Something I often discuss with an SBO or a mentee is the analogy of what you do relating to a vehicle. A number of entrepreneurs fail at their businesses not because it’s a bad idea or under capitalized but because the business itself is a bicycle. To paint you the picture more clearly, imagine trying to pay your bills riding around on a bicycle delivering door to door. You can have 50% of every house on every street as a customer (an exceptional market share) and you get a fifty cents for each delivery. Let’s say the package you deliver is the size of the largest iphone box. Got it? Let’s break it down into the business details worth considering.
First we want to look at time. We all only have so much time in each day to allocate to work, although work is a gift we should enjoy, we work to live not live to work. In this example let’s say that you will be working 10 hours each day and six days per week like most successful entrepreneurs. That is 60 hours each week. Let’s propose that a hustler could deliver on average one package per minute riding from house to house on a street throwing the package on the front lawn. It would seem that simple math would indicate that a person could generate $30 per hour at this rate. Sounds pretty good for a starter, roughly $60K per year.
Let’s consider a few more things shall we. And I’m sure this is basic for a lot of you but I am serving two purposes here. Primarily to illustrate my analogy but also to help other see, and to give those who might venture off into business a full consideration. The obvious things we need to add to this is things like, picking up more product when the bike gets empty and the time that will take away from delivering. Does that require something else like a van parked nearby, riding a considerable distance to get more? Fitness level? The bicycle? Weather? Do I need to put it in a plastic bag? Additional costs are lurking in all sorts of places. Most people don’t consider them until they have made the move to get into that business. Once I witnessed a you man about my age at the time loading his truck at the lumber yard with the entire tool package to be a contractor. Brand new, all at once. There is a lot to learn, I hope he made it, I’m guessing not, too much he didn’t know. Like what he could do in a day. He made a jump looking to see how it turned out. Somethings you can’t know until you jump but if you jump make sure the landing won’t kill you and you’ll be fine. You can recover a broken leg but dead is dead! The things associated with our bicycle scenario are more obvious and for a person who only needs to make $40 per year this might be enticing.
What we really need to look at here is where you are going in your bid picture. Are you 12 and looking at 8 more years of school or are you 30 with a family? In times past there were jobs that were intended for young people to get started learning about work and the responsibility of it. Places like the newspaper delivery, car washes, burger joints, movie theaters, coffee shop, etc. Now young people mostly don’t work and young adults are looking toward this type of work as a support mechanism while still living at home with mom and pop. When you were 12 delivering packages on a bicycle for a few hours a week it gave you some jingle in your pocket for a comic book, a soda pop, a piece of candy or arcade game. It was practical for the need of the individual. At 22, you now have expenses; rent, car, utilities and you’re trying to ride that bicycle 40 hours a week and make it work out with a credit card. It works OK until you wear out your bike or credit card and need a new one. These are meant to get you started not keep you moving forward!
One can only ride a bike so far and only be as successful to the extent that one can ride. The flip side is if I bought a car (new or otherwise) I could do more! This, of course is true, but introducing a car to a bicycle gig is like using a hammer to turn on the light every time you go into the bathroom! You can’t possibly overcome the logistical issues to get enough fifty cent pieces to make it work out. The cost of a car warrants something that has more value per transaction.
A lot of people are trying to get more out of their business than which it is capable. Trying to make pickup truck wages from a skateboard not recognizing that more capital investment won’t pay off any better, it just makes making less money easier. I learned this from thinking that being a builder and developing a piece of real estate was the ticket. After my first project as builder and developer I realized that being a builder was a very good living indeed! I applaud those whose passion is building. But what I learned was that there was more value in being the developer than the builder. I received in one deal the value of an entire years work as a builder. Now as a developer I am seeing this play out again.
It’s about learning what a skateboard is and what you can do with it then moving on to a bicycle and leaning what you can do with that and moving on to ………..
Learn and MOVE ON! If your business is not giving you what you want from it maybe it’s time to get a new vehicle?
GO, learn something from someone today,
Greg