Who are you listening to?

By CLAIRE MARKWICK

Have you noticed that there is never a shortage of people willing to share their 2 cents of advice?

Whether it’s mates in the pub; colleagues round the lunch room table or well meaning family and friends, everyone has their point of view and this can lead to a lot of confusion or misconstrued information.

Here are the top 5 business myths that I have heard doing the rounds lately and the truth that sits behind them:

 

MYTH #1: I’m great at what I do, so my business will be a resounding success

Depending on where we look the statistics will give us a different number, but the trend remains the same, a scary number of businesses will fail within their first 5 years.  So why is that the case when the vast majority of entrepreneurs that start them are so good at what they do?  The answer – it is not generally an entrepreneur that starts a business…it’s a technician.  An electrician, an engineer, a chef, an accountant, a hairdresser, a builder…technical experts in their craft; not so adept at running a business.

Before I get a whole bunch of hate mail, I am NOT saying that all technical experts will fail in business!  What I am saying is that being good at our craft does not pre-determine our business success.  That will depend on an incredible amount of other criteria, not least in our ability to articulate exactly the life we are aiming to create.

 

MYTH #2: I need to grow my business before thinking about making a profit

The classic accounting formula of “Revenue – Costs = Profit” will likely result in the above being true.  Growing our business takes investment of both time and money and so in growth phase, our costs are likely to be high and we will likely spend all we have available. 

But does this mean we have to trade growth off against profit?  Imagine if we could do both…grow AND still make a profit…

It just requires a slight tweak in our thinking. 

One of the easiest ways to eat less and lose weight is to serve smaller portions.  We don’t die of starvation by starting to eat less; we simply make the most of what we do eat…arguably enjoying it more by cutting out the binging!! 

So what would happen if we applied this thinking to our business? 

If we know in growth phase we will spend all we have available, why can we not give ourselves a smaller pot, much the same as eating a smaller portion.  If we shave a profit off of our revenue FIRST, we are guaranteeing our business remains profitable, whilst at the same time encouraging efficiency by spending from a smaller pot.  It’s a win win!

“100% tax deductible DOES NOT mean we get 100% of the cost of the thing back on our tax.”

MYTH #3: I have to post on social media every day for my business to grow

Now this is an interesting one…we are now arguably more connected than ever before, yet at the same time, probably the most isolated.  Don’t get me wrong, social media is a tremendously valuable tool to connect with large numbers of people with relative ease and is therefore a fabulous tool for business growth.

My issue comes with when it is relied upon solely at the cost of REAL human interaction to the point where it almost becomes an addiction.  As a disclaimer – I can say this as someone who used to spend so long agonising over what to post, when and on what platform that it consumed all my time to the point where I got nothing else done…this is no way to grow a business.

My advice is simple.  We can choose to include social media in an all round marketing approach IF the customer or client we are aiming to attract can be found there.  But we should not lose sight of the simple conversation or even a lumpy letter in the mail as this form of interaction is fast becoming a thing of the past.

 

MYTH #4: people don’t like being sold to

What we do not like is pushy, sleazy, in your face sales tactics that make us feel bullied into parting with our hard earned money.  That is quite different from saying people do not like being sold to.  We need to shift our perception of sales into the frame of service.  If someone has a problem and we have something that will solve that problem, we are actually doing them a disservice by not having a conversation about it.  If our attitude is always about how we can serve, as opposed to how to get more sales, we will never come across pushy and we’ll find people actually thank us at the end of a conversation instead of wanting to run a mile!!

MYTH #5: 100% tax deductible means you will get all your money back

I have lost count at the number of times I have had to be the bearer of this bad news and it doesn’t make you popular I can assure you of that!  100% tax deductible DOES NOT mean we get 100% of the cost of the thing back on our tax.  100% deductible means our taxable income is reduced by the cost of the thing.  Let me explain: 

Let’s assume someone has taxable income of $100,000 and they purchase an item costing $5,000 that is 100% tax deductible.

They do not get a $5,000 tax refund due to purchasing this item.  What happens is their taxable income goes from $100,000 to $95,000 and so they pay tax on the lesser amount.

So what’s the learning out of all of this? 

Well quite simply we need to consider who we are actually listening to and where the advice is coming from.  Are we listening to the voice of experience; someone who has trodden the path before us and learned valuable lessons?  Are we hearing the advice of someone appropriately trained or qualified?  Or are we absorbing hearsay and misinformed opinions?

We’ll get it all; the trick becomes what we choose to act on.

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