Think Big, spend small

by Daniel Batten on October 29, 2009

A lot of people forget that business primarily means earning more than you spend. A friend once told me “Definition of bliss: earning $10 and spending $9… Definition of misery: earning $9 and spending $10.

Yes you need to think abundently, yes you need to have a big vision. But so many companies I’ve seen mistake “thinking abundently” with “spending abundently”.  A plant needs both leaves and roots to thrive. The leaves is your vision, the roots is the mechanics of running a well-managed profit and loss system.

I train a technique called “chaotic compliance” which means the art of being innovative with the things that deserve innovation and being conservative and boring with the things that deserve conservative boring treatment (your budgets, compliance, cashburn etc). Success in business is the art of keeping one eye on the big picture, the other eye on your day-to-day operations without going crosseyed. If you are a visionary – you must either develop or (more likely to be fruitful) recruit your antithesis by getting with an operational expert. Same applies if you are an operator.

If you are a startup – cash is king. If you are not a startup – cash is king. Use zero-budget marketing techniques, use online templates of legal agreements and use professionals to customise them once you’ve thought through what you want in plain English first. Unless you are going to meet the Sheik of Emir on a regular basis, use low-budget premises and hire a meeting room offsite for the rare occasions you genuinely need the facade. Hire top staff for under market rates and make up the difference with a share option plan where they win on your future growth and you keep more cash today.

You can run a company on thin air (… ok, well maybe compressed natural gas) provided that you are being creative and chaotic in other areas that inspire your extended team.

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