We need to be reminded.

There is not an unlimited number of things we need to learn and master to be successful at ony endeavor.  There are a only a handful of principles that if understood and executed well, make the difference for us.  

We do have an ability to forget a lot. We need to be reminded. Re-training, re-reading, re-listening and reading the important things we wote in our journals when we were clear and inspired – this is what the majority of our education should consist of.

"But I'm not the smartest guy in the world"

Fear not.  Business success does not go to the smartest guy in the world.  

Discernment and focus – if you have those, you can do better than the smarter guys.

How does a government create jobs?

It’s a season of politics, and this question comes up. The answer is that government does not (should not) create jobs. The government is already far too big and invoved in way too many things.  

So who creates jobs? You do. Small and medium size businesses, and some large ones too. So let’s ask – what would make me hire more people?  

Your innovation creates new opportunities and new jobs, and innovation often takes investment of profits, which you’d have to have to invest, either in your company, or someone else’s. You want to feel like things around you are stable and not uncertain, otherwise you won’t feel like it is wise to expand your business.  And you don’t want to feel like IF you succeed, that much of your profits are being confiscated by taxation. Today the top tax rate is 39.6% Federal + your state taxes (mine is 6.9%) + relatively smaller bites from Social Security, Medicare, and Obamacare.  In total is between 40% and 50% for most top taxpayers.

A well known law of economics is that when you raise a tax or fee on anythng, you get less of it. Raising taxes on anyone is not how to stimulate jobs – it’s how you reduce them. We need to ask “Who CREATES jobs?” and make them feel optimistic – and we will have more jobs.

And let us remember that in America (or Canada), anyone can be someone who creates jobs.

If your business doesn't change…

If your business doesn’t change, what does the rest of your life look like?

Your Breakeven

Your breakeven is how much business you have to do each month to pay fixed expenses before you make a profit.  If you sell and deliver your breakeven each month, you just pay your bills and make NO profit.

Calculate your breakeven this way.  

Fixed Costs/Gross Margin = Breakeven.

Fixed costs are ones you have to pay even if you do NO business.  Rent, insurance, utilities, loan payments, and payroll – besides sales commission and labor cost tied directly to producing what it is you produce (office staff for example).  

Gross Profit Margin is the sales price of what you sell less the cost of materials, sales commission, and labor tied to producing and delivering the product.  (So if I sell a widget for $100, and it cost me $10 in sales commission, $20 in labor and $30 in materials, my direct costs are 60% and my gross margin is 40%).

So if your fixed costs were $15,000 a month, and your gross margin was 40%, your breakeven is ($15,000/.4) $37,500 per month.

If you cut $2,000 of fixed cost per month, how much will it bring your breakeven down?  $13,000/.4 = $32,500. So by cutting $2,000 of fixed cost per month, you have to sell and deliver $5,000 less to start making a profit.  

Wow!

What if you then cut direct sales cost by 2% to bring your gross margin up to 42%?  

$13,000/.42 = $30,952 breakeven each month.  We’re getting better – more efficient and easier to make a profit.

Do you see the relationship between fixed costs and gross margin?  How does this affect your decisions to add overhead and other fixed costs?

Qualities to look for in a prospective employee

There are qualities to look for in a candidate for this tyoe of position or that, but two qualities to look for in any candidate are-

1) Willing to learn and even WANTS to learn.

2) Wants to be here in this industry at THIS company.

Of course, the second one is somewhat dependent upon you casting a vision if your company isn’t much yet, but you need people who want to be with your team, and aren’t taking the job just for a paycheck.

What other qualities do you look for?

Improving Relations with Your Employees

The number one reason people leave a job is that they don’t like/get long with/feel respected by their immediate supervisor.  And the number one reason managers leave a company is that they don’t like / get along with/ feel respected by the number one guy they work for.

So, if you have some good people, it makes sense that you’d want to keep a great relationship with them.  It sounds obvious, but a leader needs to conciously ask himself the question – how is my relationship with my key people?  Am I taking them for granted just because they have been here a long time or because I implicitly trust them so I don’t have to do anything to acknowledge them anymore?

Here are some ideas for improving relations with your key people –

Acknowledge their work (publicly). Write a thank you note. Ask for their opinion and listen to them. Take them out to lunch. Take them and their spouse out to dinner or a show. Tell them what you are thinking of doing and ask for their advice. Keep them “in the loop” on important decisions. When there is trouble, give them the benefit of the doubt first, and ask what happened.

Keep good relations with your people, and they will work harder and look out for the organization better.

Reducing Stress

Sometimes I have to go out on a limb. An idea that would take 20 pages of context has to be presented in a few paragraphs. But I trust my Think Daily audience to ponder these ideas and see what is in there for you. Here we go today –

Your feeling stress is not due to anything that happens outside of you. “Bad” stuff happens, but that does not cause stress in your mind and body.

What causes stress is your internal reaction to what happens. Your resistance to what happened; your not accepting what happens; and the fact that what happened was not in alignment with your expectations. Was it what happened that was foul, or was it your expectations that were not correct or flexible or ready for what happened?  

If we learn to resist nothing, and accept what happens, we won’t feel stress.  

Did I just say resist nothing? How can I strive to make change in my life and the world around me if I resist nothing? How can I just accept what happens if it is not in alignment with my goals and desires?

Things that happen are in the past, even if just a few seconds in the past – we can’t change them.  If we learn not to resist, much stress is gone.  And acceptance of what happens and what is, isn’t the same as resignation or settling for less than we want. It’s just to accept what is now. We can still strive to make tomorrow better, but we accept today, and we don’t fight it just because it’s not what we ultimately want.

This is the best way I know to reduce or even eliminate stress.  Is it easy?  With our habitual patterns of response to things we have developed, we’ll have to work on it.  But if you master it, there is little that can upset or stress you.

A leader's gotta lead!

Leading a group or company is a big responsibility. A leader can not take it casually, and expect to thrive or even survive.  

The marketplace does not care what a leader wants to do, is willing to do, or what is in or out of the leader’s comfort zone. When you buy something, you don’t think about that at all. You want what you want, with the best value you can get.

A leader has to be on top of the leadership job, and often this requires being a person you are not naturally inclined to be. Personal growth, and stretching your limitis and capabilities are necessary for a leader.  It’s not easy, and it doesn’t happen overnight, but it is necessary for a leader to grow, so that her organization can grow too.

Adjustment to Feedback

The marketplace is giving you feedback.  It says “I like this (a lot or a little)”, or “I don’t like this (a lot or a little)”.  It’s giving your competitors the same feedback.

What adjustments do you need to make to give the market what it wants?

Be stubborn at your own peril.