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

October 8, 2009

Getting Past Procrastination

Filed under: Entrepreneurship,Not yet categorized,Small Business Resources — Tags: , , , , , , , — Mike Van Horn @ 3:26 pm

Inspired by a short article in BNET, “Why We’re Wired for Procrastination”

Do you ever procrastinate? Stop kicking yourself! The linked BNET article says it’s not a moral failing; it’s just the way the brain is wired. Here are the first three “brain quirks” and the resulting “procrastination effects.” (There’s more detail in this Psychology Today article.)

  • Quirk 1: The brain is built to firstly minimize danger, before maximizing rewards.
    Procrastination Effect:     We avoid tasks that threaten the self, and we discount future rewards in favor of immediate gratification.
  • Quirk 2: Too much uncertainty feels dangerous. It feels like possible pain so we avoid it.
    Procrastination Effect:     Uncertainty — not knowing what to do next — is scary. Delaying a task becomes a way of coping with or avoiding that fear.
  • Quirk 3: Our conscious processing capacity is small, which makes us terrible at a lot of things, including predicting what might make us happy.
    Procrastination Effect    : It’s difficult for us to set realistic goals — or stick to them.

Well, okay, procrastination is not a moral failing, but we still have to run a business, and get things done.

My clients are small business owners, and I see this behavior everyday in them (yes, and in myself). This springs up whenever they need to get out of their comfort zone and dive into the new, e.g.:

— Making marketing calls
— Expanding into a new niche
— Hiring a top level manager
— Investing in growth
— Preparing their business to sell
— And the #1 Procrastination Generator: Writing a book! Hey, many of us get frozen up trying to write a blog post!

So how do you counter procrastination? I was excited to note that the way I work with owners helps limit their procrastination due to these “brain quirks.” Here’s how: I put together groups of 10 owners. Each ongoing group meets half a day a month. The purpose is to tackle the challenges to growth you face, using the group as your problem-solving panel and sounding board. But these growth challenges are the very ones that generate the most procrastination, because you are forced outside your comfort zones. Thus a big part of what we do is have members set commitments, then report back to the group the following month.

Being held accountable by a group of peers you respect is a powerful force. As one woman said, “There’s no way I’ll go to the group and not have my commitments done! I’ll stay up till 2:00 am the night before if I have to.”

The 9th Circle in “Procrastination Hell” is reserved for people who write books. And business owners who write books are in the center of that circle. Running your business is a full-time job, and writing a book is a full-time job. The business pays you now; the book might pay you something way off in the future. The business gives you instant feedback on how you’re doing. The book? Will anyone ever read the dang thing? Writing a book–even a business how-to book–is complete self-exposure.

Thus writing a book scares the bejebbers out of people. (I’m saying this as a guy who’s published four books, and many workbooks.) I tell people a book takes two years to complete: 10% of the time writing; 90% agonizing over it.

An example: A consultant I’m working with has been writing a book about his field for the last couple of years. The early parts went really well, but the  closer he got to the end, the slower it got. He’s down to writing the lead ins for each chapter, and progress was zero. Every time he set aside time, something would come up. Paid client work! Can’t miss that. The wife needed his help. The dog had a problem. Etc.

We talk by phone 10 minutes a week, setting goals, then reporting how it went. Every time there was no progress, we problem-solved how to do better the next time.

Finally one week, he made a bit of progress. Elation! Congrats!

Then the next week, he reported that he had completed all the rest of the chapter summaries. “Once I got started, and generated some momentum, I just kept rolling,” he said.

Lessons:

1. Having a coach really helps. When I write my books, I hire a coach to keep me on track.

2. When you are stuck, find a way to get unstuck that will allow you to make a bit of progress.

3. Once the logjam is loosened, and you build some momentum, keep going. Stay on a roll as long as you can.

4. Strike while the iron is hot! When you feel a bit of inspiration, go for it RIGHT THEN. If you wait even 1/2 hour, it’s gone.

In my e-book “Recapture Your Time,” I have a section on getting creative things done while you’re running a business. Overcoming resistance. Carving out time for development. Finding your best creativity work style.

And I’m also doing an e-book on “Cash Flow From Your Creativity.” When will it be done? Depends on how well I practice what I’m preaching here. If you’re interested, bug me, then I’ll be more likely to get it done sooner.

mvh

September 24, 2009

When Do Companies Stop Being Creative?

Filed under: Entrepreneurship,For Coaches & Consultants,Growth Management,Not yet categorized — Tags: , , — Mike Van Horn @ 5:23 pm

(From my response on joyofhumancapital.com.)

A. As I look around at the small business owners I’ve worked with (including myself) here’s what I see:

1. Creativity comes in all kinds and sizes of business, and so does failure of creativity.

2. Failure of creativity follows shifts in the attitudes of the owner and other key people

CREATIVITY KILLERS FOR SMALL BUSINESS OWNERS

• Owners get dragged out of creativity by the demands of running the business day to day. This has a lot to do with your own management style. “ I can’t find good people that I can trust.” “I got into this business to do what I love; now I spend all my time as a damn manager.” Thus you are continually pulled back down into lower-level tasks, and can’t focus on creativity, vision, strategy.

• Lack of support. Nobody is pushing you to take the creative leap, nor problem solving how to overcome the hurdles. No-one following behind, handling the details, executing the vision.

• Lack of systems; seat-of-pants management. Thus your “franticness quotient” increases exponentially with growth.

• Ill-fitting systems. E.g., accounting or project management or sales tracking systems that don’t give needed performance information to the owner.

• Constraining systems. Too much “by the book” or “bean counter mentality.” Of course the owner has put these into place, but then starts believing in them.

• Failure of vision. A creative owner gets beaten down, burned out. You have one good idea, but stick with it long after the window of opportunity has slammed shut. Or you fear taking the needed next step. “Tried that, got beaten down, it didn’t work, now I’m gun shy.”

• You get out of touch. You drift into an eddy out of the current of new ideas and technologies. This can be related to age, but there are many creative codgers out there.

• You get too comfortable. The balance between work and life tips toward Maui.

• Physical/mental impairment. Alas, this eventually catches up with us. If you’re smart, you’ll go out at the top, handing the creative reins over to the young whippersnapper you’ve groomed—and whose ideas you probably hate.

What’s the answer? First, see if you spot yourself in the above list, and own up to it. Then you can tackle the problem.
— My book can help you tackle this challenge: How to Grow Your Business without Driving Yourself Crazy.
— If you were a member of one of our business owner groups, this would be a perfect challenge to bring up to your group of peers. This is valuable because it’s often hard for us to see and acknowledge our part in this process.

— Call or email me. I’d be glad to talk with you a bit about this at no charge.

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

December 15, 2008

Kill the golden goose with taxes?

Filed under: Entrepreneurship — Tags: , , , — Mike Van Horn @ 4:50 pm

Convincing blog post on the “Doing Business” blog on the importance of entrepreneurship for innovation and economic well-being. We all knew that!

Business Owners Toolbox

Business Owners Toolbox

Read the full post at http://www.typepad.com/t/trackback/462659/35963502

But small businesses also bear the brunt of taxes! And the more we pay in taxes, the less we can afford to invest in our businesses. So our government is damaging our ability to create jobs and innovation, the very things they say are essential to boost the economic well-being of all of us.

August 12, 2008

When to grow out of a home based business

Filed under: Entrepreneurship — Tags: , , — Mike Van Horn @ 12:50 pm

Q: “When is it time to grow out of my home-based business?”

 A: When I ran my business out of the house, my wife would say, “Mike, every flat surface in the house is your desk.” Clients would come in and plop down on the sofa. Our part time office assistant worked in the room next to the kitchen. I was always on; things always had to be cleaned up, ready for business. There was a big temptation to blur the time between work and home life. Did I work at home, or just sleep at the office?

It’s true that some good-sized businesses are run from homes. These are usually virtual business, where numerouis people work for the business, but remotely. Support people: bookkeepers, web designers, marketing strategists, virtual assistants. But also line people: field reps or technicians, contractor’s crews, and others who are paid per result not per hour.

This depends on the kind of business. A business that you essentially run out of your head (or from your computer) can be run from your home for a long time.

Many people run businesses from their homes that do not fit zoning requirements. But aside from the legalities, just how many people can you fit in your house? So the real crunch comes when you need to have a team of people work together in an office.

You must balance your desire to minimize overhead and avoid paying extra rent with several factors:

– The number of people that need to work together regularly

– Greater productivity and efficiency due to better workspace. Houses are often poorly laid out for office space.

– Image. How you come across to your desired customers and even your employees

– Revenue potential. By moving into an office or commercial space, how much could you boost your revenue and profitability? Is it enough to cover the increased overhead and then some?

– Readiness to grow further. 

August 7, 2008

How do I grow beyond a one-person business?

Filed under: Entrepreneurship — Tags: , — Mike Van Horn @ 1:40 pm

Q: from JD, Consulting engineer (from LinkedIn Q&A)

 

A: I’ll answer your question with some questions. Use these to help you assess your growth options:

 

– How easy is it for you to bring in more business? Is there business out there for you to get, assuming you have the time and resources to service it?

 

– How competitive is your market? If companies don’t work with you, who do they go to instead?

 

If your answers to these two are positive, then growth is worth pursuing.

 

– What about your pricing? I often find that sole professionals like you underprice – esp. those who charge by the hour.

 

– How do you feel about managing others? Some professionals love the work, hate to manage others. Some are control freaks: can’t let go. Others get a charge out of coordinating a team. The latter find it easier to grow.

 

– How do your customers view you? Are they hiring just you, or are they hiring your company? For you to grow by delegating work to other techs, you must train your customers to do the latter.

 

– What is your best role in the business? Tech? Business development? President? Set it up so you do what you love doing, and what you do best, and hire people (even part time) to do the other parts. I work with professionals who hire a general manager to run their company, so they can keep doing the tech work they love.

 

– How much is your time worth? List in a column the things you do in your business, then in the next column how much it would cost you (per hour) to hire someone else to do each task. For example, strategic business development, $250/hr. Tech work, $150. Bookkeeping, $35. Office tasks, $15. If you spend time on the office tasks, then you are overpaying your office assistant by at least $150/hr!

 

– Can you price high enough to generate the surplus you need to grow your business? Here’s how you can justify hiring employees:

— Tech person. You must be able to bill them out for at least three times what you pay them. (For a subcontractor: two times their pay)

— Admin person. They must free up enough of your time so that you can bill additional work that is AT LEAST three times what you pay them. That’s break even: actually they should free you up to bill many more times what they cost you.

— They free you up to take more time off.

 

– How much are you willing to invest in your company’s growth? Some are willing to grow only what cash flow will allow. This is slower. Are you confident enough in your prospects to invest, say, $50k in hiring and learning curve time for people who will then make you a lot of money?

 

– How good are you at hiring excellent people? If you don’t give yourself an A, get some help with this from an HR professional. The biggest barrier to growth for professionals like you is not bringing in good enough people.

 

Your answers to these questions will point to the best growth strategy for you.

 

My book, How to Grow Your Business without Driving Yourself Crazy, is about this very question. You can get it from my website http://www.businessownerstoolbox.com

 

Mike Van Horn

 

 

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