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Moltz's Hierarchy of Business Needs

The big budgets we all dream about usually breed laziness. When your company has lots of money to spend on a single endeavor, most entrepreneurs look to fix a problem by throwing money at it instead of thinking through all the issues or finding exactly the right solution.

To many of us, it seems "cheaper" and easier that way. This doesn't mean your company should be undercapitalized because a lack of money to launch an initiative can prevent you from achieving your goal. Simply "applying money" instead of creatively coming up with the best solution isn't always the answer.

This type of business hunger will drive your company and will allow you to prioritize what you need to accomplish. It focuses you on the most important task ahead: get customers for your business. Do not confuse hunger for customers with desperation for business success. Desperation will cause you confusion rather than clarity. It will erode your confidence.

You may be so frantic that you're unable to focus on the tasks at hand. Prospects can sense this a mile away and will have no confidence in your business. Stop holding your breath and breathe out. Lose the big picture for once and focus only on this sales call. Forget thinking that your entire business fate rides on you landing this sale.

As many of us learned in school, Abraham Maslow in the 1960s introduced a hierarchy of needs where he discusses people functioning on different levels and how people need to satisfy their body needs (food) before they think about security (safety). Likewise, they need to satisfy their security needs before they think of their social (love or belonging) needs. From low to high, the five needs Maslow described were:

5) Body needs
4) Security needs
3) Social needs
2) Ego needs
1) Self actualization

Adapting them for business, companies need to go through a similar process. When your "body" (the business) needs food to eat or "security" (cash to pay bills), you don't have a chance to think about larger "social" (marketing) issues. You are only able to spend a certain amount of time on "strategic issues" when you don't have sufficient capital to run your business for the long term. At this stage, this is usually a good thing.

With all due respect and apologies to Maslow, I think there can be "Moltz's Hierarchy of Business Needs" (from low to high):

5) Paying Customers
Without paying customers, you really don't have a business (only a very expensive hobby). It begins when a customer pays you to do something for them. Getting customers is the most basic need of a business.

When Rita Bartolone became interested in creating a Web site like LittleItalyChicago.com (which promotes Italian products and services), it did not become a business until Vespa Chicago paid to be associated with her site.

4) Trusted People to Work With You
Without a team, you will always be a one-person band. You will also burn out very quickly doing everything yourself. Build your team after you have some customers and can afford to hire some other people.

When Zach Kaplan and Keith Schacht started Chicago-based Inventables, they were able to get about 20 customers working together. In order to grow their business, they are now advertising for their first two employees.

3) Cash to Pay For All of It
Cash is king and every other face card in the deck. Without cash, your business literally suffocates. You can only survive on the generosity of your own personal savings account, friends, family and angel investors for so long. Eventually, customers need to pay your way. Furthermore, a customer isn't a real customer unless they actually pay. (Actually, some would say that the transaction isn't over until the check clears the bank.)

While Nick Nafpliotis and Mike Duda used their own personal savings to launch Chicago-based Pennant, they weren't able to optimally expand their business until they had enough cash (from profits) to buy another company. Now they have created a larger firm that can do Web hosting and the additional technology services their clients require.

Alternately, when your back is against the wall, you will be surprised how your creativity at solving problems with as little cash as possible will be developed.

For example, what if your company has no money to go to an industry seminar? Call and ask to attend a few days before for half price or free. You will be surprised at the response. No money to exhibit at a trade show? Why not just come and walk the show? Though it's not optimal, you can probably accomplish 80 percent of your objectives.

2) Defendable Competitive Position
When you become successful, what prevents another company that is smarter and has more money from squashing you like a bug? Your competitive advantage can be your products, your customers, your employees and your vendors.

One of the competitive edges of Chicago-based duo is its expertise for legal Web sites. The company sees its value proposition as one where they have done a lot of them successfully, so why should a law firm look elsewhere?

1) Feeling Happily Successful
After your company has transitioned from steps five to two, you have made it to the top of the pyramid. You will find yourself happily successful (for the moment) with a financially sustainable business that you enjoy.

Remember that at any time as the environment changes, you can roll back down the steps and be forced to climb up again. I have repeated this "round trip" a number of times. The trick is to recognize where your business is on the hierarchy of needs and enjoy each phase as you climb to the next rung.