Too often innovation gets confused with invention, when in fact they are not the same. Unfortunately, we are bombarded with articles and warnings that in order to survive as entrepreneurs we must innovate or be left behind. Ok, I’m not sure that we would be left behind, but innovating or improving how we do things, is never a bad idea.

The goal for any innovation should not be for the sake of innovation alone but should either enhance the customer experience or increase our efficiency. If you can do both that’s even better.

Microsoft Office 365

pilot in open cockpit plane

A simple example where, in my opinion, neither of these goals are achieved is Microsoft Office. Over the past few years, I have watched as this software grouping has morphed into a bloated feature laden product.. What was once a simple dropdown menu style that allowed access to the most commonly used functions have disappeared under renamed menus loaded with icons that would have an archeologist scratching their head trying to decipher these hieroglyphics.

Excel Icons
Egyptian-Hieroglyphs

I would hazard a guess that the vast majority of the Office 365 install base are not power users, therefore these improvements or product evolutions, fail my innovation test. It neither improves the user experience nor increases efficiency for most of us as we waste so much time looking for a simple formatting function.

I’m sure that some power users need these enhancements that the product engineers dream up but for most of us it’s overkill.

A recent experience with an Excel spreadsheet or is it now called a workbook or a worksheet? Regardless of what it’s now called, I needed to unlock a protected spreadsheet. Because I don’t use Excel everyday, I needed to hunt down that function. Once upon a time, you could simply click on one of the dropdown menus and click on that function. Well no more.

After I don’t know how long of hunting and pecking through the drop menus and trying to decipher the various icons, I typed “unprotect” in the Excel search bar to no avail. Finally, I turned to Google for help and finally found the answer. Seriously, nothing should be that hard.

A simple solution might be to just offer the everyday user an option for a “Classic” menu that would offer the user the most commonly used functions within the complete Office 365 lineup. Now that would be an innovation!

Alternatives such as Open Office, Libre Office and Google’s Workspace offer a simpler user interface. Aside from being free, their popularity might be driven partly by their ease of use.

Small Business

Innovation for most small businesses does not have to be earth shattering. In SBM #36 Innovation, I mention that what we need to understand is that most successful innovation comes from either borrowing ideas from other industries or reconfiguring your existing products or services to tackle new markets or customers. Put this way, innovation becomes less daunting and can be implemented  incrementally over time and does not require wholesale retraining of your staff and customers. Therefore, they are considered natural or logical enhancements.

Merriam Webster provides the following definitions which may serve to clarify the difference between innovation and invention:

Invention

“a device, contrivance, or process originated after study and experiment,” usually something which has not previously been in existence.

Innovation

for its part, can refer to something new or to a change made to an existing product, idea, or field.                                                                                   

They go on to provide the following example:
One might say that the first telephone was an invention, the first cellular telephone either an invention or an innovation, and the first smartphone an innovation.

The wristwatch

Another simple and great innovation is the wristwatch. Prior to the 20th century, wristwatches were only worn by wealthier women as a fashion accessory, whereas men had pocket watches. It took a World War for the wristwatch to become a mainstay accessory for men.

As the story goes, coordinating troop movements, bombardments and attacks required officers and soldiers to be always aware of the time. The process of fumbling for a pocket watch proved cumbersome due to the necessity of having to always check. That frustration was compounded during the winter months when wearing gloves.

Someone gave this some thought. They simply stole or should I say borrowed the wristwatch idea and adopted it for men. That way soldiers wouldn’t have to reach for their watch at all, as they were wearing it. A simple twist of their arm and they could see the time.

WWI soldier with Watch
https://www.businessinsider.com/watches-after-wwi-the-male-accessory-2016-5

My experience

When I founded the Marketing Resource Group or MRG, I brought this essence of innovation to the consumer packaged goods and healthcare industries. Prior to MRG, I owned The Sales Support Company which was a contract retail merchandising company. In other words an outsourced sales force. I had 150 people working coast-coast performing various sales functions in our client’s smaller retail customers.

Because our merchandisers needed to travel from store to store to perform their duties, wages and travel costs represented a significant portion of our costs. Raising prices was difficult as it would dilute the cost/benefit argument we had put forth. So, after eight years sustainable profits were elusive, so I sold the company.

My innovation

One of the reasons that made my decision to sell The Sales Support Company easy, was that I knew the industry still needed to service these accounts but needed cost efficient solution, which I had been quietly testing for over a year.

Once clear of my obligations with my previous company, I launched MRG to provide our clients with an alternative solution to service these accounts.

So instead of having an individual physically visit a store, we began telemarketing these accounts as a means to communicate and solicit orders. As an aside, we provided other services that previously required a sales representative to perform, but now were done remotely.

I knew of only one company that was doing anything remotely similar and that was Kimberley-Clark, the makers of brands like Huggies and Kleenex.

The big difference was that they were selling their own products, whereas we would be a sales as a service model, representing any number of companies and brands, albeit never at the same time.

Aside from Kimberley-Clark this hadn’t been attempted before and therefore it took a bit of effort to get buy-in from our clients.

Eventually, we convinced enough clients of the merits and gained the necessary momentum to make it a viable business that I owned for 17 years until I sold it.

This innovation had numerous benefits and few downsides for our customers. Considering that we handled what I referred to as their orphaned accounts, those retail establishment that due to annual purchases or geographic location, received no sales coverage from their existing salesforces.

Foremost, our reach was unlimited. If they had a phone, we could contact them, regardless of where they were located, even in the Artic.

Innovation through adaptation

So let’s be honest. I didn’t invent anything here. I simply took an existing service, telemarketing, and applied it to an industry that wasn’t using it. There is a saying “good artist borrow ideas great artist steal ideas.

Is that not the purpose of innovation? How many so called innovations, add no value to the end user and only add confusion.

First and foremost, innovation needs to improve the experience. But change for the sake of change is rarely a good idea. The best way to determine the value of your innovation is to ask your customers and not just your power users.

Also consider that instead of more features, maybe consider fewer and see if that improves the user experience.

You may also enjoy SBM #107 Beware of the whale

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

The following is an edited transcript

{Greg}
Today I would like to welcome back Dennis Geelen the author of the Zero In Formula. Dennis was a previous guest on SBM #92 titled – The 2 Biggest Mistakes. If you haven’t listened to it, I encourage you to check it out.

The reason for having Dennis join us today, is that he’s launching his new book – The Accidental Solopreneur.
So, welcome back to the Small Business Minute.

{Dennis}
Hey, Greg. Thanks so much for having me back on the podcast. So happy to be here.

{Greg}
So, I thought a good place to is by getting Dennis to share his background as we really didn’t touch on any this the last time he was on.

So my first question is, what prompted you to leave the corporate world and start your journey as a solopreneur consultant?

{Dennis}
So, your question, what prompted me to leave the corporate world and start my journey as a solopreneur consultant?

Well, short answer is I was laid off, at the age of 43, for the first time ever. I was laid off from a corporate job and I decided, hey, why not bet on myself and start my own solopreneur practice?

The longer answer would be I had great encouragement and support from my wife. I had a nice severance package, so I knew that I could give it some time.

I decided to give it a full year. Really try and give it my all and start my own consulting business. And at the end of the year, if things were working great, awesome, I would have no regrets. I would have learned, and I’d be on to something. Just the feeling of betting on myself and making it, would be awesome.

If it didn’t work again, no regrets. I would know that I tried, gave it my all and I would never have that – “What if?” feeling. And I would still be young enough to jump back into the corporate world and probably be a better person because of it.

So that’s really what prompted me. If I hadn’t had been laid off, I never probably would have taken the step. So, I guess it was a blessing in disguise.

Dennis Geelen

{Greg}
We all know there are many ways to become an entrepreneur and to co-opt some words from Shakespeare- “Some are born entrepreneurs, some become entrepreneurs, and some have entrepreneurship thrust upon them”

Being laid-off has always been a common theme for people transitioning to entrepreneurship. This is especially true if one has a decent severance package. As I like to say, it let’s you take your idea for test ride, and judging by the success your enjoying, it certainly seems to have paid off for you.

So, can you share what were some of the biggest mistakes you made early in your journey?

{Dennis}
Yeah, lots, lots of mistakes made early on. Where do I start?
So, when I first started zero in my consulting business, I was very naive.

I just thought, hey, I’ve got 20 plus years of corporate experience. I’ll just announce to the world that I’m a business consultant and I’ll give myself a catchy name, Zero IN.
I’ll create a logo, I’ll create a website, and then I’ll just sit back and watch the clients roll in. Of course, that’s not what happened at all.

I did those things, but the clients didn’t roll in. What I found was I really had to niche down. I really had to be the expert at something. Just calling myself a business consultant really didn’t appeal to anybody. That’s a generalist.

I had to get really specific. What specific business challenges am I helping you solve and for who?
What business is in what industry. So, I really had to go through the process of learning how to be the expert and then building credibility as a consultant.

In in my corporate life people didn’t know me as a consultant. They knew me as a director of professional services or a director of Project Management.

You know, I was not a consultant, so I had to brand myself. I had to build credibility and I had to become the expert. Then I had to learn how to package my services, and sell my services. So, all kinds of mistakes in the beginning. Just assuming that announcing to the world you are a consultant, and you know people will be lining up at your door. I had a lot to learn and luckily had enough runway to be able to make those mistakes and learn from those mistakes.

 “who makes more money the heart surgeon or the family physician?”

{Greg}
Focusing (SBM #53) or becoming expert in a given area is one of the hardest lessons for entrepreneurs to learn. That applies equally to companies and not just consultants. It’s a lesson I learned many years ago and it paid off handsomely.

When I sit with struggling entrepreneurs, most can’t identify their target market or ideal customer. That’s because they’ve never really looked at what they do differently or can do better than anyone else.

To drive home the point on focusing, I usually ask the question “who makes more money the heart surgeon or the family physician?” I think we all know the answer.

But to become the expert, it requires discipline and commitment. Discipline, as you point out in the Accidental Solopreneur, to know when to say no to an opportunity if it doesn’t fit. And commitment, to learn everything there is on the subject matter. It’s tough to do, but so worth it!

So let me ask, were you impacted by the pandemic, and if so, how did you pivot? 

 “I helped companies solve indifference.”

{Dennis}
Yeah, the pandemic. Boy, that really messed up a lot of businesses. So, for me, I was finally rolling, I had figured out my niche.

I helped medium sized businesses with their customer experience and creating a culture of innovation. Or as I like to say it, I helped companies solve indifference. Indifferent customers or indifferent employees. And here’s how you do it.

I had got my package down, my services down. I was doing all kinds of engagements. I was doing all kinds of speaking.
I was doing all kinds of workshops and then boom, the pandemic hits.

So, what I did was OK, now I had runway again. I had just made a bunch of money in the early part of 2020, in late 2019, from having figured things, so I had some time
I was given by the pandemic.

I had some money that I was given by my success. I decided to sit down and write the book the Zero in formula. It’s where I took everything that I was doing with my clients. I put it into a book released in September of 2020, and that’s right when things were starting to open back up again.

And boom, that got me all kinds of exposure and more, you know, companies understanding what I do and who I do it for and how I do it. And because I was on so many podcasts and, you know, there was articles about the book and the book hit bestseller. That really was a blessing in disguise. For me, the pandemic is what allowed me to do that.

{Greg}
So many business owners felt the wrath of Covid. They just weren’t prepared. As much as Covid was a health issue, it was also an economic one as the lockdowns came into play.

Long before Covid, I had always told my clients that you need to have a rainy day fund to survive any form of business slow down or interruption. I was usually thinking along the lines of short term illness or a fire, etc.

Like most people, I never in my wildest dreams would have contemplated a pandemic. However, those that heeded my advice, made it through. It wasn’t pleasant, but they made it.

By having cash reserved, it allows you to continue doing the things that need to be done or as in your case, gave you the opportunity to write Zero In.

I noticed that you now also help other solopreneurs start their own practice, what prompted that new initiative for you?

{Dennis}
Yeah, so a funny thing happened. After a few years in at zero in, things were rolling. I now have a book. I now had online courses.

I was doing all kinds of workshops and consulting engagements and I was just starting to write another business book. I thought, ok, I should have a follow up to the zero in formula. Similar niche, similar type of stuff I’m talking about, but a different spin on things just to keep things fresh.

What I noticed was a lot of people were reaching out to me at this point now saying, hey, I want to do what you did.
Hey, can I pick your brain for a little bit? Hey, I’m starting my own consulting practice. Can you give me a few pointers? Can you give me a few tips?

This was happening through e-mail, through DM’s, the zoom calls, people were wanting to spend time with me and pick my brain. I thought maybe there’s another niche here for me as well while I’ve got zero in going and I can help these medium sized businesses.

I could also start working with other solopreneurs to help them get started, so I pivoted and wrote a very different book.

Instead of the business book I was planning to write, I decided to write a book for solopreneurs and this one, The Accidental Solopreneur, which it ended up being called, is told in a fictional parable format.

I always love those types of books where it’s told in the form of a story with interesting characters. But tips and strategies come out through the book, so that’s what I did there. I started up a whole other side business as well, where now I’m also coaching solopreneurs where they can book calls with me.

I’ve created an online course called the Solopreneur Playbook where I take people through the six steps that I went through, to eventually build a successful solopreneur consulting business.

That’s really been a great new initiative for me, and it was really just prompted by all those people reaching out to ask and I thought there’s a market there. I’ve got expertise, I can help these people.

picture of playbook course
The Solopreneur Playbook: 6 Steps to FREEDOM

{Greg}
That certainly sounds like an interesting opportunity. Going into business is never an easy decision and most underestimate what is required.

By the time they do realize that they’re unprepared, they’ve used up their whole runway and have to throw in the towel. Fortunately, for those that get a reality check early in the process, they’ll now have a new resource available in The Accidental Solopreneur and the accompanying playbook.

So that a great segue to my final question. The Solopreneur Playbook that you have developed is based on your new book The Accidental Solopreneur. Can you give a high level overview of the playbook?

{Dennis}
So, like I said, the book came out of that and an online course as well. Really what I show in the book and in the course itself is a 6 step playbook. I call it the Solopreneur Playbook and it’s basically this.

Step 1 Be the expert. Like I said off the top, that was the first mistake I made, I didn’t niche down enough, but it’s easy to say that. How do you do that? What does that look like? So, in the book you get to see how the guy does it in the story.

In the course, there’s all kinds of resources to help you niche down and be the expert.

Step 2 is to build credibility. It’s great that you’ve niched down now, but you’re still probably one of several options in that niche. Why you? How do you build credibility so that people want to choose you instead of your competitors?

So, in the book, again, it shows how the guy does that in the course, all kinds of resources and examples on how to build your credibility.

Step #3 How do you refine? Which is extremely important is how do you refine and offer your services? How do you package them so that you’re not just selling your time for money so you’re not just saying, hey, it’s 100 bucks an hour to work with me?

What’s your proprietary process? How do you package what you do into a certain number of steps or a certain process and then sell it at a fixed price so people feel like they’re buying a proven methodology or a proven product?
I’ve been telling people in the course sell it like it’s a product, package it that way and price It that way.
So how do you do that?

Step #4 How do you sell it? Learning to sell and getting good at sales is so critical because if you don’t have any customers, you don’t have a business.

So, learn to sell is step #4. Now, I tell people in the course, those first four steps are probably going to be iterative.
You’re not going to get it perfect right off the bat. You’re probably have to go through several iterations before you get that, and then you might stop there.

You might have an offering that’s so good and is priced so well that you’re making all kinds of money and you’re helping all kinds of people or businesses and you’re good with that. But if you want to go further, that’s where steps five and six come in.

Step #5 is build an audience. Now, can you have a podcast? Can you have a newsletter? Can, you know, generate a large following on LinkedIn or Twitter so that you can really cash in on Step 6.

Step #6 is to build assets that generate recurring revenue instead of just offering your time and your services.
Can you write books? Can you do online courses?
Can you have people sponsor your podcast or your newsletter?

Can you create Cheat Sheets that people pay for? You know, what can you do now that you’ve built an audience? Build something once and sell it 1000 times.

So that’s the playbook. That’s the six steps. But it’s very important that you do them intentionally and in order, and you do them properly and that’s really what I go through in the book and the course.

“No Sales, No Business!”

{Greg}
Thanks Dennis for that overview. Those 6 steps make a lot of sense and that’s coming from someone who has been there. Step 4 Learn to Sell is the one that stood out for me the most.

Too often entrepreneurs are technically competent, but they lack the ability to properly present their expertise. I have a saying that I use frequently and that is “No sales, no business!” You can have the best mouse trap but if you don’t have any sales skills you’ll never get any customers.

That’s pretty much all the time we have, and I want to thank you for your time today as well as I want to wish great success with the book and the playbook. I’m sure it will help those many solopreneurs who want to grow their practices.

Also, I lied. I have more question for you. How can people contact you?

{Dennis}
Thanks again for having me on, Greg. So great to be here.
Yeah, if people want to get in touch with me, you can reach out through LinkedIn.

Always happy to connect with people there.
Or you can visit my website, www.dennisgeelen.me .
There you can see all about the book. You can see all about the courses or book coaching calls with me. Love to connect with people and help them through their journey.

{Greg}
Dennis has graciously offered a 25% discount for his online course to my listeners. So just head over to my site at gregweatherdon.com and you’ll find a link for the course, the discount code and his new book in the transcript of this interview.

Here is the link to the course – https://dgeelen.gumroad.com/l/solopreneur_playbook Use this promo code for 25% off – tvzvajc

Here’s the link to his book The Accidental Solopreneur

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

The reality of being a small business owner is that you are going to have difficult clients. How you deal with them comes down to how much you are willing to endure.

These are the clients that hire you because of your expertise, but then try to tell you how to run the project. They can also be the type that doesn’t respect your time or are late in getting you the information you need but still expect you to meet the original deadline. Of course, let’s not forget those that expect you do more than originally agreed upon, and don’t think they should be charged more. I could go on, but you get the point.

(more…)

Inflation is much like rust. Left unchecked it can quietly eat away at your buying power and can turn a profitable business into one that struggles and a struggling business into non-existence.

For many of us, you pretty much had to be a Boomer living in an industrialized world to fully appreciate the impact that inflation had during the 80’s. During that period mortgage rates skyrocketed to over 21% and unemployment exceeded 12% in North America.

As bad as that was, there were countries that faced 100% annual inflation back then. To put things in perspective, that meant that the price of goods doubled in a year.

Inflation is like rust

The point of all this is not to provide an economics lesson, because I’d be the wrong person for that. No, this is intended is reinforce the need to be vigilant in managing your costs and pricing.

Regardless of your industry, you are probably facing cost increases in materials and wages. The latter because of the tight labour market, thanks in part to government social programs.

With all the things we must oversee as business owners, being a little more vigilant with all our purchases can become burdensome. However, with inflation starting to ramp up to serious levels, it’s more important than ever review your costs and adjust your pricing to protect your margins.

Too often I find small business owners struggle with increasing their prices because they are afraid of losing customers. Their internal dialogue usually centers around “I can’t charge them that much, that’s expensive, they’ll never pay that much!”

How is it that they won’t pay that much? Everybody is paying higher prices for just about everything they buy now. So, why should you be a martyr? Unfortunately, inflation is a perpetual motion machine that never stops.

The destructive power of inflation

What so many entrepreneurs fail to realize in a high inflation era, is that you need to keep your prices in step with the increases in your costs, otherwise it ends up costing you money and potentially your business.

Inflation can destroy your income statement in short order. When you look at the bottom line of many small businesses, there is not a lot left over after a year of hard work. The typical small business has a Net Income is way below 10% with many running in the 2-4% range. So, on a $1 million business that means your left with $20-40,000 or $10-20,000 on $500,000 and only $6-12,000 on a $300,000 business. Not much of reward for all the hard work.

Now layer on inflation at 4-7% that has recently been reported by various governments over the past few months and you will start to see the potential for margin destruction. But only if you don’t adjust your costs accordingly.

Business is not a charity

Using the previous examples, a 4% increase in inflation can wipe out the profit of most small businesses. Whereas a 7% increase you automatically go negative into a loss.

Look, nobody likes price increases, but it is a reality of our time. For the past 10+ years most of us have enjoyed a low predictable inflation rate below 2%. Even then I have encouraged small business owners to take annual price increases. Because 2% compounded annually equates to over 6.1% over a 3 year period.

Business is not a charity. You are here to make money. The more you make, the more security you can bring to your firm and your employees. The more money you make, the more you can pay your staff and yourself.

Some options

Being worried if your customers can afford the new price is noble but not realistic. There’s no point of losing money just to avoid increasing your prices. Yes, you can always offer a one time discount to your better customers as a way to ease them into the new pricing. But I stress one-time.

I also know that there always seems to be someone willing to do the job cheaper and to that I say let them. Every industry has someone who offers low pricing but it’s my experience that most don’t last long.

Alternatively, you can do what many consumer goods companies are doing, reduce the size of the product to maintain a price. Offering your customers a “lite” version of your existing product or services may be all you need to do.

Minor tweaks such as a decrease in reporting, a reduced delivery frequency or even quicker payment terms are just some of the examples. These small adjustments can be used to maintain a given price point.

Another thing to always keep in mind is if those customers are only shopping on price, you must ask yourself whether you want them as customers in the first place. Often, they are not loyal and will change suppliers for a nickel.

It has been my experience that profit margins are never high enough. So, increasing your prices to ensure inflation doesn’t destroy your company, is just smart business.

You may also enjoy Pricing for profit

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

An often published piece of advice to aspiring and to lesser extent existing entrepreneurs is to follow your passion. By doing so, riches or success will surely be yours. But, as with most of these sound bites, this is rarely the case.

Let’s be honest. There’s lots of things that people have a passion for that could never support their dream lifestyle. Unless of course their dream is to just grind out a meager living.

There are plenty of examples of bankrupt restauranteurs who have a passion for cooking but couldn’t run a restaurant. What about the numerous clothing stores that couldn’t make it even though the owner’s passion was fashion?

Be passionate

Plenty of people have a passion for gardening, knitting, pottery, or music, but few would ever be able to or even consider creating anything more than a side hustle that adds a few dollars in their pockets. Of course, there are always the exceptions to this, but they are by far in the minority.

Be Passionate

So, just because you have a passion for something doesn’t mean you can make a business out of it. But then what would happen to all those “Follow your passion” sound bites and their perpetrators?

So instead of “Follow your passion”, what we should be promoting is “Be passionate about what you do!” To some this may be just semantics, but it’s far more than that. It’s about believing that what you do provides a better solution for your customers and not just wishful thinking.

Another way to look at it is that being passionate more closely resembles enthusiasm whereas having a passion is more emotional.

Merriam-Webster defines enthusiasm as having a strong feeling of active interest in something that you like or enjoy. The operative words being “active interest”. Emotions on the other hand, is defined as a strong feeling such as love, anger, joy, hate or fear.

Being passionate is also about continually trying to improve what you do. It’s about immersing yourself in the industry and grasping its nuances. It’s about becoming a student of your industry and the needs of its customers. In other words, to strive to be an expert.

What are you good at?

Another reason being passionate wins out over passion, is because being passionate usually means your good at something. You’ve found a niche that allows you to excel and therefore you just naturally gravitate towards the area where learning and subject matter information is easily consumed.

At the end of the day, most of us would never achieve any level of success if we just followed our passion. And having talked with hundreds of successful entrepreneurs it was interesting that most didn’t follow their passion.

As a matter of fact, I don’t recall anyone of them telling me they followed their passion. No, most just saw an opportunity that aligned with their skill set and went for it. But they were passionate about what they were doing. Being “passionate” about what you do, is far better advice than “follow your passion” in my opinion.

You may also enjoy SBM #64 Defining Moments

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

One of the biggest challenges of a service business is managing your inventory. Now you might wonder what inventory, besides a few stationary supplies you may have, that need to be managed?

Well, unlike a manufacturing, retail or a distribution business, where you have physical inventory that needs to be stored, sold and then replenished, service businesses on the other hand have a single and very unique inventory -TIME!

 

3 people standing inside big clock

Time- It’s how you get paid!

Because as a service business, your product is the knowledge that you and your staff carry around in your head. Putting this knowledge or expertise to work is how you generate your revenue and that’s usually in the form of hours worked.

It can be argued that service technicians like appliance or auto repair have inventory, but for the most part you hire them for their knowledge and they in turn they charge you for the time it takes to fix the problem. Therefore, the parts although important, are secondary to diagnostic skills the technician possess, because without those skills, there wouldn’t be a part to sell.

Similarly, sales and marketing services companies also generate revenue by the hour, however, it is rarely shown as such as most fees are displayed as a total for a given project. But all the fees are calculated as an estimate of how much time or hours are involved in executing the project by the various staff members.

Establish some balance

One of the biggest issues with owners of service businesses is understanding that their inventory is finite and that they should be running their companies with that in mind. Unfortunately, this is contrary to how many of these businesses operate. They assume that they can just put in more time and work longer hours. Although feasible in the short term, it is rarely a long term strategy. Yet so many continue to do so.

There are some advantages to managing your business based on your available inventory of time. First off, it should bring a sense of balance to a business. Balance, as in work life balance.
Secondly, it would allow you to establish realistic delivery timelines to the customer. Let’s be honest, we all think we can complete an assignment quicker than reality dictates but that just stresses out your staff or annoys the client when we are late. So being realistic can reduce the occurrence of both.

Additional benefits of managing your inventory can be significant on the financial front. Foremost, you’ll quickly understand whether you are charging enough and whether your existing inventory of hours available can support your financial demands.

Calculate how much time you really have

Furthermore, you should also discover how efficient or inefficient your organization is and where improvements can be made. Increases in efficiencies can greatly enhance your profitability. A simple metric such as revenue per hour is great place to start in benchmarking any improvements. This calculation is done by simply dividing your total revenue by total payroll hours for any given period, including your own.

So, how do you calculate this inventory? Well, it is easier than you think, and it really doesn’t matter whether your staff is making $20/hr or $200/hr as it is the exact same calculation. Earning a higher hourly rate does not give you more hours in a day, as we all get the same 24hrs.

The following example is how you calculate your total available inventory of time in a service business.

1. Assume a 40 hour work week = 2,080 hrs
2. Assume 3 weeks vacation = (120)
3. Assume 11 statutory holidays = (88).
4. Assume 5 sick days = (40)
5. Assume 2×15 mins breaks/day = (12.5)
Total available hours 1855.5 hrs

So before doing this exercise, most owners assume they have 40 hours a week or 2080 hours per year per employee that are available to them. However, after taking into account vacations, stat holidays, sick days and coffee breaks, that number is reduced by 11% to 1855 hours per year or a loss of almost 6 weeks out of a 52 week year.

This number actually gets worse if employees are required to travel to clients as in the case of a repair technician or a salesperson. You can easily lose and additional 2 hours per day which is a potential loss of an additional 13 weeks per annum. So now we are down to 33 weeks of billable time in a year or 1335 hours from a high of 2080 hours. That’s a 36% reduction in available inventory or billable time.

Once you understand how much available time you have, you can now start to make realistic assumptions and projections. Of course, the challenge to all service businesses is the ability to maximize your available time inventory and make sure it’s productive.

Hiring more people not the best option

Unfortunately, the only way to increase your inventory in a service business, is to hire more people. But realistically, that’s not necessarily the best option, especially if you have demand peaks and valleys in your business throughout the year. So, finding tools or processes to increase productivity might be a better avenue to maximize your existing inventory.

Realistically, we are all faced with slack periods where there’s insufficient demand and people are not busy. Sadly, you can’t store any unused time for future use. Because once that minute hand on the clock moves forward, you have lost that inventory forever.

So, sit down with staff and explain the impact they can have on the business by being more efficient. Then ask them where the bottlenecks are and their suggestions to get rid of them, because once that inventory is gone, it’s gone!

You may also enjoy episode #59 Quit Digging!

 

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

There are lots of reasons start-ups fail, but one that I see far too often is the lack of industry experience. Industry experience can be summed up as having substantive knowledge working in the area of the planned start-up.

As an advisor, I have met with hundreds of budding start-ups and one of my primary questions to them once they have explained their idea is, “what industry experience do you have?” Unfortunately, I never thought to quantify the responses, but suffice to say that a large percentage had zero industry experience.

Interesting enough, this was not isolated to any particular industry, but ran the gamut from app development to the hospitality industry and everything in between. This lack of industry experience can be partially explained by the rampant promotion of entrepreneurship and the social media heroes that give false hope to their many followers, by suggesting that they only need desire or ambition to be successful. For those of us that know better, nothing could be farther from the truth.

Chilkoot Pass

To be sure there are examples of individuals who have been successful in areas where they had little experience. For the most part these individuals had a lot of luck or a lot of money to support them while they learned, but they are the exceptions. The average entrepreneur has neither, but what the successful ones do have is industry experience.

Knowledge deficit

The authors of Age and High-Growth Entrepreneurship stated the following in a Harvard Business Review post;

“We found that work experience plays a critical role. Relative to founders with no relevant experience, those with at least three years of prior work experience in the same narrow industry as their start-up were 85% more likely to launch a highly successful start-up.”

History itself can be a great teacher and as Winston Churchill once said in a speech to the House of Commons “Those who fail to learn from history are condemned to repeat it.” There are many examples from history that entrepreneurs can draw upon to support or justify why those individuals with industry experience have a greater chance at success.

What most people overlook is that having industry experience is a massive competitive advantage. It gives you the knowledge to spot an opportunity from the inside that is invisible to an outsider. This is by no means a guarantee but having industry experience can minimizes potential missteps that are not clearly visible to the outsider.

Klondike (Yukon) Gold Rush

One of the most interesting comparisons that I can make to todays rush to entrepreneurship is that of the Klondike Gold Rush. Once the news leaked out that gold was discovered in Dawson City in the Yukon in 1896, the stampede was on.

Much like social media does today, newspapers from around the world wrote extensively about the bonanza. So much so, that in one San Francisco newspaper it was front page news for over a year.

It is estimated that between 100,000 and 300,000 people from around the world, regardless of their experience, quit their jobs, left their families, and headed out on the year long trek to claim their share of the riches. Sadly, many did not get far. Of the potential 300,000 who set out, only 100,000 thousand actually made it to the Yukon and only 30,000 of them got to Dawson City.

It is interesting to note that of the 30,000 who made it to Dawson City, only 2,000 actually found gold and only a handful of those returned home with any.

Access to Yukon in those days required the gold seekers to travel north via ships from ports along the Pacific west coast to Skagway Alaska. This was the jumping off point to the Yukon, but even if you made it this far, many Stampeders, as they became known, were in for a rude awakening and ended many a dream.

Beginning in 1896 the Canadian government would not allow entrance into the Yukon unless the individual had a year’s worth of supplies to sustain themselves. This is one of the reasons that tens of thousands of people could not continue, because they didn’t have the money to buy what was required.

These supplies were split equally between food and equipment and weighed approximately 2000 pounds. Failure to comply, would result in you being turned away at the Canadian border because the government did not want those who were woefully unprepared to even attempt this most grueling journey. Maybe today’s start-ups should be mandated in a similar way, but I digress.

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The Chilkoot Pass

One of the most famous pictures of that time is of the Chilkoot pass, where a long stream of prospectors are struggling up a 900 foot climb.

This 33 mile (53 kms) pass was the fastest, but more arduous way to Dawson City and once you made it over the pass, you still had 400+ miles (700 kms) to go. But you did not just have to climb the pass once, no you had to do it upwards of 20 times in order to move your 2000 pounds of supplies along your route.

In the early days, this was raw country and there just was not many transportation alternatives. For the most part, you either did it yourself or it did not move.

Just show up

The point of this comparison is that of tens of thousands that set out to stake their claim to riches, most had never prospected for anything. But because of all the newspaper hype, many just assumed that the gold was just lying there waiting to be picked up and if they could just get there, they would be rich. Experience did not matter, just show up.

Not to be overlooked, because it is not well documented, is how many people died in the attempt to reach the Klondike, but it numbered in the thousands. They died from either malnutrition or exposure, as the temperatures dropped to -40 degrees and colder in the winter. Sadly, they naively set out on journey, not knowing any better nor bring prepared. In other words, they had no experience.
Too many people today assume that it is easy to start a business and all they must do is to show up. Sadly, those that are not prepared, never make it to their destination. It takes more than desire, it takes knowledge and skills, and those skills and knowledge come from experience.

We need to change the way we promote entrepreneurship because, contrary to what we hear, it is not for everybody. However, for those that want to be their own boss, they need to understand that one of the best things they can do to increase their odds of success, is to get some industry experience.

It is not enough to watch a few how-to videos on YouTube or participate webinars. Only working in the industry will give you the necessary insights to map your way to the gold.

Fortunately, unlike the Yukon Gold Rush, few today are dying because of a failed business idea.

You may also enjoy Burnout

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

“Five percent of the people think; ten percent of the people think they think; and the other eighty-five percent would rather die than think”. This often repeated quote is regularly but wrongly attributed to Thomas Edison, Henry Ford and philosopher Bertrand Russell, all big thinkers in their own right. The reason for this is that they all had similar thoughts on the on the capacity or desire of humans to think, because thinking is hard work and most shy away from it. By the way, the actual author is Woods Hutchinson, an American physician who published “Balanced Work” in an edition of The Saturday Evening Post.

As entrepreneurs we are faced with a myriad of decisions we must make on any given day and quite frankly it can be exhausting. Couple that with all our other responsibilities, it leaves little time or more precisely, the energy to think. By think I mean intentionally focusing on a problem, opportunity, or challenge without distraction for an extended period of time as we search for the best solution. This is often referred to critical thinking.

Think not worry!

This is one of the reasons I repeatedly tell my audiences that as entrepreneurs, they need to make time to think. They need to find a way or a place to mentally retreat from all the day to day noise of our businesses and concentrate on the issue. For years I have used my daily walk or bike ride to ponder an issue. This 30 to 60 minute escape effectively disconnects me from all the other noise or distractions and provides focus time needed. I do not always resolve the issue, but this diversion usually provides a fertile field for ideas from which to germinate.

think

Too often people confuse worry with thinking and that is a mistake because there is a big difference between the two. Worry usually has too much emotional baggage attached to it and often has negative connotations that cloud our judgement. Whereas critical thinking on the other hand, is starting with a clean sheet and an opportunity mindset. This sets the stage to evaluate the issue or issues from a 360 degree perspective. The other upside to pondering our own solutions, is that it enhances our decision making process. To seriously think requires you to draw on all your knowledge and to determine any gaps you may have. Researching these gaps then adds to your knowledge and the more knowledge we gain, the more information we have to apply against future decisions.

Another way to look at it, is thinking is like exercise for the brain. As with all exercise it builds strength, resilience, and endurance to specific parts of our bodies. The same principle applies to thinking. The more we do it, the better we become, which in turn allows you to perform at a higher level.

The impact of Social Media

Although based purely on my observations, I see a disturbing trend evolving with many entrepreneurs and, for that matter, many individuals. They turn to various forums on social media platforms to solve their every problem. To my way of thinking this is doing the individual a disservice. Relying on others to help you make a decision does nothing to enhance your skill in this all important area.

To be sure two heads can be better than one, but hundreds of opinions, not so much. The problem is the audience lacks the context of your specific situation and are better used when dealing technical issues rather than directional ones. Relying on others does absolutely nothing to enhance this much needed entrepreneurial skill set. Just remember old saying that “practice makes perfect”.

IBM – Think

Thinking was so important that for years IBM had the word THINK strategically placed above every doorway as a reminder. They expected their employees to solve problems both internally and externally for their customers. Apparently, the origin stems from an uninspiring sales meeting. Thomas Watson, the founder interrupted the meeting, saying “The trouble with every one of us is that we don’t think enough. We don’t get paid for working with our feet — we get paid for working with our heads”. Watson then wrote THINK on the easel. (Wikipedia). The word THINK has since long been an IBM trademark and they even named their laptops ThinkPads, that are now owned by Lenovo.

The ability to think critically opens our minds to our own possibilities and if done well it allows you to solve problems or envision what your future could be. By thinking through the pros and cons and all the what ifs, allows you to distill a course of action that is home grown and is tailored to your specific needs. But it cannot happen unless you make the time to think.

You may also enjoy 10 things to overcome business failure

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

For newly minted entrepreneurs, the biggest priority is to generate revenue, any revenue in an effort to transition from struggling to profitable enterprise. To those of us who have made the crossing, we have more often than not sacrificed our own financial needs in order to create a proper fiscal foundation for our business. Because so few of us ever get investor capital, we are left to our own devices to fund our enterprises. That’s okay. As that old saying goes “What doesn’t kill us, makes us stronger!”

Unfortunately, we have trouble letting go of this attitude once the business moves off life support and begins breathing on its’ own. Of course this is understandable. Having lived through the tough times, it’s not something we’re eager to revisit. So under the guise of “reinvesting in the company”, we continue to pour our profits back into the organization and rarely do we consider taking it out of the company. Not to spend on toys, but to take some risk off the table.

Money Jar

80% of owners wealth is in their company

Considering most business owners hold upwards of 80% of their wealth in their business, this “all your eggs in one basket” scenario is a high risk situation. Ask these same owners if they would invest 80% of their net worth in shares of just one company on the stock exchange and they would certainly question your sanity. Yet these same individuals don’t think twice about their current wealth strategy.

In my case, I had set a target of getting 66% of my wealth outside of my operating company and to provide some form of creditor protection. I did this not because I was anticipating any sort of business crisis, but because I realized I didn’t want all that I had worked for to be totally dependent on the future performance of me and my company.

5 simple steps to get you started

Okay, so where and when do you begin? The following steps may help you frame your own initiative. Your corporate structure will dictate what vehicles are available to you and by all means consult your accountant, lawyer, financial planner and any other professional you need to maximize the effectiveness of this strategy

  1. Make sure you’re taking a regular dependable salary. Not your dream salary, but one that allows you to work without the stress of your personal financial situation overwhelming your decision making. In other words comfortably covering your basic needs.
  2. Begin formally moving a set amount from your current account to your chosen vehicle i.e. holding company, corporate savings account, etc. The formula you choose can range from 5% of all your billings that automatically gets transferred monthly to upwards of 50% of annual profit being transitioned out.
  3. This money should not be put at risk in another venture.
  4. Although minimizing taxation is always important, it can’t be the deciding factor.
  5. Eventually you will have transferred at least a portion of your wealth and created another pillar in your financial portfolio.

Freedom and security

If you were expecting some magic formula, I’m sorry to disappoint. This is basic wealth management, a rainy day fund, often ignored by business owners. Too many owners are hoping to cash-in when they sell their companies and are devastated when they can’t sell or get significantly less than they anticipated and have no additional source of wealth.

Being an eternal optimist is a necessary ingredient to having any chance of success as an entrepreneur, but it needs to be tempered with a bit of realism. It’s truly amazing the sense of freedom and security you feel when you’ve consciously created an additional source of wealth outside your operating company.

How you do it is up to you, but starting today in small increments is a must, because like a journey of a thousand miles, financial freedom begins with a single small step.

You may also enjoy The 1st Million is the Hardest

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.

A year ago, had you asked small business owners what 5 things could put them out of business?, I would have bet a pandemic would not have been on their top 10 let alone their top 50 things. But a lot has changed in just over a year. According to the CFIB (Canadian Federation of Independent Businesses), it is estimated that 1 in 6 small businesses won’t survive because of Covid-19. The UK is also predicting hundreds of thousands of failures with the US expecting that number to exceed 1 million according to McKinsey.

Assuming the 1 in 6 estimate to be true, that means that approximately 83% of small businesses will survive. Most certainly won’t flourish and it’ll take a long time to recover, but they will survive. Unfortunately, with the ongoing lockdowns, just surviving is incredibly stressful, to say nothing about how exhausting it can be.

What 3 things could put you out of business?

5 areas that require every owners attention

Managing the work-from-home environment is not easy for most small business owners. For many, current technology has made it possible to continue, but only after a number of implementation headaches and costs. The learning curve has been steep. Because for many, technology is just something they’ve never understood.

What we need to understand, is that most small businesses are run in an impromptu or spontaneous manner. The owners have been so busy trying grow their businesses prior to the pandemic, that the majority lacked formal processes. Most just spent their days acting, or more accurately, reacting to whatever the day had instore for them. They are more like fire fighters directing their staff on a moment to moment basis depending what fire was burning the most brightly.

To be sure this pandemic has forced a few owners to get better organized in how they structure their working days, but for many it has become quite the challenge in keeping everyone focused, productive and motivated. In episode #93 Pivot, I discussed the whole concept of pivoting, which is far more difficult than people are led to believe, but so is changing the way a company operates.

So this brings me to my question – What 3 things would put you out of business? Well if you are surviving, you can scratch off pandemic. Sadly, because so many entrepreneurs are so focused in the moment, they don’t realize there are a whole host of issues that can kill their
businesses in a heart beat. The following is a primer list of 5 pretty common areas that require every owners attention, in order to safeguard their business’s future.

 

 

 

 

“Those who think they have not time for bodily exercise, will sooner or later have to find time for illness.”

Edward Stanley, former Prime Minister of the UK

#1 Your health

Unfortunately, most of us don’t even consider what would happen to their life’s work if they were suddenly struck with an injury or worse a life threatening illness. What would happen to the business if you were laid up? Would it survive? If not, what would you do for income? How would you handle the debt? How would it affect your family? This is serious stuff and requires your attention. Contrary to what we think, we are not invincible.

The following are few of solutions that you can minimize the impact of a health problem.

First off, you should investigate disability insurance. Yes, it can be expensive and yes, it usually pays out less than you’re currently earning. But something is better than nothing.

Secondly, many health related issues are self inflicted by our lifestyle. Making time for some form of exercise should be mandatory for every owner. It can range from taking a daily walk to a full on cross-fit workout at the gym. Something is better than nothing. There’s a wonderful saying that kind of drives the point home and it is from Edward Stanley, former Prime Minister of the UK that says:

“Those who think they have not time for bodily exercise, will sooner or later have to find time for illness.”

An additional item that should be mandatory in every small business and that is delegate. By delegating absolutely everything you can to your existing staff, this will certainly relieve some of the pressure. That way, there’s a good chance that the business will survive, while you are laid up. Unfortunately, this is one of the hardest things to get entrepreneurs to do. (See Small Business Minute #18 Delegating is easier than you think)

#2 Key staff quits.

Having your key staff member quit can really ruin a perfectly good day and for some people it can take their business down.

People leave companies for a lot of reasons and sometimes there is nothing you can have do to prevent it. From career changes, to better opportunities to relocations, sometimes it’s just out of your hands. But in many cases it’s not. One of the top reasons employees leave is the lack of recognition and this is something you can control. An occasional pat on the back or some other form appreciation goes a long way. It can be as simple as a thank you for their efforts.

However, if a key employee leaves, what’s your plan? If you’re like most you don’t have one and chances are you don’t have a deep bench of trained people ready to assume that position.

Therefore one of the best things you can do is to cross train individuals. The secondary person doesn’t have to be as well versed as the key person, but they should have been given enough exposure that they could perform the job being vacated even though they may be less efficient.

Additionally, creating in depth documented processes for all positions, allows other personnel to perform those functions until such time as you can find a replacement. This will go a long way to ensure that your company will survive. (see SBM #34 Processes- Shampoo, Rinse and Repeat)

#3 Business interruption

Covid-19 aside, there are lots of things that can cause business interruptions. A flood, a fire, even vandalism can shut your business down for weeks, if not months. A closed business can’t generate cashflow, yet bills still need to be paid.

It is estimated that over 80% of small businesses have no form of business interruption insurance that would pay out a set dollar amount in the event of a catastrophe. This is different than typical commercial/business insurance, whereby the physical damage to your business is repaired. Business Interruption on the other hand can cover Gross Earnings, Profits, Extra Expenses. Certainly worth considering.

#4 Competition

What would happen if a new competitor came into your market, how would you deal with it? Being so focused on the here and now, is a great way to get caught off guard. As I’ve stated before, too many entrepreneurs are so busy just handling the daily priorities, they never have time to lift their heads up to see what going.

Inevitably, they are not even aware of that a competitor has set up shop until they start stealing your customers. By the time they do realize what’s happening that trickle of desertions turns into a flood and is hard to reverse.

One of the best ways to avoid getting sideswiped is to stay in touch with all your customers on a regular basis. Too often the only time business owners talk with their customers is when they call in an order. The thought is, “they know where we are if they need us and I don’t want to bother them.”

What 3 things could put you out of business?

 

Staying in regular contact with customers signals that they are important to your business and can also provide you with competitive intelligence. Most customer don’t change on a whim unless you’ve treated them poorly. So, by staying in touch the fact that a competitor is circling is often shared, thereby giving you time to react. (See SBM #76 Pick up the phone)

#5 Bad debt

This one item alone has contributed to the demise of many small businesses. Aside from not being diligent in collecting receivables, having one customer represent more than 15% of your business can be potential fatal if they close their doors or refuse to pay.

When you consider that many small businesses have net incomes of less than 10%, taking a hit from a major customer can be devastating. For example if a client reneges on a $20,000 invoice and you only net 10%, you’ll need to generate $200,000 in additional revenue just to recover that loss.

When you think about it, most small business are not flush with spare cash, missing out a major payment means you can’t cover payroll, rent or suppliers.

If you do find yourself with a client that represents more than 15%, you have two choices. First grow your business to get them below that threshold or alternatively collect early and often. Don’t forget you can set the rules, so don’t be shy about protecting your company. (See SBM #20 Cash Flow, the Breath of Life).

These are just 5 areas that should get you thinking, but every business has it’s Achilles heel. Spending some time thinking about “What 3 things would put you out of business?” certainly deserves your attention. Then pick the #1 item on your list and make a plan.

Let me know your thought sand ideas in the comment section.

Get More LIFE Out of Your Business

You shouldn’t be the hardest working person in your company.

Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.

Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.

Do you suffer from any of the following?

1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.

You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.