The other day I wrote an article entitled "10 Obstacles That Are Limiting Your Growth." In it, I revealed 10 common things that block entrepreneurs and business owners from achieving the success they deserve.
Those 10 obstacles included:
1. Lack of Skill
2. Bad or Negative Attitude
Since Election Day, the stock market has risen more than 15%, and business confidence has reached its highest level in 9 years.
This exuberance was on full display earlier this month with the Snap IPO, both the first big tech IPO of 2017 and one that performed above even its most optimistic expectations, with a market valuation at today’s market close north of $24 billion.
For a company with less than $500 million in revenues, and that last year lost $47 million.
Remarkable on one level, but when viewed through the wider lenses of the bullish outlook for the economy and the “it just goes on and on” low interest rate environment, not entirely surprising.
While frothy conditions like these have characterized past markets, the dynamics of this "Trump Rally" just feel different.
Let’s start with the dynamic of tone.
Quite simply, when the highest profile person in the world's economy - the U.S. president - is in so many ways a pure “promoter personality,” that this quality of “hype and sizzle” is only naturally more rewarded and expected.
For executives seeking to launch new products, raise capital, and / or to sell their companies at a high valuation, this does not mean just “blowing hot air” is an effective strategy but...
...it does mean that if ever there was a time where talking through the more “optimistic scenarios” as to our business forecasts is both okay and to be expected, then that time is certainly now.
The next dynamic is political.
With Republicans in control of most levers of the Federal Government, big policy changes affecting huge swaths of the U.S. economy are potentially coming - to health care, taxes, regulations, infrastructure, trade, immigration, and more.
Whatever your political opinions are of these changes, they are on the minds of business and investment decision-makers everywhere.
And so we all need a plan as to how to react and profit from them.
A third dynamic not entirely unique to this rally, but always characteristic of bull markets is the heightened value placed on speed and velocity.
In this context, a long time Silicon Valley venture capital colleague of mine shared with me his views on a low revenue, no profit but $2 billion+ valuation company in which his firm was invested.
He said he and his partners felt at least 25% of that valuation - or $500 million dollars - was driven solely by the charismatic and “velocity-focused” leadership of that company’s CEO and founder.
Yes, investors were willing pay a half billion dollar premium for a leader capable of driving fast business action and results.
These are both strange and uniquely encouraging times and markets.
The future remains uncertain, but for now the guidance is to bake speed, political awareness, and perhaps even more than a bit of hype into your business model and presentation...
...and watch both your business results and its value soar.
P.S. Recorded Webinar: Five Steps to Maximize Your Valuation in the "Trump Economy"
Please follow this link for a recorded video webinar - Five Steps to Maximize Your Valuation in the "Trump Economy" - where I discuss the 5 steps you can take to dramatically increase the sale price of your business, and dramatically decrease the time needed to achieve it, including:
To listen to the recorded webinar, follow the below link:
There are many mental and personal blockages that can hinder you from achieving your full potential in business. Blockages in business can be compared to fatty deposits around your arteries that impede blood pumped from the heart from reaching its destination.
For you to succeed in your business, you must identify and eliminate such blockages promptly.
Here are 10 common blockages that can impede your success. As you read through the list, mark any of them that might be affecting you and/or your business:
1. Lack of Skill - As information increases, many business owners soon find out that there is much to learn. Whether it's getting up to date on new tax laws, learning about social media, or practicing negotiation techniques, take the time to keep your skills sharp.
2. Bad or Negative Attitude - While it may be easy to learn new skills, attitude is what makes or breaks a company. Whether you think you can or think you can't - you're right! Check your attitude frequently.
3. Lack of Focus - I always tell people that if they do one thing, they can do an A+ job; but that the second they do something else, they can only do a B+ job on each. And the bottom line is that to succeed in business, you must do an A job or better. So, make sure you focus on specific projects so you can excel at them.
4. Procrastination - Procrastination is high among the top five time wasters. Creating deadlines is an effective way of preventing procrastination. Though it may feel restrictive or even stressful, having a deadline can activate your brain and infuse new thoughts and ideas.
5. Monotony - It pays to try out something new once in a while. There is always a new instructional video with a different method from the text book methods learned in school. Doing something differently offers you the necessary relief from the routine and repetition that is common in many businesses.
6. Control Issues - Sometimes the tiny voice in your head may urge you not to give up control, so you end up micromanaging everything. It is important to have faith in the people you hire. Hiring qualified people for your business helps you to focus on specific tasks and minimizes your chances of overworking yourself.
7. Overworking Yourself - Sometimes you may overwork yourself even without realizing it. When you get overworked, you become less productive. Take it easy, go on vacation if possible. Your decision-making abilities become compromised when you are tired. Stick to a schedule and get some rest.
8. Seeking Approval - In business, you may sometimes unconsciously or even consciously wait for someone to encourage you or give you permission to take a step. Acknowledge your own abilities and make decisions on what is best for business, not based on pride of emotional approval.
9. Lack of Creativity - Keeping a journal can remedy a lack of creativity. Sometimes a new idea will pop up at a random time or place. Jotting down ideas and inspirations helps to unblock your mind. Apart from noting down random ideas for future reference, journals provide a useful way to track personal progress.
10. Thinking Small - With the current technological capabilities, it is easy to access success stories. Surround yourself with people who think big. Read books, blogs and watch motivational videos, etc. In business, if you aim low, you strike low. Aim high.
How many of these blockages did you circle? There is no right or wrong answer. Whether you picked one or twenty, you have work to do. Study the blockages you marked and start with the one you feel is impacting you the most.
Work on removing this blockage for 30 days. Then pick the next one that is having an impact on your business and start working on that one. As you stretch beyond your comfort zone and tear down barriers, your business will grow.
Mr. Korala started his company in 1989, and has built KAL into the world’s largest independent supplier of Automated Teller Machine (ATM) software, with installations in more than 80 countries and over 300,000 ATMs worldwide. Marquee clients include Citibank, ING, UniCredit, and China Construction Bank.
Along the way, Aravinda has truly travelled the world, averaging more than 40 weeks per year of international travel, visiting with banks and financial industry technology providers around the globe.
From this lifetime of experience and relationships, Aravinda has developed deep wisdom as to what is real and what is hype when it comes to banking and financial industry disruption brought on by the FinTech revolution.
A Conversation Not to be Missed!
On the recorded video conference Aravinda and I discuss:
Who is This For?
This Innovator Series conversation is designed for:
What Is Crowdlending?
In brief, Crowdlending is when individuals lend you money.
This is important because oftentimes banks don't want to lend money to entrepreneurs and small business owners.
Crowdlending eliminates the banks as an intermediary and allows individuals to lend money to other individuals. Another name for Crowdlending is "peer to peer" lending.
A Brief History of Crowdlending
Crowdlending has been around for several years. The biggest two Crowdlending companies/websites are Prosper and Lending Club.
While the crowd-loans on these sites are structured as personal loans to the business owner, they can be used for business use. For example, small business owner and clothing designer Lara Miller has received three loans via Prosper which she used to launch her new website and clothing lines.
Clearly, you could consider taking a loan for your business from a friend or family member. However, with Crowdlending, you have a much larger number of potential lenders. Also, while not being able to repay your loan is always a terrible situation, it's clearly worse when you know and see the lender often.
Additionally, many individual lenders on Crowdlending websites take a portfolio approach. That is, they lend to several people. So one of their loans defaulting may not be devastating to them as it might to a friend or family member making just one loan.
Debt Versus Equity
In brief, raising equity is selling shares of your company. You are not required to pay interest on the funding or the principal back. However, the investor owns a piece of your company and if/when you exit, they will take their share.
Conversely, with debt, you have to pay both interest and the principle back.
It is important to note that equity is oftentimes MUCH more expensive than debt in the long-run. Let me give you a simple example.
Let's say you sell 40% of the equity in your business for $1 million. A year later, you are able to sell your company for $10 million. The investor would get $4 million of the sales price (40%). So, the cost to you of the $1 million investment was $4 million.
Conversely, let's say the investor lent you the $1 million at 10% interest. In that case, the cost of the funding would have been $1.1 million - which is the principle and interest you would have to pay back.
In this scenario, debt funding would have cost you ONLY $1.1 million, nearly 75% less than the $4 million cost of equity funding.
Crowdlending Versus Debt
Crowdlending, gives you several benefits over traditional debt or bank loans:
1) Your chances of raising Crowdlending are much higher since banks reject many more loan applications
2) Crowdlending gets you lower interest rates than banks because you are eliminating the bank as a "middle man"
3) Crowdlending has much fewer requirements with regards to the application and documents you need to submit
4) Crowdlending dollars are generally raised much faster than bank loans
Crowdlending For Businesses
I have been telling entrepreneurs about Prosper and Lending Club for years. Because they are relatively easy and low-cost forms of funding. However, they both have a big negative, in that you can generally only raise loans less than $35,000.
That's why I will thrilled when I recently spoke with Endurance Lending Network.
Endurance has amassed a bunch of non-bank lenders including successful entrepreneurs, wealthy individuals, family offices and institutional investors. And, these individuals lend between $25,000 and $500,000 to businesses - the amounts entrepreneurs and business owners actually need.
Crowdlending is a great new way to raise money to start or grow your business. It's much easier, faster and less expensive than both bank loans and equity funding, making it a perfect choice for most entrepreneurs and business owners.
Businesspeople, of course, love sports. This is evident in so many ways.
From the vast sums spent by companies on sports advertising, sponsorships, luxury suites, etc., and more to the point from the common sayings and cliches of both worlds.
These range from the classic sales axioms - "take your swings," "get the deal across the end zone," "this one is a Hail Mary," to the universal pleas of coaches and managers "to be a team player," "support each other", and my eternal favorite to “bring your A-game.”
The sayings might be trite, but the mindsets and daily actions of top athletes and top executives are very similar.
It starts with sports at its most fundamental - keeping score and at the end of the game having a winner and a loser.
Top executives lead from a similar “no excuses” frame.
Top marketers know their prospects either filled out the “Contact Us” form or they didn’t.
For top salespeople, their prospects either bought or they didn’t.
Top managers have either happy, productive employees, or they don't.
And the companies that top CEOs lead are either growing and profitable, or are shrinking and losing money.
And just like with top athletes, it is all on them and them alone.
The flip side of this tough love “win or lose and there is no in between” frame is how "tabula rasa" sports naturally are.
The best athletes always focus on the next game.
They don’t rest on past glories and accomplishments nor catastrophize the "damning effect" of past losses and setbacks.
Famed coach Bill Belichick is a great example in this regard.
Before he won five Super Bowls with the New England Patriots, his record in his first head coaching job with the Cleveland Browns was a middling 36-44.
Yes, it is nice to have a track record of business success, and for sure it is discouraging to have one of failure.
But...top executives know that the true value of their enterprises is based solely on its intended plan of accomplishment - and its probability of achieving that plan- in the months, quarters, and years to come.
[Click Here for a Complimentary Consultation as to your 2017 growth and business plan goals]
And then my favorite, and hardest, lesson from sports for business is how much top executives can learn from the life choices of the very best and most successful athletes.
The very best athletes - the Olympic Gold Medalists, the Masters Champions, the Super Bowl Winning Quarterbacks - define and value themselves through their sporting accomplishments.
For the very best, it is far more than a game.
It is a burning desire to win that runs as deep and hard as desire can.
And from that desire flow a whole series of life choices and disciplines.
What to eat, what to drink.
When to sleep, when to rise.
Who to have as trainers, advisors, coaches.
All of these life and professional decisions and more are guided by the simple goals of winning, of striving to win, of being the best.
Now, does being a peak performing executive require the same kind of monomaniacal focus and discipline?
Yes it does.
The negative of this is that it is a lot of work and sacrifice.
The positive is that for the executives at the top of their profession, and for those striving hard to get there, their work is truly a labor of love.
And the sweetness and joy and satisfaction they feel when it all comes together and their businesses just take off and prosper....
....makes it so much worth it!
Becoming a millionaire entrepreneur is possible, and many people have shown us how they managed to quickly build empires.
If you are an entrepreneur and are looking for inspiration, then these 5 modern success stories will certainly motivate you.
1. Sara Blakely
Today the Dow Jones Industrial Average closed at 21,068, up 15% since Election Day, with since that time more than $3 trillion in new investment wealth having been created.
This rally has been both deep and consistent, with almost all market sectors participating, and with market volatility levels at their lowest level in 34 years.
What is driving the rally is the hope that the aspects of the new administration's policies that are clearly pro-business, namely tax, regulatory, healthcare reform and infrastructure investment, will outweigh those that potentially are not - trade and immigration.
Whatever the long-term might hold, and let us always remember legendary economist John Manynard Keynes’ dictum that "In the long run, we are all dead," at this moment the “animal spirits” of capitalism are at a very juicy high water mark.
So the smart and ambitious executive feels and knows that now is the time to just get after it.
So, on this March 1st, with all of the exuberance and confidence in the business air, here are five ways to take advantage:
#5. Sell Your Company. Rising public markets, with big companies flush with fresh equity and thus able to more assertively pursue growth-by-acquisition strategies, creates a virtuous trickle-down effect on valuations and business sale probabilities for even the smallest of firms.
Primarily, the acquisition targets of the public market big boys are mid-sized businesses - $100 million to $1 billion in transaction value.
These mid-sized companies in turn look to, via acquisition as well, improve their strategic profile and growth rate through seeking buyout targets with enterprise values of less than $100 million.
Both observing and participating in this uptick in buyer demand are private equity firms - sensing a shorter time frames to exits for their portfolio companies.
For sellers, the natural result of all of this buyer confidence and urgency is better pricing and faster closings.
These conditions won’t last forever of course, but right now is about as perfect a business sale climate as we have seen felt since the 1990s.
#4. Prepare to Sell. The above is all well and good, but the significant majority of companies are just too small and financially unimpressive to even consider being sold.
If your business falls into this category, then instead focus on preparing to sell through researching and then emulating the attributes of the more successful businesses in your market.
Even if this research yields just the “obvious” insights - i.e. that my business needs to make more money, have more predictable revenue, have a better brand, etc. - simply taking the time to make the comparison is almost always illuminating and actionable.
#3. Ask Yourself What is Wrong. Talented executives are usually well aware of what they need to do to grow their businesses to attain their strategic and financial goals.
But they just can't seem to get it done.
Their classic bugaboos have been the same since time immemorial - clients not buying as much, or as easily, or at as high a price.
And / or employees not performing well enough, or the better ones not sticking around long enough.
How about instead of blaming stalling growth on problem customers and employees we place it where it squarely belongs?
On the shoulders of our leadership.
The best executives, when they see that their prospects and the customers are the wrong ones, they pivot and instead pursue, secure, and service the right ones.
If their employees aren't performing as they should, they either fire them or usually far better identify and improve those aspects of their business culture holding everyone back.
Yes, let’s channel Harry Truman and always have the buck only stop with us.
#2. Learn More, Complain Less. Whether one agrees or with the policies of the new administration, or finds irksome the personality of the new President, the incessantly negative and gossiping media coverage about it is mostly pointless and usually depressing.
Let's tune out all of the toxic noise and instead invest our “media time” in learning how to do more of what we as executives and business owners should always focus on above else - growing the sales, profits, and value of our companies.
#1. Speed Everything Up. No one knows how long the current market rally and big leap in business confidence will last.
But it will come to an end.
And instead of riding this upward wave, we will be dragged down by a declining and fear filled market.
So while the going is good, let’s act.
Let’s write that business plan. Launch that new sales campaign.
Make that new hire. Invest in that new product.
Do so with care and preparation and precision for sure, but absolutely don’t wait for things to be perfect before you do so.
We are in arguably historically good markets.
Shame on us all if we don't fully take advantage.
If you don't know Peter Drucker, you should: he's known as the man who invented modern business management. He wrote 39 books on the subject and is widely regarded as the greatest management thinker of all time.
And Peter Drucker is credited with two of the most important quotes in business management.
Here's the first: "If you can't measure it, you can't improve it."
When you think about this quote, it should immediately become apparent how true it is. Because, if you can't measure something, and know the results, you can't possibly get better at it. For example, it's nearly impossible to lose weight without stepping on a scale once in a while to measure your results - if you don't, you have no idea if you are succeeding or not.
Or it's like trying to improve your golf game, but never keeping score, so you don't know if you're actually getting better or not. Makes sense, right?
Now, in business, Drucker's quote is particularly true. If you can't measure every part of your business, you can't manage or grow it.
There are nearly 50 questions such as these that measure each aspect of your business.
And if you don't know the answers, if you can't measure them, then you can't possibly manage or improve them.
And that's why your sales are too low, profits are too low, employee performance isn't high enough, and you need to work too hard and can't take enough time off.
Now, let's move on to Peter Drucker's second famous quote: "Management is doing things right; leadership is doing the right things."
Let's start with the first piece of this critical quote. "Management is doing things right." Well, as we learned from Drucker's first quote, you can't manage and you can't do things right in your business if you're not measuring it. So that's not happening and it's hurting your business.
And now the second piece: "leadership is doing the right things." So, my question for you is this: are you doing the right things in your business? Now before you answer this, let me ask you this: do you know exactly what you should be doing, every single day, to generate the most value from your time?
Unfortunately, most entrepreneurs and business owners don't. Or their businesses would be much more successful than they currently are.
I give you these two Peter Drucker quotes along with their interpretation to help you figure out the answer to the question, what is the #1 Business Mistake you are making.
Which for most entrepreneurs and business owners is this: Your #1 business mistake is that you're running your business blind!
You're not measuring your performance throughout your business, so you can't improve. And worse yet, you don't really know what you should even be focusing on
It's like running around in a maze, and you haven't kept track of where you've been, and you're not sure what to do to get out.
But don't take it personally, virtually all entrepreneurs and business owners operate like this. And that's why business failure statistics are so terrible. As you might know, according to Dun & Bradstreet, 91% of businesses fail within 10 years. And according to United States Census, only 3.9% of businesses make it to $1 million in sales. And only 0.6% of businesses make it to $5 million. And less than 0.1% make it to $10 million and above.
The reason for this lack of success is that these entrepreneurs and business owners are running their businesses blindly. They are not measuring performance, so they can't improve. And they are focusing their time on the wrong areas of their business.
Now the good news is that there is a solution to this common problem of running blind. And it's called BI or Business Intelligence. Business intelligence or BI refers to computer-based techniques used to spot, dig-out, and analyze business data, such as sales, marketing and production in order to make significant improvements.
Importantly Business Intelligence uses the data you already collect in your business. For example, if you have a website, you probably have Google Analytics or another program installed that captures key information like the number of visitors you have to your website each day, where they are coming from, and what pages of your website they are visiting.
And you're probably using an accounting software like Quickbooks that includes information about your revenues, expenses and cash balances. And you might be using a customer relationship management or CRM system like Salesforce.com that identifies the number of leads and sales you generate.
And you might be using an email management system like Constant Contact or MailChimp that shows how many email subscribers you have and how often they open or click on your emails.
With the right Business Intelligence system, all the information from these applications and programs you already use automatically and in real-time is entered and analyzed. So you can quickly see, manage and improve your performance.
Importantly, you not only measure performance so you can improve it, but you instantly spot weaknesses in your company. And those are the areas you should focus your attention on. Remember, "leadership is doing the right things" - now you'll know exactly what you should be doing.
Ready to stop operating blindly? If so, check out Growthink's Business Intelligence solution, The Growthink Dashboard, by clicking here and start expertly managing and growing your business.
This past week, I had a pair of experiences that painted in inspirational relief the power of innovation to change the world for the better.
The first was first reading the cover article of the most recent issue of BloombergBusinessWeek, featuring Tesla's and SpaceX's founder Elon Musk and his new "Boring Company, " and then traveling to SpaceX’s headquarters just a short drive from my Los Angeles office to see for myself what all of the hubbub was about
The Boring Company is Musk's and fanciful idea to build giant tunnels under the congested freeways of Southern California.
Musk and his team have already started digging, along with calculating the reduction in tunnel cost per mile, currently at $1 billion / mile(!), to make the economics of the project work.
This, like Tesla and SpaceX, is innovation on the grandest and most inspirational scale.
My second experience last week was one of innovation on a smaller and yes much more “boring” scale.
Through my firm’s advisory practice we are in the process of developing a business and marketing plan for a team of executives with a lifetime of experience in reducing workers’ compensation costs in high injury prone environments like large construction projects.
Sadly, for many of these projecs and work environments injury and workers compensation costs amount to as much as 12% of the total project cost.
This statistic is probably not surprising to any business person with first hand experience of workers' comp, especially in ”pro-labor” states like New York and California.
At the heart of the problem is the adversarial relationship that has traditionally existed between management, labor, and the insurance company before, at and after when a worker gets injured.
Our client's key innovation is to "flip" this traditionally adversarial dynamic to one of partnership and collaboration.
While the details about how they do it are confidential, suffice to say they are able to effect workers’ comp savings of as much as 80%!
The “aha” connection I immediately made was that it was the smaller, "boring" innovations like workers’ comp reform that make possible the larger, headline - making ones like Elon Musk’s giant tunnels.
Yes, we all need the Elon Musk’s of the world to dream and make happen very big ideas like the Boring Company...
But just as much so Elon Musk needs the smaller process and relational innovations to make his big ideas economically feasible and possible.
Very importantly, for the vast majority of businesses and entrepreneurs, it is almost exclusively through these “smaller” innovations where real money can be made.
This simple fact is more true today than ever, as the modern economy is so dominated by a relatively few number of societal-changing giant technology companies like Apple, Samsung, Amazon, Google, Facebook, Uber, Tesla, SpaceX, et al.
Odds are very long that any of our businesses will grow to their size and impact but...
...if we plan and act right, odds are very short that we can devise, build, and market new business models that thrive off of their big innovations.
So hopefully, the next time you are driving in Southern California, rather than crawling along on one of the region's painfully congested freeways, you are instead whisking to your destination through a safe and state-of-the art giant transportation tunnel.
I hope you do so with a big smile on your face, both from awe and excitement for this new mode of transport.
And because you had made your business thrive by finding and pursuing opportunities that handsomely profited from the big changes and innovations around us always.
No matter how small and boring they might seem.