Good morning. And if I’ve not spoken to you so far in 2013, Happy New Year – and may the next 361 days be simply exceptional for you.
To work – and the sad news that every year I make a list: ‘things to do between Christmas and New Year.’ And every year I look at it on January 2nd and wonder why I bothered. Family, friends and the sheer need to take a break have defeated it. Again.
But not this year. This year ‘tidy up office’ actually got done. Huzzah! And as I was dutifully recycling paper I came across an essay I’d written for my MBA. It was on my old pal Abraham Maslow and his hierarchy of needs. You’ll almost certainly have seen the triangle, with our basic needs such as food and shelter at the bottom and the highest need – self-actualisation – at the top.
As I was reading through the essay (what? B if you must know) it struck me that what Maslow applied to an individual could just as easily be applied to a business. Does an SME have a hierarchy of needs? Yes, I think it does – and I think it’s a great place to start 2013.
So let’s begin at the bottom of the triangle. That’s where Maslow puts the basics for human survival – food, warmth and shelter. At the second level we find the need for safety, for health and financial well-being.
By the third level, there’s a need to be loved and to belong: friendship, intimacy and family.
Many people are content to spend their time at the third level. If they have the basics for survival, if they’re loved and they belong – well, that’s not bad. After all, there are plenty of people that don’t even make it that far – especially in the current economic climate. But people that start their own business go one or two steps further, towards Maslow’s fourth level: the need for esteem – to be accepted, respected and valued by others.
And then we come to the fifth level – the top of Maslow’s hierarchy. The fifth level is the need for self-actualisation; the need to accomplish what you’re capable of accomplishing. As Maslow put it, “What a man can be, he must be.”
This week and next week I’m going to look at those five needs and see how they translate to a business – and to the person running that business. The more I’ve thought about this over Christmas, the more I’ve seen the parallels: I’ve also seen the areas where TAB can help as you march towards the top of the pyramid.
So at the very bottom you need food, you need shelter, you need warmth. What does your business need for its basic survival? I think it needs two things: adequate capital, and a supply of fresh meat.
Over the years I’ve seen any number of businesses struggle and eventually go under because they weren’t adequately capitalised at the beginning. If that essential working capital isn’t there initially, a business always seems to be playing catch-up. One of the chief reasons is that entrepreneurs want to keep 100% ownership of their business. I’ll be looking at new ways to fund start-ups in a future blog but let me say here and now that if giving away a small slice of the equity makes the crucial difference and gives you adequate working capital, do it. An outside investor won’t automatically turn you into Facebook, but he may very well turn you into a long term viable business. And 80% of a cake is better than 100% of a slice of bread.
What do I mean by ‘a regular supply of fresh meat?’ Simple. I mean a regular supply of potential new clients and customers. Over the 20 years that I have been in business I have seen one basic law: that if you do not have a regular flow of potential new customers then sooner or later – and nearly always sooner – you are going to be in trouble.
Next week I’ll look at levels two to five: from the health and financial well-being of your business to achieving the very most that you can achieve. And if I have a theme for the coming year, that’s it. I don’t want anyone to look back on Tuesday December 31st and think, ‘If only…’