To A Frog, Feeling Fine Is Not Necessarily A Good Sign

I have a friend who, back in the mid 90s, started his own business. He got some angel investment, found space, built it out, hired a small staff, took out an ad and opened the doors.

He got a customer, then another, and by the end of the second month things were going better than he could have dreamed. So well, that his young office manager couldn’t keep up with all the paperwork. He found her late one night, overwhelmed, and realized he needed to offer some advice. “Don’t do any invoicing for a couple of weeks,” he suggested. “So you can catch up on the other stuff.”

So she didn’t. For a month. And sixty days later, busier than they had ever been, she came to him with the news that they had $174.95 in their bank account and payroll was due.

The problem, of course, was that he had never run a business before. And while he understood profit and loss, he didn’t know about cash flow, or AR, or 90 days past due, or uncollectables.

Worse. He didn’t know that he didn’t know.

I got a call from a company owner last September who thought he needed to re-brand his business. We had a meeting, the economy crashed, and he decided to wait until things got easier.

They closed last week. Not, I hasten to add, because he didn’t hire us. But because he was looking at a symptom - not a cause. He didn’t know what he didn’t know. (As an aside, I find re-branding about as effective as treating a heart attack with a capful of Tums. It’s not where it hurts. It’s why.)

Back when there was an economy, not knowing what you didn’t know was part of the journey of discovery that came with owning your own business. Over time you figured it out, and learned from your mistakes.

Today, that cushion is gone. If you’re going to make a mistake - and we all do - it can not be one of ignorance.

In that respect, running a business is a lot like being a frog. If you don’t know you’re in a pot of hot water, by the time the water’s boiling it’s too late.

By the way, the invoicing story turned out alright in the end. I never But he never made that mistake again.