You’re about to get a business lesson from a toddler. My not quite three year old daughter wants to start a business. Not someday. Right now. And she is smarter at business than most business owners today.
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Aracelli’s attitude about getting into business is “Why wait?”
She wants to start a candle-making business right now and asked Tara and me for help. So, we’re starting another business…with a toddler.
I was in her room playing with her and (no joke) she said:
“Time to work on our business.”
In reality it was time for her nap, but she did spend a few minutes planning and talking with me.
With no prompting from me, she distilled three powerful business lessons into only a few words.
Q: What will you do with the money?
A: Make more candles.
In other words, reinvest in the business.
That is the first place to put your earnings. That is the only way to grow.
Most business owners fail to budget for continual reinvestment in the company. They only see the short-term (personal riches now) and not the long-term effect of building an empire.
So when Aracelli said she would spend the money to make more candles, it showed me she gets it.
Q: What else will you do with the money?
A: Give it to Mommy to save.
The next place to put money is in savings. Without savings, economic downturns become business disasters.
FACT: The economy has never caused a business to close. Dumb business owners cause them to close. (tweet that)
Economic downturns are like fire to silver. They refine the business world down to only the wisest owners.
Most business owners fail to save for a rainy day. Again, this is usually the result of short-term thinking. They assume all equipment will work as intended, new employees will magically operate at 100% by the second week, and their customers will always spend like they spent today.
But the reality is: stuff breaks, employees usually cost more money than they make you for at least the first month, and your customers will come and go. So save up.
Q: Anything else you’d do with the money?
A: Yes. Adopt a baby that doesn’t have a home.
The last thing that she would do with the money is cause social change. She would use it to better others’ lives.
She would change the world with her profits.
I have never written prouder words than what I just wrote. The money she would make is an ends to a means…helping others.
The reality is that many business owners want their companies to be able to do good works, but by failing to reinvest in the company, it never grows and by failing to save, 95% of them go out of business in the first five years. Without growing and saving, giving is not possible.
In business, as in life, the right heart with wrong plan usually gets you nowhere.
My daughter gets business finance. She would reinvest in the business and grow it, save some for a rainy day, and give generously to help others. At its core, it really is that simple.
What business lessons have you learned from unlikely sources?