I’ve been a big fan of mentors, coaches and elders for a long time. I recently started thinking about the lessons I learned from one of my first mentors, Shields Harvey back when I first got into the vending business in 1977.
I was at an early financial controls seminar put together by Shields and sponsored by the National Vending Association. At that time I was 25 years old and thought I knew everything there was to know about anything. The real problem was I knew nothing about everything, and was really arrogant about my lack of knowledge.
I was relatively successful as a young entrepreneur. (Early success is often a really bad thing.) My business was growing really quickly, it looked like we were profitable, but I had a problem I couldn’t figure out. I was running out of cash and had no idea why.
When I went to the seminar, I brought my financial statements along with me. I showed them to Shields and he said two things to me; one, I was doing pretty well and second, if I kept doing what I was doing, I would be out of business within a year. My problem was I was burning through cash because of our growth and our profits weren’t supporting the growth we were having.
I knew how to read a profit and loss statement, could sort of understand my balance sheet and had no idea at all what my cash flow statement meant. As it turns out, my cash flow statement told the whole story. That was the piece of financial information that Shields used to quickly tell me about my problems.
Not only did Shields help me understand that cash management is at least as important as profits, he also had the follow gems to add to the list:
Cash is king - Never, never, never forget that. In a small business if you run out of cash, you are out of business. Understanding where your cash comes from how you create cash if the life-blood of all small businesses.
Make things operationally doable - Having great systems is really important. It’s just as important that the systems are simple and can implemented easily. If a program or system is not operationally doable, your people won’t do it and it will just remain a good idea.
Expect, Inspect, Accept all work - Telling someone to do something is never enough. It’s about first setting clear expectations for what you want done. Second, you must inspect to make sure the work is done properly. Finally, you must circle back to the people you’re working with to let them know the work is done well.
You pay peanuts, you get monkeys - Paying a fair and reasonable salary doesn’t guarantee that you’re going to get a good person. But, if you don’t pay a reasonable salary for a particular position you are guaranteed not to get a person who is good.
Over the years there were many times Shields and I would talk about activities within my business and personal life. He was a great mentor and the lessons he taught me over thirty-five years ago are as true today as they were then.
Let me know about your mentor stories. Who has helped you learn valuable lessons that have made your business or personal life better?
I’ve written a special report on using key metrics in your business. I encourage you to download this report by clicking on the button below. I believe you’ll find this report fits in nicely with the entry above.