I was talking to a colleague the other day who happened to open up a restaurant when he reminded me of the most important thing to understand and know before you start ANY business. It wasn’t the point of the conversation, but it came out pretty quickly. I know it will sound trivial and rudimentary, but it is more important than anything else in 98% of the cases. When you are about to open any business you have to remember that you are actually running a business.
Law Firm to Restaurant to Running a Website
For the most part, it doesn’t matter what type of business you are starting…there is still the basic structure of income vs. expenses. Maximizing one while keeping the other one low is the only strategy for long term success. Granted sometimes you have to flip it a bit (i.e. leverage) for future growth, but if you don’t remember that first rule your business will fail over the long term (well, sans some creative accounting). This is true whether you are running a law firm, restaurant or a website.
Think about all those episodes of bar rescue, kitchen nightmares, etc., most of them have one thing in common they forget this “rudimentary” concept.
Going back to my colleague, will his restaurant make it? Who knows but it is certainly inspiring to listen to him talk about controlling food costs, knowing how much they have to turn over in a night to be profitable, etc.