Is Your Business Under-Capitalized?

If you operate a small business in a competitive arena, your business is under-capitalized.  Somehow this statement is so difficult to understand.  Your business is under-capitalized.

I repeat that statement, again...your business is under-capitalized.

A statement made like this one is worth a lot of debate, but it still does not eliminate how your business is under-capitalized.  It is under-capitalized.

Now that we know what problem your business is facing what do we do about it?

We treat your business like it is under-capitalized.  That is what we do.  We do not get crazy or loose about how we "materialize" expenses.  We see deeply how governments make this silly mistake.  They see a problem, "materialize" the money that is needed to solve the problem and then they begin working to manufacture how the problem needs to receive its repair.  Your business will fail if it practices these steps to try and succeed.  Period.

Working your business from this type of approach will only run your costs up beyond what the revenues can support.  You can operate in this fashion for a very long time, but the pain you must endure to survive your debt management methods will eventually wear you and your supporters down.  Your business model will never feel like a good business, because it is not.  Manage your small business as if it is under-capitalized, because it is.

Your great ideas are likely larger than your wallet can afford.  there is nothing wrong with thinking big.  Big thoughts help you to generate good dreams that are wonderful benchmarks for the aim you place in front of your business work.  You need to think big.  You need to practice dreaming big.  You need to build a business model that plans to solve big problems.  Good businesses do those kinds of things.  Big businesses do those kinds of things.  It is necessary to think big if you want a big business.  By all means, think big...try to solve big problems with your business model.

However, thinking big and spending big are two completely different responsibilities.  Do not spend big because your thinking operates big.  Spending is governed by what you can or cannot afford to do.  You must spend little as you think big.  Get used to this idea.  It will always be one of the most important aspects you inject into your business model.  "Tight-wads" build good businesses.  Become a very tough 'tight-wad.'  Watch your pennies, not your millions.  If you do not steward a dollar bill well, you will not accidentally steward a million well.  The stewardship process of one is exactly the same as it is for the other.  The amount has nothing to do with the beauty of practicing the process correctly.  Managing money well is a process.

Your business model will need you to pay closer attention to the money than anything else you do successfully.  You need to respect your business model well enough to accept that it will operate its problem solving efforts as a small business that is under-capitalized.  You will need to become very creative in how you spend money to develop the machinery your business manages.  Learn how to accept this truth and learn how to love the frustrations this process will deliver.  Learn the art of how to make your under-capitalized business a fun challenge to manage day in and day out.  Then one day you will look back upon the trail your business made and discover how large it really is.  You need to understand how this concept will be the main concept you practice and manage.  It will be one of the key components to your business success.

Steward your spending with tightly closed gates while opening up the mental gates all the way to your big dreaming.  How you manage these two processes will likely determine how successful your business becomes.

Is Your Business Model Careful?

Your Business Atmosphere

The atmosphere of your business leadership will govern how the attitude of your employees is constructed.  Your employees are the front line of defense to your customer relations.  Any weaknesses your business model carries will need to be protected from the potential damage those weaknesses generate in the experience your customer feels.  Your employees can go a long way into making those weaknesses become invisible.  If your business model is not a fun place to work, trust me, your employees are making that very clear to your customer base.  Quit expecting your employees to be perfect human beings with the wish that they would somehow save your butt.  You may not like the relationship you have with the sensitive responsibilities your business model requires and it may seem as if those requirements are like a steady balance of walking fast in a narrow canoe.  Whatever the case, the goodness in your business model atmosphere depends heavily upon your careful respect.  You need to learn how to walk more carefully.

Your business model sings well when it knows how to sing.  It also gets burned on the edges when it has material worth igniting.  When the leadership of your business model decides to be fun, respectful, consistent, exciting, challenging, rewarding, dynamic, unique, interesting, tender, honest, reliable and truthful; the minds of its employees will be fun, respectful, consistent, exciting, challenging, rewarding, dynamic, unique, interesting, tender, honest, reliable and truthful.  Your employees will reflect to your customers how their leader behaves.  Employees are like children, they mimic their leader like a mirror.  If the leader shows up late three times per week to scheduled meetings, the employees will follow suit.  They will show up late, also.  Employees do not care who is in charge.  They only care how equal they are being treated.  Employees want one standard of treatment.  They want to know what is safe for them to get away with when they perform their work.  It gives them the sense of freedom they feel they need to express.  By all means, provide it.

Be careful with your business model.  Allow your employees the right to exercise the need they have to express their freedoms.  Your business atmosphere relies upon the energy your employees bring to the model each day.  If your model is a boring place to go to work each day the atmosphere of your model is drab, unexciting and will not produce great volumes.  Your employees will see to it.  They will express exactly what the atmosphere is doing.  You cannot stop them.  The human senses are too sneaky to harness and control.  Quit pretending your employees are saying, doing and behaving good when you are not around.  They are not.  Unless of course, they like where they work, they like how they are treated at work and they do not want to lose how they feel at work.  Under those conditions, your employees are saying, doing and behaving good when you are not around.

You cannot disguise the atmosphere of your business model.  The atmosphere of your business model will generate the wind of its smell in its own honest way.  It will not need any push from your position.  If you generate a rotten atmosphere that no employee enjoys going to each day, the smell of that truth will drift right in front of everyone of your customers.  You can make behavioral rules for the employees to follow to try and eliminate that potential, but the smell will be recognized by the customers as a rotten stench blended with the mist of a manufactured air spray.  It will not smell real.  The human senses are too good to fool.  Your business atmosphere is truly a by-product of how you perform your leadership duties.  Your employees are an open report card on how well your leadership is doing.  Your customers are the administration who grades how well the students are being taught.  You are the one responsible for how all of this turns out.  Everyone else will easily escape responsibility.

Welcome to leadership.  Is your business model careful about how well it is perceived?  Does it care?

How Is The Business Plan Coming Along?

The last couple of days have consumed a lot of time very quickly.  The clock had the attitude that it wanted to run along faster than normal.  Once in awhile, with each glance to see what time it was, the clock traveled so fast it produced a surprise at how fast time had passed.  When the clock runs faster than the work we planned to complete our desire to speed up tends to make us feel more anxious.  We tend to think that if we speed up our work steps we can get more work done to catch up where we are running behind.

Be anxious for nothing.

Lost time is a reasonable expectation.  One of the most ignored steps any planning process includes is the fact that time travels very quickly.  Losing time is a staple process that should always be included in the business world of development schemes.  Time travels very quickly.  There will never be enough time.  Learn to accept this fact and be more patient with your plans, with your work, and with your expectations.

Be anxious for nothing.  Teach yourself how to stay on task but at the same time, be patient to allow the clock to out run your expectations.  It will happen more than you prefer.  Do not allow it to dominate your energy with frustration.  When you hammer nails, not all of them remain straight.  Some nails bend without warning.  Time works in the same fashion.  The clock bends too fast some times.  It runs along too quickly and without warning.  Accept it.  Make sure you plan for unwanted delays, time consuming changes and interruptions that disturb the pattern of your path to get more done.  With that in mind, how is your business plan coming along?  Have you started on it yet?  Why not?

Performance Appraisals, Need I Say More?

The IRS calling.  Employment pink slips with your final payroll check.  Report cards.  Police car lights in the rear view mirror.  Yellow warning shut-off notices.  Pink colored paper in the envelope window of a warning late-payment notice.  After hour phone calls from collectors.  Performance appraisals at work.

These are all of the great expectations everyone looks forward to enjoying.  Wrong.

We hate them.  How do we learn anything from getting a speeding ticket?  We already knew it was wrong.  We just can't believe our timing.  How could a cop be where we were when we were driving 10 miles per hour above the posted speed?  What luck!

How do we learn anything from a performance appraisal?

We hate them.  We hate receiving them.  We hate giving them.  Nobody likes them so nobody actually does them.  Performance appraisals are not completed on a timely basis, are they?  Rarely does a business leader stay on a clear schedule to do the performance appraisals on time and routinely.  Rarely.

They are hated as much as any other life fear.  When a business leader tells an employee that their performance appraisal is due, everyone goes into a panic mode of thought.  The business leader hates to plan them, the employee hates to receive them.  This is exactly how relationships breakdown.

Here is my business take on all of this.  Get the law out of my business.  Do not force me to protect my business relationships by demanding that I perform this unwanted service with my employees.  Here is my true evaluation of this process...quit doing them.

Performance appraisals have never worked to help build a great business model.  In my 38 year history of business relationships I have never seen a performance appraisal pattern work well enough to contribute healthy progress to the relationships a business needs to build.  Never.  My history of watching performance appraisals at work is littered with fear, tragedy, damaged relationships, mis-understandings, frustrations, broken expectations and destructive results in the leadership models.  A good business leader should always be participating in healthy employee development during the course of daily operations, already.  There should be no need to pull aside a designated time chip once every six months and tell an employee what is or is not happening well.  If that kind of business and employee relationship is occurring, I will pray for that leader to improve their management style.  If a performance appraisal is necessary to inform the employee what is not working well, you are either employing the wrong person or becoming the wrong leader.  Get someone else or improve your leadership.  Do not wait six months to figure that out.  It is silly what we believe we need to be doing.  Absolutely silly.  I see it every day.  Amazing stuff.

Is Your Dream Big Enough?

His Business Was Growing Well

A few years ago I met a man who wanted to build up his small business model.  I was introduced to this owner through another business associate.  The owner who wanted to build his model up was serious about building his business up enough to provide a better lifestyle for his family than they were experiencing at the moment I met him.  We worked on getting to know each other in the beginning.  His business was actually growing well when I met him.  He was also very careful in how much he was spending in order to produce the growth he was managing.  I was quietly impressed with how well he was doing.

It was clear that he wanted a bigger business to manage.  The more we worked together on building his business stronger the more I could see what really would begin to happen.  Due to his style of management I could see the future of his work load getting so strong it would eventually become the tail that wags the dog.  His skills to build it big were somewhat good.  His skills to delegate the increased work load was on the low side of the management ledger.  His ability to organize his energy and functions was also on the low side of the management ledger.  I could see this combination of weaknesses taking its toll on his limited time chips and his positive spirit for managing a larger business successfully.

I had no right to interfere with his drive.  I was not about to become his dream stealer.  Even though I could see an eventual emotional crash coming in the months ahead, I was not going to be responsible for killing his dream.  I decided I was going to find out what kind of dream he was running on in order to help him overcome the obstacles that were headed his way later.  A combination of his current business building actions were able to help him produce a growing business.  Even so, the limitations for getting beyond what he could produce in a 24-hour period were fast approaching.  He would eventually need to develop some new management skills in order to change how he was approaching his business growth.

Everyone comes to the table with certain skills that are magical to possess.  This associate had some very good skills for attracting new growth.  He also had good skills for keeping new growth longer than what a usual business provides.  His repeat business was fairly good.  He lacked the needed talent for providing the best organizational skills to secure the activities that were driving his business growth.  Some of his follow-up duties were leaving his business model vulnerable to loss.  He was like many other well-driven business owners.  He had a very strong ego that was heavy on protecting how he was building his business model.  His protection efforts were strong and also dangerous.  They were dangerous in that they were primarily sub-conscious in nature.  He was very quick to react to any suggestions or changes that indicated some efforts needed to be given to sort out the organizational weaknesses of the business model he was building.  He could not see how those weaknesses could hurt his growth.  As a result, he turned up his strengths and produced more growth by increasing the use of his better skills.  He was mentally strong like so many business owners are.

I decided to find out what his dream really was.  Everyone runs on a dream to achieve something from what they are doing.  Some dreams are subtle and fuzzy while others are loud and clear.  I knew that this business owner would eventually be tested to save his business from choking itself.  I knew he was not about to believe his business could experience that kind of challenge.  I knew he was not working to develop a team of associates that could help him manage the organizational responsibilities this growing business was beginning to face.  I knew he would soon be facing some very crucial needs to change the approach he was using for developing his business model.  I was convinced he was not aware of this pending development.

I wanted to see how big his dream was.  I wanted to know if his dream was big enough to help him through what he was about to be facing in his business model of unorganized growth.  Is his dream big enough?

Does Your Business Plan Answer These Questions?

While we are developing a business plan for a start-up business model the art of producing a good plan is in progress.  We have determined the type of business model we will be developing. (Check the previous post titled, "The Business Idea Has Been Found.")  We have also defined how we plan to approach the market in a rough sketch set of descriptions. (Check another post titled, "Develop A Plan That Has Good Timing.")  We are using the SBA and Score websites to help us guide our development of the business plan for this start-up model.  We are working our way through the process these websites suggest.

As the plan begins to come together we must face some of the tough questions that need to be addressed.  These two websites do a great job in preparing our minds for handling the kinds of questions we need to be answering.  Some of these questions will not be easy to answer.  As you develop your business plan some of the questions you will face will be difficult to answer.  They will become uncomfortable if your answers are honest.  It is very normal to become uncomfortable with some of the answers you pen down.  Writing a good business plan is sometimes a very uncomfortable thing.

Each of the business leaders who sit down to produce a business plan will find a different area of expertise more uncomfortable than someone else who may find the same questions easy to deal with and solve.  Every business leader has a separate set of viewpoints and approaches to the questions they must face and answer.  Some will struggle with the personal questions, others will struggle with the facility and location questions.  Whatever the case, prepare the plan with the hard questions included.

Some of the more difficult questions will be more personal in nature.  The questions regarding the business techniques and methods will likely be solved almost immediately.  The questions regarding family and personal connections will be more difficult to attend.  This is always the nature of preparing a good business career.  We usually do not plan how we expect to deal with the personal side of the business models we manage.  We typically handle personal challenges on an as needed basis, through systems that look and sound like emergency management.  A good business model does not find this process very rewarding.  In fact in most cases, this process is the very one that will limit the business from participating in huge growth.  It becomes the very set of questions that are not easily dealt with in the beginning of the business development process.

What kind of questions are found in this set of personally 'difficult-to-answer' questions?