As the year starts to wind down I typically spend a lot of time reflecting on what things we did with our business that went right, what went wrong and what things we want to do in the upcoming year. I stumbled upon an idea from a post over at Problogger that talked about Short, Medium and Long Term Projects

You must always have a short-term source of income that pays the bills, two medium-term projects that supplement the income, and one long-term project that’s a year away from fruition. Always.

The gist of the post was that Short Term Projects pay the bills, Medium Term Projects are starting to produce cash flow and Long Term Projects are things you are working on in hopes of producing something, with the point being to always have projects going on in each of the three sectors. The short and medium term concepts are pretty easy to grasp, it is having some long term projects always cooking that is the challenge to discipline. Those take capital, both financial capital and human, which consultants and small business owners may not have much of.

Fail Faster is a Myth

Business book authors tend to write about the need to embrace failure, and mistakes as if that is some feel-good remedy to success. It isn’t and failures cost money. With a startup or an established business, you can make as many mistakes as you have available capital, period. Make more mistakes and failures than you have enough capital to cover your bets and lights out, you are out of business.

We were remarking this week that by year’s end a significant part of our debt load of our core business falls off. That is debt that was created from mistakes we have made in our business. After several years of struggling with cash flow issues, growing pains and the like, perhaps we can bank some money, prepare for the future for our family and business.

But wait a minute, what about that other thing that business book authors write about? Innovation!

Innovation is the lifeblood of a sustainable business, right? Well, maybe that is why we have so many boring businesses, because innovation and trying new things (those Long Term Projects) cost money and time. So, even after nine years of continuously and relentlessly pursuing differentiation and working hard to Break From the Pack of Apartment Commodity, I sort of see why business owners might choose to be boring. Because it is easier, and seems, at least on the surface, to be safer. It would be much easier, much safer to pare back on those Long Term Projects.

Boring Is A Choice

So, we come full circle. As your business or consultancy starts to grow, what choice are you going to make? Is the economy, the kid’s college fund, finally retiring some debt or whatever the case may be, going to keep you stuck in mediocrity and boring? Being a 37 Signals, or an Apple or just the best damn dry-cleaner in your town means you need to Bet Some Capital on those Long Term Projects, knowing some of them (frankly most of them) won’t work. I know that, because that debt we are retiring this year is mostly from our business mistakes — betting on things that didn’t work. However, those that did kept us in front of the pack.

What are your plans and Long Term Projects? How much of your available capital are you willing to bet, or said differently — invest — in the future of your company or consulting agency? Do smaller bets equate to more boring? I think so. Do you?

Enhanced by Zemanta
Did you enjoy this blog post? If so, then why not:Leave Comment Below | Subscribe To This Blog | Sign Up For Our Newsletter |

About Eric Brown

Eric Brown

Eric Brown's background is rooted in the rental and real estate industries. He founded metro Detroit’s Urbane Apartments in 2003, after serving as senior vice president for a major Midwest apartment developer. He established a proven track record of effectively repositioning existing rental properties in a way that added value for investors while enhancing the resident experience. He also established The Urbane Way, a social media marketing and PR laboratory, where innovative marketing ideas are tested.

Other posts by

Comments & Reactions

Comments Policy

Comments on Social Media Explorer are open to anyone. However, I will remove any comment that is disrespectful and not in the spirit of intelligent discourse. You are welcome to leave links to content relevant to the conversation, but I reserve the right to remove it if I don't see the relevancy. Be nice, have fun. Fair?

  • http://twitter.com/PaceButlerCorp PaceButler Corp

    Alot of small bets will make you really boring and ultimately shows that you have no vision for the future. I was involved in an organization where all they did was make small bets and kept chalking it up like they were big ones. People saw right through it and became extremely frustrated. Now, it's like the boy who cried wolf. They are wanting to make some bigger bets and they have gained no clout or trust following through with the little ones. Lesson to be learned, follow through on the bets you make whether you fail or not.

    • UrbaneWay

      How Much Available Capital to Allocate
      You bring up an excellent point, how much available capital to allocate per project. I think another thing that gets in the way is folks sometimes do things, thinking the are rebranding, or adding some great new feature, when all they really did was “Move the Deck Chairs”

  • brendamoots

    It's interesting to see @eric_urbane come full circle with this post, a man that would tell me money is only money and I can always make more. As he shared above, that's true as long as I'm taking enough risks in the right area to keep my doors open. I think we all struggle with that in some aspect. None of us intend on being boring but procrastination keeps us in our comfort zone.

  • http://www.thetrainingfactor.com/ Jonathan Saar

    Eric I am a firm believer in long term projects as well. They keep a team hyped and motivated to see something new added that is cutting edge and/or will provide a different feel for an existing product or service. Depending on what you are working on testing can be rolled out in many different ways. Commitment to the future is sometimes the bigger challenge. As we continue to recover from this recession most companies are still happy to be surviving and have learned to optimize the short and medium aspects of their business.

    We learn by doing!

  • Pingback: How The Lean Start-Up Can Save Your Business « MindCorp | Newsfeed