It should be clear now that a leader needs to produce consistent results by having a Vision, communicating well, and creating an accountability mindset within the company. Next, we want to make sure that we’re not doing all the heavy lifting and then start developing our team and making sure they’re properly motivated to get the job done. Like the topic of Leadership itself, this topic could cover volumes, but for a small startup, there are some pretty clear things you can do to develop and motivate your team.

Define Your Ideal Leader

Different types of organizations need different types of leaders. For example, a very process-driven and detail-oriented company like mine needs a different person than a creative advertising agency or a football team. Some businesses require different leaders at different stages of the business. A certain type of leader may be better in the startup phase, but they may need to pass it to a person better for growth or steady management later. 

For example, if I could create one in a lab for my company, my ideal leader would be humble, accountability and process-obsessed, move extremely fast, and be good humored and patient. They’d love improving processes, coaching people, and constantly inspiring them to greater heights of performance. Now that I know what I’m looking for (and maybe even admit that’s not me right now), I at least know what I need to work on myself and eventually whom I need to hire, promote, or develop within the company. 

Right People in the Right Seat

Made famous by Jim Collins in his book Good to Great, we want to make sure the people that we hire are the right person for the job. Sometimes, we’ll find a person is terrible at one job but stellar at another, even in the same department. This is why communicating well with your team and accountability are important. If you can be honest with an underperforming employee, they will likely admit that while their current job is not ideal, they’d actually be much better at something else. For example, somebody might be working in customer service but would prefer doing sales or administrative work. 

As you get more experience managing people, you’ll get better at this, but the important thing to realize is that you should try to hire the right person for the right seat in the first place. This is where it’s very important to write clear job descriptions, do thorough interviews, and have clear procedures and training where possible. If people are not in the right seat and simply cannot do any other jobs, then you’ll want to move them out of the company as soon as possible because poor-performing or toxic employees tend to cause motivation and other issues with your existing team. See Step 5 for more details on this. 

Right Incentives

Incentives can be hard to get right, but in addition to rewarding people for accountability and doing their job correctly, I believe you should pay attention to how you incentivize your team. This can vary dramatically from business to business. It’s said that the only thing Warren Buffett micromanages in the many companies he owns is the compensation plan of the CEO; he wants to make sure they’re properly incentivized for the right things and performance. You want to be careful what you are incentivizing. If you want long-term, strategic thinking but reward short-term behavior, then you will run into problems. 

Some employees want recognition or praise, others want training and advancement, some want plenty of flex time or time off, and some just want cash or a thoughtful gift. As your company develops, you’ll tend to find the right incentives for the right people as long as you’re looking for them. I believe an incentive program based on the performance of the company is effective for many companies, and I’ve been paying quarterly bonuses based on profitability since my company has had employees. If the quarter comes up short, but we’re meeting specific written strategic goals, I will still pay a bonus. 

There’s a lot of disagreement on how motivating bonuses really are in a business, so make sure that they are conditional on performance and can be taken away based on poor performance. They’re not a bonus if they’re expected by everyone for no good reason. Consider individual goals and other Key Performance Indicators” (KPIs) to further clarify what “good performance” means. 

Regardless if it’s bonuses, parties, time off, catered meals, massages, foosball tables, or whatever, the key is to incentivize the behavior you want and hopefully align your team with the types of incentives they want as much as possible. Google, Facebook, and other businesses that basically have a monopoly (or hundreds of millions of dollars in funding) and have high-demand, high-skill employees will obviously be able to offer more incentives than a cash-strapped startup. See Step 5 for more details on bonus and non-compensation benefits. 

Remove Demotivators

Like many other parts of this book, I like to focus on things not to do and mistakes to avoid as a great way to prevent most problems. A lot is written about culture in companies these days, and in the case of a small startup, simply not de-motivating and frustrating your staff will get you a long way ahead of the game in developing a competent and motivated team and ultimately in developing a high-performance culture.

• Toxic management style. As we discussed in the beginning of this chapter, constant yelling, pessimism, negativity, threatening to fire or demeaning people (especially in front of others), poor communication, and other personality flaws won’t get you far. (Only the most super-talented of CEOs get away with it.) Most employees quit because of their boss (and not necessarily the job).
• Poor treatment of staff. This includes overworking, not listening to their issues, not acknowledging birthdays, paying late, dirty offices/bathrooms, ridiculous policies (requiring a full suit dress code for call centers, no time off for holidays or grieving, etc.), skimping on supplies or resources around the office, and a hundred other little insults that some employees have to deal with at many poorly run companies. The Golden Rule applies here: treat the staff how you’d like to be treated if you were an employee. 
• Toxic and poor performing people. Toxic (mean, deceitful, gossiping, whining, complaining, angry, etc.) people need to go immediately. They’re absolute poison to a business and potentially can kill a fragile startup. Never tolerate toxic employees or managers; trust me on this. Underperforming employees should be given the opportunity to improve or move to another seat, but if that doesn’t work, they need to go as soon as possible. Having underperforming employees in your company sets a low standard and can actually anger high-performing employees.
• Problems, hassles, and constraints. As we’ll go over in Step 5 and as mentioned in the Problem Solving superpower, identifying problems along with getting rid of hassles and annoyances that your team encounters is a great way to improve motivation and remove things that drain energy. Ask your team what their hassles are, put them on a list, and work them by priority from top to bottom. Ask the same of your clients, and that will tend to make your product or service better and your employees happier as well. There will always be hassles, just get better at solving or minimizing them. 
• Lack of clarity. What is the purpose of my job? What is the purpose or vision of the company? What is expected of me every day, and where am I headed? These are questions a lot of employees at startups can’t answer (and you may not know right away), so make sure that everyone is clear what they’re working toward. Much more on this in Step 5. 

We can sum up team development and motivation as: define the ideal leader (so you can become or hire one), hire well, incentivize good behavior, and get rid of things that kill employee motivation. This will get you far ahead of the curve in most startups. In Step 6, we’ll go over how you’ll eventually want to build a Leadership Team to take over the day-to-day management of your company. 

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.

After you create a legal entity by either incorporating (C or S corporations) or forming an LLC, it’s important to know what to do next. Some states have extra requirements after you’ve completed all of the paperwork for your legal entity to become activated, and depending on the type of legal entity you chose you’ll want to make sure you’ve setup your bylaws or operating agreement. 

Regardless of where your business is located, it’s important to know how to start operating with your new entity at the front of your processes. Registering your business with a trusted partner can take away the worry that often comes with the laws and requirements being different in every state. However, below we’ll briefly cover the things to think about when you’re registering your business by yourself. 

What Every Business Should Do After Legal Formation

After you’ve completed all of the paperwork and filed it with your state, both corporations and LLC have a few similar steps that everyone needs to think about. Next, we list out the ones that every single business should keep in mind as you start operating under your new legal entity. 

Open a Business Bank Account

One of the best protections a legal entity can provide you personally, as the business owner, is the separation of business assets and personal assets. This financially helps keep you and your personal property safe from any poor business performance. In order to fully protect your personal assets, you’ll need to make sure that your finances aren’t mixed with your business finances at all. 

Creating a business bank account allows you to easily pay your bills and know how much cash your business has on hand at any given time. It’s a good idea to immediately open a business bank account as soon as you have all of the legally required paperwork. This includes both the registration of your business with your state and typically your federal employer ID number. 

Obtain Your Federal Employer Identification Number (FEIN)

Your federal employer identification number, or your federal tax identification number, is a unique nine digit number given to you by the IRS. This gives the government an opportunity to know who you are when you pay taxes and pay your employees. This is a requirement to obtain if you have and pay any employees at all, including yourself (unless you pay yourself only through profit distributions). 

You can apply online through the IRS website, via fax, or by mail. If you’re an international business owner you can apply via telephone during specific times. The responsible party for each business looking to obtain a FEIN must be an individual and not another legal business entity. 

Setup Business Payroll

If you have employees, you should setup your business payroll quickly upon receiving your federal employer identification number. You don’t want to get behind paying employees and you also don’t want to personally pay anyone out of your own account once you’ve incorporated or filed the paperwork for your LLC. You don’t want to give any reason to believe your personal and business assets should be mixed together. 

Setting up business payroll can be done a number of different ways but we recommend finding a software that you like and using it to help you through the process. Various software products will do all the payroll calculations and tax filings on your behalf so that you don’t have to add another headache to your business operations. 

Notify All Business Partners of Your Legal Entity Change

If you’ve been operating under a partnership then you’ll need to make sure every single partner receives written notification of the change of your business’s legal status. This should include copies of all the paperwork, showing exactly what it means for each partner and how much of the new business everyone owns. 

Start Operating Your Business

Now that you’ve legally formed your business, it’s time to start operating with your legal name or DBA (a name you’ve registered with your state for “doing business as”)! All of your practices moving forward should take into account the fact that you’ve now registered your business. 

This will mean something different for every business but outside of the clear financial changes (such as operating from a business bank account), your business may need to change the name you’re using on all communications. Your state may have unique rules that you’ll need to be aware of before operating your business so that you stay compliant, so it’s likely best to check with an attorney or a partner who specializes in business formations.

What to Do After Incorporating

If you’ve formed an S or C corporation, then your requirements after you incorporate differ slightly from other business types. The things that these types of businesses will need to do after they file include: 

• Review Incorporation Documents: Make sure everything you’ve filed was inputted and filed correctly. You don’t want to rely on information that wasn’t included in your incorporation documents. 
• Make Sure You’ve Completed All Steps: Some states might require additional steps to make your incorporation complete. Make sure you fully understand what those requirements are, or if your state even has any. 
• Create a Corporate Minute Book: Keeping meticulous records will be very important for your business moving forward. This starts with keeping minutes of each board meeting, which can be kept inside of your new corporate minute book. 
• Hold an Organizational Meeting: You need to hold your first organization meeting to formally announce the business structure and to adopt bylaws, which is an important step to finalize your incorporation.
• Adopt Bylaws: Adopting bylaws by which the business will operate is a legal requirement for all corporations. These will become important as the business operates moving forward and none of these should be taken lightly. 
• Issue Shares of Stock: Ownership in corporations is given via the issuance of shares of stock. When you incorporate you need to decide how many shares the business has (you can create more in the future) and who owns how many shares, based on the percentage of ownership each person or entity has in the business. 

What to Do After Forming Your LLC

Forming an LLC is a bit different than incorporating. If you’ve created an LLC, then it’s important to do these things after you’ve finalized the paperwork with your secretary of state’s office: 

• Review LLC Documents: This is similar to incorporating, but you need to make sure that all of your paperwork was completed correctly and that you understand what it all means. 
• Make Sure You’ve Completed All Requirements: When you form an LLC your state may have requirements to finalize your formation and make it legally valid. For example, some states require you to make a public post in a local newspaper that your business has been formed. Make sure you fully read your state’s requirements after you form your LLC to make sure you’ve abided by all requirements. 
• Create an LLC Minute Book: Formally documenting everything that happens in your business, or at least your big decisions, will be important moving forward. This is especially important if your business has multiple owners. The difference from a corporation is that LLC’s are not legally required to hold annual meetings and keep minutes. It’s still a good idea to organize the decisions of the business though. 
• Hold an Organizational Meeting: Every new business should have an initial meeting to layout the organizational structure of the business. For an LLC, this is a good time to adopt an operating agreement. 
• Adopt an Operating Agreement: Most LLCs will be required to draft and execute an operating agreement which the business will live by. Check out our article to understand the differences between an operating agreement and corporate bylaws. 

This is a pretty inclusive list of all the things you should be thinking about to either finalize the formation of your business or to start operating after your legal paperwork is complete. Using a service, like ours, takes a lot of this out of your mind because we provide the information and packages necessary to get all of the requirements out of the way. Register your business with us today and we’ll provide the peace of mind that your work is being fully completed!

Frequently Asked Questions After Incorporating or Forming an LLC

You may have more specific questions about whether or not you should do something after incorporating or forming your LLC. We’ve put together a nice list that’s inclusive of pretty much anything that you might be thinking about, which is relative to this type of activity. Check out our frequently asked questions if you don’t see the answer you’re looking for in this article.

Leadership should be easy if you have a clear vision and you communicate clearly to your team what needs to get done and it will just get done, right? Wrong. Welcome to human behavior in the 21st century. You would be amazed at how hard this can be in the modern workplace. Business is suffering from an accountability crisis in my opinion. It is sometimes hilarious the extent to which some employees will go to avoid accountability or even making the most simple of decisions and how leaders let them get away with it. 

Remember, if your employees are also not owners in the company, there’s little motivation for them to work beyond the bare minimum unless they are incentivized in other ways. I would estimate that 80–90% of employees do not like to be held accountable or go beyond the bare minimum. This is not me being mean or pessimistic, it’s just the new normal and the reason why the definition of a good leader can be different depending on if you’re an owner or employee. Employees often think someone holding them accountable is being a jerk, or at best, too demanding. Ask anyone who manages people for a living, and you will not likely get much disagreement on this. 

Most employees don’t understand the sometimes existential terror of owning a business, making payroll, the threat of lawsuits, being responsible for the livelihood of others, and the dozens of various other issues business owners go through. A lot of people only want their paycheck and to “clock out” at the end of day and not think about work. (And business owners are certainly jealous of this some days!) There’s nothing wrong with this, but we do need to find a good middle-ground between “clocking out” and having basic accountability for the job during working hours. We don’t expect them to be responsible for the company, just accountable for their particular job so you can count on them to get the job done. 

Building an Accountable Team

How do we fix this? Almost every modern book, article, or guru tends to hold the employer responsible for this and recommends all kinds of engagement tools to make people want to do their jobs. I’m sympathetic to this mindset, especially in poorly run companies where you have dysfunctional management, unclear goals, or five different bosses. 

However, I’m going to recommend something radical for a startup with limited resources: Hire people with an accountability mindset from the beginning and then build accountability into your company. You don’t have the time or resources to prod or beg people to do their jobs and deliver on promises; you need people who can get things done correctly and on time.

1. Hire for accountability. If you want people to be accountable, make sure you hire for it. This means putting exactly what needs to get done in the job description along with the standards they will be held to. Mention accountability in the job description, in interviews, and when training. Make it clear this person is accountable for the defined results, and if they do not achieve them, there will be consequences. People who like to be held accountable will usually tell you, and in fact, are eager to demonstrate that. 
2. Define accountability. Related to the above, it would be insane for you to hold someone accountable for something that is not clear, defined, and measurable. Make sure you’ve written and trained on exactly what you expect, what standards you have, and how you will measure them. For example, if you have a receptionist, describe how visitors are to be greeted (what to say, how quickly you greet someone, etc.) and seated, or how phones are to be answered (what to say, number of rings to pick-up, etc.). You can only blame yourself if you’re not clear and haven’t defined correct behavior.
3. Use the language of accountability, and get it in writing. Vague language gets vague results and confuses. Don’t say “get that to me ASAP;” say “I need that by close of business Thursday.” Don’t say “we should fix this;” say “okay, write me up a one-page summary of this problem and your recommended solutions and have to me by close of business Friday via email.” When assigning tasks, make sure you both agree what the final result looks like and it’s written down, whether it’s a final design or 20 cold calls per day, it needs to be something concrete that you can say: Is this done, yes or no? 
4. Reward accountability. There’s a lot of disagreement on the effectiveness of bonuses, gifts, and “spiffs” to employee motivation and accountability, but I believe they are effective if used properly. If you can reward the staff for work done correctly (no missed deadlines or standards) and especially beyond the standard (for example, great client testimonials), then I think that’s one way to help build an accountability mindset in a small business.
5. Correct lack of accountability. Nobody likes to punish anyone, and in fact, I think a lot of accountability problems are the leaders’ fault for allowing bad behavior to continue; they don’t like holding people accountable themselves! As discussed in The New One Minute Manager by Ken Blanchard, correction can be as simple as a quick conversation, a written warning, and a well-known, documented “three strikes” rule that means you will likely be terminated if we have to revisit a problem after three times. 
6. Pay and treat them Well. As we’ll discuss more in Step 5, you can’t expect to pay bottom dollar and get top-dollar performance. At the minimum, try to provide the many non-compensation benefits I recommend. If you’re a complete jerk, then you’re going to have a hard time, as we’ve discussed earlier in this chapter. 
7. Teach the Founder Superpowers. As mentioned many times, if you can create a founder mindset in your staff with things like Agency, Productivity, Good Decisions, Good Communication Skills, etc. then they will naturally tend to be more accountable because they will start thinking like a founder, which means thinking like a problem solver.

A depressing fact for employees who don’t like accountability is that outsourcing and other market pressures are only going to make jobs more competitive, so there will be little room to hire people who can’t get the job done. There are literally millions of educated, English-speaking people coming online every year from all over the world, and they’re incredibly eager to work. There are now overseas accountants that charge $5/hour online, yes $5/hour, which is one tenth what I used to pay a bookkeeper just a few years ago.

While I don’t personally prefer this, in the fragile startup phases, you sometimes need to look overseas for the help you need if you cannot find it or afford it domestically. Personally, I recommend building accountability into your organization, and if you can hire great domestic people, they will outperform the overseas employees, and many times the cultural fit is so much better that it’s worth the added expense. Either way, there’s little excuse for hiring staff who don’t believe in accountability.

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.

Communication can be seen as a way for you to get results, connect with your team, and make sure everyone is one the same page and rowing in the same direction. Good communication skills are critical to a startup; those who cannot communicate quickly, clearly, simply, and effectively will be at a massive disadvantage. A lot of companies are starting to realize that good communication skills, especially written (which is very important in the age of digital and remote communication), is one of the top indicators of an employee’s success. I believe good communication skills are even more important for founders. 

Why is communication important? You might have the clearest vision, solution, expectations, or insight in the world, but if you can’t communicate that to others (customers, employees, vendors, bankers, etc.) then you can’t persuade them to follow you, to understand your point, or why they’re even showing up for work everyday. 

Also, as your company adds people, the complexity of communication explodes exponentially. The book Scaling Up by Verne Harnish discusses this: 

“Think back to when your company was just the founder and an assistant with a plan on the back of a napkin. This start-up situation represents two channels of communication (degrees of complexity), and anyone in a relationship knows that is hard enough. Add a third person (or customer or location or product), and the degree of complexity triples from two to six. Add a fourth, and it quadruples to 24.

Expanding from three to four people grows the team only 33%, yet complexity may increase 400%. And the complexity just keeps growing exponentially. It’s why many business owners often long for the day when the company was just them and an assistant selling a single service.”

If there’s one thing you can expect from a successful CEO (and his or her managers) it’s that they focus on a very few things and tend to say the same things over and over. This is not because they’re boring or close-minded, it’s because they know that they need to repeat these things over and over so they become part of the culture of the company and gets everyone rowing in the same direction, especially as communication gets more complex. 

Communicating things like the company vision and goals, the company values, and the best practices over and over is how you get these things in the DNA of everyone working with you, and it’s effective. It’s why your parents likely said the same things over and over as well and why you can probably quote many of those from memory. 

Finally, a good founder will detect when communications are bad or are going badly (perhaps in a confrontation among your team) and step in to improve the situation or call a time-out for consideration at a later time when things are calmer. 

Writing Skills

Communication skills, especially reading and writing, are becoming more and more valuable for many reasons. Most of our communication is written, more now than ever, even in text messages and chats. It’s also expensive and a huge time waste to have to repeat or clarify yourself and to answer the same questions over and over. If you’ve ever been on an email thread, chat, or text with someone who just “doesn’t get it,” you know how frustrating and wasteful this can be. 

While it solves many quick issues, try to avoid your instinct to pick up the phone so you can develop your written skills. Improving your writing is usually a simple matter of increasing the volume of your writing. Tell your team to put things in writing so they can clarify their ideas and thinking. Writing is so powerful that writing this book actually greatly clarified and simplified many systems I already had in place. Read that again. I’ll provide some helpful information on this in the Chapter Resources. 

Persuasion

There are very few founders who would deny that being persuasive is a great skill to have. Every great salesperson is persuasive, and while it’s not fair, all things being equal, if there are two people competing, the person with the best persuasion skills will get the contract, the sale, the partnership, or even the date. If you’re persuasive, you can probably sell something even before it exists. This is a big part of selling your idea to others, and we’ll revisit this in Step 4. People underestimate the power of persuasion, in my opinion. 

Style and Tone

Electronic communication and social media have been both a blessing and a curse. While these new ways of quickly communicating and connecting have brought about many great things, one thing that has definitely fallen on the wayside is the subtlety of face-to-face and even phone conversations. Here’s an example from Cameron Herold in his book Double Double:

“I didn’t say you were beautiful.” 

Now, I have no idea how you read that in your mind but there are many ways to interpret this text, and it usually depends on the mood of the person reading it. Now, re-read it, but put the emphasis on a different word each time. Example: “I didn’t say you were beautiful” has a much different vibe than “I didn’t say you were beautiful”. 

People will read things in their mood (they may be having a terrible day) and misinterpret even simple sentences, so it’s important to review your communications for tone and how they may be perceived. It’s not what you say; it’s how you say it. 

It still amazes me how short or rude some people communicate these days (even employees); it’s killing your chance at getting what you want (for example, a promotion). At the very least, use basic “please” and “thank you” etiquette every time in written communication to make sure nothing is misunderstood. People have been fired or lost friends for less, believe me; style and tone are important.  

Finally, you as a founder have to set the example and make sure the communications themselves are not overwhelmingly negative to begin with. For example, if you find out your team is not following a clearly written rule or procedure, there are a couple of ways to inform them:

1. You can do an in-person or phone meeting and rip their heads off. The point will be taken and perhaps will stick, but since there’s no written record of it, you can’t reference it again, and your team is probably either scared or mad now, making things worse. They were probably so terrified that most of the message was lost. It wasn’t written, so it’ll likely be forgotten in a week or two, and there’s no record to refer to later. 
2. You can do an in-person or phone meeting and be incredibly nice and gracious. The point will be taken and perhaps will stick, but since there’s no written record of it, you can’t reference it again. Your team may or may not change their behavior, but who cares because you heard one thing and somebody heard something else. Search online for “Yanni vs Laurel” to see what I mean about people hearing different things from the exact same sounds.  
3. You can write the team an email or memo that says, “Hey, geniuses, nobody’s following the XYZ procedure, and I’ve told you like ten times about this. Anyone not following procedure going forward will be terminated.” The point will be taken, and there’s now a nicely written record of you informing everyone (which is good, meaning you can reference it later if the behavior has not changed), but the tone will probably just terrify everyone and likely be counterproductive. 
4. You can write the team an email or memo that says, “Team, we’re having some issues with the XYZ procedure not being followed, and it’s creating problems both for us and our clients. The procedure is attached to this email, and we’ll discuss at our next team meeting. Please be prepared for questions.” This is a) in writing for accountability b) clear and short, explains why the procedure is important c) puts the responsibility on the employee for reading the procedure d) subtly warns that they had better read it and be prepared because we’re discussing it at the next meeting (but does not berate them). That’s when the in-person component will be the most well received and effective. 

Now, Option 4 above doesn’t always work, and that’s when a formal written warning and perhaps even anger may be appropriate. The main point is that effective communicators have a clear, direct, but usually friendly style about them, and this seems to get better results overall. 

Improving Communication Skills

Everybody has their own particular style or preferred method of communicating, and they all can be made effective. Here’s what I’ve learned are the best ways to improve your communication skills. Note that this is always a work in progress (I’ve made huge mistakes on this front), and the key is to keep improving. I know some great CEOs who can communicate in one sentence what can take others a paragraph. That’s a sign of a great communicator. 

1. Same picture in everyone’s head. If I’ve learned anything over many years, it’s that what you know and how you think can be completely different from what your team knows and thinks. Something might be crystal clear to you, and your employees may even say it’s clear to them, but in reality, they have a completely different vision of the concept, idea, project, or task in their head. Knowing this should reinforce how important it is that you make absolutely sure that everyone has the same picture in their head and are talking about the same thing. A good way to do this is to make someone repeat back their interpretation of what is being communicated. 
2. Listen more than you speak. Founders tend to be fast-moving and many have little patience for too much “conversation over action.” Try to overcome this tendency and make sure to listen carefully to people, especially your customers and team. Often, your customers or team won’t speak up unless heavily encouraged (especially introverted employees), so always ask for feedback and for any questions they might have. 
3. Keep it short and simple. The best communicators keep it short and simple for easy understanding by your intended audience, especially in business writing. Remove unnecessary words and information. Don’t overwhelm people with information that is not actionable right away. 
4. Focus on clarity. Ask yourself, “What am I trying to say?” and work from there. 
5. Repetition until it hurts. Your vision, one-sentence strategy, values, principles, best practices, and goals should all be so familiar to your team that they could repeat it word for word. At Amazon, they call these “Jeffisms” because CEO Jeff Bezos endlessly repeats them. 
6. Watch style and tone. As discussed earlier, style and tone can be massively misinterpreted and it’s important to monitor. Light and friendly is best: thanks, no problem, we’ll take care of it, thank you very much, glad to help, sorry, my fault, etc.
7. Be the example and set expectations. If you’re an effective communicator and use proper style and tone, this will filter through your company. Set expectations: If you don’t expect a reply to your emails on weekends, let the team know that. I work best late at night, and everyone knows I don’t expect a reply until their working hours. I’ll call or text if something is urgent. 
8. Over-communicate at first. When starting out a new company, a new job, a new idea, or simply implementing a new policy, lean toward over-communicating so you know the message or ideas are received. You can tweak things later based on feedback or intuition, but this is way better than under-communicating. The billion-dollar merchant account company Stripe requires all their employees to CC a group email address for all internal communications so communication is out in the open and searchable. Employees then learn over time which conversations should be actively monitored or reviewed later.
9. Write things down. As we’ll go over later, writing things down, especially procedures, policies, and FAQs, is a great skill to acquire. There are a lot of “tele-philes” and “in-person conversation” junkies who love to talk all day or use the phone (usually as a crutch for poor written skills), but if you don’t have it written down, there’s no accountability, and you’ll have to repeat yourself over and over until the end of time. Make your team write things down for accountability, and be suspicious of those who resist this. Even an email can be referenced easily. 
10. Make written things discoverable. You’re not a mind-reader and neither is your team or customers. If you get asked the same question more than a few times, then it’s time to put things in writing and post them where they can be easily found. We use an intranet and Google Docs (all searchable) for teams and a thorough, searchable FAQ for our clients on our website. Tip: Have your team set their browsers to an intranet page and post memos, notices, and announcements there instead of email. This keeps announcements “front and center” and unclogs email inboxes.
11. Systemize to reduce unnecessary communication. Jeff Bezos said, “Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other, not more.” This may sound counterintuitive, but this is an important point in the world of email, text messages, and constant chat. Too much communication and interruption can massively disrupt workflow and Real Work throughout the organization. It’s important to have clear systems and procedures to handle the never-ending flow of basic questions, clarifications, and expectations of how things work. Writing things down and making them easily discoverable will help reduce the volume of communication and is one reason why they’re critical to a well-functioning business. 
12. Use a daily huddle. You can write things down and be more effective at communication, but this doesn’t stop interruptions throughout the day. The daily huddle is a good solution to this problem. It’s a quick 5–10 minute team meeting (1 minute per person, do a separate meeting for each team) in the morning for everyone to report what they’re working on, and if they’re stuck, have questions on their work for the day, etc. Done properly, this should massively reduce interruptions and issues through the day. 
13. Use communication channel best practices. Not all communication channels are appropriate or ideal for every situation. Learn how your business functions best. Some examples:
    • Chat = Urgent; should last only a few minutes, otherwise the concept is too complex and switch to phones 
    • Email = 2–24 hours (not weekends; use phone/text if something requires weekend interruption). If you need a reply sooner or before close of business, ping via chat.
    • Phone = complex thing easier discussed live, but ping somebody or schedule the call, don’t just interrupt 
    • Urgent/personal to an individual = phone/in-person
    • Urgent to the team = chat via the main or “general” channel
    • Intranet  = not urgent but important for all to see and reminders of memos and updates 
    • Meetings = In-person or video 
14. Use abbreviations and acronyms. One way to speed up communication in your organization dramatically is to abbreviate and shorten long or complex concepts and phrases (this especially helps for speeding up written communication). For example, in my company, our customer management system called “Business Entity Management Application” is just BEMA, “Ready to Process” is RTP, “Turnaround Time” is TAT, etc.   
15. Learn persuasion skills. I’ve never heard someone say they regret getting basic conversation and sales skills, especially a founder. Basic persuasion and sales skills will serve you well throughout life, and are incredibly easy to learn. 
16. Encourage good communication from your team. Coach and help your team improve their communication as well. A poor communicator is almost always a poor-performing employee. If you have to repeatedly ask them to communicate something to others or clarify why they didn’t communicate something properly, then you probably need to start planning for their replacement. 
17. Manage bad communication. Inevitably, there will be a fight, argument, or worse that will require your intervention. Make sure to intervene and de-escalate as quickly as possible. Try to resolve things amicably and get to the root of the problem. 
18. Use righteous anger when necessary. Mostly used as a last resort (and often misused by many as a first resort), and provided you’re doing most of the things above, sometimes people are just not getting the point or understanding the importance of something or are overstepping their authority and righteous anger is justified. “This is not our focus right now” may be ignored but “This is not the fucking focus right now, drop it” conveys a different level of importance. Used sparingly, it can be effective.

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.

By Vance Cariaga

A critical step in getting your restaurant up and running is choosing its legal structure. You basically have four choices here —  a sole proprietorship, a partnership, a limited liability company (LLC), and a corporation — though there are variations within each.

Many restaurants start out as sole proprietorships, which means the owners operate as individuals with no separation between personal and business finances. Partnerships are similar, with the main difference being that each partner is liable for the debts and obligations of all the other partners.

No formal action is needed to form a sole proprietorship, according to the Small Business Association (SBA). If you’re the sole owner, you become a sole proprietorship just by conducting business. Even so, you’ll need to obtain all relevant permits and licenses to operate. Contact your state’s Secretary of State office for more information.

No formal action or paperwork is needed to form a partnership, either. You can create one simply by agreeing to go into business with someone else, according to the Nolo legal website. There are a few steps you’ll want to take before proceeding, however. These usually involve choosing a restaurant name, creating and signing a partnership agreement, obtaining licenses and permits and getting an EIN.

Advantages of Incorporating Your Restaurant Business

Even though it’s simpler to form a sole proprietorship or partnership, it’s usually advisable to form a corporation or LLC. That’s because you can separate and protect your personal assets from your business assets and keep from being liable for a partner’s debts. Corporations also get tax advantages not granted to other types of entities.

A good initial step is to decide what kind of company you want to form for your restaurant. Here are the most common types:

• LLC: An LLC is considered a “pass-through” entity, meaning its profits and losses pass through to the owners. It is formed by one or more individuals or entities through a written agreement that details the company’s organizational structure, including management provisions and how profits and losses are distributed.
• C-Corporation: A C-Corp is allowed an unlimited number of shareholders, all of whom are protected from the corporation’s liabilities. C-Corps are taxed on their profits, while shareholders are taxed on the distributions they receive.
• S-Corporation: S-Corps cannot have more than 100 shareholders and can only issue a single class of stock. An S-Corporation’s profits and losses are distributed to shareholders based on each shareholder’s interest in the business. To qualify as an S-Corp, you’ll need to file Form 2553 with the IRS.

When you’ve decided what type of corporation you want to form for your restaurant, you’ll usually take some or all of the following steps:

1. Appoint members or directors.
2. Establish bylaws that outline the corporation’s operating rules
3. File articles of incorporation or organization.
4. Issue stock certificates to shareholders.
5. Obtain relevant licenses and permits.

Required Documents for Incorporating a Restaurant Business

Forming a corporation for your restaurant also requires filing various incorporation and financial documents, including those listed below. Just keep in mind that different states have different guidelines, so always consult your state’s Secretary of State office to learn more.

• Articles of Organization (LLCs only): These are required to establish your restaurant business with the Secretary of State. The information you’ll provide here includes the business name, principal street and mailing addresses and the names and address of the person or persons forming the LLC.
• Articles of Incorporation (corporations): These are similar to articles of organization. The data you’ll provide here includes the corporation name, its principal place of business, the name and address of the registered agent, the statement of purpose and the number of shares and stock classes the corporation is authorized to issue.
• Operating Agreement (LLCs): This agreement sets rules for the ownership and operation of the restaurant business. It should include info on members’ percentage interests in the business, members’ voting power and rights and responsibilities, how profits and losses will be allocated, how to amend rules and how the restaurant will be managed.
• Company Bylaws (corporations): Bylaws are used to document how various parties — including shareholders, officers and directors — will oversee the organization and its operations. Among other things, bylaws should include the corporation’s name, address and principal place of business; the names and types of officers and directors; procedures for amending and adding bylaws; procedures for shareholder, board and annual meetings; and the types and number of stock classes offered.
• Shareholders’ Agreement: This is used by stock-issuing corporations and serves as a legal doc that outlines shareholder rights as well as the duties and powers of management and board members. You should also include rules for issuing new shares, rules governing conflicts of interest and guidelines on how to resolve disputes.
• Stock Certificates: Again, these are only necessary for corporations that issue stock. They should include the corporation’s name, the date shares were issued, the signature of the authorizing entity and the company seal.
• Annual Report: In most states, both LLCs and corporations are required to file an annual report with the Secretary of State’s office. This can usually be done online on the state’s website and comes with a fee. The required information typically includes the company name and address, the names and addresses of directors and officers, the Tax ID number, the business purpose, authorized signatures of registered agents and the number of stock shares issued.

The Bottom Line

Every business is unique and has its own goals and priorities. As the restaurant owner, only you can decide which business entity is best for your business. Make sure to review all options and gain a thorough understanding of the tax implications of each so you can choose the right business entity before you open your restaurant. 

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Author Bio

Vance Cariaga is an award-winning writer, editor and journalist. As a journalist he held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. His reporting earned awards from the North Carolina Working Press Association, the Green Eyeshade Awards and AlterNet. Vance’s collection of short stories, Money, Love and Blood, includes “A Slight Difference of Opinion,” winner of the 2015 Creative Loafing Flash Fiction contest. Another short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. In addition to journalism, Vance has worked in accounting and restaurant management. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina.

“Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.” – Peter F. Drucker 

What is Leadership? 

This topic is challenging for a number of reasons. First, the formal definition of leadership, “the action of leading a group of people or an organization,” is pretty obvious but not really useful for our purposes. What we usually mean by Leadership is really Good Leadership where somebody leads a group of people or an organization effectively. 

Further, good leaders get consistent results and Leadership is getting other people to Execute effectively on the Vision (and every leader should have a Vision). Almost everything you read about leadership is a tactic of doing that.

But that leads to the issue of how you define “effectively.” If there’s one thing that’s been a constant source of contention since business and other organizations were invented, it’s that the business owners, shareholders, management, and employees don’t usually agree on what Good Leadership is because it depends on your perspective. (Think unions vs. management.) 

Does a shareholder care if the Leader is inspiring, gets their hands dirty, or has empathy (commonly mentioned traits of good leaders)? Employees may love these things, but a shareholder would be wondering why the CEO is cleaning toilets, working on the assembly line, or crying their heart out about their employees’ problems instead of executing on the company Vision. 

In another example, imagine there is a very laid back and jolly CEO who never really demands much from his staff. There’s little accountability, he pays them well above market rate, gives great benefits, and has almost no expectations or demands in regard to how things are run. Now, this company won’t last long in my opinion (unless they have some “secret sauce” super-profitable business model), but there are many employees who would absolutely love to have a boss like this and would think the CEO was a great leader because their lives were easy and they like the CEO. It’s like the sports team who loves the old, friendly coach who doesn’t demand much from the team, but has never come close to winning a championship. 

On the other hand, you have dozens of famous military generals who are considered great leaders simply because they won battles and wars. It didn’t matter if the troops even remotely liked the general (more likely feared or respected); the fact was that the general won, and that’s what matters in war. After hearing that Ulysses Grant (the ultimately victorious Union general in the Civil War) was a drunk, Abraham Lincoln famously offered to send him and his other generals a barrel of their favorite whiskey. Lincoln (and most presidents, I assume) liked people that won and didn’t necessarily care about how they did it or if the troops thought their general was cool. 

Are Most Great Leaders Jerks?

“There are no wishy-washy rock stars. No wishy-washy astronauts. No wishy-washy Nobel Prize winners. No wishy-washy CEOs.” – Karen Salamansohn, author of Ballsy

As I mentioned in the beginning of this chapter, there’s a big disconnect between what people imagine to be a great leader and the actual leaders that get consistent results. The more I research this topic, the more I find that many of the great CEOs you read about every day are actually pretty insufferable and difficult to work with, not quite the inspirational leaders portrayed in the media. Sure, there are examples of friendly, warm types, but I’m finding out a lot of that was only public relations. It seems most of the greats had what most would consider a pretty demanding demeanor or outright personality flaws.

Almost every new bit of information, even when I was specifically looking for information on the kind-hearted CEOs, ultimately showed that these people, again speaking in generalities, are hard-driven and demanding at the least. Many are, counter to stereotypes, extreme micromanagers. My company deals with entrepreneurs all day, and let me say that they can be very challenging because they’re usually very demanding by nature. 

Here are a few examples, and remember that most of these are founders that started small.

• Jeff Bezos, founder of Amazon.com (these are just a few from the book The Everything Store by Brad Stone): 
  • “As many of his employees will attest, Bezos is extremely difficult to work for. Despite his famously hearty laugh and cheerful public persona, he is capable of the same kind of acerbic outbursts as Apple’s late founder, Steve Jobs, who could terrify any employee who stepped into an elevator with him. Bezos is a micromanager with a limitless spring of new ideas, and he reacts harshly to efforts that don’t meet his rigorous standards.” 
  • “Jeff Bezos fit comfortably into this mold. His manic drive and boldness trumped other conventional leadership ideals, such as building consensus and promoting civility. While he was charming and capable of great humor in public, in private, Bezos could bite an employee’s head right off.“
  • “Bezos was prone to melodramatic temper tantrums that some Amazon employees called, privately, nutters. A colleague failing to meet Bezos’s exacting standards would predictably set off a nutter. If an employee did not have the right answers, or tried to bluff the right answer, or took credit for someone else’s work, or exhibited a whiff of internal politics, or showed any kind of uncertainty or frailty in the heat of battle, the vessel in Bezos’s forehead popped out and his filter fell away. He was capable of both hyperbole and cruelty in these moments, and over the years he delivered some devastating rebukes to employees.” 
• Steve Jobs, founder of Apple: 
  • Fired people in the elevator and fired people in front of other employees on a whim 
  • Screamed at underperforming executives and chewed out employees at all levels of the company
  • He threw a fit about the color of the vans at his company NeXT 
  • There are stories of him berating reporters, doctors, and others for various reasons 
  • He was so demanding and persuasive that people have called his mindset a “reality distortion field” meaning he could basically convince people that anything was possible  
  • “Imagine that your boss told you straight to your face that your project is dog shit. Next, imagine that this boss is Steve Jobs. Thats what happened to me when I was working as the principal engineer of iPhone software during Apple’s golden years.” – Ken Kocienda
• Bill Gates, founder of Microsoft
  • Got into shouting matches with other tech CEOs
  • Has been described as an “office bully” 
  • Argued with his co-founder Paul Allen so badly that Paul described it “like being in hell” 
  • His successor, Steve Ballmer, was famous for throwing chairs across the room 
• Daniel Ek, founder of Spotify, has been described as “patient yet fueled by an internal intensity that can border on ruthlessness.” 
• Meg Whitman, CEO of eBay, got into a shoving match with a subordinate because she felt she was not prepared properly for an interview by the subordinate. 
• Andy Grove, founder of Intel, “was known to be so harsh and intimidating that a subordinate once fainted during a performance review”. 
• Elon Musk, founder of SolarCity, SpaceX, and Tesla, has been described as “thin-skinned and short-tempered” and that his version of reality is similar to Steve Jobs—completely distorted. He’s been quoted as saying “not enough of you are working on Saturdays.”

You may be thinking surely this is just a few random CEOs, this is not how most other great leaders operate, right? However, as discussed in the book Who: The A Method for Hiring by Geoff Smart and Randy Street, a thorough analysis of 313 CEOs demonstrated that:

“Boards and investors have a tendency to invest in CEOs who demonstrate openness to feedback, possess great listening skills, and treat people with respect. These are executives who have mastered the soft skills. We call them “Lambs” because these CEOs tend to graze in circles, feeding on the feedback and direction of others. Boards love Lambs because they are so easy to work with, and in fact, in our study Lambs were successful 57 percent of the time.”

That’s a great success rate, well over 50%! This seems to contradict what we’ve discussed, but then there’s this: 

“The second dominant profile that emerged from our analysis was of CEOs who move quickly, act aggressively, work hard, demonstrate persistence, and set high standards and hold people accountable to them. We call these CEOs “Cheetahs” because they are fast and focused. Cheetahs in our study were successful 100 percent of the time. This is not a rounding error. Every single one of them created significant value for their investors.“

So I think my point is clear: Some of the most effective founders and CEOs in the world aren’t exactly the nicest people, and at the least, are pretty demanding. Again, not an excuse to be a raging jerk, but something to keep in mind if people want to guilt you into changing your ways that have proven to be consistently effective. The key is that you must be effective and deliver results to even think you can get away with outrageous behavior. Also, keep in mind that many people that worked for the above-mentioned CEOs absolutely loved them so a lot of the complaints about these people may include a healthy dose of “sour grapes” or even people who were poor performers. 

That said, in modern business, a jerk or someone who is constantly firing people is very unlikely to get consistent results. An egomaniac who can’t communicate or make good decisions is unlikely to get consistent results. Someone who has no idea what they’re doing doesn’t get consistent results. I say “consistent” because anyone can get lucky or bully their way to one accomplishment. But someone who demonstrates leadership does it consistently year after year. They consistently lead their team to achieve the results they aimed for. 

Many Entrepreneurs are Not Natural Leaders

“If you are a highly charged, hard driving, highly successful entrepreneur, then, quite a bit of the time, you aren’t going to be a lot of fun to be around, especially for the thin-skinned. But you should not change. I’ve come to appreciate that the successful entrepreneur is a unique and delicately balanced combination of dysfunctions, bad habits, and personality defects as well as incredible genius, daring, and drive. You don’t want to tinker with that. What works for you works, and you need people around you who can adapt to the strange creature in their midst; you shouldn’t be adapting to suit them.” – Dan Kennedy

Related to the previous topic, I’m just going to come out and say it: A lot of entrepreneurs, including myself, are not great natural leaders, and frankly, can be pretty disagreeable if not outright insufferable. They vastly prefer working on the Vision of the company and working with ideas, products, or customers instead of managing the mundane day-to-day of the business, especially dealing with the management of employees. I want to reiterate that this is not a license to be a jerk (there are a lot of failed jerks out there), just a notice that many entrepreneurs need to be careful when taking leadership because it might be difficult for them because others usually don’t think like them and that tends to cause frustration. 

The good news is that even the most aloof entrepreneur can learn the basics of leadership, at least until they can hire a “people person” who can take the day-to-day management of the company to the next level. Personally, it took me way too long to pick up the basics, and I still struggle, but after 17 years of consistent profits, growth, and making the INC5000, I’ve realized that I’ve reached the limits of my leadership abilities and need to step aside to focus on what I’m good at and hire someone who actually likes running the day-to-day of the business. Great serial entrepreneurs know this and will hand off their startups as soon as they can. 

The book Rocket Fuel by Gino Wickman goes deeply into this dynamic by separating what he calls Visionaries from Integrators. The Visionary is almost always the entrepreneur who founded the company and typically gets overwhelmed or impatient with the management of the company and dislikes “chasing squirrels” and managing people. An Integrator, on the other hand, absolutely loves managing people: motivating, coaching, and holding them accountable. If this situation sounds familiar to you, then you’ll want to look into hiring an Integrator sooner rather than later, certainly before 17 years go by. Some people are both a Visionary and an Integrator but this is extremely rare. 

So What is Great Leadership? 

For our purposes in a startup, I think we need to consider both perspectives when defining a good leader: the consistent desired results they achieve (which is what the owner and shareholders care about) and how effective they are at getting their team to want to achieve those results. If the team admires or even likes the leader, than that’s even better, but none of those things really matter if you’re not getting results (and especially if you go out of business because then nobody has a job). Or to put it simply, we need results, but we need to remember employees are real human beings, and their opinion and motivation should matter if you want to build a great company. 

Also, there are so many effective leadership styles that it’s important you find your own that works best for you. There’s the stereotypical outgoing “people person” leader who can rally the team to a great cause, the general who gives the rousing speech to the troops. Then there’s people like myself who realize I’ll never be that “people person” but work with what I am good at and try to focus on solving problems, creating clear goals, and removing roadblocks for my team. I think many different styles of leadership can be effective, so don’t limit yourself to the stereotypes you see in media or read about in books. 

So, where am I going with all of this? I’m defining Leadership so that it is clear and also identifying the Leadership Superpowers so you can effectively learn them. If you struggle with some of them, then you may need to hire someone else to manage and lead your company at some point. 

That said, I believe these are the Leadership Superpowers:

• Superpower #13: Good Communication Skills
• Superpower #14: Accountability Mindset
• Superpower #15: Team Development and Motivation
• Superpower #16: Courage to be Disliked

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.

An operating agreement is used by limited liability companies (LLC) to establish the operations of the business. An operating agreement for an LLC is very similar to by-laws that are used by legal corporations. Within the operating agreement is typically the terms agreed to by members of the LLC, including both day-to-day operating procedures as well as special circumstances. 

If you’re ready to complete and file your LLC paperwork then you should also make sure you’re drafting an operating agreement to outline the rules for members of the LLC. This can protect your liability and make sure all members are on the same page with operating procedures and bound to them legally. My Company Works offers same-day LLC filing and we’ll provide you with an operating agreement for your state as a one-stop-shop. 

What is an Operating Agreement Used For? 

An operating agreement is a legally binding document used by members of an LLC to outline contingencies with their legal relationship within the business. Without an operating agreement then the owners of an LLC would be leaving to chance how a court wants to handle any potential future dispute amongst themselves. 

If you have an LLC then it’s important to draft an operating agreement at the time of business formation. It’s not a legal requirement, in most states, for an LLC to have an operating agreement but it is recommended by many legal experts so that your business operations are protected for your needs. 

Every operating agreement is typically different because each business has different owners with unique circumstances and relationships. It’s important for some to have procedures in place for taking on money in the future while it’s important for others to establish what happens if one of the members of the LLC gets a divorce. 

How to Prepare an Operating Agreement

An operating agreement is a business contract so it’s drafted similarly to any other one. While your articles of incorporation are required to be filed with your state, an operating agreement is not. The operating agreement is optional in many states and rules for these agreements could vary based on the state you incorporate in. You’ll want to partner with a company that is experienced in drafting these within your state, or a local attorney, to make sure you’re creating an operating agreement that benefits your needs. 

The operating agreement should contain information about your company and its members. The agreement should include all the information that you find needs to be spelled out in how the various LLC members and manager(s) work and interact together. There might also be some specific laws in your state that you’d like to moderate for your business by including different rules in your operating agreement. Some of the most common terms included in operating agreements are discussed below. 

Terms to Include in Your Operating Agreement

Your operating agreement, and the terms it contains, should be unique to you and your business. You should also include terms that will allow your business to operate differently than any state rules that don’t work for your business. For example, some states require all profits to be distributed equally, unless otherwise stated in your operating agreement. 

With those considerations, here’s a list of some of the most common terms you’ll want to think about including inside your LLC’s operating agreement: 

• Equity Structure & Membership Interest: Who owns the business and, typically, what percentage of the business does each LLC member own? The membership interest can be broken up into two different components: the economic interest and management interest. Technically someone who owns more management interest in the business could have full control of decision-making even if someone else owns more of an equity interest, though this typically isn’t the case.
  
• Rules for Allocation of Profits: There are basic rules for the allocation of profits, which is typically the rule that all profits are distributed evenly based on the percentage of ownership. However, you could alter this rule by coming up with your own within the operating agreement.
  
• Management Structure: With an LLC you can set it up where it’s managed by members of the LLC (owners) or by a manager. If you’re setting it up to be run by a manager then you would need to define how that relationship will work within this section of the operating agreement so that everyone is on the same page.
  
• Transferability: This section of the operating agreement will define the rights and restrictions of LLC members to transfer their rights and ownership. You may enact veto rights by the other members in case a single member is trying to sell a large interest to an outside party that the rest of the members don’t want to operate with. You could also enact a right of first refusal in the event of a potential sale to allow the other members to potentially purchase the ownership interest instead of a sale to a third party.
  
• Buyout: This clause in the agreement would outline the rules behind certain buyout situations. For example, if a member of the LLC dies, divorces, or files for bankruptcy. The rules could stipulate that the company buys back the membership interest in any of those circumstances so that the other members don’t have to deal with an unexpected party.
  
• Dissolution: This stipulates the circumstances of how the LLC can be dissolved, typically by unanimous or a majority vote of the members.
  
• Records: This provision will dictate how and what records should be kept for the company, and often how long the records should be held. The most important part is to specifically point out the most important records that must be up to date at any given time.
  
• Forbidden Acts: This is an interesting provision that can actually restrict the members or managers of an LLC from specific acts, such as ones that would prevent the business from operating. Generally the punishment for these acts will also be spelled out, such as an involuntary withdrawal from being a member of the LLC. 

These rules are not a catch-all for what is included in all operating agreements but it should give you a good idea of what needs to go in yours. If you’re still not sure then you should contact legal counsel or an experienced company that helps business register LLCs. 

When is an Operating Agreement Required? 

The requirements for operating agreements vary greatly by state. Many states don’t require you to create an operating agreement when you register your LLC, but some do. For example, Alabama, California, and Ohio all require you to have an operating agreement if your LLC has more than a single member. This is contrary to other states like Colorado and Connecticut that require an operating agreement for single-member LLCs. If you’re not sure which state to incorporate in, these are the types of things you should be thinking about. Consider our guide on where to form an LLC. 

The best action for any LLC is typically to have an operating agreement in effect. If you choose not to draft and execute an operating agreement then your business will be at the mercy of the state operating laws. This isn’t an ideal situation because you won’t be able to clearly define the operating procedures that are important to you and your business. 

You may even want to have an operating agreement if you’re the only member of your LLC. Establishing an LLC and including an operating agreement with specific business operating procedures should fully establish your business from being a sole proprietorship and help you further separate your personal and business legal liability. 

Register Your LLC & Get an Operating Agreement

Even if your state doesn’t require you to have an operating agreement, it’s a best practice to create one when you register your LLC. This is to make it clear how the operating procedures work within your business, even if you’re just a single-member LLC for now. Operating agreements can help protect your business from unfavorable laws or yourself by providing a shield of liability that the courts recognize. When you register your LLC at MyCompanyWorks, you’ll get an operating agreement for your state! 

“It’s not that I’m so smart; it’s just that I stay with problems longer.” – Albert Einstein

Closely related to Decision Making is the thing that many founders and CEOs are legendary for: Problem Solving. As we go through these superpowers, you can see a pattern that goes from Vision to Execution. As we Execute our Vision we will run into all sorts of decisions, hence the need to learn Good Decisions. However, we will always encounter problems along the way, so Problem Solving is critical to Execution. In fact, all of the Superpowers in this book can be considered one part of Problem Solving because that’s typically what an entrepreneur does for a living. 

In general, the Problem Solving process is pretty basic, but the skills required can vary depending on the problem.

1. See the problem. Believe it or not, I’ve encountered entrepreneurs that can’t even see the problem. Either they don’t recognize it or are willingly ignoring it. Sometimes, their staff or customers won’t report anything, which is a separate issue to address. See Step 5 for some solutions to that. 
2. Define the problem. This can be harder than it sounds. For example, is this customer complaint the result of one bad decision or something systemic in how we operate? It’s important to get to the source of the issue and properly define it. A great tool to help identify issues is known as 5 Whys. You start by asking Why the problem happened and to each answer you ask Why again up to 5 times. This tends to get you much closer to the root of the problem. 
3. Generate solutions. Brainstorm solutions to the problem. This may be fairly simple or require specialized knowledge. The more competent brains (who properly understand the problem) you can get working on the solution, the better. Sometimes the solution, believe it or not, is to ignore the problem if it’s not worth fixing, can’t be fixed, or is too difficult to fix. Good problem solvers know when something is worth using resources to fix. 
4. Implement and follow up. Implement your solution and make sure it works by following up to make sure the problem is actually solved. 

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.

“Decision-making is everything. In fact, someone who makes decisions right 80% of the time instead of 70% of the time will be valued and compensated in the market hundreds of times more.” – Naval Ravikant

It took me many years to understand the power of somebody who makes good decisions. Get good at making decisions and you almost cannot lose in business or in life. I’m dead serious about this, so please pay attention. Think about it; life is just a series of decisions from what to eat, who to associate with, where to go to school, who to marry, who to go into business with, what marketing strategy to use, etc. 

If you can make good decisions and consistently get better at that, then you will mostly avoid the landmines and bad choices that have doomed other people and businesses. Good decisions are basically a “cheat code” for life. Venture capitalists also throw piles of cash at people known for good decisions. Even a 5% better record of good decisions has massive exponential returns in business and in life. 

So, how do you make good decisions? The obvious and funniest answer is “by making bad decisions,” but that’s not entirely correct. You make good decisions by learning from your bad decisions. A lot of people never learn from their mistakes. You know these types, and they usually live tragic lives. You also need to take the time to learn about and use good decision-making tools. Again I will mention how powerful even an hour or two of simple planning and thinking through decisions can dramatically improve your life. 

A lot of people go through life from one bad decision to another, not really thinking they have any control, then blaming anything or anyone but themselves for their outcomes. Most people get their decision skills from their parents, for better or worse. 

More and more, we’re learning that just avoiding the bad decisions in life (drinking/drugs, bad diet, anger/violence, bad relationships/divorce, excessive debt, not planning, etc.) will easily put you in the top 20% of a number of important metrics like wealth, happiness, longevity, and so on. A lot of decision-making is simply not making some big mistakes as I mentioned in the introduction.

Here are some top landmines and bad decisions that have destroyed countless companies, especially in the fragile startup phase:

• Disagreements and arguments amongst founders 
• Bad financial planning or running out of cash 
• Lack of financial controls in the business 
• Ignoring your market or your customers feedback 
• Not learning and applying new skills 
• Not getting things in writing 
• Anger: treating employees, vendors, or customers poorly (leading to lawsuits) 
• Ego: not letting something go or going legal for all the wrong reasons (like hurt feelings) 
• Not taking care of your health 
• Skirting or working on the edges of the law 
• Not planning anything (especially exit or succession) and not documenting your business 
• Excessive socializing or getting romantically involved with people at the workplace 

Making Good Decisions

Let’s go over some basics of good decision-making that I’ve learned and shamelessly stolen from great decision-makers over the years. The best decision-makers use some of these tools as well as intuition built from years of making good decisions. One tends to get better and better as you internalize these principles.

1. Decisiveness. You don’t have much time in business to wait, so you need to place a sense of urgency on making decisions. You’ll likely never have 100% of the information you need to make the decision. Jeff Bezos, founder of Amazon.com, says, “Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.” 
2. Be conscious and aware of decisions. A lot of people go through life on autopilot. These decisions include what to eat and how to take care of your body (over the long term), what to learn, what to focus on, who to marry, who to work with, where to move, and similarly important decisions that can potentially have a big impact on your life. Pay attention. 
3. Be deliberate. Set aside some dedicated time to actually think through a big decision, collect the information (opinions of others you trust especially) you need, and put things in writing. Writing equals clarity. Sometimes, even thirty minutes of dedicated time can bring about massive clarity. Also, make sure you’re relaxed and not under too much stress. Finally, act like you’re deciding for a loved one instead of yourself to help take out any biases (e.g.: you may be too easy or too hard on yourself). 
4. Reversible or not? Jeff Bezos has what he calls Type 1 decisions that are not reversible and you need to take great care in making them. Type 2 decisions can be reversed, so you don’t need to overthink them; you can take the plunge and correct course later. It’s important not to confuse the two types because it’s silly to waste too much time on a Type 2 decision. A Type 1 decision would be completely changing your company’s name, products, and services whereas a Type 2 decision would be adding a new product or service. At the least, Type 1 decisions should be tested before jumping in feet first. 
5. Pros and cons. Everyone is familiar with this tool but most don’t really use it. This is a helpful first swipe attempt at making a decision that has many factors. One way is to make a lists of pros and cons, but it seems that even writing out a story or narrative will make you think through the issue in a more complete manner. Sometimes, this alone can make a decision very clear. The author Seymour Schulich likes to take this one step further and assign each pro and con a score from 1–10. Tally the scores and if there are at least twice as many pros as cons, then it’s likely something that should be chosen. 
6. Second-Order thinking. It’s amazing to see, but most people don’t really think through what will happen after they make their decision. Often, your team won’t understand why you’re rejecting an otherwise “obvious” action. Good decision makers are always thinking “then what happens?” over and over when contemplating a choice so they can anticipate the effects of their decision. First-order thinking is only thinking about the immediate effects and can miss out on potentially devastating after effects. Try to think out several months or even years ahead. For example, it sounds great that we’re going to focus on a new market, but if we do that, what will happen to our existing market, revenue, focus, what will our existing clients think, what will our vendors do, etc. 
7. “Hell yeah! or no.” Serial entrepreneur Derek Sivers recommends this principle, especially if you are already busy or over-committed. Unless it’s something that you would say “hell yeah” to, then pass and maintain focus on your existing priorities. The successful entrepreneur Naval Ravikant further clarifies his tough decisions with the rule: “If you can’t decide, the answer is no.”
8. Jeff Bezos’ regret minimization framework. Again, Jeff Bezos shows how much effort he puts into decisions with this one: We can never predict the outcome of a decision, but we can severely regret never having tried. Bezos likes to project himself forward in time to 80 years old and see if he may regret missing out on the potential upside of a decision. For example, he thought he would massively regret not trying to open an ecommerce business in the early stages of the Internet.  
9. Choose the more painful choice in the short term. Naval Ravikant has realized over time that almost all long-term gain comes from short-term pain (exercising, eating better, planning, saving, etc.). So if you have two choices to make and they are relatively equal, then choose the one with the most short-term pain, and that’s likely to have the best long-term gains. Absolutely brilliant. 
10. Think from first principles. This is an advanced tool, but great entrepreneurs like Elon Musk take decisions a step further and even question the assumptions behind the possible choices. For example, when he knew he needed a cheaper battery to make his electric cars affordable, he didn’t simply limit his choice as where to acquire a cheaper battery. Instead, he and his team broke down all of the construction and materials in a battery and found they could actually construct one far better, cheaper, and longer lasting than was currently available. This is taking a problem and thinking in first principles, try to take the assumptions down to the basics and work from there. 
11. Adopt Core Values and Principles. Written values and principles for yourself (as well as your company) can make many decisions easier. For example, if you’ve adopted a core value of “Simplicity” and the decision is whether to add a layer of complexity to a service or process, the core value tends to help you decide if that’s the correct way to go. I’ll go more into this topic in Step 6.  
12. Use a decision journal. As previously mentioned, learning from your bad decisions is an easy way to prevent a lot of problems. However, a lot of various human biases sneak in and over time they tend to dismiss the failures and exaggerate the successes and the reasoning behind them. Simply keeping track of your big decisions in writing (keep one file for “decisions”) and noting how they went later will give you huge insight into how to keep getting better at decisions and prevents your biased brain from deceiving you. 
13. Listen to your gut. Don’t discount the thousands of data points that your subconscious is constantly monitoring and giving you signals about. If someone seems distrustful, then be aware of that. If you get a bad feeling about a deal or person, then take that into consideration. Our gut has powerful instincts, so don’t ignore them. Differentiate between a “bad gut feeling” (something doesn’t feel right) and fear (totally normal). 

Hopefully, I’ve conveyed the importance of decisions and how you can keep getting better at them. The simple fact that Jeff Bezos appears so much throughout the list above should demonstrate that the world’s richest man (as of this writing) places an enormous value on making good decisions and so should you. 

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.

“He who works all day, has no time to make money.” – John D. Rockefeller

This section may seem a little obsessive on the productivity concept, but please bear with me as I believe it’s critical to understand why and how others get things done and why others do not. This ability is absolutely fundamental to business and life. 

By developing your Agency and Resourcefulness, you will be far ahead of the curve in productivity. However, there are many things you can do to also dramatically increase your effectiveness. Again, not every great founder does all of these, but they usually employ others that do. 

In my opinion, Personal Productivity is made up of the following elements:

1. Focus. Also known as prioritization, Focus is making sure you have your one big goal in mind (in this case, it will be the business) and working on the most important next step in reaching that goal. I recommend only one big goal and never more than three. Productivity is absolutely useless if you don’t work on the right things; you’ll just be really good at getting the wrong, unnecessary, or unimportant things done. 
2. Sense of urgency. Some people have great Focus and then the task will sit for weeks on their to-do list with no action. There’s not a lot of time to goof around when starting a business or working in a startup, so you need to have a sense of urgency and know that you don’t have all the time in the world. 
3. A Deep Work routine and mindset. If you are ready to get things done but are interrupted a thousand times a day or constantly putting out fires, then you won’t get things done or will get them done poorly. The most productive people schedule and treasure their Deep Work, which we’ll discuss below. 
4. Productivity tactics and digital fluency. After you cover the three things above, there are many tactics and digital tools that will dramatically increase your productivity. We go over those later in this chapter. 

Focus

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”

– Steve Jobs

“[Focus] is the one habit I find over and over again that is present in every single successful self-made millionaire I study.” – Lewis Schiff

You can’t have Agency without laser focus. From the example about getting $1,000 above: I need to save my loved ones life right now, so I’m totally focused on this one task. I am not going to check email or Facebook right now; I need to focus. Prioritizing is a related concept. A lot of entrepreneurs can be “busy” all day and get nothing important accomplished. 

A study was done on wealthy entrepreneurs and focus was by far the #1 thing most of them credited to their success. Yes, you probably have 10 big things you want to do or build, but I guarantee if you try to do all of them you won’t get them all done and most will be done poorly. 

Focus on one big thing (or at the most a very few big related things) and watch them get done. Steve Jobs was obsessive about this point—we’re doing the iPhone this year and nothing else new—so this focus principle even works with huge companies. 

Some people are productivity experts at doing completely irrelevant or unimportant things. Their computer desktop or email folders will be completely organized, but they’re not working on anything close to their priority. Honestly, working on the priority can be messy sometimes, so an ultra-clean desktop or workspace is not always the indication of productivity (though less clutter helps clear the mind, in my opinion). 

Prioritizing can be tricky (everything seems like a priority some days!), but a great question to ask yourself is: “What’s the one thing I need to be working on now to move my goal forward?” Many times, just realizing what’s a waste of time at this moment is helpful. 

For example, here’s a list of things that are probably useless before you’ve reached Step 1 or 2 in this book:

• Long business plans
• Growth plans beyond a few years
• Elaborate emergency plans for a business that hasn’t started yet 
• HR manuals before your first hire is needed
• High-tech project management software; start with the basics, then grow 
• Complex stock ownership scenarios and business entity plans

Most importantly, perhaps, great founders also tend to focus on doing what they are good at and delegating the rest, especially stuff that drains their energy or work they despise. My life changed dramatically when I delegated the mundane and tedious to others (others who may actually like that work). 

Prioritize your list of things that need to get done and work it from top to bottom. Take your priorities and pick the most important one. Delegate the rest or at least batch it with other undesirable tasks. 

Finally, it’s hard to be focused with 15 apps sending you notifications or checking text and emails every 10 minutes. You know this is bad; stop doing it.

Sense of Urgency

“Every cent of my personal wealth and business’s success has infinitely more to do with speed than with perfection. I know how easy it is for worthwhile projects to die in the Doing, so I’m eager to get them Done in a first version, not exactly right, certain to warrant later improvement and get them launched, out the door, into the marketplace.” – Dan Kennedy

If there’s one thing in life that drives me bonkers, it is founders (and employees) who seem to have absolutely no sense of urgency. They move slow, act slow, and are always carefully over-thinking and over-planning. They seem to be of the mindset that they have all the time in the world to get things done and are happy to let the world wait on them to do it. 

I’m here to tell you that not only do we not have nearly as much time as you think we do in life, we also don’t have forever to wait for you to act on your business. Let me put it this way: I’ve rarely seen a successful entrepreneur who moves slowly. Usually, people are astonished at how quickly entrepreneurs move. 

Now, I’ve known plenty of successful investors, big company CEOs, artists, and more who happily and effectively move slowly and deliberately, but not a successful startup founder or employee. Business simply moves too fast these days, and it’s only getting faster. You need to light the fire. 

A Deep Work Routine and Mindset

Once you know the priorities of execution, then a way to radically simplify your life is to make your productivity a daily routine. There’s a myth that great artists and other creative types need massive inspiration and have no schedule or routine. I’ve found nothing to be further from the truth. Most have dedicated times when they work and create. 

This list may seem long, but in reality, most of it is about learning the basics then building a great routine that you really never have to think about once it becomes a habit. It becomes part of your subconscious. Having a routine is actually a key to having more freedom in life. 

All told, I estimate there’s less than 1 hour difference in a day between an exceptionally productive person and your average person who doesn’t have a routine or skills and gets much less done: 5–10 minutes planning tomorrow, 5–10 minutes reviewing tasks/goals, 20–30 minutes exercising (to create energy and reduce stress), then arranging their day around proper Deep Work. 

1. Health and energy first. There’s a reason why I made this the first founder superpower and a reason why almost every high-performing person I know prioritizes health. It’s the source of energy and clarity to get things done in life. Energy leads to momentum and focus. Don’t ignore your health.
2. Know your chronotype. Some people are creative and alert first thing in the morning at 6:00 a.m., and some people, like me, have never had a creative thought before 2:00 p.m. and wake up feeling like a hungover zombie. This is your chronotype and it’s important that you schedule your important work to match when you can think best and when you’re at your optimal energy level. If you’re a night person doing a morning person routine, then you’re going to have a rough time. Learning this was a game-changer for me. Make sure your team and family understand chronotypes as well so that they respect your most productive hours. You can change your chronotype, but it’s difficult. 
3. Schedule work how you work. Know your most productive time and put it in your calendar in chunks that let you do real Deep Work. No meetings, calls, emails, etc. during this time. For some people, this may mean splitting up your day: 2 hours admin, 2 hours deep work, 2 hours sales or training, etc. For others like myself, I like to dedicate an entire day (as much of it as possible outside very basic Process Work) to a big task and even a week or month theme to a big project where I try to focus as much as possible on that one thing. 
4. Improve discipline by planning. Discipline is making the good things easy to do (meal prep for eating right, exercise clothes ready for exercising, etc.) and making the bad things hard to do (no booze, junk food, toxic people, etc.) in your environment. 
5. Habitizing goals. Taking your goals and turning them into daily routines that are achievable is the source of an enormous amount of progress and success. For example, daily exercise, daily writing, ten daily business ideas or ten daily cold calls. 
6. Keep your Vision in mind. You can do all the productivity hacks in the world, but if you don’t remember why you’re even doing them day to day, then you may lose focus and motivation. Keep the “why” in mind. Something as simple as, “I’m building the next great X” on the top of your to-do list can be very helpful.
7. Understand and do Deep Work. Cal Newport’s book Deep Work shows that in an 8+ hour day, it’s not realistic to do more than 4–5 hours of real, thoughtful, valuable mental work where you are “in flow”. It can take up to 20 minutes to get into flow. Understanding this and doing Deep Work is the key to not mindlessly overworking for what is ultimately diminishing returns. 
8. Minimize interruptions and distractions. Because it requires sometimes 20 minutes or more to get into flow and one “Hey, you got a minute” interruption to kill flow, you need to minimize interruptions. Shut down email, and silence your phone (put it out of the room even). Disable all notifications on all devices that are not critical. Respect that your team may need to minimize interruptions as well. Request if they have time for a chat before a full interruption, then you can to go to email or discuss later. Note: Interruptions costs U.S. businesses $588 billion every year. Workers typically waste 28% of their day handling interruptions.
9. Identify and do Real Work vs. Process Work. “Process Work” (also known as Admin Work) is the recurring work that needs to get done for your customers but doesn’t improve or move the business forward. Make sure you and your staff do “Real Work” (projects that improve the company based on strategy and goals) instead of just Process Work all day—preferably first! Aim for at least 10% Real Work once operational and considerably more during startup. Note that most of your staff will probably think Real Work is Process Work so make sure they know the difference. Just because everyone is busy all day doesn’t mean things are moving forward. More on this in Step 5. 
10. Track your time. If you want to see how much “Real Work” you’re actually doing, track your time for a week or two in an app or spreadsheet. Most people are astonished when they methodically track what’s actually getting done. Those 60 Hour weeks are usually far shorter when measured in real work and even Process Work. A totally eye-opening experience for me was finding out that I was wasting half my week, mostly with distractions. This will also help you identify your ideal chronotype or the hours that you’re most productive.
11. Focus on 80/20 work. Closely related to Deep Work is the Pareto Principle (popularized by the book The 80/20 Principle) that says that 80% of results are going to come from only 20% of your effort (and this same principle is demonstrated throughout life: 20% of customers usually produce 80% of profits, 20% of criminals cause 80% of crime and so on). This also means the reverse: 80% of your time only accounts for 20% of your results, so it’s critical that you identify your 80/20 work and focus on that relentlessly. The key is identifying 80/20 work (Hint: it will likely be Deep Work), and it usually involves things with high payoffs: planning, creating, writing, building, selling, marketing, systemizing, and anything that moves your business forward or helps you create, scale, and market a better product or service to your customer. 
12. Force the work. Many times, there is some uninteresting and mundane work that needs to get done or you’re just having a hard time “getting down to it.” (This is something you’ll want to delegate as soon as possible.) You can punch through this by using the Pomodoro Technique or Cycles by Ultraworking, which help you focus on just doing one timed session or cycle of work at a time (20–40 minutes) followed by a short break. It forces you into Deep Work, and I highly recommend it; some people see 40% or more jumps in productivity. Another good mantra is “don’t think, just start.” The Chapter Resources has links to further details on these methods. 
13. Reading is working. As you’ll see later, almost all “leaders are readers” and reading is important work. Warren Buffett spends much of his work day just reading. Schedule regular time to read and don’t feel guilty; reading is real work, even if it’s fiction. (I find science fiction gives me great business ideas.) Obviously, there’s a balance, and I prefer action, but reading is great as long as you’re getting things done. 
14. Use flow and momentum. Sometimes, you have days or days of the week (for me this is usually a Wednesday or Thursday) where you are really getting into the flow of things and creative juices are just flowing, much how an athlete has bursts of activity. Try to use that momentum and keep going for as long as you can, but quit before you run out of gas so you can save some energy to reignite later. Don’t pull all-nighters unless they’re necessary. 
15. Say no a lot. If you spend hours and hours negotiating deals, contracts, or partnerships that don’t have great potential, then you’re probably wasting time; just pass on them. I think I’ve lost entire months to phone calls, meetings, and emails about deals that never even came close to materializing. Don’t tell everyone to pound sand, but you can say, “Sure, if you can send the details via email, then I can see if it’s something I want to discuss later.” 
16. Keep your promises. Nobody likes people that can’t show up on time or don’t do what they say they will do. If you want to be known as someone with Agency or even respected, you’ll respect others’ time by keeping your promises. 
17. Remember your Effective Hourly Rate (EHR). Discussed earlier, you probably want to put your EHR right at the top of your task list so you know the kinds of things you should spend your time on and the things that are not worth your immediate attention. This same principle applies for hiring. If you can hire someone for less than your EHR to do something that you hate, then that’s something to consider. Finally, some hires will make you even more money, so if someone costs $50k/year but makes you $100k/year (a good salesperson for example), then that’s a pretty easy decision. 
18. Delegate and elevate. The book Traction by Gino Wickman shows that leaders need to focus on what they’re best at, and this includes delegating what they hate or are not good at and focusing on what they are good at. You also need to admit when you need help. If you want to magically transform your business, get good at delegating. There’s more on this in Step 5.
19. Keep personal and business separate. Many founders become one with their business, and this can make you feel like you’re always working. Make sure to “clock out” at the end of the day, even if you work at home (literally close the door to your home office). Try to keep your personal communication separate from business. For example, keep a separate phone for business or don’t text/email with business contacts on your personal phone. 
20. Purge negativity from your life. Politics, news, social media, toxic people, interpersonal drama, and more can simply drain your energy. I recommend you cut out anyone or anything that doesn’t give you energy. Note that this includes that friend or employee who is “great”, but for some reason seems to just give you grief. They’d probably be better suited somewhere else, and your energy will skyrocket once they’re gone. Additionally, sometimes you simply have to fire a client who makes life miserable (and your team will love you for it). 
21. Triage when super busy. Sometimes, the amount of work is simply overwhelming and this usually comes in bursts. You may have hundreds of emails and tasks; ruthlessly prioritizing by important and urgent is the only way to stay sane. Tip: Set up an email autoresponder that says something like, “I’m in the middle of a huge project right now, so I’m not able to answer emails right away. Please text or call me if it is urgent.” Feel free to turn this on whenever you want, even if you just need a breather. Another tip: Sometimes you just need to ignore all communication for a while and trust that people will follow up with you directly if it’s urgent. There’s more tactics on email later in this chapter. 
22. Do mental reboots. When your computer gets slow and acts funky, then you know what to do: Reboot it. I believe humans should do the same. I have a specific “reboot protocol” I do whenever things start to get out of control that includes meditating for ten minutes (learning meditation properly is like taking a flamethrower to your “problems”), exercising, taking a hot then cold (contrast) shower, reviewing inspirational pictures, viewing a favorite movie, or just being grateful for what I have. This puts me back in the saddle mentally and prevents me from spiraling into a worse mindset. 
23. Spend money on your development. It still amazes me that some entrepreneurs will hesitate to spend a few bucks to get the premium version of their favorite software, buy a life-changing book, get a massage, or get the coaching or training they desperately need. Spend money on your personal development, and don’t feel guilty about it. It’s a business expense, anyway. 
24. Remember the work is never done. I used to have anxiety about the massive size of my task or reading lists until one day I realized this was silly and the work will never really be done and that’s fine. There’s no special reward for completing all your tasks, and any leader or forward-thinking human will always come up with more tasks each day, so what’s the point? Just make sure the important things get done. 

Productivity Tactics and Digital Fluency

These are massive time-saving tactics that will explode your productivity, especially if you’ve implemented the above-mentioned items. Adding digital tools to your productivity arsenal can also dramatically simplify your productivity. 

1. Learn the GTD system basics. Getting Things Done by David Allen is by far the most popular personal productivity system amongst entrepreneurs, and there’s a reason why; it’s an in-depth system that covers many aspects of getting organized and tracking projects and tasks. I recommend the book if you have time or at least one of the excellent summaries online (linked in the Chapter Summary). Here’s a bare-bones summary of overall principles to the system with some of my own interpretations:
   1. Collect and capture to clear your head. Capture everything into an inbox or task list so you can clear your head. Minimize and try to centralize your various inboxes or collection points: one email inbox (forward all of them to one inbox), one physical inbox (maybe one for remote work or home office), one task list, one note-taking application or notebook. 
   2. Inbox Zero. Process your inboxes (physical and virtual) regularly and try to get to Inbox Zero (zero items left) if your communication stream is capable of it. In the Chapter Resources, I list some apps that can help you with this process by filtering your email. 
   3. Correctly process incoming items. When processing incoming mail/email, etc., touch it once and take action or create a follow-up. You want to make a decision immediately. The average employee spends one month a year re-reading information without taking action—an enormous waste.
      1. Do it: If it takes less than a few minutes, just get it out of the way.
      2. Delegate it: Forward it to someone that can do it for you.
      3. Schedule it: Put it on your calendar or on your task list. 
      4. Defer or process later: Sometimes something is not urgent, and you want to read or review it later. 
      5. Delete it or archive it: Archive and label anything you want to reference later. 
      6. “Someday/Maybe” and “Waiting For” lists, labels, or folders. These are great for keeping items you may want to do later or items that you’re waiting on a response from. 
   4. Review regularly: Have at least a weekly review to process, prioritize, and organize all of the above. This is a critical step to making the system work. 
   5. Focus on action: The purpose of the whole system (that is lost on a lot of people) is to have a clear mind and more consistently take action on your tasks. A lot of people forget this and get lost on the specifics of the system. Review your task list and calendar daily and get the work done—that’s the point. Make sure tasks are broken down into simple actionable steps and are not vague like “write a book.” Finally, 10–15 tasks a day is probably enough before overwhelm kicks in (and you may need help); I prefer 5–10 or less. 
2. Use a digital task manager. There are literally hundreds of to-do and task management applications, many of which are GTD-friendly. Choose one you like and that you’ll actually use and works well on all of your preferred devices. Make sure it has recurring task capability so you can begin systemizing and delegating your recurring tasks. Consider one that allows your team to collaborate with you in addition to managing your personal tasks, one that easily allows you to delegate to others. 
3. Use a digital calendar. Even if you’re not extremely busy, I believe you should learn how to use a digital calendar effectively. I don’t know many successful founders who aren’t a calendar ninja. They usually know exactly what they’re doing for the next few weeks and can pull it up immediately if they need to schedule something. Get good at scheduling and using proper notifications and reminders.
4. Maintain routine checklists. Checklists of weekly, monthly, and quarterly tasks (don’t do repeat tasks haphazardly, do them in batches) added to your recurring tasks and calendar. Do this for your company’s tasks and your personal tasks as well. This is a big head start on systemizing your business and delegating covered in later steps. There’s much more on this in Step 5. 
5. Take good notes and keep lists. You’ll be learning a lot of new stuff so keep good notes. Use a notebook or software you can access from all devices. Again, for simplicity I prefer one electronic document for everything related to your company’s operations like the Startups Made Simple Planner. Trust me, it’s way better to get bad notes now then try to salvage them from memory later. Use folders, notebooks, or tags to organize by topic. Advanced notetakers and knowledge workers should definitely consider creating a “commonplace book” or “second brain” for which I have recommendations in the Chapter Resources. 
6. Learn email hacks. Email is vastly superior in almost every way as a form of communication. It is easily searchable, you can add attachments, cc people, review the conversation, star it, save it, forward it, forward/copy/paste into task software, etc. As said by Naval Ravikant, “Text is precise, compact, indexable, transmissible, translatable, asynchronous and quick to absorb. Intelligent, busy people prefer text.” 
   1. Check email as few times a day as possible and either reply now (if it takes a few minutes or less) or star for later and archive (label if you want). 
   2. Star everything that’s not resolved or for which you’re waiting on something and archive (to get it out of the inbox). 
   3. Once a day, check starred items top to bottom and take action or update anyone who is waiting on you or vice versa. 
   4. Be brief, thoughtful, and clear. Use one email thread per topic (nobody likes going through eight different emails on the same subject) with a clear, searchable subject for easy finding later. 
   5. Put what action you are looking for in the email (use #s if multiple items).  Many times I get emails from people that I have no idea what to do with. Just ask the question or ask for the task to be done. Highlight in red if it’s an action item that is buried in a longer email. 
   6. Only “Reply to All” if you’re adding something everyone needs to know. Keep it as short as possible, add supporting info (links, invoice #s, all relevant info to make a decision), and make sure you are clear (you’re either communicating something or asking for something).
   7. If you need to update yourself or add more data, forward the email to yourself with the additional text, attachments, etc.
   8. Create a “Process Later” folder and a recurring calendar reminder to check it regularly. Put everything that you don’t want to deal with now or can wait until the next scheduled review. If I know something can wait until my next Weekly Review on Monday, I throw it in that folder. To get to Inbox Zero now, Star important emails from the past few days, select all emails in your inbox and move them to this folder. 
   9. Create a “Waiting” folder and a recurring calendar reminder to check it regularly, usually during a Weekly Review.
7. Get an assistant. Some people simply cannot, for various reasons, integrate any of these tactics into their own life, have more tasks than one person can do, or may have disorders like ADHD. If that’s the case, then I recommend you get an assistant who is familiar with all of the concepts above (have them read this chapter and print out these lists) and let them manage your inbox, calendar and task list. A great assistant can be a game-changer in your effectiveness. 

A Sample Day

You can probably gather by the length and depth of this section on productivity that this is one of my personal strengths. I’ve been informally coaching people on productivity for a while, and one of the things that illustrates this best and others have found helpful is how a sample day works for me.

My Productivity Guidelines:

• Remove the inessential: Unnecessary meetings, low-priority projects and negative people. 
• Goals List. I keep a list of goals for myself and the business. The business goals are known by everyone on the team and are prioritized quarterly. 
• One big focus: I work best when I have one big project that I focus on until it’s complete. Sometimes more, but usually I have one big project that takes the most of my time. 
• Automate: Most of my bills are on autopay or come through digitally. If there’s a routine or workflow I can easily delegate or automate, then I do. 
• Delegate: I’ve documented and systemized my Process Work and delegated most of it to others, especially work I dislike. 
• Meetings: No meetings before 1:00 p.m., and I try to stack them all on one day a week, one after the other. I don’t have meetings unless absolutely necessary and especially if a phone call, screen-share, or emails will work. 
• Emails: I prefer almost everything in writing for tracking, accountability, and for many other reasons mentioned above. Inbox Zero daily. I despise voicemail, and phone calls usually make me simply have to write things down, which is why I prefer email in the first place. (FYI, several CEOs that have reviewed this book mentioned that this was their favorite bullet-point in the whole book.)
• Momentum: I don’t expect the same level of productivity each day and tend to go with momentum when I hit it. Some days, I’ll get a week’s worth of work done and other days a lot less. 
• Capture: I capture all tasks and ideas immediately using task management or note software on my computer and devices. 
• Weekly review: Clear inboxes, review calendar and goals, and set tasks for the week. I pick 1–3 big things to get done that week. 
• Monthly/Yearly I review and assess how I’m doing on my goals and prioritize new ones. 

My Daily Routine:

• I’m a night owl, so I wake up pretty late, usually without an alarm, open the blinds, and get some sunlight.
• I go into the kitchen and start the coffee/tea machine and take my supplement stack (vitamins). I rarely eat breakfast as it tends to make me sluggish. While coffee or tea is brewing, I go into the bathroom, brush my teeth, and dress for the day. 
• I grab my drink and may chat with my family for a bit, then go into my office or home office. Notice that I’ve not checked email or news at this point. The night before, I’ve reviewed what I need to get done today, so I already know what the day looks like, more or less, and am prepared to get right to work. 
• Check email and team chat. If I’m not working on a big project, then I scan email for important things and clear my inbox. I use an email filtering service so what used to be over 100 emails is usually around 10. If I have time, I clear out the other folders (where the filters have moved unimportant emails). 
• I glance at my task list and calendar to review what needs to get done today. Most of these tasks will be Process Work that I haven’t deemed necessary to delegate to others, so I get them done first before I do Deep Work later. Also, I find that doing Process Work first builds momentum to go into Deep Work. Some people like to reverse this order (and also check email after Deep Work) but this works best for me because my creativity peaks later in the day.
• I have 4 hours on my calendar nearly every business day for Deep Work, typically from 2:00–6:00 p.m. This is where I turn off all distractions, chat programs, etc. and work on my top project and get into flow. 
• During Deep Work I take breaks of 5–10 minutes every hour or so. During some breaks, I exercise with kettlebells or bodyweight, right in my office, which will take care of exercise for the day. 
• After Deep Work, I go home and spend several hours with my family, have dinner, relax, and read or listen to music. The point of all the other steps and this book in general is to have plenty of time for this. 
• Later in the night, I review my task list one last time to make sure things are done and reschedule and re-prioritize tasks if necessary. Sometimes I’ll work and clear emails and tasks, but only if I feel like it. I’ll review what needs to get done tomorrow so my brain can think about solutions while I sleep. 
• If I have time or feel like it, I will do business reading a few nights per week: books (mostly ebooks), articles I’ve saved in email, or “read later” apps like Instapaper. I’ll save ideas, highlights, and articles in my note-taking app (Evernote) so I can find them later. 
• Shower, relax, and personal reading or Internet until bedtime. (Sometimes I’ll check the news but that’s becoming increasingly rare.) I don’t really watch TV but may put on a movie. 

As you can see, though I’ve adopted the many skills, habits, and tools in the lists above, the actual routine once you’ve internalized and learned them is simple and most days are usually never more than 5 or 6 working hours long (up to 4 of those being Deep Work, which I usually enjoy). I don’t even have an assistant. The best part is that I get more done now than when I was working 10 or more frazzled, interrupted hours per day before I adopted this workflow (the 80/20 Principle and Deep Work let me get much more done with less work). 

Now, my productivity is basically on autopilot, I don’t really think about it and things get done, even exercise. Once you’ve learned your basic routine and internalized these principles, then begin ruthlessly simplifying your day until you only do what you’re best at and what you enjoy doing all day. It took me years to figure out this ideal workflow, so I highly recommend you do the same and watch your productivity soar.

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.