Mike Michalowicz's Blog, page 93

You First

The premise of my newest book, Profit First, is to take your profit prior to expense. Ahem – take your profit first.

I am eternally grateful for the emails that stream in every day sharing how this simple “put the important stuff first” method has changed business after business. Emails sharing how entrepreneurs are achieving more and more financial strength with this simple premise.

Financial health is critical. But I am realizing there is another struggle for entrepreneurs. Our time. We work too hard for too long. And all the money in the world is of little value if you don’t have the time to enjoy it.

Now is time to fix your exhausting schedule, by again “putting the important stuff first.” Working too hard for too long? The fix is easier than you think. Put you first.

 

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Episode 18: Job Satisfaction and Profitability with Stan Genadek

Show Summary

Stan Genadek, owner of Genadek Landscaping and Excavating Inc. joins Episode 18 of the Profit First Podcast. Stan talks about the importance of job satisfaction and how it relates to the profit margins of your business.

 

Our Guest

Stan Genadek grew up join the country and has been working in the excavation and landscaping Industry since he was 13 -­ Shhh don’t tell the child labor laws. He moved to the Twin Cities Metropolitan area and paid his way through the college – ­the only way he knew how – ­running a landscaping crew. Stan quickly built this up from nothing into one of the largest specialty companies in the Midwest, and has now refocused his energy into helping others do the same. He runs the Landscape Business Pro Podcast – a program dedicated to finding experts from around the world and bringing their knowledge to help contractors everywhere Build a Better Business.

 

Show Quotes

I started to build my company focused on growth alone. We quickly grew to bring in $2 million dollars per year and were booked up months in advance – but the profits were not reflecting the amount of work we were putting into the business.

It can’t just be about profitability; the bigger we grew, the more miserable we became. When you have that much going on at work, it’s almost impossible to not bring that home with you. If you focus on your job satisfaction, ultimately that will result in profit.

You have the option to be the Jack of all trades and Master of none; take on any project that comes your way, but unable to do any of it really well or with the maximum amount of profits you could achieve. Instead, make the decision to become a Jack of all trades and Master of two – one bigger niche and a smaller one.

Pick your niches strategically and become an expert in those two things. Once you do this, you can put systems in place to maximize the use of your time and learn how to run a healthy, profitable business (because you are mastering two specific services).

Tip of the Day: Stop asking how BIG your business is, and start asking how HEALTHY your business is.

 

Show Links

The landscape business pro Podcast

Twitter

Linked In

Dirt Monkey:  https://dirtmonkey.net

Genadek Landscaping and Excavating Inc

 

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!

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Improve Your Office Productivity By Making 6 Changes

Too often we conflate being productive with quirky new apps designed to help us do a million things at once.  Now don’t get me wrong…I love gadgets and apps as much as the next guy, but I have found that we often neglect some simple changes in our physical environment that can help up be productive – no gadgets or downloads required.  Here are my top six changes that can boost your office productivity.

1. A “Do Not Disturb” sign.  When you’re up against a deadline or facing a task that requires extraordinary focus, closing your office door and keeping folks out can be your very best move.  Forcing yourself to buckle down and removing the distractions that keep you from staying focused can yield great results.  It’s important to save the sign for times when it really matters.  If the sign’s always up, people will start to ignore it.

2. Two screens.  Using dual monitors will improve your productivity more than you’d think.  You’ll find it easier to copy and paste between the screens, rather than having to switch from one window to another.  The interesting thing here is that two screens are ideal.  Any more, and you’ll find that you waste time trying to locate pieces of data or that one of the screens ends up being a distraction in the form of social media or a news feed.  Moving from one screen to two, though, will astonish you.

3. Use both standing and sitting desks (or a convertible desk.)  Taking the simple step of changing your posture will keep you fresh and give you a sharper focus.  Your body fares best – both in terms of health and attention span – if you change your position frequently.  If you can possibly fit two desks in your workspace, give yourself a couple of options.  If you’re working with a small office, you can find convertible desks that raise or lower as you need to change position.

4. Paint your office.  We’ve known for decades that colors affect our moods, so why not put the power of color to work for you?  Blues tend to have a calming effect and actually lower blood pressure – that’s why NYC police cars were light blue for many years.  Orange and red can stimulate your energy, but can also stimulate your emotions, making them questionable choices for the office.  Yellow is cheerful and sunny, but your best choice is probably green.  Green invokes balance and concentration, and is the least likely to alienate or rile up visitors to your space.  Even if you’re in a rented space and can’t paint your walls, try employing splashes of color to brighten your space and boost your productivity.

5. Natural light.  No matter how much we evolve, our bodies are designed to respond to – and even crave – natural light.  Just think about how grouchy we all get in the depths of winter when we haven’t seen the sun for days…or even weeks!  Situate your desk near a window if possible, or add a window to your office if you can.  Natural light brightens your outlook and stimulates you, keeping you fresh and focused for your workday.

6. Get a plant.  Even if you don’t have the option of installing a window, you can still bring a little of the outdoors into your workspace.  You might not be able to paint your walls green, but you can green up your office with a living plant.  It may sound like a small thing, but a 2013 study showed that living plants in a workspace may improve both productivity and focus.  Another study showed that during computer tests designed to simulate stressful working conditions, the presence of live plants decreased stress, improved reaction times, and lowered blood pressure among participants.

Sure, you can find apps to help you manage your time better, or you can buy a wristband to monitor your sleep and exercise.  Don’t make the mistake of overlooking your physical space, though, when it comes to maximizing your productivity.  A fresh coat of paint, new lighting, and physically reducing distractions are all effective ways to get the most out of your workday.

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Double The Results, Half The Effort

What are you working on right now? I want you to pause just for a moment and ask a question about it: “How do you double the results with half the effort?”

I know it sounds like an extreme question. But ask it of yourself anyway. In fact, ask it of all things you do. How do you double the results with half the effort?

You will only ever get answers to the questions you ask. So ask big questions.

Sometimes you’ll discover the answer. Other times you will find ways to get closer to the answer. Either way you win.

So, I’ll ask you one more time. How do you double the results, with half the effort?

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Snow

My friend, Barrett owns a lawn care business. To grow his company he hired a company to do outbound calls as the new season approached. As frustrating as it may feel to get sales calls at home, Barrett gets one new customer for every three hundred outbound calls. The numbers work. Barely.

Then Barrett analyzed the data. Certain days he was able to get one new customer for every seventy five calls. A little more research and he found on those days a snow storm had hit the community he was calling. People were home.

Now Barrett chases snow, so to speak. He calls the homes he is trying to sell services to when he knows they will be there – snow days.

What about you? When are your prospects “home?”

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Arguing With Your Business Partner (It’s A Good Thing)

I have had multiple business partners over the years, and realized that the most successful businesses came from partners that I argued with. I believe, in fact, that arguing is one of the most important determinate of a successful business. But only if the arguing is rooted in one foundational value: it’s in the best interest of the company.

When you and your business partner argue on ways to advance and improve the company, you are aligned. In fact, you will likely find middle ground that is even better than your own independent ideas.

But when your arguments devolve to personal attacks, that’s when you are in trouble. That’s when the business suffers.

So go ahead. Argue. Just keep the arguing limited to ways to improve your company.

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Episode 17: Profitable Tax Deductions With John Thomas

Show Summary

John Thomas “JT”, the CEO of Deductr joins Episode 17 of the Profit First Podcast. JT talks about the different ways small business owners can maximize their tax deductions.

 

Our Guest

John Thomas or “JT” is the CEO of Deductr. JT has spent his career in small growth stage technology companies. When he isn’t helping independent business owners save time and money, he enjoys running, hiking and cycling in the beautiful outdoors of Utah.

 

Show Quotes

There are 3 general categories any business can deduct from their taxes – Expenses (travel, meals & entertainment, office equipment), Milage, Time

It all starts with tracking certain things in your business – if you’re not in the habit of tracking you are either missing out, or you’re guessing – which means you’re missing out as well.

It’s important to take a few moments and go through the steps to see if you qualify for certain deductions, because you may be entitled to much more money  than the standard approach may give you.

Anyone running a small business out of their home needs to take the “home office” deduction. It has to be a specific area in your home that is dedicated exclusively for business purposes.

If I take a business partner out to lunch at a restaurant, typically I can take 50% of that expense IF I have it documented (who it was, the business purpose, the receipt)

Tracking your time isn’t just about time management and productivity, it’s about validating you as a small business owner.

Small business owners are 3 times more likely to be audited than a W-2 employee.

Tip for the Day: If you hire an employee that’s a cultural fit, they will improve the bottom line more than a person who is not a cultural fit.

 

Show Links

JT’s Website: Deductr.com

Deductr on Facebook

Deductr on Twitter

 

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!

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5 Secrets To Increasing Your Prices

It’s inevitable. We all have to raise prices at some point in order to stay solvent. It’s also inevitable that we’re going to agonize over the decision, worrying about what the net effect on our business will be. Here are some tried and true strategies I’ve learned that make your prudent business decision even more effective.

1. Create a new label. Language is even more powerful than we realize, and if you’re using the standard, generic industry label for your product, then you’re going to have a harder time charging a premium price. When I owned my computer forensics business, “data imaging” was the term the industry used for retrieving and storing information from a computer. I wanted to differentiate my services from the rest of the pack – and I added some bells and whistles that the other guys didn’t, and I called my service “data encapsulation.” When you use a new term, you can get a client to ask “what does that mean?” That’s a huge opportunity – the chance to differentiate yourself from the crowd and justify your premium price.

2. Don’t charge by the hour. Think about it – if you charge by the hour, the better and more efficient you become in your field, the less money you make. Bad scenario. Charging by the project rewards efficiency, because as your skills and speed increase, you’re able to complete more projects, which makes you more money.

3. Packaging/bundling. I worked with a client on his business model, looking for a way to improve his profitability. His problem? He sold iPhones on eBay, and there’s no shortage of people who were doing exactly the same thing, and that inevitably drives prices down. Our solution? He created a DVD that shared insider secrets for the iPhone, and he included it with purchases of iPhones. He bundled his products, creating a unique package that no one else could offer, and he was able to raise his prices and improve profitability.

4. Just do it. Don’t beat yourself up; don’t lose sleep over your decision. Here’s a secret – your best customers will be surprised that you didn’t raise prices sooner because they value your work. It’s possible that you may lose a customer or two over your increase, but those clients who leave are likely to be your problem children anyway. Also – a tip on a hybrid method of increasing prices – depending on your business, you may be able to introduce a price increase for new customers only and see how it goes, before increasing prices for existing clients.

5. Explain. Robert Cialdini, in his groundbreaking book, Influence, illustrates the importance of explaining your actions by using an example of a woman in line at a library copy machine. If she simply asks to cut in line, sometimes she’s successful. If she asks to cut in line and explains that she’s in a hurry, she’s successful 94% of the time. In the absence of an explanation for your price increase, your customers will invent their own. They may speculate that you’re greedy and taking advantage of them. If you take to time to explain why you’ve increased prices, though, you’ll find that your customers will accept the change much more easily. Cite your increased expenses, your expanded staff, and your commitment to improve quality, and your clients will support your decision.

To sum these tactics up, you have a responsibility – to yourself and to your employees – to run a successful business, and the success or failure of a business is due in part to the revenue it generates. It’s not immoral to turn a profit, and you deserve to be paid fairly for the hard work you do.

How and when you pitch the price increase may end up being what matters most in terms of its success, and thoughtful positioning of your business decision can determine whether or not your staff and your employees accept or reject your pricing. I heard a tale once – from an industry that shall remain unnamed – of a CEO who announced a hefty price increase to a room full of salespeople, coincidentally enough on the same day that he drove his new custom Bentley to work. His timing left much to be desired because it left his sales force with a price increase to explain to their customers and the belief that they were funding the CEO’s extravagant new car purchase. Choose your moment, explain your good reasons, and you’ll be surprised at how little pushback you receive.

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5 Steps To Take When A Great Employee Has A Bad Habit

About fifteen years ago, I owned a company with a small telemarketing division.  Of the four or so employees we had in that division, Bill was far and away the superstar.  He scheduled more appointments than anyone else, and he did it effortlessly, with no complaints.  He was the standout in that division, but there was one problem.  Bill didn’t shower.  Like ever.  He had a horrible body and clothing odor problem.  I didn’t realize how bad the problem was until I was approached by some of Bill’s coworkers and I checked it out for myself.  Sure enough, Bill’s odor made the work environment exceedingly unpleasant, and I had to find a way to deal with.

Here’s the good news:  I followed the strategies that I’m about to share with you, and completely resolved the problem.  Bill was clean as a whistle, and his coworkers were much happier.  Here’s how we got there:

1. Clarify the story in your mind.  Specifically identify the bad habit and identify the consequences of that habit.  It’s important to make sure that the trait that’s driving folks in the office crazy is, in fact, a habit, and not just a personality trait, part of your employee’s identity.  Habits are relatively easy to break … identities, not so much.  Keeping the consequences of your employee’s habit front and center forces you to deal with the issue (because you have a problem to solve) and helps you focus on what you hope to achieve in confronting the employee.  Once you’ve clarified the habit and its consequences, you’re ready to more forward.

2. Ensure confidentiality.  Whether it’s the employee whose habit is causing problems in the workplace, or whether it’s the staff member who brought the matter to your attention, it’s essential to keep personnel matters private.  You want your employees to feel like they can approach you with problems, and you want them to understand that if you’re forced to address problems with them, that their habits or shortcomings won’t be broadcast for everyone in the office.  Be discreet.

3. Don’t confuse the symptom with the disease.  What’s important here is to get to the root of the problem.  My telemarketer, Bill’s, problem was that he had terrible body odor.  The cause of that problem stunned me.  It turned out that Bill was living in a shelter.  I had no idea.  Because he typically worked 9-5, he couldn’t get into the crowded bathroom he shared with other shelter residents, so he was forced to cheese between getting to work on time or taking a shower.  The cause of Bill’s odor was his lack of access to a shower.  We changed his office hours to 12-8, and never had a problem again.   Easy solution to a difficult problem.

4. Pat on the back, kick in the ass, pat on the back.  This describes the approach you should take when you raise the issue with your employee with bad habits.  Start the meeting by taking the time to praise your employee and his or her importance to the company.  Then address the problem, while acknowledging that it may be a difficult, uncomfortable discussion.  Follow up by restating that the problem is minor, given the employee’s importance to the company, but that it must be resolved because they’re so valuable.

5. Make the connection between cues and routines.  Some habits are hard to break – harder than Bill’s problem.  Charles Duhigg’s book, Power of Habit, explains that habits actually have three parts – the cue, the routine, and the reward.  Disrupting this relationship can help when your employee is struggling to change.  Say one of your customer service reps is a stress smoker.  The routine is that a difficult client results in a relaxing smoke break (and temporarily decreased productivity.)  You have several options.  You could shift the employee to another area, one free of customer contact, or you could make the smoking area less relaxing, removing the positive reinforcement the employee currently gets.  The key is to break the routine.

At the end of the day, bad habits can be overcome.  It may be a frustrating and time-consuming endeavor, but it’s possible, especially for those great employees who are far too valuable to lose.

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Storytelling Can Kill Your Message

We tell stories because they paint pictures in people’s minds. When we get an audience – whether it’s one person or 2500 – thinking creatively and engaged in our story, then they’re active participants in our performance. Stories make our messages more memorable and persuasive, and they’re an essential element of public speaking.

We all know that there are times when stories fall flat, fail to convey a point, or even obscure a message. What’s gone wrong when the story kills our message? Keep reading.

1. When the story is all there is. Whether a speaker’s not properly focused or looking to stretch a speech, we’ve all experienced the flop that happens when a rambling story makes up the core of a speech. Even the most entertaining of stories is only effective if it’s used in support of some coherent, legitimate point. Stories should support a message, rather then being the entirety of the message, otherwise the speech becomes merely entertaining, rather than educational. When you’re preparing a speech, ask yourself what function each story serves, and if you can’t answer the question with a definite, productive function for a story, then the story may not belong. The story can’t be your core; it must play a supporting role.

2. When the story doesn’t compel the audience to act. The role of a story should be to illustrate or give an example of why your topic is important – why your audience should want to act after they’ve listened to you. A story should drive your point home in a way that simply stating the fact or listing reasons can’t do alone. Stories that fail to evoke an emotional response are a failure. Sometimes the solution can be as simple as making it clear why you chose to tell a particular story – what you want your audience to learn from each example you provide.

3. When the story overpowers the message. I’ve seen this problem crop up more times than I can count. Frankly, this mistake is typically the result of a lack of self control – when a speaker knows a story’s so compelling that he just can’t help sharing it … even though he knows full well that it’s somewhat off-topic, or worse yet, contradictory. Great speakers know how to cull through their stories and find the one that’s best suited to accomplishing a goal. Stories should support, rather than detract from a message, and when you’re polishing the final version of your speech, you must be ruthless. Cut any story that doesn’t serve a purpose.

4. When a story is disjointed or not meaningfully linked. Particularly in longer speeches, it’s essential to tie a story back into your message for your audience. You know why you selected any given story, but you have to make those connections explicit for your audience. Stand up comedians are masters at this tactic. They use call backs – references back to earlier themes or jokes – to weave a shared narrative for each performance. Move your audience through your speech, and connect all the dots for them. Pay attention to transitions between stories and your major points, and make sure that your audience’s journey is a seamless one.

5. When you’re the focus of all your stories. Yes, you may have been invited to speak, and yes, you may be the universally acclaimed expert in your field, but nothing turns an audience off quicker than the perception that a speaker is full of himself. Self-deprecation goes a long way, as does the selection of stories that don’t all feature you as the hero. Make sure you choose your stories carefully, pulling in, rather than alienating your listeners. If you find yourself saying “I” or “me” in every sentence, that’s a clue that your speech is too you-focused. Make sure your audience can relate to your subject by featuring stories that serve a purpose other than inflating your own ego.

Storytelling is how we preserved history before humans developed written language. Stories create the foundation and fabric of human relationships, and they’re key to creating connections among people all over the world. Storytelling is just one of the tools used by skillful public speakers, though, and the best speakers use stories carefully, deliberately, and with great effect.

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