Not all effort or actions yield equal results

You can work a lot of hours to try to get ahead.  But time is finite and if you use it all up working, you’ll have none left over for living otherwise.  Time is also life.

A different strategy is to do higher and higher-value activities where you get leverage.

What is the most important thing you can do that will make tomorrow better?

There are lot of ways to say it and ask it – 

What action can you take that will get results tomorrow, and eliminate further actions by you in the future?

What actions do you take that you can hire someone to do?

What are you not doing well because you have “too much to do”?

What is the lowest value thing you do?

What things do you do each day that you could get someone else to do?

What do you do that will make no difference tomorrow? (there will just be more of that to do).

How can your actions go up the value chain?

The Balance Sheet's Glaring Omission

On your Balance Sheet you have all your assets and liabilities.  But the MOST valuable thing a company has is NOT on there – people.

People who have been found, hired, and trained.

People who have experience and are capable of delivering results.

People who you have invested in.

People who know each other, and are comfortable working with each other in harmony. 

People who can train other people.

When assessing the value of a company, consider the people first.

Return on Assets

I’ve been in business for 41 years.  I have things that I paid for a long time ago that still benefit us today.

Perhaps they would not fetch much at an auction, but they enable us to do what we do today, and if I was just starting out I’d have to buy them with cash money or finance them.

Picture having a vision and renting an empty building – all the things you’d have to invest in to enable your business need to go in there – i.e. (for me) tools, forklifts, pallet racking, fit-outs (remodeling), office furniture and equipment, software, systems, trucks, cars, and so much more.

This is yet another reason that, all other activities being done well, patience and staying power are rewarded over the long term.

Learn to run a small business well.

Entrepreneurs – the growth of your business is about how well and how fast you can learn.

If you don’t learn to run your business well when it is small, you won’t be given the opportunity to have a large business.

How much time do you spend learning, particularly about the areas where you have the most difficulty?

It's supposed to be challenging

That what makes you better.

Go right after your biggest problem today.

You got this.

Above all, excel at sales.

The number one reason businesses go out of business – sales aren’t high enough.  

At great companies – sales are high and growing.

My wife and I were at a diner in a little strip of stores near our home.  There was a flower shop next store and as we were getting into our car to leave, we decided to go look in there.  It was a beautiful shop.  They had these really high-end artificial flower displays – really beautiful.  After looking for 5 minutes, I wanted one!

So we asked a young lady who worked there “How much is this?”  She said she wasn’t sure.  “Can you find out?”  I asked.  “Well, the owner isn’t here.”  She offered no solution.  I waited.  Nothing. 

“Well are they for sale?” I asked.  “Yes” she said.  “Ok, can I buy one?”  “Well, you’ll have to come back later when she’s here”.  We walked out, and never went back.

The owner of the store did a great job sourcing materials and creating beautiful displays.  But she forgot to put a price tag on the stuff and train her people a bit.  All the effort in creating a product, and no effort in the final part – selling it – or making it easy to buy.

What a shame.  I was hot to spend hundreds of dollars then, but not later.

Do you make it easy for people to find, know about, access and buy your stuff?

Virtuos Competent People Squared

Leaders have to find virtuous competent people who want to be here on our team.  Getting one is a start.  Then we get another and the effect of two working together is greater than the sum of one plus one.  

Then we get another and another.  The effect of great teamwork is compound interest.  Wehn we get an entire company full of virtuous competent people working well together, we make some real progress, and the hockey stick of compound interest appears.

How many seats are filled with virtuous competent people working well together in your company?

Consumers are in Control in Free Markets

There are some in recent times who argue that capitalism is evil and that some form of socialism would be better.

It’s an important subject because you are a consumer, and you are participating in a capitalist system.  If socialism replaced capitalism now, it would fundamentally change your life.

While the word “capitalism” has been assigned to our current system, it’s really about freedom of choice and competition.  Do people who want to make money always behave well?  No.  But in a market where there are competitors who are trying to serve the customer better and cheaper, and one where consumers are free to choose what they see as best for them, they are kept in check from bad behavior.

When there is “crony capitalism”, (which is where regulation or subsidy favors one producer or another),  or one where there is a monopoly, it restricts freedom, and producers lose their incentive to do right by their customers and can take advantage of them instead, bad things can happen.  

Real free market capitalism has many competitors trying to make things better for consumers.  And it has consumers who have lots of choices of what and where to buy based on their own free choice. Every purchase is a vote.  Consumers pick the winners.

We have that mostly.  It works better than any other system of top-down command-and-control system ever could. 

Less Failure is Progress

Do you have an underperforming salesperson (or other member of a team)?

By removing (or improving) an underperformer from a team, you improve the average performance of the team.

You can bring the top up, the middle up, or cut the bottom off and replace it.

Winning teams can’t have losing players.

Knowing the rules – and when to apply them.

There are lots of “rules” or key principles to apply while on an entrepreneurial journey.  Some of them contradict each other.  You can’t apply all of them all the time. 

For example, “Be willing to do whatever it takes to succeed” might seem to conflict with “save time for your family and health”.  Stick to your values and part with teammates who violate them”, may conflict with “Keep your people for the long term and show empathy while they are learning”.  “Do what works” conflicts with gambling on “Innovation”.  “Be nice” can be a problem when people are taking advantage of you.  

There are lots of frames of thought.  It’s up to you to know which one to apply in which situation and when in your business.  The answers change.  It’s not a science.  It’s a learned art that you can get better at with experience.

In the end, you are trying to get results through people; different people with different styles, attitudes and ambitions.

Make that work – for all involved.