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A Simple Way for Entrepreneurs to Stop Thinking Small

entrepreneurs need to think BIGG | BIGG SuccessThe world is full of small thinkers. Fortunately for us, they don’t read our blog or listen to our podcasts.

So we know you’re not one of them. But we want to talk today about a trap which even BIGG thinkers can fall into.

Thinking “either/or” can snare you into thinking small.

Yes, there are times when you have to accept a trade-off. But the BIGG idea behind BIGG success is synergy.

So BIGG thinkers don’t think “either/or”. They think “and”.

It’s the BIGG idea behind BIGG success – synergy. Let’s consider an example for entrepreneurs:

I either work in the business or I work on the business

Small thinkers get stuck. Like most entrepreneurs, they work in the business when it is young. The business grows. They hire an employee.

The employee is ready. But the business isn’t. So the business owner finds himself or herself busier than ever. They have their own work to do. But now they also have to go back and correct the employee’s work.

Customers leave because the service isn’t what they have come to expect. The small thinker concludes, “If I want the job done right, I have to do it myself.”

BIGG thinkers work on the business by working in the business

When the business is small and they can’t afford employees, they document as they perform. Then when the business grows and they hire an employee, they are ready to train him or her.

Customers continue to be thrilled. So the business grows even more. They hire more employees. The entrepreneur makes more money.

Everyone, including society, wins when entrepreneurs think “and”. It leads to BIGG success!

Do you think “and”?

Image in this post from stock.xchng

A Bold Career Move May Save Your Life

opening a new career doorWe chat with a number of entrepreneurs day to day. We’ve noticed that a number of them are tired, stressed and even burned out.

In some cases, it’s because of the economy. More often, though, they’re just ready for a new challenge.

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We often associate career moves with employees. But even small business owners sometimes need to move on.

There’s good reason to do so: study after study have shown a link between satisfaction at work and our health. Even the person at the top experiences this occasionally.

But for small business owners, it’s not just a matter of changing jobs. It may require a bold move.

Listen to The BIGG Success Show podcast to hear:

  • George share what led to his career move
  • 7 signs that it’s time to move on
  • The surprising thing that happens when entrepreneurs talk about what’s next for them

If you’re a business owner thinking about moving on, maybe we can help. Leave us a voice message at 888.455.BIGG (2444) or e-mail us at bigginfo@biggsuccess.com

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00669-020811.mp3

(Image in today’s post by ilco)

A Technique to Cut Costs

spendingHere’s a concept that business owners often struggle to really understand: Every penny you spend is an investment.

We’re used to seeing investments show up on our Balance Sheet. We buy a new computer and we see it added there.

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When we spend money on advertising or office supplies, it shows up on our Income Statement rather than our Balance Sheet.

But we’re still spending money. It’s an investment for the purpose of increasing our sales.

The financial statement on which it shows up on is based on accounting rules. We have to understand that we are spending the money with the purpose of increasing sales.

Interdependence of business and personal finances

While we say business owners, this concept applies to our personal finances as well.

As a business owner, particularly a business owner who owns 100% of your firm, your business finances and personal finances are completely linked.

Not in a legal sense – you’ll want to talk with your attorney to select the right entity for your company – but in a philosophical sense.

Your business has to do well or it will affect your personal finances. We all get that.

What a lot of people forget is that their standard of living may affect their business. If you spend too much personally, you put more of a burden on your business to produce more income for you to take out of the business. It can really add to the pressure, particularly for a start-up business.

In our personal lives, every penny we spend should add to our happiness. If it doesn’t, it’s not a worthwhile expenditure.

Start from scratch

There’s a technique that helps you decide if the returns you’re getting are sufficient. It’s called zero-based budgeting.

For every line item on your Income Statement, you assume you don’t need to spend any money. Then you add to it for the outlays you determine will give you the return you desire.

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georgeI do this in my businesses every three years. Costs can creep in. You commit to this service or that program. It all adds up. Instead of doing it all every three years, you may pick a few line items every year for review. Just make sure you cycle through all of them every few years or so.

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marylynnLet’s take an example that applies to our businesses and our personal lives – our cell phone. I might ask myself: Do I need the package I currently have or could I cut back? Do I need unlimited texting?

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You’ll also consider alternatives. If you weren’t spending this amount of money on your cell phone, what might you spend it on? You might find you could increase sales faster or be a lot happier if you spent this money on another thing.

You might decide to increase your long-term happiness and invest this newfound money. That may make you happier now and then.

By justifying the expense all over again, away from the emotional point of purchase, you’ll spend your money on what you really want. You’ll get the returns you seek. That’s bigg success.

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Thanks for the gift of your time today. Please join us next time when we ask, “Have you evolved enough?” Until then, here’s to your bigg success!

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00492-093009.mp3

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Is Your Project Worth Your Time?

time_pieces Last time, we looked at the two most common ways to analyze a potential project. We focused on the money side which works great for business decisions because the cost of time is included implicitly.

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But if you’re a business owner, do you include the value of your time in your calculations? How about when you’re making a personal decision? It’s important to add time into the equation.

To do that, follow this process:

  • Step 1: Estimate project hours. How much time will you spend if you do this project?
  • Step 2: Select your alternative activity. What would you do if you weren’t working on this project?
  • Step 3: Calculate your opportunity cost per hour. Your opportunity cost per hour is the amount of money you could earn (or not spend) per hour on the alternative activity you chose in Step 2.

For example, if you would watch TV instead of working on this project, then that time wouldn’t be valued at much. Maybe, instead of watching TV, you would clean your house. Now that’s worth something!

How much would you pay somebody to clean your house? How many hours would it take you to do it yourself? Divide the amount you would pay someone to do the work by the number of hours it would take you to do it yourself to get your opportunity cost per hour.

  • Step 4: Determine the total cost of your invested time. Multiply the number of project hours (Step 1) by your opportunity cost per hour (Step 3). That’s the value of the time you will invest in this project. This should be added to the money you will invest to find your total investment.

Example – Getting certified (Part II)

Let’s look at the same project we considered yesterday – you decide to go back to school and get certified for some specialty. Here are the details:

Cost: $2,000
Incremental income: $2,000 in Years 1 through 3 (then you retire)
Opportunity cost of your capital: 6%

Now let’s add in the time component. Assume that, if you put the same time into another activity instead of this certification program, you would expect to earn $2,000. That’s the opportunity cost of your time. So instead of an investment of $2,000 (as mentioned above), your investment is really $4,000.

Payback period doubles

We see that your payback period is two years. You’ll be fully compensated for your invested time and money by the end of the second year. But remember, when we didn’t factor the value of your time into the equation, your payback period was only one year. So it doubles in this case.

Net Present Value falls

We said yesterday that calculating the Net Present Value (NPV) was a better way to determine whether or not you should do a project. In this case, with the value of your time factored in, the NPV is about $1,300 as shown in this screenshot from Microsoft Excel:

Microsoft Excel Time Set Up Screen Shot

As you may recall – if our NPV is greater than $0, then we take on the project. That’s the case here so we would want to do this project. In fact, even factoring in our time, this project – under the assumptions we’ve made – would return 23%. That’s a pretty good return on our time and our money!

But not nearly as good as the 84% we thought it was when we weren’t placing any value on our time. That’s why it’s so important to include our time. As we said, businesses do this implicitly because they have to pay people to do projects. But when we’re taking them on ourselves, we have to be sure to place the appropriate value on our time. We forget this too often … to our own detriment. 

Now you have the ammunition you need to determine whether or not you should take on that project you’re considering! 

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We thank you so much for reading our post today. Join us next time when we share a magic elixir we just discovered … it’s success in a can! Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00322-020309.mp3

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(Image in today's post by egiprime)

Marketing in Tough Times: Part 3

marketing3 We wrap up our conversation with John Jantsch on today’s Bigg Success Show. John is the author of the fantastic book, Duct Tape Marketing – The World’s Most Practical Small Business Marketing Guide. So far, we’ve discussed:

Part I: getting closer to customers and building your business with strategic partnerships

Part II: how to add value to improve customer loyalty

Let’s continue …

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marylynnJohn, what if you’re a business that’s been around since … 1942. You’ve gained trust, you’ve been reliable, but you notice customers trying out your new competitor. What do you need to do?

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johnOne thing that’s happening, just like you described, is that the way in which people are finding companies and the way they are getting information has forever changed because of this little thing called the Internet. I have found that companies may be doing a great job, but they have not embraced the new ways in which people want to get information – the Internet, blogs, search engines, e-mail marketing, and mobile marketing. If you’re not at least trying to understand how your market is changing, you probably are going to get left behind. So when people ask me what they should be doing in 2009, I typically say to embrace the web and create web presence as opposed to thinking that the web site you put up five years ago is good enough.

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georgeIt’s interesting … I was talking with a business owner not long ago whose customer base is 45 and older, very well-to-do and educated. His perception is that his customers aren’t on the Internet because they’re older. But that’s no longer true.

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johnNo, and another misperception, of course, is that “I’m just selling stuff here in town. I don’t need to sell stuff on the World Wide Web.” I read a statistic out of Forrester the other day that said that 83 percent of adults are now going online to search locally for products and services. That’s shoes, legal services, and the plumber across town … as opposed to buying a sweater at some online store across the world.

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georgeIn times like these, advertisers are hungry for that revenue too. With your competition cutting back, isn’t this an opportunity to really stand out in a way you can’t in good times?

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johnWell, I think there are a couple of opportunities. One is that there are deals to be had in print and broadcast advertising. I’m not saying that we want to prey on bad times necessarily. But there are opportunities to buy some lower cost advertising right now, to the tune of ten cents on the dollar. But the thing that I would focus on, in addition to getting closer to your customer, is building a systematic approach to converting leads. In some cases, this doesn’t cost anything. But in most cases it pays the greatest dividend. One thing that happens in good times is that the phone is ringing a lot. You get a little bit lazy. Sometimes you say, “Hey, I could be there on Tuesday … maybe” or “Call me back again. We’re a little bit busy right now.” We get some bad selling habits, bad lead conversion habits. When the number of leads starts drying up, then it becomes really, really important – when you do get those opportunities – that you turn them into customers. I’ve found that, by creating a systematic approach that really focuses the entire brand on making every sales and marketing touch a positive one, it can dramatically impact the percentage of leads that you’re closing.

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marylynnAnd you have all sorts of systems that small business owners might be interested in – from how to get more referrals to creating a marketing system.

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johnYeah, in essence that’s what Duct Tape Marketing is. Duct Tape Marketing is a brand that is meant to represent very simple, effective and affordable marketing tips, tactics and tools. Essentially it is a system that says, “If you follow these principles and go from Point A to Point Z – then decide that you’re going to do it again next year, but you’ll do it bigger and better – small business owners start to realize that marketing is a system. It’s not an event or the idea of the week, which is how most people treat it. We also have a network of coaches that use our system and actually install our system into small businesses. With a foundation and a set of principles, marketing doesn’t have to be that creative or expensive. It just has to make sense. It has to work and you have to work the system consistently. Once small business owners understand that, then marketing doesn’t seem so hard.

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george
And marketing is everything … all the time. That’s what you’re saying.

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johnI tell people … it doesn’t matter what your business makes, ships or sells … that you are essentially in the marketing business.

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We thank John so much for sharing his time and wisdom with all of us. Learn more at his site, Duct Tape Marketing.

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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And we thank you for spending time with us today. According to some people, Monday is the unhappiest day of the year. Join us next time when we discuss how to escape the Monday blues. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00310-011609.mp3

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(Image in today's post by duchessa)