Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

August 20, 2009

Women vs. Men Business Owners

Filed under: Growth Management — Tags: , , , — Mike Van Horn @ 12:39 am

Q: How are women business owners and execs different from their male counterparts? What do they do right? What mistakes do they make? Lee B.

A: Two observations from my many years of working with men and women small business owners:

1. The similarities are much greater than the differences. Some of the claimed differences I hear about aren’t true in my experience.

2. But here’s one difference: In general, women owners are more intent on preserving their balance between work and the rest of life. A while back, I surveyed a number of our Business Group members during meetings. I asked, “How many hours a week do you work?” The men complained/bragged about the number of hours they put in: 50, 65, 80, more! One guy said, “I have to wear a nametag so my kids will recognize me.”

Then it was the women’s turn: “I work 35 hours, then I go ride my horse.” “I’ve set it up so I never work Fridays.” “I want to be an absentee owner. If my GM can’t handle things, he’s fired.” “I want to spend as much time running my non-profit as I do my business.”

The women ran equally large and profitable companies — ranging from 5 to 50 employees. And they weren’t brilliant managers. It’s just that they insisted on maintaining their work/life boundary and ran their business to maintain it. The men looked at working long hours as a badge of honor.

I must say, this exercise had a huge impact on the men. They started changing their attitudes about this. And it has paid off: the guy who made the “nametag” comment is now finishing a four-month sabbatical from his business, during which his Operations Manager handled things just fine.

Lessons:

1. The difference in hours worked was entirely due to the attitudes and beliefs one held.

2. People could change when confronted with the possibility of doing things differently.

******

Want to reduce the hours you work without hurting your business performance? I get into this more in two of my e-books:

— Recapture Your Time

— The Inner Game of Growth

August 4, 2009

How Much Time for Admin?

Filed under: Entrepreneurship,Growth Management — Tags: , , , , — Mike Van Horn @ 5:46 pm

Q: From Matthew on LinkedIn. “How much time does a “single shingle” professional spend on admin?”

A: One person suggested 30% of time for admin. If this is on target, this is why solopreneurs never get to take a vacation.

Suppose as a professional, your time is worth $100 per hour, and that you can find work at this rate if you have time to market. Suppose you work a 50-hour week, so 30% of your time is 15 hours per week. Suppose you can hire a really good admin assistant for $20/hr, or $300 for a 15-hr week. (You’ll hire somebody AT LEAST as fast as you are.)

So if your admin person freed up 15 hours of your time each week, and you used that time to get even 3 more hours of paid work, you’d break even. But surely you’d be able to generate more than 3 extra hours, so you’d definitely be ahead financially.

You’d also be focusing on activities where you brought more value to your business, and that were more exciting for you. And you might even be able to take more time off.

With more time and energy for marketing, you might get more selective with your client selection, and thus be able to raise your prices. You may have time to brainstorm and create a new way of structuring your business that sets you apart, so you could charge even more. More money, less effort. I like it!

So stop thinking “single shingle” and get the help you need.

Do I Have to Work All the Time?

Filed under: Entrepreneurship,Growth Management,Thrive in tough times — Tags: , , , , , — Mike Van Horn @ 2:26 pm

“For the Self-Employed, It’s an Endless Workweek. Recession Takes Away Vacations, Weekends as the Consequences of Missing a Business Opportunity Mount”
Sarah Needleman, WSJ Small Business. 8.4.9

In this article, solopreneurs tell us why they can never take any time off. Here’s my response.

I think the folks described in this article have fallen into a bad “24/7” habit. It’s unnecessary, and damaging to their business prospects.

Back in boom times, people said, “There’s so much work, I’ve got to be available 24/7 to handle it all!” Now they’re saying, “There’s not much work, so I’ve got to be available 24/7 so I don’t lose out.” I see many people like this who wear it as a badge of honor that they are on call all the time.

A solopreneur who gets stuck in this vicious circle virtually guarantees he or she will remain a tiny operation. Why? If you work all the time, when do you do the strategic thinking and planning? Develop strategic alliances and new ways of doing business? Train or groom skilled associates who can take part of your load? When do you recharge your batteries, and leave time for creative insights?

That’s the job description of a successful entrepreneur who is intent on growing the business, putting more money in their pocket, and not having to work so dang hard. The 24/7 worker bee never gets to this place.

I use this parable with my small business owner clients:

The Zen master says,
“Every day I meditate an hour,
no matter how busy I am.
Except on those days when the crush of work is overwhelming.
Then I meditate two hours.”

The “hour” is figurative: you set aside the time you need—even during the toughest of times.

Some simple rules:

— Don’t stay a solopreneur. Have a collaborator so you can energize and back up each other. Can be a colleague, a “partner,” or an employee.

— Tell your clients when you are available and when you are not. Mostly, they just want to know ahead of time. I do not believe your clients disrespect you for taking time off.

— Think you always have to be available to Client A even if you have something personal scheduled? Try this simple test: Suppose you have a meeting Tuesday with Client B. Then Client A calls and says, “I want to get together with you Tuesday.” Do you break your Client B meeting? No, of course not. You tell A, “I’m booked for Tuesday; what about Wednesday?” Treat your own appointments with equal weight.

— Feel you absolutely must stay in touch during vacation? Then do so, but limit it. My wife and I  (both consultants) take weeks in Hawaii. We tell our clients when we’ll be gone, and say we’re available only for brief urgent contact. Our insight: we’d rather spend an hour during the morning fielding emails via laptop while sitting by the beach than not go at all. And there’s a subtle joy from billing for $175 while sitting under a palm tree in your swimsuit!

*      *      *

If you’ve read this far, and you’re shaking your head and thinking, “No, no, this doesn’t pertain to me. I really do have to work all the time,” then respond and tell me why. If I can’t give you a way out of your vicious circle, I’ll send you a free copy of my “Recapture Your Time” book. But of course you wouldn’t have time to read it . . .

View Article

August 3, 2009

Should I Bring In a Partner?

Filed under: Entrepreneurship — Tags: , , , , — Mike Van Horn @ 7:06 pm

Q. What are the four or five most important things I need to consider in deciding if a partnership makes sense for me and my business? I need to build my client base and am thinking about entering a partnership with someone in my field. He has his own, albeit smaller, client roster but is not paying his way in.
Miriam  (from Linked In)

A. First, don’t do a partnership, period. If anything, form an LLC or LLP. A previous post already explained the importance of limited liability.

So let’s assume you’re using “partnership” in a figurative sense, i.e., someone you work closely in collaboration with.

I’ve advised many prospective “partners” on what it takes to succeed, and after this, 3/4 decide to do something else. Usually, the person who would have put the most in comes and thanks me profusely for talking her out of it.

All “partners” must make equal contributions and equal efforts. The contributions don’t have to be money, but “skin in the game” is essential. Bringing in someone who contributes less and doesn’t “pay his way in” is guaranteed to create problems. He has not earned ownership in your hard-won endeavor. You will resent his wanting a say in your business, and he will resent that you resist this.

Why not hire him as an employee? I know: you can’t afford to. Uh-uh. Giving someone an equity stake in your going concern in order to avoid paying him wages will turn out to be the most expensive hire you ever make!

There are only a few good reasons to bring someone in as a “partner.” These include:
— Synergy. The two of you click big time so you produce a lot more than either of you could separately. And you work really well together.
— Complementarity. Each of you provides a critical element or skill that the other cannot provide. E.g., marketer and producer, visionary and money-head.
But if one can hire the other, do that instead. That is, even if I’m terrible at marketing, why don’t I just hire a marketing whiz?
— You need a substantial investor and you’re willing to give up some control.

Even with this, there are big issues about goals, style, working culture, etc., that need to be explored.

Even if the stars seem aligned, I recommend you start with a joint project with each of you retaining your separate business entry. Test out all these issues in a time-limited working relationship and see how things go.

mvh

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