Management

Focus on not to lose rather than win

Regarding the concept of “Focus on not to lose rather than win,” please set aside optimistic ideas such as “there is no winning or losing in work” or “everything is just an experience” and instead, consider them for the sake of discussion here losing as being in the red flag on paper for the business to survive.

When starting a business or taking on a challenge, my goal is to ensure that the business becomes profitable from the first month or stabilizes within six months. To achieve that, I avoid creating high fixed overhead costs and only begin once I feel I have a chance of winning.

I prepare as much as necessary to increase the percentage of winning, but I do not start if I can’t foresee profit from the business.

I understand everyone has a different style to succeed in business, and how you approach establishing the business will change as we are also evolving. My approach is to start a very conservative approach to taking risks to avoid a big punch on our face to knock down and move to a more optimistic style that is only possible when I have lucrative cash that allows me to fail without going down to the bottom.

I strive to have several sources of guaranteed profits, even if each one does bring not large profit.

One example of this is the franchise model we run. Each store can generate revenue of around 40,000 dollars to 60,000 dollars a year per store after 6 months without incurring high fixed costs.

This can be achieved by starting with only one employee, one bed, a 150 to 300-dollar advertising budget, and using a home-based salon which allows us to have a monthly rent of zero dollars. This allows for quick profitability from the start.

If the goal is to achieve significant growth in a short period of time, the stores will need to increase in size, which requires higher investment. However, starting small, even with only 40,000 dollars, can create a business that generates 1 million dollars in revenue within two to three years.

If there is no extra cash to survive when things are against us, it becomes harder to survive because we cannot to make an investment to rectify the situation such as changing directions, automating, or allocating funds for advertising.

This may result in debt and forced withdrawal. To avoid this, I always start with only one person and do not increase fixed costs until I know I can win.

Doing so makes making a progress much easier.

Even if you manage to scale your business with multiple stores to run, it is often the case of one store with good results covering the loss of another store. Maybe on paper, some people think it is okay because the profits are generated in total. However, accepting this kind of situation allows a business that does not contribute value to the business to survive even though those stores do not move the needle at all.

Therefore, from the start, it is essential to create a solid foundation of positive financial results and withdraw decisively if losses occur.

Once success is guaranteed, you earn the right to challenge a large scale. By minimizing and mitigating gambling elements, you can navigate your business to avoid losses and achieve stable results.

In today’s world, it has become easier to expand several businesses while keeping one business as the main focus. Having “multiple sources of small but guaranteed profits” (e.g., “40,000 dollars from 10 businesses”) makes it possible to delegate management and automate the business without reducing profits, as long as it is not in the red in the paper.

Gradually taking steps to increase profits from 40,000 dollars to 1 million dollars from the 10 businesses created that are not in the red is achievable.

ABOUT ME
Yuzuru Ishikawa
Small Business Growth Specialist | Director at Globalcube Limited | CMO for Kesae Total Balance: Beauty Massage Salon | I specialise in helping small local businesses that aspire to expand to a nationwide scale |