Electricity can be a great metaphor for a lot of things – as a business owner, it’s a great way to describe the entrepreneurial spark that powers your business.  It can be a blinding flash that makes a lot of noise or it can be a powerful steady thrum that consistently drives your business forward.

What’s the difference between the two?  In a word – grounding.

Benjamin Franklin initially invented the Lightning Rod in 1749 as a way to tame powerful electrical discharges (lightning) by shunting it to a natural grounding circuit (literally the ground of the planet).

As a business owner – it’s important to have grounding of your own, a way to keep things under control and not burn out!  What keeps you grounded?

The Thanksgiving holiday just passed here and I had an opportunity to spend a lot of time with my extended family.  If your family is anything at all like mine, they don’t really care what you do, what great ideas you might have or all of the day to day worries you’ve got from running your business.

They’re way more interested in learning about how the kids are doing and if you’ve been up to anything interesting lately (outside of work).  It’s a great reminder about what’s really important and for me it was a refreshing perspective that life goes on outside of what you’re building and if you’re not careful you just might miss it!  (Thanks Ferris!)

What keeps you grounded as you’re working in and on your business?  Have you taken the time to get some new perspective on what you’re doing in the grand scheme of things?  Share your thoughts if you think it’s important to be grounded (or not important at all….I know plenty of people that don’t buy into the idea that you need to be grounded and would argue that it’s holding you back).

Shawn Kinkade   Kansas City Business Coach

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As a business owner, you always have choices on how you run your business.  It’s not unusual to see a taskmaster chewing out their employees and running a tight ship.  You will also find those businesses that are run with encouragement and a high degree of compassion.

The cynics out there will sneer at the power of positive thinking.  It’s all about profits and the bottom line and there’s no room for fluff and nonsense and making people feel good.  These employees are grown-ups, if they can’t handle getting yelled at, then they need to go somewhere else!

On the other hand, the uber-idealists will tell you that all you need is love (or maybe that was the Beatles) and as long as people are happy, the results, the bottom line doesn’t matter.  It’s okay to spend more than you have if it means helping people out and giving them what they want.

Clearly these are extreme examples, but directionally what is the better answer?

Let’s start by taking a look at our very own Kansas City Chiefs!

Haley turns Positive!

There’s an interesting take on this in Jason Whitlock’s article today:  Chiefs coach Haley shows how far he’s come .  For those very few of you that don’t know, the Chiefs aren’t a very good football team right now (and haven’t been for several years).  Their first time head coach, Todd Haley has generally adopted the approach of the no-nonsense highly critical manager who yells at his team and his coaches…a lot (maybe not as much as they do in Lawrence…but still a lot). 

However in yesterday’s game against last year’s Superbowl Champion Pittsburgh Steelers, Haley went out of his way to be positive and encouraging…and they won!  As Whitlock put it:

Haley coached an excellent football game. He concentrated on play-calling and encouraging his players. He left the refs alone. He didn’t overreact to the mistakes made by his players.

Good things happen when you expect positive results, when you put your mind in a positive place, when you treat the people fighting with you like they have as much invested in the outcome as you do.

Did the Chiefs win because of a positive attitude?  No.  However it’s likely they performed better, and they were able to bounce back after getting behind because they weren’t drowning in negativity.

As a leader, it’s your job to inspire and pick people up.  Yelling and negativity might have a short term effect of driving results, but in the long run it will work against you.

Example 2 – Positive Company Approach

I had the opportunity to do some Social Media training for a local company last week and I was really struck by how they ran their business.  This was a company that was investing serious time and money into their lower level employees – not on job specific skills, but on broader leadership and management training and awareness that would really help them see the big picture in the long run.

Additionally, you could see a real culture of working together and helping each other out.  The employees genuinely enjoyed working there, they appreciated their opportunities and their turnover was very low.

The kicker?  This company is growing so fast that they are struggling to find enough good people (in this economy).  Is that all due to the positive environment?  No – but I can tell you that it certainly helps!  These are employees that will do what it takes to help the company succeed – because they want to, not because they have to.

What kind of environment have you built around your business?  You can believe in the bottom line and still treat people with respect and positive reinforcement.  You may not get the quick response you get with yelling and screaming, but you’ll certainly get a better one – especially in the long run.

Have you seen any great examples of really positive (or really negative) companies out there?  I’d love to hear your thoughts – share them below.

Shawn Kinkade   Kansas City Business Coach

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photo by lepiaf.geo

The continuing evolution of the internet has changed a lot of things – how people communicate (Facebook, Twitter), how they establish expertise (blogging, answering questions, wikis) and how business is done (online presence is mandatory now).

What’s really exciting is that social media and the internet has generated a lot of cool new businesses and business models.  Business models like Threadless – a t-shirt design studio that’s completely driven by fans and users in terms of what t-shirts get made and sold (and they’re selling millions of them!). Or Woot! – a deceptively simple site that sells 1 product per day until it sells out or runs out of time.  It’s popular enough to have turned into a phenomenon on it’s own.

The latest fresh business model that I’ve seen is Groupon (a combination of Group and Coupon).  They just made it to Kansas City earlier this week.

Groupon is a local based ‘deal’ site that offers 1 deal per day for your city.  Typically the deals are 50% off or even more…however there’s a catch.  The deal isn’t ‘on’ unless a minimum number of buyers sign up for the deal that day.  So if you see a deal you really like, it’s in your best interest to promote it out to your friends via all of the easily available social media channels.  (You have to love that built in viral component).

As a business owner, why would I do Groupon?

Overall it’s a fairly low risk situation – you get to decide what the cutoff is for your deal – if you feel like you need 50 buyers to make it worthwhile, you can set the cutoff at 50.  Once Groupon is more established (they only have 105 followers in KC right now on twitter @grouponKC, but I’m sure that will grow) – it will be a great way to get exposure to new potential customers.

Even more interesting – based on Groupon’s research, most customers spend 60% more than the value of the coupon and most participants are first time customers (I don’t know how they know this, but it’s interesting…).

Obviously you’re paying to advertise if you decide to sign up with Groupon, both with a discount and a cut to Groupon (they don’t say how much their cut is) but wouldn’t you generally rather give more of your advertising money to your new customers rather than some 3rd party?  Plus – let’s face it, old school advertising isn’t exactly knocking it out of the park these days in terms of effectiveness.

Don’t stop with Groupon!

Groupon only takes 1 deal per day – but there’s no reason why you can’t take the same idea and run your own variation of a groupon to drive in traffic or pick up new customers.  If you wanted to be more sophisticated, you could partner with a few other complimentary businesses (or maybe do it as a shopping center) and setup a page that’s a deal of the day / week and feature one of the partners and promote it via social media.

Or you could copy the Sprinkles model (high end cupcakes, coming to Kansas City soon) and offer daily freebies to visitors that are fans on Facebook or Twitter.

Obviously this works best with Business to Consumer types of businesses, but you’re only limited by your imagination!

What fresh business idea have you seen lately?  Will you particpate in Groupon?  Share your thoughts below, I’d love to hear them.

Shawn Kinkade  Kansas City Business Coach

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Are you a hero in your business?  Are you out there applying your super heroic selling skills, delivery abilities or micromanagement ‘gifts’ in order for your business to thrive (or survive)?

Do you take special pride in your ability to fight the fires and the chaos that surrounds your day to day operations?  Are you especially proud of your creative way to get things done right at the last minute – knowing you are the only one that could pull off delivering the customer’s expected results…or that you were the only one that could close the deal.

If this describes you or maybe one of your key employees, then you are slowly killing your business, headed down a path that far too many businesses end up on.

Here are 5 reasons why you need to stop being the Hero for your business!

Why you can’t afford to be a Hero in your business

Reason #1 – it’s not sustainable

As the Hero in your business, you’re working long hours and all of the important stuff must go through you.  But what happens when you’ve kept up that pace for 2 or 3 years and you come down with a nasty flu…or you fall off a ladder…or you get hit by the proverbial bus.

If you’re really the Hero and the only one that can get things done, then your business is going to shut down when you’re not there.  And there will come a time when you’re not available…it’s not a matter of if, it’s when.  You might be able to have things come to a halt for a few weeks, but what about the next time?

Reason #2 – it’s not scalable

It’s a sad and unfortunate truth that there are only so many hours in the day – even for the Hero.  When you first start out, 10 or 12 hours a day might be enough for you generate a good revenue stream.  Things are going well – you’ve got a good reputation and your heroics are making your customers happy.  You’ve got some opportunities to grow!

So you start working longer hours, weekends become a great opportunity to work even more just to keep the growth going.  You hire some extra help, but they can’t do what you can do and just cause you to work even more to make up for their lack of not being you.  But there’s only 24 hours in the day – at some point, even if you don’t break down or snap, you will literally run out of time and be unable to grow any more.

Reason #3 – It’s not transferable

One of the biggest reasons to own a business is that not only do you have a chance to generate income, but you also have the opportunity to build up equity in the business that you can take advantage of when you sell down the road.

As the Hero, you are responsible for generating most of the revenue in the business…but when you sell the business,  you’re not going with it, and without a Hero to plug in, the business isn’t going to generate much revenue…which means it’s not worth much.  In some more extreme cases, the business may not be worth anything without you – the Hero.

Reason #4 – It’s not consistent

You can only be in one place at any one time, but it’s pretty likely that you have more than one customer.  And even though you are driving all of the key decisions, it’s pretty likely that others will have to be involved, which means that they will do things differently than you will.

Even if that’s not the case, as the Hero your best weapon is your ability to creatively freelance solutions.  That means that you’re delivering things differently every time and while variety is the spice of life, your customers have expectations on your consistent delivery in all aspects of your business.  Whether it’s you or your employees that are creatively coming up with new ways to do things, you’re not going to be consistent and that will cause problems.

Reason #5 – It’s not fun

As much as you might celebrate your heroic efforts, it won’t take too long before the long hours, really hard work that never seems to end and the constant pressure of having to do everything yourself is going to wear you down.

It’s fun to deliver a great product (or service), make money and have lots of time to strategically guide your business and take time off.  It’s not fun to constantly be on call, fighting fires and never having a chance to take a deep breath.

What’s the alternative to being the Hero?

I’ll cover it in more detail in future posts, but the baseline alternative is implementing systems and procedures for all aspects of your business.  Working hard (up front and one time) to make sure that your products or services are delivered with minimal input from you as the owner.

So are you being a Hero in your business?  Are you convinced that you need to stop being the Hero?  Share your thoughts below – I’d love to hear whether you’ve spotted any Heroes lately.

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As a business owner, when you first start out you create some sort of vision of success.  A vision that’s compelling enough to get you to take the big leap, leave your job, take the risk…whatever it might be.

That vision usually has a money component – ultimately you want long term financial independence (what ever that might be for you), and you also want to make good money along the way (be well compensated for your efforts above and beyond the hours you spend). 

Most business owners would like a certain amount of freedom and flexibility relative to their time – you know you’re going to work a lot of hours, but if you can have some say as to when those hours might be, that would be great.

Finally – as a business owner you’d like to be doing something you believe has a larger purpose or is at least interesting…and you’d like to carve out some time to hang out in a hammock by the ocean every now and then!

Unfortunately for most business owners their vision of success gets lost somewhere along the way.  That’s why I found it really refreshing to hear some friends of mine talk about the business success they had achieved in the last couple of years.

Reaching success isn’t easy

We were at a dinner thing over the weekend and I had a chance to catch up with a couple that I’ve known for over 15 years.  As a couple they own a franchise business they opened almost 7 years ago.  Because they were worried about making ends meet, only one of them made the leap from the corporate world at first, with the other one continuing to travel and work a high paying (and high stressing) corporate job.

Although they purchased a quality franchise, it was a business that required a lot of up front capital which meant they had a lot to lose if things didn’t work out.  They both put in extremely long hours for the first several years, learning the ins and outs as they went and struggling through the start-up years that pretty much all business owners go through.

It hasn’t all been sunshine and roses, but about a year ago they decided there was enough revenue in the business for them both to work it as their sole full time job.

When I asked them how it was going, they quietly mentioned they were down to working only 3 or 4 days a week.  They had reached a big part of the success they envisioned 7 years after they took the plunge.  They’re making good money, they (now) aren’t working crazy hours and they’re continuing to build long term value for if and when they decide to sell sometime down the road.

How did they reach this success?

It has taken them 7 years of very hard work, but they also were smart about how they built up the business.  I don’t have all the details, but here are some keys that I’ve seen them focus on.

The customer comes first – they’ve done a great job making sure that their customers were happy and impressed with their service.  Word of mouth is their primary marketing strategy and it’s worked well for them.

Hiring the right people – because of their extensive corporate experience, they both had a lot of experience when it comes to interviewing and they developed extremely stringent hiring processes that minimized employee mistakes.

Watching cash flow and finances – every couple of months they would go through their expenses and overhead and cut out whatever they could.

Putting in systems and optimizing where ever they can – they have a strong focus on designing and documenting all of the processes that make the business run…so it can run without them.

This isn’t a complete list, but if you’re doing the 4 things above, you’re likely having a lot of success as well!

Where are you when it comes to finding your vision of success with your business?  What keys are you focusing on?  Share your thoughts and let me know how you know when you’ve reached the next plateau and what you’re doing to get there.

Shawn Kinkade   Kansas City Business Coach

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