Tag Archives: running a business

How to Be Decisive

Do you sometimes feel like the indecisive vultures from Walt Disney’s The Jungle Book?

Buzzie:  Hey Flaps, what are we gonna do?

Flaps:  I don't know, what you wanna do?

Military life involves lots of decision making.  And while it may seem that decisiveness increases with higher rank, decisions are more difficult when they affect more people.  So I spend a lot of time helping people at all levels when they struggle to decide something.

As an entrepreneur and sole owner of my company, I determined strategic direction with little input from others.  Then I delegated operational and tactical decisions to my staff.  If I were commanding a squadron or a ship the process would be similar.  But as a chaplain, achieving a consensus of other chaplains and senior enlisted people is crucial.  This process feels less decisive to me but in the long-term is more efficient for getting work done.

This all demonstrates that:

Decisiveness comes from understanding the importance of a decision before you begin deliberating.

These three questions can be quantified quickly and will aid you in determining the gravity of the decision you face:

  1. How important is the decision?  Most decisions are not life or death.  A decision’s place in the continuum from minor to major can be determined by asking:
    1. Who and/or how many people are affected by this decision?  As the closeness of your relationship and/or the number of people affected increases so do the repercussions.
    2. What is at stake?  When the cost to your relationships and financial, mental, and spiritual wellbeing, or that of your organization, gets bigger so does the gravity of your decision.  As the risk to life and property rises, there is a greater need to gather input from others.
  2. What is the context of the decision?  Lengthy deliberations and getting input on choices may be appropriate but:
    1. How crucial is the time factor?  Will you lose the opportunity if the decision is delayed?
    2. How will you implement it?  A military chain of command and a board of directors of a nonprofit are poles apart in making and executing decisions.  The latter generally requires significantly more buy-in from stakeholders.
  3. What are the consequences of a wrong decision?  While the results of your decision may seem permanent, rarely is that the case.  In reality, what is the cost to set things right?

Not only will answering these questions help you decide how much effort to put into a decision, it will also reveal other people with whom you should consult if necessary.  This information enables you to take the next step.

Decisive people self-impose a deadline for deciding.

Having assessed the situation, you can conclude whether:

  1. No decision is necessary.
  2. You must decide immediately, or
  3. The amount of time you should use in the event you rejected options 1 and 2.
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Like so many things, decisiveness comes with practice.  Take every opportunity.  If your family needs to decide where to go out for dinner and all are saying they don’t care, seize the opportunity and decide.  When you are not the ultimate decision maker, offer a reasoned recommendation to the person who will.

Apply this three-step process:

  1. Assess the importance.
  2. Set a deadline.
  3. Make the decision, if necessary.

It will become second nature.  You will also find that most of the decisions you have to make are not so consequential, thereby requiring far less time and anxiety.

Whether in your personal, family, work, or communal life, the time you spend deciding subtracts from the time you spend doing.  In the final analysis, the purpose of making a decision is so you can get on with your life. So . . .

What prevents you from being decisive?

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Pursue Entrepreneurship Like a Marine

When stationed with the Marine Corps, I learned a concept called maneuver warfare. Attrition warfare was the primary philosophy until World War I. Today speed and agility, also called shock and awe, dominates warfighting.  Typically thought of spatially, Marines broaden it to include psychological, technological, temporal, as well as spatial issues.  As the wars wind down I've been thinking about how to apply this doctrine to entrepreneurship.

Lesson from the Marine Corps

Image from iStockPhoto.com

While I don't equate business to war, the usefulness of maneuver warfare translated into entrepreneurship can ignite your life. Here’s how:

  1. Spatial Maneuver: Merely because another company is larger and better capitalized doesn't mean you can't enter the market.  Its size can be its biggest weakness if it prevents innovation and agility in the marketplace.  Maneuvering spatially means more quickly taking advantage of opportunities than larger, better funded competitors.
  2. Psychological Maneuver: The psychological enemy you face as an entrepreneur ranges from negative self-talk and opposition from family and friends to the lack of knowledge you need to pursue your idea.  Tackling this enemy requires forethought as to how you'll respond.  For example, when someone, including yourself, puts down your concept or your potential to succeed will you simply ignore it?  Can you continue to do so over time?  You'll do better if you analyze the defeatist arguments and have ready answer showing them to be wrong.
  3. Technological Maneuver: Technology is amazing.  But note that this can mean it is amazingly good AND amazingly bad.  Its value lies in how well it helps you get your business underway and makes it run better.  Technology purely for its own sake will hold back your progress.  Maneuvering through the technological morass should lead you to solutions that help you serve your customers and make you a nimbler competitor.
  4. Temporal Maneuver: In war, by creating a faster operating tempo than the enemy, Marines seek to disrupt their enemy’s ability to react.  With entrepreneurship, the temporal enemies are the desire for perfecting your product or service, fear of failure, or other issues that cause you to delay launching.  By setting hard and fast goals for completing each task of your start-up plan and sticking to them, establishing a battle rhythm, you gain the inertia you need to break through the temporal barrier.

Marines constantly train by planning and practicing how to use maneuver to make them the most effective warfighters in the world.  Success means shattering the enemy’s cohesion so badly it can't function.

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The enemies of your success wage a war of attrition.  Everyday they seek to dissuade you from changing your mindset and engaging in tasks that will improve your life.  Undoubtedly your definition of success differs from the Marine Corps'.  But making maneuver a key aspect of your plan will help you more quickly defeat the negative attitudes and lethargy holding you back.

Which type of maneuver will help you most toward your goals?

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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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