Mike Michalowicz's Blog, page 92
March 23, 2015
Episode 20: Profitability and Leadership Darryl Lyons
Author and business owner, Darryl Lyons joins Episode 20 of the Profit First Podcast. Darryl shares how authenticity and good leadership skills can help your business benefit profitably.
Our Guest
Darryl Lyons: Author of Small Business Big Pressure. Endorsed by 2 NY Times bestselling authors (Dave Ramsey & Dan Miller), an NBA Hall of Famer, and 16 successful business owners. His business is considered one of the best places to work in San Antonio and one of the fastest growing companies in the city (SA Business Journal). He has been a contributor for the Good Men Project and the San Antonio Express News. Darryl was recognized as one of the top 40 business people under 40 and the mayor of San Antonio named a park, the Darryl W Lyons Park, after his work helping to redevelop part of the city.
Show Quotes
When you are authentic in who you are and what you believe in, people of all religions and faiths genuinely appreciate it.
As a leadership we set aside about 41 principles when we first started our business that we abide by, which has become the framework of the company. “No gossip” and “Robust conversation surfaces reality” are just two examples.
It’s the job of a leader to constantly remind your employees of your principles.
I take pay not as an owner, but as an executive of the company. The reward for my risk as an owner is from the profit. We take profit quarterly as long as our emergency reserves is adequate (we want to make sure we always have 3 times our monthly operating expenses).
We have a target profit margin of 15%-25%; if we reach 30%-35%, I take a good look at our expenses and say “is there a place here where I am not investing in our people?” and reinvest accordingly.
Show Links
Find Darryl on Twitter: @darrylwlyons
Website: www.smallbusinessbigpressure.com
Show Sponsors
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!
March 20, 2015
How To Get Things Better And Cheaper
In a few rare moments of downtime, I was flipping through TV channels when I happened on Suze Orman. I paused to watch a bit, and her words were profound. She said that financial freedom today achieved by getting more pleasure out of what you save rather than what you spend. While Suze was talking about personal finances, I immediately thought that the same principle holds true for businesses as well.
Set your goal to find reward in the money and resources you save, rather than what we spend. Here are seven ways to get it done:
1. Barter. You need business cards printed, and you’re willing to trade your web development expertise. While bartering used to be limited by your ability to find someone who needs exactly what you have to trade, websites like Tradeaway, OurGoods, and InstantBarter have simplified the process and broadened your scope. Dollar values are applied to your products or skills, and you can trade for credits within the site. It’s important to remember, though that time is money, and it’s important to get fair value for your time.
2. Buy used. Anything that you purchase new begins to lose value as soon as it belongs to you. Do your homework and find lightly used products whose history you can learn. Whether you research a used car’s VIN or whether you call a manufacturer to see if they’ll honor or even extend an original warranty, a little homework can make your used purchase better than new in terms of value.
3. Buy generic. We’re not just talking about antibiotics. Brand names confer confidence, but not necessarily better quality. You may find that you’re better off paying for an inexpensive, highly rated printer, rather than a printer with a fancy brand name whose biggest claim to fame may be its reputation for excessive maintenance costs.
4. Borrowing. If you carefully assess all the equipment your business owns, you will discover that much of it is used infrequently. Do you really need to buy expensive camera equipment, or can you borrow it for the three occasions each year when you really need it? Particularly for big ticket items, finding a friend or even a staff member who’ll let you borrow a box truck or a 200 person tent once or twice a year lets you spend your money on the things you use every day.
5. Leasing. Formalized borrowing. Short term leases make perfect sense for items used occasionally or items you intend to replace in the short term. If it’s important to you and your clients that you have a late model car (and you put limited miles on that car) then a lease is perfect. You always look current, and your expenditure over the term of the lease will be lower than if you’d bought the car. Expensive copiers and phone systems, too, may be cheaper to lease – particularly if you can negotiate to have maintenance included.
6. Sharing. It’s not just for kindergarten anymore! When you think about how the 80/20 rule applies to office space, for example, you realize that if you share common spaces – conference rooms, restrooms, kitchen space – you can share out the expense for those important, but infrequently used, spaces. Find businesses with similar needs, and find ways to share common resources. Spend your money where you spend your time.
7. Just wait. Time can be your best negotiator because buying is frequently tied to emotions. Think about the bright red sports car as a personal example, and think about its business corollary: the newest, shiniest office equipment. You’re thinking about how good that new espresso maker could be for office morale; you’re imagining your staff’s delight at a round of Herman Miller Aeron chairs for everyone. Stop. Give yourself a few days to think the purchase over, and that excitement will wane and let you make business decisions with a clear head. If you wait, you will get things more cheaply.
Buying is drenched in emotions, and Suze Orman rightly identifies this emotion as one of the factors that can keep us from making the very best fiscal decisions. We need to change our thinking. We need to learn to see the value in money and time saved, rather than in money and time spent.
March 19, 2015
Integrated Counsel
Integrate Counsel. You probably have never heard that term before. And I suspect, to some degree, you are now curious what it means. They are professionals who will work from your offices so they can integrate into your company’s culture. Then when you hire them to do your legal work (like writing employment agreements, etc.) the documents are both legally sound and speak to your corporate culture.
Lawyer. I suspect you are already familiar with that term. And I suspect you are not curious enough for me to explain what they do, since you already know.
Integrated Counselors and Lawyers are barely different. In fact either one could do the other ones job just as well. But Integrate Counsel has your attention and interest (even if it’s just momentary) because they use a different name than you are familiar with.
Different gets noticed. Different dictates interest. Different wins.
Be different. Even if it is just the professional title of what you do.
March 18, 2015
Kindle Unlimited Teaches Us 5 Critical Lessons
My most recent book, Profit First, launched on July 8 of last year. Ten days later, on July 18, Amazon launched its new subscription service, Kindle Unlimited. Publishing a book is always a roller coaster. It’s constant checking of sales and reviews, hoping that readers find value in all the hard work you’ve done. Now sales of hard copy books are updated daily or weekly, but Kindle sales are updated hourly, giving me the opportunity to watch selling trends, and a prime opportunity to see the effect of Kindle Unlimited.
My launch went very well, and after about the first week, the Kindle sales of my book had leveled off to about fifty per day. The day that Kindle Unlimited began, my sales dropped to twenty-five a day. At first, I panicked. But then I looked more closely. Though sales have continued to fluctuate some, if you add the “free” downloads for Unlimited members to my sales, the number of my books being read is actually up slightly, compared to the sales before the Unlimited program began.
The subject of payment for books that are part of the Kindle Unlimited program is an interesting one. Typically, when you list a Kindle book for sale, you get a percentage of the selling price, and Amazon keeps the rest. The way that payment goes to authors in the Unlimited program is different, though. Amazon establishes a pool of money and distributes it based on the percentage of the free downloads that your book experienced, as long as readers read at least ten percent of your book. It’s hard to tell how profitable the Unlimited program will be, since it’s new.
My first book, The Toilet Paper Entrepreneur, was self published. Because I didn’t have a publisher to consult, I immediately put TPE into the Unlimited program, and since the launch of the program, downloads of TPE have increased dramatically. While I don’t know exactly how much money I’ll bring in from the decision, what I do know is that more people are reading my book as a result of Kindle Unlimited.
So I know that Unlimited is increasing my exposure, but here’s the really interesting thing – the big publishers – Simon & Schuster, Hachette, HarperCollins, MacMillan, and Penguin – have opted out of the program. They’re waiting to see if the program will serve their interests. While some self-published authors may see the big houses’ reluctance as a cautionary tale, I see it as a huge opportunity. As the number of Kindle Unlimited users grows (and it will,) my chance for exposure is that much greater. The longer the big publishers steer clear, the more readers I have access to.
I understand publishers wanting to hold off and see if the financial gain is worth it, but here’s why I know it’s been worth participating in Unlimited for me: since the launch of my most recent book, I’ve seen a dramatic increase in the number of requests for me to speak at a variety of events. I have speaking engagements booked all over the world, and that increase must be due to the greater number of people who’ve been reached by my book.
Self-published authors – a rapidly growing category – would do well to realize that there’s more to the bottom line than just book sales. If you can distribute a boatload of free downloads, you’re building your brand, and there are a host of other ways to turn that exposure into dollars. Whether you collect fees for speaking engagements, or whether you use the popularity of your free downloads to generate interest in your next book, readers are readers, and favorable impressions build your brand.
Profit First has done so well for me that I’m considering stepping up the schedule for my next book in order to capitalize on the opportunity to reach readers before the 600,000 volume Kindle Unlimited library becomes more crowded by the entry of a major publisher.
Authors would do well to think about the example of the music industry. Artists and labels who at one point opted out of participating in services like Pandora and Spotify are changing their tunes (pardon the pun.) Exposure is everything, and as the way that people interact with music continues to evolve, artists who choose to stay stagnant will have a dwindling market share to show for their decision. Savvy writers will get out in the forefront of this new trend and will cash in big time.
March 17, 2015
How To Increase Your Confidence Instantly
Confidence isn’t about other people. Confidence is really about the stories we tell ourselves in our heads. It’s revealed in our body language, our word choices, and the image we project. In general, we find confidence an appealing, attractive trait in others, which means that if we can boost our own confidence, then the image we convey is perceived as stronger, more dependable, and more charismatic.
Want to boost your confidence? Here are 8 proven techniques:
Physiology.
The next time that you’re sad about something, try to smile convincingly. You’ll find that it’s very difficult, and that’s because there’s a connection between our bodies and our minds. If you want to project confidence, then change what your body’s doing. Stand or sit up straight, put your shoulders back, put your chest out, and you are getting both your body and your mind into a more confident state. When you know you have a difficult call or conversation, get yourself physically prepared.
Mind talk.
We all talk to ourselves, even if it’s an internal monologue. Change those words. Choose a powerful mantra for yourself, and repeat it until you believe it (so that you can make it true.) Tell yourself, “I am the best accountant, and I am going to show the world.” Focusing on the process of showing the world that you are successful and valuable lets you create a narrative – a story – that doesn’t have to be complete to be useful. You don’t have to be acknowledged as the best in your field … yet. You just have to be working on it!
Exercise.
It’s absolutely critical that you get regular exercise. Study after study has proven that exercise boosts creativity, focus, stamina, and productivity – all of which makes you better in your chosen field. An often overlooked benefit of exercise, though, is its profound effect on your confidence. Knowing that you’re taking care of your body will help you stand up straighter and feel better able to handle business challenges.
Sleep.
Like exercise, sleep is mission critical! Sufficient sleep is an essential component of health, so I often wonder why so many people boast about surviving on very little sleep. The tendency to emphasize how busy (and important) we are by claiming that we simply don’t have time to get enough sleep is doing us a great disservice. If we get the sleep we need, we’re sharper, more efficient, and much more confident. Sleep gives us the energy and the willpower we need to achieve our goals.
Hang out with confident people.
There’s a saying that resonates with me: You are your five closest friends. Choosing confident people for your inner circle will help you create and maintain a confident demeanor in your business dealings. Now remember – confidence and arrogance aren’t at all the same thing. I’m not suggesting you surround yourself with a bunch of blowhard windbags. Pick people who are genuinely (which sometimes means quietly) confident.
Humility.
Humble is not the opposite of confident. Humility is the recognition that we’re human, and therefore fallible. Confidence is what brings us through our failures, mistakes, and difficulties to emerge as successful people. Humility is what helps us prevent our egos from getting in the way of our success.
Live your passion.
When you’re deriving joy and energy from your work, rather than letting work consume your soul, increased confidence will naturally follow. When your work becomes something more than an obligation, then you’re on your way to becoming more confident.
Exercise your confidence.
Confidence is like a muscle. If you build it and push it, it will fail from time to time, but it will also heal and grow stronger than it was before. Pushing yourself to let your confidence carry you past your comfort zone can be the key to achieving great things … with even greater things in the future.
Confidence comes with achievement, for sure, but it can also derive from the certainty that you’re on the path to success – even if you haven’t yet achieved that success. Confidence doesn’t mean that you never have doubts, but it does meant that you believe in yourself – and your vision – enough to keep moving forward working toward achieving your goals. One last thing that I love about confidence: it’s self-perpetuating. If you believe, then you’re more likely to succeed, and that success, in turn, gives you confidence!
March 16, 2015
Episode 19: Time Tracking and Maximizing Profits with Matt Rissell
Matt Rissell, co-founder and CEO of TSheets, joins Episode 19 of the Profit First Podcast. Matt dives into how time tracking protects employees and helps employers maximize their profitability.
Our Guest
Matt Rissell is the co-founder and CEO of TSheets, an Eagle, Idaho-based technology firm that provides online, GPS-powered time tracking for companies with hourly employees.
Matt started TSheets, his sixth successful startup venture, in 2006, after discovering a gap in the employee time tracking and reporting market. Since then, the company has been named Idaho’s Innovative Company of the Year, currently employing 45 of the best employees in the business and growing and circling the globe with customers in over 50 countries.
With a passion for startups, strategy, and identifying high-growth opportunities, he speaks at conferences nationwide and is a regular contributor to The Huffington Post. Matt serves on the executive committee of the Idaho Technology Council, the advisory board of the Boise State University Computer Science Department, and the Vistage CEO Network. He has also received the 40 Accomplished Under 40 Award from Idaho Business Review, Cartridge World’s Franchisee of the Year award, and was named to the Verizon Wireless President’s Cabinet.
A native of Colorado, Matt enjoys spending time in the mountains of Idaho with his wife, three children, and his weimaraner, Brushy — bird hunting, bowhunting, and fishing.
Show Quotes
For business owners, typically your single largest expense item on your Profit and Loss statement is labor.
Tracking time is important for accuracy, protection of the employee and the employer. It’s also about job costing and making sure you allocate time to the right projects, so you know where your largest resource is being invested.
A time tracker protects both the employer and the employee. From a profitability standpoint, just by implementing a tracking system you can save money off of the top line on your payroll. It helps eliminate the possibility of extra minutes employees may be [unintentionally] giving themselves. Once time is tracked in the system, an employer can modify the employees time – but all changes are tracked in a log for employees to see (who did it, what they changed and what time they changed it).
Matt’s favorite quote: “Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” – Calvin Coolidge (30th President of the United States)
There will always be people out there who are smarter than you, better funded than you, have a better education, a better pedigree or are more talented or whatever; but you get to choose if you give up or not.
Different personalities in business partners can compliment each other if you can learn to listen. We had a business coach that helped us communicate for the first 2-3 years because it was really difficult; once we were able to hear each other and communicate with each other it changed the company dramatically.
As the business grows, the business owner has to change their communication style and change the way they fit into it. Make sure everyone in the company understands where the company is headed, what it’s priority is and where they fit into the bigger picture.
Treat your employees the best that you possibly can and hold them to high expectations; employees naturally want to be held to higher standards, because people with drive and work ethic want to care about what they create. In return, your employees will want to do everything they can to help your company succeed.
Show Links
Website: TSheets Time Tracking
Matt Rissell on Twitter: @MattRissell
Show Sponsors
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!
March 13, 2015
Our Visit to MSNBC’s Your Business
Mike Michalowicz was at MSNBC’s Your Business yesterday, to discuss pivoting, tax strategies, and other business strategies. Be sure to tune into MSNBC this Sunday at 7:30am ET (or set your DVR) to see the show!
Mike Michalowicz getting ready to go on set… or become a camera man.
Mike Michalowicz talking with JJ Ramberg, host of MSNBC’s Your Business. Notice Mike’s socks… they are the USA flag.
Ron Saharyan, Co-Founder of Profit First Professionals, with JJ Ramberg, host of MSNBC’s Your Business.
Mike Michalowicz and JJ Ramberg on set at MSNBC’s Your Business.
Ron Saharyan working the camera at MSNBC. Don’t quit your day job, Ron!
March 12, 2015
The Best Wins, The Better Goes Unnoticed
The faster runners are unknown, but the fastest is – Usain Bolt.
Stronger financial returns are nice, but the strongest financial returns are what everyone wants.
There out countless companies that are better than the competition, but they don’t get noticed. Only the best company gets the attention.
Endeavor to be the best in your niche. Otherwise you’ll never get the attention (and the customers) you deserve.
March 11, 2015
A Lesson In Horrible Service (A Review of Simplify Commerce)
My experience with Simplify Commerce exemplifies the most important lesson in customer service: pick up the phone. Make sure you employ this lesson in your own business before its too late.
First a little background. I started a new business this past summer to help accountants and bookkeepers stand out in their extremely competitive industry. Just like any start-up, we set up our new office, hired our staff, and configured our e-commerce components. The shopping cart we selected was 1ShoppingCart (highly recommended), the merchant service provider was Simplify Commerce (avoid at all costs).
As I configured the shopping cart, Simplify Commerce was presented as the “suggested” credit card processor. Perhaps Simplify is part of 1ShoppingCart, or maybe it has a referral alliance or possibly they paid 1ShoppingCart a lot for the exposure. Regardless, it is highly influential marketing. It is just like your doctor suggesting the specialist you go to. If they suggest it, you do it. I followed suit and selected Simplify Commerce.
The setup was easy. The pricing and fees were not even close to competitive (albeit I only figured that out in retrospect since I didn’t take the time to competitively shop). Our first few payments processed, and then the first problem arose.
Our per day release of funds was capped to $500. I inquired with Simplify Commerce to see what we could do to resolve this. My emails to support where 1. not responded to 2. pointed the finger to underwriting and left me on my own to resolve with them.
Now, I get that we were a new company and that Simplify Commerce needs to mitigate its risk. But there is a lot more to us, that the simple application we submitted wouldn’t explain. So I just wanted to hop on the phone with someone at Simplify Commerce to explain more about our organization and to see what we needed to do to get past this problem. Welcome to problem number two.
Simplify Commerce doesn’t like to talk with their customers. Email communication are their preference – scratch that – no communication is their preference. Some technical questions were answered by their techie guy (he even picked up the phone and called us a few times). But the financial decision makers (ahem, underwriting) would never pick up the phone. Just abrupt emails, that came out of no where.
One email, one day stating that the $500 limit was adjusted up. One email, one day stating that since we took a client payment for an annual membership our account was on hold (as in we could continue to collect payments, but that Simplify Commerce would permanently withhold the funds until the situation was resolved… via email). One email, one day saying our account was reopened. Then the next day that it was on hold.
Finally out of pure frustration, I wrote the most aggressive email I could, hoping it would somehow get someone to call me. It worked! 48 hours after demanding I talk with someone, a person actually called me.
After thirty minutes on the phone, we resolved everything. Our account was fully cleared, funds were released. As we completed the call, the underwriter said “I wasn’t aware of how established your company and brand was. I wish we had known this. Your account is fully open.”
“I wish we had known this?” How absurd! Simplify Commerce did everything in its power to not learn about my business (their client). Simplify Commerce did everything it could to avoid communication with me (their client). Simplify Commerce did everything it could to make it difficult to do business with me (their client).
I left Simplify Commerce that day for a new merchant service provider, NMI (highly recommended). Oh, and during the on-boarding process, the NMI representative called me. We have talked multiple times since. The result of being able to talk with someone? We have received inter-change plus rates (far better rates than Simplify Commerce), we can accept annual member payments (something Simplify Commerce prohibits), we have no cap on receivables (something Simplify Commerce forced on us) and, surprise, surprise we have access to real live humans. Twenty four by seven.
The lesson is this. Customer service boils down communication. Landing a customer is the easy part, keeping is even easier, if you simply talk to them. Make sure you regularly communicate with your customers and you make it easy for them to talk to you when they want. The “savings” you achieve by making it impossible for customers to talk with you will cost you in the long run.
Ironically, when I tweeted out to Simplify Commerce that I was going to share my bad experience with them in this blog post, they called me immediately. Did you read that? They called me! Doh!
My suggestion to Simplify Commerce (and to you if you have customers) is this: Call your customer’s while you have them, not when you lost them. Communication is king.
A Lesson In Horrible Service From Simplify Commerce
My experience with Simplify Commerce exemplifies the most important lesson in customer service: pick up the phone. Make sure you employ this lesson in your own business before its too late.
First a little background. I started a new business this past summer to help accountants and bookkeepers stand out in their extremely competitive industry. Just like any start-up, we set up our new office, hired our staff, and configured our e-commerce components. The shopping cart we selected was 1ShoppingCart (highly recommended), the merchant service provider was Simplify Commerce (avoid at all costs).
As I configured the shopping cart, Simplify Commerce was presented as the “suggested” credit card processor. Perhaps Simplify is part of 1ShoppingCart, or maybe it has a referral alliance or possibly they paid 1ShoppingCart a lot for the exposure. Regardless, it is highly influential marketing. It is just like your doctor suggesting the specialist you go to. If they suggest it, you do it. I followed suit and selected Simplify Commerce.
The setup was easy. The pricing and fees were not even close to competitive (albeit I only figured that out in retrospect since I didn’t take the time to competitively shop). Our first few payments processed, and then the first problem arose.
Our per day release of funds was capped to $500. I inquired with Simplify Commerce to see what we could do to resolve this. My emails to support where 1. not responded to 2. pointed the finger to underwriting and left me on my own to resolve with them.
Now, I get that we were a new company and that Simplify Commerce needs to mitigate its risk. But there is a lot more to us, that the simple application we submitted wouldn’t explain. So I just wanted to hop on the phone with someone at Simplify Commerce to explain more about our organization and to see what we needed to do to get past this problem. Welcome to problem number two.
Simplify Commerce doesn’t like to talk with their customers. Email communication are their preference – scratch that – no communication is their preference. Some technical questions were answered by their techie guy (he even picked up the phone and called us a few times). But the financial decision makers (ahem, underwriting) would never pick up the phone. Just abrupt emails, that came out of no where.
One email, one day stating that the $500 limit was adjusted up. One email, one day stating that since we took a client payment for an annual membership our account was on hold (as in we could continue to collect payments, but that Simplify Commerce would permanently withhold the funds until the situation was resolved… via email). One email, one day saying our account was reopened. Then the next day that it was on hold.
Finally out of pure frustration, I wrote the most aggressive email I could, hoping it would somehow get someone to call me. It worked! 48 hours after demanding I talk with someone, a person actually called me.
After thirty minutes on the phone, we resolved everything. Our account was fully cleared, funds were released. As we completed the call, the underwriter said “I wasn’t aware of how established your company and brand was. I wish we had known this. Your account is fully open.”
“I wish we had known this?” How absurd! Simplify Commerce did everything in its power to not learn about my business (their client). Simplify Commerce did everything it could to avoid communication with me (their client). Simplify Commerce did everything it could to make it difficult to do business with me (their client).
I left Simplify Commerce that day for a new merchant service provider, NMI (highly recommended). Oh, and during the on-boarding process, the NMI representative called me. We have talked multiple times since. The result of being able to talk with someone? We have received inter-change plus rates (far better rates than Simplify Commerce), we can accept annual member payments (something Simplify Commerce prohibits), we have no cap on receivables (something Simplify Commerce forced on us) and, surprise, surprise we have access to real live humans. Twenty four by seven.
The lesson is this. Customer service boils down communication. Landing a customer is the easy part, keeping is even easier, if you simply talk to them. Make sure you regularly communicate with your customers and you make it easy for them to talk to you when they want. The “savings” you achieve by making it impossible for customers to talk with you will cost you in the long run.
Ironically, when I tweeted out to Simplify Commerce that I was going to share my bad experience with them in this blog post, the called me immediately. Did you read that? They called me! Doh!
My suggestion to Simplify Commerce (and to you if you have customers) is this: Call your customer’s while you have them, not when you lost them. Communication is king.
The post A Lesson In Horrible Service From Simplify Commerce appeared first on Mike Michalowicz.
