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Is it hard to be an Ethical Business Builder?

Posted by ethicalbusinessbuilder on July 20, 2008

Me on the top of Mt. Washington in Pittsburgh

Me on the top of Mt. Washington in Pittsburgh

Since I’m 26 I often go to meetings with other business owners where I’m the youngest one there and certainly look too young to own a business. At one such meeting someone who was quite a few years older than me and was working for another business asked me if its hard to own a business. “Not really. It’s like anything else. If you take the time to educate yourself anything can become easy.” Here’s why building businesses is “easy” for me. Keep in mind I don’t define easy as working 2 hours per week (though that is the goal). Easy for me is simply sleeping well at night, not feeling overly pressured, and welcoming the day. Nothing I encounter troubles me that much because I feel confident I know how to overcome it.

  1. I LOVE it. When you’re totally, completely, absolutely passionate about something and you know its what you were designed to do even the trials are colored positively.
  2. I picked a great partner. The rule of thumb is you only get a partner if you absolutely need one. Since I can’t service or sell my company’s products I needed to make sure I could rely on someone who could if times got tough. Granted that’s far secondary to finding someone I can easily work with and trust.
  3. I’ve spent a ton of time and money educating myself. If you ask an expert programmer if it was hard to write that last program, chances are they’re going to say no. Ask the plumber about plumbing that house, or the salesman about closing that deal and you get the same. Why? Because they’ve spent the time and energy necessary to become experts to the point that doing what’s best is second-nature.

By far, educating yourself in how to ethically buy, build, and sell businesses is the most important part of making it “easy”. If you want the crash-course in business that will far exceed anything else you could ever learn in 3 days I highly recommend saving up $4k and attending Brad Sugar’s Entrepreneur’s Masters class. He’s the best. Or if you don’t have that money and you prefer to get more hands-on, then join my team and we’ll work through the 6 Levels of a business together.

There are really only 2 paths to getting started down the path of being a successful entrepreneur without having to make all of the common mistakes along the way:

  1. Go work with the absolute best entrepreneur you can find with the potential of buying him or her out. Or just eventually take the knowledge you’ve gathered and go out on your own.
  2. Attend Brad Sugar’s Entrepreneur Master’s Class (if you know of a better 3-day training then I’m all ears), read his and the other books I recommend, find a good lawyer and accountant (which is by far the hardest thing to do), and then go do it.

As a motorcyclist, when I first jumped on a bike with no experience and no friends to ask for advice it was a bit scary. I just never felt completely in control. So my first trip on my brand new bike was to the library where I borrowed every book I could find on motorcycling. A few hours later my eyes were forever open and my riding skill improved 1000% as I learned the concept of “counter-steering”. If you’re not a motorcyclist here’s the simplest definition of what it means: to go left you turn the handlebars to the right and to go right you turn the handlebars to the left. In other words it’s backwards or “counter” to how you would turn a car. What? That doesn’t make sense, right? Well without getting into the Tony Foale (Tony is probably the greatest motorcycle chassis and suspension expert in the world who I’ve had the pleasure of learning from) explanation, if you look at it in a few basic steps it becomes perfectly clear. First, all 2 wheeled vehicles turn by leaning. No lean, no turn. It’s impossible. Second, motorcycle tires are rounded, not flat on the bottom like car tires. That’s important because to get the bike to lean you turn the wheel to the right and the front tire immediately drops down onto the left side of the tire – which causes it to lean, and therefore turn, left. This blog isn’t about motorcycles but if you ask any cyclist to demonstrate how it works with the bike sitting still on flat ground you can see it very quickly.

So now you know how something that seems to go against common sense actually works. Business is much the same way. We as business owners think the more time we spend taking care of customers and putting out fires the happier everyone is going to be and the better business will be. Makes sense, right? The problem is, that if you’re so busy putting out fires and helping each customer, who is making sure the customer is happy when someone else helps them? Who is the fire marshal out teaching your team members how to prevent fires? There are hundreds of “common-sense” business practices that you and I would easily understand if someone just told us. That’s why it’s so important to learn from the best. Guys like Brad Sugars, Marcus Buckingham, Michael Masterson, Dale Carnegie, Warren Buffet, Dave Yoho, Duane Sparks, Dan Kennedy, Michael Gerber, etc. etc. etc.. Read the various books that I reference, look for great business blogs, and make as many contacts with business owners as you can possibly make. They may not all be geniuses, but all they need is to fill you in on one great idea, system, or program to make it worth spending time with them. Plus, we entrepreneurs are all egotistical and think our ideas are great. So we’re generally more than willing to share those lightning bolt ideas with you and after we’re done we like you even more since you let us talk. :-)

To your success, Bryan

P.S. If you really want to know what it’s like to live a hard life then check out American Courage: Remarkable True Stories Exhibiting the Bravery That Has Made Our Country Great and learn about some of the greatest figures in American history who they didn’t teach you about in school. :-)

Posted in Business Books, General Business | Tagged: | No Comments »

Work the system - the WHOLE system

Posted by ethicalbusinessbuilder on July 13, 2008

In the spirit of Dale Carnegie’s How to Win Friends & Influence People I will recommend Sam Carpenter’s book Work the System and I certainly felt reinvigorated about the systems I’m working on in my business. (Dale Carnegie suggested that before you critique someone you always offer a positive so as not to put them on the defensive.) I will recommend the book to people who I don’t need or want to have a big picture of generating wealth - to people who just need to understand the importance of systems, but not everything else that comes along with being able to grow lots of businesses.

For me if I can pull a single good idea out of a book then I consider it worth the $20 and time invested. It wasn’t until the last few chapters that I found that great idea from “Work the System”. It’s a concept Carpenter calls “PTO” or Paid Time Off. The way it works is that with every paycheck your team members accumulate vacation or sick days or both. Well Carpenter found out that caused a problem with people just taking one of those sick or vacation days because “i don’t feel like working today.” So instead of that, he wrapped both into Paid Time Off and paid the employee for that time immediately as an additional line item on each paycheck. That way when the employee takes off a day or week, they don’t get paid for that day or week since they’ve already been paid ahead of time. He claims it reduced absences by 80% and I believe it. I read that last night and this morning I was working with my accountant to get it into our Quickbooks program! Brilliant idea!

Beyond that, let’s call it what it is - Sam Carpenter’s “System” was an effective way for 1 man to take 1 small business (currently $2 million in annual revenue) in 1 area of the world in 1 specific industry to his own personal definition of success. God bless him because he’s living his American dream and I absolutely LOVE to hear how people are able to do that. The thing is, Carpenter tries to convince the world that what has worked in his very limited world and experience is the answer to all business owners’ prayers.

There are a few reasons his systems approach was so effective for him:

  1. He had absolutely none to begin with. I felt really bad for him reading the first few chapters about how his life and business were in such shambles. It was rather depressing.
  2. His business has a recurring revenue business model. In other words if he doesn’t sell another X this month he’ll still make payroll and there are a LOT of businesses that don’t have that luxury.
  3. His business is relatively simple. He mentioned they can take someone off the street with decent typing skills and have them handling calls for his 24/7/365 call answering business within 3 days. There are plenty of small businesses that require much longer then that just to get someone acclimated.
  4. His business is a necessity for its clients. Its not a luxury.

So let’s face it, he misses some VERY important points in growing a business that no business owner should be without. Here’s a quick list of just a few things he doesn’t address that are important to a business:

  1. Unique Selling Proposition and guarantee.
  2. Testing and Measuring particularly with lead tracking.
  3. He grows his customer base mostly through buying other businesses but gives no weight to the value of doing that. I’m curious as to how many new accounts he signs up every year through his marketing and sales system since they’re never mentioned.
  4. His first systems to fix were his operation’s systems not his sales/marketing systems (he had that luxury because he had a recurring revenue business).
  5. He never really reviews team-building other than to find people who buy into his systems mantra
  6. NLP, Proximity, marketing, scripting are all missed.
  7. He doesn’t review any method for maintaining the systems or the business with important financial numbers such as a daily break-even, the cost of “buying” your customers, the 4 ways to grow revenue, lead conversion ratios, lifetime value of each customer, etc. etc. etc. How can you manage what you don’t know?
  8. Back-end Sales, cross-marketing, additional income streams
  9. Commission and employee incentives for productivity. For as much time as he harps on the necessary mechanics of life in that everything is controlled by systems, it seems ironic that he doesn’t have an incentive based pay-structure for his managers. Instead he seems to rely on the “pay my people a good salary and make them feel good and they’ll perform to their full potential” model. Wasn’t his whole hippy-to-reality conversion based on feeling good doesn’t produce results?

You get the point. The list can go on and on. Let’s face it, Sam Carpenter may be the McDonald’s brothers, but he’s no Ray Kroc. The McDonald’s brothers created a fantastic systematized business that made them both millionaires in a relatively short amount of time. However the McDonald’s business didn’t make it big until Ray Kroc bought them out and applied all of these other principles to their beautifully systematized business to become a billionaire.

If his systems are that good, and he’s looking to develop a lot of credibility so he can write books and charge people $3k to attend his workshop in Oregon, I’d recommend spending the next 2 years buying a competitor a month and applying the systems. Or just franchise his systems out to other call center businesses since his systems approach is the way you develop and sell a franchise. Within a few short years his business could grow ten fold into a $20 million operation. I have no doubts he could do that very successfully with the well developed systems he has in place. Then again he is more than twice my age so maybe at that point in my life I’ll be more interested in living comfortably than creating an empire. :-)

Again, his systems approach has its place and is certainly a crucial point for every business - but its not the guiding factor for success and certainly can’t be taken on its own. Maybe it’s because I personally know and have consulted with at least half a dozen people who make a lot more money than him, work when they want, and take vacations wherever they like without his obsession for systems. Especially since many of those business owners I’ve worked with understood that their first priority and most important systems were the ones that generated leads and closed sales (something he never addresses).

Michael Masterson in Ready, Fire, Aim: Zero to $100 Million in No Time Flat probably points out the biggest flaw in Mr. Carpenter’s approach and that is that a Stage 1 business’ main priority is to sell. In Stage 2, once you’ve proven that you have a viable product and a willing market, you focus on systems’ development.

The freedom, comfort, and happiness that Mr. Carpenter has found through HIS approach to HIS business is awesome - this blog is just a fair warning to people who think that by reading his book you know all there is to becoming a successful entrepreneur. His book is excellent for what it is - a book on the importance of systems to small businesses - but that’s about it.

It’s worth the read and a decent book so check it out but only after you read the other 5 books on my list of books that make you wealthy so that you have a picture of the WHOLE system that a business owner needs.

To your success, Bryan

P.S. I can’t stop thinking that Brad Sugar’s is by far the greatest entrepreneur of the last 100 years (maybe longer). Eight years ago when Mr. Carpenter had his epiphany about systems, Brad Sugars was retiring at the ripe age of 26 with $10 million cash in the bank. He has since owned 54 businesses all over the world and is only 34 or 35.

Posted in Business Books, General Business | Tagged: , , , | 1 Comment »

Why I decided to buy my first new cell phone of this millenium…

Posted by ethicalbusinessbuilder on June 17, 2008

A few weeks ago after much research and debate I finally decided to fork over the money and buy my first brand new cell phone of the millenium. The only other new phone I have ever owned was the phone I originally bought when I first started cell service in 2000. Since then I had an Ebay phone and a $20 phone that I bought from my bro. So what prompted me to spend $200 on a brand new Blackberry Curve 8830 and renew my contract for 2 years???

  1. The $400 discount was more than the $200 cancellation fee. I absolutely hate phone contracts so I haven’t had one since 2002. The main reason for that is (A) I’m always moving and need to make sure wherever I live the phone service is going to have good reception. (B), and more importantly, on about a yearly basis I would call my phone provider, ask for the cancellation department and get them to give me additional minutes, services, or credits because without a contract they’ll do whatever they can to keep my business. :-) So even if I have to pay the $200 cancellation fee at some point, that’s still better than not signing a contract and forking over an additional $400 up front.
  2. I wanted to know immediately if a sales lead or other important email came in. It’s very important to respond to sales leads right away so if someone emails us an inquiry I want to get them a call back within 20 minutes. The only way I could ensure that was if I was in front of my email all day or I was able to check me email on my Blackberry Curve.
  3. I needed an efficient way to stay in touch with my office. Not everyone has a company cell phone so text messaging isn’t a good option though it’s used at times. Very often talking on the phone while in a meeting (or out on the golf course) isn’t really acceptable. However a quick IM through GoogleTalk allows people in my office to easily ask questions that I can respond to while someone else is teeing off… err… uhhh… I mean presenting. :-)
  4. I moved 1900 miles from home and my sense of direction is lacking… Integrated GPS helps. The GPS has search function to tell you where to find the cheapest gas in your area, how to find businesses and restaurants, or even a friends house. And since it’s all right in my phone it easily moves with me from car to car. It’s even integrated with my calendar so that when my phone texts me to remind me of an appointment, I just click “Drive to” and it tells me how to get there. Time is money so not getting lost is a valuable feature.
  5. It is a legitimate business expense. Since I always worked for someone else, forking over $200 after-tax dollars for a phone always seemed like a lot. Now that my business pays that and the monthly service plan pre-tax, its a much better deal.
  6. Provided the perfect way to always have my schedule. It instantly syncs with Google Calendar thanks to googles free mobile sync options. Within minutes of putting an appointment on my Google Calendar it’s synced up to my phone wirelessly and vice-versa. No sync cables or docking stations or any of that silly stuff.
  7. It has unlimited internet access. So whether I’m checking into a flight while sitting in a car on my way to a wedding, keeping up on the Pens score, looking up the departure gate for my connecting flight, or reviewing the weather forecast at “Current Location” (GPS integration, baby), having the internet at your fingertips never seems to get old.
  8. My goal is to be as mobile as possible so I can run multiple businesses at the same time. When you add all of these things together, it sums up the most complete mobile toolbox since a laptop. Obviously I can’t do everything with it, but I can do most things.

Other technologies that are on my “Must-have” list for a mobile work environment:

  1. Kindle: Amazon’s New Wireless Reading Device - If you’re like me, you read. A LOT. And every time you travel you have 2-4 books to pack away in your bag that you’re working on. Or you’re at the office and need to reference something that’s in a book at home. Well the Kindle gets rid of all of that. Imagine having all of your books (120,000 at last count are available) at your fingertips in a device the size of a single book. Don’t forget you can also have your favorite magazine or newspaper (I prefer The Wall Street Journal) delivered wirelessly to your Kindle. You can even buy new books for $9.95 (less than a paperback version) anywhere you have a cell signal and have it delivered to your Kindle in about 60 seconds. This is by far the coolest thing that has come along in a long time.
  2. Document Scanner - How can you possibly be mobile if your important documents and all of your customer’s information is stuck in filing cabinets??? You can’t. Buy a good document scanner and scan EVERYTHING into your computer. The time you invest to do that will payoff 10 fold in just having access to everything you’ll ever need at the click of a button. You’ll be able to serve your customers better and be more efficient. My personal recommendations are anything with Fujitsu ScanSnap as well as the Fujitsu 5110c. The Canon DR2050c and 2080c are also top-notch units. Don’t ever spend less than $100 on your business scanner. It won’t be worth it. Trust me.
  3. Server with remote access. Along with my receivables, scheduling and lead-tracking software, this allows me to work from almost anywhere I can find internet access. My preference is a Windows 2003 Server with Terminal Services since I can access it with my Linux laptop, a Macintosh, or obviously any windows based computer.

What technologies are allowing you to become more mobile???

To your success, Bryan

P.S. You can access my blog on both the Kindle and the Blackberry. ;-)

Posted in Business Books, General Business | Tagged: , , , , | 3 Comments »

Asking your customer “where did you hear about us” is a waste of time and what to do about it…

Posted by ethicalbusinessbuilder on February 14, 2008

A few days ago I was reading Michael Corbett’s The 33 Ruthless Rules of Local Advertising. In his book, he points out one of the biggest flaws I’ve seen in businesses - you cannot rely on a prospect to accurately inform you where they hear about you. In other words, a customer cannot provide you with accurate information on which of your lead sources are producing the most profit. Here’s why:

As Michael tells the story, he was working for a business that was having a big sale one Saturday. Prior to the sale they did a lot of advertising in the local market and wanted to determine which marketing project paid off. To do that Mike and his boss stood at the door all day and asked every customer where they heard about the sale. 30% said TV, 20% said Newspaper, and 50% said Radio - Good to know, right? Except they never had a TV ad. When they asked people if they were sure they heard about it on TV everyone assured them that they had.

Your prospects don’t know and don’t care where they heard about you.

So now what? To wisely invest your marketing dollars, you NEED to know where your leads are coming from. Michael suggests just watching sales to determine if the marketing worked. However, what if you’re running multiple marketing promotions at once? After all, who isn’t? You may have a direct mail piece, yellow page ad, website, a radio slot, and be sponsoring your local high school sports events all at the same time.

The internet marketing guru’s have this one figured out. They may have 100 different ways that they are marketing their products, but they always know exactly where the leads are coming from by tracking the “referral sites” to their website. (If you’re not familiar with “referral sites” your webpage can be setup to track which other webpage people visited that lead them to your site.)

In the “physical” world if you’re running multiple advertisements you have 2 options:

  1. For print ads (i.e. yellow pages, direct mail, newspaper, magazine, website etc.) provide a coupon. Have each coupon be unique (preferably a different color) with a unique promotion ONLY available with the coupon (and obviously void with any other offer). The different color is useful because even if they forget the ad at home, they can generally remember the color so you’ll know exactly which one they’re talking about.
  2. Simply offer a unique promotion. Your radio ad, TV ad, announcement at the high school event etc. should all include a different promotion when they go to your business and mention it.

Note: Make the yellow page ad your “weakest” promotion. In other words, if they hear you on the radio and pick up the yellow pages to find you, you want them to tell you about the radio promotion, NOT the yellow pages promotion.

What about referrals? - Well you need to incentivize (I’m aware that I just made up that word) your referrals. You need to offer something to the referrer for providing the referral. If you do that, the referrer will be sure to tell you about it. ;-)

Also, make sure your promotions provide some sort of exclusivity. Generally items are made exclusive by offering a time limit, quantity limit, or “previous customer” discount. If you look at any good online information marketers, the good ones (i.e. Yanik Silver, Perry Marshall, Jim Edwards) ALWAYS make their materials “exclusive”.

Here’s the other “excuse” I hear from business owners all the time about why tracking lead sources is a waste of time. They claim that you can’t really ever know which lead source brought them in. Maybe they did hear your TV ad and radio ad and saw your newspaper ad and finally one day decided to call. I agree that in your market, having your name synonymous with your product is very important and to some extent all of your marketing projects should be helping to do that (if they’re structured properly with you Unique Selling Proposition). But here’s the thing. Who cares if everyone in the world knows that you make widgets if no one is buying your widgets??? The reason you offer promotions is because even though your prospects may have heard your name in 10 different ads, the ad that brings them in to buy something is the one you need to know about.

Do not confuse “activity” - people calling or stopping by because they heard your ad - with “profitability” - people actually BUYING something because they heard your ad. Online affiliate marketers are great at distinguishing between the 2. They don’t pay a dime to anyone for any marketing UNTIL someone buys a product! Don’t you wish you could do that in your business? Imagine setting up a deal with your local newspaper, radio station, or TV channel where you paid for the ad by giving them a percentage of sales that came directly from that ad. If you ever manage to negotiate a deal like that please let me know about it.

To your success, Bryan

P.S. The “other” way to track all of your lead sources is to offer unique phone numbers, email addresses, or web addresses with each ad and promotion. That can get a little more inconvenient for the consumer to try to remember that information however with the proliferation of the internet, VOIP phone services, and email, at some point I imagine you’ll see this happening more often. It’s already becoming popular in direct mail marketing.

Posted in Business Books, Ethical Marketing | Tagged: , , , , , , | 1 Comment »

The best 6 books to teach you how to generate wealth…

Posted by ethicalbusinessbuilder on February 8, 2008

When I started business “consulting” at the ripe old age of 20 with no actual business ownership and management experience, I ran into a few problems. My job was to implement a new software system that would significantly change the work flow of a business. In that process I would have to recommend ways to handle leads, in-bound and out-bound calls, inventory, receivables, and offer suggestions on what management reports to run. I learned that to get buy-in it was necessary to explain WHY they needed to do all of this. No matter how much I knew or how many businesses I helped, a 21 year old wasn’t ever going to get much respect right away. So I learned a quick way to build rapport is to use “experts” to make some suggestions instead of me just making them. In other words I learned to use books to backup my expertise and build instant credibility. I furthered that credibility by publishing articles in trade magazines when I was 22… But that’s a different story. :-)

So after years of reading books on real estate, investing, business building, sales, marketing, and psychology here are the ones that offer the BEST advice for wealth building in the order of importance.

  1. Billionaire In Trainingby Brad Sugars: If you don’t know this guy then you need to. He retired with $10 million in the bank at age 26 for a few years. Then got bored and launched what is now the largest business coaching business in the world, Action Coach International. Now at age 34 he’s been involved in over 50 businesses and is using the formula in this book to become a very young billionaire. The best book of its kind.

  2. Ready, Fire, Aim: Zero to $100 Million in No Time Flatby Michael Masterson: Masterson’s approach is a bit different than Sugar’s which is why I liked it. Masterson talks in detail about starting and growing a business step-by-step, whereas Brad says don’t waste your time starting one, just buy one. Regardless, Masterson has turned himself into a hundred millionaire and retired for the first time at age 39. He provides some excellent tools particularly his insights into marketing and back-end sales.

  3. The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About Itby Michael Gerber: One of the best business books ever according to Inc. magazine. Gerber breaks down the reason most businesses fail to the owners misunderstandings about business. The greatest misunderstanding - that because I’m a good plumber, electrician, accountant, lawyer, etc. I’m gonna be great at running a business that will allow me to use my sweet skills.

  4. First, Break All the Rules: What the World’s Greatest Managers Do Differentlyby Marcus Buckingham: After interviewing 80,000 managers in 20,000 different organizations over 20 years Buckingham has broken down the best way to measure employee productivity and happiness to 12 simple questions. If 12 is too many he even gives you ways to shorten that list depending on your goals. If you EVER plan on doing a performance review or have employees, read this book.

  5. Built to Last: Successful Habits of Visionary Companiesby Jim Collins and Jerry Porras: The greatest lesson I took away from this book was that Gerber and Sugars are right. Even the greatest businesses over the last 100 years were founded to be great businesses from the start NOT to provide a great product. That’s a VERY important distinction. Sorry to dissapoint all those high-ranked business schools that say you need the product first. :-)

  6. The Millionaire Mindby Thomas Stanley: This book is a compilation of data from survey’s answered by over 1300 millionaire’s. Some of his findings are quite interesting. The most important 2 were that the number 1 thing millionaire’s attribute to their success is “Being honest with all people.” The second is that most millionaires were at or below average according to our fine education system. They were mostly college dropouts , C students, and averaged less than 1000 on their SAT’s.

Though I’ve read Robert Allen’s Nothing Down for the 90sand Hagstrom’s The Warren Buffett Way and Peter Lynch’s Beating the Street along with dozens of other books and online services related to real estate and investing, I have very purposely left those out. I’m not saying they’re poor books, because they are all VERY good (Robert Allen inspired me to buy my first rental property at 21) - however, as Brad Sugars points out in “Billionaire in Training” you don’t climb the capital ladder (i.e. real estate and stocks/securities) until you’ve climbed the cash flow ladder. In other words, until you have cashflow to backup your real estate investments and securities in case of trouble, you’re wasting your time with those. I know in the instance of both my real estate investments and stocks/mutual funds I NEEDED cashflow (from my job) to cover them.

To your success, Bryan

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