According to the Social Security Administration’s statistics, Mental Illness is the second leading  cause of disability in the United States and strikes one out of every five people. It usually affects people between 25 and 40.  The recent economic downturn has put a strain on everyone. If someone breaks a leg, you can see it, sympathize, and react appropriately. You can’t ” handle ” things you don’t know exist and mental issues are generally not visually detectable. Employees, customers, vendors, people in general, are at risk for mental disorders. In a larger business, the development of a mental disorder or illness in a single individual may not be catastrophic, but it can pose serious challenges for a micro-sized business. For that reason, it’s helpful to recognize it early and develop a strategy for dealing with it.

If one member of a very small staff develops a mental disorder, work life for everyone will be affected. The situation is made more difficult, and more complex by lack of disclosure. Mental disorders cannot be seen. We’re taught to be ” understanding. ” Behavioral changes may not be radical, or may be explained away. Any mental disorder, however, diagnosed or not, may affect an employee’s ability to react normally to the demands of their jobs.

If someone has a mental disorder, they may have difficulty communicating. They may not process corrective criticism normally, or they may be overly critical of themselves. If someone becomes depressed, they lose the energy they typically bring to projects. Most mental disorders and illnesses interfere with sleep patterns. Lack of sleep generally translates to a drop in performance.

While we need to be sensitive to people who have problems, changes should trigger enhanced observation. If people seek help, get on medication, and stay on it, they can often function normally.

While employers must always be compassionate, they need to maintain professional detachment. It’s difficult not to  get close to individuals you work with, particularly when the period of employment becomes lengthy and the staff is very small. Still, it is the best policy.

Having a personal attachment to an employee renders you incapable of making sound business decisions. Maintaining a professional detachment will allow you to be objective when analyzing your employee’s performance. If the employee has historically performed well, you’ll tend to overlook performance problems. Documentation is a key in helping to avoid that.

Just as it’s difficult to tell if someone you see daily is losing or gaining weight until a substantial change has occurred, you may not notice a gradual slide in performance. Constantly measuring performance using analytical methods will remove personal bias or inability to perceive small amounts of change. Sliding levels of performance should be addressed promptly and consistently. If standards are not maintained, use Human Resource procedures for scheduled, as well as spontaneous, performance reviews. Document findings and comments, have employees acknowledge the content of the conversation with their signature, and provide them with a copy.

Individuals suffering from mental disorders and diseases are considered ” disabled ” and cannot  be discriminated against. You will be expected to make special accommodations for their needs. They may well be eligible, by virtue of their own disorder affected perceptions, for Unemployment Compensation, should they choose to quit. In some cases, they may also attempt to file for Worker’s Compensation. Stay detached, measure performance, document deviation, and develop an operational strategy.

When you’ve made a decision that ends in failure, the lessons you learn generally are worth more than the money you lost. Knowledge gained will propel your forward progress. Do you remember Adam Sandler’s movie, “Fifty First Dates”  Drew Barrymore’s character was stuck in time – constantly repeating the same day.  Only Adam Sandler’s approach was different. Business is often like that.  A great many tries end in failure.

The initial human tendency is to get bitter, angry, and look for others to blame. When that happens, the lessons taken from the experience are all the wrong lessons. Tuition paid to the “University of Entrepreneurism” - otherwise known as the “School of Hard Knocks,” is wasted. The key thing is how you respond to failure. Reviewing why you made the decision will contribute to responding in a constructive way.

Understand that things happen the way they happen for a reason. Even if ”luck“ played a part, as it so often does, you need to be in the right place at the right time to get ”lucky.” If you keep backing the logic down, action by action, you will find a point in time when someone make a decision that wasn’t “luck” enabling the recipient to “get lucky.”

Whether it’s luck, or just hard work, that drives your success and your failures, the greatest contributor, overall, is how your own mind works. Understand your own thought processes. Other people, organizations, banks, etc. – that whole list of people and things you are tempted to blame - never enter the picture until you decide to let them. It still boils down to your thought processes. If you don’t remember why you made the decisions you made, you are likely to repeat the cycle - or at least waste valuable time rediscovering old thought processes. That’s substantially slows forward progress.

The best way to understand yourself is to keep a “Decision Journal.” In decision making, you must describe the problem clearly.  Give thought to the way you want to word the problem since the exact wording of the problem will affect where your mind goes to solve it.  For example, never ask, “can I” – ask “how can I.”  A good portion of the time, our businesses suffer because we asked the wrong question to start with.
Once your question or problem is phrased properly, you can begin the decision making process – and that process should be logged.  Key components of a Decision Journal are:

• Your mood or attitude -if exceptionally good or bad, you may wish to provide detail.
• What you think
• Why you think it
• Is it “pro” or “con”

If there are only pros or only cons, we generally just ”do it” and it never reaches the point where it requires a process that reaches the conscious level of “I have to think about this.” Chronological order is important. You can use a lot of words, or a few words - it’s your journal. It’s not a new concept, but in scouring the web for suitable software, I find it to be a much underserved market.

You can use a basic spreadsheet to start simply. Assign a new sheet in your Decision Workbook for each new decision you want to track. The columns I use are:

1. General Assessment of Mood (Mood and attitude are very important. Create a key like “1 through 5″ that you can sort.)
2. Date
3. Thought
4. Reasoning
5. Pro or Con
6. Comments

When you’ve come to a decision, it will be reflected in the last entry on the page. I work from the bottom up so I insert new lines at the top each time I add new entries.

Whether decisions prove to be good, or bad, go back periodically to review your decision process. You might want to highlight observations or thoughts that hindsight have proven to be right in one color, and those hindsight shows to be wrong in another. Many people spend time analyzing what went wrong at the expense of looking at those things that went right. They also fail to be brutally honest with themselves about why the things that went wrong did so. That never helps.  As you get more comfortable and more familiar with a more structured approach to decision making, you may want to move on to software that assists you in the process.

Not understanding how you arrived at a particular decision coupled with not being honest with yourself about your contribution always leads to repeated failures. There is no guarantee, however, that even complete understanding leads to success. Business is risky. That’s why there is the opportunity for substantial reward when you get it right.

This post by Seth Godin is the heart and soul of micro start-ups and the concept of bootstrapping.

Lack of money can be a micro startup business owner’s biggest asset.  It’s easy to shop.  The world is full of “good” for a “reasonable price.”  Everybody has “it” – the very same “it” – the “it” you buy at Staples or Wal-Mart of Home Depot. Those buyers don’t stand out.  Spending money is the easy solution.  Applying creativity takes work.  The result, however, will differentiate you.

Take what you have.  Multiply it 100 fold through creativity.  Every option you can’t afford simply magnifies your success.  Every perceived slight of fate becomes a diamond in the rough.  Your own creativity releases it’s beauty and hones its value.

When I started one of my businesses, I couldn’t afford color even though many of my competitors could.  I designed a logo and theme that looked best in black and white.  Black and white stand out in a colored world.

How can creativity make you competitive?

President Obama instituted six new initiatives to help “small” business.  CNBC, on Facebook, asked for comments.  I’d like to comment on them here for clients, friends, and readers, of Success Center USA. We serve mico clients and the small end of the small business world.  Keep in mind that the government definition of “small” business runs up to 500 employees.  In today’s technology driven, minimum human capital world, that is quite a large world.  My contention is that nobody in government has a clue what micros need, and if nobody burps and changes diapers on the babies, there are no toddlers, no teens, and no new adults.   Here are the initiatives from CNBC:

The measures are as follows:

• Obama is directing government agencies to pay their bills on an accelerated timeline to all prime contractors for the next year — within 15 days as opposed to 30 days.
• He is calling on Congress to let small businesses write off up to $250,000 in capital investments in 2013.
• The Small Business Administration is revamping its Small Loan Advantage program to raise the maximum loan amount from $250,000 to $350,000 and streamline the loan process.
• SBA is launching “QuickApp,” a streamlined application process for surety bonds.
• The SBA’s Disaster Loan Program is streamlining its online application process to give families and businesses easier access to rebuilding funds.
• The administration is working on regulatory reforms to the New Markets Tax Credit to make it easier to attract private sector funds for startups and small businesses in lower income communities.”

Here is my analysis:

• Government paying their bills quickly:  I don’t know a single business that is actually going to benefit from this.  I know the government blows a ton of money, and I know they have a small business initiative, but it’s going to hit several rungs above any of our clients.  This is further weakened by the “Prime” contractor clause.  Most smaller businesses are not “prime.”  They may be in the supply chain further down.
• Let small businesses write off up to $250,000 in capital investments in 2013:  The section 179 write-off limit was half a mil in ’10 and ’11 so this is a drop from those levels.  I doubt anybody I handle last year bought more than $50,000 -and that was an anomaly!  Clients aren’t buying equipment for the most part.  There are a few people starting new businesses, and perhaps this helps some, but this is not going to help any of my clients.  Micros and the smaller end of the “small” category just don’t buy this much in a year.  The business climate is too uncertain.  Good employees are impossible to find, and no one is sure of what it will cost to hire them.  Every aspect of the business environment is questionable.  In the meantime, there is no spending that isn’t absolutely necessary.
• Revamping the Small Loan Advantage program and the QuickApp process.  While CNBC listed these separately, it’s really just making obtaining loans from the SBA easier.  The same comments apply as to the previous initiative.  Low demand and uncertainty make business owners hesitant to borrow.  If you’re interested in applying for a loan, here’s a link to the SBA.
• Streamlining the Disaster Loan Program:  This is another SBA program and I don’t view this as a “small business initiative.”  This is a “disaster response initiative.”  Either way, you have to be pretty much wiped out before it matters. Most would rather not consider that.
• Regulatory reforms to the New Markets Tax Credit:  This might be helpful but it’s still in the “working on it” stage – and I’m not sure but what it doesn’t actually benefit the investor class more than anyone else.  It had its roots in a Bush program from 2000 targeting development in low-income areas.  We’ll have to see if anything of value comes out of this.

If I were asked to “grade” these initiatives, I’d have to point out that these are “graduate school” courses and, by the numbers, most are in the freshman class.  Which of these initiatives are helping your or a business with which you are familiar?

Did you know some Big Box Stores are accepting PayPal? It was announced in January. PayPal’s 15 new national retailers include: Abercrombie & Fitch, Advance Auto Parts, Aéropostale, American Eagle Outfitters, Barnes & Noble, Foot Locker, Guitar Center, Jamba Juice, JC Penney, Jos. A. Bank Clothiers, Nine West, Office Depot, Rooms To Go, Tiger Direct and Toys “R” Us.

This does a couple of things. First of all, the idea that accepting PayPal is “unprofessional” is laid to rest. Anyone can accept PayPal for anything without having a stigma attached.

Secondly, it opens up a whole new “payment” world. While Visa, MC, etc. are in there chugging in the electronic payment world, one has to wonder for how long. What service do they really provide at this point? By accepting PayPal in payment, a vendor leaves the decision of exactly which way to pay up to the customer.  the decision can be made on the spot.  We’re on the cusp of instituting massive changes in the way we pay for EVERYTHING.

Near Field Communication technology, NFC for short, is allowing us to pay with out mobile devices.  PayPal is also one of the leaders in that field.  The most common use of NFC technology is device to device payment.  If your NFC enabled cell phone is placed next to another NFC enabled device, payment can be made in a simple device to device exchange of information.  Other uses for NFC technology are ticketing and checking in.  These are equally important, if not more important, uses for NFC technology in most business settings.  Keep in mind that you can attach NFC enabled chips to almost anything.

If you’re a business owner, consider how this might affect you. How can you gain a competitive advantage by employing new payment methods in your business?  Think in terms of ways you can speed up processes, increase accuracy, provide additional valuable data, and make life easier for your customer or client.

The permalink to this post is http://www.successcenterusa.com/2012/05/25/you-are-competing-on-price/

Seth Godin wrote a thought-provoking post today called “The Tyranny of Low Price.”  He starts by saying,”If you build your business around being the lowest-cost provider, that’s all you’ve got. Everything you do has to be a race in that direction, because if you veer toward anything else (service, workforce, impact, design, etc.) then a competitor with a more single-minded focus will sell your commodity cheaper than you.”

It is a foregone and unarguable conclusion that to compete on price is a losers game. I agree – but I’m also a realist so let’s step way back and examine the progress of humanity. The reason you and I live in houses, not caves, with running water, and we’re riding in cars, not just walking, is that throughout all of time, a series of events governing availability of goods has taken place. The end result of the process is decreases in price that bring goods and services to the masses.

A creative person will find a way to mashup existing ideas to come up with something new and exciting. Initial production will be expensive and initial adopters, few. Often initial offerings are the domain of the wealthy. Profits at this stage are very low. Envy and the desire to be part of the exclusivity  bring more people to the market.  As more people choose to the pay the price, margins increase and there is profit to be enjoyed. The next step is imitators and duplicators who quickly flood the market and drive down the price. The earliest of these typically enjoy profits. Later, they, and new entrants, fail.

This doesn’t just affect items that can be mass produced.  It has also been the circle of wealth of artists throughout the ages.  Even though they produce one-of-a-kind items, they fall into, and out of, favor.  One artist’s nude male statue is bested by the next artist’s nude female statue.  A new artist enters the fray and will settle for a smaller stipend but produces work of superior quality unseating the current royalty of the field.  As quality artists become abundant, it becomes harder and harder to stand out.  Soon someone is attempting mass production to, once again, increase margins.

Natural economics govern the forward march of humanity and there is no escape.  Talents and time flow to fill unmet needs – every single time – and as they do so, prices fall. Over and over and over, forward movement of all of humanity through all of time has been a function of ever lower prices for more and more stuff. As prices drop, items move from being luxuries to necessities.  The Standard of Living moves ever upward.  Some of us might whine about needing a mansion costing tens of millions of dollars on the best coastline in the world – with 24k gold faucets in our bathrooms but, in fact, just 200 years ago, our we may well have lived in dirt-floor shacks. Our current homes may not be what we want but they are surely far more than our ancestors had and far less than our progeny will enjoy.

There are some instances where nature reaches a limit.  For example, there is a limited supply of emeralds on earth.  As supply dwindles compared to demand, price rises.  As price rises, it becomes worthwhile to spend more money hunting for more emeralds and more and more expensive technology is utilized in the prospecting stage.  In addition, technology drives the desire to duplicate.  At this point only those highly trained, or with sophisticated testing equipment, can tell the difference between man-made and nature made gems.  Even those made by nature are heat-treated or enhanced to make them appear like more expensive stones.  It doesn’t matter whether it’s by duplication or prospecting, and it’s usually a combination, price and demand will attain an equilibrium.

Mickey Drexler, the genius behind The Gap’s explosion, now bringing J Crew to prominence, believes the key to success to be creating something that can not be gotten anywhere else.  That is the way you can avoid competing directly on price. Add scarcity to the equation.  Make no mistake about it, however, you are still competing on price! The value of your scarce item will be balanced against that of your competition.  Since there are other components to value, by making your product unique in some way, you can prevent “lowest price” from equaling “best value.”

When you hear people tell you to not compete on price, what they are really telling you is that you have to offer more value, or different value, than your competition. You are always competing on price because price is a component of value. There really is only one way to win business, and that is to be the best value.  The best value results from either lowering the price or raising some other characteristic that enhances value. Overall, through time, price will drop because when there is failure to add other components to value, the price drops.

That’s why you always have to keep innovating.

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There is one basic challenge we all need to think about and work hard at. Scale. No – not the one you step on, although that’s a challenge too, but scale as it applies to life and business. The business term is “Economy of Scale.”

Fact: It costs more, per unit, if the total units are small. I can think of only one instance that might “seem” like an exception – and it isn’t. If you have a gigantic flawless diamond, each carat in that diamond will cost more than the sum of the prices of 8 of the highest quality 1/8 carat diamonds. That’s because the size is the rarity, not the fact it’s flawless diamond. Until you get to a place where the size itself turns it into a different commodity, price per unit drops as the number of units rise.

This explains why things cost more in poor neighborhoods. It explains why it costs just as much to have your tax return down when you’re losing money as when you’re making a profit. It explains why it costs $6.95 to ship the first item and only $2.95 per item if you add them to the package.

It’s a law – like gravity.

How can we break the law? If you can find ways to minimize the effect of scale, you can profitably sell to people who can afford to pay less – and that market is huge. If you can profitably get the costs under control and sell at the lower price point, the quantity you sell will soar.  There is enormous profit in finding ways for small quantity markets to not have to pay a quantity premium. Just ask Sam Walton.

In fact, it even effects weight loss.  Those last five pounds are always the hardest to lose.  They’ll cost you more effort than the first thirty combined, right?  Economy of Scale gone awry.

I was having a discussion with my sister last night when she uttered these words, “Water – God only knows what’s in our water.”  I instantly realized these are the costs – this time, health costs – of trust and distrust.  As you have discussions with people, notice the high cost we pay for lack of integrity.  Steven M. Covey wrote The Speed of Trust a couple of years ago. I read it when it first came out and it made an enormous impact on me.   What costs time, costs money.  It costs real money – and lots of it.  The name for these costs are “transaction costs.”  When these transaction costs have not been paid, we distrust.  Today, it’s so ingrained in us to not trust that “God only knows” is a constant component of our thought processes.

Actually, bottled water is a great place to start a conversation about trust. I’ve enjoyed Poland Springs for years – much preferring it to even the very expensive brands of bottle water.  Like so much, however, water, and especially bottled water, isn’t what it seems and when we find out the truth, our confidence in our own ability to sense the truth is shaken.

There is something that happens to people when they find themselves in a life environment where their cats die from contaminants in cat food, they find out there really is an acceptable level of rodent feces in their food, and that deaths from exploding gas tanks apparently are acceptable.  At some point we simply become jaded about broad groups rather than individuals.  ”Big business only cares about profits,” and “All politicians are crooks” are two excellent examples.

The marketing mantra is “Know, Like, and “Trust.”  The fact is, we seldom get to that last step – and if we do get there, the tiniest thing shakes us back out.  We often do business without full trust.  We feel we’re being “taken” at least a little – lied to at least a little – but we think “this one lies less than the rest” so we choose to do business. It’s “measured trust” – not full, but  there is some trust, enough to allow business to take place.  The uneasiness is always there.  We’re watching, testing, and it affects the entire relationship from start through separation.

Raving fans, which the referral process depends upon, are getting harder and harder to come by naturally.  Now fans want to know “what’s in it for me” and that makes referrals a commodity, not a gift.  If it’s a commodity, it’s price based.  If it’s price based, bought and paid for, it’s not honest.  As a result, the government legislates what can be said and the general public is skeptical at best.  Many assume that for every testimonial there are a hundred who are dissatisfied and those shown are either paid or are from friends and relatives.

We’re so used to being lied to that unless it’s a whopper, we barely even feel violated.  We’ve built it in.  We live our lives without trust.  That’s a big part of why the trust related emotional overhead in both our business lives and our personal lives is so high and so very costly.

We still need trust or measured distrust to do business.  We still have to work to earn it.  Trust is becoming an area where great businesses really can set themselves apart.  It take work – time, and money – to be trustworthy. The transaction cost has skyrocketed.  The job is much harder.  You have to be more trustworthy and more transparent than ever before, but when you do get to the point where you have actually earned trust, you’ve arrived at a place few reach today and the powers of the universe will reward you.

As I listened to talk about Facebook getting it’s IPO, I started thinking about how it took off and MySpace died. Why? My conclusion is “packaging.” MySpace was butt-ugly. Just hideous. Pages would absolutely hurt your eyes. It was the best example I can think of for “don’t do it just because you can.” Otherwise, the functions were similar, right?

I first saw Facebook back in 2006, my reaction was very much the same as my reaction to Google when it first came out. There was a clean white page – no clutter – no hideous flashing animated gifs. There was just clean functionality that allowed my own mind the time and space to function without fighting through, and against, all of the other sensory input.

I’ve long held the belief that about 80% of all of life relates directly to the packaging. Your success relates to how you package yourself – keeping in mind that different kinds of people are drawn to different packaging. Successfully merchandising requires the right packaging.  Mates are generally considered packaging first.

When you examine the outcome, especially on the web, and I think it’s true in all of life, good design principals count – a whole lot – and keeping that interface crisp and clean with a lot of open space wins every time. If MySpace had just controlled the hideous clutter, there would be no Facebook today.

The lesson is this. The easiest way to be hugely successful is to find something that is already successful, then rebuild it without it’s flaws. Rebuilding without flaws is often simply a matter of editing.

I was intrigued by an article posted by Guy Kawasaki on Facebook and one of his friend’s responses. The article talked about the steps a spa took to make sure the Groupon experience was a good one.  The adamant response on Facebook was that the article couldn’t possibly be true because, basically, everyone knows that spa owners don’t have good Groupon experiences.  It’s a prime example of getting out of life what you put into it.

As a Groupon spa consumer, I can tell you that some vendors treat you as though you are their very best customer and even refer to “next time” using a very gentle selling technique that ends up making you feel as though you’d like to be a long-term client. You just really want that treatment you just weren’t booked for today. People buy spa services for their “entertainment” value. It’s an escape from reality – that sense of being someone “rich and famous” for a few hours, of being pampered – and we call it a “necessity.” It’s the same principal Starbucks uses to sell liquid desserts at breakfast and call it “coffee.” I don’t know anyone who actually buys “coffee” at Starbucks, but I digress.

No matter how pampered you are, you want “more” and the best spas deliver. Others treat you as though you’re somehow substandard – a coupon shopper who is never coming back – someone who’s interfering with the employee’s ability to get “paying” work done.

Guess what? The results are exactly what they make them. Spas are the kind of business you’re loyal to for a time, but because so much of it is experience based, after awhile you start looking for a new experience. It’s nice to check out a new spa without getting stuck for the full price when you don’t know if you and the spa are a good match. So, for me, everything the guy in the article said has a ring of truth to it. From my perspective as a consumer, and a business consultant, that is exactly the way you make it work.