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?