Keep it as simple as you can.

An organization’s efficiency decreases as its complexity increases.

(Just look at our government for example.)

If everyone can understand it, it’s easier to master its few simple operations and parts.

Your business?

Can you charge more?

If you are selling the same thing as everyone else, maybe you’d lose some business.  But what if you sold something different and better that people would love more than what anyone is selling now?

This question is what drives the standard of living for humans on earth higher and higher.  Free market capitalism.  Competitors trying to outdo each other to win over customers by providing better and better value, solving more and more problems, (for less and less money).

How can you beat your competitors by lowering your costs and charging less?

How can you beat your competitors by adding value and charging more?

To set things right, you have to see things right

I created a School of Entrepreneurship online.  It’s a 3 1/2 year, (a 12-minute video a day) course at thesoe.com.  Specifically, it is for contractors like me, but any business can benefit.  (It’s better than college and far cheaper!)  The title of this post is one of my favorite maxims in the School.

Yesterday we talked about profit.  To make it, you have to have a positive gap between revenue (sales that you actually deliver on and collect the money for) and expenses (both direct expenses associated with producing and delivering the product or service and indirect ones called “overhead” or “General and Administrative” expenses).

As a leader, you have to SEE these things right.  You have to understand your direct and G&A costs, and what you charge for what you produce.  You might be saying “I’m the owner – of course I know my business intimately”.  Maybe.  But many don’t.  And when you don’t know the numbers well enough, you can’t understand which dials to turn to make the final number come out better.

To set things right, you have to see things right.

Do you/can you see things right?

What is profit?

Profit is the difference between gross revenue and expenses.

It’s so simple – and I know you know that.  But just think about it for a bit.

After being in business for 40 years, and owning a full or partial interest in 32 companies, I have lots of experience in all aspects of operating a business.

Many businesses have trouble making a profit or a good one.  Some (after all that work), lose money. (How disappointing!) 

If you are one of these you have to be able to explain exactly why you lost money and how you will change things to turn the losses into profits.  If you are a new business, you will likely lose money for a time.  But that time has to end and sooner is better. 

If you can’t look at the numbers and understand the important issues and trends (negative or positive) to explain them, you are stuck, frustrated and probably not feeling very good about what you are doing and the future.

Can you explain clearly how the final number ended up as it did and what you can and will do about it? 

Not all activities are equal – move the big needle

Some things you can do are far more important than others. They have a lasting positive effect into the future.

Many activities that take up your time in your day you do are not very important – the benefits are minimal or fade very quickly.

The most productive and successful people know the difference and focus on the few things that will move the big needle.

What is most important for you to be doing now?

You can't see your blind spots

You can’t see what you are missing.  If you did you wouldn’t be missing it.

That’s why you need to be a humble leader, learn every day by reading and listening, hire people smarter than you, listen to others, and develop the wisdom to know when they are right.

You can only take the business so far with your own thinking.

Right?

"Earned" – a true reward

When something is earned it is valued.  Working hard, making mistakes, taking responsibility, and coming through is part of running a business.  If it was easy, you would not get the real reward of the experience – a feeling that you earned it and are a stronger, smarter, more capable person because of it.

“Something that is received for free, is seldom valued.”

Today, reflect on how your business has made you stronger, and what value this has in your life.

Get more of what you like.

What customers/transactions are the most profitable for your business?

How do you get more of them?

Are you happy with your business?

Life is too short – change it so you are happy with it. 

Stop being afraid of something.

Did you accomplish your 2021 goals?

Why or why not?