After five years of living in our new house, my wife and I decided to buy a new clothes washer and dryer. We figured we'd upgrade to those new, ultra-efficient machines that use really little detergent, water and energy.
But right as I was about to make the purchase, I started to feel really bad for the washer and dryer manufacturer.
Well, we bought it at Best Buy, and before we made it to the front, where the registers are, our son Max stopped us in the video game section.
And so I started thinking. When am I going to buy my next washer and dryer? Maybe in another 5 years? 10 years? 15 years?
And when is Max going to get his next video game? Probably next month. And then the month after that. And then the month after that. (If he keeps up the good behavior and good grades as I expect he will.)
What an amazing difference! The washer and dryer manufacturers may only get one sale from me in the next decade while the video game companies might get 120 sales over the same period. Sure, the washer and dryer are bigger ticket items, but even if I'm satisfied, that manufacturer isn't getting squat from me for a long time.
Which made me think of the mistake I made when we first started Growthink.
When Jay and I first started Growthink, we focused solely on developing business plans for companies. We helped a ton of companies achieve a lot of success. But oftentimes, after we helped a company, they no longer needed us. The used the plan to raise money and grow their businesses, and didn't need to come back to us for another business plan.
We were like the washer and dryer manufacturer.
So, we set out to correct this mistake.
We started offering more services to help clients after developing their business plans. We launched our investment banking practice to help them raise capital and/or sell their businesses. And we began offering marketing and internet marketing services to help them generate new leads and customers.
And then we launched Growthink University to help clients with everything they need to successfully start and grow their businesses.
It took us years to get to this point, but now things are humming.
So, my key takeaway for you is to really think about your business:
How often will customers buy from you?
What is the lifetime value of your customers?
How can you increase the number of purchases that customers make from you?
Can you develop new products or services for them?
Can you offer them value month after month after month?
As we start this new year and decade, I want you to take some time to think through these questions. Make sure that you are adding as much value as possible to your customers; and giving them the opportunity to pay you month after month, year after year to receive this value.
It's really easy to make fun of big businesses. With all their bureaucracy, they tend to move slowly. And they tend to be difficult to work with.
But there's one thing that big businesses typically do much better than smaller companies. And that is conducting employee performance reviews.
In fact, many smaller businesses focus so much on solving day to day crises, that conducting employee reviews falls by the wayside.
Which leads to problems. Lots of problems.
Companies that succeed have strategic plans.
And, when you conduct periodic employee performance reviews, you ensure that your employees have objectives that are congruent with your company's strategic plan.
So rather than employees focusing on tasks that they think are right, you ensure that they accomplish the tasks that really allow your company to grow and profit.
Without performance reviews, you get lots of problems. Management gets frustrated because employees are not achieving key objectives. And employees get frustrated because they don't know if they're doing a good job or not.
Interestingly, when I recently interviewed Mike Carden, co-founder of performance management review company Sonar6, he told me that most employees really like performance reviews, even when they are underperforming.
He said, "It's sort of like playing golf. Even if you don't play great, you want to know your score at the end."
Carden gave me some other great tips on conducting performance reviews to ensure that you get the most out of your employees and your company achieves its objectives.
Among other things, Carden mentioned that reviews should typically be done monthly and should take no more than 20-30 minutes per employee.
By getting into the habit of conducting monthly performance reviews, you ensure that your employees remain focused on the RIGHT objectives and that you reward them and/or improve their performance more quickly.
To hear a short clip of the interview, click the blue triangle on the player below:
Most of us are familiar with Ivan Pavlov and his famous Pavlov dog experiments.
To refresh you, Pavlov found that when dogs constantly heard a bell when they were fed, that subsequently, the mere sound of a bell would cause them to salivate in anticipation of their next meal (even if that bell was not accompanied by food).
Interestingly, when I recently interviewed productivity expert Laura Stack, she compared checking email to a Pavlovian response. Basically, applications like Microsoft Outlook with features like a bell sounding with every new email, or an envelope in the system tray, have conditioned people to check email far too often.
In fact, many entrepreneurs and business managers check email 10 times a day or more. Some check it constantly.
But what happens when you are checking email too often? Well, according to Stack, you are failing to complete the key tasks and projects that must be done in order to grow your business.
Successful entrepreneurs and business managers have the insight to determine the highest value uses of their time. And then they have the self-discipline to ensure that each and every day, they devote time to these uses. It is then, and only then, that entrepreneurs can grow their businesses. If not, every day they might accomplish 20 tasks, but these tasks won't help their businesses grow.
During the interview, I peppered Ms. Stack with a series of productivity questions, and received tons of great answers in return. My favorite was her six-step outline for entrepreneurs to become more productive as follows:
1. Determine what you are supposed to be working on (what has the highest value-add to your organization)?
2. Make room for those activities on your schedule (and do whatever you have to do to get it done, including scheduling meeting with yourself or working offsite)
3. Focus on achieving those things that need to be done. Don't let yourself get distracted.
4. Get organized.
5. Be disciplined. Do the things you need to do. Don't waste time on rituals like checking email, getting beverages, and socializing with co-workers in the morning.
6. Get back the attitude you had when you first started your company. By focusing on the high value-add objectives and freeing up your time from monotonous and low value-add activities, you will feel a renewed energy and excitement for your business.
To hear a clip of the interview, click the blue triangle on the player below.
This video will help you raise capital more confidently and quickly.
It's a simple formula, and may sound counter-intuitive, but it's very effective.
And if you enjoyed that video, you may be interested in my new online training course, Secrets to Raising Capital, where I give you step-by-step instructions on exactly how to raise 40 different types of capital to grow your business.
Because of all the negative news in the financial markets, this may come as a surprise to many, but last week, over Half a Billion dollars was given to startups and growing companies.
That's right. In venture capital alone, over $200 million was given out. Startups like Ansca Mobile (mobile application firm) and Branders.com (online seller of promotional items) raised $1 million and $5 million respectively.
And early-stage companies like Lanyon (management solutions to the hospitality industry) and Seeking Alpha (financial commentary website) raised $7 million and $10 million respectively.
And the angel market was also booming from coast to coast. Next Big Sound in Boulder, CO (music services) raised $1 million, PBworks in San Mateo, CA (wiki hosting) raised $650,000 and FitnessKeeper in Boston, MA (fitness platform) raised $400,000 among many, many other deals.
And hundreds of other startup and early stage companies raised debt financing and funding from numerous creative and alternative sources.
So, money IS out there. And lots of it.
The key is, as it has always been, to know what sources of financing are right for you and how to get them.
This 14-week course covers 40 sources of capital. It teaches you what they are; helps you determine which sources (note that "sources" is plural on purpose) of capital are right for your business, and most importantly, gives you step-by-step action plans to raise each one.
As you know, last month we opened the doors to 100 new Growthink University members.
And to make it even more exciting, I offered to donate, from my own pocket, $10 to Habitat for Humanity for every new member. Plus I offered to donate the $1 trial fee that all new members paid.
As you might have imagined, the 100 spots filled up quickly, leaving me with an obligation to donate $1,100.00 to Habitat for Humanity.
So, I wrote the check. And I wrote it with a smile, knowing two things. First, that I was helping Habitat for Humanity succeed with eliminating homelessness. And second, that I was helping the new Growthink University members succeed in building more successful businesses.
Here's a picture of me holding the check:
Now, next week, I am going back to raising money. But this time, the tables will have turned. This time I will not be raising money for a charity. This time, I will be raising money for you! To start or grow your business!
That's right. Next week I will be releasing my brand new Capital Raising Course. This 14-session course is the culmination of all of my best capital raising products. It provides step-by-step action plans for you to raise capital from 40 different sources.
Even if you think you only need one source of capital, I will show you how most successful companies raise money from 5 or more sources. And more importantly, I will show you where and how you can raise capital too. And you'll that it's a lot easier than you think - if you follow my directions!
If you haven't already done so, you should listen to my 45-minute long MP3 entitled "The 7 Secrets To Capital Raising Success."
I originally intended to include this audio as part of the Capital Raising course (and charge for it), but I wanted to give everyone access to it, since it's that important.
Click here to download (right-click and "Save As..." MP3 to your computer), or click the blue triangle below in the player below to stream the MP3:
When I was younger, I had four full-time jobs before I started my first business.
Looking back, in none of these jobs did my managers ask for my ideas or suggestions. Nope - my business creativity and ideas simply didn't matter. Even though I had a lot of them. And many were ideas that could have really helped those companies.
So what did I do?
I left. I left those jobs until I found one where all of my ideas would receive the proper attention - running my own company.
But now that I'm running my company, I can't make the same mistake that my past employers made. That is, I must challenge my employees and encourage their ideas and suggestions.
Why? Well for numerous critical reasons according to award-winning author and professor Dr. Alan Robinson who I recently interviewed.
Specifically, according to Dr. Robinson's vast research, 85% of new ideas at companies come from front-line employees. Yes, the employees that are interfacing with customers and vendors, and employees that are manufacturing your products or cleaning your facilities come up with the vast majority of your best ideas.
Which is very interesting and dispels the myth that most great ideas are generated by CEOs and top managers. This makes sense though. Entrepreneurs and founders come up with ideas to form companies. But then they must eventually transform into managers of their organizations. In doing so, they move farther away from the front-line operations, making it harder for them to innovate themselves.
Which is why great entrepreneurs make innovation and business creativity a key part of their organizations.
According to Dr. Robinson, the first key to effectively integrating business creativity, idea generation, and innovation into organizations is "alignment." Alignment simply means that everyone in the organization knows the goals of the organization, and what goals new ideas should aim to solve. In an example of poor alignment, he mentioned the angry CEO who found a note in the suggestion box to "offer different flavors of peanut butter in the cafeteria." Clearly, this CEO, and not the employee, is at fault for not aligning his organization around its key objectives.
The second key to effective idea generation is to establish systems or processes. These systems do not have to be formal or costly. For example, giving employees 30 minutes/week to discuss new ideas is enough for them to 1) know that they should always be thinking of new ideas, 2) that their ideas are valued, and 3) that they have a formal opportunity to discuss their ideas.
Implementing idea generation programs not only results in great new ideas that allow companies to outperform competitors. But they result in dramatically higher employee satisfaction and morale.
In fact, one of the top reasons employees give for quitting a job is that management didn't take their ideas seriously. When employees are asked to submit ideas, given time and/or incentives to submit ideas, and see their ideas implemented, they become much more committed to their organizations and perform better.
So, as you grow your organization, be sure to implement formal processes for business creativity and idea generation. Fortunately these processes are easy to implement, and will have multiple benefits to your bottom line.
In the interview, Dr. Robinson gave some great advice for implementing formal processes for idea generation in your company. He also provided great ideas for assessing new ideas, making sure new ideas don't interrupt the process of implementing existing plans, and dealing with bad ideas, among many other key topics.
To hear a short clip of the interview, click the blue triangle on the player below:
Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?