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The Less Money You Have the Better!

penny We were talking with one of our banker friends recently about start-ups. He said that people often look for money when they should ask if there’s a better way to run their business. Money isn’t always the best solution.

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In fact, sometimes not having a lot of money to get started is a good thing because it forces you to be innovative and look for ways to save money. Obviously, it is possible to have too little money. Most of us have probably experienced that a time or two.

The baker

He told us about a person who wanted to start a bakery. She thought she needed a storefront. Our banker friend asked her who her customers would be. She said it would be friends and family at first. Then she expected word-of-mouth to take it from there. So he suggested that she just use her own kitchen or find a way to use a commercial kitchen part-time, instead of spending money on rent, utilities and all the other costs of maintaining a store. She didn’t need much money if she used this operating strategy.

An internet business

A friend of ours is putting together a really cool web site. They want to have an active community. They were going to pay a developer quite a bit of money to put together the forum area. We talked him into using open-source software and having it custom designed after his community starts building. He cuts his start-up costs drastically!

A chiropractor

Our banker friend knew a chiropractor who thought he needed to rent office space so he had a place for his patients. Instead, he found a fellow chiropractor who had extra space. He rented from this chiropractor for five years. Then he secured his own location – one he knew he could afford based on the income stream he had established.

He reduced his risk and conserved money by finding a better solution to get started. Because if you build it, they may not come. Test it out first!

The average entrepreneur starts his or her business with around $25,000. Sometimes the less money you have the better, because it forces you to think creatively and spend every penny wisely. Here are two entrepreneurs who did just that …

Bear Naked

Kelly Flatley is the co-owner of the all-natural snack food business, Bear Naked.
When her business was young, she didn’t go out and rent a large space to manufacture her product. No, she negotiated to use the commercial kitchen at a local market after they closed. She manufactured at night and made deliveries to her retail customers during the day. 

Sure, she worked some crazy hours. Don’t most entrepreneurs? That’s a concession for not having money. If you’re undercapitalized, you may have to get creative and make it up with “sweat equity”.

Newman’s Own

Years ago, we heard the story of how one of our favorites, Paul Newman, started Newman’s Own – his food products company that has donated millions to charity. The details here probably aren’t fully correct, but that’s not as important as understanding what he did.

He invested a small amount of money to start his business. He contracted with one company to manufacture the product. Another company sold it to grocery stores. He outsourced almost everything. His business was bringing in millions a year in sales, yet it only had one or two employees!

He did all this with very little money, but a whole lot of creativity! You can do it too!

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Next time, we’ll discuss how something as simple as the font you choose can get people to do what you want. Until then, here’s to your bigg success!

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Direct link to The Bigg Success Show audio file:
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Are You a Victim of Your Own Success?

stress You’ve made it! You’ve arrived! You’ve reached that next level of success! You’ve achieved your dream!

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But you’re swamped. Now, you have a seemingly endless list of things-to-do. And it all just keeps coming. Minute after minute, day after day, week after week. It’s sheer chaos.

You find yourself busier than ever. You’re more successful than ever. But are you happier than ever?

It seems that you’re a victim of your own success – too much to do, too many clients, too many constituents. So what can you do about it?

Congratulate yourself

Take a deep breath and a little pause. Enjoy it for a bit!

Get away from it all for a day

We know … you’re too busy. But here’s the thing – you’re too busy not to get away because, on your day away, you’re going to contemplate. What’s most important? What’s least important?

After you’ve thought about those two things:

Hire an assistant, outsource, partner, joint venture … you get the idea

Delegate – in some way, shape or form – those things that aren’t most important.

You might be asking, “Can I afford to hire someone?” But you’re asking the wrong question. The question really is, “Can I afford not to?”

Because the most important things – the people who are most important for you to spend time with, the projects that only you can and should do – will get pushed aside by the less important things if you don’t take this step.

Set the expectations for the people in your life

You need to establish boundaries for all your people. You may set certain times when you’re available to employees, vendors, and even customers. We think customers can’t be trained, but even they can. 

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georgeIn one of my early businesses, my second biggest customer was constantly calling with demands for immediate service. Finally, I presented them with an option – they could work within our time frame for the price we negotiated or I could offer them quicker turnaround for a higher price. They chose the better price!

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Finding your model

Now you’re only working on the most important things and you’ve communicated your boundaries to the most important people in your life. You’re ready to do those things you do in the most efficient way possible.

So let’s look for a model. Think about a manufacturer’s assembly line with products coming down it. What are your products?

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marylynnFor us, it is shows to produce. Articles to write. E-mails to return. People to reach out to. Products to create. Services to deliver.

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Your production cycle may flow over an hour, a day, a week, or a month. Think about all of the important things you do – that’s your product – and engineer your processes to move that product down the line in the most efficient manner possible.

Engineer your processes

What is the best way to do it? Think about it logically. Step back and look at it again. Walk yourself through the whole process, step-by-step as it exists today. Now, start looking for ways to save little bits of time.

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georgeOne of the guest speakers for my class became a billionaire by turning his little business into a Fortune 500 company. One of his secrets was finding ways to get more done with the same people. For example, they discovered a way to change how they labeled packages for shipment. It saved them 55 seconds. That’s time they could spend on something else!

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So if you find yourself a victim of your own success, start with effectiveness – make sure you’re doing the right things. Then work on efficiency – doing those things the right way.

Doing the right things the right way … before you know it, you’ll be an even bigger success without being victimized by it!

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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!

___

Next time, we ask, “Are you afraid of success?” Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

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How to Get Your Employees to Own Their Job, Not Just Do It

employee As business owners, we’re told that we should work on our business, not in it. But how do you do that when you’re just getting started? How can you do that if you don’t have any employees? Here’s the secret …

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At first, you work on your business by working in your business.

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george
Mary-Lynn’s always trying to get me out of the business!

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Seriously though, you begin working on your business by documenting your procedures, position by position, as you work in your business. Before you hire your first employee, it’s essential to put this structure in place so that, when you do hire someone, you can train him or her them effectively.

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marylynn My favorite General Managers in radio had worked in all areas of the business. They had been on the air. They had produced commercials. They had sold commercials. So they knew the business because they had worked the whole business.

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As a new business owner, you do that anyway, right? All you have to do is document what you do, position by position. Maybe you don’t do it all – you’re not comfortable with accounting, for example. So you get a partner who documents the procedures for those positions. Or you outsource them.

You’ll work through each position that your business will need. As you do, you will document every task that your business performs.

This leads to your employees OWNING their jobs

Now you’re going to build upon the work you’ve done. Put together two or more procedures and you have a process. Two or more processes start to build your system. You’ll end up with a full-fledged Operations Manual.

You get there by working on your business as you work in your business. Because while you’re doing that, you can test your procedures to make sure they are effective and efficient.

Assume you own a retail store. You would want to greet your customers as they come into your store. Here’s a typical conversation:

You: “Hi, may I help you?”

Customer: “No, I’m just looking.”

End of conversation.

Michael Gerber, in his great book The E-Myth Revisited, said he has consulted with retailers who increased sales by 10 to 16 percent when the following question was asked:

“Hi, have you been in here before?”

Now, if the customer says “Yes”, you can offer a special program for repeat customers. If the customer says “No”, you can make another offer for new customers.

So you set up one procedure to greet your customers. Then you test it. That’s working on your business. You’ll have a separate procedure to promote your special offer for customers. These two procedures are the beginnings of your process.

Keep doing this, procedure by procedure, process by process until you have a complete operating system. Document that and you have your Operations Manual.

Now when you hire an employee and start to train him or her, you can involve them in the process because you have it in writing. You’re ready for the five step process for training your employees.

Since you’ve tested your procedures, you can tell your new employee why you do things the way you do. This helps them understand the idea behind the procedure which helps get their buy in.

You’ll also tell your employee that your testing isn’t over yet. In fact, you want them to help you test new ideas. You’ll emphasize that it’s important to follow your system, but you also want them suggesting ways to improve how you do things.

That’s how you get employees who don’t just do their jobs; they own them!

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For more tips on how to succeed bigg, subscribe to
Subscribe to the Bigg Success Weekly – it’s FREE!

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Next time, we’ll look at an inexpensive way for families to connect and compete. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

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Is the Way You're Spending Your Time Costing You Money?

moneyGeoffrey Moore, in his book Living on the Fault Line, discussed the “Core versus Context Model” for businesses. Core activities are things which set you apart from your competition and context is everything else. For many businesses, this may include administrative activities, marketing activities, and the like.

As we discussed his model, we realized that this works in our personal lives as well. You want to do more of the things you’re really good at and less of everything else. Usually, we really like to do what we’re good at so by focusing on just those tasks, we can advance in our careers.

Like for us, our strength is working on content for Bigg Success. At least we’d like to think so … or more importantly, we hope you think so!

For us, the contextual activities would be everything else. So for a couple of examples, we outsource our house cleaning and the yard work. Instead of spending time on these things, we can work on our business.

You’re getting a glimpse into how integrated our personal and professional lives are. Since we often work from home, all of these decisions are floating around together. We don’t think we’re alone on this – a lot of people are finding it pays to integrate their work life and their professional life.

By outsourcing your contextual activities, you save time and you open up the opportunity to make more money. It comes back to the time vs. money conundrum …

If you don’t have money, you have to invest more time.

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georgeFor example, if you start a business that is well-capitalized, you will be able to spend your time differently than if you start on a shoestring. With limited capital, you may have to take care of the janitorial work – a lot of business owners have done that. I’ve done that!

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At first, you may have to do it yourself because there’s no money. But you want to contract it out as soon as you can because it’s definitely a contextual activity, unless you happen to be the owner of a janitorial service.

Thinking about core vs. context helps you focus on where you want to spend your time and where you want to spend your money. You think twice about spending money because there’s something else that will let you spend more time on your core.

You may find that you spend your money on things that save you time, rather than cost you time.
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marylynnI want a bigg screen TV, but we would rather spend that money on a web person. Right now, I handle our web site. So when there are changes that need to be made, I get to work. But there are better uses of my time.

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Because we know that’s not in our core. Bigg Success is still in its early stages, so as soon as we can we’ll outsource this activity. Another example is publicity – right now, we do it ourselves. We want to contract with someone who is better at it than we are and can accomplish more than we can on our own.

So although we don’t have HDTV, we do have goals for that money!

It boils down to thinking about how much your time is worth. You may find that by contracting out certain activities, it costs you less than what you can make by spending your time working in your core.

Subscribe to The Bigg Success Show in iTunes.

Subscribe to the Bigg Success

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Is the Way You’re Spending Your Time Costing You Money?

moneyGeoffrey Moore, in his book Living on the Fault Line, discussed the “Core versus Context Model” for businesses. Core activities are things which set you apart from your competition and context is everything else. For many businesses, this may include administrative activities, marketing activities, and the like.

As we discussed his model, we realized that this works in our personal lives as well. You want to do more of the things you’re really good at and less of everything else. Usually, we really like to do what we’re good at so by focusing on just those tasks, we can advance in our careers.

Like for us, our strength is working on content for Bigg Success. At least we’d like to think so … or more importantly, we hope you think so!

For us, the contextual activities would be everything else. So for a couple of examples, we outsource our house cleaning and the yard work. Instead of spending time on these things, we can work on our business.

You’re getting a glimpse into how integrated our personal and professional lives are. Since we often work from home, all of these decisions are floating around together. We don’t think we’re alone on this – a lot of people are finding it pays to integrate their work life and their professional life.

By outsourcing your contextual activities, you save time and you open up the opportunity to make more money. It comes back to the time vs. money conundrum …

If you don’t have money, you have to invest more time.

.
georgeFor example, if you start a business that is well-capitalized, you will be able to spend your time differently than if you start on a shoestring. With limited capital, you may have to take care of the janitorial work – a lot of business owners have done that. I’ve done that!

.
At first, you may have to do it yourself because there’s no money. But you want to contract it out as soon as you can because it’s definitely a contextual activity, unless you happen to be the owner of a janitorial service.

Thinking about core vs. context helps you focus on where you want to spend your time and where you want to spend your money. You think twice about spending money because there’s something else that will let you spend more time on your core.

You may find that you spend your money on things that save you time, rather than cost you time.
.

marylynnI want a bigg screen TV, but we would rather spend that money on a web person. Right now, I handle our web site. So when there are changes that need to be made, I get to work. But there are better uses of my time.

.
Because we know that’s not in our core. Bigg Success is still in its early stages, so as soon as we can we’ll outsource this activity. Another example is publicity – right now, we do it ourselves. We want to contract with someone who is better at it than we are and can accomplish more than we can on our own.

So although we don’t have HDTV, we do have goals for that money!

It boils down to thinking about how much your time is worth. You may find that by contracting out certain activities, it costs you less than what you can make by spending your time working in your core.

Subscribe to The Bigg Success Show in iTunes.

Subscribe to the Bigg Success

Related posts

Your Personal SWOT Analysis (Part I)

Your Personal SWOT Analysis (Part II)

(Image by penywise)

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