Contrary the popular mantra of doing what you are passionate about, following passion blindly can be the cause of financial ruin, as at least one business owner has learnt the hard way.
Former Olympic swimmer and owner of four Perth hospitality businesses, Eamon Sullivan, has told My Business that while it is great to have passion in what you are doing, there are two common problems leaving that passion unchecked.
The first, Eamon said, comes down to the realities of running a business.
“I didn’t know the first thing about it to be quite honest,” said Eamon.
“We’ve recently just sold that business, a couple of months ago, and [I’m] definitely glad I did something at the small scale like that, with having no idea what I was doing, because if it had been of a bigger venue, I probably could’ve lost a lot of money.
“It was that mentality, which I think a lot of people do have when they’re passionate about something: they neglect the specifics and the reality of what a business or another decision might mean.”
Eamon admitted he was “naïve” about business, and thought it was simply a case of make it and people will come.
“But [I] didn’t, at the time, didn’t know about creditors, and, obviously you had to play your suppliers but making sure you were operating at the right percentages and hitting margins, and your mark-up, and the cost of goods, and the wage costs, super, payroll tax, all those sorts of things,” he said.
The second aspect of passion, according to Eamon, is mistaking your own passions for those of your customers.
“I learnt pretty quickly, you can’t tell people what they’re going to like, you’ve got to find out what they like and give it to them. You can be as passionate as you want about doing pork belly sliders, but if that’s what you’re going to do in Subiaco, you’re not going to make any money,” he said.
“[I made the mistake of] trying to push what I was passionate about for people in an area that was passionate about that, but it wasn’t appropriate for their line of work, and how long they were wanting to wait for food, and that sort of stuff.
“The demographics, and the sort of people you get coming to your venue, and where you situate it, makes a big difference.”
Hear more insights from Eamon on the My Business Podcast below: