The Foundational Principle Every Successful Business Is Built On

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Just this month I stopped envying businesses that have external funding from investors. And it is not because I now feel I can do as good as them. It is not because funding my business from my own pocket is now easy. And it is not because I want to feel big and immune to intimidation.

It is because the success of a business does not depend on the source and volume of fund. The number one role of every businessman is resource allocation. If you are good at making a cool headed evaluation of your available resources, the resources you can borrow/lease, and the business goal you can hit; then success is purely a matter of strategy. 


Every successful business is one that generates more financial resources from the limited resources it has. Not the one that can get the most money pumped into its business. And as the key to success is generating the cost of the resources you use plus a significant profit on top, you should be more concerned about your business strategies and marketing than looking for an investor. You should start from where you are with what you have and provide a service/product of value that will earn you the money to grow your business.

Sometimes you might need to start with just a small part of your business idea. Start with the part your resources can fund. You will learn the invaluable skills of managing and growing a business. You will become good at resource allocation and when you finally grow the business to what your initial plan was, it will be with no regrets of having partnered with the wrong set of people.

It is a lot easier to start small and grow big, than to start with a lot of external fund and try to stay big. My starting small has made even my most terrible mistakes not too costly. I have been learning as much as anyone running a business. I make what, by percentage of my entire financial and non-financial resources, are big bets. I make long-term business plans and I make plans to keep us alive to see that long-term. I keep turning down job offers because I have a business I am building and I have figured out how to be profitable/successful.

As long as you meet a valid need, identify the market segment you want to capture, pick your product differentiation model, build a stellar strategy to reach that market segment and sell at a price well above all your expenses; you are already standing on the foundation of success.


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