There is a famous story by Napoleon Hill. It goes something like this:

There was a cat who liked to sit on the stove. One day he accidently sat on the hot stove. That cat never sat on the hot stove again. In fact he never sat on the stove when cold either. He simply got out of the business of sitting on stoves… He ‘over-learned’ from experience…

So why recap this story? Last week, I was treated to lunch by two successful business owners who both appeared to share traits with the cat in our story and herein lies the truth of the past few years.

Regardless of industry, the overwhelming majority of us have had to adapt to how we do business. We’ve seen our markets move, the strength of business relationships tested and the need to be less cavalier about spending.

The danger of over-learning from our experience is we begin to see everything we do as a prelude to disaster and walk the cautious path. We all know this path, the prudent and careful one, forgetting that it was the opposite of such behaviour that lead to our entrepreneurial desire and success. So we willingly move from one extreme to the other under the justification that we’re in tough times.

So what’s the result? We create a business that is starved of success, creativity and most importantly joy. With the green shoots of recovery becoming evident (go on, I dare you to take off those pessimistic specs and take a REAL look), we are all in danger of being the cat that tentatively goes back into the market place, that slows growth and confirms our worst fears, we’re not ready. We’ve forgotten what a calculated risk is. We just see the problem in things.

So how to improve? How to find a balance between caution and the cavalier? Here are three tips:

1. Write down your optimistic and pessimistic expectations for the task ahead.
2. Clearly write down the risks to success. Now this can be hard to see. We can be in denial about the real risks, so explain it someone who is not directly related to you business. Someone’s whose opinion you trust. If you can explain to them the task without using jargon, then you are more than half way there.
3. Look at both the Profitability and the cashflow requirements of the task. These are different. If a new venture/product/service has a high gross profit but the customer payments are delayed, you could find yourself out of business.

 Lastly as we say at Templeton Green, in business as in life, we have choices, what will you choose today?

The story of jack and beanstalk is as old as days; however as a story about business, it is equally, if not a more powerful a story.

We have Jack, and employee who works for his mother, the manager. Jack does what he’s told and regardless of what happens that day, his mother, the manager ensures his dinner is on the table.

So Jack, works hard, and will always have the security that he’ll always have his dinner that night. (An employee will always get paid, that’s their security)

His Mother, the manager is solely concerned about getting enough done to run the house and ensure Jack’s dinner.  She sometimes feels she runs the house (biz) for the sole purpose of providing a lifestyle for her son (the employee).

Then one day Jack, on another mind numbingly boring task, of insanity, meets a man, who plants an idea in his mind. Have the freedom of working for yourself, take charge and go fulfil your dreams. So in a euphoric rush of blood to the head, he frees himself from his mother’s apron strings and flies solo with magic beans in hand (now self employed).

His mother mocks him and sends him to bed without dinner. The truth of freedom is you may not have dinner each and every night. (In self employment, nothing is guaranteed).

However our enthusiastic Jack, inspired by his hunger devises a path of growth and after overcoming his fear of heights, climbs the beanstalk (walks the talk).

After overcoming many obstacles he finally gets his head out of the clouds and sees a rival business owner with a goose that lays the golden egg (The Business Owner). The giant doesn’t even look after the goose (biz). His minions do; all he is concerned with is the golden egg (profits). As it’s from this egg, he amasses his wealth.

Jack inspired by the giant, wonders what it would be like to have a gaggle of geese laying multiple golden eggs (The Investor e.g. Dragons Den). Jack first attempts espionage then simply harvests the idea in order to obtain his very own golden goose, so he too can live off the profits and not simply continue to work the sweat off his own brow as either the employee or self employed person that trades his time for money. He wants the profitable business that works without him… He wants the lifestyle running a business was supposed to bring, as promised to him, the moment he pulled himself free from those apron strings.

 So in this entire story, the question, who was the Entrepreneur? The answer, why the man who sold Jack the magic beans (the idea). He made money regardless of the risk to him. He is in the business of ideas. The investor and true business owner crave the golden egg. All of the other protagonists in effect have jobs either making money for themselves or in return for cash flow security someone else.

This path is common for most. It’s not about getting to the top, but achieving your goals. My penultimate question, is as you read this article, which role(s) have you occupied this week already?

As we say at Templeton Green, in business as in life we have choices, what will you choose today?