Mike Michalowicz's Blog, page 50

The 8 Tendencies Bad Decision Makers Possess

I’ve been an entrepreneur for a lot of years.  At one point, I’d started, grown, and sold a couple of businesses, and I thought I knew everything there was to know about making business decisions.  After all, I was a success!  After I sold my companies, I became an angel investor – finding ventures that I thought were promising and plunking down my hard earned cash to give other entrepreneurs a chance at making their dreams a reality.

As it turned out, I was more like the angel of death.  I made some truly terrible decisions.  So bad that it started to seem like everything I touched was destined to fail.  I realized that I’d been pretty lucky early on (in addition to the fact that I’d worked really hard,) but I knew the money I’d earned wasn’t going to last forever – especially if I didn’t rethink the way I made my decisions.

Here are the things I learned – the hard way – about the tendencies and motivations of people who are making lousy business decisions.

Basing decisions on your ego.

If you think you know it all and that your expertise in a narrow field will translate to every other field, you’re just flat wrong.  Don’t fall prey to the fantasy that you’re King Midas and everything you touch will turn to gold.  In fact, even King Midas wasn’t very happy by the end of his tale, but you’re not Midas.  Assemble a team of folks whose experience rounds yours out, and you’ll have the benefit of an entire team’s input, rather than relying solely on your own knowledge.

Relying on the momentum effect.

There’s certainly some truth in the belief that past events can predict future events.  The problem, though, is that the world evolves.  Inevitably, things fall out of fashion and are replaced by new products.  Think about the typewriter.  At one point typewriters were the best technology available, and they sold like crazy.  But at some point, companies had to move on – to work processors and computers – or become obsolete.  If you’re sticking with the tried and true and refusing to look at other options, you’re running a high risk of making a bad decision.

Being lazy.

Entrepreneurs have to be hungry, have to be curious.  If you’re only looking to confirm the results that you expect when you research a new opportunity, then you’re likely to ignore other, potentially significant results.  Make sure you’re looking at the whole picture – both negatives and positives of any decision.

Being indecisive.

Don’t become a victim of the mañana syndrome.  Delaying a decision is still making a decision, and if you’re putting off making a choice, you can end up limiting your options down the road.  You may be right.  You may be wrong.  Don’t let yourself be cheated out of success, though.  Make the decision and stand by it.

Going it alone.

Just like you can’t expect yourself (or anyone else) to be an expert in every area, you can’t expect that you’ll necessarily understand all of the options and complexities of any given situation.  Sometimes the very best results are achieved through compromise.  If you’re the sole decision maker, then you’ll never get the benefit of working through all of the angles and options before arriving at a reasonable compromise that benefits everyone.

Executing poorly.

Making a decision is only ten percent of the process.  The execution of that decision is the other ninety percent.  If you fail to communicate the reasons for your decision to your staff, they may fail to understand its importance.  If you neglect to plan or follow up on the execution of your decision, then you’re not getting the job done.  Make sure that you implement your changes in a thoughtful, logical way.

Seeing the tree, rather than the forest.

Good decisions are made with the big picture in mind.  If you’re focused on putting out fires or only thinking about next week, then you’re not going to be able to plan for the next year, or the next decade.  Leave the short-term decisions to your trusted staff, and devote some energy to the long term.

Not balancing your sources.

Abraham Lincoln was a great President, but it wasn’t just because he was a smart, thoughtful man.  He was great because he surrounded himself with a Cabinet comprised of his most bitter rivals.  He knew the power of hearing from someone other than yes men.  Don’t fall into the trap of listening to sycophants who only tell you what you want to hear.  By seeking out contrary opinions, you’ll avoid making decisions based on biased sources.

One of the most significant roles we play as entrepreneurs is the decision maker.  If we can improve the process by which we make the vital decisions that affect the health and profitability of our companies, then we’re certain to see more consistent and positive outcomes.

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How To Find Banks That Support Profit First

Profit First is a simple system, but the process of finding a bank that supports it can be painful. Almost 100,000 companies have implemented Profit First within the first year of the release of the Profit First Revised & Expanded Edition and the most common question I get is, “What bank should I use for Profit First?” Here is the simple answer:

You want to work with a bank that does not charge minimum balance fees on checking or savings accounts.

Which leads to “How do I find the bank?”

CONSIDER YOUR EXISTING BANK

If you are thrilled with your existing bank, tell them you would like to set up additional checking and savings accounts. But, before setting up the accounts ask them if there are any minimum balance fees for the new (or existing) accounts.

If your existing bank does not have a minimum balance fee:

Congratulations, you already have a bank that is likely a good fit for Profit First. Still, explain that you are looking to save more money at the bank (you know, like profit) and to do this it will be necessary for you to transfer money from account to account often bringing zero-dollar balances to certain accounts. It helps for your bank rep to know the system.  

Set up your foundational five accounts (Income, Profit, Owner Comp, Tax, OpEx) and start using the Profit First system.

If your existing bank does have a minimum balance fee:

Explain that you are looking to save more money at the bank (you know, like profit) and to do this it will be necessary for you to transfer money from account to account often bringing zero-dollar balances to certain accounts.

Then ask if they are willing to waive their fees.

If they are not willing to waive their fees, that (in my opinion) is a strong indicator of how interested they are in your business and in supporting you. And it is a strong indicator that you need to find a new bank.

 

FINDING A NEW BANK (OR CREDIT UNION)

Community banks and credit unions are the best for Profit First. Why? Because they don’t charge minimum balance fees, they offer (in many cases) more advanced technology than large institutions, are often the most secure banking platforms, and they are often better designed to support small business.

In fact, I personally work with a local federal credit union and have twelve accounts set up there for my business. No fees, no problems.  Albeit, I get an occasional (fun-loving) eye roll from Lorraine when I go to the bank to set up another account, they get what I am doing and I have become one of their biggest customers.

Here is a great tool to find a community bank near you: ICBA Bank Locator

Here is a great tool to find a credit union near you: NCUA Credit Union Locator

 

TRANSFERING TO A NEW BANK

I know it can seem daunting, but don’t get overwhelmed by the prospect of moving to a new bank. It is an easy and painless process if you do it in small steps. Here’s how:

Once you locate a new credit union or community bank that doesn’t charge minimum balance fees and allows unlimited (or at least 10) checking/savings accounts, set up the initial accounts.
Minimally, request three checking accounts for Income, Owners Comp and OpEx. You can add additional accounts later for advanced Profit First techniques, but this will get you started.
Minimally, request two savings accounts for Profit and Tax.
With the accounts setup up, you are ready for the transfer from your old stodgy bank to your new Profit First bank.
Don’t close the accounts at the old bank just yet.
Start the transfer by putting new check deposits into the Income account at your new Profit First bank.
Then set up the transfers for any other types of deposits to your Income account at the new bank. This may include credit card receipts, wire or ACH transfers, or transfer from payment processors like PayPal.
With the money now flowing into your new bank/credit union, you will naturally start to pay bills from that bank and follow the Profit First process.
As your bank accounts dwindle at your old fee charging bank, be sure to stop all vendor payments and all deposits from going to that bank. Once the cash flow at the old bank is stopped, shut down the accounts, and transfer all the remaining money from that bank to your new Profit First bank.

I can’t emphasize enough, how important it is to have a bank that supports Profit First. I realize this may take a few hours of your time over a few days to get initially set up, but don’t let that dissuade you.  I mean, you want to be profitable right?

DON’T LET THEM LIE TO YOU

Don’t let a banker tell you that Profit First won’t work for you.

It is funny, but some bankers hear about the Profit First method and then say things like “That is too complicated.” or “That won’t work.” But that is an argument from ignorance. The truth is they have never done it and they don’t know any clients who are doing it, so they just assume it won’t work. And they assume it won’t work because it is in their best interest to tell you that.

You see, if you don’t try Profit First, then they don’t need to change how they serve you as a bank. It is easier for them to force you to do it the way that works for them.

Resist the temptation to listen to a banker or anyone who has no experience with Profit First. They may mean well, but they don’t have practical experience and will give “advice” that is in their best interest. Remember, Profit First is about you. We are about to make you permanently profitable, with the right bank!

A STORY FROM A READER

Here is an email I received from a reader named Colby Street. Colby’s experience with her bank, sadly, is not too uncommon. Her response and action are perfect. Profit is clearly in Colby’s future:

“Funny story! Just called my personal bank to open the additional accounts I need to implement Profit First for my personal finances. The guy asks why I needed so many accounts and was more than happy to help me set up the new accounts after I briefly explained Profit First.

After he explained all the bells and whistles he was told that there would be a fee for each account and I asked how I can get those waived. He went on in detail all the different events that had to happen (all of which are against everything PF stands for) I told him that those are not going to ever be met with this system I am starting and that if the fees cannot be waived I would be switching banks.

His response was to challenge the Profit First System as cumbersome and complicated! That was his sales pitch! To call the reason I was interested in doing more business with them STUPID and that it wouldn’t work!

I have been in sales for over 10 years and have made some bonehead attempts to save a sales going south but have never had the courage (if you want to call it that) to insult the thought process of a decision maker!

You were right. People won’t get it!”

TAKE ACTION NOW

As with anything, you will only see results if you take immediate action.  Right now, find that credit union or community bank and start the process. Wishing you a very profitable year ahead.

The post How To Find Banks That Support Profit First appeared first on Mike Michalowicz.

7 Ways to Make Your Business Money While You Sleep

Think about the way your business runs:  you attract prospective clients, convert them to customers, collect the money, cultivate repeat business, and encourage customers to refer other prospective clients.  Each of these steps entails specific challenges, and one of your goals as an entrepreneur should be to automate as many of these steps as possible.  Automation – implementing systems that perpetuate your business without your involvement – is the key to generating income while you sleep.

Here are some ways in which you can set your business to earn a profit while you focus your attention elsewhere:

1. Make yourself into a product.

Once you’ve found success – or even while you’re on the road to it – you should look for opportunities to promote yourself as a brand.  Position yourself as the authority in your niche and develop products like videos or books that share your secrets of success.  The beauty of a book is that once the hard work is over – it’s written, edited, and a marketing plan implemented – then you simply collect proceeds while you move on to your next project.

2. Do fewer things.  

It’s impossible to automate aspects of your business if you insist on doing everything personally.  You need to train your staff to handle certain aspects of your business and the best way to accomplish this goal is to simplify your output.  Look at McDonald’s:  they do basically five things – burgers, fries, chicken, salad, and soda.  They package these things differently and sell them in different combinations, but the simplicity is what allows them to reproduce the menu in locations all over the world and sell their products without requiring highly skilled labor.  Identify your strengths and streamline your offerings, focusing on the items that you can train your staff to replicate.

3. Create continuity.  

Billing for each service or product you supply is volatile; both your revenue and your client’s expenses vary wildly.  By selling a subscription at a flat rate, you create a reliable income for your company and you provide your clients with predictable expenses.  Both parties are invested in maximum efficiency – maximizing quality and minimizing hassle.  It’s the ultimate win-win for both you and your clients.

4. Sell your system cheap and make money on the refills.  

We’re talking primarily about businesses that produce tangible goods, here.  The best two examples of this model are the Keurig coffee makers and printers.  While the devices themselves are relatively cheap, all of the profit is in the individual refills for cups of coffee or cartridges of ink.  If your machine makes a great cup of coffee or great quality copies, once consumers own your brand of device, you’re guaranteed their continued business.

5. Become the middle man.

Find a way to broker business and let other folks do the work for you.  Becoming an Amazon affiliate is a great example.  You link to their site; they sell, and you make money.  There’s also a fortune to be made in consolidating and coordinating the transportation of goods.  Be on the lookout for the opportunity to broker goods and services.

6. Become a teacher.  

I’m not taking about summer breaks and parent conferences.  Look at your business and find ways to teach other entrepreneurs how to acquire the skills necessary for opening their own business modeled on yours.  Say you own a successful pizza shop.  You might think that you don’t really have to opportunity to cash in on the educational aspects of your expertise, and you’d be flat wrong.  You could write a book or create a series of instructional videos on your family’s recipes, or you could market a consumable version of your plan for opening a profitable pizza shop.  An additional benefit is that you’re positioning yourself as an authority, and your name on a book enhances your brand.  Use this side benefit of creating your educational product to generate greater consumer awareness for your business.

7. Become an investor.  

Money makes money, but it’s important that you’re careful about how you invest as an entrepreneur.  Here’s my tip: look at your clients and assess their needs.  Find a company (in addition to yours) that addresses those needs and invest there.  Not only will you be forging a bond between your company and others that focus on enhancing client relationships, but you’re also cementing your position in your customers’ minds as the business that caters to their desires.  Once you’ve done the groundwork, you’re the good guy who makes money without effort.

 

I’m not going to try to minimize the grueling effort that it takes to launch and build a successful business.  What I am showing you, though, are some creative ways that you can make your hard work pay off once your business is on its feet.

 

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Accounting Professionals, You are Wasting Your Time on LinkedIn

If you are like me, you are wasting your time on LinkedIn.  At least I used to.  A year ago, I thought I had the social media platform down pat.  I had over 500+ connections, a professional profile picture and my detailed professional resume posted.   I had sprinkled keywords around and “liked” every article I could.  I followed influential people, joined groups and then sat back just a little impressed with myself.  And nothing happened.  People didn’t climb over each other to connect with me.  Customers didn’t start knocking down my door. Nothing.

I went to a PR group who said that they could ramp it up.  I bought advertising and spent money on Press releases and social media blasts.  Nothing.  A professional resume writer said my resume was tired and old fashioned and rewrote it.  Nothing.  A marketing expert told me to post stuff, something, anything 2-3 times each day (as well as 20-30 tweets on Twitter and 3-5 posts on Facebook, which consumed my entire day) Guess what….zippo.

Then, I listened to the author of LinkedIn Profile Optimization for Dummies, Donna Serdula, deliver a presentation and discovered that her book has the perfect title, because I, in fact, had no clue.  In order to make things happen, I had to BE an influencer, not just try to hang around them.  It turns out that the functionality of groups was not at all what I thought it was.  And while posting a resume might help find a job, alone it does not create the impression of an authority.  Keywords only matter if you know which fields to put them in, and searches are limited.  

With serious help from her professional group that DOES know what it’s doing, the LinkedIn Makeover team, my professional profile got a complete redesign.  Two weeks after the facelift, I was contacted and asked to join an advisory panel as an expert in the field.  I hadn’t changed in those two weeks, but a complete makeover made me look like I had.  This members-only group that I had been trying to connect with reached out to me and asked me to join!

The moral of the story is if you are going to use LinkedIn as a tool to promote your events, attract the right people or to be an influencer, don’t bother if you are going to only sort-of use it.  That is like throwing breadcrumbs in a pond.  You will make fish happy, but you are not going to catch any.  To get the fish in your boat takes the proper equipment, the right hook and tasty bait.  LinkedIn is a powerful tool if you know how to use it.  Don’t waste your time using LinkedIn.  Either go all in…or just close your browser now.

Li Hayes is a Professional Speaker Manager, and LinkedIn Amateur and Founder of GoLeeward Speaker Management.

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5 Tips for Private Practice Optometrists to Grow Profits This Year

Profitability is the main key to business success.  But maintaining that profitability is becoming more difficult for private practice optometrists. There is increasing competition from big box stores, mall kiosks, and the internet to overcome. Online refractions and other commoditized industry services make it hard for private practices to remain relevant in the marketplace.  Take some notes from some of the industry’s thought leaders to overcome these hurdles and make your practice more profitable this year.

Tip 1: Improve Your Customer Service | Dr. Eric White, OD

Dr. White has one of the highest Yelp scores among private practice optometrists and has one of the highest per-patient revenues in the country. He attributes some of this success to his approach to interacting with his patients. One common belief in the industry is that this is a numbers game. To be successful, a doctor must see a large volume of patients, can only spend fifteen minutes with each person, and thus must move through appointments very fast.

Dr. White has taken a different approach. He treats his patients like family members. Instead of rushing through the exam, his patient interactions begin with icebreakers and catching up with that patient’s life. It’s not uncommon for Eric to ask patients about their family, their vacations, or anything else personal that’s important to them.

He also goes so far as giving patients his personal cell phone number. Other doctors have asked him before why he would do such a thing. He simply responds, “Does your family have your cell phone number?” Yes, of course, because they’re family. Exactly. Treating your patients like family means they have some of these same privileges.

Action Steps: Take a little extra time to get to know your patients. This will help you win them over. Also, handwrite a personal thank you note at the end of every day. Take that opportunity to ask for online reviews and referrals.  

Dr. Eric White, OD has been in private practice since 1985. His practice, Complete Family Vision Care Optometry, is in San Diego, California.  Learn more here: https://www.drericwhite.com.

Tip 2: Upgrade the Patient Experience and Constantly Evolve | Dr. Aaron Neufeld, OD

Dr. Neufeld’s advice to compete with the increasing outside pressures on the industry is to constantly evolve with the market and innovate in your practice.  The days of having a practice, sitting back and doing the same things day in and day out are over if you want to have a flourishing practice. Although the science remains the same, finding new ways to do things and improving your processes as the market evolves is a must in today’s constantly changing business climate.

Another key piece of advice is to upgrade your patient experience and, by doing so, increase your patient retention. Dr. Neufeld points out is easier to keep an existing patient than it is to add new ones. Although new patients should be added consistently, it should not come at the expense of your existing patients. The patient experience in a private practice should transcend any of the alternatives on the market.

Upgrading the patient experience starts with being personable and building a relationship. Find ways to show patients they are the #1 objective in your practice. Educate them on the different eye conditions that may get missed if they go to less experienced or cheaper exam providers. Put the patient first in all aspects of the practice. Dr. Neufeld’s practice even goes as far as making home deliveries! Patients are more apt to be loyal and come back if they perceive you really value them.

Action Steps: Look at the systems and processes in your own practice and identify if they are out of date. Identify several ways you can go above and beyond patient expectations to demonstrate their value to your practice.

Dr. Aaron Neufeld, OD is an Owner/Optometrist at Los Altos Optometric Group in Los Altos, California. Learn more here: https://www.losaltoseyes.com

Tip 3: Focus on Building a Better Team | Steve Vargo, OD, MBA

A good team is arguably the most valuable resource in a private practice. A mediocre staff can make it incredibly difficult to move forward and grow. A poor staff will weigh the practice down and keep it from growing. If the staff is unmotivated and noncompliant, plan on spending more time putting out fires than growing a profitable business.

Successful practices are built on a true collaboration of people putting forth their best efforts to serve the patients. Although this is a big undertaking, some of the steps you need to consider are utilizing good interviewing systems to make sure the right staff is being hired, putting together comprehensive training systems for all staff, and having office processes that empower employees to really serve the customer.

One major benefit of focusing on building a highly competent staff is that the practice starts to become less dependent on the owner. The average optometrist owner spends 80-85% of their time in the exam room. Meanwhile, nobody is running the business and working on future growth. Optometrists should work towards a CEO model where they spend more time working on business development and management. They shouldn’t stop seeing patients altogether but try to have more balance in their daily activities.

Action Steps: Review hiring processes and office processes for efficiency. As a practice owner, improve your ability to lead and hold staff accountable to specific outcomes. Identify ways to move more of your time out of the exam room and into business development.

Steve Vargo, OD, MBA is a practice management consultant at IDOC. Learn more here: https://idoc.net/

Tip 4: Consider Specialty Marketing | Nancy Rausman

One of the things Nancy Rausman and EyeCarePro is focusing on is bringing the eye doctor back into medical care. Patients can already get cheaper glasses and contacts and, in some cases, even a basic exam online. But there is a level of care that only a doctor can provide, which is where private practice optometrists can really thrive.

Specializing in a specific issue or using higher tech equipment for more in-depth testing are two ways to accomplish this. Specialization creates more trust and loyalty with patients because it shows you are sincerely interested in their complete eye health.

Profitability can be directly impacted by specialization in a couple of other important ways. First, specialized services typically carry higher profit margins. You buy the equipment or training once, then continually charge more for the related services. Second, some of these higher priced services may not be covered by insurance, which attracts a more affluent patient to your practice. These patients are not usually looking for the cheapest options. They want to deal with experts that truly value their business and reward service providers with loyalty.

Above all else, if you’re going to specialize in your practice, make sure to let people know! Get the word out that your practice is newly certified or uses the latest technology. If nobody knows what you do, they’ll simply lump you in the same box as every other general optometrist they know.

Action Steps:  Turn yourself into a medical expert. Then let your potential patients know about it! Start by looking at your community and existing clientele to determine needs that are currently not being met.

Nancy Rausman is managing editor at EyeCarePro, one of the leading providers of online marketing and practice development services in the industry. To contact Nancy, email nancy@eyecarepro.net.

Tip 5: Plan to be Profitable and Implement a System to Achieve It | Eric Levenhagen

Many small business owners expect their business to be profitable. They work towards that goal by driving sales month after month and trying to keep an eye on cash while keeping costs as low as they reasonably can. Some owners use tools like a Profit & Loss Statement to manage these costs, while many others must constantly look at their bank balance to judge their success.  These are outdated ways to manage your business finances and won’t help you maximize profits.

First, optometrist owners should flip the outdated formula of Sales – Expenses = Profit. This formula leaves the most important thing in your business, your profits, in the least important position (at the bottom). Almost like you’re expected to live off leftovers. Instead, flip the formula like this: Sales – Profit = Expenses. Now you’ve moved profit into a place of priority; your profit is first. Next, instead of working from financial reports that are 3-5 pages long, learn to consolidate the most important financial info you need in your business to one page. It will be easy to look at, easier to spot trends and figure out where your business needs your attention the most in real time.

Action Steps: Implement a cash management system that puts your profit first. Streamline your financials to look at what is most important. Lean on your accountant and hire a good financial coach to hold you accountable.

Eric Levenhagen is the Head Coach at ProWise Financial Coaching. Learn more about Eric and his firm here: www.prowisefinancial.com.

Now don’t just let all this knowledge sit in your head without action. The only way you really make this next year the most profitable year of all is to do something with what you’ve learned! Implement an idea, measure the results, and adjust as necessary. It’s the only sure way to improve.

Eric Levenhagen’s mission is to empower entrepreneurial abundance for self-employed service professionals. Connect with him at www.prowisefinancial.com.

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Pay Yourself…It’s Better for Your Business!

When I’m consulting with clients looking to invigorate and grow their businesses, one question I often ask is: “Who’s your most valuable employee?”  They inevitably give me the wrong answer.  They might wax poetic about their rockstar sales person or their dedicated assistant, but they’re missing an obvious point.  Entrepreneurs don’t realize that they, themselves, are their most valuable employee, and that is a short-sighted position.  You are your most important employee, and you need to treat yourself just as you would any other staff member who’s integral to the success of the company.

Entrepreneurs wear two hats (okay, it’s often more than that.)  You’re both an employee and a shareholder.  You produce the revenue, and you should benefit from that revenue.  Just as you’d nurture a star employee, and just as you’d expect a return on your investment as a shareholder in another business, you deserve – in fact, you’re obligated – to pay yourself for both of these roles.

Why should you pay yourself more?

To avoid being a crutch.

Make a list of your responsibilities and duties.  What would you pay someone to do all of that work?  If you’re not fairly compensating yourself, then you’re not running your business responsibly.  If you’re subsidizing your business by underpaying yourself, then your company is doing little more than limping along.  Paying yourself a fair wage forces you to run your business properly and profitably, and is inevitably better for your business in the long run.  Too many company founders suffer under the delusion that they must sacrifice income in order to start a business.  In fact, the opposite is true:  if you start a business and require it to be profitable from day one, you have a much better long-term outlook.

To make yourself replaceable.

Growth comes when you can hire an employee for part of your current workload and free yourself up for bigger and better things.  If you’re already paying yourself for the duties you’re hiring for, then it’s an easy transition.  If you’ve been volunteering your efforts, then you have to scrounge up the money for payroll – not an ideal scenario.  It’s not uncommon to see entrepreneurs running around like one-armed paper hangers, unable to see the big picture for all of their little daily duties.  You must be able to afford employees as you grow so that you can keep the big picture in sharp focus.

To keep from resenting your business.

I see it over and over: entrepreneurs who sacrifice their income to help their business limp along.  They end up caught in the perpetual cycle of the desire to grow and the frustration of seeing their unsustainable business be unable to support that growth they so desperately want.  If you’re getting paid fairly, you’re rewarding yourself for growth.  It’s responsible and sustainable, and it breeds success.

To become more efficient.

If you’re writing yourself a paycheck, then your business has to bring in money.  It’s that simple.  Without the pressure of expenses to meet, it’s easy to treat your business more like a hobby, rather than the entity that lets you afford to live.  As your business grows, you should also pay yourself more.  Your healthy business should pay you dividends that reflect your hard work, vision, and dedication.

Now you’ll notice that what’s absent from the list of reason you should pay yourself more is a fancy sportscar, or your impending 20-year reunion and your desire to impress the folks who sneered at you in school.  Don’t get me wrong, I get the appeal of success, however you measure that.

The reason I’m telling you that you must pay yourself fairly is because it’s better for your business, both in the short and in the long term.  Requiring your business to be sustainable is smart.  You’ll force yourself to find ways to economize and boost your efficiency.  You’ll find that you attract better employees if you realize the value of the work you’re asking them to do.  And you’ll realize that growth will perpetuate growth.  Creating good habits will yield benefits for the entire life of your company.

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5 Wrong Reasons to Become an Entrepreneur

More people are starting businesses than ever before. The fact is many of these entrepreneurial start ups are guaranteed to fail, since they were started for one of these 5 WRONG reasons:

Desperation

Desperate people do desperate things. With the unemployment rate being so low, former great employees are trying to become (marginal) entrepreneurs. Unfortunately this does not work. Entrepreneurship is about fortitude and that is definitely not the same as being desperate.

Jobs Suck

It seems most people hate their job. And with so many people unemployed, the “lucky” folks who still have their career have to now perform the work of two or three people. These people are burning out, and believe the grass is greener as an entrepreneur. Little do they know they will now need to do the work of ten people.

Quick Money

Get rich quick schemes DO NOT WORK, yet many fall for the trap. The people who become entrepreneurs to make quick money get trounced by the other individuals who go into that same industry because it is their passion. The passionate entrepreneurs are far more persistent. And these are the ones who are ultimately (emphasis on time) successful.

It’s In The Genes

While an entrepreneur has certain innate qualities they are born with, it didn’t necessarily come from the prior generation. Just because Mom or Dad was an entrepreneur, doesn’t mean the child is going to be a good one… yet they think it’s destined. No entrepreneur should go into business, just because his or her parents did. And no aspiring entrepreneur should skip out on the opportunity because his or her parents did.

You Can’t Get Fired

This one get’s my blood boiling. I meet person after person that plans to start a company and glows in the fact that they can never get fired. I mean, after all, who in their right mind would fire themselves? Listen up, Buck-o! YOUR CUSTOMER CAN FIRE YOU. If you aren’t the best, your customer will leave (along with their money) to go else where… a.k.a., You’re Fired!

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Building Trust with Prospective Clients

People prefer to do business with other people (or things) who they know, like and trust. It makes sense. But how do you ever compete with established, big companies like Amazon that pretty much everyone knows, likes (well maybe not likes) and trusts. Surprisingly, it’s easy. You do it by achieving greater frequency.

Frequency is simply the number of times your prospect sees you or your brand during a specific period of time. More is better here. Our reptilian brains are hardwired to automatically trust things that we experience more often. We may not like something that we experience frequently (think beeping smoke alarm), but we definitely know it and trust it (to happen every 30 seconds).

Once you win the know and trust game via frequency, you have achieved the critical awareness you need for prospects to determine if they like you.

So, the next time your business is facing the Amazon of your industry, concentrate your efforts in a small concentrated area (location or niche) where you can have a far more frequent presence. You will become top of mind with those prospects, and in the driver seat to win the “like” game.

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Is Financial Freedom Costing You Your Life?

Financial Freedom?

I love money.  It is a powerful tool for getting lots of things done.  And it provides that all so valuable financial freedom.  But I’ve learned that it’s not the only kind of financial freedom there is.

For instance, take the popular parable about “The Tourist & The Fisherman.” It goes something like this – an American businessman visits Mexico and sees a lone fisherman bringing in his catch for the day. Confident of his ability to help people grow their business, no matter how small, he strolls over to the fisherman and smugly points out that if the man worked longer hours and sacrificed time with his family, he could buy a boat, hire people, catch more fish and go on to build a large fishing business from which he could retire from or sell in 50 years in order to spend more time with his family and truly living his life.

The fisherman thinks about it and says, “Isn’t that what I’m doing now?” What the fisherman knows that the businessman doesn’t, is that what he is doing now is enough to support his family and give him the lifestyle that he wants. In other words, he doesn’t have to wait 50 years, have a heart attack and four ulcers to realize what’s important to him.

He is happy with his life now.  Instead of working harder and harder to make more money so he can pursue happiness, he has made happiness his priority and by default, lives a rich life.

If you are like most entrepreneurs, you want to start your own business because of the freedom it offers. Heck, we all do! Not that there is anything inherently wrong with that dream, or the dream of winning the lottery. Having your own business gives us the ability to do what we want, when we want it. At least, that’s what we think when we first start dreaming the dream.

 

Reality Sets In

When you start out in any business you think you’re going to be the person in charge. It’s heady stuff! It doesn’t take long before you realize the customers are the true bosses. They tell us what to do and when we need to do it.

Our dreams of flexibility and doing what we want will fade away. Our personal little fantasy of the four-hour workweek gets lost in the shadow of doing what the market demands that we do. In order to make a lot of money we start dancing to someone else’s tune, just the thing we were trying to escape. And when we aren’t serving clients, we’re working our butts off to find more clients to tell us what to do. Needless to say, it’s not exactly the comfortable paradise we had imagined.

 

Spinning Your Wheels

The fairy tale vision of starting a business in order to have freedom turns into a something that resembles more of a Stephen King remake of the sitcom of “The Office.” Just like the businessman offering advice to the fisherman, you actually believe you can work like mad now, so that you can have “financial freedom” later. And then, when that happens, you believe you will be successful and be able to do what you want.

This might work. You could work like crazy until you have a lot of money, so that you can do what you want, but it’s like winning the Powerball lottery — it can happen, but it’s rare that it does. Yet a lot of fools still keep playing, believing they’re the next big winner!

The “work now, play later” belief system of the financial freedom dream, is it a trap. Or perhaps even more of a bad habit. You do more to get more, which results in a perpetual loop of doing more and more so that “one day” you will have the freedom (financial freedom) because, after all, that is all we know how to do. When it comes down to it, all you really know how to do is continuously work for more and more.

Unfortunately, I know people who have been caught up in this cycle for years, even decades. They keep working themselves to the bone, yet their dream of financial freedom is farther away than ever.

 

Happiness Rules

I think we can all learn an important lesson from the old story of The Mexican Fisherman – namely that when we say we want “freedom,” what we really want is happiness. And while money seems like it has the potential to bring happiness, it doesn’t.

What money has is the ability to amplify your core desires. When you have more money, and you are already happy, you can grow that happiness. But the reverse is true, too. If you are angry, depressed, or unhappy, money is not going to do much to help. In fact, it can lead you down a path of disaster. Just think of all those overnight celebrity success stories about people who are unhappy at their core. They get the money, or financial freedom, that they desire…and what happens? Two words: Lindsay Lohan.

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Dressing For Success

Clothes, Will Make Or Break The Man

Mark Twain was right about a lot of things, but one of my favorite truths was what he had to say about clothes: “Clothes make the man. Naked people have little or no influence on society.” While we’d all like to think that what we wear doesn’t have much influence on what people think about us, the truth is that’s like saying Apple pie would taste as great whether it smelled like last week’s garbage or not. In other words, looks matter.

There used to be a time when I went to all my meetings in a suit and tie. Heck, anyone who wanted to succeed in business did. That’s just the way that meetings used to be held. But today, the meetings I attend have pretty much gone to a standard t-shirt-and-jeans look. Well, kind of, depending on the kind of meeting. Think of business like “casual Friday optional.”  Meaning, no matter how comfortable we may have gotten in the business world, there are casual days and there are suit and tie days. Pay attention to your attire and match it to your client’s expectations.

Case in point – if you are a lawyer or you’re attending a meeting at a law office, you will still want to don the suit and tie. We haven’t come so far away from professional dress codes that you can get away with jeans in that type of meeting unless you’re wearing an orange jumpsuit that says “County Jail” on the back, and matching silver bracelets to boot. Then I understand you probably don’t have that option. But there are some other types of meetings where you can, and probably should clean up a bit and look like you actually own something that requires dry cleaning once in awhile.

 

How Entrepreneurs Should Dress

Although you probably shouldn’t wear jeans to a law office meeting, you could likely get away with it at a media company, a recording studio, and maybe even a restaurant’s kitchen. It’s all about knowing your audience. Here’s the trick – before you go to the meeting, do a little investigative work online. Today’s social media sites are a window into people’s lives and their closets (pun intended).

If you want to know how entrepreneurs should dress, start by doing a quick search for the people you are meeting with, on FaceBook and LinkedIn. Check out those people’s pictures. The key here is not to look at the personal photos, the professionally taken shots, or the ones that make you blush, but to concentrate on those taken at after-office parties and get-togethers. Those pictures, taken right after people have a typical day of work, will give you a good idea of how they really dress when they’re going about their day.

Another trick that you can try is simply to call the office where you will be meeting and sound out the receptionist about the typical dress environment. Just say something like, “I am coming in for a meeting and want to make sure I dress appropriately for your office environment. Do your colleagues wear suits, business casual or jeans, or loin cloths and headresses?” If you’re really worried, drive over a few days early (not on a Friday), sit in the parking lot and watch what the people going into the building are wearing. Wear something professional in case someone thinks you’re a stalker of course.

 

Playing It Safe

It’s not just women who stand in front of their closet door staring at a $5,000 wardrobe and cry about not having anything to wear. Men do it too. How to dress for a meeting or interview is one of the biggest issues men and women do share. Best advice, have some safe, “I can’t go wrong in this,” kind of standard business attire for when you don’t know what to wear. You don’t have to wow anyone; you just need to blend in so no one thinks you’re the guy collecting aluminum cans from the break room.

My one final tip is that you should keep in mind that it is better to over-dress than it is to under-dress. While a three-piece suit may draw a few funny looks at a construction site, it isn’t likely to get you booted off the property. By contrast, torn jeans, a t-shirt and sandals at an accounting firm probably won’t do much to get you the job or the sale.

Deciding what to wear on the job isn’t like competing on Project Runway. Just try to dress according to what will fit in with where you are going. If you’re just not sure, dress up a bit. I’m not saying invest in a tuxedo, but the closer you can come to matching the attire of those you are meeting with, the more likely it is that they will feel you are one of them. And you know how the old saying goes – “When in Rome…”

 

Check out this great article on entrepreneur.com, an interview with Richard Branson on attire in the workplace.  Also, short of your own queer-eye for the straight guy outfit outing, you may want to consider subscribing to GQ Magazine.  It is my go to source for how entrepreneurs (or anyone) should dress.

 

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