Coming together is a beginning.  Keeping together is progress.  Working together is success.  ~Henry Ford

Almost every business starts with an entrepreneur working alone. Even if you started with a partner or two there comes a time when you divide up the work and are head down working by yourself. Those early hours (or days, or weeks, or months…) alone are a crucible; do you really want it, are you willing to keep working to make it a success? The strength of many business owners comes from those early days of gutting it out.

When a business matures and there is starting to be a team in place, or even when it grows and there’s a strong team around the founder, there is still a part of his or her heart that is alone. There are things the founder sees, but can’t share. How can you tell your team you don’t know how to solve some of the problems your team faces? Where do you go to talk about your shortcomings, your fears, your failures?

But the flip side is also true. When you figure out a particularly difficult issue, or find a way to get the client to agree to a new deal, who do you tell then? It’s a lucky entrepreneur who has a spouse who’s interested and understands all that’s going on; most don’t. Your friends haven’t been through these experiences either.

In the early days of my business I had a few close friends that I turned into my “kitchen cabinet” I sent them weekly reports so that they would know all that is going on. They held me accountable to my goals, and celebrated my successes. They didn’t always understand why I was so excited, but they got excited along with me.

Friends are great, but there is a special community when business owners get together, let down their guard and start asking each other real questions. I was lucky enough to find a group of  business owners who met together, all looking to improve their business. When that group ran out of steam I found another one.  I have found so much support and generosity in those groups. Problems that were thorny to me, were cake walks for others, and vice versa. When I finally overcame those issues that the group had helped me with it was great to show them the solution and have them appreciate it for what it is.

Who is your community? Who’s got your back? Who tells you your ideas stink, or your communication needs to improve? Who can understand and celebrate your wins?  We all need it. Where’s yours?

If you need this kind of business owner community, check out Anchor Advisors’ Peer Groups.

Here’s a sampling of economic headlines from Google News:

July Autos Sales Up, Yet Economic Concerns Persist‎

Big media’s profits defy gloomy outlook, for now

Debt relief replaced with recession fear

US Stocks Fall as Dow Has Longest Slump Since 1978

Obama and Bernanke out of ammo to boost jobs, growth

Take a look at economic news anywhere and what do I get, a load of bummer. Washington is messed up, Europe is crashing, stocks are sinking, and on and on. There is a lot of bad news out there, and to make things worse, most if it is outside our control.  That’s right, your business is being buffeted by negative economic forces that you cannot control. So what should you do about it?

I say ignore it.

That’s right, I said ignore it. Every second you spend reading scary economic news, making contingency plans, talking it over with your advisors, and even lying awake at night worrying is time that is wasted. Instead spend that time building a new product, developing a some compelling content, reaching out to talk to current and past customers, encouraging your staff, but please don’t spend it worrying about the economy.

For most small business people “the economy” is relatively irrelevant. Most of us rely on a relatively small number of clients. We don’t need the whole economy to be doing well, we just need those clients to be doing well. And if the economy hurts those clients’ businesses we need to find a few more. Your best defense against economic uncertainty is to keep your head down and get your best work done.

Ever wonder what other business owners are thinking about, what they might be doing differently, or how their results might be better or worse than yours? I think about that all the time. Even though in my role as a small business advisor I get to see and hear from lots of business owners, it’s very anecdotal. We are trying something different today, a survey where we could get a larger sample size and deeper insights.

Visit https://www.surveymonkey.com/s/bizownersurvey to take our survey that will compare, in a quantitative way, the attitudes, actions and results of business owners across a wide range of variables. Everyone who takes the survey will get a copy of the results, so they will be able to compare their answers against the answers of other business owners.

This survey is totally anonymous (we do ask for your email address, but only so that we can send you the results and give you a Kindle, more on that later). The report you will get will show you the typical responses along with some insights we gained by slicing the data every which way.
We hope to uncover some ideas and practices that are unique to those business owners who are growing and making more money than their peers; and if you take the survey, we’ll share them with you.

It only takes 10 minutes, so hope over to https://www.surveymonkey.com/s/bizownersurvey and answer some questions.
Oh, about that Kindle. We are giving a Kindle (or an Amazon Gift Certificate if you already have a Kindle) to one lucky respondent (that could be you!) chosen at random from those who complete the survey.

This is one of those things where the more respondents we get the better the results, so feel free to pass this along to any business owners you know. Feel free to tweet, Facebook, or Plus it up! (There’s a share widget at the top of the right hand column, try that out. It’s cool!)
Thanks for your help, and watch this space in September for a review of some of our key insights.

I’m a sucker for productivity software, so when I started using Evernote I was cautious about getting too hyped up about it. Now 6 months into my Evernote journey I’m more in love with it than ever. But like Quicksilver, it’s a little hard to describe what it is and why it’s valuable. Maybe by seeing how I use it you might see a way it could be helpful to you.

It’s a notebook.

If all I did with it was take notes it would be the bomb. It’s got a nice simple writing interface that lets me focus on what I’m writing. It has folders (Evernote calls them Notebooks) and tags that I can use to keep all my notes organized. Plus it has a terrific search engine for finding anything I need. So right away I’m miles ahead. If I just start taking meeting notes in Evernote I’m instantly more organized and effective.

But I can’t always whip a computer out and take notes in a meeting. No problem, write notes on paper, then snap a picture of your notes, or scan them in with your ScanSnap and presto. Your notes are in Evernote. The bonus? Evernote uses some kind of OCR magic and reads your handwritten notes so that the text in them is searchable! (You have to write somewhat neatly, your mileage may vary.) See how it’s making your notebook better?

The mobile app takes your notebook to a whole new level. With it you can easily record a voice memo, or snap a picture to get something into Evernote. See a book you want to order, snap it. Have trouble keeping track of receipts, business cards, or other scraps of paper, take a picture of the item and toss it! It’s all in your notebook now.

It’s a list machine.

I tried a bunch of fancy GTDish to-do apps, with little success. But Evernote got me back on the GTD bandwagon, with focus and productivity.

I keep four lists in my To-Do Notebook in Evernote, Today, Tomorrow, Later and Saturday. Each day I construct my Today list from the Tomorrow & Later lists so that I have a focused list of things that are urgent and important. I also measure what I put on the list based on how much time I have work on to-do’s that day. This means it’s likely I can actually accomplish my Today list today! This keeps me tons more focused on my tasks during the day. (Saturdays are different for me, that’s mostly errands, so those chores go right on the Saturday list.) I can easily cut and paste tasks from one list to another to make my lists. Once I complete a task I mark it off and move on.

Because the notes sync effortlessly to and from the mobile app to the desktop I can capture to-do’s anywhere, mark things off as soon as they are done, and easily remember what’s next on the list. It’s hard to screw up!

It’s a brain.

My hatred for (and frustration with) paper is legendary. I can lose, misfile or otherwise misplace any piece of paper no mater how important, or how little time I’ve held onto it.

By creating a list of things that I frequently forget, and dropping them into Evernote, I became a genius! I added:

The web clipper adds websites into my brain easily. Push one browser button to clip a webpage as a PDF and dump it into Evernote. I use it for two things, reference notes and recipes. When I’m doing research for a client or a project I will often clip some of the webpages I find that are helpful. It makes it nice and easy to reference them. It’s also easy to email those pages out of evernote if the client wants to see them. Cleaner and more convenient than emailing a bunch of links (and the email includes the URL if the recipient wants to visit). When I come across a recipe I want to keep, clip it! Then when I’m working on menu planning they are all there.

Pro Tips: I found Brett Kelly’s Evernote Essentials e-book enormously helpful. He helped me to think through how I wanted to use Evernote so that I would start as I intended to continue. He gave me some great hints including: He also has great tips for when to use notebooks and when to use tags, it’s really worth the small investment (if you are going to make Evernote a key piece of your workflow).

How do you use Evernote?

Why is entrepreneurship so fulfilling and working for a big company so soul sucking? For some of the best years of their lives you gave your all (or a good portion of it anyway) to moving the ball forward for some faceless entity. For some people it has become almost mindless. One more email, one more conference call, it never ends. One NYT columnist likens it to fighting zombies. But the day you launched out on your own you had the same feeling as every other entrepreneur.

“I’m FREE!”

But what does that mean? Why does it feel so freeing to step away from that large organization and into the unknown?

“No one is telling me what to do.” – Yes, now YOU have to figure that out.

“I don’t have to carry a bunch of lazy co-workers.” – Instead you have to do everything yourself.

“I don’t have to work late just to show ‘face time’.” – Right, but now you have to work late in order to meet your client’s needs.

“No one is holding me back. My success is up to me.” – Ah, now we are onto something.

One of the most motivating things we can experience is the feeling that our efforts, our work is making progress. Bonus points if we are making progress to a big goal that matters to us (Daniel Pink and HBR do a great job explaining this).

Entrepreneurship creates just that kind of situation. We define the goals, we work hard and each day (hopefully) we get to see progress. Having control over that feeling makes us feel free!

We want to create an organization where every person get’s to experience that? Because leaders who do that almost always have extraordinary teams.

1. Connect the work to something bigger.
If your work, the work of the company and every person in it is connected to a REALLY BIG GOAL. One that’s people care about (no one cares about making you more money); work has more meaning. For Google it’s “Organizing the World’s Information” , for Starbucks it’s “to inspire and nurture the human spirit”  These are big goals, that people can get behind and care about.

2. Create measurements and systems that reveal the progress that’s being made.
How does a finance analyst at Google know that reconciling that ledger helped to “Organize the World’s Information”? Why does the person buying paper bags at Starbucks feel that connected to nurturing the human spirit? They will only feel that connection if their boss and organization helps them to connect the dots. If the Big Goal is important to everyone, they will all be paying attention to what is helping to make progress and what’s not. If that purpose matters to them, they will make decisions and set priorities that will move the organization toward that goal.

3. Recognize effort that created progress.
When people’s efforts are making a difference you should say thanks. If people’s efforts are making a big difference you should say thanks in a very public way.

4. Don’t hold people back.
People want to make progress, the want to use their judgment and creativity to make a difference. To the extent that they have demonstrated that they have good judgment, and their work has produced results, get out of the way.

How are you connecting your organization’s purpose to the progress that individuals are making every day?

Clients and business owners ask me different forms of this question all the time. “Why don’t my employees work as hard as I do? Why don’t they put in the hours, go to the extra effort? Why do they go home at 5:00 when there is still work to be done?”

The short answer is because they aren’t you. You started this business because it’s your passion, it’s what you are made to do. All of the growth and profit are yours! You love this business more than anyone else does; no one is going to be as committed as you are.

But that doesn’t mean that our people can’t have real commitment to our enterprise. There are two things we can give them that really help build that willingness to go above and beyond; a sense of purpose and a way to measure progress.

If you are asking people to stay late so that you can go on a nicer vacation, or buy a bigger house, that’s not very motivating. Measuring your business success in terms of how much money it’s making for the shareholders doesn’t result in heroic acts by your team members. But if your business is about more than making money, if you have a higher purpose that your business is there to achieve, and if that higher purpose aligns with the values of your team members, people will heroicly rise to that challenge. You don’t have to take my word for it, Jim Collins has a terrific article about it too.

But just as they need a strong purpose, your people need ways to see that they are making progress or impact. As the owner you can pretty easily see the impact you are having on your small business. Each day you can weigh the gains and losses and decide what the score is. Do your employees have those same measurements? How do they know that those extra two hours in the office are achieving the goal and purpose you have for the business? How can they see the results of their extra efforts?

What can you do to more effectively communicate your purpose and a sense of progress to your team?

What measurements or indicators do you look at to measure your business performance?Small business owners tend to have an intuitive sense for how their business is going. Is the phone ringing? How’s my bank balance? What’s the mood in the office? Everything that they do gives them feedback about how their business is performing. However, there is a problem with relying on intuition. Our intuition is a way that our brain uses to short-cut the prefrontal cortex (thinking part of the brain). It uses our past experiences to “filter” the data we are seeing and fit it into a pattern we’ve seen before. So that gut instinct is usually pretty accurate as long as the data we are looking at is similar to a pattern we’ve seen before. The problem lies when the pattern doesn’t fit, when you are entering into a situation when your past experience isn’t a good fit. That’s when you need to have a better handle on the actual data, and use analysis of that data to guide your decision making.

We find that our clients often fit into this category, as their business grows there is just too much data to take in through osmosis. With a more varied and active customer base it’s too difficult to keep track of every customer, and each transaction. Finding ways to aggregate that data into reports, and analyze those reports using charts and graphs becomes essential to staying on top of how your business is performing.

What reports to we need to see?

1. Monthly Financials

At least monthly review your full financial statements. Income Statement (Sometimes called your P&L), Balance Sheet and Cash Flow.  Your Income Statement should tell you if you are making money, if you compare your actual performance to your budgeted performance you can see how each of your spending and income categories are doing compared to your prediction at the beginning of the year. Is your income up, but your expenses are also up? That’s probably OK as long as the growth in income is greater than the growth in expenses. But if your income is below expectations, then your expenses better be too!

Your balance sheet tells you if you are a debtor or a borrower. How are your receivables? They are going to grow if your sales are growing, but how much is too much. By calculating your Receivable Days Outstanding you can get an index number that will tell you about how well you are doing at collecting your receivables regardless of your sales growth. When your A/R Days go up you are not collecting as efficiently as you should, when it goes down you are collecting more quickly.

Also check your cash on hand, or borrowing capacity; do you have access to the cash you will need to grow? A Days Cash on Hand calculation can help you to get a handle on it. Total up your cash needs for the next 90 days and make sure you have cash on hand to cover it (If you are growing you need more cash than you did in the past!)

Last, make sure you aren’t taking out too much money! You need to maintain a healthy positive net worth (called Total Equity on your balance sheet). You can do that if you make sure to leave some of your profits in the business to operate it.  Your Cash Flow statement gives you an overview of what cash is coming in and going out. This is really the amount of money you have to operate your business. You can have positive earnings, but a negative cash flow if you aren’t getting paid for the work you are doing, or if you are taking out too much in shareholder distributions.

While financial indicators are important, it’s easy to get lost in all the numbers. I recommend using Trailing Twelve Month charts (TTM) to graphically display the trend in your sales, and profits (at a minimum).

2. Sales Indicators

Financial Indicators give you a good idea of what happened in the past, but you need to look at some leading indicators as well. Your Sales Manager or CRM system can provide a nice look at what those would be. How many leads have you received (compared to last month, or last year)? What are the value of those leads and how are they moving through your pipeline? The number  and value of proposals issued (compared to last month or last year) is also important. Lastly, closed new business (from existing clients and from new clients) is a more immediate indicator.

Each of these directions have issues (how accurate is your forecast, is there a lot of “junk” in the pipeline, etc.) but every business needs to choose a path, and start tracking at least some of those numbers; dealing with the issues as they come up.

3. Internal Efficiency Measures

Now that we have looked at what’s coming in, we need to look at how well we are doing at delivering that. For a service firm Utilization (billable hours/total hours) is a key efficiency measure. However, so is on time delivery. In a software or product company, tracking the cost of quality is key (time spent fixing problems or dealing with customer complaints and issues divided by sales). For other firms they can track project profitability, or contribution margin by project. These measures are usually more unique to your business. What can you look at that gives you an indicator of how much time or effort you are putting in to delivering on any particular piece of business.

4. Community Measures

Your business is not just a profit machine, it also has employees, and community members who care about your success as well. How do you measure your effect on those resources? Do you survey employee sentiment? Do you engage in community improvement projects? How do you know that these things are having a positive effect? Employee turnover is one sign (but it’s a lagging indicator, one you see it you already have a problem). What else can you measure?

Lastly, you need to talk about the frequency of these measures. I worked for a very seasonal business that tracked leads and orders by day and the whole company knew what the number for that day should be. Other measures like employee satisfaction are difficult to measure frequently and you might only check them annually.  The key is that you spend time each week/month and quarter looking at the numbers that your business creates, deciding what they mean, and taking action based on the results. Your business will be healthier and you will worry less.

What measurements or indicators do you look at to measure your business performance?

It’s 5:30, you are still at your desk working when suddenly you hear it; silence. You are the only person in the office again. You think, “That’s OK, my team must have been really productive and burned through things today.” But as you walk past desk after desk you see that there are critical projects that are still unfinished. Despair and even panic starts to rise in your gut. “How can people do this, don’t they see what this means to our business and our clients? Why aren’t they more committed to the work?”

This is a common story that I hear from business owner after business owner. The owners know how critical the work is, and they are willing to sacrifice to accomplish it, but employees? Not so much. Why don’t employees care? Is there anything we can do to turn that around?

First, lets look at why you care. As a business owner you are in a pretty unique position. First you started a business that (hopefully) scratches an itch you have. You see a way in which other people struggle with something that you can do easily. Knowing the pain and challenges that the clients are feeling you also know the relief that comes once they are solved. When you put in that extra more hour or complete one more deliverable you see the difference it makes. That satisfied customer pays their bill and offers you another project and may even tell a colleague about their experience. You get to see how your work is making a difference in a way that is particularly meaningful to you.

Does your team have that same experience? How many times have they heard the client gush about the difference the work has made, not just second hand from you, but face-to-face with the client? Have they made the connection between exceeding the clients expectations and getting paid? Many team members (especially if they are young) haven’t had that experience, and don’t really understand on a visceral level the value that they can create, for the client and the company, from that one extra hour’s work. People want to make a difference, they need to see with their own eyes how their work is making a difference.

Then sometimes there are those clients or projects. The ones where no matter how hard you work, or how much extra you do it doesn’t pay off. At those times the whole team needs to understand that all our work is part of a larger purpose. Even if the client doesn’t appreciate it, we know that our work is connected to a larger, more important change we are making in the world. That’s the itch that you started this business to scratch. Maybe your work brings beauty to interior spaces, or creates clear and compelling messages, or you develop software that’s easy for people to use. Whatever you do, somehow you are making a difference in a way that matters to you.

By clearly stating this purpose, this “Way you are making the world better” to your team, your clients and your vendors & partners, you will attract people that value that purpose too. If when you talk about an assignment with a team member you can connect the work to that purpose it helps people to see how doing this work is making a difference. Very few people actually work for money. Yes, money is important. If you pay people too little they can get very dissatisfied. But paying people too much doesn’t motivate them to work harder or do better work. People want to make a difference, they want to be connected to something bigger than themselves. To the extent that we can give that to them, we will see more commitment, engagement and excellent work.

Are there times when your team was extra committed? What was different in those times? Have you tried connecting purpose, and results to the job that’s getting done?

You are sitting in your third meeting of the day. This is no ordinary meeting, you have several of your key team members in the meeting and you are working on an issue that is really important to the success of your business; but you keep getting sidetracked. In fact, you have lost track of what the team is talking about and instead you are staring at your to-do list and fantasizing about getting some of that done.

How did this happen? You are the boss, and you are roped into spending time in meetings that you hate, that aren’t getting you closer to your goal. I think I know, you forgot to invite the most important person to the meeting, Warren Buffet.

Before you write me off as a loony, go along with me on a thought experiment. If Warren Buffett was in this meeting with you how would it go? Who would set the agenda? Would people come prepared and stay on topic? What kind of meeting would you have? So if Warren Buffet came to the meeting you would have a meeting that wouldn’t drive you batty? Then invite him, only you play the role of Warren Buffett.

If you walk into a meeting and you can’t see that there is a clear agenda, either set one or walk out. If the discussion starts to drift, ask folks to stay on point, or schedule another time to deal with the issues that are coming up. You be the person who’s time is too important to waste but has tremendous value to add, if the discussion can stay on point.

Many times we get the results we tolerate, and if we tolerate mediocre time wasting meetings, that’s what we get. But if we believe that our time is valuable, that we have important things to do outside of this meeting, then we will do what we need to do to complete the important work that you have to do in the meeting in the shortest possible time. What’s the best part? If you keep your meetings crisp and on point, your team will love you! Everybody hates time wasting meetings, if you set the example it will become the norm and everyone will be happier.

What works for your to keep meetings in your organization focused and productive?

via Flickr courtesy of woodleywonderworks

Uncertainty has been the watchword the last few years. The business climate has been full of uncertainty. We’ve seen the economy fall from the heights of the early part of the decade into the depths of the last 12 – 18 months. The political climate has seen a sea change, and with that change comes a lot of uncertainty. For many people their households have experienced significant changes as the value of their savings have dropped, their home equity has evaporated, and they or their spouses or friends have lost jobs.

These changes and uncertainties have produced a lot of fear. Some are fearing radical political ideas, others are afraid of foreclosure or bankruptcy. While these fears may not be the ones that we are facing, the changes going on around us are creating some level of fear and anxiety for most, if not all, of your team members and their families.

People who are living in fear are working with only a small portion of their mental capacity. As one brain researcher said, “Fear prompts retreat. It is the antipode to progress. Just when we need new ideas most, everyone is seized up in fear, trying to prevent losing what we have left.”

But wait, it’s actually worse than that, even if people haven’t experienced loss themselves, the anticipation of loss can actually be worse than the experience of pain. From the same researcher,

“For many people, the wait was worse than the shock. Given a choice, almost everyone preferred to expedite the shock rather than wait for it. Nearly a third feared waiting so much that, when given the chance, they preferred getting a bigger shock right away to waiting for a smaller shock later. It sounds illogical, but fear — whether of pain or of losing a job — does strange things to decision-making.”

So what can we do? How can we deal with our own fear, and then engage our team to minimize the effect of the fears that they are experiencing?

If we are experiencing anxiety or fear we need to get our own heads right. In my life I’ve found that Thankfulness is the antidote for fear. Even in the worst of times when I had clients going out of business, and others deciding to hold onto their cash instead of working with us, I still had so many things to be grateful for. The clients who are healthy and growing, the network of professionals that support me, my health and family, are all positive forces that keep me moving forward and I need to be thankful for those things. It’s good for me to recognize that I don’t achieve success on my own; that I need and have a web of support that I can depend on.

Being thankful is a great antidote to my own fear, but it also provides a way forward for others too. If I can be thankful out loud, where my team can hear it, it can be contagious. Publicly thanking your team members when you do see them exerting that extra effort or even just reflecting the company values in their normal course of work can go a long way to defeating that fearful attitude that’s robbing you and your company of productivity.

What about the fears outside your workplace? You can always send your thank you notes to your employees at home, so that they can open it in front of their family and explain why their boss is sending them a hand-written thank you note to their home. This shares that same thankfulness with your team member’s whole family, and communicates that you are paying attention when they make sacrifices at home for the benefit of the company.

How are you being thankful now? How are you showing others your thankfulness?