by Kyle on July 9, 2010
“This is the lesson: never give in, never give in, never, never, never, never—in nothing, great or small, large or petty—never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.”
— Winston Churchill
Have you ever given your all to something only to have someone else come in and crush the results of all that work? Do you get frustrated because the outcomes you want aren’t coming to you as quickly as you’d like, despite the fact that you bust your butt day in and day out? Do you start to doubt yourself, your skills and talent, and your ability to succeed? YOU ARE NOT ALONE. As small business owners, we have all been there.
There are a number of ways for us as business owners to handle these types of devastating set-backs. Here are three of the most common:
- Do nothing and just keep absorbing the abuse;
- Quit;
- Make a change.
Option Number One – Do nothing.
If this tactic appeals to you, you probably shouldn’t be an entrepreneur. Most of us started down this road because we weren’t willing to slog along in mediocre jobs just taking indiscriminate abuse meted out by others. If we wanted to suck it up and slide along the path of apathy, we could have stayed in our corporate positions and let circumstances and other people dictate the direction of our lives.
Option Number Two – Quit.
This choice is a bit more problematic. Throughout our lives, we are reminded that you should never quit something you started. Cliches like, “quitters never win and winners never quit” (Vince Lombardi) or “success is 99% failure” (Thomas Edison) are pointed to as evidence of the viability of this notion. I think that point-of-view is far too over-broad, though.
If an objective is worthwhile, I urge you to stay on course, even though you may have to endure a significant amount of pain. But, if you start down a path and find that the result at the end of the road is either 1) not what you thought it was or 2) not obtainable, then it’s time to re-evaluate whether you should continue with the endeavor. In The Dip, Seth Godin, proposes that Americans have been brainwashed by Vince Lombardi. “Winners quit all the time,” says Godin. “They just quit the right stuff at the right time.” The million-dollar question, though, is when to walk away from something. The key is to step back, gain some perspective on the situation, and try to objectively determine whether you should continue.
Option Number Three – Make a change.
If you’re unwilling to keep your mouth shut and are convinced the goal is worth pursuing, it’s time to do things differently. Einstein is credited with defining insanity as “doing the same thing over and over again and expecting different results.” If you keep running into roadblocks in your business, maybe it is time to stop the insanity and make a change. The only way to produce different results with the same set of circumstances is to do things differently than before.
Instead of reacting to circumstances, take a step back and assess what you need to change to obtain a different result. Be proactive by taking the first step and being the person who gets the ball rolling towards change. Successful small business owners embrace change and make it happen. Change usually starts with disruptive innovation, so you must also be willing to break a few paradigms to create any real transformation.
So, my question for you is:
If you are not happy with what you’ve got, what changes are you willing to make to get something different?
by Kyle on July 6, 2010
Starting a business, expanding an established company or even pursuing a single customer costs your business time and money. So, agile business founders, whose companies are based on speed an efficiency, must constantly view every move their businesses make through the lens of return on investment.
With each opportunity, you, as the agile business leader, should assess the investment costs and risks in light of the forecasted revenue. The agile business methodology is based on taking a disciplined approach to determining when to spend money and time, but that doesn’t mean that you can afford not to spend them. It just means that you should properly evaluate whether the costs could be worth the potential rewards, and then go after those opportunities where the numbers look like they will work out in your favor.
In my agile business, we continually remind each other of the following mantra:
“Is the juice worth the squeeze?”
Or, in other words, will this business/new line of business/customer be worth the time, money, effort and risk it will take to pursue? If not, we move on, looking for those opportunities that will.
Try this mantra for a couple of days, and let me know how it works for you.
by Kyle on July 4, 2010
Today is Independence Day in the United States. As most people in the country band together to celebrate the 234th birthday of our country at local parades, barbecues, softball games and other community events, I think it is an opportune time to reflect on the notion of independence in our lives in general.
Two definitions proposed by Meriam-Webster for the word independence are:
- A state of not being controlled by others; and
- Not requiring or relying on something else.
I don’t agree with those definitions, though. Personally, independence is about much more than the amount of control other people can exert over me, and it certainly is not about going through life alone.
Independence, in my opinion, is about aligning one’s life and one’s actions with the values you hold sacred. In order to to accomplish that feat, I believe we can’t do it alone and must lean on others for wisdom, advice, counseling and support.
On July 4, 1776, the 56 Founding Fathers signed the Declaration of Independence because they believed in something bigger and chose to take action in alignment with their values, regardless of the consequences. Many of those men gave up their possessions, their families and ultimately their lives for a cause they steadfastly believed in. The Founding Fathers and the patriots who supported the cause lived the very essence of independence – taking action in pursuing cherished values.
What is your definition of independence?
For me:
- Independence is exploring and pursuing the things in life that interest me and eliminating those that are negative, draining or irrelevant.
- It’s about living deliberately.
- It’s about forging my own path instead of walking on one forced upon me by society.
- It’s about acting instead of reacting.
- But, most importantly, independence about living true to my values and designing my life around those values.
I celebrate Independence Day every morning when I wake up grateful that I have the flexibility to pursue those things that fulfill and interest me and have a positive impact on other people’s lives.
As a creative entrepreneur, whether you are in the United States or not, take some time to celebrate your own personal Independence Day today.
by Kyle on June 29, 2010
We all know that results are derived from action, but, too often we get stuck in inaction — the quagmire of doubt and perfectionism and distractions and planning that stops us from moving forward. I am no proponent of taking off in a buzz of unguided activity, but the sad truth is that no plan will ever be perfect. If you wait until your plan is bullet proof, you will never get anything of real significance accomplished. The best way to get unstuck is to stop worrying about being perfect and to just get going.
The trait that separates successful entrepreneurs from floundering entrepreneurs is a daily commitment to fulfilling the benchmarks they set for themselves and their companies. Every day you must be willing to step out of your comfort zone and take care of what you know needs to be done. For some people this daily commitment means picking up the phone and making calls to prospective or current customers, no matter what. For others, it means sourcing suppliers for new products, drafting new copy for a website re-design, implementing changes in fulfillment procedures, or a myriad of other fundamentally important action items.
Planning isn’t action. Yes, you absolutely need to plan so you are clear about what you want to accomplish and the general direction you will take. Just do it quickly and get to the actual action as soon as possible. It is only through action that you will ever accomplish anything of significance.
Here’s my suggested plan for success:
- Prepare an action plan or plans;
- Start implementing your action plan or plans;
- Make course corrections along the way.
Be forewarned – you will face obstacles; you will learn some hard lessons and the journey will not always be pretty. But, this process of discovery is invaluable to your success. You will learn what works and what doesn’t, and these are insights you would have never uncovered by staying put.
Take action on one of your business plans today. Only action will get you where you want to go. So, take the first step – stop thinking and start doing.
by Kyle on June 28, 2010
Let me make this easy – Yes!
When starting out as a freelancer or independent professional, you may not need a lot of legal help in the beginning. But, one thing you absolutely need is a good service contract. I say this because the service contract is critical to protecting the most important aspect of your business – the relationship with your clients.
Let’s Go Back to the Beginning.
Business revolves around agreements between people and organizations. A contract makes these reciprocal promises legally enforceable. Without contract law, freelancers would find themselves providing services and merely hoping to get paid for them.
That sounds ridiculous, doesn’t it? Well, the unfortunate fact is that this is exactly what many freelancers do each and every day when they provide services without a written contract. “We don’t need to put that in a contract; they said they would just do it for us.” “They’re great guys – if the widget doesn’t work right the first time, they will work with us.” “I’ve worked with them for years, and there’s never been a problem.” These are all excuses I have heard for why a contract wasn’t written for an agreement. Another common theme behind all of these situations was that the freelancer in question was not paid. In fact, a recent study (PDF) by the Freelancers Union found that 40% of freelancers polled went unpaid when employers refused to pay them fully for work performed.
Why Some Deals Don’t Work Out.
People usually get along while the deal is being put together. But all too often, something goes wrong along the way. My (admittedly simplistic) model for why business deals fall apart consists of two elements:
1. The parties’ expectations were not adequately detailed in the beginning; or
2. One party does not live up to its obligations.
In many cases, the second element relates back to a failure to properly define everyone’s expectations at the outset (element #1). You, as the freelancer, may deliver everything you thought was included in the agreement, but the client may have expected more or may have anticipated something else.
Clarifying Expectations.
As you can see, the real value in creating a written contract is in clarifying what everyone expects out of the deal. You shouldn’t feel untrusting or slimy about asking a client to sign a contract for services, because it is good for all involved. A contract shines a light on the parties’ presumptions about what their obligations will be and what they will get out of the deal.
Anyone who is serious about living up to his or her obligations will happily agree to a written contract. Moreover, presenting yourself as a freelancer or independent professional who asks clients to sign a contract before actual work begins demonstrates your professionalism and allows you to separate the serious clients from those you should be wary of.
I believe that most people are not out to take advantage of others. There are definitely situations in which one party either cannot or decides not to live up to its obligations. But, the majority of business deal collapses boil down to a failure to define everyone’s expectations in the beginning. Either way, a contract protects you by setting the expectations or by providing a method of addressing a breach of the agreement.
Does it Matter?
If the deal matters to you, create a written contract. If the relationship with your client matters, create a written contract. If neither of these apply, create a written contract anyway.
by Kyle on June 28, 2010
“You’re a lean, mean, fighting machine!”
-Bill Murray as John Winger in Stripes
What comes to mind when I mention that your business should be running “lean?” If you are a management consultant “lean” would mean:
A generic set of management strategies used to change the culture of organizations to bring about dramatic improvements to key metrics.
*Yawn* For me, the word “lean” in a business context means:
Not spending a penny more than you have to create value for your customer.
Easy, right? Well, it is a sad fact that most businesses don’t stay focused on remaining lean. The boom days of years past saw an explosion of small businesses pop up all over the landscape. These businesses grew up in an environment where money was easy to come by and customers were abundant. There was plenty of money to go around, so overhead was taken on without a second thought.
Fast-forward to 2008, and many of these businesses found themselves in serious trouble in a hurry. Customers disappeared and small business credit became virtually extinct. The overhead costs that were easily paid before soon became crushing burdens.
Most small businesses that fail don’t go out in a blaze of glory. Instead, they simply die on the vine from a cash flow shortage. Every business runs into hard times and periods of cash flow diminution. It is the lean, focused businesses that continue to survive and even thrive in those times.
Getting Lean
Business owners should look at mid-year as an opportunity for a “tune-up.” They need to examine every area of expense, cut the fat and rein in costs that are unnecessarily high. Don’t go into your accounts with a financial sledgehammer and smash every cost. Instead, take the time to conduct a detailed analysis of the return on investment you receive for every dollar spent. Then, pick up the scalpel and do some financial surgery.
The smart companies will look at their financial records for 2010 and ask, “How can we make sure we operate in a lean and effective manner and cut costs where it makes sense to cut without impairing our competitiveness?” Those companies will finish the year lean, healthier, and competitive. The other companies, well, they won’t be around for much longer in this economic environment.
The Tip
Take a look at your financial records and closely scrutinize every recurring expense. How is each dollar of those expenses contributing to creating value for your customers? The idea is to make every element of your business the best it can be, without sacrificing effectiveness.
Take the time to do this now and soon your business will be a “lean, mean, fighting machine.”
by Kyle on June 27, 2010
We’ve all heard the cliché, “those who fail to plan should plan to fail,” but in the crush of daily activities, business planning tends to take a back seat. But, mid-year is a great time to dust off the business plan and re-evaluate your company’s strategic direction for the rest of the year in light of this year’s performance so far.
The Business Plan
Many new entrepreneurs and those who advise them set the business plan on a pedestal as if it is the answer to all entrepreneurial questions relating to a business idea. But, there are also those on the other end of the spectrum who think business plans are a complete waste of time.
I tend to emerge somewhere in the middle. I know many entrepreneurs who never wrote a formal business plan for their businesses but went on to make a lot of money. But, all of those successful entrepreneurs understood the importance of business planning. While a formal, MBA-approved business plan itself may not always be absolutely necessary for success, effective business planning always is.
Your business plan is just a map. The actual path you take may look very different from the original plan, but the plan will make you think about the details and how they fit together in your business.
It is intuitively obvious, but, in order to eventually arrive where you want to go with your business, you need to know two things: 1) Where you are now, and 2) Where you want to go.
Where Are You Now?
The three general areas you should consider in determining your current position are finances, marketing and operations.
Finances
Prepare and examine your “Big Three” financial documents:
- The balance sheet shows all of your business assets, liabilities and equity and provides a summary of how your business is doing financially at a particular time;
- The income statement lets you see at a glace whether or not your business is profitable by itemizing your revenue and expenses;
- The cash flow statement shows the net increase or decrease in your cash flow over a period of time and will show you where the money went.
As you review your financial documents, what issues become apparent? Are there leaks in your financial infrastructure that should be addressed? Do you have enough cash and credit to maintain operations into the foreseeable future?
Marketing
Your business should have marketing plan in place to address:
- Who is your target customer group?
- What is your positioning in the market or unique selling proposition?
- Where will you approach your target customers?
- When will you approach your target customers?
- How will you approach them and how much in sales do you expect to achieve?
Have you answered each of these questions? How is your business executing in these areas? If you need some assistance, a great resource for small businesses to use in implementing a realistic marketing plan is The Duct Tape Marketing System by Jon Jantsch.
Operations
Operations are where the rubber meets the road. Without efficient and effective operating procedures, your business will waste time, money and effort. Sam Carpenter, in his book Work the System states that every business should have three types of operational documents:
- The Strategic objective defines the primary goal of your business and how your business is structurally organized to achieve that goal.
- Operating principles are the fundamental guidelines for decision-making within the organization.
- Working procedures are documented and systemized methods for addressing daily or periodic business processes.
What operational documentation do you have in place? Do you have strategic, operational and tactical documentation for your business? What processes are not working as smoothly as they should, and how can those processes be modified to produce regular and frictionless results?
The Tip
Over the past six months, your business has likely changed in ways you don’t recognize. Take the time now to analyze your financial, marketing and operations plans to determine where your business is now.
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