Humans can accomplish amazing things with limited resources — as the Apollo 13 mission taught us.
The mission was to land on the moon, but an explosion in one of the oxygen tanks forced the crew to return to Earth as quickly as possible with no moon landing. Losing one oxygen tank meant that at some point before the shuttle made it back to Earth, the astronauts would run out of oxygen. Oxygen tends to be a big deal for we humans, so they were going to need a new air scrubber, pronto.
The scientists at NASA grabbed all the parts the crew members would have access to in their space pod and, using just those items, they were tasked with figuring out how to make an air scrubber.
Normally, this process would take three months. With the limited resources on the shuttle, and with limited time, the scientists at NASA came up with a lifesaving solution in three hours. It’s quite an amazing story.
Toothpaste Tubes and Money
On the same principle from the Apollo 13 story, I’m reminded of Mike Michalowicz’s amazing example of toothpaste.
How do normal people use toothpaste? When you get a new tube, resources are aplenty, so you use ample amounts. Lay it on thick.
“Oh crap, the paste fell off the brush right into the sink. Oh well, I’ll just put on another ginormous dollop. No big deal.”
But what happens when you get to the end of the tube?
The tube is getting really flat, and squeezing more toothpaste out becomes a hand and forearm workout. What happens now if the paste falls into the sink? You start racking your brain trying to remember the last time you cleaned the sink. If you’re like me, you might not be able to recall that, so you convince yourself the sink is clean and scoop that fallen toothpaste onto your brush.
You certainly aren’t using huge dollops anymore. How much is enough? So, you read the instructions and see it says apply a 1-inch strip to your toothbrush. Well, how thin can that 1-inch strip be?
Then there are the many ways we get every last drop out of the tube of toothpaste.
You roll from the bottom. Maybe sometimes you use a rubber band, so the bottom won’t roll back. Or maybe you buy a tube-squeezer product. (They exist.) Or maybe you cut off the end with scissors and squeeze the rest out of the bottom. My favorite is to just suck the toothpaste directly into my mouth.
The point is that there are lots of creative methods people have come up with for getting toothpaste out of the tube.
What does Apollo 13 and toothpaste teach us?
When resources are limited, we have proven to be capable of making them work for our needs.
I know you have heard the stories (and maybe you are one of these stories) in which the gym owner, for example, started in a garage, or in 50 square feet of someone else’s space, or in a 300-square-foot shack—but each one made it work. Chris Cooper, founder of Two-Brain Business, told me his first space was so small that as his membership grew, he would have one-on-one sessions on the landing of the stairs.
You just make it work!
This leads to a key Profit First principle – small plates.
We want you to set up a number of different bank accounts. Each account will have a specific purpose, which will allow you to consume the cash in that account for the purpose the cash was set aside for in the first place. You don’t get one big account that gives you a false sense of security—like a full tube of toothpaste.
You allocate funds into each account, and then you work like NASA to make it work.
One of the accounts is labeled PROFIT, and you put money into it early on or you’ll get to the end of the month and find there isn’t any money left because you let expenses expand to soak up the profit.
Back when I was working with just one bank account, things were a struggle. December and January can be really slow collection months for a tax business. It was super stressful to hope I’d make enough just to cover our personal bills. I felt like my business was a Ponzi scheme almost. I had to use the current, right-now income to cover payroll from last month. I had to utilize my ninja skills with tax strategies to make sure I didn’t owe a lot because I didn’t have the cash to pay any taxes.
As the business grew, I knew I needed more help, but I was never sure if I was going to be able to afford it. After all, it didn’t seem like I could cover my existing bills and payroll. I was working tons of hours. 80 to 100-hour weeks during tax season, 60 hours outside of tax season. I think my hourly rate was around $10 an hour at one point. Super sucky for sure.
Then Profit First came into my life. Even though the first year wasn’t as great as it could have been because I wasn’t using a separate INCOME account, it was still better than working with just one bank account for everything. How about two years later? Forget about it! All those pain points and struggles I had are now strengths!
Profit First for Microgyms works. Having multiple bank accounts works.
That said, let me mention a common pushback we get with the multiple bank accounts. Some business owners believe that this is going to complicate the hell out of their accounting.
And here is my long-winded response to that pushback: Nope. Not true.
Yes, this system adds more bank accounts. Yes, those accounts need to be tracked. But these accounts are only adding a few transactions each month. They are holding pens more than anything.
It isn’t that much more work, and the extra clarity is what we owners need.
Don’t settle on the same routine.
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