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Your Best Foundation for a Sustainable Business

Would your business survive burning down?

What would you do if your business burned to the ground? If you had to literally start over, would you be able to cope? What would your approach be?

I have been falling behind with my workload lately. You just have to look at my posting frequency to see that I have been dropping as many plates as I manage to keep spinning.

I’m busy. That’s a great problem to have, so long as it does not impact my commitments and customer service.

My first act has been to cut back on any new commitments. You may have noticed I have suspended offering consulting and coaching. I just don’t have capacity to take on any new clients. Even critiques now will only be offered as part of the Authority Blogger monthly mastermind calls.

This is a difficult reality to face, but it made me think about what it means to have a business that sustains itself even when you are so busy you find your business with nobody at the wheel …

It also got me thinking about if I had to start over again, what elements of my current business would I need to recreate to know I had good foundations?

What are the essential foundations?

What does a self-sustaining business look like?

Of course the first definition we need to agree on is that a business that is going to function long term must make more income than is spent in expenditure. Seems obvious, but there are a lot of businesses not in that situation.

How does a business get to that place? A business that can support itself is built on assets.

Assets are the foundation of a healthy business.

We often get confused about what that really means.

Your equipment is not an asset, because, while you could sell it to solve some short-term cashflow issues, it depreciates in value, and once you have sold it you can’t make income that depends on it.

There are also a lot of things that are not strictly assets – things you don’t have ownership over, but that you can influence:

  • Traffic – Ashkan recently moved to a new domain for his app reviews site and found his traffic disappeared. It’s still a good site, but Google needs time to rediscover the content and start trusting it again. Even though many websites are sold based on traffic, it doesn’t mean that you own it. You are at the mercy of outside forces. At best, you borrow or rent traffic for a while.
  • Reputation – We build our reputations but can slip up and destroy it at any moment, and we see in the media all the time how even innocent people can have their reputation destroyed by a powerful story.
  • Relationships – Relationships are a partnership, all you can do is your best to hold up your side.
  • Market – Even the goliath companies that seem to be able to steer a market ultimately fall from grace.
  • Social media accounts – I don’t need to tell you how little control you really have over the accounts you get from Twitter and Facebook. I have the same name as a USA politician and a Canadian Football player. Some day they might decide I don’t deserve to have vanity URLs that match my name. I don’t have a vanity URL at Google+ yet. With these accounts, at best you are a tenant, at worst you are the product that they are selling. Copyblogger calls this Digital Sharecropping.
  • Third-party tools, such as gmail, hosted video platform, backup solution – Outside of the excellent spam team, Google is renowned for not exactly putting customer service as a priority. I know very few people who have managed to speak to a customer service person there. Even when you are paying a lot of money in advertising.
  • Influence – You might have influence today, but who will say how long it will last? Stars rise and fall.
I’ve said in the past that I think a network is one of your key assets, but by my above-mentioned standard, I think we only have partial influence over our network because it depends on relationships and reputation.

So … What DO you own?

Your real business assets

I had to think long and hard about what are actual assets were (I would love your input into this).

What we really own are the things we have built ourselves and have complete control over.

  • Your content – Even if people rip you off, copy, and the like, your content is still something you own that has value, even if you don’t sell access to it.
  • Your list – You don’t have complete control over the response from the list, but you do own that list of names while ever the people on it continue to give you permission to contact them. This is why I always encourage my clients to start an Aweber list as soon as possible and to start email marketing.
  • Your knowledge and expertise – Nobody can take what you have learned away from you, and the more you know, the more useful you are to other people. I have always tried to keep my knowledge and skills expanding. Just this week I have been learning Adobe InDesign, not because I think I can be the new Rafal (if that was even humanly possible), but because it will make me more useful on the projects I work on.
  • Customer experience – Things can go wrong with anything, and a lot of events are beyond our control, but the ultimate customer experience you provide is down to you. Part of that is how you say sorry and correct problems. The better your customer service, the better your long-term business prospects.

Why my business survives despite being too busy to promote it

Now we get to the whole point. How can you make your business work even when you can’t be 100% present in it?

  1. Build useful skills. Educate yourself as much as you can. Start with free material (try your best to sort the signal from the noise) and when you can afford the premium information and training, start investing in it.
  2. Grow your network and show your value to the people in it. Part of that value will depend on your character, another part will be the knowledge, skills and experience from #1.
  3. Build systems that attract leads without your constant, direct input. (As I said above – Get Aweber. Build your list) – Part of that is giving the people who do buy from you the best possible customer experience so they will advocate on your behalf (see above).

Why does my business survive despite me neglecting my marketing? Because I am fortunate that my foundations are in place. People reach out to me to help them, they know where to find me, and I have systems in place that help people 24/7 without my direct involvement.

Over to you, I would love to hear your thoughts in the comments! 

 

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Comments

  1. I like Robert Kiyosaki’s definition of an asset verses a liability: “an asset is anything that puts money in your pocket, and a liability is anything that takes money out of your pocket.”

  2. For those of us who are techo-geeks, getting the web-based foundation in place is a bit time-consuming but doable. For those who aren’t programmers, html authors, or power users, you have two choices: 1) become all those things, and quickly; or 2) hire it out, and quickly. There is no getting around the fact that a solid foundation takes an investment in either time or money (or some combination thereof).

    Forethought is also required. What do you need in place? Even if you have the skills, you still have to put them to use before you have a foundation. Chris and a bunch of others have detailed the minimum components necessary so I won’t repeat them here. Suffice it to say that you can’t be stingy about this, you must accept the responsibility to give your market/constituency what they need to engage with your offering.

  3. Chris, I found this a thought-provoking post.

    The idea of suddenly losing everything I had made me consider what’s important in my business and how would I start up again. I had always considered my list one of the most important aspects, but the value of my network is becoming more and more clear after reading this.

    Recently I’ve had the strong feeling that I am doing too many things at once and as a result, the quality of my work is being compromised. It feels like an important time in my business to consolidate my efforts and focus on things that actually generate revenue.

    In light of what you’ve written, I’m going to continue to reflect on what my real business assets are and how I can maximize them, instead of dispersing my energy on lots of projects that result in no or little income.

    Thanks again, Chris!

  4. What I really liked about this post is that it helps to sooth my fears as a small business owner. I find myself often worry about the things you mention are not strictly assets.

    Focusing on real assets provides some degree of reassurance. Regardless of whether or not your business fails those assets remain. It is important to not be afraid of failure. Once you are the decisions you make are narrowed minded and creativity suffers.

  5. Concentrating on value creation or addition in anything done for money is a good start. Making sure that clients get what they want, and something more is a good strategy to keep them coming later, when the business environment changes.

  6. A really informative post! What caught my attention is the business assets that you have mentioned. Of course most of the entrepreneurs don’t realize that in order to survive in the market they need a business that is sustainable enough to stand the tough competition in the market. Thanks again for posting this!

  7. Chris,

    In your case, even if you stop spending time on marketing your business, your survival is assured by the reputation you built over the years, by the relationships you cultivated among colleagues, as well as among customers and students and by the “evergreen” products you created (i.e. your books).

    Some may say, that the problem with the discontinuation of marketing is that you are not getting “new blood” to your business. However, even this claim is incorrect in your case, because there is a tremendous amount of “noise” out there about the importance of being an “authority” in one’s niche market. To build a successful business, one needs to appear to be an “expert” or “authority” in their field. Most people are not clear about “how to be or how to appear to be” an authority. That is when either via Google search or through recommendation people will find your course. Ask anyone how to become an authority, and most will direct the person to the best course on the Internet, run by Chris Garrett.

  8. I think it is important to stay focused on the long term goal and not a possible short term gain for cutting corners. “The List” of email subscribers is something that you can build over time and can turn out to be one of your biggest assets! Take a look at Travelzoo.com. They have millions of subscribers that get weekly emails promoting travel deals.

  9. Really enjoyed your points Chris. Would like to add an additional one under your heading of “your real business assets” and it is this – one of the most important asset (if not THE most imporatnt one is ourselves). I think many small business owners forget to look after themselves. Yet we are the main asset of our business as if get ill or stressed out for some reason then we can’t actually run the business effectively. So I think we need to see ourselves as an asset and include self care as part of our business strategies.

  10. I just thought about what I would do with my business if something or someone else, for example having and raising children) required a large chunk of my time over a long period of time.
    It’s so good to know that there is a way to do it. I think you nailed the details on how to do it, too.