The phrase “Follow your passion” is as deeply ingrained in today’s business culture as “Think outside the box,” “Drink the Kool-Aid,” and “Grab the low-hanging fruit.”
Hooey to passion, I say.
Here are two reasons why passion should not be the be all and end all of your start-up plans, no matter how much cash you’re starting out with in your business checking account.
1. Passion won’t pay the bills
Now, there is no mistaking that passion is powerful. It’s exciting, it revs one’s engine, it’s a North Star. Great. But here’s the reality: Passion on its own doesn’t guarantee a successful business. To succeed as an entrepreneur requires many traits and actions:
- A great idea
- A great team
- A solid plan
- Funding
- A visionary entrepreneur
Do you see passion on that list?
If you were watching Shark Tank and one of the entrepreneurs on the stage kept talking about their passion, how far do you think they would get? Right, not far. As Mr. Wonderful might say, “But where’s your plan? Now get out of here like the cockroach you are. You’re dead to me!” Interesting side note: Only about 60% of the entrepreneurs who appear on Shark Tank get a deal on the air, and many of those later fall through.
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Regular: |
To thrive in business, you need more than just passion and enthusiasm. You must also be skilled in the practical aspects of running a business. Passion doesn’t pay the bills. What does? Income, marketing, and paying customers.
2. Your numbers are more important than your passion
Would you ever drive a car down the road while wearing a blindfold?
No, of course not.
Driving blind would be reckless. You wouldn’t know if you were on the right road, how much fuel you had, if there was a problem with your car, or if there was danger up ahead.
But that’s exactly what you’re doing if you don’t know the numbers of your business. Passion won’t reveal if your expenses are outstripping your revenue or if your cash flow is drying up. To steer your business in the right direction, you need to be well-versed in the critical metrics that drive success — namely, your business accounting.
Marketing magic
Want to succeed in your new business? Here’s the secret:
Market your business. Then market it some more. And then market it some more. The only way to get people who don’t know of you to learn of you is via your marketing. And yep, that trumps passion too.
The 80-20 rule
While understanding your money situation and marketing are essential, there’s one last idea that can significantly impact your success: the 80-20 rule.
You are likely familiar with it: 80% of your profits come from 20% of your customers. It’s probably equally true that 80% of your revenue might come from 20% of your products. Do you know which ones? Or what about your website, are your top pages optimized for sales?
The most successful small business owners have an intimate understanding of their businesses. They know which products, customers, and employees drive the most value, and they focus their efforts on these key areas.
By understanding these crucial issues, you will never have to run your business in the dark, or on passion. You’ll be a businessperson who understands business, and that is how you win the start-up game.
