The Financially Savvy Entrepreneur by Emily Chase Smith

Author:Emily Chase Smith
Language: eng
Format: epub, mobi
Publisher: Career Press
Published: 2014-04-23T04:00:00+00:00

I recently read Jim Collins’s book Great by Choice. As are all Jim’s books, it’s fantastic, filled with wise words backed by years of research. In this book Jim delves into how the most successful companies have survived in turbulent times. He uses the story of the 1996 Mount Everest disaster as an illustration (the subject of the book Into Thin Air by Jon Krakauer). That year, an experienced guide, Rob Hall, led a group of people bound for the top of Everest. It’s a long, arduous, costly journey to reach the summit. In every such group, on each day in which they make their bid for the summit, a time is set by which the party must stop their movement forward, turn around, and head back for camp. We’ll call it the turn-around time.

Turn-around time is pivotal when climbing Everest. The leader has to ensure the party has enough daylight, strength, and oxygen to get back to the safety of the last camp. But turning back means not reaching the summit, something the leader has promised and the expedition participants have planned and trained for, sometimes for years. In short, when the turn-around time has passed, the expedition has failed. Based on the conditions, the turn-around time for Rob Hall’s 1996 group was 2 p.m. For many “good reasons” and despite years of experience, Hall decided to extend the turn-around time past 2 p.m. That decision, coupled with other events and circumstances, cost him his life and the lives of seven others on the mountain.

It’s a tragic story that illustrates an important point: Climbers on Mount Everest set a turn-around time. SCUBA divers clock the oxygen left in their tanks. Road-trippers monitor the gas gauge, anticipating the next fill-up. When darkness descends at the local park, you pack the kids into the minivan and head home. Unsurprisingly, this same concept applies to your business. You need a turn-around time. You need to quantify the cost before you’re on the mountain straining for the summit and every “good reason” keep you moving forward, and you never make it home.

Mount Everest climbers turn around. SCUBA divers come up for air. Road-trippers stop at the next gas station. Mothers call, “Kickstands up!” They’re all exit plans. Exit plans keep climbers and divers alive, road-trippers on the road, and kids out of the park after dark. In business, exit plans allow you to:

• Stay out of the bankruptcy court

Open another business

Keep your family relations intact

Retain retirement funds

Have somewhere to live and something to eat

You live to fight another day. The time to make the decision about when to turn back is not when you’re caught up in the excitement or anxiety of attempting to summit a mountain, it’s at the base of the mountain, before you take the first step. The time to make the decision on how much time, money, and effort to spend to make a business successful is not when you’re in the driver’s seat, totally immersed in the daily decisions.

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