Here is a question I was just asked on the Q and A. I do not watch or read the news in regards to political issues so my answer is based solely on the issues I deal with on a day to day basis with no BS or political agenda. It is what it is...
Dave;
Just wanted to get your take on whats going on on Capitol Hill and in DC with regards to a small business.
How do these things truly impact your business?
How could policies that pass now impact you, and other small businesses, in the future? (positive or negative)
Is there any benefit to small businesses for financial institutions who have poor business models to begin with being propped up by government? If their business is doomed to fail due to poor business decisions, why should it be prolonged? What is the benefit other than political?
What about this:
http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090325_426418.htm?chan=top+news_top+news+index+-+temp_top+storyNot trying to be political here, I just would like to hear from a sucessful small businessman how what is currently going on impacts you and others like you. Talking heads on TV and politicians with agendas are of no use...
Thanks,
Will
Will,
Thank you for the question. Here is how I see it...
Powerlifting / Politics
Something I’ve learned in the sport of powerlifting is that there will always be drama, dictators, egos, strict and loose judges and people looking for free handouts. At the same time, there are always those who will do anything to help you, provide the advice you need, lift you up after you get hurt, help tighten your belt, pull your straps up and give you their seat so you can wrap up.
When it’s all said and done, all the lifter can really do is prepare the best he can, show up and do his best.
When you are "in the trenches" as a lifter, you don’t have the time to become actively involved in running meets, being on committees, advisory boards, or heading federations. If you do, you will not excel at either. As a lifter all you can do is show up and lift by the rules of the federation you belong to.
I have applied the same philosophy to small business. I'm in the trenches trying to do all I can do to keep my business around so my employees have jobs, my vendors can sell their goods, and we can provide education and service to our customers. I don’t have the time to follow what’s going on. I rarely watch or read the news. I DO KNOW things are bad (next rant), but I’m too focused on doing what I feel I'm paid to do: keeping the company alive. The indicators I watch are the company indicators of EliteFTS. I don’t concern myself with what happens outside. This is not to say I don’t care. I DO!
My focus, however, HAS to be on what will keep my employees employed, my vendors moving product, and our customers happy. Whatever changes or policies are made will happen, and I will have to play by the rules the same way I always have. If you already have a small or midsized business, you already know we get pounded by the government more than anyone else. Every single year they come up with something else that’s total BS that costs the company more money. The bigger you get and the more people you employ, the more they beat you up. I can sit here and complain about it, but I can't change it, so just like missing a lift because of judging you don't agree with, you sit back down and wait for your next shot.
Don't get me wrong here: I have no problem paying taxes, and feel that this is the greatest country on earth. If you’re paying taxes, it means you’re making money. I do, however, get pissed when I see how high the unemployment rate is and where it’s heading.
My Rant on The Recession
What pisses me off more than anything else are all these people who are running around saying, "What recession? I'm kicking ass right now!" What recession?!? Are you kidding me? This is so fucking disrespectful to say that it makes me want punch people in the face. Let's forget, for a moment, about the unemployment rate, the national debt, the lost value of the dollar, consumer spending and all the other indicators. Let's take this down to the small town I live in, and one very basic example.
Three days a week I pick my kids up from school. At the beginning of the year, at 3 PM, it would be me and two other parents waiting. One worked from 6 AM to 2 PM, and the second was retired. After a couple of months I noticed on Fridays that we now had 6 or 7 people in our group, and I never gave it a second thought until I overheard them saying one day how they were cut back to 4-day work weeks. Not only did they lose overtime pay, but they’d also forfeited 8 hours per week and had their benefits. Over the next month, this group doubled on Fridays, and now we even had people waiting in their cars until the bell rang. Now they’re ALL there everyday because they’ve ALL now been laid off. We went from a few people to a parking lot full.
What recession? How about you ask all these people, I'm sure they’d be more than happy to tell you.
I’ve also been part of SCORE for many years, and I’ve met many business owners with whom I’ve stayed in touch. 50% are gone, and the other 50% are just holding on. These are all small businesses, but we figured the 50% that are now gone employed 125 full-time people with above average wages. Their skills are unique to the jobs they did for these companies. They are still looking for work. Maybe these aforementioned dickweeds should ask them if there’s a recession. Better yet, tell them how great you’re doing. I'm sure they would love to hear it. While the employees lost work, the owners have lost ALL they owned. When you own a business, it’s like having a child, and you’ll do whatever it takes to save it.
Yet, and this must be stated: all business owners know this risk the day they turn the lights on for the first time. It comes with the territory.
Small Business Impact
Small business has a much greater reach than most people think. As a company with just over 10 full-time staff members EliteFTS is responsible for making sure they stay employed. In turn, most of them have families, spend money on consumer goods, and could very well hire home cleaning service and lawn companies. A small percentage of every dollar spent at EliteFTS can trickle all the way down to the pack of gum the 4-year-old son of a lawn service employee buys at a local convenience mart.
Small Business Impact on the Economy
The estimated 27.2 million small businesses in the United States:
*Employ about half of the country’s private sector workforce.
*Hire 40 percent of high-tech workers, such as scientists, engineers and computer workers.
*Include 52 percent home-based businesses and two percent franchises.
*Represent 97.3 percent of all the exporters of goods.
*Represent 99.7 percent of all employer firms.
*Generate a majority of the innovations that come from United States companies.
Source: U.S. Small Business Administration Office of Advocacy, September 2008
Small Business Survival Rates
*Small Business Openings & Closings in 2007:
*There were 637,100 new businesses, 560,300 business closures and 28,322 bankruptcies.
*Two-thirds of new employer firms survive at least two years, 44 percent survive at least four years, and 31 percent survive at least seven years.
*Findings do not differ greatly across industry sectors.
Sources: U.S. Small Business Administration Office of Advocacy, September 2008
Survival and Longevity in the Business Employment Dynamics Database, Monthly Labor Review, May 2005.
Redefining Business Success: Distinguishing Between Closure and Failure, Small Business Economics, August 2003.
Leadership
Three years ago I was told the hardest skill for any entrepreneur to learn and excel at is leadership. This is because it’s easy to lead when things are good and change is minimal because all you have to do is set the path, track the indicators and make changes when needed (rarely). In many cases, the path (or system) is developed by the management team and then modified by those who are in the trenches doing the day to day work. I'm not saying this is a right or wrong way to structure project management or systems, but what it does do is shift personal responsibility back to the people who are responsible for the work flow.
In times of change, old systems no longer work, and entirely new systems need to be developed. If the work is still yet to be determined, but it’s already known that the "old" way no longer works, there really is no choice. You change or you go out of business. It really is that simple, and this will be the major reason why more than 70% of all small businesses will not make it into 2010.
The resistance to change has always been great, and dates back to the beginning of time. Throughout history you can see the overcoming of this resistance as the benchmark for greatness in business, sport, government, and even personal relationships. But where does the overcoming begin?
In recent conversations with other entrepreneurs, I have seen a trend that marks what I feel is one of the biggest mistakes an effective business leader or coach can make. They forget some very major factors:
1. Nobody cares about your problems. Not one person cares that you made 50% less last year than the year prior. They don’t care that you have not been paid in the past 4 weeks, and they don’t care if you just pulled a second mortgage on your house. They have their own problems to deal with, such as how they will make their next car payment or put gas in their tank next week. Thus, if you do cut your own pay to ensure people get to keep their jobs, then keep your mouth shut about it. If you think you’re some kind of "savior" or "prophet" for taking a pay cut or making sacrifices, then I'm here to remind you that you knew the job when you took it. This is part of the deal! If you’re a coach on a losing team, then YES, you will need to work harder to get better. And if you’re having trouble with your spouse, guess what? You will also need to work harder on that, and in all cases, NOBODY CARES! One aspect of effective leadership is doing what needs to be done to keep the company or team moving forward or, in this economy, alive. Don't expect a pat on the back for doing what you need to do. Actually, expect the opposite and worse.
2. They’re "hoping" things get better. Guess what? They will, but it won't be for a long time, and if you’re waiting for "hope," you may as well shut the doors now. Now we will finally get to see how well "The Law of Attraction" and "The Secret" work for most people. Hope will get you nowhere. Customers are looking for companies they can trust, and employers are looking for employees willing to step up. The fact is, customers will now settle for worse customer service and quality from a company they know will be around, and with the unemployment rate now hitting double digits in several states employers know they can fill positions with better (lower paid and overqualified) employees than they have right now, and could care less if you step up or not. Actually, given the fact that most businesses can fail within two months, they will no longer even give grace periods to get on par. They can't afford it.
3. OPM (Other People’s Money) is NOT going to be there as it has been in the past. Credit lines have been reduced and investors are not going to jump in for the rescue. If you’re looking for a disaster rescue plan, don't expect one. If you doubt this, read number 1.
4. Sacrifice. If you’re an entrepreneur who’s getting hit by the economy, then let me make this as real as I can. You WILL be taking a giant pay cut, you may have to refinance your home, you’ll become the lowest paid person on your payroll, you will ultimately be responsible for your future and the future of your company, you WILL work longer hours than you have in years, you WILL need to hire consultants, you WILL need to become more educated, you WILL have to cut expenses (some that will hurt), you may very well to fire staff, cut hours, cut benefits and other things that you have worked very hard to provide. The thing to remember is that if you don't, you will NOT have a business or jobs to provide. YOU will not have a job and will become nothing more than a statistic.
5. Staff, contractors, consultants. You will find out now who is really on board and who is not. If you feel someone is not on board, then explain the current situation to them, and if they don't get it, then get rid of them. I know this is harsh to say given the economy we’re in, but out of the companies I wrote about earlier that failed, they ALL said they had one or two rotten eggs that brought the whole team down. This is not saying that getting rid of them will be what saves the company, but it will lower the stress to allow others to focus on doing what they can to keep the company alive. This happened five years ago, and I was just reminded of this again a few weeks ago. As a business owner, you have to look at all your personnel (not just staff, but contractors, consultants, sponsors, etc) like a game of poker. Who you have now are the cards in your hand. To win, you always need to be looking on the table to see what you can trade up for.
For example, you’re playing 5-card draw, holding three queens, the two of hearts and the three of clubs. One benefit of the unemployment rate is that there are a lot of aces on the table that you can pick up for less than you may be paying your four of clubs right now. The question you need to ask is this: What’s more important, the business or any individual person? If you say "the person," you’ll be out of business in a year. Note: you also fall into "the person" category. Maybe you need to replace yourself with people who know how to run a business, and fall back into the technical role you started in.
If you’re the employee you need to ask yourself, “Am I an ace? Or am I the two of hearts?” There have been many people laid off and fired across the country. In many cases (but not all), the first to go are NOT the aces. The ones cut first are the bottom tier workers who couldn’t care less about performance or the company. If you were in the middle group, guess what? You’re now the new bottom dwellers. To save your own job, you’ll need to become the ace card, or else when the next batch of cuts come, it could be you who’s out the door. Companies will hold onto their aces as long as they can regardless of how bad things get. They know they’ll need these cards when things turn, and they know they’re harder to replace.
The Bottom Line
The bottom line is no one person is worth more than the company, and this includes you. If you’re unwilling to go back and work for peanuts as you did in the beginning, then it may very well be the beginning of the end. In the beginning, you knew nothing about business. In times of change, we all know nothing about business and have to learn at alarming rates, create better systems, and get everyone on board and moving forward.
Business Book List
Dave,
Based on some of your postings (ex. your most recent response in response to the gentleman who proposed he can bring you 1000 new visitors to the site and they way you replied back with the win-win and win-lose paradigm) and the way you conduct your business overall (for which I am extremely impressed with). Correct me if I am wrong, but you have read "7 Habits of Highly Effective People" by Stephen Covery.
Also, what other books that are similar to "the 7 habits" have you read and would recommend to others?
Thanks very much for the help and keep up the amazing work, it def doesn't go without notice!
Steve
Steve,
Thanks for the question. I have been meaning to do this for close to a year now and you finally inspired me to get off my ass and get it done.
It is important to note I spend a lot of time reading business books, reports, web sites, blogs, etc. I would venture to guess not one day goes by that I'm not reading 2-3 hours. I have been doing this since the first year I started eltefts because I don't have a business degree and I figured I had some making up to do.
I have no idea how many books fit on each on each shelf but I have 30 packed and stacks beginning on the floor (these are almost all business and training related). No the picture in this post is not my library... Yet.
I have one special shelf for those books that have had the greatest impact and influence. These are the books I have read more than once and will go back to for reference, motivation and ideas.
IMPORTANT: It is NOT the information in the book that has value. It's the ideas you gather and the information you USE that does. Reading is only reading. Without thinking and action it's just eye exercise.
In no specific order
My Top Shelf Business Book List
In Search of Excellence: Lessons from America's Best-Run Companies (Collins Business Essentials) by Thomas J. Peters and Robert H. Waterman
The 48 Laws of Power by Robert Greene
The 7 Habits of Highly Effective People by Stephen R. Covey
The Art Of War by Sun Tzu
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It by Michael E. Gerber
E-Myth Mastery by Michael E. Gerber
Mastery: The Keys to Success and Long-Term Fulfillment by George Leonard
Awaken the Giant Within : How to Take Immediate Control of Your Mental, Emotional, Physical and Financial Destiny! by Anthony Robbins
Everyone's a Coach: Five Business Secrets for High-Performance Coaching by Ken Blanchard and Don Shula
Good to Great: Why Some Companies Make the Leap... and Others Don't by Jim Collins
Execution: The Discipline of Getting Things Done by Larry Bossidy, Ram Charan, and Charles Burck
Raving Fans: A Revolutionary Approach To Customer Service by Ken Blanchard and Sheldon Bowles
TurboStrategy: 21 Powerful Ways to Transform Your Business and Boost Your Profits Quickly by Brian Tracy
The Effective Executive: The Definitive Guide to Getting the Right Things Done
by Peter F. Drucker
Built to Last: Successful Habits of Visionary Companies by Jim Collins
Think and Grow Rich by Napoleon Hill
Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter
The Five Dysfunctions of a Team: A Leadership Fable by Patrick M. Lencioni
Atlas Shrugged by Ayn Rand
Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renée Mauborgne
Now, Discover Your Strengths by Marcus Buckingham and Donald O. Clifton
The Age of Unreason by Charles Handy
The Leadership Challenge, 4th Edition by James M. Kouzes and Barry Z. Posner
Purple Cow: Transform Your Business by Being Remarkable by Seth Godin
The New Law of Demand and Supply The New Law of Demand and Supply: The Revolutionary New Demand Strategy for Faster Growth and Higher Profits by Rick Kash
THE DILBERT PRINCIPLE: A Cubicle's-Eye View of Bosses, Meetings,
Management Fads, and Other Workplace Afflictions by Scott Adams
THE POPCORN REPORT: Faith Popcorn on the Future of Your Company, Your
World, Your Life by Faith Popcorn
REENGINEERING THE CORPORATION: A Manifesto for Business Revolution by
Michael Hammer and James Champy
Becoming a Category of One:
How Extraordinary Companies Transcend Commodity and Defy Comparison by Joe Calloway
Out of the Crisis by W. Edwards Deming
Purpose: The Starting Point of Great Companies by Nikos Mourkogiannis and Roger Fisher
How to Become a Rainmaker: The Rules For Getting and Keeping Customers and Clients by Jeffrey J. Fox
How to Win Friends & Influence People by Dale Carnegie
Stewardship: Choosing Service Over Self Interest by Peter Block
Strategy of the Dolphin: Scoring A Win In A Chaotic World by Dudley Lynch and Paul L. Kordis
The Balanced Scorecard: Translating Strategy into Action
by Robert S. Kaplan, David P. Norton
Flight of the Buffalo: Soaring to Excellence, Learning to Let Employees Lead by James A. Belasco and Ralph C. Stayer
The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell
It's Not Luck by Eliyahu M. Goldratt
Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life by Spencer Johnson and Kenneth Blanchard
The SPEED of Trust: The One Thing That Changes Everything by Stephen M.R. Covey, Stephen R. Covey, and Rebecca R. Merrill
I look forward to hearing from you.