There were so many good lessons this week that I had to cover another one before moving on to the next episode. This one comes to us from Gina Catroneo of Souls Calling.
The Sharks seem to bear with her line of inspirational products, that is, until they ask her how much she makes. Last year she pulled in $18,000 in sales and it’s her sixth year in business! Sometimes your numbers are trying to tell you something, like maybe this isn’t a viable business.
These days, since it’s harder to close on business sales and many investors are still waiting to buy, I’ve been focusing a lot on helping entrepreneurs grow their businesses. One of the first steps is to get a close look at where you are and where you are going by building a Financial Model. Sometimes the Model tells us that things are going well and helps us focus on areas to improve. Other times it’s clear that if things don’t change drastically, the business will be out of money before next year. At that point it’s important for the owners to take a good hard look at the things that would need to change and decide whether it’s worth the risk of bankruptcy to keep driving forward or whether they should liquidate or sell today, while there’s still the potential to get out in one piece.
Entrepreneurs are generally optimistic people; how else could we take such crazy bets on the future? It is important to learn to view your business from a realistic and grounded perspective to make sure your optimism isn’t trying to take you places you just can’t go. If necessary, find yourself a mentor or an advisor who will tell you the hard facts on a regular basis.
