I recently became acquainted with a retiree who in his day, was a very successful business owner. Over the course of the weekend, he and I discussed some of my consulting clients and their challenges and opportunities. It was truly a pleasure to speak to this man and I look forward to learning more from him in the future.
As I was leaving his home, he gave me a book to read written by a man named Leon Danco, the title of the book is "Inside the Family Business".
I'd like to share an excerpt with you:
" Who is this guy, this"enterepreneur"? Why and how did he get himself into this mess he is in?
He asks himself the same question night after night as he stares at the ceiling telling himself over and over that he's really a hairy-chested rugged individualist, striking off on his own path, hacking out a trail never before traveled. He's a hero, the bearer of the American Dream.
And from the other side of the bed, his wife looks at him and knows that he is scared half to death"
If that does not sum up the struggles and journey of an entrepreneur, I don't know what does. we are all in it together trying to build and create our dream enterprise to provide us a living and sense of accomplishment. It is a wonderful and scary journey
Wednesday, January 28, 2009
Wednesday, January 21, 2009
Focus on Results Not on Tasks
Anyone who has read my Special Report "The 7 secrets to making Your Business thrive In Any Economy" or my E-Book "Power Squared: The Ultimate Entrepreneur Success System" would know that I am a planner, an organizer and efficient executer of business related tasks.
The key to being effective in the execution of your business tasks is to focus on the desired results of your project or endeavor and not to get bogged down in the smaller details. If you work backwards from the finish line, to the starting point, you often may find a faster and more efficent route to reach your goal.
For example, when developing a new process or procedure, we may ask ourselves "how do I make sure this widget is always used properly?" But in actuality, my real concern or objective is "to make sure this widget is used in this manner everytime". My real objective is to make sure everyone knows how to do it and produce the result?
You may be reading this and think I am splitting hairs and it is just semantics, but it reality it takes you down a different thought process and ensures that you are focusing on the results to develop the procedures. and not the procedures to develop the results.
The key to being effective in the execution of your business tasks is to focus on the desired results of your project or endeavor and not to get bogged down in the smaller details. If you work backwards from the finish line, to the starting point, you often may find a faster and more efficent route to reach your goal.
For example, when developing a new process or procedure, we may ask ourselves "how do I make sure this widget is always used properly?" But in actuality, my real concern or objective is "to make sure this widget is used in this manner everytime". My real objective is to make sure everyone knows how to do it and produce the result?
You may be reading this and think I am splitting hairs and it is just semantics, but it reality it takes you down a different thought process and ensures that you are focusing on the results to develop the procedures. and not the procedures to develop the results.
Wednesday, January 14, 2009
Survival Tips for Tough Times
All of the current economic data predicts that 2009 will present many more challenging months for business owners. If you and your business are fortunate enough to have survived the tough times in 2008, here are some tips to guarantee survival in the new year:
1) Ask for Discounts- ask all of your vendors for discounts on purchases, shipping, surcharges and fees.
2) Trim the Fat off Every Bill- Often times bills for recurring services like pest control, phone service, bottled water, web hosting, and certain advertising are laden with charges for extra bells and whistles you can do without in exchange for saving a buck or two.
3) Compare Bills to Prior Months for Price Increases- If you notice surcharges, increases or other fees that are increasing your costs, call the vendor and ask for a waiver or reduction.
4) Renegotiate Interest Rates on Credit Cards- Become an interest rate hawk, call your credit card provider and ask for a rate reduction. Most companies will decrease rates for clients in good standing.
5) Talk to Your Landlord- For lots of businesses, rent is the largest expense, ask for some temporary relief and use the saved cash to establish an emergency fund.
We all know good times are ahead. The smart & savy Entrepreneur business owner who can survive this environment will do very well when the economy recovers. Taking some of these steps will help to ensure you are here to reap the rewards of all your hard work.
1) Ask for Discounts- ask all of your vendors for discounts on purchases, shipping, surcharges and fees.
2) Trim the Fat off Every Bill- Often times bills for recurring services like pest control, phone service, bottled water, web hosting, and certain advertising are laden with charges for extra bells and whistles you can do without in exchange for saving a buck or two.
3) Compare Bills to Prior Months for Price Increases- If you notice surcharges, increases or other fees that are increasing your costs, call the vendor and ask for a waiver or reduction.
4) Renegotiate Interest Rates on Credit Cards- Become an interest rate hawk, call your credit card provider and ask for a rate reduction. Most companies will decrease rates for clients in good standing.
5) Talk to Your Landlord- For lots of businesses, rent is the largest expense, ask for some temporary relief and use the saved cash to establish an emergency fund.
We all know good times are ahead. The smart & savy Entrepreneur business owner who can survive this environment will do very well when the economy recovers. Taking some of these steps will help to ensure you are here to reap the rewards of all your hard work.
Tuesday, January 6, 2009
Reply to Classy & Small Business Budgeting
I always start the new year with a new budget. I use the prior year's actual numbers and increase my expense projections by 3% (the average inflation rate) and increase revenue projections by 10% (a modest growth goal).
If I was just starting a business or creating a budget for the first time, I would speak to my landlord, accountant and neighbors to get some baseline figures for my budgetary expenses. For my income, I would rely on my income projections from my business plan.
An expense that must always be included in every business plan and budget for that matter is the category of owner's compensation or owner distributions. Let's make an assumption, that I would like the business to pay me $60,000 for my services over the course of year. I would then put $5,000. per month in my budget ($60,000 / 12 months= $5,000).
Each month I would treat my compensation, like any other bill that needed to be paid and try to get as close as possible to the payment I promised myself. In the months I did not make my minimum payment to myself, I would record that as money the business owes to me. When the business increased its revenues, I would pay myself the back pay owed.
Many business owners do the opposite, they do not plan how much they want to make, instead they plan how much they want the business to gross and take whatever is leftover. That method is not owners compensation, that is profit. I believe, profit should be an additional distribution on top of owners compensation. It is the pot of gold at the end of the rainbow so to speak that makes business ownership worthwhile.
As a business owner, you must make your compensation a priority. Afterall, you would not work for someone else for free, why are you working for your business for free?
Reply to Classy- I hope the information above gives you some insight on how to budget payments for yourself. The rest is up to you, commit to treat your compensation like any other expense, rent, electric, etc. If you can't afford to pay yourself, maybe you need to be more aggressive on cutting other costs or reducing payments on credit card or other debts to free up some cash.
If you have additional questions, feel free to post them.
If I was just starting a business or creating a budget for the first time, I would speak to my landlord, accountant and neighbors to get some baseline figures for my budgetary expenses. For my income, I would rely on my income projections from my business plan.
An expense that must always be included in every business plan and budget for that matter is the category of owner's compensation or owner distributions. Let's make an assumption, that I would like the business to pay me $60,000 for my services over the course of year. I would then put $5,000. per month in my budget ($60,000 / 12 months= $5,000).
Each month I would treat my compensation, like any other bill that needed to be paid and try to get as close as possible to the payment I promised myself. In the months I did not make my minimum payment to myself, I would record that as money the business owes to me. When the business increased its revenues, I would pay myself the back pay owed.
Many business owners do the opposite, they do not plan how much they want to make, instead they plan how much they want the business to gross and take whatever is leftover. That method is not owners compensation, that is profit. I believe, profit should be an additional distribution on top of owners compensation. It is the pot of gold at the end of the rainbow so to speak that makes business ownership worthwhile.
As a business owner, you must make your compensation a priority. Afterall, you would not work for someone else for free, why are you working for your business for free?
Reply to Classy- I hope the information above gives you some insight on how to budget payments for yourself. The rest is up to you, commit to treat your compensation like any other expense, rent, electric, etc. If you can't afford to pay yourself, maybe you need to be more aggressive on cutting other costs or reducing payments on credit card or other debts to free up some cash.
If you have additional questions, feel free to post them.
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