“Here’s $1,000,000, what will do you with it?”
That’s the question that was asked me by a venture capitalist (VC).
My good friend Jimmy Graham, former Navy SEAL and Director and Lead Instructor at ASRTrainingCenter.com, had invited me to meet with his friend. We had talked a lot about our faith and business over the years. It included how our military training provided some of the necessary skills needed to make it in business, but not all of them.
Jimmy’s friend, the VC, stopped talking. The VC turned to me and asked his question, “Here’s $1,000,000, what will do you with it?”
My “matter of fact” and quick response?
“I’d give it back!”
He stopped his note taking and looked up with a shocked and stunned face. He probably had never heard my response from anyone before, that I’d give his investment money back. But he replied with an eager desire to know more, “WHY?! How come?!”
“There are two reasons why I am not ready for that amount of money,” I said.
“First, my business is NOT at the $1,000,000 in sales yet! If I sell a $20 book, that means I need to sell 50,000 copies of my book to reach the $1,000,000 in sales. Let alone making $1,000,000 in profit, the next stage in any business growth. If I can’t sell my product/service to 100 people, let alone 1,000 people, you and I would BOTH would be fools to take your $1,000,000 in investments.” He was now leaning closer to listen to my second point.
“And second, if I can’t handle a business that consistently has $50,000 in sales, what makes anyone think I can handle a business that has $1,000,000 in the bank? It’s like running a marathon, running 26 miles means I have to build and train up to that point. If I’m terribly out of shape, I’d probably die within the first few miles having done no training beforehand. Same with my business. I need the maturity and experience at $50,000 in sales and revenue before I can handle $1,000,000 worth of venture capital or angel investor’s money. The problems at $100,000 in sales are much different than $1,000,000 in sales. That means more money means different and more problems to encounter and solve.”
He smiled and said, “Nice. Great answer,” and then continued to ask more questions. It was my first taste with being on the business “HOT SEAT” having to defend my startup decision making, but a start it was.
Money, money, money, m-o-n-e-y!
This is what you’d typically hear from people when asked this question:
- “Oh, I’d invest it and go live on the beach at….”
- “I’d invest it in some land and a building to hire others in the local community and….”
- “I’d pay off ALL of my bills, put the rest in the bank, and then….”
- “Oh yea!! I’d buy a new house, car, cars for my kids and grandkids, and then take a nice long vacation. And when I’d come back, I’d…..”
You get the idea.
What’s the definition of insanity?
Doing the same thing over and over again expecting different results.
Whether you are making $50,000 or $1,000,000, your money habits are just that: Habits are habits. In fact, experience has shown that both stress and money brings the “real you” and other’s out, i.e. it forces your various insecurities and bad habits out into the open. Do you want to end up being a story on the six o’clock news?
When I have asked my friends and others the same question, they’d ALL say roughly the same thing as I have outlined above, which gives insights into their thinking:
They’re thinking or have the mindset of a consumer and NOT a producer. They’d BUY something before they’d ever been able to SELL something.
Setting up your mindset
But it is God who puts the proper perspective we’re to have when it comes to starting a business and money:
Prov 24:27 Prepare your work outside, And make it ready for yourself in the field; Afterwards, then, build your house.
So before you or I think about approaching any Fortune 500 company regarding selling our product or service in their business, we have to “have legs” with what we’re selling. That means we need SALES!!! If we can’t sell it to 100 people, what makes us think we can 10X it and sell it to 1,000 people?
READ: Entrepreneurial mindset
But forget the Fortune 500 companies for now, build up your local community and tribe of businesses first, they everyone will learn at the same time as you and grow into those $1,000,000 businesses we all dream about.
Small success first, then scale for success.