It’s much more fun to be proactive about this rather than being forced to be reactive.

But cutting expenses needs to be done thoughtfully and strategically, otherwise you risk “cutting to the bone” as they say, and starving your company of the resources it needs to be successful.

How to do this?  I read a newsletter article from the folks at the E-Myth today and thought is perfectly captured the key questions you need to ask yourself before cutting an expense:

1. Will you reduce your ability to compete effectively?
2. Will you reduce the quality of your product?
3. Will you reduce your client’s experience with your company?
4. Will you reduce the good will you have worked so hard to create?

If the answer to all of these questions is NO, then you can probably cut the expense and feel good about it.  If the answer to any of these questions is YES, you’d better be very careful.

You can read the full article here.

Mike Cooch

PS -Anyone that has spent any time with me talking about business knows that I’m a huge fan of the E-Myth.  If you haven’t read it yet, pick up a copy today - The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It - and get started. It’s a very quick and easy read, and it will change how you think about operating your company.

Source: McGraw-Hill Research

I don’t know about you, but that would make me think twice about cutting back on my sales and marketing efforts!

The results of this research seem intuitive to me; most competitors will pull back, leaving an opportunity for more aggressive competitors to establish their brand and take market share.

MRC

In order to be able to sleep at night, I had to force myself to come up with a filter I could use to narrow in on ideas that had sticking power (for me personally, not because the idea was necessarily more sound from a business perspective) so I could discard the rest.

Here is what I came up with.

The first portion is focused on making sure I have the vision and emotional commitment to the idea, and was borrowed from a book called Art of Achievement: Mastering the 7 C’s of Success in Business and Life.

I must be able to bring all of these to anything I consider pursuing:

• A clear Conception of what I want, a vivid vision, a goal clearly imagined.
• A strong Confidence that I can attain my goal.
• A focused Concentration on what it takes to reach my goal.
• A stubborn Consistency in pursuing my vision.
• An emotional Commitment to the importance of what I’m doing.
• A good Character to guide me and keep me on proper course.
• A Capacity to enjoy the process along the way.

I then added to that list the following criteria that are more focused on the business dynamics of the opportunity:

• Fast to start and test
• Be able to start with little or no outside funding
• Payback of initial investment within 18-24 monthsBusinesses in which you “work once, earn many times” (initial sale leads to many repeat purchases and initial product/service creation can be leverage in multiple formats)
• Ideally automatic, recurring revenue
• Can be managed from anywhere – ideally web-based
• Something that I’ll still find fun 5 or 10 years from now and that other people think is fun too!

I hope someone finds this helpful.  It’s been a great filter for me, and it forces me to find ideas that will really be productive for me.

MRC

I’ve never heard anyone point specifically to 13 months as a benchmark before, but I like his line of reasoning. I can say that I completely agree with the idea that most people quit to early; before they’ve even had a chance to taste success.

The phenomenon that I see happen to people is that they decide multiple times instead of “deciding once”. “Deciding once” is one of the most important lessons I’ve learned in life, and unfortunately I can’t recall where I picked it up. Somebody deserves some credit!

By “deciding once” I mean to do all of your homework, weigh the risks and alternatives, get yourself to the point of making a decision - and then decide to decide once. Once you’ve made your decision, resolve to no longer let your mind scramble on whether you made the right decision or not - just move forward with all of your energy and 100% commitment. So much time and energy is wasted on reconsidering your decisions after you’ve made them; you are better off just deciding once and being done with it.

Now, I’m not suggesting that you foolishly go in one direction forever just because you decided to many years ago. You should set some sort of time frame and milestones that make sense to base an evaluation on (13 months?), and then commit like hell until you reach your evaluation point and then make another decision…once!

MRC

MRC

David Brooks recently wrote an article in the New York Times about Tiger Woods’ “Frozen Gaze”; his levels of concentration and mental toughness are legendary and have become the model that many athletes and business people aspire to reach themselves.  It’s an interesting read and an interesting glimpse into what makes him the top performer of top performers.

My favorite quotes are from his mother and father.  It should be noted that his mother is considered the tough one in the family.  Her words:

“Old man is soft,” Kultida Woods once said of her husband. “He cry. He forgive people. Not me. I don’t forgive anybody.”

And from Earl Woods:

“I’d say, ‘Tiger, I promise you that you’ll never meet another person as mentally tough as you in your entire life.’ And he hasn’t. And he never will.”

He’s probably right!

MRC

Obviously any company that wants to continue to grow and grow fast must find a way to get regular access to the good stuff that is in employees’ heads, and employee morale will only be improved if employees feel execs are listening.

At my company, we’ve recently started using the following tool:

https://www.employeesuggestionbox.com

I highly recommend it.  They’ve done a great job of capturing all of the basis systems and processes you need to solicit and review feedback.

Check it out - perhaps it will be a good fit for your company.

MRC

You don’t have to agree with all of them, but considering his track record, you should at least give them some thought.

MRC

A Couple of My Rules for Startups

Mar 9th 2008 2:13PM

My buddy Jason had a GREAT post about rules for startups. Read it, love it learn it.

Of course, anyone who has started a company has their own rules and guidelines, so I thought i would add to the meme with my own. My “rules” below aren’t just for those founding the companies, but for those who are considering going to work for them as well.

1. Don’t start a company unless its an obsession and something you love.

2. If you have an exit strategy, its not an obsession.

3. Hire people who you think will love working there.

4. Sales Cures All. Know how your company will make money and how you will actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap

6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. If an employee is about privacy, show them how to use the lock on the john. There is nothing private in a start up. This is also a good way to keep from hiring execs who can not operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over their secretary, run away. If an exec wont go on salescalls, run away. They are empire builders and will pollute your company.

8. As far as technology, go with what you know. That is always the cheapest way. If you know Apple, use it. If you know Vista… ask yourself why, then use it. Its a startup, there are just a few employees. Let people use what they know.

9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.

10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when someone sends me logo polo shirts. If your people are at shows and in public, its ok to buy for your own folks, but if you really think someone is going to wear your Yobaby.com polo you sent them in public, you are mistaken and have no idea how to spend your money

11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.

12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out 100 dollar bills to salespeople. At Broadcast.com and MicroSolutions, we had a company shot. Kamikaze. We would take people to a bar every now and then and buy one or 10 for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party :0

These are all off the top of my head. But they have worked for me so far.