1. Feeling Successful and Loving What You Do: The Ultimate Payoff!
What is the ultimate in business success? In my view, and in the view of 98 percent of those surveyed who are existing entrepreneurs, it means meeting goals for the business and also loving what you do. If you are highly successful but dread going
to work, you might as well have stayed in Corporate America! You really want to enjoy each component of your job, just as you want to be able to enjoy each component of your life. As the time required to run my business increases and as the resources available to me increase, I find myself outsourcing more and more of the work I don’t like to do and spending more time on the coaching side of my business, which is what I enjoy doing. If you don’t have many resources, try to think outside the box. Are there neighborhood kids who would like some extra cash for some of the labor? A family member or friend you wouldn’t mind mingling business and pleasure with?
Even though most of our survey respondents are working long hours, 49 percent said that their business is taking the amount of time they anticipated when they planned, 45 percent said it is taking more time than planned, and 6 percent say their business takes less time than they had anticipated. Some noted that their learning curve was so steep that it was tough early on, but is getting easier as time goes by. Others indicated that the reason for the large amount of time spent is because they set their own bar very high, and others said they enjoy their work so much that they have stopped worrying about how many hours they spend on it.
1.1. Rewarding Yourself
Most people who run their own business prefer to put capital back into the business to grow it, although there are those who spend the profits immediately, never having a second thought about reinvesting. Many others feel that bonuses should first go to their team—the people who fueled the success in the first place—and while I don’t disagree, you also have to keep yourself motivated through personal rewards. What would you want from a boss? Why not give that to yourself?
Here are some creative ideas to help you reward your own success, essentially keeping your head in the game.
First, don’t forget about where you started from. This is very easy to do; I admit I do it all the time myself. In my case, it’s easy to fall into the mindset of “one more interview” or “one more course,” but I have to remember that a year ago there were no interviews and only half the number of courses in my business.
It’s easy to lose sight of your own success. I try to count on family and friends to keep me in check; when I beat myself up over lack of success, they catch me by gently reminding me what I started with. Reminding yourself where you started from should provide you with a clear view of how far you have come, even if it’s not as far as you eventually want to go. By the same token, don’t allow yourself to revel in all your glory, as doing so can easily take your focus off continued success and you could find yourself sliding backwards.
1.2. Personal Merit Increases
If you are successful, you can certainly adjust your own compensation—and you should! Many of us have had people work for us who want to know what we get paid, or what our contracts pay us—it is none of their business! If you are close to your team it’s sometimes hard not to share that information, but remember that your team is there to do a job—they didn’t take all the risk of starting the business.
Moreover, what you pay yourself need not be something you are ashamed of. It certainly shouldn’t be increased because of others’ inquiries—tell them to mind their own business and do their job! For most of us, these questions are uncomfortable, but employees who are too comfortable in their work tend to feel it’s okay to ask. Remind them that it isn’t. Often they’re trying to assess if they feel they’re being paid fairly. Remember, as a business owner, you have the right and obligation to make a profit on everyone you hire. If you didn’t, there would be no point in hiring anyone. It’s one thing to have your staff feeling like they work with you and not for you—it’s another for them to be asking questions that make you uncomfortable or are outside acceptable bounds. Many business owners in the survey for this book expressed concern over it, and I have felt it myself, too.
We know from many surveys that money alone isn’t enough to motivate our workers, so it most likely won’t be enough to motivate ourselves, either. However, you need to pay yourself for your own successes, your new ideas that do well, and your new risky ventures that paid off; or just for trying something new—for stepping outside the boundaries of safety and taking a leap of faith, no matter how it ends up. This is similar to what you’d expect if you worked for someone else.
One thing you can do for yourself is be sure you are still building your nest egg, even if you’re not paying yourself a ton of cash (at least, not yet). A nest egg can give you a sense of security and can alleviate the feeling of being “stuck” if you’re no longer happy with your current business. Of course, don’t get so trapped in the mindset of building your nest egg that you forget about growing your business.
Also, be sure that you always take care of your healthcare needs. Going without healthcare policies can ruin your business, because one major illness can wipe away years and years’ worth of profits. As we noted in previous chapters, joining professional organizations can often lessen the cost burden. If you find healthcare costs enormous, consider raising your yearly or per-visit deductibles or searching out other providers. Going through an insurance agent can alleviate many hours of searching for the best option—let them do the work for you, you have a business to grow!
1.3. Separating Business and Personal Funds
On the flip side, some business owners are tempted to take pay increases or merit increases too far. This can utterly destroy a business in no time flat. At a very young age, I worked for a very successful small business owner—very successful until about two years into each business, when he filed for bankruptcy. Ultimately—about nine companies later—he created a company and sold it to Microsoft and retired early. In the meantime, though, he damaged great businesses by frivolously spending money on his own personal things. This is one of the many reasons that it’s vital that we keep our personal money separate from that belonging to the business, notwithstanding those funds required by the IRS.
Remember, too, that unless your income passes through to your own personal return, the IRS has rules about separating business income. Even if it does pass through, most accountants (and some IRS PDFs available online) note that you must keep funds separate anyway. If you don’t have your business set up that way, discuss any ramifications with a tax planner, and always keep receipts so it’s clear what purchases were spent specifically on your business. If it’s not clear that the item was used for business purposes, the IRS could require you to pay back taxes on that amount in the event of an audit.
One surefire way to get yourself excited about your business again is to expand. Toward the end of this chapter, we’ll talk about expansion with a different twist—overcoming common obstacles, particularly for small businesses. If you find yourself lacking enthusiasm for your work, consider expanding into new territories and see if that lights your fire again! I know for myself and many of my self-employed colleagues, finding new ways to grow my business is so motivating that I want to work until midnight again rather than feel drained in doing so.
2. Your Personal Definition
As you reward yourself and expand your business deeper into existing territories or broader, into entirely new ones, don’t lose sight of your personal definition of success and where you want to be. One thing I find to be a common “complaint” among successful entrepreneurs is that their business grew so fast (oh what a problem to have!); they didn’t expect the time commitment that was ultimately required, nor the level of responsibility that would be needed on their part. Try not to lose sight of those core competencies, or you risk doing what my friend did—drastically cutting back your workload to balance your work and home life again. I also have many friends who have lost families and good marriages because their spouses felt that they were more committed to their business than to the relationship. Keep your priorities in check. I make my attempts at doing so (though I’m not always the best at it) by asking very close, trusted friends to tell me when they see that I’m “out of whack.” They tell me—I don’t always change, but they keep on telling me anyway, and I am glad that they do.
3. Knowing If You Want to Take It to “Another Level”
Obviously you need to do some assessing before you take your business to another level—whether it is in the depth of what you offer along the same lines, or in breadth, in terms of expanding the opportunities and capabilities of your products or services. As with anything, there are pros and cons, and you need to evaluate the market before taking a plunge.
3.1. Pros of the Next Level
There are some obvious pros to expansion:
- Potential for more profit
- Diversification, and lessening risk to one market or demographic as a result
- Excitement over new possibilities
- Motivating the team you hired because of the new areas they get to learn about and be a part of
- Meeting new customers, bringing on new clients, and understanding a new business sector
- Eliminating things you don’t enjoy in your work
Sometimes, by growing into areas we do enjoy, we’re able to slowly remove those elements from our business that we don’t—or those that have become unprofitable.
3.2. Cons of the Next Level
There are also cons, of course, to expansion. Some of these include:
- Potential risk and profit loss
- Upsetting existing customers
- Upsetting business partners who don’t like you in their space
- Too much diversification leading to too little focus on core competencies— losing focus on what is important and necessary
- Going back to the beginning again in many respects—finding new sources of capital, new revenue streams, and new clients
- Rebranding if necessary
- The risk of diversifying to the point of not having brand identity anymore
3.3. Evaluating the Market
Before you decide to expand or not, you must evaluate the marketplace or space that you wish to enter into. For instance, if you sell products to Boomers and have a new spin on an old product for Gen Yers, evaluate what the interest level might be. We’ve discussed many ways to do that in Chapters 4 and 5.
Try to mitigate risk and unknowns by evaluating how the market will react to your new product or service. One quick way to do that is to ask existing customers.
4. Deciding to Expand
Often, the time to expand is when business is slow, whether it is due to macro or micro issues. As you expand your business and identify potential new areas, try to identify each obstacle and a way around it.
Identifying common obstacles is a good place to start, but you should identify obstacles within your particular market, as well as in your business sector, for the best opportunities and the least risk. While most potentially highly beneficial endeavors involve the most risk, that isn’t always the case.
One big obstacle to expansion is fear; fear of the unknown or fear of failure, or fear of losing money that you fought so long for and worked so hard (through long days and late nights) to earn. You may be risk averse, not wanting to take much risk regardless of how great the reward. It can be exceedingly hard to change this particular personality trait. The best thing you can do is create a nest egg, and calculate your risks as much as possible. Usually for people who are risk averse, putting every contingency and possibility on paper can make them seem less daunting and more predictable, lessening anxiety along the way. Some people of course have the opposite problem—they are big risk takers, sometimes taking uncalculated risks with lots to lose and not much to gain.
Another possible obstacle is if you lack in the self-discipline department or tend to be a procrastinator. Both of these can kill any expansion efforts. As your own boss, you will need self discipline to be successful, and at a level you’ve probably not experienced to date. Every day, something will compete for your attention— your spouse, your children, all the ideas floating around in your head, expansion versus maintenance of your existing business, customers, employees, contractors, suppliers—you name it! The more you stick to your principles, set specific hours, and be disciplined in your time (for example, try to avoid surfing the web at work, even though you can), the more successful you will be. Try to remove office distractions, too, just like you would if you were working in an office for someone else.
Another expansion killer is lack of confidence. You need to have confidence in yourself, your business, your employees, your contractors—everyone you work with. If someone in the chain is not performing up to standards (yourself included), he or she may need a kick in the pants. Any area of your business you lack confidence in needs a second, third, nth look, until it meets your satisfaction and you are confident that it can work well. This may mean restructuring parts of your business, removing employees who aren’t performing up to snuff, or revising product offerings. Try to remember that you got this far on your own, and remember that you can trust yourself. This can get lost along the way sometimes, particularly if something unexpected happens or doesn’t go the way we would have liked or hoped. That is just par for the course.
Once you decide that expansion will work or you want to give it a shot anyway (as I often do), here are some things to do to get ready:
- Send information about your expansion to existing clients through e-mail or snail-mail, informing them about new opportunities with you and, of course, offering coveted discounts and referral bonuses.
- Update your website to reflect your new business endeavors and be sure that your meta tags for search engines are updated, too.
- Consider new advertising strategies and what marketing techniques will be needed.
- Survey existing clients and potential new ones to be sure you’re covering the bases in terms of what they want in your new offerings.
- Determine if existing staff, suppliers, and contractors can handle the new avenues, or whether you need to make changes.
- Scope out who the new target market is and what changes will need to be made between your old business and the new one.
- Form strategic alliances both with people you can help and those who can help you—and preferably, they will be the same people!
- Assess staffing needs.
- Promote like crazy!
4.1. Financial Implications
There will be financial implications for whatever methods and practices you use to expand into your new business growth opportunities. For one, you will have additional costs that perhaps you hadn’t planned for at the beginning of your fiscal year. You will also have financial implications by way of less time to dedicate to existing lines of businesses that are profitable, potentially hurting existing revenue streams.
4.2. The Need for Additional Revenue
Many businesses decide to expand because they quite simply need to find additional avenues for revenue or capital raising. In the next and final section of this book, we talk a bit more about raising capital for expansion. But first you need to identify what kind of potential revenue increases you will see as a result of your new endeavors. Any bank or investor will want this information, and you will need it for your own peace of mind.
You have to outline in very precise detail how much money you will raise as a result of your new expansion, much in the same way that you did when you created your business plan. In many respects, when you expand you go back to basics in terms of planning, leading, organizing, and controlling your business. If the need for additional business revenue is the main reason you are expanding, be sure that the return on investment will be there or you may wind up in a worse position than you were when you began.
4.3. Raising More Capital
Any time you wish to expand, you will need resources—both monetary and human resources. First, evaluate whether you have the right people and the right contractors and suppliers in place to handle your new lines of business. Also evaluate how much money will be required to promote and market your new idea, get the word out, and then sustain that part of the business until you have vetted its viability. Don’t be afraid to back out if you realize this course of action isn’t going to have the net result that you thought. Better to stop the bleeding and rebuild while you can than to bleed out, so to speak.
Should you decide you need to raise capital, you should revisit Chapters 6 and 8 in this book on raising capital for your new business because much of the same applies here. There are a few sections of the business plan that will of course be different than in the first attempt. For starters, you will have to update items such as:
- History of successes
- Methods of handling and mitigating failures
- Potential risks to the existing business by engaging in a new one
- Required capital for expansion
- Profits and losses of the existing business
- Documentation of all needs for expanding into the new business space
- Potential risks
- Potential upsides (including money, but other things as well, like new sources of business for existing product or service lines)
Source: Babb Danielle (2009), The Accidental Startup: How to Realize Your True Potential by Becoming Your Own Boss. Alpha.