When is profit a problem? When you do not know how you made it.

Sometimes new entrepreneurs get lucky.

Meet Jack Potts. Jack has little hands-on experience in business. But Jack was very fortunate. When he started his business, conditions were just right. He had the right product, the right timing, the right customers, and the perfect climate. It was as if a favorable wind blew the customers in on a balmy summer breeze. His bank account multiplied quickly. What could be wrong with that? Nothing, except that it took him by surprise. He had no idea how it happened. It just did. So he had no idea how he did it. He had no idea who his customers were or why they liked his product. Therefore, he could not replicate it or sustain it. His business began at the top of the hill, and it was downhill from there.

It is easy to manage a business when you are making a substantial profit. You can be a bad manager when you have plenty of cash flow, and still make it. Accidental entrepreneurs often overlook the fact that the fad will eventually end, and the customers will blow away as fast as they blew in. Accidental entrepreneurs are often oblivious that the winds are dying down until it is too late. Because they are unaware, they are not prepared to change or innovate the product to better serve the customers’ needs, and remain a viable option.

What is the moral of this story? Know thy customer. Know why they buy. Prepare in advance to innovate your product to remain a bona fide option.

Alma Knack? Alma is also a new entrepreneur and reads a lot about business. In fact, she is a virtual encyclopedia of business advice. She seeks out mentors. “They tell me things I already know,” she said. She already knows how to do market research to find her ideal customer and to find better ways to connect with them. She says she already knows she needs a company culture and consistent branding. She knows how to set up systems, and to train her employees to these standards.

So what could possibly be wrong with knowing how to do all this stuff? It is fine that Alma knows. She just does not do it. She is all talk and no go. All the business wisdom in the world will profit you nothing if it sits there like a book on a shelf–unapplied to your day to day affairs.

Until you are applying what you know, you are not managing. Until you are doing yourself what you tell others they should be doing, you are not a leader.

You can know nothing about business and succeed for a little while. You can know everything and fail. If you do not know what you need to know, find out, and keep learning. The learning curve in business never stops. But the most important thing by far is to apply. It is a waste of time to read books or seek advice without applying what you have learned.

“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.” – Leonardo da Vinci

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In the 26 years that we have been helping small companies with their marketing and advertising, we have seen almost every kind of difficulty one can imagine. Throughout this month, we are sharing some of the most common problems using fictitious characters in a humorous way. While all of the details in these stories are true, the names have been changed, to protect the guilty. Should any of the stories sound familiar, it is our desire that they would help steer you around some pitfalls. Stay tuned for more Complex Characters of Capitalism.

For more stories on all the Characters this month, visit www.etcgraphics.com/thincblog