Be an Ethical Entrepreneur, Marketer, and Business Builder

The 3 Non-Leadership books every Leader, Teacher and Parent should read

I realize that might title is a bit redundant.

A great leader IS a great teacher and vice-versa.
In industries, like internet marketing, where the amount of information doubles every 8 months, the ability to teach your team may be the single most important aspect of leadership.

So with that in mind, if you want to be a leader on one of my teams, these are the 3 books you need to read and live.

Mindset: The New Psychology of Success by Carol Dweck

If there was a single book that taught you how to be a great teacher and thereby a great leader, this is it.

Each day we are all faced with success and failures and we respond in 1 of 2 ways:

  1. Fixed Mindset – Each mistake is validation that you aren’t smart, talented or good enough. Conversely, every success tells you that you are innately “gifted” which is very dangerous because then you stop looking for challenges where you might fail and therefore not validate your “gifted” status.
  2. Growth Mindset – Each failure and success are a means of learning. You either learned what you wanted (i.e. succeeded) or you didn’t (i.e. failed). Either way, you have more to learn, further to go and higher mountains to climb. Your mind is ever-expanding and intellect can always grow.

Our team has summarized this in our Culture Statements as:

Learning from other’s successes is extremely valuable however sometimes learning from our own mistakes is more memorable. We embrace our mistakes, learn not to repeat them, and therefore are constantly pushing the limits to get better.

If you only have time for one leadership or teaching book, Carol Dweck’s book is it!

The Talent Code: Greatness Isn’t Born. It’s Grown. Here’s How. by Daniel Coyle


It wasn’t blind luck that the greatest concentration of artists, sculptors and painters of all time just happened to live in the same area of Italy over a 60 year time frame in the 16th century.

It’s also not chance that the small, dingy school where Anna Kournikova learned to play tennis, at one time produced 4 of the top 50 greatest players in the world.

It’s by design that the Dominican Republic has an unmatched density of great baseball players and, amidst abject poverty, Brazil has produced some of the world’s greatest players and teams consistently for nearly 50 years.

There’s a system and a code to “talent”. It’s not merely innate and it’s not simply about working for 10,000 hours on something. It’s about mindset, commitment, and breaking down the skill or talent to it’s essentials.

Daniel Coyle tells you exactly how and it’s as inspiring a read as you may ever encounter.

Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman


Think for a second of the tests that you may have taken to measure your intelligence.

  • IQ Tests
  • SAT’s
  • ACT’s
  • College Exams
  • High School Exams

Of the tests listed above do you know which one most closely predicts success in life?
None of them. None can be correlated to job, income, happiness or any other measure of success.

But there is a test that can.

It’s called the marshmallow test.
Put a 3 year old in a room. Give her a marshmallow and say, “You may eat the marshmallow. Or you can wait a few minutes until I come back and I’ll give you 2.”

If she waits, she understands the value of delayed gratification – working hard and sacrificing now to receive something better in the future – and it will predict her future success more accurately than any other test.

That’s one of hundreds of examples that illustrate that Emotional Intelligence (EQ) is more important in our lives than IQ.

Goleman also provides great examples of how to teach 3 to 93 year olds how to improve their Emotional Intelligence and better empathize with those around us.

Those were listed in the order of importance so start at the top and work your way down.

To your success in becoming a great, teaching leader,
Bryan

Customer loyalty isn’t about your product – It’s about your PEOPLE…

When I work with small businesses nearly coast-to-coast one thing we do is collect and review testimonials from customers. What I’ve learned from this exercise is that your customers will become fiercely loyal and gladly recommend you primarily because of YOUR PEOPLE, not your products…

Here’s a quick sample of actual testimonials:

Our service guy goes above and beyond the call of duty.

The girl in the office makes me feel like she knows me.

Our rep doesn’t try to sell us stuff we don’t need.

Our service man is wonderful – wouldn’t change him ever!

Or how about, “We love their business because they have such great personalities.

I didn’t make that last one up! It’s a real testimonial that we received for a small business.

You mean people are choosing their vendors based on the personalities of that vendor? Yes! Believe it or not, people want to do business with other PEOPLE!  In case you haven’t noticed, these days in the USA we aren’t real fond of doing business with our government or big corporations.

Now keep in mind, if the product or service you promised to deliver is sub-par, then you have a problem. If the customer enjoyed working with your people, chances are very high they’ll give you the opportunity to fix the problem. If not, good luck.

However, if you deliver just what you told them you would, or a little more, then it’s your people who will turn those regular customers into raving fans. Once they have your product or service there’s virtually nothing else to set you apart from everyone else who provides a product or service for them. You said you would deliver X, you delivered X, and the transaction is over.

Let’s look at a dramatic example…

The banking industry has some of the highest retention rates of any industry bordering on 90% retention of customers. You’re much more likely to get divorced than to change banks once you get married.

But, believe it or not, it’s not the free checking, savings account interest rates, or debit card rebates that get people to stick with a bank…

My mother got married when she was 19 and moved 1500 miles across the country to do so. She was in a new area and didn’t know anyone aside from my father and his family. In those first 6 years of marriage she had 5 children and guess who were often some of the first people to meet her new babies?

The tellers at the bank!

Sounds crazy, right? But in the days before direct deposit, every 2 weeks she’d have to go to the bank to deposit a paycheck and every time she’d see the same ladies. They obviously would chit-chat about her current child or the one on the way and what women don’t love to see cute little babies?

The point is, to this day, nearly 30 years later, she couldn’t tell you a darn thing about the programs or services or interest rates of that bank, but she remembers the tellers AND the bank.

If your business has any sort of regular interaction with your customers (and it should if you have recurring revenue) then the same can be true for you.

Here’s how:

  1. Provide great service to YOUR team members – One of the keys to great employee productivity and retention is if they, “feel like someone at work cares about me as a person.” Call it touchy-feely, but I’m an engineer and if the science didn’t back it up, I wouldn’t point it out.
  2. Collect testimonials and reward people for doing so. Not only does that show how important happy customers are to you (actions speak louder than words) it’s actually very uplifting and exciting for the people gathering the testimonials. They’re also a great marketing tool.
  3. Track customer complaints. Review each one of them, immediately resolve the problem, and review with your team what happened and how we can prevent it from happening again. If you care about mistakes being made, they will too.
  4. Develop a great small-business culture. The advantage to your customer in dealing with a small business is that they get to deal with real, local people and not bureaucracy. The same needs to be true for your team. If they have an issue, question, or suggestion they need to feel comfortable talking to the head-honcho. To do so, each of your team leaders needs to have regular reviews with their team members at least twice a year but ideally every 90 days. Separate those reviews from pay. The goal is to build a relationship between the 2 parties, not to bash someone.

To truly develop a team culture that promotes great service, you need to do a bit more homework. You are welcome to contact me and I’ll show you how to transform your small business culture.

Or read the following books and try to implement the changes on your own:

To your success fostering loyal customers, Bryan

How do I change the culture in my office or business?

A friend of mine just emailed me today to let me know he’s just been promoted, is now taking on a much larger leadership role where he works, and sales are doing well BUT he’s having ‘people’ issues.

Well who isn’t, right? 🙂 All businesses have issues with unproductive, combative, and poor-communicating employees. But before you can address how to fix those problems, you need to know why people are that way. It’s my firm belief that the vast majority of people don’t want to suck at their job. If that’s the case, why do so many businesses have so many personnel issues?

Here’s a quick litmus test to see if your business is creating personnel issues or you just happen to have a few bad eggs.

Personally I’m not a big fan of the term “managers” as “managers manage resources and leaders lead people”. A hundred little things, like your titles, added together form a culture for your team and team members (not employees) that can affect everything about your culture, including financial results. I’m getting a bit ahead of myself, so I’ll get more into what’s required of a leader in number 4.

  1. The first step is defining the culture you want… Mine is literally called our “14 Points of Culture” that set the ground work for our team expectations. While you’re laying the ground work for your team and culture, you may already have a Vision and Mission statement, but if not, that’s foundational so create that as well.
  2. From there you need to develop a Team Organizational Structure chart with the hierarchy of the leaders in your business. Keep in mind that the 3 points on a successful business triangle are made up of Sales/Marketing, Finance/Administration, and Service/Operations so your Team Structure should make sure someone is excellent at each of those things and has the supporting team to get better. At it’s most basic level, your Organizational Chart would include a Team Leader (CEO) above the Sales/Marketing Leader, Finance/Administration Leader, and Service/Operations Leader who all report to the Team Leader. Underneath each of those leaders will be their supporting teams. Keep in mind that the Team Leader should always dedicate half of his time to sales/marketing and the other half of his time to everything else!
  3. Create job descriptions for every position in your Team Organizational Structure. The descriptions should include expectations, benefits, Key Performance Indicators and benchmarks tied to incentives. No one on your team should ever be able to say “I don’t know what’s expected of me or how to do my job well.” More importantly, you must fit each team member’s skill-sets and passions into the position that will best allow her to express those passions.
  4. Now you start changing the culture by actively leading your team. You provide opportunities for open communication like regular team meetings (even going to the point of picking fights between people and departments). You provide regular and consistent feedback with quarterly performance reviews based on the 12 Questions Marcus Buckingham outlined in First, Break All the Rules. You rearrange your offices according to the rules of proximity. Make sure each of your leaders knows how to use NLP and then train your people. When you come up with new products, ideas, promotions, etc. you work hard to provide systems, procedures, scripts and all the pieces your people need to be successful at implementing new programs. You develop a culture of innovation by requiring people to come up with new ideas without fear of reprisal for “bad” ideas that don’t materialize… And rewards for the ideas that do yield results. You ensure that your leaders all develop relationships with their team members because the most important factor in employee satisfaction is an employee’s relationship with his direct superior.
  5. The fifth piece is probably the hardest, yet most important. You fire, let go, or force out the people who don’t fit into your culture, vision, structure, or job descriptions. You get rid of the people who aren’t contributing to the team and culture immediately. The lost time and energy in trying to “fix” them can almost never be recouped. However, if you haven’t provided for them an environment to succeed (with all of the 5 pieces), you’ll really have no idea if they’re good or not because you haven’t defined the rules of the game, yet. If you’re the leader or manager, this is your responsibility. If your leader or manager isn’t providing this type of atmosphere, maybe you should read my last blog on moving on.

Obviously I just presented a whole lot of ideas and pieces that make up a complex problem in a rather succinct manner. The myriad links throughout this blog will provide additional details on certain topics, however don’t try to make this TOO complex. Problems that are TOO complex get pushed to the back-burner, avoided, and ultimately never solved. Take these 5 pieces at relative face value, work on each of them, and enjoy the results.

For further resources, I recommend the following 3 books to help you change your culture:

  1. First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham
  2. The Five Dysfunctions of a Team: A Leadership Fable by Patrick Lencioni
  3. Instant Team Building by Brad Sugars

To your culture-creating success, Bryan

P.S. Though it should go without saying, before you do anything else you should foster a highly ethical business environment. Without an ethical foundation, everything else will be overshadowed.

5 and 6 year olds taught me everything I need to know about great leadership…

Sorry for being a bit slow on the blogs lately. My 10-day, 2800 mile, cross-country motorcycle ride kinda had me preoccupied. Then of course coaching football to 13 5-6 year old boys has also cut into my 80 hour work weeks. 🙂  As a matter of fact, if you EVER think you’re a great leader, volunteer to teach 13 kindergarten and first grade boys how to play flag football… Teaching a handful of these kids in a classroom certainly must have its challenges, however football has it’s own nuances that the classroom does not. For instance its a physical sport and everyone knows a boy’s favorite thing to do is wrestle, tackle, push, and tease so having them go from that to learning something new is never a smooth transition. Additionally, each kid is learning something different and all at the same time. One is learning to be a quarterback another to be a running back another a wide receiver another a center. It’s actually more like the team in a business than in a classroom. Most importantly – You just gotta get all of them running in the same direction.

So here is a quick summary of the lessons my 5 and 6 year old players have taught me about effective leadership already (all of which apply to adults):

  1. Everyone has preconceived notions. I have one player who has older brothers and has obviously watched football on TV. He’s really fast and so a running back would be perfect for him. However this is flag football so running straight up the middle, like they do on TV, isn’t generally the best way to avoid getting your flags pulled.
  2. Work with what they can do and what they like. I have another player who is particularly rambunctious. Always goofing off, tackling other players, not listening, throwing grass etc. So I gave him a single objective on defense. Pull the player with the ball’s flag. He’s one of the 2 smallest players on the team and yet he pulled more flags than almost everyone else combined. He absolutely loved it and obviously I encouraged him every time. He got so good at it that he once pulled the flag of the running back before the quarterback had time to hand him the ball. The referee wasn’t real sure what to do and I couldn’t help but laugh.  So when I asked him what his favorite part about football was guess what he said? “Pulling flags!”
  3. Let them understand why its better for them to do something. The fearless player who runs up the middle does it because that’s what the pro’s do. So how do I get him to run around the other team to the outside instead? Well I can tell him to do so, or teach him why its in his best interest to do so. “OK running backs, what’s your goal?” “Score a touchdown!” “Great, so in which direction do we run?” “That way!” “Straight up the middle” “Yes!” “If you run up the middle do you think they’ll get your flags?” “Uh, yeah” “So since your so fast you think they could get your flags if you ran around them?” At this point you should have seen the excitement on his face. It was like the whole world was open to him and now he could score limitless touchdowns (those looks alone make coaching worth it).
  4. Give them structure. If you don’t have specific drills, specific breaks, specific plays, huddles, team meetings, key phrases (like “freeze!”), and some ground rules it’s chaos. Honestly my team is chaos. I’m still trying to figure out this structure thing. I like to think I’m better at it in business but now I’m not so sure… And that structure doubly applies to the dads who are helping out. They’re even more lost without specific instructions.
  5. Provide encouragement but don’t be too nice. As mentioned in #2 above you have to encourage, however if you don’t also discourage certain behaviors you have a riot on your hands. That’s my problem. I’m too nice (which makes me think I have the same problem in business). The kids need specific guidelines as to what’s acceptable (like your business needs Points of Culture) and when they’re out of line they need to have some sort of punishment (sitting next to coach and not participating is always a good one).
  6. Never assume everyone understands because you’re so great at explaining things. This results in kids running in the wrong direction. It has the same effect on your business, which is why procedures, position descriptions, scripts, incentive-based pay, Points of Culture and other VERY specific documents are necessary.
  7. Reward success. Kind, compassionate mothers everywhere are going to chastise me for this one, but if a child (or adult) drops the pass, fumbles the football, misses the tackle etc. you don’t give him a sticker. He’s not stupid. He knows he didn’t succeed so why would you confuse him by rewarding him? Now when he does well, you (as the highly respected coach) better be the first one to congratulate him!
  8. Do what you say you will. If you tell a team member you’re going to stop practice if they keep misbehaving, then stop practice. Threats without consequence carry no weight. Even a 5 year old figures that out real quick.
  9. Ignore the ignorable. My mom taught me this one. When a group of boys are sitting in the middle of a field they are going to throw grass on each other. It can’t be stopped. It’s an impossible force of nature that cannot be overcome. So ignore it. Often times there are things in our business that require the same selective ignorance… Not everything warrants our attention.
  10. You don’t know everything. Since I’m a nice guy, and not a brilliant coach, we took turns handing the ball off to different players to run. One by one each player got a chance. Another of the littlest guys I was a bit concerned about… I really wasn’t sure what he could contribute to the team and what I could encourage him to do. So when it was his turn to run he took off and ran for a touch down. His next rotation around he ran in for the extra point. In practice today we didn’t have any goal lines so he ran all the way down the field and back to me (the line of scrimmage) with no one catching him. I don’t think anyone has ever pulled his flag! Looks are deceiving. The shortest legs are not necessarily the slowest. Man am I glad I gave him a chance and, more importantly, so is he!

In First, Break All the Rules: What the World’s Greatest Managers Do Differently, Buckingham points out that you always do better by having people who are good at something keep getting better than having someone who is not so good improve. You build up his strengths and ignore his weaknesses. You don’t spend time trying to overcome his weaknesses. Granted, as small children they have a lot of growing and learning to do so what may be a weakness now could certainly become a strength later. However for adults, that’s almost NEVER the case. Adults love doing what they do best, will be proud of themselves when they do it, and will continually work to get better at it because of that pride. They’ll do even better with some encouragement and continual education from their leader.

Wait a sec – that sounds exactly like my 5-6 year olds. Let them play the position they love – some prefer running, others throwing, others catching, and others getting flags – encourage them when they do it well and they will make themselves better. And if you’re a decent coach and can help them learn what they need to do to become even better, then they’ll be immeasurably more excited with their new found knowledge. The team at your business works the same way. That’s why we have team meetings, regular reviews, benchmarks, reports on performance, commissions, bonuses, processes and procedures, scripts and a Team Leader (which I tell everyone is most synonymous with “coach”). My job as a coach (and team leader) is to help everyone do their jobs to the best of their abilities.

What’s your goal as a leader (coach) in your business?

To your success, Bryan

P.S. You know what’s most amazing? These kids taught me all of this in only 4 practices and 1 game so, so much for that MBA. 😀

Improve employee teamwork by picking a fight!

Ok, I didn’t exactly pick the fight on purpose… It just sorta happened because in my normal read-a-book-and-instantly-implement-a-great-idea method I didn’t bother to inquire of the team what they thought…

Anyway – maybe I was a bit over-excited about Sam Carpenter’s suggestion about PTO (Paid Time Off) in his book, Work the System… After all, as I stated before, that single idea was worth reading the entire rest of the book (yes, including his hippie woodstock stories). So why didn’t my team love the idea as much as me??? Did I present it wrong? Not explain it well enough? Not review the benefits clearly? Possibly I should have asked them to participate in the decision to implement PTO to improve team buy-in…

Possibly all of those… Or possibly none of those… Actually, it doesn’t really matter to me why they hated the idea. Let me explain.

First off, PTO is simply paying someone immediately for their vacation and sick time so they don’t have any “accumulated” sick or vacation days. In other words, if you pay someone $10 per hour, they earn 40 hours of vacation per year, and you pay them bi-weekly (26 times per year) then each paycheck will include a PTO Earned bonus of $15.38 (40/26*10). That means that they earn 1.538 hours of Paid Time Off per paycheck and multiplied by their hourly rate of $10 they have earned $15.38 hours of “vacation” that I paid them for immediately.

For my business, I loved the idea for a few reasons:

  1. Since people are paid ahead of time and generally aren’t great savers, the chances they can afford to leave the office and take a 2-week vacation all at once are pretty slim. When someone who is an integral part of the business takes such a long vacation all at once it hurts the business, stresses the team, and our customer complaints instantly go up. In theory I thought PTO would take care of that.
  2. We offered Sick/Personal days as part of a perk. That always seemed silly to me… How can I know how many Sick/Personal days a person will need at the beginning of the year for that year? And if they don’t “need” any then people feel obligated to take them which negates the whole point of a Sick/Personal day. It’s not meant as a day to just use even when you’re not sick since you have it available. With PTO if they take off a day, they don’t get paid since they were already paid ahead of time… So according to Mr. Carpenter, in his office absenteeism dropped 80%. Makes sense to me.

Lucky for me, the Team Building exercise the week after I implemented the PTO was a review of The Five Dysfunctions of a Team as taught in the book of the same name by Patrick Lencioni. Part of that was a review of the first rule being, “an absence of trust”. Without getting too caught up in the lessons of that book, one idea is that a team that trusts each other is not afraid to “argue” and bring up points of disagreement. It’s important that everyone brings up any frustrations or varying point of view during meetings so that an open debate can ensue and everyone knows that their opinion matters. That allows everyone to then buy-in to the final decision discussed whether they originally agreed with that or not. You see where I’m going with this?

I implemented PTO unilaterally. Some team members hated the idea and several others were indifferent. No one was on my side. :-/

So we hashed it out. I let everyone speak their mind and then I explained the 2 reasons listed above that were important to me as benefits that PTO provided. I then asked them to give me a better program or system for allowing the above 2 goals to be met without PTO. So they did. They suggested to adopt as policy that no one could take off 2 weeks of vacation at once and that no 2 people in the same department could take off a week of vacation each back-to-back during peak season. They also suggested that we just ditch Sick/Personal days altogether. Seriously – I never even hinted at that. Someone suggested it and I verified with everyone that, that was acceptable. Everyone agreed. 🙂

At any rate, we no longer have PTO, however we don’t have to worry about someone taking off 2 weeks in a row and we won’t have a problem with someone abusing sick/personal days. Moreover, the whole team made that decision together as a team so everyone bought-into the new policies and felt better about being able to reason with the Team Leader…

Maybe implementing PTO, even for its short-lived glory days of 1 week, was actually a brilliant idea… 😉

To your success, Bryan

The 3 basic leaders every business needs…

Imagine in its most basic form that for any business to truly excel it requires 3 main pieces. Picture a triangle with following at each point:

  1. Sales & Marketing
  2. Finance & Administration
  3. Operations & Service

Here’s the basic idea, without marketing you can’t sell and you won’t have any customers. Without effective operations and service you can’t install or service what you’ve sold. Without finance and administration you can’t pay your bills, issue paychecks, track if you’re making money, or if your margins are high enough to cover your overhead.

If your business has excellent leaders taking care of all 3 then you’ll be humming right along. Without even 1 piece, and your business will never reach its full potential.

As a team leader I take a portion of the responsibility for each one. Not necessarily because I have to, but because I enjoy it and like to think I’m good at it. 🙂 My leadership requires me to control marketing, handle financials and payables, and manage all of the numbers and systems. That means I have a few gaps to fill. My business still requires a Sales Leader and Operations/Service Leader. As a matter of fact, nearly any business that I’ll be involved in in the near future will require leaders with a passion for those areas of business. Eventually the goal is to find leaders for all aspects so I can completely step away or simply work on marketing and reviewing the numbers.

Let me explain more thoroughly. As a mechanical engineer, it’s no secret that I love numbers. Cash flow projections, margin calculations, break-even analyses, closing ratios and ROI evaluations are a few things that get me excited. 😀 On nearly a daily basis I’m creating one or more spreadsheets to help me track the proficiency of some area of my business in the hopes of finding areas of improvement. Those (and many other) numbers help me find, address, and then ultimately plug holes. Then as we implement changes the numbers again tell me if we’re going in the right direction or if we need to make a U-turn. Every business owner uses his or her “gut” to make decisions, but completely shooting from the hip will never allow you to make the most educated decisions. Additionally, as my aunt recently pointed out to me “You love to know how things work.” For that reason, designing and implementing systems for my business gets me pumped. Scripts, check lists, flow-charts, training materials and on and on are great fun for me. (As a matter of fact, this blog itself is a system of “indoctrinating” my team leaders without having to repeat myself every time.)

My other talent and passion is marketing. Without getting into too much detail, cross-marketing, up-selling, sales scripting, back-end sales, and the like are all areas where I focus a good deal of my time. As Michael Masterson pointed out in Ready, Fire, Aim: Zero to $100 Million in No Time Flat (Agora Series) a Stage 1 business’ main priority is sales. If your business doesn’t have an efficient system for generating leads and closing sales then you probably have a lot of room to grow. Which probably also means I’d be interested in buying your business. hahaha

So what do the 3 pieces to the business triangle mean?

  1. This is about the most basic way to create an organization chart for your business to make sure you’re taking care of the crucial aspects of leadership.
  2. If you’ve read my last blog and are still a little fuzzy on how you could fit into the picture as one of my team leaders this should narrow down the passions my leaders will need.

For example, if I’m looking to buy an oil services business and you don’t know a thing about sales, marketing, finances, administration, or systems BUT you know how to lead people and are passionate about the service and operations of customers in that field, then you have the potential to be the Service and/or Operations Leader.

If you have the ability to sell and you have the talents and motivation to teach others how to sell, you could be a sales leader for almost any business regardless of what you’ve had experience selling before.

However, that thinking is a bit backwards don’t you think?

Before we delve into why that’s backwards, let me quickly reiterate why I keep saying “Leader” instead of “Manager”. My main goal as a Team Leader is to enable all of my team members to do the absolute best that they can at their jobs. Leaders lead people and managers manage resources. To fire on all cylinders, the main leaders of a business need to not just tell someone they aren’t performing up to standards – they need to be able to lead them into improving themselves. James Rhome, I believe, was the one to say “Work harder on yourself then you do on your business” and the same is true for your team members. A leader is willing to invest in her team and gets excited when someone improves. Leaders with a passion for and ability to positively communicate with their teams are the people I’m constantly searching for.

Since my strengths are Finance and Administration its my contention that with the proper Sales and Operations leaders we could grow any business. Conveniently for me, calculating profit margins, closing ratios, lead sources, or creating systems for phone scripts etc. etc. etc. are almost exactly the same for every business everywhere in the world. So with a little adaptation to a few spreadsheets I can quickly get all of the important numbers from any business. However, without a sales leader and operations leader I can’t effectively make the changes the numbers tell me I need to make.

For that reason, my approach to buying businesses is shifting. My first goal is to find the 3 main leaders I’ll need (usually it will be 2 since I can handle Finance & Admin with a bit of help) and THEN I’ll find the business that would allow all of us to excel at something we’re passionate about. That is why I’m completely vague on what businesses I’m researching, evaluating, and looking to purchase in my blog – If you have the ability to be a top-notch leader of service or sales, I’ll find a business we can excel in together.

“The only failure is the failure to participate.” – Brad Sugars

To your success, Bryan

The toughest thing in business??? Working for me? :-)

It’s funny. The question I get asked possibly the most often when I talk about buying great businesses to build and sell is “How do you find them???” Interestingly, that’s probably the easiest part. A few weeks ago I bought a motorcycle and the guy I bought it from had some contacts with business owners. So we start talking business since he’s also a young entrepreneur. I tell him a bit about my business philosophies and he takes off. Less than 6 hours later as I take a brief break from riding my new motorcycle he calls me –

“Hey, were you serious about buying more businesses?”

“Yeah, of course, what do you have?”

“My uncle is selling his and he’s standing next to me. You want to talk to him right now.” As I’m sitting on the side of the road straddling my motorcycle I think for about a split second.

“Yeah sure, put him on.”

So hopefully this week I’ll be evaluating that business. More and more have popped up. Almost every week someone calls, emails, or tells me about another business for sale. They’re all over the place. All you have to do is start asking and telling people what you’re looking for. It really is that simple.

Alright since the Buying part of Buy, Build, Sell is easy and, as of yet, I can’t give you any real world experiences with Selling, what’s the toughest thing? Building the business takes a lot of time and work however for the most part if you follow some basic formulas (all of which can be found in the books by Brad Sugars, Marcus Buckingham, and Michael Masterson) the building part can really be broken down in to small, manageable chunks. Things like developing systems, scripts, a niche, a Unique Selling Propostion, improved marketing, Points of Culture, incentive-based pay, cross-marketing, back-end sales etc. etc. etc. are all pieces to the Ethical Business Building puzzle that are relatively easy – they just take time. If you disagree, ask yourself if you’ve truly made the commitment to work “on” your business every single day instead of just “in” it.

Now, if your goal is to own more than one business or to be able to step away from your current business to experience other adventures in your life, you need a Great Manager – excuse me, I mean Team Leader, for each business. Its been told to me by several millionaires (I’ve met so many I can’t recall which) that wealthy people rarely invest in a great idea or product – they invest in the people behind the idea or product.

The book, In Search of Excellence: Lessons from America’s Best-Run Companies (Collins Business Essentials) repeatedly points out how “excellent” companies like Hewlett-Packard, Texas Instruments, and 3M have learned through years of trial and error that great ideas die. Texas Instruments did a study that found out that EVERY product that management thought was a great idea that died on the vine had one thing in common – they all had team leaders who were appointed by management. Whereas all the great (i.e. profitable) ideas were started and followed through by teams of people who were led by at least one person who either came up with the idea or who had a great passion for it and approached management with it. At 3M their entire business model is designed around the concept of making your idea work against all odds. There are all kinds of stories and tales of Presidents and Vice Presidents of 3M divisions who were told 2 or 3 or more times that their idea wouldn’t work, but they kept persisting – often working after hours and on weekends – to make their idea successful.

So why is all of that important to Building your business? Well, if you can’t find someone who believes as strongly in your business as you, then how can it ever reach its full potential without you? Granted, if your exit strategy is simply to sell the business and go onto another then you won’t need that great Team Leader since that’ll be you. Keep in mind, that each area of your business – Service, Sales, Operations – needs someone to effectively lead. In my business I certainly can’t be the one to do all of that and so I stick to Operations and leave the Sales and Service up to other Team Leaders. Actually at the moment, I’m working to recruit a great Service Leader.

My bigger goal is to ultimately own lots of businesses. Possibly 2 or 3 or 8 at once. To do that, I need great Team Leaders. This blog is my opening for recruitment.

If you want to learn from and with me on how to Buy, Build, and Sell businesses and you’re willing to relocate to somewhere in New Mexico or Colorado here is your opportunity. 🙂

To work with me, the most important things are strong moral ethics (reference my Points of Culture), passion, communication skills, and intelligence. If you have those, experience, education, connections, age etc. etc. etc. become secondary.

If you do possess those qualities, I promise you’ll have the opportunity to work in an exciting, ever-changing atmosphere where we’re always learning something new (reference the Team Building portion of my What would someone pay to learn from you blog). You will be challenged and be held responsible for your performance. If you perform well, you will be paid exceedingly well (reference my blog on Never Paying an Hourly Wage).

Consider this for a moment. Right now I have plenty of business buying opportunities and few Team Leaders available to run them. I am acutely aware of that and will NOT buy another business without first having a Team Leader in place. In your current job does your boss, manager, owner or anyone appreciate, trust, and have the willingness to invest in you that much???

Another potential benefit of working as one of my Team Leaders is the opportunity to buy the business that you lead. What better, quicker, low-risk way to enter the world of owning your own business? Just thinking about working with some new Team Leaders gets me pumped. Developing my team members into being the best at what they do is probably the most exciting part of my job! If that also excites you then send me an email at bryan@ethicalbusinessbuilder.com.

To your success with me 😉 , Bryan

Never pay someone an hourly wage!

Particularly if they’re full time. A while back I wrote a blog ranting about how lawyers billing by the hour is not at all customer-focused. What’s even worse is encouraging each lawyer in the firm to meet certain targets for billable hours. How in the world does that encourage them to provide the best service for the customer??? I’m aware that “high-end” accounting firms work the same way so I’m not just picking on lawyers cause I don’t agree with how those accountants bill either.

Now the irony of the situation is, I currently have 5 hourly team members. Not only are they hourly, they also all have overtime available. Let’s think about this for a second, what does paying someone by the hour and more for overtime encourage?

  1. To do as little work as possible to fill up the first 40 hours.
  2. To work as many hours of overtime as possible.

So which one of those is beneficial to the customer? Uh, right, neither. And why in the world would I pay someone by the hour? Well, in my own defense, the pay structure was already setup before I became involved. Ok, since I hate to discuss problems without offering solutions let’s look at some other alternatives.

Before determining any pay structure, you first need to determine what will make that person a profitable part of your team. In other words, determine what Key Performance Indicators are most important for that position and then incentivize ALL of them. No matter if that person is a secretary, accountant, engineer, or middle-manager, if you can’t tie there productivity to some form of revenue generation or cost-cutting, at least make them part of a company-wide profit sharing. Keep in mind, you can always bonus people for showing up on time, not taking sick days, finishing projects on schedule, etc. etc.  So even if they “need” a base salary or hourly wage, a significant portion of their income should still be performance based.

When I determine Key Performance Indicators for a position, I start with what would make that team member provide the absolute best service for the customer while still remaining profitable? In other words, even though the customer would love it, providing free service probably isn’t a great plan.

Let’s look at a few possibilities for service technicians/installers. A few ideas that come to mind as great service are the following:

  1. Fix any problem the first time every time.
  2. Show up on time.
  3. Dress professionally and smell pleasant.
  4. Explain the issues to the customer’s satisfaction.
  5. Bill appropriately for top-quality service.
  6. Exceed the customer’s expectations in some way…

And don’t forget that we have to do all of this and remain profitable.

  1. Pay commission based on the revenue he generates instead of by the hour or salary. This encourages him to not dawdle between appointments since he’s not getting paid for that time. In other words, he’s encouraged to get there on time.
  2. Have him handle call-backs himself (since that won’t generate any revenue) or if another technician needs to correct the problem give them credit for the original revenue generated.
  3. Only pay commission when the customer pays. – If they explain the issues appropriately, smell good, and dress professionally they’re much more likely to pay quickly and hopefully at the time of service. Remember the plumbing company that marketed that “all of our plumbers where belts”?
  4. Drop off a candy bar, have someone follow-up with a phone call after service, or something equally “unique” to exceed their expectations. Be creative. I’m still trying to work this out at my business, but I’ll keep you posted.

In other words, encourage each technician to bring in the maximum amount of revenue each day while not creating many mistakes. Doesn’t that sound a LOT better than paying someone by the hour? Since 2 of my technicians are leaving and the girl in the office will be going full-time this summer, I’ll be sure to let you know how the new incentive program works for us.

Keep in mind, to get everyone on your team to commit to such a program, it’s paramount that you show them that as long as they’re doing their job well, they’ll actually be making more money while working less hours. If they can bring in more revenue in a 40 hour work week then they’ll make more money than if they worked for overtime. As the Team Leader, you need to figure out what revenue they’ll need to bring in each day, the average revenue per service call, and the average # of service calls they can complete each day to determine how much money they will make. If you have a great service tracking software then even figuring out exactly how much the technician would have been paid with the commission-based system over the last year should be a cinch. It’s also important that your Service Leader ensures that your technicians have enough work every day as well as efficient directions to get to each service call. Obviously he should get paid a commission on the total service department revenue as well.

My list of great service is purposefully short. Without a doubt, you and I will come up with lots of additonal items that are important such as minimizing workman’s comp, not wrecking trucks, keeping accurate track of truck inventory, etc. etc. etc. My challenge to you (and myself) is to figure out a way to incentivize every possible positive thing whether its on a weekly, monthly, quarterly, or annual basis.

My last thought: Why punish what you don’t want your teammates to do when you can reward what you do want them to do?

To your success, Bryan

Leadership – What would someone pay to learn from you???

In my experience meeting hundreds of business owners, 2 stand out as extremely unique. In a sentence, Bob Reiss and Steve Dickerson are probably the only 2 businessmen I’ve encountered who I would carry their briefcases around for a year for free. I would just download as much information and as many lessons from them as I possibly could. It occurred to me that I when I’m leading people, I want them to feel the same way about me. What can I do so well and so fluently that someone would actually pay me to learn it???

Well it better be whatever I’m doing to lead my team. Think about it for a second. Consider you’re hiring someone new. They’re young, inexperienced and considering whether to enter the job market or go to school full time for business. You’re the team leader for your business, right? Would that person learn more from you or from her professors at business school? Will they learn more from the other business owner down the street? Why can you teach them more? What about your service leader and office leader? Do they all have something to offer each of their teammates?

Let’s face it, if you aren’t so talented at what you do that you can teach a class on it and people would pay to learn from you, then you probably need to start investing more time in yourself. James Rhome used to say “Always invest more time in yourself than in your business.” Doesn’t that make sense?

Here’s another way of looking at it. If you’re team has so much faith in you that they would pay to learn from you, imagine how enthusiastic they’re gonna be when you thank them for their hard work every time you hand out their paycheck.

In case you haven’t noticed from my blogs, I’m a bit neurotic. I can’t stand not doing something to the best of my ability. So if I’m going to create the best marketing or sales system for my business, you better believe I’m going to read dozens of books, blogs, articles and ask my colleagues about those topics. However, as much as I love to learn, I’ve learned that it’s much more fun to teach others. If you want to see your teammates light up and get actively engaged in growing your business, start teaching them new things. Start helping them shape their ideas into effective parts of your business. Start showing them how their contributions are making a difference by measuring the results. And most important of all, reward them for what they’re doing. My next blog will be about why I will never pay a full-time person an hourly wage which is related directly to what we’re talking about now.

I previously mentioned that no one wants to suck at their job. Quite to the contrary, everyone loves to go home to their wife, husband, mom or best friend and tell them how they had this great idea that helped improve the business. In my business, if I’m working with someone who has been on the team less than 6 months or more than 20 years, it amazes me how hungry they are to both learn and be challenged. We all want to brag about how much fun our job is because our team leader gives us so much “freedom.” The interesting thing about “freedom” is that if everyone is part of a team, they start to worry less about doing it “their” way and instead appreciate what’s best for the team. However that only works if you walk the walk. 😉 When I implement a new policy, incentive, marketing program, etc. we discuss it at the team meeting, get some input and run with the idea. Everyone seems to feel apart of the team instead of me just dictating this is how it should be. Keep in mind, that if everyone on the team respects my talent for marketing or leadership so much that they would pay me to learn it, then maybe what I suggest in the meetings carries a bit more weight… Maybe not… lol Time will tell. 🙂

If you need incentive to keep yourself on your toes and always learning and teaching your team, implement a Team Building portion of every team meeting. That’s the point where you educate your team on some of the great ways to communicate with customers, improve themselves, and be an effective part of the team. In our last team meeting I introduced Neuro Linguistic Programming (NLP) and it was so much fun! One of these days I’ll summarize my NLP lesson into a blog or 2 for you to help build your team.

To your success, Bryan

Polarizing your company’s culture

In our team meeting 2 weeks ago I introduced our company Vision, Mission, 13 Points of Culture and Company Philosophy. I hadn’t intended to review it with the team as quickly as I did (our 4th team meeting) however we had some issues that required me to be much more specific than “lying is never an option” as I had emphasized at our first team meeting. The details of the incident really aren’t important – basically we just told a customer one thing and did something else. Obviously we corrected that and so it is my responsibility as the Team Leader to lay out for them in black and white EXACTLY what is expected from the team.

You may reference my previous blog, “Your company has a culture, did you choose it?” for the first 12 points of culture and I recently added another point emphasizing safety.

The first week I just handed out a copy of the Vision, Mission, Culture and Company Philosophy to present the concept of each and then allow them a week to “mull it over.” My teammates ensured me that while they had down-time they were reviewing the points and a few questions came up that hopefully I clarified to their satisfaction.

At the next team meeting, a week later, I reviewed each point with a quick synopsis. At this point my goal was to ensure everyone was familiar with the points and knew exactly what our team was about. The 2 things that amazed me most about what happened after revealing the points of culture were:

  1. The number of times I referenced a point of culture with a teammate. – In the first meeting when I was explaining the concept of “Points of Culture”, our most senior technician spoke up and said he’s had an issue at times with pride that prevented him from asking for help when he really needed it.  I immediately got a big smile and said – take a look at #7 on the list “We understand that every person we encounter has something to teach us and so will learn from everyone around us.” He just laughed and whole-heartedly agreed. Throughout the week, I was working on reviewing our “12 Questions” employee review surveys courtesy of First, Break All the Rules: What the World’s Greatest Managers Do Differently, and in every single performance review meeting I referenced at least 2 points of culture. I never planned to bring up the points in our meetings, they just happened to explain something that my teammate and I were discussing.
  2. The enthusiasm with which everyone embraced them. When I reviewed all of the points of culture one-by-one, I made it clear to the team that in companies where a culture as specific as this is created, not everyone fits. I went as far as to say that I hope this doesn’t happen, but I’m prepared for people who just don’t agree to move on. For me it is extremely important to let them know that this isn’t a game or some feel-good lovey, dovey BS. Everyone on our team has a job to do and the result of that job can be boiled down to black and white. For me, my responsibility is to make the business more profitable. If the bottom line doesn’t improve, then everything I’m doing is a waste. With that being said, of the 4 people I sat down with to have performance reviews all 4 of them said “Bryan, I agree 100% with what you’re doing and I think it’s great for the company.” And I believe that they were all very sincere and excited about what’s to come.

So how does the bottom line look after only 2 weeks of improved culture and a dedicated focus on our service department? Well the “black and white” performance measurement that I use in our service department is the average revenue each technician brings in each day. I know what my daily break-even is for each technician and so I have a target reasonably higher then that. On average, in January thru April 2008 we were losing money each day in our service department. The first 2 weeks in May represent a 60% increase in Revenue/Tech/Day over the average for the first 4 months in 2008. 🙂  Now, in the interest of full disclosure, I do still have to figure in the alotted revenue the service department receives for each new install since my numbers only reflect revenue generated from service. Nonetheless, with a 60% increase, I think we’re on the right track!

Additionally, 2 of my technicians are moving on to greener pastures. One to make 3-4 times more money then I can offer (though he did admit he wishes my programs were in place for longer since he knows they would have helped him do better at his job. He also went on to say that if he could choose his boss, he’d be exactly like me. lol I just had to throw that in.).  The other stopped showing up for work before I ever had a chance to review our Vision, Mission, Culture. There seems to be some bad blood between him and my partner that I really don’t plan to get involved with.

One of my main goals with developing a company culture is to polarize it. Nordstrom’s is famous for creating a culture where you either love it or hate it. According to one of Jim Collins’ books, people who are hired are there either less than 6 months or more than 10 years. There is no middle road. There is no luke warm. You’re either a part of the team or you’re not. That’s the kind of culture I want for our team!

Have you or can you develop that for your team?

To your success, Bryan