in one of my businesses, I saw expenses drop by 14% the very next month!
I've been following this practice for four years now, and I can tell you with confidence: I know exactly where every penny in my businesses is going.
I can also tell you that my simple scrawled-out list has saved my businesses millions of dollars.
You don't have to be making millions to put this practice into play. My mom wasn't making millions! Find the waste, destroy it, and watch your profits add up.
Ask for discounts.
Mom and dad are savers. (I tend to be more of a spender.)
One time, I was shopping with my dad at Nordstrom because he needed to buy some new shirts. A display rack at the store had three shirts that were all basically the same. My dad was thinking about buying all three of them, but the blue one on the right cost four dollars more than the other two.
I would have just grabbed the shirts and headed for the checkout. But dad? Oh no. He believes that everything is negotiable.
He took the shirts to the checkout and asked, "Excuse me, but can you tell me why the blue shirt is four dollars more?" The attendant told him that it was a popular color, and popular clothes tend to have a higher cost.
"I'd like to buy all three shirts," dad told her. "The blue one should be the same price as the others because it has the same design and is made by the same company."
Would you ask for that? Or would you be too embarrassed?
The sales clerk ended up giving my dad the discount. Now, this normally doesn't happen, but my dad and mom and never ashamed to ask for a discount.
My mom is the same way! Like I said, her couponing at the grocery store is exhibit A of her frugal habits.
Personally, I don't do much negotiating when I buy my clothes. And I don't go grocery shopping very often. As a business owner, however, I'm constantly looking for discounts.
- I called up Apple, and asked for their corporate discount for my team's Macbooks. Granted.
- I called up Starwood, got a corporate code, and arranged discounts for my entire team to stay at Starwood hotels. Granted.
- I called up Amazon to reduce my server bills and negotiated a lower rate by agreeing to prepay part of my bill for a year. Granted.
Does this sound cheap to you? It's not cheap when I count up the savings. Take these into consideration:
- I asked a contractor to lower his rates by 16% in exchange for more work. He agreed, and I saved $34,000 a year.
- I called a service provider and requested to cancel our service, because I wanted to switch to a new provider. We negotiated a new contract with a discounted price. I saved $275,980 per year with the new agreement.
- I called up a design agency, gave them an idea that would streamline our work with them and requested a discount in exchange for fewer work hours. I now pay 25% less with this agency.
Notice what I'm doing in each of these situations. I'm arranging a win-win.
My goal isn't to go all greedy on people, destroy their profits and pocket the difference. I believe that if I negotiate a lowered price, I should provide more value to the service provider.
Value is the important thing, not the cash amount. It works the other way, too. If I find that people are increasing their value to my business, but I'm still paying them the same amount, then I will increase their compensation. They don't have to ask me for it. I just do it.
Here's why. Business is a value game. If you can get discounts, go for it. But if you can increase value, do that, too!
I took this principle from business, and used it for personal expenditures. I've discovered ways to use credit card point systems, purchase inexpensive travel tickets, and reduce my out-of-pocket expenses.
My parents were right. It's easy to ask for discounts, and it feels great when you get them. Everything in life is negotiable. You just need to ask. Mom and dad weren't afraid to ask, and they learned that if you don't ask you don't receive.
This habit, ingrained to me at an early age has saved me millions of dollars.
If you don't need it, don't buy it.
When I went shopping with my parents, I did like most kids: "Can I have this?"
Usually, it was candy at the grocery store. Gah! Candy is awful for you! And mom knew it! When I asked, "Can I have this, she would ask me, 'Do we need it?'"
Of course not, mom, but I want it!!! Isn't that reason enough to buy it?
No, it's not. If you don't need it, don't buy it!
This is a tough lesson to learn. Often we feel so desperately like we need something, that we tend to let our spending get out of control.
Once I realized that I didn't need stuff, I started buying less. Waaaay less. I got rid of my home, my wardrobe, my collections, and a ton of other stuff. I didn't need it!
For this reason we also teach the kids in our family about frugality. My sister brought home a Tesla SUV the other day and her 6 year old son asked, "Mommy how much money did you waste on this car?"
I also try to instill this with my team members. It worked! We shored up their spending. Instantly, our profits rose as needless expenditures were slashed from the budget.
It all goes back to my mom's persistent and patient question in the aisles of Ralph's grocery store.
"Don't need it? Don't buy it," and mom would reach for the brown rice instead of the Skittles.
This article is intensely personal, I know. But I hope that in some small way, it inspires moms and dads around the world.
Parenting is tough. And parenting someone who shows entrepreneurial promise must be really tough. Risk-taking, rule-breaking, and outside-the-box thinking aren't a recipe for easy parenting.
The habits you model and the principles you teach are shaping your kids for success. This doesn't mean you're perfect. It just means you're trying.
I also hope that this article gives some hope to aspiring entrepreneurs. It doesn't take a perfect home to become an entrepreneur. It doesn't take an amazing mom or dad.
To be an outstanding entrepreneur, It simply takes you -- who you are and what you become. It requires your hustle and hard work, and a dose of critical thinking.
You've got this, parents. You can make it, aspiring entrepreneurs. I'm cheering for you.
And thanks, mom. You're the reason I'm writing this.