Building The American Dream

I believe that business is important. In free market economies the best ideas, best-executed win. There is the freedom to create a product that you are passionate about and if the market accepts it then it will succeed. There’s a lot that goes into that simple premise that I believe most don’t see. If you’re in this category that doesn’t really know or understand what it takes to be successful that is okay. You just didn’t know. Once you read this you’ll have an idea, a glimpse. Because it is not until you are in the trenches, in the battle, that you can understand.

Just like me calling plays for football or second guessing what’s going on as I’m watching the game comfortably in my own home having never played football in my life. I was a soccer guy. Maybe I have an idea, but I have no true understanding of what it takes to succeed because I am not in the arena.

When it comes to business there is not only the product. This is what most of us are familiar with. The end result. The thing that you hold or the painting you look at or the software that you use or the car that you drive. We understand the result. We can touch and feel and engage with the result. Most of us also work on the product. Whether that is a set of drawings, building a building, making a car, writing reports, or some other product. We work on and with products every day of our life.

There is the idea portion – thinking of a better way to make something. Rethinking the entire process. Having the idea is the first part of this. Ideas are valuable, but an idea not executed is just that – a thought.

From thinking goes into creation, to research and development and creating the product. Seeing if it will work. This phase of development can last for months or decades. A small plastic piece might only take a few months to perfect whereas the Honda Jet took 20 years to come to fruition.

Once it’s out of R&D and a product is actually created, viable, and tested – we reach the production phase. Producing the product to get out to market. Figuring out manufacturing and how to get this produced at scale to whatever the anticipated initial demand might be. While simultaneously figuring out the sales and marketing side of the business. How is demand going to be generated? How will people know about the product? What type of ad budget is going to be used? Do you have a mailing list?

Because if you don’t tell anyone about your product, then no one can or will know about you. Therefore they can’t buy from you and you don’t have a business. The whole, build it and they will come is true if you told someone you built it! This is what is called marketing.

Now, to be fair, I have until recently not been a fan of marketing. I thought it was a whole bunch of BS or the Mad Men type marketing. What I’ve found out and realized is that marketing is a whole lot of math mixed with a whole bunch of psychology tied to stringing words together in a way to put your best foot forward.

How is there math (economics) you might ask? Well, you have to put your message out and that isn’t free. You’re charged for how many people see or click or view or buy a product when you’re advertising or paying commissions based on sales. Depending on the medium you put your ad and how good you are at tracking the sales process it can either pay for itself or not.

For example, you have a product that sells for $20. It costs you $3 to get someone to click on your ad on Facebook and your sales page and process are so bad that only 1 out of every 10 who visit your page buy something. Now it costs you $30 to get a customer for a $20 item. So on every sale, you lose $10. Depending on what else you have to sell and how good your systems are can either be a good or bad thing.

See if you have more to sell them, you did not have to spend another $30 to get their contact information because you already have it. To sell them something else costs nothing other than the cost to deliver the product. And if they continue to buy from you for a long time (lifetime value) then that person and all the other people they tell about you now become extremely valuable to you.

Every person you deal with, every customer, and every interaction is important. There is nothing more important than people. People aka strangers are your business. And they are strangers until they aren’t. Until they become friends.

Back to the process. So you’ve got the idea, then the research and development (R&D) then you have a production which is simultaneously assisted by sales and marketing to predict demand, and then you have operations. This is where most people work, which is enabled by sales. No one has a job unless something is sold. Salespeople will be out of a job if the product isn’t delivered. It all goes hand in hand.

Then you have finance and HR. Finance is making sure that cash is flowing and moving the way it’s supposed to and that bills are getting paid and every penny is accounted for. HR makes sure that your people are all behaving themselves and that they are taken care of.

Every single position in a company is important and no position is more or less important than another. In most businesses (49% of all businesses are small businesses) every single person is needed. Because people are the highest cost to any organization. And if you look at it right, the best investment any organization makes. Now, no investment can have a negative return. This is the same for people.

I believe that most business owners are trying to juggle everything the best they know how. They are wearing multiple hats – sales, operations, HR, and finance. Doing everything possible. Hiring when they can so they can do more of what they are great at.

I didn’t understand this until I was in the trenches. Until I was running my own thing and really starting to understand what it took.

This is why free markets are so important. This is why having low taxes is important because when taxes are lower small businesses will hire more people, they will grow their team. Why? Because it takes more of the burden off their shoulders. When taxes are 50 and 60% there is no money to hire anyone. It’s all stolen by the government. Only to be “lost” by the pentagon.

True free markets is what made this a powerful nation. Giving people the opportunity to make out of their life what they want. To rise from the poorest of people to the wealthiest. This is the American Dream.?