Categories
Employee Training Employees Entrepreneurs Leadership

Keep looking for lessons

The previous discussion about chain of command when leadership isn’t supporting their team properly generated a number of private inquiries and comments. One stood out, saying: “You sure run into a lot of broken businesses”. Perhaps so, since helping owners get their companies out of situations like that is one of the things I do. The other, which the last piece spoke to, is helping employers and employees understand each other.

Communication lessons

Employers and employees are stunningly adept at misunderstanding email messages and comments made to one another. They’re not alone. At least once a week, I’ll get an email from a client that asks me to explain what in the world I just said – not because I went too technical, but because I assumed too much. Maybe I remembered the lead up to the conversation better, worse, or differently than they did. Maybe I’m coming from a place that they’re not seeing. Maybe I misunderstood some part (or all) of our last conversation.

Employees and employers struggle with this. This week, a guy was ruffled because his team did something he asked – but in a different context than what he wanted. This happened because he didn’t put himself in their place.. in their mindset.

His people did the wrong thing because they don’t think like owners (hello – they AREN’T owners). They created the resource he asked for in the context of their work, rather than in the context of his.

Unless you explain the WHY, you’re unlikely to get the right WHAT.

Context means everything. Owners and employees are different. They must work harder to understand what each group is really, truly saying.

Ultimately, communication is a team sport. It’s a skill we first learn to do by crying and continue learning, teaching, and sometimes still crying, until the day we die. Which brings me to John Haydon.

Look for the teachers

I didn’t know John well. Like all but one person in the charitable world that I’ve encountered and served on national boards with over the last 20 or 25 years – I never met him. All of these nationally-known people know each other and have met for decades at conferences, on consulting gigs, etc – but that’s not really my work world.

I stumbled across John because of his connection with several of the folks involved in my online-only charitable board relationships. I remembered him and followed his work because of the wisdom of the things he taught, and perhaps a little because his son’s a Scout.

He was a teacher to executives, marketers, and others in the charitable world – an expert at communicating and teaching organizations how to care for the people who donate to their cause. He wasn’t simply good at showing people how to “get the message across”, but thinking about the people who would get your message and grooming that message to have the most impact possible to them. The messages were caring for, relating to, and encouraging them.

A little more than a week before he passed, he gave a very personal interview to Chris Brogan about his experience with cancer, and the conversations he was having with friends, family, and himself. Even in his last week of life, he was teaching his long-time friends and peers via a private Facebook group assembled to help his friends and family share memories with John, say their goodbyes, and eventually, deal with the inevitable.

I mention these things about John because there’s a lesson in there. Here’s a man most likely wracked with pain, knowing he’s facing death in mere days, yet he’s still helping his fellow man by passing along wisdom… on camera, in what was probably his last public act. Even then, he wasn’t done. His book “DonorCARE” is about to be published, so his teaching continues.

Looking for lessons

Those “broken businesses”, the not-so-broken ones, and the stories I tell about them are intended for one purpose: To pass along lessons to you. Sometimes these stories and their lessons fit what’s challenging you that week, sometimes they don’t.

A famous TV personality used to say “Look for the helpers.” To that I would add, “look for the teachers.” They might be a business’ behavior, the behavior of a leader, manager, employee, the staff at a business you frequent, or… a guy named John whom you barely know.

Keep looking.

Photo by Ryan Graybill on Unsplash

Categories
Banking Employees Entrepreneurs

Boomer business for sale

I noticed a decades-old retail business that’s closing soon. There’s no “For Sale” sign in the window. The newspaper article about the upcoming closure says nothing about the owner’s desire or attempts to sell it. It appears they’re simply closing. I suspect their staff are looking for a new job. Later that day, I was listening to a podcast discussing data showing that 60000 U.S. boomers retire every day and that boomers own 57% of the 28.7 U.S. businesses. The impact of closing rather than selling a “boomer business” will not go unnoticed by local economies.

This boomer business data comes from the U.S. Census, Social Security Administration, the SBA, the BLS, and the financial industry. Per a JP Morgan Chase analysis of U.S. Census data, 48% of the people U.S. employees work at a small business. 18% of them work at a small business with fewer than 20 employees.

Boomer business closures

If you combine the 60000 per day figure with the 57% figure, what you get is a picture of a massive group of businesses that will change hands over the next decade or so. The troubling thing is that the sale of the business isn’t the only option.

Many business owners choose to close up shop and walk away. Perhaps they don’t have children who wish to take over the business. Maybe they don’t feel their “boomer business” is worth anything to anyone else, even though it’s probably producing an income. They may not be interested in dealing with the hassle of finding a buyer who can pay the price, much less the effort required to train the new owner.

At first, I thought this apparent hesitance to sell and train was because a long-term business required very specific, and perhaps disappearing, skills. Some fit this profile, but the JP Morgan analysis shows that 51% of small businesses are less than 10 years old, so many likely aren’t limited by that problem.

Over 99 percent of America’s 28.7 million firms are small businesses. The vast majority (88 percent) of employer firms have fewer than 20 employees, and nearly 40 percent of all enterprises have under $100k in revenue.

JP Morgan Chase analysis of U.S. Census data

Why this matters

There’s somewhere around 155 and 160 million Americans employed. I know, the numbers are weirdly calculated, politicized (as always), and may count people with multiple part time jobs as more than one person.

There are probably other problems with the numbers, but for the sake of discussion, let’s assume they’re inflated by 20% – a wide margin of error. That means roughly 128 million individuals have at least one job. Interestingly, a little research after the first draft of this found a Statistica report showing that same 128 million figure for full time employment in the U.S.

If 99% of the employers of these people are small businesses, and 57% (percentage owned by boomers) of them have owners nearing retirement in some form, there are a lot of jobs at some sort of risk.

You can’t simply take 57% of 99% of 128 million, of course. What we can do is accept that it’s reasonable that a very large number of people work for businesses that will either close or change hands over perhaps the next 10 years.

With the average number of employees across all businesses being fewer than 20 (16 is one of the averages I saw from BLS.gov data), every time a business sells or changes hands, 15 jobs are at some level of risk (on average, assuming one owner is an employee).

That’s a significant impact on employment, even if these calculations are off by 50%.

SBA/SUSB data shows about 115,000 businesses in Montana – a number growing by ~3400 per year. About 51% remain open after five years.

If half of them close/sell over the next decade, that affects about 118,000 employees. While these numbers are rough, it’s reasonable that resulting life upheaval will ripple through local economies.

Collaboration required

Owners: Consider a creatively-structured sale. No matter how it pencils out, you gain little by closing the doors.

Employees: Tell the owner you’re willing to keep going. Look into how the business can be kept running. Someone who already owns a business is a good candidate.

Locally-owned banks: Is it OK for these businesses to disappear? No bank understands and can serve these folks like you can.

All three groups: Look for the win-win, rather than the fantasy outcome. Everyone can be rewarded by a successful transition – including the community’s economy.

Photo by Tim Mossholder on Unsplash

Categories
Entrepreneurs Leadership Productivity

Doing it faster, but poorly?

In today’s busy times, we’re always trying to create that little bit of extra time to get one more thing accomplished. Seldom is this item one more strategically critical task, mind you. In most cases, it’s simply one more thing because somehow we got the idea that we’re not doing enough things. No matter that we’re doing 100 things poorly – the focus is often on reaching 100.

Hearing or listening

Podcasts and audio books are a good example of this. We listen to podcasts at double speed so they don’t take as long. We listen at that speed under the illusion that we’re getting more done. This, despite the cartoonish voices and the almost certainly reduced comprehension. That way, we can listen to more of them. Or listen to them again because we didn’t really get anything out of them. We listen to more of them on the same topic because we’re struggling to absorb what we might get out of any one of them if we weren’t focused on how many we listen to and how fast.

Does it matter that you listened to 30 audio books last year if you didn’t get anything out of them? Or half of them? Obviously, audio isn’t the culprit, the same could be said for books, newspapers, blogs, or research papers. We sometimes forget that getting anything done well is better than getting that thing done faster and poorly. There is, of course, that “done is better than perfect” thing, but even “done” should have some context.

Years ago, a friend who owned several franchise locations of a fast food restaurant replied to some good natured ribbing from one of this friends who chided him that his restaurants made a lot of mistakes at the drive through window. He said “I don’t pay them to get every order right. I pay them to get the orders done quickly.” It’s a good example. Do you mind if you waited in line for five minutes if your order is right? Or would it be ok to wait in line for two minutes and frequently have your order wrong?

How is that different than whatever you’re rushing through today?

It takes an unbelievable amount of energy to resist reality.

Jim Dethmer

Advice from an old guy – and those around you

No, I wasn’t referring to me. Back in the ’60s, Earl Nightingale sold a ton of his book “The Strangest Secret” on albums. Yes, vinyl records. Some of the book revolved around his thought “Watch what everyone else does–do the opposite. The majority is always wrong.“, which I suspect rolled downhill from G. K. Chesterton’s “I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.

While advice like this can be less useful when lived as a hard and fast rule, it has plenty of value. The real root of it is to understand the benefit of taking the time to be observant of the behaviors of those who are, and aren’t successful. What you won’t likely see from the most successful people you know is that they’re cramming more and more into their life. It may seem like it because they are doing different things than you are – and that has the appearance that they’re simply capable of doing it all.

They aren’t.

The difference is that they make a deliberate decision to remove unimportant things from their lives (like “Big Brother” or “Survivor”) so that room is created for the things that are important to them. They subtract, rather than add. Subtracting unimportant things from their lives creates the space that they fill with the things you think you can’t possibly make time for.

Do be careful while observing these folks and selectively extracting lessons to improve your own life and business. Don’t compare your life to theirs. The difference doesn’t matter, and the difference is never what you think it is because you never know the whole story – just like those who have judged you don’t know your whole story.

Don’t compare your beginning with someone else’s middle.

Alison Beere

You’re unlikely to make your bucket of life more full by cramming more things into it. Be fiercely selective about what you let in.

Categories
Business model Entrepreneurs Leadership Management Small Business

Small Business Scorecard

I’ve long focused on helping businesses one on one, by choice. From time to time, I’ve considered mechanisms (other than my writing) that provide help in a group setting. Ideally, this would let me help more people while not drastically increasing the time required to do so. Typically, this means holding webinars, group coaching, masterminds, ie: “one to many” events. This piece is intended to fill some of the gap between one-on-one help and one-to-many help, at least for now.

How we get help differs

When it comes to seeking help, business owners appear many forms. Some repeatedly seek help from people, books, and other resources. Others tend to accept help about specific topics, or when a resource is recommended to them by a trusted friend. Some read or listen to many sources of help / advice, but are pretty choosy about the things they implement. Some seek no help at all – and this group seems to be broken down into a group that knows they need the help but never take action, and another segment that simply figures it out on their own (or doesn’t).

Efficient learning varies from person to person. Some prefer reading, while others learn / retain more from audio, video, pictures and/or diagrams. Some people prefer brief information, others tend to consume “long reads” or extensive, highly detailed video. This time around, I decided to take a self-guided approach. I’d appreciate feedback on how effective the scorecard is for you – and why.

How the scorecard works

I’m calling this a scorecard, but the goal is not to arrive at a number and think “We got a 74, so we’re doing fine as is.” It’s more of a self-assessment & introspection tool. You’ll find statements about how things work in your business. You’ll agree with some. Others will have you thinking “That’s definitely not us.” If a seemingly-negative item on the list doesn’t pertain to you, cross it off. Look at the items you circled / checked as “yep, this is us” as a milestone on the way to a stronger company. Some may need recurring attention.

Marketing

  • Our marketing is completely automated across all media, digital or otherwise.
  • Our marketing is strictly digital. We don’t make sales calls, send US Mail, visit prospects, have prospects visit us, and we don’t go to trade shows.
  • Our marketing is strictly organic. We don’t advertise, other than having a website.
  • We test new ads against our ad that performs the best.
  • We market our work consistently.
  • We spent ad money effectively.
  • We have data that tells us what works and what doesn’t, marketing-wise.
  • Our marketing is executed based on a plan or marketing calendar.
  • We collect information about people who show an interest in our products / services.
  • On a regular basis, we reach out to people who have shown an interest in us. We send offers as well as useful information that will help them make a purchase decision.
  • In marketing dollars, we know how much it costs to get a highly-qualified lead.
  • In marketing dollars, we know our lead cost on each type of media.
  • For each of the media we use for marketing (radio, tv, newspaper, direct mail, various internet options), we keep track of lead quality, lead volume, and ad investment.
  • We decrease our marketing efforts / spend when the market is tight.
  • We use our lead cost to drive decisions about ad purchases – including internet ad options.
  • We increase our marketing efforts / spend when the market is tight.
  • We don’t really advertise with any consistency. You might say it’s driven by which ad salespeople call on us.
  • In our market, expertly-done marketing has ceased to become an edge. Everyone in our market is a good marketer.
  • We decrease our marketing efforts / spend in good times.
  • Most companies in our market are spray-and-pray marketers.
  • Some companies in our market are haphazard or random marketers, but there are some that we’d consider experts. They spend ad money effectively.
  • We increase our marketing efforts / spend in good times.
  • We’re one of the haphazard / random marketers.
  • We’re one of the more effective marketers in our market.

Operations

  • It feels like things “fall apart” a little when critical people leave, or are out of the office.
  • When the owner or manager are gone for the day, things seem more productive.
  • When a team member is gone, it’s easy to deal with their workload because we’ve been cross trained.
  • When someone is out of the office, it can be a little tough, but we have written process / procedures documentation to help us get the work done.
  • We rarely / never have to contact someone who’s out of the office to ask them how to do something, or to get online and help us deal with this or that.
  • When our front desk takes order / job status calls, they have to call back into the shop to get someone to tell them what’s up with an order / job.
  • We sometimes run out of the supplies / raw materials we need to do our work.
  • It’s common for us to contact someone who’s out of the office because we need help dealing with something they do.
  • Customers can tell when a critical employee is on sick, off that day, or vacation.
  • When a customer contacts us to find out the status of a job / order, any employee can easily and quickly find the info and pass it to the customer.
  • Customers can’t tell when a critical employee is out of the office.
  • We never run out of the supplies / raw materials we need to do our work.
  • We use a system to track and manage our tasks / work.

Business model

  • Our products / services are one-off. We don’t make something once and sell it multiple times.
  • Once we make tooling, we can make and sell the same item repeatedly.
  • We sell services on a subscription basis.
  • The business doesn’t generate income when the owner isn’t working.
  • We serve a vertical (narrow) market.
  • We sell products and service them, so ongoing reputation is critical to get returning customers.
  • If we’re not on the job and billing hours, we’re not generating revenue.
  • We serve a horizontal (wide) market.
  • Our market has already been disrupted / is difficult to disrupt.
  • Once created, our services have a marginal COGS so we can make something and sell it repeatedly.
  • Our customers pay us each month. We deliver / replenish consumable products / services.
  • Our market could easily be disrupted.
  • We provide customers with a service infrastructure.

Staffing

  • We’re always understaffed.
  • We have trouble keeping people, but they don’t tell us why they leave.
  • We have trouble keeping people. They tell us why they leave, but we can’t or won’t do anything about the things they mention.
  • Customers can’t tell when an employee is brand new.
  • Our people rarely do things together outside of work.
  • It takes a long time for us to hire someone because we’re careful to find people who fit our existing team.
  • Customers can tell when an employee is brand new.
  • We have trouble keeping people. We’re not sure why.
  • Few of our first line managers are familiar enough with the line employees’ work to take over for them in a pinch.
  • It takes a long time for us to hire someone because candidates are hard to find.
  • We’re overstaffed, but our workloads vary wildly so we don’t want to shrink the size of our staff.
  • Our team is a family – they frequently do fun / family / activities together outside of work.
  • Our first line managers could easily handle the work our line employees do, if they needed to.
  • We tend to promote from our existing staff.
  • We rarely promote from our existing staff.
  • Our team tends to be swamped one week, and might be sitting around with nothing do the next week.
  • Most of our team members are easily replaceable.
  • We have employees who have been here for many years.

Sales

  • Our sales team says they never have enough leads.
  • The sales team feels our leads are properly qualified when they get them.
  • Customers and prospects comment that our sales team was useful in helping them make a purchase decision.
  • Salespeople often comment that they’re getting leads who aren’t suitable for our products / services.
  • Our pipeline is difficult to confidently predict more than a couple of weeks out.
  • We have quotas, but we aren’t involved in deciding what they should be.
  • We close an acceptable-to-us percentage of sales when we have a highly-qualified lead.
  • I feel confident when I give a solid lead to one of our salespeople.
  • We have sales quotas – and we’re involved in determining those numbers.
  • We’re constantly under pressure to make quota – and we know it’s because the company’s cash flow is precariously low.
  • We get very few complaints about our sales team.
  • Finance is always bugging us to give them pipeline information, but we can’t consistently tell them anticipated revenue more than a week or two in advance.
  • Our sales team has an experienced leader.
  • It’s not unusual to get comments that our sales team is pushy.
  • Finance really appreciates that we can give them dependable sales pipeline info 30-60 days in advance, so they can depend on revenue in advance of receiving it.
  • Sometimes people send in feedback saying our sales team is more interested in closing a sale than they are about helping customers decide on a purchase.
  • We have more leads than our sales team can handle, but not all of them are well-qualified.
  • Our sales quotas feel like impossible expectations rather than achievable goals based on lead flow.
  • Our sales team is lead by the salesperson who usually sells the most.
  • We have more highly-qualified leads than our sales team can handle.
  • We believe that our product / service makes a significant improvement in the lives of our customers and as such, it is our obligation to offer it to as many qualified prospective customers as possible.
  • Our sales team easily handles all the leads we give them. They keep asking for more.
  • Most days/weeks/months, our sales team can handle the leads assigned to them.

Management / Leadership

  • You can ask any of our employees what motivates us as a company, or “What’s our why”. They all know.
  • Our people are an investment in our business.
  • We have to constantly watch our people to keep them working.
  • Our managers are all family members who learned to manage here – and it’s worked great for years.
  • Our people feel like a cost / expense.
  • Sometimes new employees have to wait to get a phone, desk, computer, tools, or a space in the shop. Those things aren’t always / usually available on their first day.
  • Employees know what our company long and short term goals are.
  • We’re an open book company.
  • Our managers are all family members who learned to manage here. I think the company would positively benefit from an experienced leader.
  • We don’t share any financial performance information with our people.
  • When a new employee get to their desk / work station / shop station on their first day, they have everything they need to get to work.
  • We have a 401K.
  • Team members don’t seem to connect their work with the company’s goals.
  • It takes new employees a few weeks / months to get their act together and become effective.
  • We routinely discuss the importance of 401K participation in our employees’ future.
  • Our financial performance is none of our employees’ business.
  • Any good manager could join us, learn our business, and be effective here.
  • Only our family can manage this business.
  • Our employees understand what makes our business profitable and sustainable.
  • New employees often comment about how good / refreshing our on-boarding process is.
  • We encourage our employees to educate themselves and offer ongoing training as well.

Finance

  • We know where the funds for our next payroll will come from.
  • We’re always on top of the required state and Federal reports related to employees and such.
  • Sometimes we have to pay our invoices late, but it’s not an every month thing.
  • We get paid late by our customers and it creates issues for us.
  • We don’t have receivables.
  • Our payables are always behind.
  • We never have any issues with state or Federal tax returns or deposits.
  • We’re always on top of tax returns.
  • If sales could deliver dependable pipeline numbers for the next quarter, our finance problems would disappear.
  • The owner / management hates accounting.
  • We’re always up to date on tax deposits.
  • We’re not very good at managing the company’s finances.
  • We tend to be late on tax returns. Sometimes we have to pay a penalty.
  • Managing our finances is one of our superpowers. We suspect we’re better at this than many other companies.
  • We tend to be late on tax deposits. Sometimes we are charged penalties / interest.
  • We do all our own bookkeeping and accounting / tax work.
  • Debt is an important ingredient in our ability to grow.
  • We do our own bookkeeping, but we have a professional handle the taxes and related paperwork.
  • We outsource bookkeeping.
  • We’re focused on eliminating debt for the long term, even though we know it may slow us down from time to time.
  • We have a professional handle taxes and related paperwork.
  • Our “numbers” drive strategic decisions.

Systems

  • We understand that “systems” might include automation, but also may include manual systems – such as checklists, documented work processes, job descriptions, manufacturing reviews, and similar items.
  • New employees learn our systems as they learn their job.
  • We’re gradually systemizing parts of our business.
  • None of our systems are “perfect”, but our imperfect systems save time, keep us on track, and help us avoid missed steps.
  • There’s one person who knows it all on our systems, but that’s it.
  • As an owner, I ask myself “Whose job is this?” every time a piece of paper crosses my desk.
  • Our systems are a strategic advantage. They make our work safer and more consistent. They help us produce a more consistent outcome for our customers.
  • We routinely review our systems with feedback from the people who use them. Reviews drive upcoming system improvements.
  • The nature of our business requires that we invent most or all systems ourselves.
  • We don’t have anything we’d call “automation” but we’re definitely a systemized business.
  • We have several team members working together to know, improve, and manage our systems.
  • Over time, we train new employees on all the company’s systems so that they help in any area if someone is out.
  • We understand that automation / systems can be leveraged in any part of our business, from management to finance to manufacturing, sales, and/or marketing.
  • We’re using systems and ideas that others have refined over time.
  • Systems (and particularly automation) are something we need in order to keep up with competitors. If we didn’t have to, we’d use as few as possible.
  • Our systems have been in place for years. We rarely change them.
  • Our systems are very close to ideal. We’ve worked hard to get there.
  • Our systems are difficult to change.
  • Our systems are a mix of commonly-known systems from experts and systems specific to our industry and/or business.
  • We train new employees on all the systems in their area.
  • Adding new systems to our work is easy.
  • It’s difficult getting new systems into our workflow.
  • When we hire people. we look for experience in systemized businesses and experience with systems like ours.
  • If we find job candidates with experience with systems unlike ours, we consider this useful as we might gain an edge from that differing background.

Photo by Dan Meyers on Unsplash

Categories
Employee Training Entrepreneurs Leadership Management

Are you holding on too tight?

Have you ever driven something to the post office because then you’d be absolutely sure it was put in the right box and actually mailed? Seemed rational at the time, right? The biggest turning point in a business owner’s life is when they trust someone enough to let them do something the business owner used to do. Yes, bigger than deciding to start the business itself. It’s one of the most difficult achievements for owners because it’s driven by fear, an emotion as primitive as there is. This fear convinces us that no one else can do the work as well as we can, even when the task is unimportant but necessary.

We have a bias toward the illusion and value of control at least in part because we did everything when there was no one else to do it. We remember the good old days when we built it alone in our basement, kitchen table, garage, etc. We did it all, thumped our chests, and drank from the skulls of our competitors. Our fond memories tell us we were in control of everything. The reality was more likely daily firefighting in an environment where we were alone and nothing was truly in our control.

Control isn’t the secret sauce

We think control is an important and essential element to building and growing a company. We think this because it’s all we know. When we’re the only one doing the work – control of everything is the default behavior model. Over time, “control of everything” stakes its claim as one of the essential ingredients of our success comes to us simply because we were the only employee. That doesn’t mean it’s the ideal.

Delegating work is one of the hardest and most valuable skills a business owner can develop. We usually won’t admit to ourselves that being bad at delegating (or not wanting to delegate) is a product of our desire to preserve our illusion of control.

We convince ourselves to stay small with thoughts like these:

  • I built this thing myself when I discovered others weren’t doing this, or weren’t doing it well.” (until I delegate to the right person with the right details, assuming this was ever true, and of course the task is so critical that I MUST be the only one to do it. Except it usually isn’t that critical, it’s simply work that must be done.)
  • No one knows what we went through.” (and?)
  • No one works like an owner.” (which is understandable – they aren’t owners).
  • It’s faster to do it myself than to teach you how to do it.” (Except for the second through nth times, assuming you taught it properly)
  • Others don’t care like I do.” (even though they might – worst case, they care enough or in their own way. Again, they aren’t owners.)
  • So and so’s work isn’t perfect.” (Neither is yours)
  • I can always do it better than anyone else.” (Are you sure? Is 10% better worth not getting to that truly critical work that is of a nature that you really are the only one who can do it?)
  • No one but me has the twenty seven years of experience that’s necessary to do this work well.” (It isn’t usually necessary, we just think it is. If we use that experience to guide our training & delegation, someone else *can* do it as well.)

Control has limits

How many items can you carry at one time? At some point, you’ll either stop adding items, or you’ll start dropping things. Our minds have a similarly finite ability to control things. That “control” includes managing people, projects, relationships, much less doing the work our role demands of us.

Your leadership role requires your full attention. Would you prefer to lead your company well, or lead it poorly because your mental and physical energy is consumed by less important tasks other people can do?

Holding on too tight stifles growth. We had to hold tight when we were working alone, but it’s a serious liability when you have a team. The best NFL quarterbacks throw or hand the ball to someone else most of the time, despite most of then having great running skills. Your children won’t learn to walk if you never let them out of your arms.

An executive who works with famous bands and professional athletes regularly asks his clients how their work changed once they “went pro”. In both groups, the most prevalent answer was “having the time and mental space to focus solely on our music / on-field performance and the wants / needs of our clientele, without the distraction of little things that used to consume their time.

The fear of letting go of the control that we think helped us succeed when it was just us – is exactly the thing that keeps us small.

Hiring my assistant Lorena is one of the best decisions I ever made.
But, many entrepreneurs don’t know how to go about hiring one. (Myself included! I got lucky with Lorena!)
Many entrepreneurs don’t know where to look. They don’t know what to pay.
They don’t know WHO to trust.
But most of all, they don’t know HOW to trust.
They don’t how to let go of tasks they really need to let go of. They don’t know how to let go of control.
I get that. We entrepreneurs have skin (and blood and hair and sweat) in the game. We can’t take our eye off the ball or things slide into chaos in a hiccup.

A comment from Perry Marshall

Photo by davide ragusa on Unsplash

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Business model Entrepreneurs

Dilation, blindness, and the value delivered

You could go blind, you know.

My eye doctor said that. He’d barely stopped exhaling the words “Your eyes look great, they’re as healthy as they could be.” So what’s this blind thing about? Maybe he was reminding me to be grateful, or simply giving me a warning he gives everyone. I thought about it the rest of the day, partly because he dilates my eyes – which I do not enjoy. It’s my annual reminder that being blind might be “awful” until I got used to it. Dilation robs me of clear vision for a few hours and gives me a tiny little peek at a world that functions much differently. It’s OK – I know my doc is doing what’s best, but it still makes me crazy. This time, his passing comment (coupled with the dilation) made me think a little. What if I went blind? Clearly my life would change. My first thought went to “How would I make a living?” DUH, probably in much the same way. More importantly, what about my work would change? What wouldn’t change? Could I still deliver value to clients?

Deep thoughts

While my eyes are apparently super healthy, the Debbie Downer comment got me thinking. My first thought went to “What isn’t documented well enough?”, perhaps because I regularly nag about process documentation & checklists. I wondered if the difficult-to-explain tasks are properly documented for that situation. Not likely.

A lot of my work revolves around the ability to see software or a web page. That’d be OK for a short while, until the familiarity I have from frequent use is eroded over time. Even without that erosion, web pages and apps change over time. That’d make using some of them quite difficult a year from now. Screen readers and adaptive technologies have improved greatly over the last 10 years. Despite that, there would almost certainly be difficult moments at the computer.

A lot of my work is communicating. I’d need to figure out how to read & respond to email. I could dictate to an app & have someone transcribe it, but there’d be that initial jarring loss of privacy & independence. The loss of independence would initially go much further than the increased difficulty of emailing. However, it wouldn’t really change phone calls or webinars much. I’d have to come up with a system for writing, editing, & following agendas that I could no longer see with my eyes. Someone’s mastered that, I’m sure.

Changing the how doesn’t change the what

For whatever reason, I never pondered the possible impact blindness would have on the day to day basics of life that afternoon. Things like eating, cooking, the bathroom, transportation, interaction with people, hiking, getting dressed, or finding that stubborn piece of spinach in my tooth without a mirror. Steve Jobs supposedly wore the same outfit every day as a strategy to reduce his cognitive load. None of that stuff crossed my mind at the time. Maybe my subconscious assumed those things were trivial or could be mastered. Perhaps my subconscious “knows” that continuing to make a living would dominate my thought if this happened.

The interesting part of this (perhaps odd) thought process was a deep introspection of what I do, how I do it, for whom, and the value delivered.

I thought about the clients I have and what would change. Clearly, the work that requires hands on software use would change. While I could use voice to text or other adaptive tools to write, program, strategize, or produce marketing copy – certain aspects would likely become quite difficult. Curious, I googled around a little and found several interesting pieces where blind programmers described how they do what they do. These were not hobbyists, but seasoned professionals.

Ultimately, I realized that the majority of the value I deliver isn’t visual, has little to do with the software I occasionally write, and isn’t defined by this column (even when it’s good). This would surely be different if I were in my twenties and didn’t have the experience I have now, but that’s really not relevant to me. To others, it might be significant.

If I went blind, the mechanical details of my work (ie: “the how”) would change substantially. Thing is, people don’t get value from the how. They get value from the what. What do you think?

Photo by Rahul Bhosale on Unsplash

Categories
Community Employees Entrepreneurs

Why Business is Personal

14 years ago when this blog got the name “Business is Personal”, you’d occasionally hear “It’s not personal, it’s just business.” I found the idea repulsive, transactional, and most importantly – the opposite of everything I’d been taught. The phrase later became part of pop culture thanks to a TV show. I even had a business partner say this to me back in 2006. Because I never believed it wasn’t personal, it marked a turning point in that business relationship – which soon ended. “Business is Personal” was true when “it’s just business” was said to me in 2006 and it’s still true today, perhaps more than ever.

Sales and marketing is personal

The marketing messages that touch us and do some part to convince us to make a purchase are effective because they touch us. I recently heard of a study of a man who had an operable brain tumor. When the tumor was removed, it required removal (or damaged) a part of the brain that controls emotion. There was speculation that he would be more capable of making decisions than most people, since emotion would no longer cloud his decision making. It turned out quite differently. Without the ability to use emotion, he was unable to make even the simplest of decisions. Unable to decide between salt & pepper, or between red wine & white, he required extensive care, rather than becoming a highly logical decision-making juggernaut.

To excel at sales, we must become experts at listening to prospects. We must “get inside the head” of people to learn what motivates them, how they are thinking, and often, what their deepest wants and needs are. My dad used to tell me to “be a good listener”, a phrase which changed meaning from decade to decade. Today, “listen to understand, rather than to respond” has become the catch phrase of many who are figuring out that listening to respond completely misses the point.

We’ve all been subjected to a salesperson who is focused on their quota, or on their sales process, rather than on our wants and needs. It’s frustrating. Transactional. Many avoid businesses with this type of sales team. Eventually, some businesses figured it out and started using non-commissioned salespeople. Despite that, I still get calls and meet salespeople who start the conversation about their quota and the need to close a deal by some irrelevant date.

The sales our companies make are very personal. They allow us to hire people who support their families, which support schools, charities and entire communities. Those sales fund salaries that are spent at other local businesses, that fund infrastructure and schools, and allow our employees to get their kids into schools, sports, outdoor activities and more. In communities where a business is a substantial employer, the impact of that business ripples across the economy of the entire community.

Employment is personal

For many people, their job or their chosen field of work is a part of their identity. It may be what motivated them to go to college or trade school. It might be what got them to spend Gladwell’s perhaps-discredited 10000 hours to achieve mastery, and/or to seek out the mentor who would teach them the ropes. For some it’s a bit bigger piece. Ever spoken with someone who’s unemployed? Would you even begin to tell them that experience isn’t deeply personal? For some, it digs at them to their core and they might never forget it. It might even drive decisions they make for the rest of their lives, simply because they never want to be in that situation again. “It’s just business” doesn’t begin to describe it.

It’s personal when you get the job you’ve worked years to be qualified for. When you get the job of your dreams, it’s personal. It’s personal to take out massive student loans while becoming a doctor, lawyer, engineer, teacher, etc. When someone tells you that you aren’t good enough at a job and fires you, it’s personal. It’s personal when you come home and explain to your family that you were laid off or fired. When you have one of the greatest business successes of your life, it’s personal. If you have to humble yourself in front of friends, peers, and the people you love because you were fired, it’s personal. When tough times threaten the faith they put in you and tarnish the promises you’ve made to them… it’s personal.

Ownership is personal

That business you built from scratch, the one that almost now one knows how much time, mental strain, money and work you invested in, it’s personal to you. The sacrifices you made, the jobs and financial opportunities you gave up to build your dream, they’re personal too. The dream is personal. It pushes you to work, sacrifice, get your life out of balance, struggle to get it back in balance, only to work harder the following month to keep it that way. Your business is personal to you, no matter how it feels or appears to someone else.

You chose who you wanted to be a hero to. It was a personal choice. There’s probably a reason for it. I think back to how I advise people to take care of their customers, and it surely goes back to watching my grandmother make butter and riding around in my granddaddy’s truck to deliver eggs, milk, butter, and chickens. Even though the world had all those things at the corner grocery store, people paid still paid them to deliver these items to their door. My grandmother’s butter wasn’t simply a round of butter. She milked the cows. She churned the butter. She hand-formed the rounds and then personalized them with a design she hand embossed on the top with a wooden spatula that someone had carved for her.

How is your craft any different from that? How is it “just business”? Please.

For some, it’s who they are

Like it or not, what we do and how we earn a living is quite personal to most of us. Even if you’ve arrived at a point where “it’s what I do, it’s not who I am“, the fact that you had to do some introspection to get to that point is evidence that your business is personal. It doesn’t matter what you do. If you deliver firewood that you carefully chose, cut and had the patience to season before selling it, do you toss it over the fence and leave the pile for the owner? Or do you neatly stack it where they asked and cover it with a tarp so it’s dry and ready to warm their home? If you do the latter, is it really “just business”?

Taking your business personally doesn’t mean you’re emotionally fragile. It doesn’t mean you hate your competitors, or that you’re angry at someone who decides not to buy your product. It means your customers’ success is important to you. It means the work is important to you. How you help them achieve success, how you deliver the work, how you care for them over the years. These things tell people what kind of person you are. The people you rescue and the effort necessary to rescue them is important to you – no matter what form that rescue takes. If it’s “just business”, it shows. If it’s “just business”, you’re just a vendor that can be replaced by the next lower priced option. There will always be a vendor that’s cheaper – and it shows. There will always be someone who takes their work personally. That shows too.

If your business is personal to you, that’s OK. It’s your choice. Don’t let someone else take that away from you.

Photo by Benjamin Suter on Unsplash

Categories
Entrepreneurs Management Small Business strategic planning

Selling your company

In Silicon Valley, “exiting” means a company you started / invested in went public or was bought by another company. It’s a time of celebration, reward, & anticipation of the next big project. When you are selling your company, it’s often different. For some, it’s an escape. For others, it’s the achievement of a long-anticipated goal. Are you prepared for it?

Is your company ready to sell?

The process of getting a company ready to sell is really about getting it running smoothly. It’s easy to think of it from the “E-Myth” perspective & focus on “systematizing” your business, but there’s more to it. Put yourself in the shoes of a buyer during due diligence.

They’re looking for proof. Signals that provide assurance.

They want to see data that indicates how your company performs. If you have good, verifiable data, you don’t need to make big claims. Let the data talk. For example: You can probably predict gross revenue over the next 90 days with a fair amount of accuracy simply by gut feel, but can you show data that supports your prediction? How you do this will vary, but many use some form of leads-per-month and conversion rate.

Sidebar: One conversion rate calculation is the number of leads who buy during a period divided by the number of leads you gained during that same period. If you get 1000 leads a month & sell to 520 of them that month, your conversion rate for that month is 52%. Sales cycle length & other factors can complicate rate calculations. Keep it simple.

Selling your company requires leading indicators

Measurable business performance can be difficult to extract solely from financials, which produces trailing indicators. Income history over time is good to have, but it’s a trailing indicator. A trailing indicator is one that documents how the company did last week, last month, last quarter, last year, etc. What about the future?

Buyers want to see leading indicators. Data that accurately predicts future performance.

A leading indicator uses verifiable data to reasonably predict how the company will perform next week, next quarter, etc. Restaurant reservations are a leading indicator: You can predict on average that 78 people will show up for dinner if you have 100 dinner reservations for next week.

Lead counts (inbound phone calls, website opt-ins, etc) function both as a trailing & leading indicator. Imagine you got 100 new leads a day on average over the last two years. Let’s say your close rate on sales hasn’t changed during that period. If your average sales cycle is 60 days long, you should be able to predict income quite accurately for the next 60 days. Why? Because the lead count is steady and so is your close (conversion) rate. While this ignores changes in prices & costs, it reasonably predicts future gross income.

Why are you selling your company?

When someone approaches you about selling your company, it’s often done without provocation. You haven’t listed the business for sale. You haven’t indicated that you’re ready to retire. “I’m not ready“, you might think.

They see opportunity. Sometimes they see synergy with their existing business. Maybe they want to buy more customers. Their reasons are theirs. What are yours?

When you ask owners in this situation what they really want, they’re often unsure. There’s nothing wrong with that. You don’t always know what the next step beyond business owner is because you haven’t thought hard about it. You’ve been focused on running the company, growing it, & taking care of customers. It’s OK if you haven’t put serious thought into what a sale really means – even if you always knew you’d sell someday.

A big check” is too simplistic an answer for some, because the business is a big piece of who they are. Some want a role in the company after the sale. Many don’t. Some care what happens to the company, the customers & their team. Some don’t.

Owners often have a number in mind that they would take. The first number I hear is rarely based on hard numbers, desired ROI / payback period, etc. Remember that a buyer is purchasing assets (most likely) as well as an income, whether they’re an individual or a company.

When it comes to selling your company, your “why” is as important as theirs. Think about it and get your business ready.

Categories
Buy Local Employees Entrepreneurs President-proof Restaurants Retail Small Business

The butterfly effect of a shutdown

This past weekend, my wife & I shared a cold one at a local brewery while discussing the shutdown. Pundits and others wave off the shutdown’s impact as “a small percentage of the Federal workforce”, as if it’s trivial. Trouble is, the headcount of furloughed Federal employees creates a butterfly effect that ripples outward to almost every sector of U.S. business.

Shutdown data & families

800,000 Federal employees are currently going without pay. Slightly fewer than half are furloughed – meaning they aren’t allowed to work. More than half are “essential workers” – required to work during a shutdown. Those working will receive back pay once the shutdown ends, but furloughed employees have no “guarantee” of receiving back pay.

The shutdown affects about 3.2 million employees & family members. My non-scientific extrapolation assumes four members per Federal employee household. There’s income flowing into those households if they have two employed people if one isn’t a Federal employee… maybe. Perhaps the two jobs depend on access to childcare. If one is unpaid, can they still afford childcare? If one employee is “essential”, both still have to work. Result: childcare is necessary. It’s not uncommon for both family wage earners to be Federal employees. I know a number of couples who both work for the USFS or Park Service, having met at work when they were single.

You’ll hear some say these people don’t matter and/or that they don’t care if they’re paid. You should. Their economic activity (or change in activity), regardless of their financial condition & habits, is what creates an economic butterfly effect in towns all over the U.S. (Update: 1/9/2019 from the NYTimes based on US Gov data: https://www.nytimes.com/interactive/2019/01/09/us/government-shutdown-state-by-state.html?smtyp=cur&smid=tw-nytimes )

The local economic butterfly effect

Federal employee families have mortgages, eat in restaurants & go to bars. They get oil changes, rent movies & purchase medical care. These families own businesses (like a favorite local brewery), buy raw materials, & employ people. They buy gas, clothes, donuts, firewood, cleaning services, plumbing / electrical repairs, groceries, etc.

This economic activity creates revenue for all local businesses. If you run a restaurant, bar, or other business near a Federal building – it’s likely that a lot of your business comes from Federal employees. TSA folks get a coffee/meal at an airport business. I suspect that activity will shrink at every U.S. airport.

Tax refunds often pay for vacations, bills, & down payments on large purchases. Loaning the Feds money at zero interest may seem unwise, but the economic impact is undeniable. The IRS does not pay refunds during shutdowns.

The now-closed IRS income verification service will eventually impact home purchase closings. Mortgage approvals use the service for income verification. Home purchases affect local banks, real estate agents, closing firms, home inspectors, and home repair contractors, among others.

Local breweries that can / bottle beer are stuck in line waiting to release new beers. The Federal agency that processes over 16,600 beer label applications per month is closed. Someone sells them hops, malt, yeast, bottles, cans, labels, & graphic arts. Someone manufactures & delivers them. Some puts that income into investments, savings, tuition, a home, etc.

Closed or limited Federal lands access can more directly affect local businesses. In West Yellowstone, Montana Public Radio reported that Xanterra and 13 other local businesses managed to arrange a temporary deal to pay the park to plow the roads & groom snowmobile trails in Yellowstone. While $7500 a day is expensive, the alternative is a lot of lost revenue & people out of work during winter peak season. There aren’t a lot of open jobs in West Yellowstone, so even one business laying off its entire staff could create a cascading nightmare for a small town and its families. A snowcoach business owner in the area mentioned that the deal keeps his 14 employees working. Businesses in the Mammoth, Cooke City and West Yellowstone areas are likely thrilled about the temporary deal.

That option isn’t available everywhere.

Butterflies & ripples are different

In a pond, ripples get smaller in height as they expand their reach toward the shore. When they reach the water’s edge, they might barely be noticeable. The butterfly effect works in reverse. Each wave is bigger and interactions create more waves.

As each of these economic impacts ripples outward, it affects more and more people & businesses. At first, the impact is small. Over time, these small impacts accumulate and start to push family & business finances over the edge. Not just those of Federal families, but everywhere. Want to help out? Buy local.

This highly scientific diagram is an incomplete and highly simplified representation of a part of this discussion. Note that it doesn’t include every Federal agency, nor does it include cash flow lines between families who own local businesses to other local businesses.

Categories
Entrepreneurs Management Small Business

What does freedom mean to business people?

When you ask business owners why they started their company, you frequently hear these words: Freedom and opportunity.

Opportunity tends to have a narrow definition. Someone sees potential in a market and goes after it. Opportunity may also mean the ability to make more than they could make at a job.

Freedom’s meaning seems to vary a bit more from owner to owner, at least as it relates to “I started my business because I wanted more freedom“. Knowing exactly what it means to you is critical. Those specifics will impact on how your company takes shape, how it’s run and eventually, how it appears to potential buyers.

I bring this up because I’ve recently been in a number of conversations with owners who are planning or considering the sale of their business. Some haven’t made the “I want to sell” decision yet. Those who haven’t decided yet are still  focused on improving their business practices. These changes will make their businesses more attractive to potential buyers if and when that time comes.

Working toward a better freedom

When discussing what needs to be done to sell your company, there’s usually a long list of things that the owner wants to improve before looking for buyers. Since your company will benefit from a subset of these improvements even if you don’t sell the company, be sure to focus on those things first.

Why?

First – Anything that makes the company better also improves it for you between now and the time you do close a deal. If you never close a deal, you still benefit.

Second – Some of the things you’d to prepare will only benefit you in situations where an “investor-class” buyer is involved, such as a private equity group.

Selling your business to “someone in your town” is much different than selling it to investors. The more sophisticated the buyer, the more complicated, annoying, and costly the due diligence process will be. Be sure that the prospect is dead serious before venturing into this process because it won’t be fun, cheap or easy – and it’s possible their intentions won’t be honorable. Doing your homework is essential.

How does this relate to freedom? The improvements you make should improve the freedom your business provides – and these things are almost always the same things that make the business more attractive to buyers.

What does freedom mean to you?

Specifically, what freedom does your business provide – or what freedom do you want it to provide?

Whether you are looking at what happens after you sell your business, or simply what will happen once your business reaches the point of being able to support you – it’s critical that you know exactly where you want it to take you.

Does freedom mean more time? What’s that mean for you?

Working fewer hours than at your last job? Working at home vs. having to commute? Being home every weekend? Not having to travel 25-30 weeks per year? Having the ability to come and go at will? Having a more flexible schedule day to day than at your last 8-5 job?

Businesses that provide time freedom typically have a team doing the day to day work. At first, the owner might be managing the team. Over time, owners need to recruit and/or develop someone to manage their team.

Companies structured like this can be easier to sell because they aren’t as dependent on the owner to run them day to day, much less to create revenue. They also provide smoother continuity if the owner dies or is disabled.

Does freedom mean more money? What’s that mean for you?

Does it mean that your income is more secure? More resilient? More diverse? Less likely to be at the whim of someone else?

What aspects of the business protect that income, your pipeline, etc? How resilient is that income if you have to interrupt your work (as owner) to care for a family member for more than a day or two?

Companies where income freedom is more important than time freedom can be harder to sell if the owner is critical to day to day operations.

Either way, the important thing is knowing what you want & structuring your business to support that over the long term.

Photo by USAG-Humphreys