Tag Archives: advantages of entrepreneurship

Pursue Entrepreneurship Like a Marine – II

A few weeks ago I examined how maneuver warfare applies to entrepreneurship. Hopefully, you see it as a key aspect of your plan to more quickly defeat the negative attitudes and uncertainty holding you back.  An essential aspect of employing this concept is determining where and how to focus your effort.  The Marine Corps calls the practice of concentrating combat power the Main Effort.  Let’s translate this idea to entrepreneurship.

Pursue Entrepreneurship Like a Marine – II

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While I advocate living a balanced, purposeful life based on the Three Pillars of Fitness – Physical | Mental | Spiritual, attempting to focus on all three simultaneously will dilute your ability to reach your goals. On a daily basis, concentrate on a single outcome.

The key points of the Main Effort in Marine Corps doctrine are:

  1. Of all the actions going on within your business, recognize one as the most critical to success at that moment. As you work on your business, each day should focus on the activity crucial to moving it forward, be it marketing, sales, product development, or something else.
  2. The Main Effort involves a physical and moral commitment, although not an irretrievable one. While the Main Effort embodies the action you will take, your commitment must be deeper than task completion.  Dedication at the highest level is required to propel you through the inevitable vicissitudes.
  3. Faced with a decision, ask yourself: How can I best support the Main Effort?  Having made such a profound commitment, reinforce it by making all future choices through its lens.
  4. The practice of concentrating all your power toward the Main Effort necessitates the willingness to accept prudent risk elsewhere.  When focusing on a singular direction by definition you are excluding everything else.  This entails some risk.  Occasionally, your family may feel neglected or your fitness may decline.  End each day by assessing your physical, mental, and spiritual resilience so you will know when the risk is no longer prudent and requires a shift in your Main Effort.
  5. As the situation changes, you may shift the Main Effort. Seek to exploit success rather than reinforce failure.  As demonstrated by maneuver warfare, your ability to identify and quickly exploit opportunity increases your likelihood of success.  When you make the inevitable shifts in Main Effort, do not wait for a crisis, rather look for situations in which you can address the issue requiring the change without weakening your overall thrust toward your goal.  Add an extra day or two onto your business trip dedicated solely to time with your spouse and family.  Change a sit-down meeting to a walking meeting.

Essential to unity of effort by your team, as the leader, strive for a clear expression of the intent and expectations supporting your Main Effort.  Then ensure that everyone involved realizes the burden of understanding it falls on all team members.  You must make your purpose perfectly clear but in a way that does not inhibit initiative.

Applying the short-term focus of your Main Effort will dramatically increase your ability to achieve your goals.

What is the Main Effort in your life right now?

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5 Common Career Problems: Which Ones Do You Want to Overcome?

Every problem is a gift - without problems we would not grow – Tony Robbins

Life is filled with problems. In the early days of starting my first business, I learned to call them challenges since those sounded easier to overcome.  Among the worst are career problems.  Nearly all people are fortunate to have within their grasp the ability to choose the set of challenges with which they want to grapple.  Unfortunately, most don't exercise this choice.

5 Common Career Problems: Which Ones Do You Want Overcome?

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When I talk with people about career problems they tend to air the same complaints. Not necessarily in order of frequency, they are:

  1. I don't make enough money.
  2. I have to work too many hours.
  3. I miss too many family events.
  4. I dislike the people with whom I work.
  5. My boss doesn't know what he's doing.

Do any or all of these sound familiar?  Most were on my list back in 1985.  During that year I committed to finding a solution. On February 28, 1986, I started my first business. Being an entrepreneur eventually solved all of these challenges. Here is a rough timeline:

  1. Money:  It took less than two years to generate an income similar to the one I gave up and about five years to get my income to a comfortable level.
  2. Hours:  The first eight years I worked long hours, though rarely as many as at the company I left.  But after ten years this issue was under control.
  3. Family events:  From day one I controlled my schedule.  The flexibility of being self-employed is one of the top reasons for taking this step.
  4. Co-Workers:  Since I had the final say on hiring and firing, I never worked for very long with someone I didn't enjoy working with or who was incompetent.  This is another excellent reason for starting a company.
  5. Boss:  The truth of the matter is my boss, me, often didn't know what he was doing.  In the beginning, I was pigheaded about my ignorance.  But after a disappointing first year, I admitted to myself that I had a lot to learn and started filling in the gaps.  And while I constantly found my knowledge lacking it was within my power to get trained.
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Entrepreneurship won't solve your career challenges overnight.  But the ability to find and implement solutions will be in your hands.  While the business press tends to focus on the financial benefits of startups, I think the lifestyle benefits are much greater.  They will lead you to a more enjoyable life whether or not you have a multi-million or billion dollar IPO.

What is your biggest career challenge?

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Dividends Entrepreneurship Will Pay You

Rarely will entrepreneurship only pay you money. You'll learn numerous lesson for improving your life.

Dividends Entrepreneurship Will Pay You

If you start a service business you'll find the Pareto Principle applies: 80% of your headaches will come from 20% of your clients. I'll never forget one property management client who drove me crazy trying to please her. She owned an apartment building in tony Bel Air, California. Her outlandish expectations and constant harping only marginally outdid the extraordinarily demanding tenants. After handling her building for two years I asked a friend who was managing her commercial properties how things were going with her. Turns out he had dropped her account after three months.

I was astonished! Despite more than ten years in business, it never occurred to me that I could fire a client. A week later, with a huge anvil lifted off my shoulders, I started to enjoy life again. I actually had free time!

Life lesson from entrepreneurship:

If over the long-term a client uses 80% of your time, he had better pay you 80% of your income.

You may have a friend constantly needing your support. But will that person be there for you in your hour of crisis? If so, you have a friend. Otherwise, you are an unpaid psychotherapist. Re-examine your feelings of self-worth if you need to have this person in your life for validation.

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Another equally memorable client had a gorgeous 1930s era building in Los Angeles. One evening, happily ensconced in my apartment not too far away, I got an emergency call from one of my resident managers. A pipe had burst. She needed my help. So I threw on a jacket and jeans over my pajamas, grabbed my keys and pager, and ran out the door. I had walked about three blocks when I sensed a car following me. Not good.

Sure enough, in the next block I heard tires squeal. Within seconds a young man had leaped out of the car, put a gun in my side, and demanded money. I yanked my hands out of my jacket pockets and protested all I had was my keys and pager. He poked the gun into my ribs and insisted on money. Shouting now, I explained I was responding to an emergency at a building I managed. Trying to convince him I had not brought any money with me, I insisted he frisk me!

Evidently, my bellowing disturbed the occupant of the apartment we were next to. He shouted, “if you don’t shut up I’m going to call the police!”

With a confused look on his face, the gunman sprang back into the car and off it drove. Visibly shaking when I met my resident manager, I quietly told her what happened. But we got the problem fixed. And I didn't mention the hold up when reporting to the owner the next day.

But the resident manager had told him. So at the end of our conversation, he said he had heard what had happened. He expressed his gratitude for my perseverance. Some time later he told me to raise my fee!

Life lesson from entrepreneurship:

Are you frustrated with people who do just enough to get by? You should love them. Because of their laziness your top-quality performance, sooner or later, will stand out. It has to.

In today’s competitive economic environment even employees have to be entrepreneurial. The good news is such a milieu plays to your strength of striving for personal growth.

What lessons about personal development have you learned from your work?

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How Raising Your Rates Benefits Your Clients

Back during my real estate days, a friend I'll call Becky (seems the right thing to do since that is her name) and I met for coffee. We had similar businesses. She performed business valuations and consulting and I appraised property and consulted on real estate. We were frustrated. Both of our incomes had stagnated. And since all our working hours were filled, we saw no way to make more money.

How Raising Your Rates Benefits Your Clients

Analyzing the issue we concluded there were only two ways to increase our incomes: work more hours or charge a higher hourly fee. Since we couldn't do the former we discussed the latter.

Pricing for our services varied widely. So it was impossible to pinpoint what we should charge. We agreed to an experiment: Raise our hourly rates by 50% and see what happens.

Within a couple of months several we found:

  1. Clients paid the higher rate
  2. The number of hours I worked did not drop
  3. I got more challenging projects
  4. I traveled more

In short, I made more money doing better work. The same thing happened for Becky.

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About a year later we tried the experiment again with similar results. By then I had learned to have greater confidence in my professional ability. Also, I learned about the concept of:

Perceived Value

If something is more expensive people think it must be higher quality.

Raising Your Rates = Better Service

Equally important, my clients benefitted by:

  1. The quality of my work improving.
  2. Having someone who reliably tackled tough projects without sacrificing quality.
  3. Having greater focus on their specific needs because I didn't have to work on multiple projects or constantly pursue other work.

Of all the decisions I made in my business career, this one scared me the most. This includes dealing with a gangster though in fairness I didn't know he was a crook when I refused to be intimidated. I had worked so hard to build my company I didn't want to see it fail because I was too greedy.

But the risked paid off for my clients and me because I met the challenge of producing superior, more complex work to justify higher fees.

As you plan and start your business it's easy to be myopic.  Don't be afraid about raising your rates. Reach outside yourself to make sure your growth continues and is being rewarded properly.

Is it greedy to leave behind clients who can no longer afford your services?

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3 Ways Your Business Will Make Money

Throughout my business career I had a philosophy that sustained me whenever I made a stupid, read costly, mistake. My first year I lost out on about $20,000 because of a carelessly worded agreement. The client terminated it after I had solved his problem but before I reaped the benefits of my hard work.

How Your Business Will Make Money

So I told myself I had just bought a semester at the Wharton School. I don't know why I chose this eminent business school. But over two decades of entrepreneurship, I lost enough to pay for a MBA. Still, I gained practical knowledge that helped me become more successful in the future.

Like many new entrepreneurs, in the beginning, I was perpetually short on capital. I feared to ask for too high a fee thereby losing a client. Through experience, I learned that limits on my income were self-imposed.

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The 3 Business Models

Whether you want to be a solo-trepreneur, also known as a freelancer, or build a business, you can make money in three ways:

1. Fixed Fee: I started with this arrangement. It works a couple of ways. In real estate typically you get a percentage of the transaction price, whether a sales price or an amount of income generated by a lease or from managing a property. Numerous other businesses such as plumbing and auto repair operate on a fixed fee. Retail businesses and restaurants are also fixed fee enterprises. Whether a job takes you four hours or 40, the fee does not change.

To be successful you have to be good at estimating the amount of time it will take to handle a job. In the beginning when you have little experience you may have to charge a lower fee to undercut your competition while also learning how long different tasks take and gaining efficiency. Start counting the classes you could have bought at Wharton.

2. Hourly Fee: After a few years of paying my accountant and lawyer by the hour I realized they had something. If they misjudged how long a job would take I paid more. So I added consulting to the services I offered. If you are a solo-trepreneur this fee arrangement will eventually limit your income based on the number of hours you can work and the hourly rate above which you price yourself out of the market.

3. Passive Income: While most of my income came from the first two categories I had a few projects that generated passive income. In this arrangement, you make an initial investment of time and resources and the venture generates income thereafter with little additional work. Many types of investments fall into this category.

So does intellectual property. A training company asked me to do a video class on real estate appraising. The preparation and shoot took about 20 hours. Thereafter I received a royalty every time someone watched it. About every two or three months I had to answer a question from a student who had seen it. The checks came every three months until I joined the navy.

None of these is better than the others. Each has positive and negative aspects. The key: Understand the model into which your idea falls and the details of how to apply it.

Look for more on this topic over the next couple of months.

What other income models are you aware of?

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