Work Less Hours & Take a Pay Cut
Posted by: admin on: January 16, 2012
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If you are self-employed and working every waking hour in order to maximise how much you take home every month, you’re doing it wrong. This advice is completely counter-intuitive to most people … but is an extremely important step for every entrepreneur to understand. Getting over this hurdle is vital if you want to go from surviving to truly profiting from your business.
The expression “busy fools” is important to remember. We all know them, people who busy themselves with things add no value to their businesses. They have meetings but come away with no firm decisions or progress. They’ll spend three days trying to learn accounting so they can complete their VAT return. They will spend 10 hours talking to a customer who is spending £100. These people will never be rich as they don’t value their own time so their customers never will.
She's doing it wrong!
Many startups come to a point where they are limited by the number of hours their founder/s can work before they have a breakdown. They get stuck, feeling unable to hire someone to help as it will mean a pay cut. Their business hits a ceiling and goes nowhere.
You need to take that pay cut and hire that person sooner rather than later. Before your exhaustion means you start letting down customers and before you lose enthusiasm for your job and the prospects of your business. You need to have confidence that any cut in pay will be more than compensated for as the business will have your attention again … rather than slaving for customers, you will have time to think about things like business development or marketing. This is where the energies of the founders should be, and where you add most value.
If business founders are worth £100/hour and employees £15/hour, the company will obviously make more profit on a job if an employee does the bulk of the work. You can then invest your £100/hour time in finding more business so that other people’s work is paying your salary. You’ll also be able to streamline your business, negotiate better deals with suppliers, spend time with your key accounts, etc. … things worthy of your time that will enable it to grow and become more profitable than before.
Bite the bullet, spend less hours doing and more thinking strategically… take a pay cut … and then reap even greater rewards!
Reviews of “Startup Expert: Get Ready!”
Posted by: admin on: January 5, 2012
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I wrote in my first book that you should always take time to celebrate successes or achievements, no matter how small they may seem to you. We all often overlook the progress we make. It has been 6 months since I released my free e-Book with literally no marketing whatsoever … only asking a few trusted people to check it out. No author could make a living from the small numbers you will see below, but they mean a great deal to me all the same. I am very flattered so many people took the time to read my thoughts and proud that some found it inspirational. The below has ensured I continue my effort to provide free advice to would-be entrepreneurs to give them both help and encouragement …
>500 downloads on Smashwords with 47 Facebook ‘Like’s
Average of 4 stars rating in US iTunes – 21 ratings
Average of 4 stars rating in UK iTunes – 16 ratings
***** by Whitney Spelman:
I enjoyed this book greatly.
***** “Very inspirational and motivating” by Gskskshak:
I have been trying to come up with ways to make money on the side, other then working at the office job I have now. I don’t make bad money but would love to start my own business and work for myself. This book encouraged me a bit more and I think I will start putting ideas into play more often. Thank you for the awesome bit of information. It was inspiring!
***** “Better than expected” by Yung_Executive:
Inspirational book without the cheesiness of self-help literature. The author does a great job of warning entrepreneurs of the challenges ahead while providing convincing encouragement that YOU CAN DO IT…and you should! Quick, easy, and purposeful read.
***** “Start – go get em!” by John Conroy:
Great read and a real motivator, it’s seems the doubts are no just mine, thanks for publishing this.
**** “Decent Startup Book” by Mark P:
This book helps go over the startup phase of any business. It was short, easy to read, and came with inspirational quotes. I liked it enough, that I going to recommend it to my students. I run a business myself.
***** “Simply amazing” by Ramsy Rollie:
I’ve read many business self help books (the intelligent investor, think and grow rich, the E myth, etc) and this little iBook phamplet has got to be one of the best. It’s motivational but also MOST importantly keeps you in check with reality. Clearly telling you it ain’t all candy and roses, and giving you valuable advice from experience. My take? READ THIS BOOK
Sacrifice to Succeed
Posted by: admin on: December 28, 2011
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There is an awful lot written about what you need to do to succeed. Determination, passion, hard work, learning from mistakes, customer service, etc. etc.. There are plenty of people out there with these qualities who never make it & one of the big reasons is they are not prepared to sacrifice to get where they want to be. I guess few like to write about the really tough stuff when it comes to starting a business from scratch.
Few people would downsize their home, sell their car, work weekends and holidays, see their family less, stop buying new clothes, miss the big game on TV or even sleep less to reach their goals. Yet, unfortunately, more often than not this is what people need to do to get on top.
Eric Thomas, the ‘Hip-Hop Preacher’ is a motivational speaker. He sums the above up nicely by saying “When you want to succeed as bad as you want to breathe … THEN you’ll be successful”. When you want to make your startup work, more than you want life’s luxuries like TV, holidays, a nice car, etc. then you are far more likely to make it work.
Creature comforts & startups don't mix
This is one of the big reasons, in my opinion, why most successful entrepreneurs are young (18-30). Students are already doing without, living on a tight budget, sleeping in a tiny studio … so it is far less sacrifice for a student than it is for someone who has tasted the comfort of a regular pay-cheque, owned a nice car or lived in a nice home. People who have had a decent job almost always end up with a bunch of liabilities that prevent them from taking risks. Higher rent payments, car payments, a credit card … all things which are hard to sacrifice in order to make a start-up business get off the ground.
Lets be clear, the higher your living costs the more difficult it will be to take the leap and persist long enough for you to learn the intricacies of your business and gain traction. That is unless you have a large pot of savings to fall back on during the inevitable difficult patches … which nearly no-one has.
So how can you increase your chances? It is easy to write down, but very hard to implement. Reduce your liabilities and outgoings as low as possible, and save as much as possible! Debt must be one of the biggest worries that prevents people from starting a business, so try to eliminate yours. Go without. You don’t need a nice car – I sold a 9-month old car and bought a £2000 boring one to give me some extra cash when starting a business for the second time (even when technically I was a millionaire!). Sell things you don’t need on eBay, stop having expensive nights out, eat at home & cook for yourself … even get a part-time job to do on the side of your start-up to reduce the burden on your fledgling company.
The longer you can survive and keep your business running, the more likely it will start to take off. Plenty of people have the perseverance and commons sense to make this happen … but can you also make the sacrifices required to last long enough?
How to be Exceptional
Posted by: admin on: December 7, 2011
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It always surprises me how few people decide to be exceptional. Some don’t want the attention, others lack the confidence … or maybe it is just down to a lack of imagination or motivation?
What being exceptional is not about is being a genius. You do not need an IQ of 150 or a PhD to do something better than anyone else. Having a passion for what you do and striving to improve are the sole prerequisites. You don’t need to have an incredible job to demonstrate to the world that you are exceptional …
You can choose to do any job exceptionally...
The above image has been doing the rounds on the Web as a funny illustration of what a valet parking attendant with OCD (obsessive compulsive disorder) might do. I tend to think that it is actually a great use of spare time to make his or her car parking something memorable and different … i.e. exceptional. If I was this person’s boss I would be extremely pleased and make sure I kept them as an employee … if I had several different locations with car parks I would make it company policy!
Small innovations can have big effects on your customers and your reputation. I was on a customer support call the other day and the person in the call centre said “I’m going to put you on hold. I estimate it will take 4 minutes to get you a definitive answer, but I will come back in 2 minutes to update you”. Any possibility of me getting frustrated by being on hold was eliminated with that simple line … I imagine they have far fewer people hanging up mid-call than other call centres.
So, whatever your job or business, have a think about some small things you can do to become exceptional. The small, thoughtful things make an impression and can create free word-of-mouth marketing for you or your company … or, like the photo, may cause it to go viral!
Rapid Iteration
Posted by: admin on: November 21, 2011
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No business is ever perfect, but every business should continually strive to improve every aspect of itself. How can you improve the terms with your suppliers? How can you better predict what human resources you will require? How can you spend your marketing budget more effectively? What things can be done to improve cash flow? What features or services would your customers like to see in the coming months? How can you discover and capitalise upon the strengths of your employees?
Iteration means repeating a process over and over to get closer to the desired result. For example, if you’re making a Web site you continually review and improve the site. The effects of each change are measured and feed back into the review and development process to create something better than the last version. This is a scientific approach, not trial and error. The results from each experiment guide the approach you take the next time around. The more iterative steps you take, the more you learn and the better the results.
I believe that rapid iteration of every business process is critical to success. Especially in startups. Larger business get stuck in their ways and become slow to adapt, so small companies need to press home the advantages they have. Trying new things each week or month will allow you to adapt far faster than many existing companies and serve your customers better. Undoubtedly you will discover things that work and other things that done. Be careful to remember every lesson you learn and use that knowledge to your maximum advantage.
The key point here is to take many small steps/improvements rather than try to do everything in one big step. You must also measure all relevant data so you can properly judge each change on its own merit. If you change too many things at once you will not know for sure what causes the improvement or drop in sales.
Some examples of small iterative steps having a high-impact are:
- A 5% price-drop doubled the conversion rate on a Web site (i.e. sales doubled for the same volume of visitors)
- Changing the wording on a Web site’s button improving the number of clicks by +20%
- Google improved the speed of their search engine’s results, which led to a rise in search traffic and therefore revenue (the improvement had to be measured in milliseconds, an amount of time most people believe humans cannot perceive)
Get in the 1% … Fast!
Posted by: admin on: October 24, 2011
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We’ve all seen the ‘occupy’ protests where left of centre protesters vent their fury and frustration at Wall Street, big business & its influence on politics, their unfortunate financial state, etc. etc. They say they are the 99%, protesting against the 1% who hold the majority of the wealth in the World. In my opinion, this is just the beginning and I fear it is going to get much worse for the average Joe.
In 1988, average wages in the USA were $30,400. After 20 years of so-called progress (the S&P 500 share index has quadrupled since then) the average wage was $30,000 in 2008. Yes, that’s right, $400 lower.
I’ve been wondering why this has happened, and can only assume it is due to an increase in the number of people earning nothing at all and surviving off the welfare state. In America around 47million people are in poverty. 15% of the population in the USA struggle to feed themselves.
This is scary stuff! I hate to be negative, but I really can see it getting worse. Progress in technology is such that many more jobs could be obsolete in the coming decades. Robots will replace more people in manufacturing, computers with ‘artificial intelligence’ will reply to customer service enquiries and answer phones, buses will drive themselves and medicine will improve so much that not only will populations swell but preventative treatments should keep us out of hospital. The result of all of this will be more people and less employment.
Not as far away as you think ...
I’m not talking about science fiction … this is already happening. Unpopular pension reforms are being pushed through because we are all living longer. Prototype cars which can drive themselves already exist and you probably heard about ‘Siri’ the personal assistant you speak to that comes with the new iPhone 4S. Progress is accelerating. As we get smarter and, more importantly, as our computers get smarter we can develop solutions to nearly anything more quickly. In a decade technology will be nearly unrecognisable to what we have today. Just look how far the mobile phone has come in that time or the development of the Internet.
So, in short, you need to get into the 1% as quickly as you can. The only way to really get ahead is to operate your own business and not rely on an employer to enrich you … you may become obsolete and unemployed rather than promoted! You need to be the person installing robots, using AI computer programs, etc… the one profiting from new technology and serving your customers better with it. What you do NOT need to be is the person competing for superiority with technological progress. You will fail.
Clearly not all jobs are at risk, at least right now … but who knows where the next breakthrough will be. I know I’m much happier being master of my own destiny than hoping Artificial Intelligence doesn’t develop too fast and replace me!
Teach Business to 10 Year-olds
Posted by: admin on: October 15, 2011
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There’s something seriously wrong with most modern education curricula today, so fundamental and overlooked it is actually quite shocking when you think about it for more than 30 seconds.
Schools (i.e. those educating young people up to the age of 16/17) simply do NOT teach their pupils anything to do with business, creating a company or any of the fundamental knowledge someone would require to incorporate a company or set up as a sole trader.
There is heated debate about education constantly. What age should sex education start? Should creationism be taught alongside evolution? Are religious schools good or bad for an integrated society? Are education/exam standards slipping in order to give the illusion that we’re all getting smarter?
What I never hear a debate about is what age should we start teaching kids about profit and loss. How much time should we spend encouraging kids to think of small businesses they could run to raise money for charity? What introduction to the business world can we give kids to empower them to form companies, create partnerships and generate wealth?
Teach them young!
Sure, by the time teenagers get to their A-levels they can select a course such as ‘business studies’ but this is far too specialist and elitist. Why can’t ALL kids be taught about business in a basic way?
The lessons are valid for everyone, not just those that decide to become entrepreneurs. Cash-flow management is relevant for any person looking to balance their expenditure with income. Teaching about buying low and selling high would encourage people to shop around & seek out value. Starting a small enterprise for charity would give real-world lessons in project management and accounting. Students would learn a little bit about law, use their mathematics for a real application and how to prioritise or advertise. They would also have a better understanding of how their first employer works and likely be more able to spot opportunities.
Small companies hire 2/3rds of the people working in the private sector. They are the life-blood of modern society. What would the world look like if every student had at least tried to run a little business for a good cause before they were 16? Would that double or treble the number of adults who then try to set-up a real business to support themselves? Or, even if it didn’t increase the numbers, perhaps it would help reduce the failure rate. Any improvement in either of those statistics would enrich a country substantially.
I believe putting some business education into the curriculum could dramatically help Western economies, increase the number and variety of startups, create employment and spark more innovation and diversity of business. It would also create a much-needed alternative to higher education and the indebtedness this creates for many.
So, isn’t it time to teach some simple business lessons to 10 year-olds?
Compete With Yourself
Posted by: admin on: October 2, 2011
Worrying too much about the competition is a mistake … the biggest opportunity for you to surpass your competition is for you to stop competing with them and start competing with yourself.
Too many companies are obsessed with their competitors. Trying to win business away from them, talking trash about them to customers, taking legal action against them, threatening suppliers to not do business with them, etc. etc.. It is a never-ending process that saps your energy away from where it is needed. Every minute you spend thinking about what your competitor is doing is one not spent on improving your business.
There is no point trying to match a competitor’s pricing if you can’t make a profit, both companies could easily end up in a death spiral and wind up insolvent. Price wars don’t benefit anyone and ruining a rival’s profits doesn’t transfer them into your bank account!
Don't pick fights you can't win
Having rival businesses around you is a fact of life. If they are hostile towards you, they feel threatened and you should appreciate that you must be doing something right! Don’t waste time and energy being fearful of them, you should not care if they make £1million as long as your business is going OK and improving. Even if you’re killing the competition, it does not mean that you should stop trying to improve. Complacency kills far more businesses than competitors.
So if you’re going to compete with someone, compete with yourself. Try to make each month better than the last. Work to improve margins and efficiency. Try new things you’ve not done before on a regular basis. Constantly seek ways you can improve the way you do business. Never be satisfied and always keep an open mind. Push yourself. If you’re lucky enough to be doing well and making a healthy living, the worst thing you can do is stop trying to improve and adapt. One day the market will change and you’ll find yourself in hot water.
Who’s Holding You Back?
Posted by: admin on: September 29, 2011
Sit down and pay attention!
There’s someone holding you back. A teacher at school who told you that you were an idiot. A shitty boss who is miserable with their own life so spends their time trying to drag everyone else down. A jealous family member … or even a super-successful family member who you can never compete with. Perhaps so-called friends who tell you to give up before you even get started … or the newspaper journalist who loves to make a lot of noise when someone successful falls from grace and so makes you reluctant to be their next target. Even well-meaning parents who can’t bare to see their child disappointed will hold you back and beg you to play safe.
Ignore them. All of them.
As I write in my short e-book ‘Get Ready’, entrepreneurs are vastly outnumbered by critics and commentators … probably in the order of 100,000 to 1. These people are irrelevant. Their opinions are completely irrelevant and undoubtedly wrong. How well do they actually know you? Do you think they really know what you are capable of? Have they been there in your darkest moments or with you during your greatest achievements? No-one, and I mean no-one, has the right to pass judgement on you or decide what you are capable of.
When I was 16/17 I was asked to teach mathematics to a 13 year-old girl who was the younger sister of a good friend of mine. I was probably more nervous than her as we started going through a test she got an average grade in. After just one ‘lesson’ it became perfectly clear that this young girl was actually very good at maths indeed. Turns out that the problem was her teacher spent too much time putting a pretty blonde girl down and not enough time reinforcing her confidence which would allow her to blossom and master her subject. Her new tutor, being a teenager with dimples, probably helped her relax and before long she was correcting my mistakes and realising that she could not only complete the work, but get the highest grades! I didn’t teach her for long, after 4 or 5 sessions she started getting 90%+ in tests and a nice little earner for me ended quickly!
I see that experience as a metaphor for broader society. Too many figures with authority, influence and/or power putting those with potential down or placing obstacles in their way. Far too few people are out there trying to encourage us, reassure us and raise the ceiling on what we can achieve.
However, we all know how to rebel. How to say enough is enough and refuse to accept the status quo. Stop comparing yourself to others and shed your fear of failure. You can’t take what other people think to the bank, so what value does it hold? It isn’t until you unleash your potential and start aiming far higher than the majority dare that you will truly be satisfied with life.
In the end, the only person holding you back is actually you.
How Much is Enough?
Posted by: admin on: September 10, 2011
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I made my first million when I was 23 (on paper at least). While I was obviously happy about it, there was a strange sense of anti-climax. First of all, I had no access to it … all of it was in stock which I couldn’t sell. Secondly, my life was absolutely the same it had been the week before. Nearly no-one in the world knew, I still got shitty service in restaurants (and still do!) and I didn’t get membership to a secret ‘millionaire’ club so I could mingle with the rich and famous. I did not get selected for the Under-30 Rich List, nor did women show more interest in me.
The fact is, £1 million is no longer a massive amount of money. $1 million is even less! You could just about retire on it if you bought a modest house and invested the rest very wisely but inflation would soon force you back to work. You can only get 3-5% per year on your money in income unless you really start gambling with it. That would be fine, but inflation is currently ~4% so unless you spend only 1% of your money each year you are getting poorer!
A lot of people start their own business to be a millionaire. Many set age targets like ‘I’m going to be a millionaire by the age of 25′. But how much would you be willing to sell out for? How much is enough?! What should your target be?
It is a difficult question to answer. First of all you have to consider the lifestyle you want to lead and how much that is likely to cost you. Then ask yourself whether you plan on working again and if not, how many years you’re likely to be retired for. How many homes do you want and where? How much are they likely to cost to buy and then maintain? How much will you travel? If you plan on working again, will your income cover your day-to-day living costs or not?
The fact is, assuming you sell your business for a multiple of profits, you will be actually getting a big cut in income when you sell. Private businesses usually fetch for quite low multiples of around 3-7 times annual earnings … somewhere between a 14 and 33% return for the buyer. You *will not* get a return like that on your cash without taking very big risks and so if you invest wisely you can expect an income of around 1/3rd to 1/6th of that you were getting before you sell.
It is common for people to suffer from ‘grass is greener’ syndrome and long for an easy life with a large bank balance rather than working all hours on their own business. Don’t be too fast to look for the exit, you could very easily regret it. Being self-employed is worth a lot more than you think!