Mike Michalowicz's Blog, page 89

Episode 26: Business Appreciation and Profitability Andrew Moon and Peter Verlezza

Also Available On

 

Show Summary

Andrew Moon and Peter Verlezza join us for Episode 26 of the Profit First Podcast. Andrew and Peter share their experiences with working on their businesses and increasing profit margins.

 

Our Guests

Andrew Moon (left)

I’m a serial entrepreneur who has launched and run several successful businesses of my own since age 8. I am the founder of Orange Nomad, a unique business consultancy that takes a progressive approach to educating small businesses and entrepreneurs on all things digital.

I am also the author of “Insider Technology Secrets That Will Make Your Business Run Better And More Profitably”. The seat of my passion has always been the entrepreneurial spirit, which drives me to bring the technology and business philosophies of “The Big Guys” into small business. My goal is to guide small businesses in implementing their business vision, while aligning their digital strategy to meet that mission.

 

Peter Verlezza (right)

For over 28 years, Peter Verlezza has been the architect of technology solutions that make sense for medical practices, businesses and non-profits.  His unique way of approaching challenges comes from a belief that it all starts with people.

In the early years, Peter worked at his family’s deli and catering businesses where the foundation of exemplary customer service was instilled by his family.  The value of serving has extended to his professional relationships with clients as well.   Peter internally asks the question, “Is this in the best interest of the client?” while remembering the old saying, “You can’t change what you have been handed only how you deal with it.”  He approaches both of these with a sense of humor, charisma and genuine care for others – it’s become a way of life.

He is the author of 3  books, “Hassle Free IT MD,” and the 2 Amazon best selling books, “The Tech Multiplier,” and “The Business Owners Essential Guide To IT and All Things Digital.” Peter recently completed an audio series titled “Touching People In Appropriate Ways” a series that speaks to the importance of connecting and communicating with an audience. That series has turned into a podcast of the same name where he interviews movers and shakers around the world to find out what they do in their businesses or professions to “Touch People In Appropriate Ways”.

 

Show Quotes 

When working on your business, document and systematize everything (once process at a time) to bring about repeatability.

Have clarity on who and who not to do business with.  Focus on the clients you want to serve, rather than having to spread the love to some people that you don’t want to be involved with.

Make the decision to profit from the business you build.

In order to start appreciating what you have, start rewarding yourself. The small bites that you take will be bigger than no bites that you didn’t take

Lesson of the day - When it comes to profitability there are 3 steps to get there.

1. Cut costs.

2. Build efficiencies.

3. Increase your margins.

 

Show Links

Andrew Moon

Website: www.orangenomad.com

Linked In: www.linkedin.com/in/orangenomad/in

Twitter: https://twitter.com/theorangenomad

Facebook: www.facebook.com/orangenomadllc

Peter Verlezza

Podcast: www.tpiaw.com

IT Business: www.smbnetworksllc.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!

What Are Your Office Traditions?

As I am writing this, I just got back from doing push ups. In fact the entire office just did push ups.  Why, you ask? Because it is our office tradition.

If any one of us here asks a question that really didn’t need to be asked (and resulted in unnecessarily shirking work or dumping it over to someone else), no matter how small… we do push ups. Everyone.

It is a fun, goofy tradition now. Every day you will hear someone yell “Push ups!” and everyone hits the floor. It bonds us. It make us unique. It makes us, us.  And when a company has traditions and rituals to bond around, the culture gels.  And a powerful corporate culture can take on any challenge the competition presents. It is your greatest opportunity… start traditions.

The Most Important Conversation In The World

My son played in an 8th grade lacrosse game this weekend.  I use the term “played” loosely. He saw seventeen seconds of field time.

When we got in the car to head home he was outwardly upset. He wouldn’t say a word, and just stared out the window. A tear came down his face.

There was silence for entire ride home. After the twenty minute ride home we pulled into the driveway and I turned.

I said, “I love you more than anything, son.  I don’t care if you play an entire game, seventeen seconds, or only do warm up drills. I am proud of you no matter what, and you are my favorite player of all time.  I want you to learn something from this experience, though.  Not what happened on the field, but what happened during the ride home.”

“The conversation during the ride home, was the most important conversation you have ever had about lacrosse.  You see, son, the conversation that you had for the last twenty minutes, in your head, will determine your future with the sport.”

“You can say whatever you want in your head. You can say the coach is unfair. You can say that you are not being treated fairly. You can say that others don’t deserve it. And then you can say ‘I don’t want to be part of this.’ and quit (either emotionally or walk off the field). You can say the decision is theirs.”

“Or you can say that you want this. You can say that you will perform harder and stronger at practice than any other player. You can start earlier and end later. You can practice on your own.  You can decide to never put your stick down. You can say that your success is your decision.”

“You see, son, your entire life’s experience is a result of the conversation in your head.”

A tear came down my face. I love him with every ounce of my soul. And I pray that he learns this lesson. I pray that you and I do, too.

The most important conversation in the world is the one you have in your head. What are you saying?

The 8 Worst Pieces Of Advice Business Owners Receive About Money

I know that advice is free and plentiful, but not all of it’s worth taking.  Particularly when it comes to finances, it’s best to take advice from people who’ve successfully been there, and done that.  Listen to the experienced experts.  That said, here’s my top list of business advice you should NEVER follow.

1. Raise lots of money.  

The reason this piece of advice is a flop is because it suggests that raising money – in and of itself – is the end result, rather than a means to an end.  While there may be times when you do need an infusion of cash in order to accomplish a goal, the mistake is in making money-raising your primary objective.  Investors want to bet on success, and the real value of a company isn’t how much cash it can raise, but how much good, successful work’s being done.  Don’t spend your time chasing other people’s money (which is far too easy to spend.)  Spend your efforts earning, rather than raising, money.

2. Always have five years of financial projections.  

Now I get it – you may have had to do some projections for your business plan in order to get some start-up money, but it’s time we called financial projections what they really are – a guess!  Trying to forecast where you’ll be in five long years is an exercise in futility, and is often simply a waste of your valuable time.  You’re much better off investing your energy in developing an action plan to target a specific market (and then executing it,) rather than piddling around trying to figure out projections that may never come true.

3. To make big money, you need a big business.  

Let’s face it, the bigger your business grows, the bigger a target you are for your competitors.  In fact, the riches are often in the niches – smaller marketplaces with far less visibility and competition.  You don’t have to be big to be profitable.

4. Save money by hiring friends and family.

This piece of advice may actually be the worst, because you can end up wreaking havoc on not just your business, but also your personal life.  You may think that hiring a friend – a known quantity – is the safest bet, but you must remember that your shared history isn’t based on your business.  Business relationships should be – first and foremost – centered on your business.  Hiring friends and family is almost certain to put you in the position of making business decisions based on your emotions and your personal ties, rather than on what’s fiscally sound for your company.

5. Beat the competition on price.  

Now it’s possible to win the price game – but those bids are only successful if you’re a big company (think Walmart.)  The fact is that low price = low margin, and success only comes when you do huge volume.  Small businesses are much better off leaving the price competition to the big boys and focusing on other areas.  If you’re selling your brand based on quality or convenience, you’ll be able to charge a premium price, and your margins will look much healthier.

6. You have to spend money to make money.  

Yes, money makes things easier, at least in the short term.  But here’s the thing:  money makes you lazy.  It’s when you’re on a tight budget that you’re forced to become innovative – find unique ways to solve problems, and that’s where the magic happens.  Throwing money at a problem is rarely the solution.  Take a step back and find an efficient, creative way to accomplish your goals, and then the money will start to flow.

7. Leverage your debt.  

There nothing more dangerous and addictive than OPM (Other People’s Money.)  Once you’ve had it, you’ll continue to crave it – that easy solution that lets you kick the can down the road, rather than doing the hard work of solving your problems.  If you continue to spend, thinking that your debt will – at some mythical point – resolve itself, you’re wrong.  Don’t jeopardize your future earnings by burying them under a mountain of debt.

8. Pay yourself last.  

So many of us started out believing that only by sacrificing our paychecks could we get our business off the ground.  This last piece of advice is responsible for more burned-out, bitter, resentful, failed entrepreneurs than I can count.  Think about how you’d treat your very best rock star employee.  You’d treat ‘em like gold and keep them happy, right?  Well YOU are your best employee.  You owe it to yourself and your company to pair fair value for your valuable work.  Don’t sell yourself short.  Your business should support you, not the other way around.

We hear these catchy little pieces of advice so often that it’s far too easy to believe that they must be true.  Your company’s future is far too valuable to risk on trite sayings that will create far more problems than they’ll solve.  Get your advice from successful folks who have real experience on their side.

The Perfect Hobby

I am reading The Miracle Morning by Hal Elrod and it has me thinking (and exercising). I am so focused on work all the time, that it can be exhausting.  It’s surely not healthy.

When I am eating dinner, I am thinking about what I can do to improve operations. When I am in the car, I am thinking about clients. When I am working, I am thinking about working more.

In Elrod’s book he suggests along with exercise, affirmations and journaling that we meditate. He suggests that we get our mind off the day to day.

Not thinking about work is really hard for me, and I suspect you too. But I found a solution: a hobby.  The perfect hobby, I believe, is really a form of meditation (or at least allows our heads to disconnect from work).

For me the perfect hobby is playing guitar or working in the garden.  Both of those things require enough concentration, that I don’t (or can’t) think of work. I effectively meditate and when I am done, I am refreshed.

What do you do that allows you to disconnect from the day to day, and when you are done makes you feel refreshed and energized?  That is your perfect hobby.

 

Episode 25: Profitable Neuromarketing with Roger Dooley

Show Summary

Author and Entrepreneur, Roger Dooley,  joins Episode 25 of the Profit First Podcast. Roger shares a few tips on how to use neuromarketing to increase profitability in your business.

 

Our Guest

Roger Dooley is the author of Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing, and writes the popular blog Neuromarketing as well as Brainy Marketing at Forbes.com.  He is the founder of Dooley Direct, a marketing consultancy, and co-founded College Confidential, the leading college-bound website.  That business was acquired by Hobsons, a unit of UK-based DMGT, where Dooley served as VP Digital Marketing and continues in a consulting role.

Dooley is focused on spreading his ideas through writing and speaking, with limited engagements for training, coaching, and facilitation.

Dooley spent years in direct marketing as the co-founder of a successful catalog firm and also was director of corporate planning for a Fortune 1000 company.  He has an engineering degree from Carnegie Mellon University and an MBA from the University of Tennessee.

 

Show Quotes 

95% of human behavior is non conscious, and only 5% is conscious.

You can reduce price sensitivity by re positioning your product as more of a luxury item.

Sometimes you’re just in a commodity market, therefore if you raise your price 1 cent over your competitors you will lose all of your business. However, make yourself the more attractive alternative – for example: Amazon.com.

First impressions make a big difference. People will form a first impression of you, your product, your website, etc. in just a fraction of a second. Then as you have their attention, even if you present information that contradicts their first impression, a portion of their first thought will remain in tact.

Use sensory metaphors/descriptive words to help people be more in tune with what your saying, and feel what you’re feeling.

You can use psychology to persuade yourself to do certain things. Increase the friction of performing a habit you don’t want to have; if you make it more difficult to do something you are less likely to actually do it.

Profit – it’s all in your customer’s head.

 

Show Links

Roger’s Website: http://rogerdooley.com

Neuromarketing: http://www.neurosciencemarketing.com/blog/

Forbes blog: http://www.forbes.com/sites/rogerdooley/

Roger Dooley on Twitter: @rogerdooley

LinkedIn: https://www.linkedin.com/in/dooley

Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing:  http://www.amazon.com/Brainfluence-Persuade-Convince-Consumers-Neuromarketing/dp/1118113365/

 

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!

How To Raise Prices When You Are Afraid Of Losing Clients

Inevitably the biggest challenge you will ever get for raising your prices will not be from your clients, but will come from you.  You will fear losing your clients, even if the price increase you are considering brings you up to prices that are comparable to your competitors.

That fear is normal.  But the reality is you will rarely lose clients when you increase your prices.  After all if you lose a client over prices, they are price shoppers… and is that really they client that you want.

Sometimes that fear is insurmountable without some strategy, keeping entrepreneurs stuck in a bad pricing model. If that is your situation, use the “More For Me” pricing increase strategy:

1. Tell your best client that you company is growing and bringing on new people (contractors, employees, part time, full time, it really doesn’t matter… you just need to explain that you are growing).

2. Tell them that you and/or your key employees will be continuing to do really the high end stuff, and that you need to charge a premium for that  time.

3. Tell them that some clients like working with you (and/or your best employees) so much that they have requested to continue working with you exclusively and understand that as a result can’t do other high-end stuff for clients.

4. Then say to make it fair for you (and all your clients), that you are charging your premium rate for all work.

5. Tell the prospect that your other clients have no problem with this and you wanted to make it available to them if they are interested.

Don’t say another word and see what they say.

If they won’t proceed with the higher price and will seek the services of another firm, you can explain that is exactly what you are making available through your new people. Conversely if they say they are ok with the higher price to continue working with you and/or your best employees you have achieved what you want.

Either way you keep the client and aren’t at much risk of losing them during your price increase.

The Biggest Determinant Of Success

The biggest determinant of success is the level of commitment you have to being successful.

5 Ways To Help Manage Someone You Hate

Hate your co-worker or employee? Congratulations!  You have completed the first step in making things work.  Acknowledging you have a problem, after all, is the first step.

Ironically, teams where everyone likes each other are typically weak teams.   People (that includes you) have a tendency to like people who are like them.  We revel in similarities.  Grew up in the same town as me?  You’re awesome!  Went to the same college? Hot diggity dog!  Enjoy the same TV show as me?  You’re practically my twin – gosh you are amazing!  With all those similarities, a team of copy-cats will have tunnel vision and won’t have complementary skills.  Great teams don’t like each other nearly as much as they respect each other.  There is greatness in differences.

Abraham Lincoln was famous for building a political cabinet of personal enemies.  In a country that was polarized by a horrific civil war, Lincoln’s genius was to assemble a cabinet of people who were his sworn enemies.  Members of his cabinet may not have liked him (or vice versa) but it served what the country (client) needed.  He built a government where every American, regardless if they were from the Union or the Confederacy,had at least one person in the government who they liked (or at least felt represented their best interests).

Your company has a mix of clients with different needs and demands of their own.  Your company has a mix of things to do, which requires special talents.  Your company needs diversity, but along with that may come personal conflict (just ask Abe).  Here is how you manage the people you hate:

 1. Stop Trying To Like Them - A big fallacy of managers is to believe they need to like the person they are managing.  That is not the case at all.  The manager just needs to respect what the employee does.  And when I say “respect,” I mean to see genuine value in a talent or ability of that employee.  Stop trying to find things to like about the employee that you hate, find something to respect.

2. Find The Bigger Enemy - My consulting group was engaged to help grow a business run by two sisters. The problem was finger pointing. Each sister blamed their struggles on the other, and they hated each other.  That was until they found out their father was diagnosed with cancer.  Immediately they had any enemy (the cancer) much greater than their hatred for each other.  Instantly they start to work together amazingly well.  Seek to find a common enemy (perhaps a competitor) that you and the employee you hate can target together.  A common enemy makes the best of friends.

3. Distance Makes The Heart Grow Fonder -  Short, temporary bursts of disgust trumps a continual stream.  If you just can’t get over the fact that you can’t stand the employee you manage, put distance between you.  Put them in a different part of the office, or a different office altogether.  Of course, you can fire them too… but we are working under the understanding that you have an employee that is great at their work, you just can’t stand them.

4. Hate Your Hate, Because It Hates You - The greater the hate you have for your colleague the greater the burden is for you to carry the weight.  Hating them doesn’t hurt them, it hurts you in the form of stress.  The fix?  Forgiveness.  Forgiving your sworn enemy does not make what they did alright, but it does release the stress for you.  How do you forgive?  Recognize that they are a result of everything they have experienced in their life, just like you and me.  If you experienced every single thing they did, in the exact same way and at the exact same time they did, you would be the same as them.  They are just human after all (like you and me).  Then simply say the words out loud, ideally to them.  And if you can’t forgive them face to face, go look at a mirror and say out loud that you forgive them.  Repeat it over and over until you feel you forgive them.  When you feel forgiveness, the burden you carry will evaporate and you will be able to manage them again.

5. What’s Your Problem? - The problem with disliking or hating others always boils down to your thoughts. Challenge yourself to explore what you don’t like about yourself that needs to be fixed.   When you seek out to understand what you don’t like about the person you hate, you in fact discover more about yourself.  Often, when we dislike someone, it is because we see a behavior in them that also exists in us.  Conversely, if that nasty, “hate worthy” behavior exists in them, and not in you, you will feel sorry for them but not hate them.  Hate is an indicator that something in you needs to be fix.  Appreciate the hate as an indicator of an opportunity to fix something in you.  And when you do fix you, you will be able to manage them better.

If Abraham Lincoln was able to manage a cabinet full of enemies and put a struggling country back onto the track to greatness, I think you just might be able to manage those employees you don’t like (but respect) and put your company back onto the path to success.

Growth Happens When You Say Ouch

I meet with my mastermind once a month.  We sit down together for five hours to discuss our business (and personal) challenges.

This past week, I was the first to present. My challenge? My brand. I think it is time to grow (after all if you aren’t growing you’re dying). I think it is time to mature it. But how?

I presented my thoughts to my peers and they gave their feedback. RJ looked at me, and said “No offence, but your stuff is kinda goofy.” Ouch. That hurt.

My goal is not to be goofy, it is to be approachable.

That “ouch” moment is a gift. That is when a sore spot is exposed. That is the spot where growth needs to happen.

My job is to grow out of the goofy, yet be true to ensure I am approachable.  Pedestals are definitely not for me, nor is trying to lead people off an island dressed like Gilligan.

What makes you go ouch?  Grow there.