Mike Michalowicz's Blog, page 76

Reward The Effort, Not The Outcome

When my son came home with straight A’s, I congratulated him on the success. That was a mistake, because what gets rewarded get’s focused on. While at first blush, getting straight A’s seems like the exact thing I should praise, it’s not. The objective is that he maintains the effort and emotional muscle required to get straight A’s.

By praising my son on his grades, I set an expectation of straight A’s and not hard effort. So, if the next go around he doesn’t great straight A’s, it becomes a simple excuse of “bad teachers” or “no one else got straight A’s.” If I had praised his hard work, then that would become his focus. And with it, external circumstances, would become less relevant.

In his book, Drive: The Surprising Truth About What Motivates Us, Daniel Pink explains when it comes to your employees, don’t praise the outcomes, praise the effort it took them to get there. Specific feedback (“You got all the negotiation points properly documented in the contract”) and praise about the effort (“I appreciate all the time and attention to detail you put into the contract”), will be far more motivationally effective than outcome praise (“Great job getting the straight A’s… er… uh… I mean, the deal”).

7 Ways To Reduce Stress In Seconds

Life is stressful, especially if you’re in a startup or are an entrepreneur. That’s why sugar, caffeine, high fat snacks and comfort food are so popular. The thing is, that junk only adds to your stress, it doesn’t detract from it. Stress increases your heart rate, makes you breathe faster, and raises your blood pressure. Me? I eat a lot of ginger, I run and eat healthy, but I’m not immune to stress. Slapping people, screaming and throwing things might make you feel better and less stressed in the short term, but they almost always result in more stress, usually about the time security arrives. The techniques below help me force me to relax and chill out when I over schedule, under sleep and freak out.

Breathe. 

Yep. We all do it until we’re dead. But most of us don’t do it right. Stress tends to make us shallow breathers. When you’re stressed stand up and take long, slow deep breaths—the kind you take before jumping into a swimming pool of cold water or before giving your kids “the sex talk,” or asking your boss for a raise. Slow inhale slow exhale. Do this at least five times. If you get dizzy, sit down. You’re probably not used to that much oxygen.

Laugh out loud.

If there’s nothing funny in your life or office, turn to YouTube. Search on “Cats, Fail,” or “Epic Face Plant.” You’ll find lots to laugh out loud at. If you’re not near the Internet, think about something funny.

Put things in perspective.

I used to think noises and distractions outside my office were annoying and stressful. Then Hurricane Sandy hit and suddenly I was walking to a shelter every day and working at a table with six other people. It put a lot of things into perspective. So did going from a net worth of millions to a net worth of whatever coins I could find in the couch, my ashtray and my daughter’s piggy bank. Think of the worst thing that’s ever happened to you, or someone you know and put your stress next to that.

Look at something awesome.

Look at some great photos of sunsets, the ocean, mountains or even your kids, family, spouse or last vacation—except for the parts that stressed you out. Studies show just looking at something beautiful, awe inspiring or calming reduces stress. If you have something outside to look at, like a park. Go sit on a bench. If you’re in a high rise office, make sure you have some flowers, or a painting or something to look at. It doesn’t have to be big. It just has to touch your soul.

Change location.

Being able to teleport to a hot tub or a deserted beach somewhere would be awesome, but until that technology is available, the break room or bathroom will have to do. If that sounds depressing, and it does doesn’t it, then step outside instead. Walking to the vending machine or coffee pot or taking the elevator to another floor and wandering around pretending to be lost is an option. The point is to change locations and get away from the place (or person) stressing you out. The walk there and back and even a different environment can reduce stress in a matter of minutes.

Plug in.

The right music can calm any stress. Don’t turn on heavy metal or something raging or that you’d workout to. Try something more mellow and happy, or something that reminds you of good times. Relax into it.

Stretch.

Yeah, crazy right? But it works. Stand up and stretch. Move to a doorway and push on either side of the doorframe. Twist. Sit down and put your legs out in front of you and point your toes. Find a stairwell and do some standard runner’s stretches. Google “stretching” to find something if you’ve put your high school gym class behind you.

No technique is going to work if you’ve let stress build up. The minute you start to feel stressed, address it head on. Hydrate—even being dehydrated by 2% can be stressful to your body. Coffee and soda don’t count. Drink water. Sip it throughout the day. Get some regular exercise, even if it’s just walking to the fast food place or taking the stairs instead of the elevator. Physical activity (I run) can drain stress better and faster than a juicer crushes fruit. Finally, figure out what’s causing the stress and eliminate it as much as possible.

The Best Time To Sell Your Business

When you need money the most. . .

when your sales are good, but your profits are bad. . .

when you are exhausted and don’t want the business any more. . .

those times. . . those are the worst time to sell your business.

Would you buy a business (or anything) that needs money desperately to survive, has no profits, and the current owner hates the business? I hope not. Any buyer in their right mind wouldn’t either.

If your business has a healthy balance sheet. . .

if sales are good and profits are better . . .

if you are energized and love your business. . .

those times. . . those are the best times to sell your business.

Investors will see great worth in your business. And so will you. . . and you probably won’t want to sell it.

Episode 62: Cash Flow and Profit First Tips with Kevin Davis

Also Available On

 

Show Summary

Kevin Davis joins Mike Michalowicz, Chris Curran, and Kristina Bolduc for Episode 62 of the Profit First Podcast! Kevin shares his story about his business and what he has been struggling with; Mike gives some great tips on setting up the Profit First system.

 

Our Guest 

Kevin Davis is a serial entrepreneur currently running 4 businesses, with another on the back burner.

He has run a successful web, graphics, and app development firm since 1998, completing projects for both small and large businesses. In 2011 and 2012, the market shifted, and the days of large revenue projects began to dry up.

Like most entrepreneurs, Kevin looked for a solution, and opened a detailing shop, going back to his car-guy roots. This provided not only stopgap revenue, but also lead to the invention of a product for the automotive industry.

In 2014, he launched Detailer’s Helper, a detailing product brand, primarily focused around a unique paint-friendly tool belt for detailing. Thanks in large part to a give-lots-of-free-advice social media strategy, it has grown quickly over the last 15 months and is Kevin’s primary business focus. The brand has lead to some fun opportunities, including a spot on a new Velocity Channel (from Discovery) show called Competition Ready.

In addition to the automotive niche, Kevin is expanding into other brands around the same product, and will be launching The Helper, a similar product for the consumer market, and Little Helper, a kid’s version in the next month. Kevin has goals for securing several large retailer PO’s in Q1 of 2016.

In 2012, Kevin also invested in a vacation rental business in Orlando, which was a deliberate move to not only generate sustainable revenue, but to also provide a respite for the long Montana winters. He’s been fortunate to enjoy over 80% booking rates in a market that typically sees 48%. He hopes to expand this business into another property in Grand Cayman, and is currently working on an e-course to teach others how to systematize their own vacation rentals (currently on the back burner).

In addition to the business endeavors, Kevin is a die-hard car guy, and just finished a six-year project, building a 1965 Shelby Cobra replica.

Kevin and his smokin’ hot wife live in Montana with their two girls (17 and 16), and carry the entrepreneurial theme throughout their lives. From a 12,000 mile camping trip throughout the US, to Spanish immersion school in Costa Rica, and trips to Brazil, they take a very “why not” approach to life.

For the record, Kevin also enjoys sunsets and long walks on the beach…in Grand Cayman.

 

Show Quotes 

Use the 4x rule: when you sell products direct to consumer your minimum markup should be a 4x markup for premium products.

Cash flow is king. If that money is not collected it can destroy a business. Inventory flow is a big deal… the faster you can clear that out the sooner the money is released to you.

When you have multiple accounts in place, you will start to notice things you are spending money on that you should NOT be spending! Parkinson’s Law. When we see that the money is available, we spend it.

You do not need to make an adjustment for cost of goods sold because these are considered expenses. Instead, setup a unique account for your “real revenue” and subtract it out. That’s when you’ll know how much money you’re actually making.

 

Show Links

Websites: www.detailershelper.com,  www.thehelpertoolbelt.com, www.littlehelpertoolbelt.com

www.corvinacove.com, www.vacationrentalprofitmethod.com

Social Media: www.instagram.com/kevin_b_davis/, www.facebook.com/detailershelper/

www.youtube.com/channel/UCOj4ZTNAEO-9GTRKXddbmeA

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

Episode 61: Transitioning to Specific Business with Leticia Mooney

Also Available On

 

Show Summary

Entrepreneur Leticia Mooney joins Mike Michalowicz and Chris Curran for Episode 61 of the Profit First Podcast! Leticia talks about her business goals as Mike gives some great tips on becoming a specialist to skyrocket your businesses success.

 

Our Guest 

Leticia Mooney is a 30-something woman of many talents. A published author, serial entrepreneur, music critic, and scholarship-winning dance student, Leticia has owned four businesses. One was a total failure, one was acquired just before it was shut down, the third – her current venture, Brutal Pixie – has gained traction and is a quickly growing success story. The fourth was a fast-grow, fast-fail startup that lasted 12 weeks, from July to October 2015. In the art of music critique, Leticia has been described as a “master”, and has been recognised internationally for her work.

Leticia’s mission in life is to inspire people, and on her tombstone they will write an epitaph to her ability to help people make positive change.

Point of interest: Dead-ringer for Sissy Spacek. Go to http://biodagar.com/about for proof of that (my sister thinks I must have been adopted or stolen. Ha!)

Brutal Pixie is an Australian content strategy company that focuses on strategy creation; risk, governance and workflow; and of course content development. People come to us for content and stay for the strategy.

 

Show Quotes 

The double helix trap: typical oscillation that entrepreneurs have between the working and the doing. As sales increase the work decreases because there’s less availability for it. Then when we try to focus on doing the work, we are unable to take time to sell. If we’re not selling the sales slow down and the work runs out. Panic ensues. This is the ultimate trap.

Oscillating back and forth will not bring you traction. When you work with any client of any type, that forces you to custom work; it’s not perfectly consistent. Think of a heart surgeon vs. a general surgeon. The general surgeon has a touch of knowledge in a bit of everything to be able to treat you. The heart surgeon is a specialist to help you with one thing.

If the practitioner realizes that your symptoms are severe they push you right to a specialist. The specialists make more money than the general practitioners because they attract the patients with very specialized needs. General practitioners attract a general audience with general needs AND the generalist diagnoses a significant problem and then refers them out to a specialist. A specialist is someone who can address a specific problem with a specific need and can charge a higher premium because the need is greater.

If you become a specialist, the likelihood of success increases significantly.

If you’re inspired with new ideas, DON’T focus on new ideas for new businesses; focus on new ideas within how you’re serving your existing clients! You will still get the same excitement but you’re innovating for your best clients.

If you start concentrating your services to one specific category, that will get your out of the double helix trap because you will start to get repeating consistent needs. There’s not a switch from serving anybody to serving a specific niche… it has to be a transition. As new work comes in you may continue to work in other industries – you need that money for survival so do not turn it away. Accept what’s coming in but no longer market to other communities; only market to the community you want to focus in and you will start to get natural traction. Once you have enough traction in the industry you desire, you can fully commit your business.

 

Show Links

Brutal Pixie  http://brutalpixie.com

Twitter @brutalpixie

Insta @brutal.pixie

Google+ Brutal Pixie Official 

Leticia Mooney on LinkedIn 

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

How To Name Your New Company

If you are picking a company name the old fashion way you are in trouble. You know what I am talking about — brainstorm names how customers can quickly figure out what you do. Oh yeah, and you better pick a name that starts with an “A” in it so you can get first spot in any list of competitors. Not. That old school approach to choosing a company name does not work anymore. Here’s the new way:

1. Third Grade Vocabulary

How To Choose Your Company Name: The first consideration about your company name must be the ease of finding it on the web. Even if you have the coolest company name in the world, if it is hard to spell, people won’t find you on the web or will give up trying. And if they can’t find you on the web, you are losing money. That’s NOT the way to get ahead in business.

The Right Way: Pick short, simple, and easy-to-spell names. Now, I know what you are thinking, “all the short domain names are all already taken.” But alas, they are not. Try an adjective and a noun combination and you open infinite possibilities. Like Red Hat or Blue Cross or… you get the idea.

2. Unexpectedly Visual

How To Choose Your Company Name: When you hear Monster, you think — wait for it — job searches. And what picture comes to mind? A cute monster, right? That is the power of being unexpectedly visual — you tie a common picture in with an unexpected association, and people remember. How about Proctor & Gamble? What picture comes to mind? Nothing really. Maybe a couple of old guys that smell funky, but that’s about it.

The Right Way: Pick a company name that can invoke a picture in your customer’s mind. Then make sure the connection is not obvious, but with a story that makes sense. Once they make the connection, the picture will stay with them for life and you will never be forgotten.

3. Think Globally

How To Choose Your Company Name: When American car manufacturer Chevy introduced the Nova, US consumers bought it in droves. But when the same car was introduced to Spanish speaking countries in South America, the car didn’t sell at all. Once Chevy realized “no va” in Spanish means, “it won’t go”, they quickly renamed the car to Caribe and, sure enough, sales took off.

The Right Way: Realize that the moment you open your doors for business, you are in an international market. Spend a little time researching how your company name will play out in different languages before you commit.

4. Taken

How To Choose Your Company Name: So you pass the first three qualifiers and you love your name. It sounds so great, you are amazed that no one else has thought of it. Think again. Just because you can’t find the name out there on the web, doesn’t mean someone else hasn’t already grabbed it.

The Right Way: A simple trademark search will identify if the name is already legally owned by someone else. And that is way better than the alternative method of finding out – a cease and desist letter. Then check the web to see if the domain is available (most common names are swallowed up already, so you may need to buy it from someone or find an alternative.)

5. Make It A Verb

How To Choose Your Company Name: There is a good chance you found my blog post by “googling” or “tweeting.” They are two examples of businesses that have made their company name into verbs. There is no sweeter music to an entrepreneur’s ears than having your company name become the activity itself.

The Right Way: If your company name ends in a noun (e.g. Toilet Paper Entrepreneur) it becomes much more difficult to become a verb, but it is still possible – especially through acronyms. For example, many readers of The Toilet Paper Entrepreneur are “TPEing” their way to riches, and readers of The Pumpkin Plan are Pumpkin Planning their business.

Doing More, Faster: The Hidden Secret

If you are like most people in business, you are looking to do more, faster. This is evident from even a quick search on Amazon.com for books about productivity. One search will net you over 40,000 hits! That subject is the Holy Grail for the majority of us. We all seem to have the same goal – make a boatload of money in the least amount of time.

Productivity Killers

As you may have suspected, ironically, productivity is decreasing. People are working longer and longer hours, yet we seem to be getting less done. The biggest killer of productivity seems to be the Internet. How ironic, since it is also the most amazing productivity platform ever, allowing us to talk, work, learn, and find virtually anything, at any time.

The problem is that, along with unlimited access to the world, come unlimited ways to waste time by surfing, e-mailing, chatting, and watching. Just one look at the statistics and it is clear that we are wasting a lot of time online during our workday. We log on for just a few seconds…but those ‘few seconds’ turn into a wandering path as we check out a multitude of other things.

Case in point – Nielson reports that 65 percent of all streaming content is watched during the work week, between the hours of 9:00 a.m. and 5:00 p.m. Furthermore, YouTube reports that 2 billion videos are watched each day on their site alone. That’s a lot of lost productivity, especially considering that most watched videos don’t have much if anything to do with business.

Taming the Snowball Effect

But here is the real killer when it comes to continuously diverting your attention with online pursuits. When you are finally ready to get back to work, you usually find that you’ve forgotten where you left off and need to start all over again. And, with that, you might as well surf again…and so you are off to the races!

So, here is what all the productivity books tell you to do: turn off the Internet and turn off your e-mail. I mean, duh, it is so simple! No Internet, no distractions, work gets done.

But there is the problem with that. You actually need the Internet to get work done! So, ultimately, these well-intended directions don’t actually work. Instead, there is a better way to be more productive, and it only requires a piece of paper, a pen and a highlighter.

Here is what you will need to do:

1. Make two columns on your sheet of paper: a small column to the left, labeled TYPE, and a second, wide column, labeled TASK. You will notice that there is no column for “DUE DATE,” because that is not necessarily reflective of the most important stuff. Due dates in fact make us rush to the urgent, but not necessarily the important.

2. In the task column, write down all the tasks you need to accomplish. And while you are working, if the thought of a new task comes to mind, write it down in the TASK list, right then and there. This is important, because if you try to simply remember the new task, you will either forget it or be distracted from the task at hand by trying to remember what else you need to do.

3. Next, once all your tasks are written out, go down the TYPE column and put a dollar sign ($) next to the tasks that will bring you revenue within the next 30 days.

4. Finally, go back through the list and put a smiley face next to the items that serve an existing client.

When you look over your columns, you will notice that most of your tasks don’t actually generate revenue or address a client. Those unmarked tasks are the items that you can tackle later. Now go through your list and, first, do those items that have both a dollar sign and a smiley face together. This is for a client who is bringing in revenue for you. Do that one now!

After that, do all the ones that have smiley faces, followed up by all the ones that have dollar signs. Once you are done with that, you are ready to go on to the other tasks. But here is the key – when you start a new task, use your highlighter to mark it. This way, when you get distracted by the phone or an e-mail, you can go right back to your sheet, see what is highlighted, and get it done. Once you complete a task, put a line through it. It is really gratifying to see items crossed of the list.

Getting It Done

I know it is hard to resist the urge to log online and check your e-mail every five minutes, or watch the new Justin Bieber video (hey, with almost 400 million views, someone is watching it!), but with this new little system you can slip a little, since you will be right back on track instantly – making money and helping clients.

Easy Doesn’t Last Forever

When sales comes easy, and you don’t need to scratch and claw to get it, you will not be ready for when sales dry up. And it will dry up. It always does. Ironically, it is during these easy-peasy times when you need to sell harder than ever. When business is good, you need to scratch and claw the most. . .

. . . because when the sales do dry up, all of your weak competitors will close their doors. Their former customers will need someone new, someone they can be confident in. If you are one of the standing healthy vendors, the customers will come to you.

Episode 60: Overcoming Limiting Beliefs with Stan Shields

Also Available On

 

Show Summary

Martial Artist Stan Shields joins Mike Michalowicz, Chris Curran and Kristina Bolduc for Episode 60 of the Profit First Podcast! Stan shares his entrepreneurial story and talks about overcoming limiting beliefs.

 

Our Guest 

Stan Shields is a martial arts professional who began operating a martial arts school in January 2002 (nearly 14 years now). Having been through the ups and downs of business cycles he has seen many businesses come and go, both in and out of the martial arts industry. Shields martial arts school currently boasts upwards of 200 students.

The martial arts school is not the first foray into business for Shields. He also co-owned and operated a very successful home remodeling company with family, owned and operated a security products company and was involved in a variety of network marketing organizations. Shields professional background also includes approximately 15 years in Human Resources, 3 years in financial services sales, another 5 years in technology sales, and a variety of other positions in corporate America.

Shields has been training in the martial arts since 1994 and has racked up some pretty nice accomplishments during this time. He is currently a 5th Degree Black Belt in the American Taekwondo Association, three time World Champion with the first coming in 1999 in sparring competition as a 2nd Degree Black, the second in 2006 in Xtreme (XMA) Weapons competition as a 3rd Degree Black Belt, and lastly in 2015 in Forms competition as a 5th Degree. Over the twenty plus years of competitions he has been in the top ten for Forms, Sparring and Weapons more than a dozen times. He has won State Champion in these events more than a half dozen times and is currently ranked in the top ten in Forms, Sparring, Weapons, and Combat Weapons Sparring. Shields is expecting to test and promote to the rank of 6th Degree Black Belt in July 2016 and is training for that now.

 

Show Quotes 

The key decision that made a difference in Stan’s business was moving his home office to his martial arts studio. Now someone was always there to answer the phones and take walk ins.

You need to have a live person answer the phone – many people will not leave a message!

There are so many accounting and bookkeeping professionals out there, but in many cases they don’t help you to understand where your money is going.

Take advantage of automated systems! They will save you time and money.

 

Show Links

Website: www.kicks4all.com    

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Fundbox –  the simplest and fastest way to fix your cash flow by advancing payments for your outstanding invoices.

The 7 Ways To Make Your Clients Love You

Love is love is love. The same things that you used to woo your spouse or boy/girl friend with, work with clients too. Why? Because you’re showing them you appreciate them, care about them and are truly interested in developing a long-term relationship with them. I’ll try not to get too syrupy here, but I’m trying to make a point:

1. A rose by any other name wouldn’t smell as sweet. Nothing is as appealing to us as our own names. Learn their names (first and last). Say and spell their names properly. If you’re using a customer management system or digital database make sure whoever enters the names checks and double checks to make sure they’re entered correctly. Put a note in or on their file with the phonetic spelling of their name. Have your employees sing it during a weekly sales meeting karaoke session if you have to, but get it right. Make sure your entire team knows the names of your customers and can pronounce them correctly… because there is nothing we hate more than hearing our name beaten to shit.

2. If you love something, set it free… Corny right? But so true. Give customers insights on the best deals, even if it is not with you. Know your industry and your competitors well enough to know when what you offer doesn’t work as well as someone else’s product or service. This builds loyalty and trust because it tells them you’re actually looking out for them, not just the health of their wallet. Set them free to pursue a better deal-o-the-day and they will always come back to you.

Besides, if you don’t tell them, someone else will and then you’ll just look greedy and self-serving. Beat the competition to the punch. Put your customer’s best interests first, truly first. They’ll thank you with gratitude and referrals.

3. Surprise! Ever show up at home with flowers or a card for “no reason”? Yup. It works because unless they think you’re cheating on them, it screams, “Thinking of you!” when you’re not on the clock. And they will know it. Give an unexpected gift at an unexpected time, for no particular reason other than you’re glad they’re a client. You are glad, aren’t you? Gifts (even small gifts) when unexpected and genuine, build loyal loving fans.

4. Get it done early or faster. A classic in the under promise over deliver effort. Do more than expected and you win fans that keep coming back for more of the same. The key is really in not over promising. Set a realistic promise and then blow it away.

5. Anticipate their needs. Fix things before they happen. As you get more and more clients you can plan for problems your clients might experience before it happens. A contractor in NJ who specializes in kitchen renovation starts his projects by setting up a temporary kitchenette in the dining room of a client’s home. When the renovation gets under way, clients are thrilled to have a mini-kitchen they never thought they would need. This says, “thoughtful and considerate,” in ways you can never imagine.

6. Show appreciation every chance you get. Say “Thank You.” Show gratitude before, during and after. Never take anything for granted. What this does is convey the very real message that they do matter. Studies show that the more someone appreciates us, the more likely they are to respect us and vice versa. The more respect, the tighter the bond and the longer the relationship. You do the math. The return on investment for showing appreciation is huge!

7. Celebrate. If you’ve ever forgotten an anniversary, you know nothing says “caring” like remembering and celebrating the memory. Invest in an anniversary cake and card. Show your customer how much you value them, by sending them a cake and card on the one year anniversary.

See? It’s not that hard to keep your clients and customers happy, loyal and feeling appreciated. Call it karma or good business practice, customer service, or just simple human decency, but what goes around comes around. If you follow these seven practices your clients will keep coming around.