Last night, I read this fantastic article in Fortune Magazine about one of my business heroes - Jeff Bezos - who was named this year's Fortune's Businessman of the Year. 

It is full of awesome anecdotes of how Jeff leads Amazon to keep changing and prospering in our brave new worlds of global and social e-commerce and business. 

I particularly was struck by the description of how Jeff manages the meetings of Amazon’s senior executive team:

“…the Amazon CEO's fondness for the written word drives one of his primary, and peculiar, tools for managing his company: Meetings of his "S-team" of senior executives begin with participants quietly absorbing the written word. Specifically, before any discussion begins, members of the team -- including Bezos -- consume six-page printed memos in total silence for as long as 30 minutes”

Bezos goes on to note that “Writing a memo is an even more important skill to master." Full sentences are harder to write," he says. "They have verbs. The paragraphs have topic sentences. There is no way to write a six-page, narratively structured memo and not have clear thinking." 

Now when I learn of things like this, I understand why the success of a Jeff Bezos is no accident.

Remember, in addition to founding and leading one of the most successful technology companies of all times, Jeff Bezos also made arguably the greatest investment of all time. 

The story is well-known but worth re-telling. In 1998 when Larry Page’s and Sergey Brin’s Google offices were a Menlo Park, California garage, Bezos invested $250,000 of personal funds into the fledgling startup.

When Google went public in 2004 that $250,000 investment translated into 3.3 million shares of Google stock. At Google’s IPO that represented a stock share position worth over $280 million.

While he doesn’t disclose how many of those shares he still holds, at the current price of Google stock they would represent an investment position worth over $2 billion dollars.

So, what is it about what makes Jeff Bezos tick that allows him to have such great success when so, so many others - with similar ambition and arguably even greater talent - fall by the wayside? 

I recently finished a great book (bought on Amazon, of course) by Mark Helprin called "A Soldier of the Great War."

It is the amazing story of an Italian PhD student in aesthetics who was drafted into the Italian Army in World War I.  In addition to being an unbelievable barnburner of a read and a tale of love and heroism and adventure, it is also the story of a young man trained as an "effete" intellectual struggling to come to grips / find wisdom from and peace with the horrors of war.

The story ends with our hero - Alesandro Giuliani - as an old man looking back on his life of books, of art, of family, of adventure, and of war and loss.

In the end it is the intersection of these two - of his great intellectual journeys tempered into character and resolve via the various "mortifications of the flesh" of his life - hard work, self-sacrificing, courageous deeds and words, and the willingness to push himself to the limits of one's endurance.

Now before we talk about business, do let us take a moment to both honor the sacrifices and to mourn the uncountable, wasted human potential through the ages caused by the scourges of war, by corrupt governments, by un-free structures.

And, correspondingly, let us stand in gratitude and in awe for the power of these qualities unleashed to make our world a so better place.

This coupling of intellectualism, ideas and analysis with a life of action, battle, and victory that the great entrepreneurs like Jeff Bezos possess in spades.

And from this coupling flows - in life, business, and investing - the genius, power and magic of a Jeff Bezos.

The saddest lament of entrepreneurs and owners of private companies seeking to sell and exit their companies is that they want their businesses to be valued on their future potential, and not its CURRENT profitability.

Given that the typical, offered purchase multiples for smaller businesses – as in those with less than $5 million in EBITDA – can be as low as 1 or 2 times last year’s tax return profits, this is understandable.

In fact, we often see purchase offers based on multiples of MONTHLY earnings – not exactly the “happily ever after” exit dreamed of when these businesses were founded!

Yes, getting a business valued and sold based on factors other than its earnings while by no means impossible nor uncommon, is HARD.

The lucky ones that do so – and there are literally hundreds of businesses every month that sell for very high multiples of profitability, for multiples of revenue, and even companies that are in a pre-revenue stage that sell every day just on the value of their technology, their people, and their work processes – focus laser-like on the below:

They Are Technology Rich. Companies rich in proprietary technology in all its forms – patents, processes, and people – are far more likely to be valued on factors other than profitability and correspondingly attain purchase prices beyond a few times current year’s earnings.

As an example, the likelihood of a medical device company being sold or taken public is twenty times greater than that for a services - or a low-to-no proprietary technology company - doing so.

They Have Gold at the End of their Rainbows. Businesses that sell for high multiples communicate exciting and profitable future growth.

Their managers demonstrate understanding of the big 21st century “macros” - i.e. how technology evolutions and globalization will impact positively and negatively their industry, market, customers, and competition.

Concurrently, these managers understand the micros well too, especially how their business’ human capital will adapt and grow as change happens. 

All this translates into well-developed stories that if their businesses aren’t making it now, there is gold (and a lot of it!) at the end of their rainbows.

They Are Great Places to Work. Businesses that sell are usually characterized by that good stuff that we all seek in our professional environments.

They are culturally cohesive. If they don’t have low employee turnover, they at least have well - defined career progression paths. And their compensation policies align and pay well with desired performance.

Quite simply, they are great places to work and are reputationally strong within their industries.

They are Process and NOT People Dependent. Businesses that are overly dependent on charismatic owners or a few dynamic salespeople or engineers rarely sell because the majority of their value can simply walk out the door tomorrow and never come back.

Important aside: for those entrepreneurs that harbor the desire to sell but not the ambition to build a meaningfully sized, process-based organization should then focus their exit planning almost exclusively on technology and intellectual property development.

If they are unwilling / unable to do this, then they should put the idea out of their head for now and invest this energy into more meaningful pursuits.

Like my favorite - making absolutely as much money today as one possibly can.

They Have Good Advisors. Businesses that do everything right but have messy financial statements because of poor accounting, messy corporate records because of poor or non-existent legal counsel, and messy “future stories” because of poor exit planning and investment banking advice, simply do not sell.

Sure, they may get offers, but invariably these deals fall apart in diligence and at closing.

And as anyone that has ever been through a substantial business sale process knows, almost nothing in business is as time and energy-draining as is getting close to a business sale and not getting it done.

They Get Lucky. Luck remains a fundamental and often dominant factor that separates the businesses that successfully sell from those that don’t.

The best entrepreneurs and executives don’t get philosophical nor discouraged by this but rather they embrace it.

They try new things. They follow hunches. They make connections.

They start from the pre-supposition of “accepting all offers” and work backward from there.

They and their companies can be best described as “happy warriors” – modern day action heroes ready for the fight. When they get knocked down, they smile, wipe their brow, and get right back in the fray.

And you know what? Our happy warriors, living and thinking and working like this day after day channel some mystical power and draw great luck and more to themselves and their companies.

Yes, companies that sell are the good and lucky ones.

Follow the advice above and fortune just may smile on your company and those you invest in too.

Take this short quiz to find out:

Are your revenues growing month after month without fail?

Are your profits rising, and allowing you to pay yourself enough money to spend freely on the things you want?

Do you have plenty of customers, with no need to get more?

Do your employees care as much about the success of your organization as you do?

Do you have enough cash flow to radically grow your company?

Would your business thrive if you took the next month off?

Are other companies regularly approaching you to buy your company?

... If you answered NO to one or more of these questions, then your business is NOT giving you the results you want or deserve.

And unfortunately, you’re not alone.

In fact, millions of other entrepreneurs and business owners are struggling.

As you may know, Inc. Magazine found that 80% of businesses fail within the first 5 years, and Dun & Bradstreet research showed that 91% of businesses fail within 10 years.

And according to the 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 with the slow-down in the economy since 2008, many businesses have been struggling...

with no growth and declining profits.

That’s just depressing.  But there IS a solution...

...and I am so committed to helping you find it that I am offering free copies of Dave Lavinsky's new book so you too can discover what it is.

To learn more, click here: http://startattheendbook.com/free-offer

If you haven’t yet registered for my Wednesday webinar, this is your last chance.

Webinar: “How to Make 2013 Your Best Business Year Ever!”
Date: Wednesday, November 14th
Time: 8 pm EST / 5 pm PST
Registration Link: https://www2.gotomeeting.com/register/459943082

The fact is this: successful people figure out what they need to do BEFORE they do it.

For example, a winning football coach always comes up with a game plan BEFORE the game. Then he’ll go over the plan with his team and practice BEFORE the game. So when the game starts, the team is ready and able to execute on the plan.

The same is true in your business. And if you want 2013 to be your best business year ever, you need to start planning NOW (2013 is only 49 days away).

That’s why I’m hosting a complimentary webinar on Wednesday, November 14th at 8pm Eastern / 5 pm Pacific.

The webinar is called “How to Make 2013 Your Best Business Year Ever!”

REGISTER HERE*
https://www2.gotomeeting.com/register/459943082

On the webinar you will learn:

•    How to significantly increase your business’s 2013 sales and profits
•    The precise way to figure out the best 2013 opportunities for your business to pursue
•    How to set attainable 2013 goals that lead to long-term success
•    My #1 tactic for ensuring sustained success in 2013 and beyond
•    And much, much more!

You can expect to hear a positive, motivating message loaded with actionable intelligence to make 2013 the best year of your business life.

2013 is just 56 days away.

And if you want to make 2013 your best year ever, you need to start planning now.

To help you succeed, I’m hosting a complimentary webinar next Wednesday, November 14th at 8pm EST / 5 pm PST.

The webinar is called “How to Make 2013 Your Best Business Year Ever!”

REGISTER HERE (note, to allow for quality audience interaction, we are limiting attendance to the 1st 40 registrants):
  https://www2.gotomeeting.com/register/459943082

On the webinar you will learn:

•    How to significantly increase your business’ 2013 sales and profits
•    The precise way to figure out the best 2013 opportunities for your business to pursue
•    How to set attainable 2013 goals that lead to long-term success
•    My #1 tactic for ensuring sustained success in 2013 and beyond
•    And much, much more!

You can expect to hear a positive, motivating message loaded with actionable intelligence to make 2013 the best year of your business life.

REGISTER HERE (there's limited space for this free webinar):
 https://www2.gotomeeting.com/register/459943082

P.S. Whenever Growthink hosts a webinar, we get a lot of requests asking if there will be a replay or a recording of the call.  Right now we don’t have any plans to do a replay nor to record the call -- so my advice is to be on the webinar LIVE!

REGISTER HERE (there's limited space for this free webinar):
 https://www2.gotomeeting.com/register/459943082

Dave Allen, author of the great productivity best seller "Getting Things Done," has developed an almost cult-like following for his ideas, structures, and best practices around to-do list management, prioritization, and metrics and schematics that define what an effective work day should be.

Without question, there are great benefits to his methods, and I especially like his best practice of always ending a meeting, conversation, or work on an open-ended project with the simple question "What is the Next Action?"

This discipline alone can greatly improve daily and meeting productivity, and perhaps more importantly reduce that sometime suffocating sense of anxiety common to knowledge and entrepreneurial work that there is always way more that must be done than there are hours in the day.

 

But a focus on simple to do list management, in the modern world, is far from sufficient.

You see, the dirty little secret that all of the self-help masters, all of the highly paid management consultants fail to tell you is that in our incredibly fast-moving, changing, competition from everywhere modern economy it is virtually impossible to design a plan or strategy that is in any way close to being assured of success.

The reason why is simple. Plans and strategies, by their nature, are speculative and assumptive.

They require the planner to survey the current market and competitive landscape along with assessing the current strengths and assets of their enterprise.

And then, from those assessments, forecast how a course of specific decisions or investments will be received by the market, by current or perspective customers, and responded to by the competition.

 

When stated this way, it becomes obvious that there is a very high likelihood that a plan as designed will not work.

It really doesn't matter if that plan is to introduce a new product or service offering, a new marketing or advertising campaign, a website re-launch, or an internal re-organization.

So, does this mean that planning is worthless? Of course not! 

But it does point to a pair of strategic best practices:

1.    Before commencing any planning process, first reflect deeply and document extensively what is working now.

These could be the practices and habits of a top sales person, a pay-per-click advertising campaign with positive ROI, an invoice collections best practice, a particularly profitable partner or affiliate.

Or, on a personal level, an exercise or diet or spiritual regimen.

Now to do more of these things that work, productivity and accountability best practices as outlined by the Dave Allens of the world are incredibly valuable and should be incorporated aggressively into the daily work habits and disciplines of the modern professional.

2.    But for everything else that falls outside of this realm, the right mindset is one of testing and exploration, of brainstorming, of speculation and possibility. Of open-ended questions.

AND it should be noted extremely well that it is usually in this mode that the big outlier, “black swan” ideas and strategies and relationships are usually discovered.

As for the question as to how much of #1, or playing more of the existing game better, versus #2, playing a new game, should be incorporated into your daily work flow and planning processes, well that is a decision that the best managers, the best consultants and the most renowned self-help masters are paid a lot of money to answer.

My answer is - no surprise here if you've ever met me at a party - is to have my cake and eat it too.

Strictly schedule times, deadlines, to-dos and accountabilities to accomplish more of the stuff that you know works and leave plenty of open space - on the calendar and in one's mind and spirit - to step out of the safe harbor and into the big sea and dream more than just a little bit.

And when you balance doing and dreaming like this - and sprinkle in a little luck, a little bit of being at the right place at the right time - your dirty little secret will soon be how much money you are making.

Or even better, how much difference for the better you are making in the world every day in every way.

A great best practice for all companies of ambition is to establish and hold regular meetings - in person - of a well-qualified and experienced board of strategic advisors.

Let’s set aside for now some of the mechanisms of setting up a quality board (of which more can be read about here) and instead focus on some of the “tough love” feedback a board can offer executives on what they are doing right and far more importantly what they are doing wrong and how to fix it.

That Often It is Better to Receive than to Give:  While advisory board members, unlike a formal board, do not have liability nor fiduciary responsibility, their time and energy requirements to participate are significant.

And for most smaller companies, the financial incentives it can offer advisory board members are relatively little compared to the value of a board members’ time. 

A good if imperfect analogy is that for many senior executives their involvement with a smaller company advisory board is almost a philanthropic endeavor - where they give of themselves without expectation of direct reward - financial or otherwise. 

Correspondingly, the owners and managers of the small company must approach the sage advice and good energy offered by their advisory board fully in “receiving” mode.

For businesspeople of the mindset of always trading value for value and reciprocal obligation, this is hard. But only by clearing this space can the board’s counsel be best received.

And somewhat counter-intuitively, often only by management fully accepting the “gifts” of its advisors will the board member’s experience be richest.

Begin with the End in Mind: For companies beyond the startup phase, its operating executives are naturally pulled to the shorter-term challenges and realities - this quarter’s revenue and profits, this month’s sales, the challenges and angst of a difficult employee decision, etc.

In contrast, an advisory board discussion - by both its nature and by the kinds of folks attracted to serve on it - naturally pulls to the long view, to the big questions that all businesses should be regularly asking themselves always but rarely do.

Or, as they say, the “why” and the “which.” 

The "why" questions are hopefully embodied in the Company’s mission and its values, and need the regular attention of strategic planning sessions like advisory board meetings to keep them from existing only in “hot air.”

The “which” questions are in many ways the harder ones that an advisory board dynamic can help address. 

You see, ambitious entrepreneurs and executives (especially after they taste a little success!) are naturally drawn to expanding their sense of their market opportunity, and correspondingly their list of products and service offerings.

This naturally leads to a diffusion of focus, of trying to be all things to all people. 

A thoughtful advisory board will challenge management to more clearly define where they are aiming to be 1 year, 3 years hence and beyond, and from this vision where resources and attention should be focused today.

Speak Little, Listen Much: Managers and owners of emerging companies are often also the lead salespeople, the lead “evangelists” for their companies.

As a result, their default mode is to always be selling, always be pied-pipering their incredibly bright futures. 

Even if, especially if, so doing is buzz-killing and / or depressing.

Why?  Because it is often only in the “low negative” energy state that a certain kind of reflective creativity can flourish and completely new approaches to solving vexing problems can be discovered.

Brevity is Next to Godliness: Strategic planning sessions in a modern business context should be tightly scheduled to last not more than 2 hours.  After this length of time, diminishing returns starts setting in fast. 

A tight frame also requires all participants to come to the meeting prepared.  And, in turn, that the meeting organizers select the right meeting homework and then plan and moderate the agenda with the proper balance of structure and free-flowing dialogue.

Doing all of the above requires work – a good guide is that for every hour of strategic meeting time there should be 5 hours of planning time by the meeting organizer and at least 2 hours of preparation time by each participant.

Conclusion: Given that the only way to increase the value of a business is to either a) increase its bottom line financials and/or b) to improve its strategic positioning and growth probability, creative planning sessions like advisory board meetings should be a FIRST priority of any responsible manager.

They are classic Steven Covey, “non-urgent and extremely important” activities. 

Ignore them at your peril, and benefit from them in ways well beyond predictable expectation.

Probably the worst way for an entrepreneur to begin his or her day is to read the newspaper.

Or watch the news.

Or, for that matter, to surf the net or even check in on the latest and greatest on Facebook, LinkedIn, Twitter, et al.

It is not to say that keeping up with events is necessarily a bad thing, and of course for many types of businesses and professions, it is part of the job description to do so.

But for the busy and ambitious entrepreneur, doing so first thing in the morning at best is highly distracting, and at its worst misdirects one's mind and energy in the absolute wrong direction.

Why?

Well, unfortunately the overwhelming majority for what passes as “news” these days is a downbeat recital of the things that either have, are, or are about to go bad the world over. 

War.  Economic crisis.  National disasters.  Scandal. 

All usually presented in that oh-so depressing of "yes this is bad, but just wait because it's only going to get worse" tone. 

Not the best “stimulus” with which to start one’s day to get out and conquer the world, now is it?

Yes we should be informed.

But really, it is not the “informed” that change the world for the better.

Rather, it is the men and women of action, purpose, and zest that do.

And these energized and effective souls don’t start their day with the “news.”

Rather, they feed their spirit, minds, and bodies wholesome fare.

They meditate. They read inspirational literature. They exercise vigorously. 

They set their day's goals and get right after the most important ones first thing.

They recognize that the first hour is the rudder of the day and so they tack their daily ship in the best direction right from the day’s get go. 

And once they are good and going…

…well, then they take a peek at a few tweets, they accept a few friends requests, and they indulge themselves in a little of the “news.”

But not too much.

This blog post is a reprint of an article written by Jay Turo in this month’s Vistaprint Small Business Blog.

As any venture capitalist worth his salt will tell you, there is a chasm of difference between the mostly grounded-in-reality financial forecasts offered by public companies, and the almost never to come true "rosy scenario" projections offered as a matter of course by startups and small businesses.

And while large public company CEOs and CFOs are judged as a matter of the highest honor on their ability to deliver on projections, exceedingly rare is the entrepreneurial executive that comes anywhere close to meeting forecasted results.

For a sense of the extent of how bad this problem is, a partner I know at a prominent venture capital firm estimates that of the 30+ companies that his firm has invested in, only two have consistently met or exceeded their financial projections.

And let me add that it isn’t like the inmates are running the asylum at my friend’s fund - as a prerequisite of having them as an investor, each of their portfolio company CEOs are required to undertake and report on a vigorous, quarterly budgeting and forecasting cycle.

And also let’s not assume that my friend is just a lousy investor. Lack of consistent financial performance is pretty much par for the course for startups and small businesses.

So what is going on?

Are the entrepreneurs just not ready for prime time? Are their managerial skill levels that many levels below their big company brethren?

I’ll say this - it is certainly not for lack of trying.

Most small technology company executives work longer hours than businesspeople have at any time in history.

If you doubt this, pick up Ron Chernow’s masterful biography of John Rockefeller.

In it, we read enviously of Mr. Rockefeller's daily 9:15am visits to his barber, his afternoon naps, and his unwavering commitment to always leave the office each day, no matter the season, so he could be home before dark.

And it is not for a lack of know how.

Modern entrepreneurs - with their always-on, “click of a button” best practice knowledge and connections base - are a better informed and more globally networked lot than at any time in history.

So if they aren’t the problem, is it modern business itself?

Has it just become - with all of its technological bells and whistles, all its globalization and pricing pressures, all of its customer unpredictability and fickleness - just too unwieldy a beast for any small company to ever consistently ride?

And concurrently, has accurate financial forecasting become equivalent to throwing dice?

Or more disturbingly - is it not even worth doing as even when they do turn out to be accurate it just falls into the category of the blind mouse getting some cheese every now and then?

For better or for worse, modern business demands that we take a more “balanced scorecard” approach in judging managerial effectiveness and entrepreneurial progress.

Factors like intellectual property development speed, organizational design, and client satisfaction as measured by a companies’ net promoter score are proving to be just as important predictors of a business’ value creation as is its forecasted-to-plan accuracy.

Please let me be clear: on their own these factors do NOT make a business valuable. 

Rather, the right matrix of them, properly prioritized, IS highly correlated with businesses that attain high profit exit and investment outcomes.

As an added bonus, these non-financial key performance indicators (KPIs) can be designed to be far more consistently predictable than traditional projections.

As such, they are usually far better measures of executive effectiveness than budgeting and forecasting “gap analysis.”

You just have to have the guts to forget about the numbers for a quarter or two.

Or, if you are really get good at defining, tracking, and accomplishing the right non-financial KPIs, to forget about them permanently as they will just take care of themselves.

Now wouldn’t that be nice.

Holding constant for socioeconomic factors, the typical entrepreneur makes less money, work more hours and suffers more work-related stress than their employed counterparts.

And when we combine these statistics with those that show a very incredibly low percentage of startups and small businesses ever attaining meaningful profitability, it is remarkable that people ever even dream to be entrepreneurs and start businesses at all.

But start them they do!

Quite possibly the most amazing and inspiring number in all of American business is 550,000.

That is the approximate number of new businesses that are started in American each and every month, or more than 6 million per year.

Now these opposing statistics beg the question, “Why?”

Why would 550,000 people - who statistically are far better educated and wealthier than the population as a whole - engage in behavior that on the surface clearly seems contrary to their self-interest and dare I say, delusional?

Well, on the cynical side, many of these brave folks probably think the odds of economic success are greater than they really are.

And even if they know the odds, they think that they don’t apply to them. 

On the slightly less cynical but still not totally inspiring side, one could argue that businesses are started out of boredom - out of the need for that “action rush” that in the realm of business often only an entrepreneurial endeavor can truly provide.

Inspirationally, many believe like I do that entrepreneurship is the greatest force for positive change in the world today, and they start and grow businesses to be positive change agents, on levels big and small.

They start restaurants to create and share beautiful food, service, and atmosphere.

They open day care facilities to provide quality, spirited child care for working families.

They start creative agencies - graphic design, public relation, web development firms, and the like to leverage their business and creative talent to its most effective end.

And they start drug development and medical device companies to help people live longer, healthier lives.

And thousands of types and forms and sizes of business in between, led by entrepreneurs with aspirations big and small, driven by motivations both pedestrian and soaring.

But at the heart of all of their reasons for starting businesses, at least of the ones that survive, is that often begrudged but really most inspiring motivation of them all.

They start businesses to make a lot of money.

Now the key word in that sentence is make - as in bringing into existence through creativity, effort, and as often as not more than a little serendipity and luck, something that did not exist beforehand.

Making money is the difference between Mo Ibrahim becoming a billionaire through bringing inexpensive mobile telecommunications to millions in Africa and Mo Gaddafi stealing billions of his people’s money at the point of a gun.

It is the difference between Steve Jobs and Apple creating $630 billion in market capitalization - and untold additional hundreds of billions in economic and multiplier effect.

Now often, for the entrepreneur and those that back them, the touching of this money often takes many years, even decades, of under-paid, hard, and often thankless work, before a cash windfall in the form of a business sale or a public offering.

But that is a story for another day. 

For now, find those entrepreneurs that can truly make money, encourage and back them, and you and the world will get to a better place.