6 Steps to Turn Garbage Into Gold

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This is a guest post by my friend and Location Rebel Expert, Tom Meitner.  He’s run the entrepreneurial gamut and shares some of the insights he’s learned through his experience in this post.  If you want to see more from Tom, definitely check out his site The Practical Nerd.

As I write this, my freelance business is currently riding on a wave of success. I’m pulling in almost twice what we normally budget for my income this month, and the month is far from over. As an entrepreneur, I know that these months don’t always happen, so I need to enjoy it while it’s here. After all, running a business means a lot of high’s and low’s, and this is definitely a high.

But as I sit back and savor this moment of success, my mind turns back to two years ago. In 2009, running pretty much the same business, I tanked.

In April of 2009, for example, I made $300. Total. I lived by myself, so I had rent to pay, utilities, groceries, and gas for my car. If you do the math, you’ll know that $300 won’t float you for the month.

With no money in the bank, I set on my path toward destruction. My then-girlfriend (now my wife) emptied her savings account to keep me going (and eating). Throughout the summer, things continued to remain dire. The headlights went out on my car, and I had no money to fix them. I ran my car empty of gas almost constantly. My landlord and I had pretty regular conversations about when I was actually going to pay rent.

At the end of the summer, I decided to start bartending a few nights a week to supplement my business income, hoping that I could keep myself afloat with a few hundred extra dollars a week. Unfortunately, the hotel in which I worked didn’t have a very successful bar, so it was common for me to come home with only a few dollars. In one night, after working 7 hours, I came home with $6 in tips. Another night, the bar was so trashed that I had to work until 5:30am to keep it clean. As I stumbled to my car after 13 hours of work, I noticed the sun was rising.

Finally, I admitted defeat and grabbed a full-time customer service job.

My landlord kicked me out of my apartment at Christmastime, and on New Year’s Day 2010, I was living in my parents’ basement with zero clients and a job I already hated.

So how did I go from this to running my own business full-time again, and making over $4,000 this month?

I could go on about hard work and persistence, and all the stuff that you have already heard. But the basic truth is that I followed a series of steps to respond to the disaster my business life had become, and then I pulled myself up, dusted myself off, and got it done.

These steps aren’t hard to understand, but they may take some hard work – and even a little dose of humility – to accomplish.

Step 1: Determine the real problem.

Notice: I said, “real”. My real problem was not that my clients stopped sending me work. My real problem was having no other clients. I had put all my eggs into the same basket and paid the price. Once those wells dried up, I didn’t have any other work to fall back on. In business, the last thing you want to do is rely on one source of income. When somebody’s business doesn’t do well, it is common for them to throw their hands up in the air and say, “Oh well, I guess it didn’t work out.”

But here’s the thing – everybody’s business hits roadblocks. There is no such thing as a sustainable business without problems along the way. So really, take the time to figure out exactly what was wrong with the business that made it fail.

Step 2: Recognize that the problem is avoidable in the future. 

Okay, here’s the point where you need a little humility and a lot of tough love: you failed because you did something to make you fail.

Read that again: you failed because you did something to make you fail.

Are you innocent? Sure, maybe. I started doing business with somebody who gave me a steady stream of income, but then he started taking advantage of my time and eventually stopped sending me paying work. Did his actions cause me to fail? Yes. But is he the reason I failed? Nope. I hitched my wagon to him, and that was a mistake. It comes down to me.

Did somebody screw you over? Well, that means you put yourself in a position to get screwed over. You took on more risk than you were able to handle. Once you understand this perspective, you can move on. But let’s be clear about this: you’re not a victim. You are a living, breathing person that has the free will to make choices. If you made a bad choice, it’s your fault for going down that road.

We’re not trying to get into some kind of downward spiral of self-blame and self-esteem issues. Being at fault doesn’t mean that you are a horrible person or a lousy businessperson. It just means that you are digging down to the true cause of the problem. In my case, I was too trusting of someone. Having that knowledge transforms how you do business moving forward.

Step 3: Compare/Contrast your approach with those who are successful.

When Dave Ramsey talks about personal finance, he tells people to take financial advice from rich people. Do as they do. If you take financial advice from somebody who doesn’t have any money, then what are you learning? You’re following the path of someone who failed.

So, in business, look around. Somebody is doing business similar to what you are doing. Grab them on Twitter. Google around a little bit. We live in an age where you can connect with just about anybody, with a little effort. If you need a little personalized help, reach out to them. In my experience, most of my fellow entrepreneurs are remarkably open to meeting and chatting with you for a little bit. But before you do that, remember: you don’t go up to them and say, “Hey, can you help me?” That’s a surefire way to getting no response.

Instead, try to offer something of value.

If they’re in your neck of the woods, offer to take them out for a beer or something. Meet up for lunch. Just offering to have a conversation is more than enough for most. And then, when you do get them in conversation, just chat with them. Let the conversation develop naturally. Don’t try to shoehorn your problems into it. Listen to what they have to say, and they will listen to what you have to say. If your problem comes up organically, they will be much more likely to offer a little bit of advice. But be genuine and sincere in your conversation.

Another great way to connect with those who are successful is through their blogs. Most entrepreneurs have an online presence somewhere, and you can find a blog for just about any goal. Start leaving meaningful comments on their blogs. Many are happy to share a little extra advice in their blog comments for everyone to see, and it helps them establish two-way communication with their readers.

Step 4: Determine your alternatives to future choices.

Let me sum up this idea using my failed business as an example:

• What I Did Last Time: I relied on one client for all of my income.
• Why It Failed: That client stopped sending me work and I didn’t have any additional income.
• Alternative For The Future: Spread the risk out across several clients.

That was easy, right?

There’s a concrete reason why you failed last time. Once you’ve figured it out and learned from the successful, now you need to determine what you’re going to do when that problem comes up again in the future (because it will come up again).

In my case, I needed to keep getting more clients after getting the first one. Your’s could be finding a different source of motivation, or another way of mitigating your risk. This is the extra step in learning from your mistakes that too many people miss.

Step 5: Commit to those alternatives when the situation calls for them.

It does me no good to say I’m going to get more clients if I fall back into the trap of the “comfortable client” like I did before. The same goes for you: all of this education and learning from past mistakes is completely useless if you don’t put it into action. You need to be proactive and consciously commit to those solutions when the problems come up again.

Step 6: Get back out there!

Everybody falls down. The people who succeed are the ones that get back up.

If you’re running a race and you fall down, you’ll pick yourself up, dust yourself off, but do you just quit? Of course not!

When you’re building a business, you’re going to have that opportunity many times. The ones who succeed are the ones that keep moving forward once they pick themselves up again.

Think of it this way: if building that business is your dream, and you want your dreams to come true, which action is going to give you the best chance of success? If you keep going and learn from your mistakes, you could have a 50%, 60%, 75% chance of succeeding (if not much more). Every time you get up and learn from your stumble, you increase your chances of success. If you quit and walk away from it, your chances of success instantly drop to 0%. Give yourself the best chance to succeed by getting back out there without fear of failure. You might trip and stumble along the way, but the race gets smoother every time you get up again.

Too many people give up after their first problems arise.

If you want to succeed, you have to push yourself past those. But do so with your eyes open – don’t just grit your teeth and try to power through your problems. Take a time out, assess the situation, find a resolution, and then keep going.

Working smarter, not harder, is the key to making progress towards success.

Image Credit: Proimos

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