It's All About Business™

For many people, starting a business is the fulfillment of their dreams. But sometimes starting a business can be the realization of their nightmares. I’m writing this post to help you fulfill your dreams — and avoid the nightmares.

I recently read an article by Marshall Goldsmith about Why Coaching Clients Give Up. He said clients give up because

It’s harder than they thought it would be,
It takes too long,
Ownership,
Distraction,
Rewards, and
Maintenance.

I agree with Dr. Goldsmith’s list. And I believe the same issues he lists for coaching also apply to starting a business. So I will use his list to explain.

Running my business is harder than I thought it would be.
You are correct. Running a business is hard work. You may have thought it would be easy. If it was easy, everyone would do it; and be successful at it.

Ask yourself if you are willing to work hard enough to own your own business.

It’s taking longer than I planned.
Studies have shown it usually takes 9 years to become an “overnight success.”

Ask yourself if you are willing to put in the time it takes to own your own business.

I started my own business and failed but it wasn’t my fault.
Too many business owners refuse to take ownership — responsibility for everything that happens in their business. I touched on this in a previous post. Everything we do as business owners (good and bad) is our “fault.”

Ask yourself if you are willing to take ownership of everything that happens in your business.

I’m busy right now. I’ll get to that problem tomorrow.
When you own a business, distractions happen every day. Problems arise, every day. Being the owner means it’s up to you to deal with the distractions.

Right now there are programs on television showing various businesses and the problems they face every day. In a recent episode the owner got upset when his employees stood around because a machine broke down. The question he needed to answer is “Who is responsible for seeing that your machines are in working order?” The answer is, “You — the owner.”

Ask yourself if you are willing and able to deal with every distraction and problem in your business without delay.

I started my business to make money and be able to enjoy it.
The rewards of owning your own business are often intangible. And often take years to be realized.

Like Dr. Goldsmith, I often hear clients say “Why am I working so hard? I didn’t make any more money anyway, so why am I killing myself?”

Ask yourself if you are willing and able to put off gratification until your business rewards you (if ever).

My business is going great! Now I can coast and enjoy the ride.
Wrong. Owning your own business is a process you must maintain. Your business is either growing or dying. It can’t stand still; and neither can its owner — you.

Ask yourself if you are willing to maintain the growth of your business.

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If you want to start your own business, go into it with your eyes open. It will be hard work and take a lot of time. It will be your responsibility to take care of everything that happens in your business — good and bad. You may not see immediate rewards, and even when good things happen it will be up to you to maintain the activities that created those good things.

Starting your business is the fulfillment of your dreams. Every day will bring new challenges — and opportunities. Read and study the posts in this blog. Read and study and get the help you need. Ask questions and keep asking questions. Then starting your business won’t be the realization of a nightmare.

Thanks,
Larry

Your comments are always welcome. Please let me know.

In my last post on April 20, I talked about a company whose owners didn’t know their accounts receivable, their accounts payable or their cash flow.

The day before my April 20th post, the U.S. Tax Court issued a ruling about taxpayers who didn’t understand their numbers. In Lam and Chang v. Commissioner of Internal Revenue, the taxpayers were found liable for accuracy-related penalties.

They prepared their tax returns using TurboTax software. Unfortunately, they didn’t understand how to use it correctly.

The Tax Court said, “Tax preparation software is only as good as the information one inputs into it.”

The taxpayers confused capital gains and losses with ordinary income and expenses. They didn’t talk to a tax professional. They didn’t talk to the IRS. The didn’t check the IRS’ Web site, or understand the instructions for filing a Schedule C. So the Tax Court said they didn’t behave reasonably in filing their tax returns.

Do you understand your tax return — and the numbers on it?

Let me know your feelings about this post. Your comments are welcome.

Thanks,
Larry

Here is a link to a great post at Accounting Tips For You.

I recently worked with a company whose owners — at first — didn’t know anything about their numbers. They didn’t know their accounts receivable. They didn’t know their accounts payable. They didn’t know their cash flow.

When I asked about their chart of accounts they asked, “What’s that?”

If you don’t understand the numbers, check with your local Small Business Development Center. You can attend an introductory course (really inexpensive) on accounting to learn how to understand your numbers.

Have you had similar experiences?

Do you understand your numbers?

Let me know your feelings about this post — do you like it or dislike it?

Thanks,
Larry

Dear Readers,
I’m writing this post to get you thinking about your business. And what you should do before you sign a contract.

“Penny Wise and Pound Foolish” is an English saying (idiom) dating from 1607. It appears to be attributed to Edward Topsell (or maybe Robert Burton). The Phrase Finder says “The meaning of the phrase is something on the line of ‘saving a little money only to lose a great deal more due to their own stupidity.’ ” And Collins English Dictionary & Thesaurus defines Penny Wise and Pound Foolish as “greatly concerned with saving small sums of money.”

The phrase should be in the mental toolkit of every businessperson.

Here is a recent experience I had that illustrates the saying:
A few weeks ago, I was talking to a business owner. She was lamenting how a business deal had gone sour and wanted to know her alternatives.

Her real problems (there are many) arose when (or before) she signed the contract. I could go on with the problems in her deal, but these four are the biggest:

1. The contract price was USD $1.9 million.

2. She is not an attorney.

3. She drafted the contract.

4. She never had an attorney review the contract before she signed it.

She was already upset and I didn’t want to add to her pain. So I didn’t ask why she didn’t talk to an attorney before she signed the contract. And I didn’t ask why she drafted a contract for $1.9 million when she isn’t an attorney.

Too often, we don’t call an attorney before we sign contracts. We are worried about how much it will cost to talk to an attorney. Or how much it will cost to have an attorney review the contract.

But if we never make the call, we can never know how much it will cost.

Here is a simple test you can use:
A. Always ask yourself, “How much is this deal going to cost me if it goes sour?” In other words, what is the dollar amount of the contract?

B. Then ask yourself, “How much am I willing to spend to protect myself on this deal?” In other words, how much will it cost to have an attorney represent you in the deal?

Compare A to B and make an informed decision.

Then you won’t be Penny Wise and Pound Foolish.

And one final comment on the subject: If the other person doesn’t want you to have your attorney review the contract before you sign, you should be VERY careful.

Have you had experiences or seen this happen? Do you agree or disagree with what I’m saying?

Please post your comments and opinions on this subject.

Thanks,
Larry

What vision do you have for your company? What is your Core Ideology? What are your Core Values? What is your Core Purpose?

When you discover your Core Ideology you will begin to Envision your Future.

Then you will be able to create your Big Hairy Audacious Goal (BHAG).

Here is where you say, “OMG, Larry’s lost it! He’s finally gone around the bend.”

Not quite.

In the October, 1996, Harvard Business Review, James C. Collins and Jerry I. Porras published an article titled Building Your Company’s Vision. You can click on the preceding link to read the full text. (I would reprint it here but I respect their copyright rights.)

If you want to go deeper on the subject, I recommend you read James Collins’ book Good to Great: Why Some Companies Make the Leap… and Others Don’t. It’s a classic and should be in your library.

In today’s business world, we all need more vision in our companies.

Do you agree or disagree with what I’m saying?

Please post your comments and opinions on this subject.

Thanks,
Larry

Last week I was talking shop with a fellow business coach (I’ll call him Bill). Bill told me about a sales seminar he did. When he finished the seminar, he asked his attendees what they thought. Their response was “I Don’t Get It.”

Bill couldn’t understand how attendees with the education levels of his attendees couldn’t “Get It.” I explained to Bill that I have had the same experience.

The problem is that they don’t get it because they can’t get it. And the reason they can’t get it is that they have never had any training or experience in sales.

Most people who graduate from college with degrees in management, marketing or business have never been exposed to sales. They don’t get any exposure to sales until they take courses for an MBA, if then.

Without experience or exposure to sales, no one can “get it.” We aren’t born knowing how to sell. Or what it means to sell.

I see this issue with new business owners. As Michael Gerber explains in his book E-Myth Revisited, most new business owners are technicians. They don’t understand that their job is to satisfy a want or need of their customers. They think that all they need to do is explain the features of their product or service and sales will magically follow.

I’m not saying anything negative about college graduates or new business owners. It’s just that we need to change our behavior. We need to face reality and understand that most of the people we meet won’t Get It. They won’t get it because they can’t get it.

Another example. A few years ago I was in a coaching session with Mark. Mark was venting his frustration(s) to me. Mark’s wife, Joan, had asked him about his day. He told Joan about all the networking and other contacts he had made that day. Joan said that was good, but asked Mark when was he going to make any sales. Joan was saying “I Don’t Get It.”

The lesson for all of us in business is to be sure the people we are talking to will understand what we are saying.

When we do a seminar, ask our attendees about their background. And we must change our presentation (often on-the-fly) to match their background.

When we are talking to family or friends, we need to realize they don’t get it, and adjust what we are saying.

When we make contact with a prospect, ask questions to be sure they will hear (and understand) what we are saying. Otherwise we are setting ourselves up to fail. And it will be our fault.

Do you agree or disagree with what I’m saying?

Please post your comments and opinions on this subject.

Thanks,
Larry

Pretend for a minute that you own a restaurant. Picture the kind of restaurant you own. It doesn’t matter whether it is a greasy-spoon grill or a 5-star gourmet. The choice is yours.

Since it is your restaurant, you get to choose the dishes you serve. You get to choose the ingredients you use. You get to set the menu.

As a restaurateur, you need customers. You need to sell.

Now THE question for you: “What is the one thing a prospective customer can say to you that will stop you in your tracks?”

The answer: “I’m not hungry.”

If your prospects aren’t hungry, it doesn’t matter what’s on your menu. It doesn’t matter what ingredients you use in the dishes you serve. And it doesn’t matter what kind of restaurant you own.

To know whether your prospects will buy, you must ask them “Are you hungry?”

Once you know they are hungry, your next question is “How hungry are you?” The level of their hunger will tell you how much they want and need what you are selling.

If a prospect is very hungry, they will buy your food for any price regardless of whether they like it or not.

So as you go into 2010, remember to find out if your prospects are hungry. If they aren’t hungry, find out when they will be hungry. If they say they will never be hungry, move on.

And don’t forget to ask yourself, How Hungry Are You?

When you are hungry enough, you will do whatever it takes to grow your business.

Do you agree or disagree with what I’m saying?

Please post your comments and opinions on this subject.

Thanks,
Larry

I was watching a special on the History Channel about the Grand Canyon. How the Earth was Made — Grand Canyon

Mountains grow. They grow from volcanism or from plate tectonics.

When the mountains stop growing they begin to die. Wind and water erode them. As they erode they fill up the valleys at their bases.

Where there were once mountains and valleys there becomes a flat plain or plateau.

But the flat plain doesn’t stay a flat plain. Lakes form. The lakes overflow. When the lakes overflow they wash away part of the flat plain.

And the Colorado River does the rest.

The Grand Canyon is still growing.

That is nature. In nature, everything is either growing or dying. I didn’t make these rules. You didn’t make these rules. Nature made these rules.

For mountains, valleys, the Grand Canyon or the Colorado River the time period is millions of years.

For an adult mayfly the time period is (at most) 2 days. Mayflies Invade Minnesota For a microscopic life form the time period may be minutes or seconds.

What is the time period for your business? Is it growing? Or dying?

What did you do last week to grow your business? What are you doing today to grow your business? What are you doing tomorrow to grow your business?

Your business is either growing – or dying.

And the choice is yours.

Do you agree or disagree with what I’m saying?

Please post your comments and opinions on this subject.

Thanks,
Larry

…continued from yesterday

You need to know right now how your Cash Flow will look in the future.

Many business owners think Cash Flow means “Do I have enough cash in my bank account to cover my expenses?” They don’t think about the time element of Cash Flow.

In the real world Cash Flow means “Do I have enough cash on hand and coming in to cover my current and foreseeable future expenses?”

Cash Flow in your business means knowing if and when money is coming in. Cash Flow in your business means knowing when and why money is going out.

The Startup/Restart® Business Primer² is all about Cash Flow in the Real World. I’m not writing this as an accounting textbook.

I’m writing what you need to know to manage your Cash Flow. Managing your Cash Flow is critical to your business.

Chapter Two will teach you what you need to know about Managing Cash Flow.

These two posts contained a reprint of Chapter One of the Startup/Restart® Business Primer². I hope they have helped you.

As I mention above, the time element is often overlooked in dealing with Cash Flow. As business owners and managers, we need to be constantly aware of when a cash flow issue will arise.

To help your awareness of when a cash flow issue will arise, I put together a Cash Flow Worksheet. Click here to open it or download it.

It is a simple Excel spreadsheet. And it is one of the tools I discuss in Chapter 4 of the Primer.

You can use it to forecast what — and when — cash flow events will occur in your business.

If you have any questions about the worksheet, please post a comment. That way, everyone can share.

And here are a couple of (unedited) comments from people who have read the book:
“I have read the Cash Flow Primer and looked at the worksheet you recommended. It was all very useful and has me thinking in new ways.”

“I like the simplicity of it. It was straightforward and easy to understand. At least once I felt like the author was mistaking my ignorance for block-headedness. Different things. The examples given were repeated too often and they were not varied enough. Each assumed the small business was dealing primarily with a limited number of large contracts or repeat customers. This is not always the case with my work. … (One sentence redacted for privacy purposes.) We have a lot of one time clients and we need them. But our business ebbs and flows for reasons not discussed in the text so I had to work to make the examples applicable to me. On the other hand, I was able to do so. The examples got me thinking and got me on the right track. I also like the catchphrase quips like ‘don’t be afraid to turn down a job’. Those stuck in my head and changed the way I was thinking as I repeated them. There was at least one place where I thought the wording did not convey the complete intended thought. Or, at least, I had to mull it over to get to the root of it. I am remembering the line ‘I’m not saying not to spend money, I’m saying know where your money is being spent’, or something like that. It did get the point across, but I did not immediately understand WHY. It seems like the ‘why’ could be condensed or turned into a neat little maxim (maybe). But you are forcing me to be picky. It was good and simple. Even the author’s voice showed through in a likeable way. I would read more of the same.”

The list price of the book is $15.99. A few weeks ago, I was talking to some business owners about my books and one of them said “Larry, I can buy (author’s) book for $8.99 on Amazon.”

I said, “Yes you can.
But when you finish reading (author’s) book, will you put it on a shelf or keep it with you for reference?
Will you buy (author’s) book to read for entertainment, or to grow your business?
Do you look on (author’s) book as a book, or as a business tool?”
The Startup/Restart® Business Primer² is a reference source you can keep with you all the time. You can refer to it any time you feel the need – even when you aren’t at your computer.

It is very readable, but it isn’t for entertainment — it is to grow your business.

And it is a business tool — a step-by-step guide written just for business owners and managers like you.

Thanks,
Larry

PS Here are links to the Primer

on Createspace
on Mobipocket
and on Amazon

In the first Startup/Restart® Business Primer you learned three rules about money:
Rule 1. The perception of money is different from the reality of money.

• Feeling you are poor is a perception.
• Having no money is reality.
• Being afraid to talk about money is a perception.
• Not talking about money is reality.
• What you think you are worth is a perception.
• The number on your bank statement is reality.
• What you think your goods or services are worth is a perception.
• The cost of producing your goods or services, and the profit margin needed to keep your company in operation while meeting your goals, is reality.

Rule 2. Price isn’t the problem. The problem is in people and their perceptions of money.

Rule 3. Leave your emotions at the door. This rule applies throughout the selling process — not just when talking about money.

Now I’m going to talk to you about a business issue many people don’t understand. This is an issue that can make or break any business.

I’m going to talk about Cash Flow. In the Real World. This is different from how an accountant talks about it.

Let me explain.

Your accountant may give you a cash flow statement. Or you may have accounting software on your computer that will print out a cash flow statement for you.

And cash flow statements are okay as far as they go. Cash flow statements give you an accurate history of where your money came from and where it went.

But in the real world that is a problem.

Let me give you an example.
Right now in the news media we are hearing about world economic problems in business and government. The economic problems we are hearing about all pertain to cash flow.

They are talking about cash flow the same way as an accountant or your accounting software. They are talking about the history of where our money came from and where it went.

But to manage and grow your business, looking at cash flow from a historical view does you no good. You don’t want or need to know that you were bankrupt (or rich) at some point in the past.

What you just read is part of Chapter One of the Startup/Restart® Business Primer². Here is a picture of it

It is a primer. A simple book, written in simple terms. And it is short. It is only 36 pages in length.

Tomorrow I’ll share more from Chapter One. In the meantime, take a look at the book on Amazon.com, Mobipocket.com or Createspace.com.

Thanks,
Larry