Some Entrepreneurs Are So Focused On Winning They Do Not Recognize They Have Already Lost

I recently spoke with a small business owner who has been in business for 17 years and who built a special requirement building that carried a $20,000 per month mortgage obligation. It was sized to accommodate his needs when he was doing five million annually, now he is doing one million and gagging, choking, still paying the note, but is focused, committed and figuring out how he can get through another month. Not for one second is he considering the fact that the numbers do not add up. I asked him about his profit margin and after discussing this for a few moments he agreed it was about 20-25% (on a good day). So really, in dollars, his gross profit was approximately $250,000, maybe $300,000 if we want to kid ourselves. I then asked him his annual mortgage cost. Easy arithmetic, $240,000 not counting insurance, taxes, maintenance.

There was stunned silence for a long time. The man just got it. He was walking dead and had not acknowledged it to himself. After allowing this to sink in, I asked him if he could move down the street and rent, maybe a not-so-terrific a building, but at $5000 per month rent, maybe even $7500. He could save $150,000 per year and maybe even take a paycheck home every now and then. ”But my building…” he muttered, as if it was his child. He was emotionally crushed, feeling totally defeated. We have all been there and understand this feeling. It’s an empty sinking feeling in your gut, the sudden realization that you have failed, that your mission has failed.

But, I congratulated him on seeing reality as many business owners at this point simply disagree and rush to get me off the phone, not even wanting to consider such “insane” thoughts. However, he got it. My next statement was, “Nice work. You see the issue, now let’s talk about how we turn this problem around and create success again. We can do it.” And we did. The man is out scouring the community looking for a place to rent. He is ready to succeed again and walking away from his building, mentally and spiritually. This is the first step. He succeeded, he made this leap, all within a one-hour telephone call. It can be done.

Deep inside, we all know the truth. We simply allow ourselves to ignore it and to go about doing what we think we should be doing to survive, never once thinking if we actually should survive in the same format and with the same business plan. One of two emotions happen when that deep truth is stirred, either rejection (the usual response) or clarity, followed by the sudden feeling of emptiness and nausea, quickly buried in a “can do” attitude, the hallmark of a committed entrepreneur. That works most of the time but when it is about the basic issue of survival, the entrepreneur digs in and fights harder, never considering giving up, knowing he is wrong but choosing to act in the only way he knows how, hanging on until they drag his cold corpse out the back door.

But this man wants to survive and he has seen the real issue and now must decide if he is going to do something about it or put the truth away and believe his own lie, that he can make it if he only works harder. Unfortunately not so, my friends. Not so.