Control freak is often an apt description of business owners. We like the ability to control our destiny, make our own decisions and see the impact of what we accomplish. The challenge comes with:
• understanding how little control we actually have – just a perceived control,
• learning how to relinquish control i.e. delegate, for the business to grow and
• how to leverage our controlling nature into something successful.
An employee kept watching how the business was being run, the waste that was taking place within the business, how customers were being treated and the lack of profit being generated by the business. These frustrations led to his determination to start his own business. His premise was he would treat employees much better than his current employer, eliminate the waste taking place, treat his customers better and generate more profit. In essence, he wanted control over the areas his current employer struggled. He accomplished those goals. He learned a number of lessons in the process. These were his and others primary drivers for family business ownership (and possibly entrepreneurship in general). The business owner is tired of:
• Following someone else’s lead/orders
• Believes they can serve the customer better
• Has different ideas on how to implement the product or service
• Desires flexibility in their day to day lives and a stronger balance between work and home and
• Can make more money, i.e. profit
The lessons learned are:
• Their new boss (themselves) is not the wonderful bosses they thought they would be and they have a great deal to learn. Looking in the mirror at the new boss isn’t always a pretty sight. It is the age old statement of “the grass is always greener on the other side of the fence.”
• They can serve the customer better, but it is much harder than they thought and they start to understand their old company better. Customers can and often are demanding. Their interpretation of quality is different than yours. You may see value in something that the customer doesn’t care about.
• They do have different ideas on implementation – some of those ideas work and some don’t
• Flexibility is fantastic – you can work any part of the 24 hours per day that you want. Yes, you do have flexibility to take kids to school, pick them up, go to games etc., but there is a cost and that cost is often working evenings and weekends and other times that you didn’t previously work.
What makes great entrepreneurs is the desire for control, but understanding less is more. To have the utmost control, we need to leverage our skills and have others in place to do the work – therefore we stop being the bottleneck to success.
The more we want and think we have control, the less we have. There is always someone else who truly has more control. It might be customers, government, laws, acts of God. It is that desire for control that if not managed well drains the business. Lack of an ability to delegate is the result of the business owners desire to have control. They can do it better than anyone else. We serve the clients better, they know the product better, therefore they don’t delegate. We truly want the control and the ego lift that comes with it. Stop it NOW. Learn to delegate and delegate wisely.
Attitude is all about how you look at things. I recently took a trip to New Orleans flying through Houston. The Polar Vortex that has been hitting the US made for cancelled flights and a one day delay in actually making the trip. Then upon my arrival in Houston my connecting flight was cancelled. Rather than waiting around hoping to make it on another flight (the standby list was over 200), I chose to drive. The situations on that drive will generate some good stories during my speaking event!
That drive and the resulting situations (i.e., getting pulled over, having the road closed for 125 miles and getting detoured twice etc.) could have made for a very unhappy person who was grouchy, blaming the airlines, mad at the world and generally miserable. What I chose was the pure joy of having 6 hours to myself in a part of the country I haven’t driven before and the peacefulness of my thoughts (when I wasn’t singing at the top of my lungs to a favorite song).
The event that happened was the cancelled flight, my response was – ok now what happens. My actions created the outcome; “this is a journey and who knows where it will take me”. My response could have been much different and the outcome could have ruined the whole conference for me.
My questions to you:
I have learned that one great joy is to take a bad situation and NOT take it out on others. I love watching them respond when they expect you to yell and get mad. I love putting joy into their day of not having an irate customer in front of them. Now this doesn’t mean I allow them to walk on me, or am a push over (those who know me probably haven’t even dreamed of that situation.) You would be amazed at how often I then get told: Thank you for being so understanding. Thank you for your attitude.
How do YOU respond? Do YOU need to change your response to life, business, and personal situations which not only change your world – but those around you?
For years the business owner did it right. She created a viable business, worked through her business plan and now, years later her hard work has paid off and it's now time t retire. What does this ambiguous word RETIRE actually mean, and how does it impact a business and the life of the original owner?
Not being too many years away from the typical age of retirement myself, I have read many articles on both what to do and what it takes to retire. Each author provides a personal point of view from either a financial perspective (what can you afford), or from a times perspective (what do you do now to prepare).
For some business owners, the shift sometimes never happens. They neglected to create a life outside of the business, so to stop doing what has motivated them throughout the years may create an essential spiral down of personal value. They have no identity outside of work, and to quote my son in his salutatorian speech for high school graduation: "You g to school, get a job, raise and family and die." Doesn't sound that enticing does it!
Let's explore an attitude adjustment on the idea of retirement. Here are 2 topics that I challenge you t consider:
1. Wording: Change you wording from retirement to financial independence. So you are 32 and retirement isn't part of your vocabulary - I get it. Yet when I talk to almost anyone at any age, they all seek financial independence. Being financially independent can happen at any stage of life. The first ting you must do is determine what financial independence means for you and for your family. For some, it is having millions in the bank, for others it is having enough set aside that should they stop working, the money set aside would allow them to live a reasonable life style. The magic is determining what is enough. The questions of what is enough can only be answered by you, but avoidance and not planning isn't the answer, unless you want at some point in the future, to be limited by what you can d, when you can do it, and how you will do it etc.
2. Attitude: The old style of sitting in you rocker on the font porch is either gone, or should be gone - since all it will do is make you a goner. Our life has stages; childhood, teenage yeas, young adult, raising kids (or middle life), and empty nesters. Notice the concept of when you work isn't' defined at all. For the years that you want to be a contributing member of society, you will work in one way or another. The mother that works inside the home may not get paid an hourly wage, but she works her tail off. The empty nester that is mentoring a new business may not be paid in monetary dollars, but is contributing in so may other was. The question is, what are you planning to contribute at each stage of your life? What will you impact on your family, community, church and world look like?
Notice in the above 2 topics I never once asked when you were going t stop your paying job and "retire". Sure there will be a time that you will cut back on the schedule you presently keep, the office hours, and the number of people that report to you, that is part of life. However, just like changing jobs, starting a new business, or going to college, each requires a plan. Therefore create your "RETIREMENT" plan and execute that plan. Your family, your church, your community and the next generation will thank you for becoming financially independent, and for choosing to give back and invest in them at a time when they needed it most. After all, isn't that what you were really looking for all along? The ability to make choices?
All too often, I hear excuses for why something did not happen the way it should have. People always search for ways to absolve their guilt by blaming their issues on something else. I have found throughout my career that there are three major categories of excuses:
The “It’s good enough” excuse
This is one of the most common excuses. Someone will do a passable job, scraping by, but quit as soon as possible with the excuse that what they accomplished is good enough. They are not striving for an “A” or for real quality work. Merely scraping by with a “C” or adequate work is good enough. However, if you want to make your business truly exceptional, meaningful, a true world-changer, this is not acceptable. You will never get ahead with “good enough”. Would you yourself do business with just “good enough”?
The “I’m new at this” excuse
Along this same line, people who are new at something feel that they have a right to give themselves a bit of slack. Although there is something to be said for the learning curve, all too often it becomes an excuse to slack off your first few months. However, the opposite is true; you need to be ready from day one. Otherwise, you get trapped in a cycle where the “I’m new at this” excuse becomes a “good enough” habit.
The “I didn’t plan for that” excuse
We all have moments that make us go “Oops!” If you have any doubts about that, I have a board game called Leverage to show you. Even though there are some unexpected developments, you cannot simply say “Oh well.” You need a plan B, as well as a Plan C, D, & E. Be prepared for any and all eventualities, because you never know what will happen in the future. An employee may walk out on you, or there may be a sudden shortage of your product. When that happens, what will you do? Seriously think about a variety of scenarios and create plans to put in place before you need them.
Ultimately, complaining about a situation does nothing productive for you or your business. What you need to do is isolate the problem and identify a solution. Don’t waste ages explaining your problems to your friends and colleagues, only to ignore their advice. Instead, get to the root of the problem, follow through with the corrective solution, and move on with your business. The art of self-correction is among one of the most important business lessons you will ever learn.
You started out with a great idea, one that seemed to be desirable by a number of clients, and it paid off. You truly found what you loved to do and are able to get people to pay you for it! Congratulations. Now, how are you going to sustain your business? You may be fantastic at developing widgets, but how are you at the actual business competencies that will sustain your business over the long run?
An October 2012 report on Sustainability and Leadership Competencies for Business Leaders identifies top competencies as follows:
Business owners need to provide themselves with learning opportunities that will strengthen each of these core business competencies. This education can be accomplished through reading, formal training, or most effective, by utilizing a business mentor or business coach that can hold business owner accountable for actually implementing stainable changes in their company, ones that are customized to meet their company’s specific needs. However you choose to receive your small business advice and continue your education as a leader, make a plan and follow your plan to ensure you are a perpetual learning leader.
An old adage goes, “Rules are meant to be broken.” In many ways, this is absolutely correct. Simply following the rules, doing the same thing over and over, won’t get you anywhere. Albert Einstein once said, “We cannot solve our problems with the same thinking we used to create them.” Every truly great, major innovation in history has come about as a result of new thinking.
So let’s say you’ve set up your business, and are doing fairly well. You have a steady stream of revenue, a good customer base, efficient systems in place, and everything is going great. What do you do next? Often, businesses will plateau. They will improve up to a certain point, but things won’t get better from there. Once a plateau is reached, new thinking is required if you want your business to grow-which you should. Now, you should not throw your old playbook out the window, however, change is needed, and in many cases this change is rather unconventional. You need something that sets you apart.
Find that niche, and utilize it. Do something new, something different, and blow everyone away with your creativity and innovation.
Keep the Happy in Your Holidays
[Recently, I discussed taking time out for yourself to relax and take a break (Read: “Seeing the Forest Through the Trees!”). This week, I’d like to elaborate on this topic and incorporate it into the holiday season.]
It’s the most wonderful time of the year! And also the most hustling, bustling, hectic, lose-your-mind-because-you’re-so-crazy-busy time of year. Running a business and making time for festivities and celebrations can be a challenge. In between the potlucks, get-togethers, cookie exchanges, and ugly sweater parties are invoices, year-end financial statements, payroll, budget forecasting, planning and hundreds of other tasks to complete before the new year.
Here are some helpful hints to get you through the season with your sanity intact:
The holidays are meant to be a break from the everyday routine. These are the days when you can focus on spending quality time with the people in your life who matter most. Your time is valuable, and unlike money, you can’t obtain more of it—what you get is what you get! With some proactive planning and time-management, you can enjoy the challenges and rewards of working for yourself AND enjoy the holidays too! And from me it is Merry Christmas to you.
The whole concept of accountability is tainted with misperceptions, frustration and blame. It is so often someone else’s fault. Within the family constructs, this dynamic is even more frustrating and brings along tension, “stories of why” and more excuses.
Accountability at its core is “doing what you say you will do, when you say you will do it”. The foundation lies in the communication cycle and the definition of the deliverable. Let’s start with the communication cycle and with an example we can all relate to; taking out the trash. Mary asks Jim to take out the trash before dinner. Jim says yes. He knows that dinner is scheduled for 6pm, it is now 4pm. He will get to it. Mary however wants the trash taken out now, not in an hour, although she didn’t communicate that specific detail. Mary is also expecting not just the kitchen trash, but the rest of the trash in the house will be collected, since “everyone” knows that the weekly trash pickup is tomorrow morning. Stress and frustration builds. Mary doesn’t understand why Jim didn’t do it immediately and why the job wasn’t complete. Jim doesn’t understand why Mary is suddenly upset. Sound familiar? I am sure it does.
Now apply that same scenario to the work environment. You may not be asked to take out the trash, however the joy in preforming your duties and the communication concepts are still the same. Your priorities and that of your co-workers might not always weave together well. You get the project completed; however it is later than desired and not to the quality expected. Tensions rise, delivery date to the customer is missed, and quality suffers.
What is the solution?
One of the most asked questions during an accountability discussion is what are examples of consequences and how do they get enforced. Consequences must be appropriate to the situation. Firing for being late the first time due to a large traffic jam is not appropriate. Here is a story of a large company that doesn’t have the best reputation for how they treat their employees. The CEO of the company had stated that employees must be at their desk by 8:00 am. One day he went to the parking lot of the company at 8:30am and anyone who was just arriving to work was told to go home. He didn’t even allow them inside the building. Did he make a point yes, people in this company are to be at work by 8am. Is this the type of employer I would want to work for – no!
Yet, I will give him credit for stating the rules for the company and for being willing to stand for what he believes and then enforces the rules. He also has employees that have worked with him for decades and the company continues to grow and is profitable – so something must be working.
Consistency is critical. Treating every situation different creates a divisive environment for an organization. Allowing one person to “get away” with not following procedures, not getting things done etc., does more to erode employee morale than the example above where the employer sent everyone home that was late. They knew his policy, they knew the rules. They chose to break them, or get away with things, and it didn’t work.
Most companies I work with on this topic find that everyone complains about the lack of accountability. However, when the organization starts to implement true accountability, people begin to complain about being held accountable. The reality is that everyone wants it for someone else, but not for themselves. It is hard to change, yet worth every step.
The choice is yours. The solution sits in your lap; you can choose to take the challenge of being personally accountable or sit back and complain about the lack of accountability. What is your choice?
The family business; it’s the foundation of the small business world in the US. Approximately 80% of small businesses are family owned. That can mean brothers, sisters, parents, grandparents, aunts, uncles and children. Why are there so many family owned businesses? One reason – blood is thicker than water. There is a trust factor that comes with working with family. I hear laughter from some of you. Some of you wouldn’t trust your family with a dollar let alone own a business with them. While that can be true, the reality is even where the family has a trust and verify. The family business has a set of dynamics that are unlike any other. Think of your family – what would it be like to work with them every day? Then, go home each night. Now I have you thinking… Yes, that is the joy and challenge of family business. It is often hard to:
The list goes on for both sides. If you are considering starting a family business congratulations – you will love the journey.
What have your experiences been with family businesses? Are you in one? Have you done business with one? Share them with me; I would love to hear the stories.
Conflict is part of everyday life. If you have a business, marriage, or relationship without conflict then you essentially are an ostrich with your head in the sand. Avoidance of conflict is the equivalent to being a yes man – which means you agree to things even if you don’t agree to avoid conflict – which is in and of itself conflict. One class I would recommend every business owner take is a mediation or conflict resolution class. There are books on the subject. One is “Getting to Yes: Negotiating Agreement Without Giving In” by Roger Fisher. For me it was a hard book to read – but I really enjoyed it on audio. The sooner you learn how to deal with conflict the better off life will be.
One of my clients was engaged at the time of our session. Life was sweet for both of them. They enjoyed being together, they were obviously in love with each other, yet trouble was brewing. Every time he wanted something and she disagreed, she caved in. This was very evident in the business environment. It had been his business; she was the new partner in his business, however she was also very accomplished on her own and actually had better business sense than he did. Yet, every time she would suggested and idea and he would disagree, she would back down, both in business and in their relationship. He once stated that he wondered when she was going to stop becoming so agreeable. It would eventually happen, and for both of them it would be a time of rude awakening as neither had really learned how to negotiate. They hadn’t learned the art of give and take or how to move both their ideas forward without squelching the spirit of the other person.
Couple of points on conflict resolution:
1. It isn’t always about getting what you want – learn the art of compromise.
2. If it is all about you – then the “we” part of any relationship won’t be long term.
3. Make sure you get the complete picture – stop assuming – remember what assume means. If you don’t know – then break out the word assume into 3 syllables – you get the picture.
4. Life is about negotiating – learn how to do it well, then apply the same art within your business and within your family.
We are quickly headed into fall which usually creates a time of review for me. Where has the year gone? It seems to move faster every year. Yet it is that review that causes me to stop and ponder a few recent events.
Do you ever get that feeling that just about the time you get it all together, someone comes along side and sort of hits you in the head? One of my clients had just that thing happen this week. They were making great strides in their business only to have a key employee decide the grass was greener at another company. The employee said they didn’t want to leave, but they couldn’t turn down the offer. Wow, that was the preverbal baseball bat alongside the business head – which feels pretty personal.
What could have been done to change the outcome? They tried to create a counter offer. It didn’t work and often doesn’t. In many cases, there isn’t anything you can do, yet I am not one to stand by the sidelines and say, “Oh well, nothing to learn here”. Here is what you can do:
Turnover is hard, yet your attitude is critical in how you weather the crisis. Know that there is someone else out there who can do the job just as good if not better. When you find them, determine what you can do to encourage greater job satisfaction and make it happen.
It has been a few years since I traveled on a regular basis for business. When I changed careers and knew that weekly travel would no longer going to be a part of my weekly routine, I rejoiced. No more waiting in long lines at the airports, no more issues with security, TSA, or eating airport food. Forget all those airline delays, joyful flight attendants and endless excuses for flight delays. Sounds good doesn't it.
Yet, I am now sitting on a plane returning home from pleasure travel and have realized there is one thing I do miss about airline travel. That uninterrupted time of 3, 4, 5 hours or more where I can unwind, think, read and ponder life. I have never been one to watch movies while sitting on a plane. I have always read, completed planning, organized action items or enjoy a nap.
It is this time when nothing else can be done, that I unwind, stop the busyness of just doing things, and ponder what is next. My pondering from this plane ride resulted in the following wisdom: I need to start creating more time to ponder, unwind and think. It is my time away from distractions, of "doing". Most would describe me as "action oriented" (even my radio show is called "Action in Business with Janna Hoiberg"). I’ve challenged myself to consider, “Does the action of my “doing” get in the way of creative thinking? Will taking more time to stop and rewind allow me to consider new opportunities, new ways of handling current challenges? I believe it does.
What do you do to stop, ponder, consider and then create an action plan? Are you like me - one that has a hard time slowing down? Or are you one that slows down too easily and has a harder time speeding up and taking action? The later can also benefit from the "plane" time, however from another perspective, that of using the time to focus and make the decisions needed to speed up and make things happen.
For those of us who don't seem to slow down and are often chasing the latest "squirrel" (that new idea that sounds much better than the last one), we need to become more intentional. We need to walk away from the day to day on a regular basis and get on our "plane", clear our mind, take time to focus and make the changes that will help us achieve our goals (or in some cases create the goals). For me, it is hour 3 of a 4 hour flight that this pondering popped into my head. It also happened on the return trip after a weekend away; note that good ideas come most often when the mind and body have relaxed and opens itself to new ideas. On this flight, I have read 3 newspapers, a book, played some card games, and taken a nap. It was then and only then that my thoughts could expand and be open to something new.
Now my challenge is to be intentional without physically getting on a plane. Or, I will just need to take more vacations and embrace something I thought I was happy to leave behind.
In Part IV of this series, we continue our look at some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.
We've Always Done It Like This: Failure to Innovate
Sometimes a family company that has enjoyed decades of success feels quite confident in its formula for success, so much so that it may not recognize when change would benefit it immensely. While some second or third generation owners can't wait to change the running of the business when it becomes theirs, others refuse to do anything differently which, in time, can result in an operation in dire need of an update. Social media is a good example where some businesses have rushed to take advantage of its platforms while others have ignored these networks to their peril. Failing to establish an online presence is a conflict that many family-run businesses now face. Of course, innovation or change takes many forms, but the family business is often challenged to embrace the business need to innovate.
No Structure, Little Strategy
For some family businesses, the only structure is the family structure. Perhaps there is one leader or a leading couple--husband and wife or siblings, for example. Sometimes a business will thrive without a business-type structure for a generation, but often this will change after succession and with the growth of the family. Without clearly defined roles, problems tend to arise. Secondly, a lack of long-term strategy is an obstacle for many family businesses. Is there a five-year plan? Is there a plan to operate regionally? Globally? Designing an effective strategy and working towards its business goals is a tenet of many businesses, but one that is often neglected by family-run businesses.
Every business faces vulnerabilities. Often the challenges come from the outside such as the economy. The family owned and operated business comes with a set of challenges, however, that don't typically apply to other types of businesses. Family firms that are able to successfully navigate these challenges into their third generation, therefore, have much to be proud of--and possibly much to teach other families struggling to keep their businesses afloat.
In Part III of this series, we continue our look at some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.
I Love You, You're Hired
Many family business owners simply can't help but hire those family members they love best and provide them with the best roles. In their vision, the ideal reality is a child that takes the helm after them. Sometimes the owner's children or other close relatives aren't the best candidates. Sometimes an owner is persuaded to hire a family member for a certain role that would suit the talent and skills of another far better. It is often difficult for family business leaders to effectively assess the skills of another family member because they are blinded by love and their own desires regarding the business.
Conflict and Emotion
In non-family business a work conflict remains a work conflict. In a family business, a conflict that erupts at work goes home and vice versa. There is a decided emotional vulnerability that is connected with the family business platform. There is no way to get away from the boss or people at work when you may live with them or are in close proximity to them. Many people find this constant connection to family members stifling. Others cannot recognize the need for boundaries--for giving other family members their personal space even though that separate time could be therapeutic. Work conflicts, in short, are personal conflicts and nearly always emotional, always threatening the foundation of the business.
In Part II of this series, we continue our look at some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.
Lack of Grooming, Lack of Succession
When the head of the business neglects training someone as a replacement or does not effectively consider a succession plan, a level of business chaos can ensue when the business lands in the lap of the second generation and quite frequently by the third. Sometimes an owner will simply 'groom' the wrong person, a family member not equipped to manage the business or staff well.
Other times the leader is simply too busy to mentor the second generation in a meaningful way. The longevity of a family business depends upon effective management training. Ignoring this aspect can result in the business falling into a family member's hands with no adequate experience for holding the reins.
Non-Family Need Not Apply
Sometimes a family business fails by failing to recognize when it needs to bring in outside help to fill some pivotal role. Of course, even when someone from the outside fills a pivotal role there may be considerable unease among the other family members who did not sanction the decision to hire from the outside. It often happens that family members of an existing business do not have the skills or talent needed to move the business forward. In such cases the business can stagnate while its competitors roll more effectively with the changing times.
Next week: I Love You, You’re Hired
Family owned and operated businesses have been part of the American fabric and are certainly a tradition alive and well in many parts of the world. Knowledge of merchandise or the skills associated with a particular craft are passed from one generation to the next as the elder generation fosters the younger to ensure continuity and success. While all businesses face obstacles, the family-run business is associated with some unique challenges. According to the Family Firm Institute, in fact, only about a third of family businesses will thrive under the management of the second generation. The challenges outlined here are among some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.
The Unshared Dream
So often the main issue that a family business faces is that the business is not the family's dream at all but, instead, belongs to just one family member. For that one member, the business is a dream, a lifelong pursuit, and even a passion. Yet to other family members, the business may merely be a job--and one they may not especially like. When the founder relies upon others to share a vision and work ethic they do not have, this tends to erupt into problems. Sometimes this dilemma can be warded off when the main owner allows other family members authentic ownership of their roles. People tend to care more about their jobs when they feel safe to emotionally invest in their work. A tendency to micromanage is almost always a surefire way to alienate other family members, to prevent them from feeling like true stakeholders.
Next week: Lack of Grooming, Lack of Succession
Every manager has experienced the need to fire an employee, and every business owner has experienced the need to fire a vendor. Most family owned business owners have experienced the desire to fire a family member, and almost everyone who has dealt with an obnoxious customer has experienced the desire to fire that customer. Yet so often we don’t follow through on the evidence provided, nor the instinct that tells us that this person can only bring a caustic relationship to our business. We allow the tension to continue to build, often causing our profits to erode and productivity to be impacted. When is enough, enough? When should you fire that customer and how do you accomplish the task – professionally?
Before you make a final decision, let’s look at a few aspects of your business that might provide some additional perspective. The four “M’s” of parting ways with a customer include:
Mindset is the foundational issue for almost all relationships with people. No, not their mindset, yours! Reflect back in your or your company’s relationship with that specific customer. Have they been treated (serviced) the way you want your company to be known for treating clients? Were they treated the way you personally would like to be treated? Has the client’s issues been clearly heard; or does fear get in the way of your ability to listen to meaning of their explanation, not just the words? Very often it is our mindset, perceiving what the client knows or experiences, which is the actual stumbling block to delivering that WOW service you expound upon.
Mirror implies a reflection, in this case of oneself. Have we trained our employees to provide the best service possible or are they “mirroring” what they see leadership providing? Once our mindset is open to new perspectives, we can take a more honest look at our business. In many situations, our worst customer can be converted to our best customer just by listening and understanding where the customer is coming from and making a necessary change that can bring satisfaction. In a family business, we might find ourselves wanting to fire a family member because of what we “perceive” as their inability to work well with us. Sometimes this leads to our treating a family member with less respect than we do our employees. However, if we stop and listen to them, understand issues from their perspective, we may find a resolution that will bring a greater buy-in and respect on both sides.
Measurement of the cost for parting ways with a customer has to be considered. Is it costing more to keep the customer than to recommend they used someone else? Does the emotion of dealing with the situation impact all aspects of the business because everyone hates coming to work when that family member or customer is around? Caustic people and situations do leave lasting results if not dealt with in a timely and reflective manner. The outcomes of what to address and how to address issues needs to be weighed and measured.
Movement, taking the initiative to take action and make something happen is critical. Once you have checked your mindset and attitude; you have looked at yourself in the mirror and you have moved by making adjustments in the way you manage people in your business; the next step is addressing challenging behaviors. If you still have the employee who just doesn’t want to change, the vendor that still doesn’t deliver the quality you expect, or maybe the problem customer continues to verbally abuse everyone they come into contact with in your business, then this is time to actually take the final step. Fire them, do it professionally, but stop procrastinating. Everyone; employees, family members, and even other customers will thank you for taking action. Once you’ve followed through, you will wonder why it took so long for you to actually do it in the first place!
Entrepreneurs, business owners, leaders, managers need to step back on a regular basis and get back to basics. The temptation when running your own enterprise is to stop doing the foundational elements that made you successful in your business. What are the basics for you? Could they be?
• Marketing: Testing and measuring what is working in your marketing program and what isn’t. Are you guessing as to which marketing programs work and which don’t. One of my clients swore that one of their marketing programs worked and worked well, until we ran the numbers. They were investing about $14,000 per year in this program and got about $6,000 back. Even taking into account lifetime value of the new customers, it was an expense and not an investment. Both revenue and profitability went up when they stopped that marketing program.
• Sales: It is documented that sales people must be trained and retrained on a regular basis to refine their skills and ensure the basic blocking and tackling is being done. What old sales techniques need to be revisited and are there new ones? Selling today is very different than 5 years ago, however some of the basics like communicating with your prospect are foundations which often get forgotten due to bad habits.
• Closing: Are you asking for the close in the sale? I have a client that lost the potential of a big new account because the prospects perception was that they didn’t want it enough. They asked for the close, but not often enough during the final presentation. Their competition asked for the sale more.
• Advertising: Are you running the same old ad that you always do? It works – great, but could it be better. What is your shock and awe with your advertising? Do you get their attention, or are they yawning through the whole process?
Basics are critical. Innovation is critical, yet if the innovation is built on a rocky foundation the whole business may fail before you know it.
The last issue addressed 3 aspects of your business. This issue will address 3 additional areas of: Are you working harder than your business, or is your business working harder than you? There are 6 steps to creating a profitable business that works without you having to be there every day:
Each of the six steps builds upon the previous. Here is a high level jet tour of the last 3 of the six steps.
Leverage: creating efficiency = more time for the owner
If you are the typical business owner, you are the hub of a wheel. The spokes are the channels of decision making from all aspects of your business. Get the picture?
In our desire to control our business we have imprisoned ourselves, the owners. Additionally, because we have not implemented written systems to run our business we have become vulnerable to certain key individuals within our organization. These key players are very good at what they do and if they leave the company, the consequences will produce a significant setback for the business.
The answer is to systemize the routine and humanize the exception. Systems should run the business and people should run the systems. The Japanese taught us this hard lesson in the 80s. Systemize your business and you will leverage your capacity as the owner. Until systems run your business, you have a job. You will never be able to extract yourself to work on your business instead of in your business. Lifestyle improvement will remain an unreachable dream.
Team: having the A-Team run your business = structuring for growth
Ask business owners what represents their greatest headache, most will tell you “employees”. You’ve heard it said: “People are a company’s most valuable asset.” That is not true! The right people in the right positions are a company’s most valuable asset. In the book “Good to Great” Jim Collins writes: “Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”
Synergy: a well-oiled business machine = freedom!
This is when 2 + 2 = 5. Too many business owners after experiencing a little success try to expand through duplicating outlets or franchising before they have successfully completed the four previous steps. As they grow, because of insufficient systems and/or the wrong people on their executive team, cracks start to appear in the foundation. So they retreat and go back to when it was only one business location that they can control with their presence. In fact, if the owner carefully built a strong foundation on the four previous steps, the cumulative effect of this smart work will be significant income with time to enjoy it. Congratulations – you now no longer have a job! You are a successful entrepreneur!
Massive Results: diversification through multiplication or acquisition
As a result of what you have learned by taking your business through this process, coupled with the time and money to leverage, you can create multiple steams of income and wealth by multiplying your business concept or acquiring other businesses and taking them through the six steps. Or, you can retire with a lifestyle that is the envy of most.
Janna Hoiberg is a local business owner and business coach with 25+ years of business experience. Forward your business questions to: 719-358-6936 or email to firstname.lastname@example.org
Are you working harder than your business, or is your business working harder than you? If you are working harder than your business, you are among the many self-employed who have succeeded in purchasing a job for themselves! Do you aspire to be an entrepreneur? Then you must figure a way to create a business that works harder than you, so that you can use your spare time to launch other business endeavors or to enjoy the lifestyle that typifies the successful entrepreneur; time with family and time for personal leisure pursuits. So how does one get their business to work harder? Follow these 6 steps to creating a profitable business that works without you having to be there every day:
Each of the six steps builds upon the previous. Here is a high level jet tour of three of the first six steps. The last 3 steps will be covered in the next issue.
Mastery: from chaos to order
Time is our most valuable asset. We can regain lost income, but can never regain lost time. There are four activity categories into which we can invest or waste our time:
1 and 2 are time wasters for the business owner. 3 and 4 are the difference between working in your business and working on your business. 4 is working in what I call the Zone and should represent 80% of your time. Working in the Zone will prevent many of the urgent/important from occurring.
Do you know where your business is financially? What is your breakeven? How about your cash flow – can you predict it? What is your profit position – how accurate and real-time is your information? Is your most valuable tangible asset (your business) increasing or decreasing in value? Is your business consistently delivering your value proposition to the marketplace in such a way as to not just satisfy your customers, but create many raving fans? This is called the WOW factor. And finally, are your business goals aligned with your personal goals so that when your business is working harder than you, you are living your desired lifestyle?
Niche: effectively marketing your USP = predictable cash flow
Discounting your prices in the face of competition is devastating to your bottom line. Let’s, for example, assume that your gross profit margin is 40%. If you discount your prices by 10%, your sales must increase by 33% to maintain the same gross profit dollars! How does one avoid such damaging action? By creatively crafting your marketing around your USP (Unique Selling Proposition)! Done correctly, this will carve a niche in the marketplace that you alone occupy, thus insulating your business from the discounting frenzy produced by a market crowded with competitors.
Look for Part 2 and the balance of the six steps coming in the next issue.
The pinnacle of business accomplishment is Level 5 Entrepreneur! It is at this level where mega wealth is created and with mega wealth comes the opportunity to do mega good.
Rung Level of Entrepreneur Ladder
Self Employed: 1
To operate as a true Level 5 Entrepreneur, we must gain a thorough understanding of corporate structure as a Level 4 Investor - how to structure businesses so that everything works to our advantage.
Advancing to Level 5 Entrepreneur
At Level 5 we are, once again, on a steep learning curve. Don’t let that scare you. If we stop learning we die. To ascend to the level of Entrepreneur, you must succeed with enough business deals at Level 4 to be considered a master. People will then want to invest with you. At that point you will be investing with other people’s money, which will lead you to the last level - that of Entrepreneur.
Big stakes excitement
Level 5 is the most exciting. This is where the true capitalist operates. It is at this level where you make money by raising capital. You are using other people’s money to build paper assets like stocks, franchises, licenses and royalties.
Think of it this way - true entrepreneurs use other people’s money to make money. The larger your reputation for successful entrepreneurship, the larger will be your pool of eager investors. One way to market your skills is to write books on how to succeed in business. This builds your reputation so that when you take companies public, you have a large number of investors jumping on board. This should be part of your strategy.
How did Bill Gates do it?
Consider this: What does Bill Gates, one of the world’s richest men, sell? Does he sell computer software, information, solutions, or systems? In reality, what Bill Gates sells to create his wealth are shares in Microsoft. Level 5 Entrepreneurs build businesses they can take public. This allows them to quickly gain a massive amount of wealth.
You must be a visionary
At Level 5 you are a visionary – a dreamer with a vision. It is often said that all the best ideas start with a simple dream. It is not enough to just dream – we must take action to make our dreams come true. Sell the dream, then work to make it a reality. Always keep your mind focused on what is not currently real but soon will be. Then trust yourself and your team to make it so.
Level 5 capital
Level 5 Entrepreneurs do not have to work for money. They certainly do not trade time for money, and do not rely on profits as their primary source of income. They are interested in Return on Investment (ROI). They make money by raising capital. They create money by adding value.
Share price can be considered the entrepreneurs stock in trade. Their relationship with money is through the stock market. As Entrepreneur, you operate using your finely honed skills and deep economic understanding. When everyone else is in a panic, like today’s market, you remain cool headed because of your understanding of the economic seasons, briefly mentioned in last week’s article.
Turn, Turn, Turn
The Bible talks about this seasonal concept in Ecclesiastes chapter 3 verses 1 – 8 (the Birds put these verses to music in their famous song Turn, Turn, Turn, in 1965, written by Pete Seeger in the 50’s). Understanding the timing of your ventures in relation to the economic seasons is vital to your success and one of the reasons others entrust their money to your vision.
With our current economic turndown, we have once again entered the economic season of winter. For the savvy entrepreneur, winter represents the beginning of the wealth creation cycle. Acquiring or starting businesses near the end of economic winter, at a fraction of the cost of during other seasons, enables the entrepreneur to maximize ROI during the summer in the form of IPO (Initial Public Offering) or acquisition.
Entrepreneurial wealth creation – a tool for good and for maintaining individual freedom
Many who reach the top of the e-ladder become great philanthropists, donating money and brain power to charities, hospitals, children’s organizations, scientific research, and education.
The e-ladder is the foundation of our capitalistic system, which has produced the greatest wealth and lifestyles for the largest percentage of the population than any other system in the history of mankind. How far you choose to climb has nothing to do with your value as a person. It has everything to do with your vision, your gifts, your willingness to work hard, take calculated risks, and to constantly learn. Marc Nuttle, a Norman attorney and advisor to many presidents, in his insightful book “Moment of Truth” clearly delineates how intricately our capitalistic free enterprise system is linked to our personal freedom as individuals. I highly recommend his book.
To maintain our freedom as individuals it is imperative that many exercise this freedom by climbing the entrepreneurial ladder. We climb, first and foremost, to provide for our families, and second, to do good for others. When we climb the e-ladder, we are providing jobs, opportunity, and hope for those who follow!
Like all things in life, running a business has its ups and downs, its highs and lows, and its successes and failures. Celebrating the sweet victories is easy, but how do you cope with the agonies of defeat?
First things first, like it or not, failing is inevitable. Every single person has failed at one time (or in most cases, lots of times). Throughout history scores of renowned great achievers not only failed, but failed over and over again. When Albert Einstein was young, his grades were so poor that a teacher asked him to quit, saying, "Einstein, you will never amount to anything!" Michael Jordan was cut from his high school basketball team for his lack of skill. Winston Churchill failed the 6th grade. Soichiro Honda was turned down for an engineer position with Toyota Motor Corporation.
Here’s another truth: Failure is not something to fear. Failures and mistakes are lessons that can be used as stepping stones. And even though it may feel like it’s the end, it’s actually just the beginning. According to dictionary.com, failing is “an act or instance of failure.” But according to John Maxwell, bestselling author of Failing Forward, “Failure is simply a price we pay to achieve success.”
Failing forward is a willingness to learn from failures and implement the lessons into your actions, behaviors, and business. It’s choosing to pick yourself up and continue to move forward and toward your intended outcome in spite of being discouraged.
Think about the last time you failed and ask yourself these questions:
Now take the answers to these questions and plan how you will incorporate the lessons into your future actions.
So the next time you find yourself flat on your face, be grateful for the learning opportunity, dust yourself off, keep trying, and remember that the most inventive and successful people in the world not only fail, they are the BEST at failing.
Call or contact Janna Hoiberg online to schedule a free, initial consultation.
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