How to balance passion and profitability
Passion works best with a thoughtful, ambitious-yet-grounded business plan
Have you experienced contagious excitement in first-time entrepreneurs who have discovered or are in the process of converting a passion project into a business?
I have been there myself and over the years have interacted with many entrepreneurs who are in the enthusiastic phase. It is an un-comparable high when you discover that something you are passionate about can also make money. In many cases, they do. But in an equal or perhaps slightly higher number of cases, enthusiasm tends to take over practicality in building and running a business.
In his blog, author and business mentor Chris Ducker warns that "too much passion - for your idea, your solution, your potential - will kill your business faster than just about anything else".
Turning passion into a profitable business is a generic topic applicable to men and women entrepreneurs, but here I'd like to focus on women business owners. A time too many, I have heard of women who are at best one experience old, jump in with the intent to turn something they enjoyed doing into a business.
While passion is fantastic to build a great business, only passion is not enough to make it tick. In the book How to be a Financial Grownup: Proven Advice from High Achievers on How to Live Your Dreams and Have Financial Freedom, the chapter inspired by Charles Best, founder and CEO of DonorsChoose.org, says: "The most incredible businesses are started by entrepreneurs who relentlessly pursue their passion, but passion works best with a thoughtful, ambitious-yet-grounded business plan."
It is myopic to assume that you will be financially rewarded by the market, in other words be profitable, for a skill or hobby. You may enjoy organising kids' birthday parties, baking, decorating homes or styling yourself and friends. But taking that hobby to the market and giving it legs to become a profitable business is a different ball game.
A business, like a child, has many needs which are often not taken into consideration by first-time entrepreneurs who are in a rush to start such as employees, payroll, inventory, supplies, rent, price pressures, and all the various challenges of growing a business. Any business will and should grow, thus it is not pragmatic to jump right in thinking it will remain a one-woman show.
Business coach Sujit Sukumaran in an article rightly says: "A sound business plan is never overrated. Forecast it for at least three years and ensure that you have funds for at least two to survive even if you don't make a single dirham, time and overheads included."
A business plan is imperative like the blueprint to construct a building or house. Do not disregard spending the required time to study the market, have a sound plan for funds, ensure that you have more practical fuel that just passion to run the business for a few years. Seek the advice of other entrepreneurs who have run a successful business for a few years and take notes. What worked for them might not work for you, but it will be ideal to have some insight into what did not work for others.
This is a great piece of advice from John Torrens, a serial entrepreneur and entrepreneurship professor at Syracuse University: "Sometimes passion can blind you to the potential downside of your idea. The one non-negotiable factor for any sustainable business is that they solve a problem for a specific customer segment in a way that is appreciably better than the next best alternative. Get as much feedback from potential customers as possible. No matter how great you think the idea is, you still need to understand what your market thinks".
Often, women also have a tendency to do everything on our own. Remember to look out for and hire people who share your passion and delegate, delegate, delegate. Think of passion and profitability as David and Goliath. In the story, David defeated Goliath, but in a business scenario, we should learn to maintain a reasonable balance between the child (passion) and the giant (profitability).
The writer is founder and CEO of Stars Dome Realty and Mall.Global. Views expressed are her own and do not reflect the newspaper's policy.
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