Doveryai no Proveryai,” is a Russian proverb that means, “Trust but Verify.” It was coined by President Ronald Reagan in the 80’s while negotiating with the Russians during the Cold War. I can’t help but to notice the similarities when it comes to business. In today’s business climate, many of our suppliers are extra cautious. Numerous conversations took place before lines of credit were extended and one of our suppliers even reached out to the lending institution. You would think a good credit score, references, and a proven track record were enough, but our suppliers were extremely cautious when considering our credit worthiness. But I understand because it was strictly business, nothing personal. For when it comes to business, “It’s Accrual World.”
Most small businesses use a cash based system of accounting where a service is performed or goods are sold and money is exchanged immediately. This is one of the reason’s why there’s an abundance of barbershops, beauty salons, and funeral homes, versus grocery stores and major chains in the black community. Building Blox is working hard to establish trust among our contractors, suppliers, and the community. This form of trust usually requires accrual-based accounting where most of our associates are paid weeks AFTER the work has been performed. This requires a high level of trust between parties, especially when the supplies are expensive.
Statistics show that 50% of small businesses close within the first 5 years. FIFTY PERCENT! That’s an alarming rate when you consider that most businesses begin with savings that has taken years to accumulate. That’s a hard pill to swallow because money is hard to come by if you don’t understand its principals. Most lenders require that you have “skin in the game” before extending lines of credit.
Last week, I heard from a friend that was upset because he felt that no one wanted his business to succeed. But truthfully, he never studies the market to find what people NEED. It’s a cruel world and friendship may jumpstart your business, but friends will not solicit your business year round. You must humble yourself, study the market, and fill a void if you want to stay in business, and after you’ve earned a customer’s business, you need to fight like hell to keep it. People work hard for their money and they’re not obligated to solicit your business. I am GRATEFUL that my friends, family, and potential customers are taking the time to watch us grow. I consider it an honor that they’re interested because the time they give me could be spent with their families.
The late great A.G. Gaston said, “Find a need, and fill it. Successful businesses are founded on the needs of people.” Starting a business is one of the most selfless acts you could perform because it makes you a public servant. If you want to start a business, consider the needs of the people FIRST, which means that you should leave the “boss” talk to the rappers. It also means working long hours, regardless of the weather. It’s not uncommon for entrepreneurs to wake up at 3:00 AM. While most are in the bed sleeping, entrepreneurs are working on themselves or their business. It’s a matter of survival, and it may look nice from the outside, but trust me when I tell you that, “It’s Accrual World!”
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