10 Things That Keep Small Business Owners Up At Night

Small Business Owner FEAR

FEAR leads to frustration for many business owners

The top challenge will surprise you … only if you haven’t bothered to ask what challenges small businesses really face.

If you ask any small business owner “How’s business?” invariably they will respond: “Well, I can always use more customers.” So, if someone asked you what’s the greatest concern of small business owners, you could be forgiven for being wrong if you said they need more sales, because that’s what most people think—especially politicians.

Small business owners are actually pretty good at buying and selling—every company has been built to do those things. But operating a small business in the 21st century has become more complicated than ever before, which is why people who know small business know the best way to find out what’s really going on is to ask the owner what keeps them up at night.

One organization that knows how to ask the right questions is the National Federation of Independent Business. As you may know, the NFIB’s monthly Small Business Optimism Index has been the gold standard for such research for 43 years. They also have a quadrennial report that speaks directly to the question, “What keeps you up at night?” It’s the NFIB’s Small Business Problems and Priorities survey, and you may be shocked to learn that “more sales” came in at No. 45 out of 75 possible concerns in the 2016 report.

The 2,831 small business owners who responded to the survey told the NFIB that their greatest challenge isn’t competition (No. 31), or social media (No. 64), or online retailers (No. 61). What about poor profits? Nope, that’s No. 16. Even the most experienced observers of small business would feel safe in presuming that cash flow would be No. 1, but this primordial Main Street challenge is actually No. 25 on the list of top concerns.

If you listen to politicians, you’d think needing a loan is what makes small business owners wake up at 2 a.m. Surely you know better than to listen to politicians when it comes to small business, because needing a loan is almost last, at No. 70. That monthly NFIB index has reported that since 2007, established small businesses have been adhering to what I call “The Great Deleveraging.” They don’t want no stinkin’ loans.

So what is the No. 1 greatest small business challenge? Drum roll, please: The cost of healthcare.

No. 2 is oppressive government regulations. No. 3 is federal income tax on businesses. No. 4 is uncertain economic conditions. No. 5 is tax compliance complexity. And numbers six through nine are also all government related. This next point is very instructive: The first operating challenge to rank on the list is No. 10—finding qualified employees.

Let’s review: Nine of the top 10 greatest small business challenges are directly associated with government.

Some might say healthcare costs are not the government’s fault, but that would be Rip Van Duffus who just woke up from a seven-year nap and never heard of Obamacare. To be fair, let me hasten to add the cost of healthcare was a small business challenge prior to Obamacare. And this law did “bend the price curve,” as promised. Unfortunately, for the small business sector, Obamacare bent the cost curve up, not down.

Thanks to the NFIB Survey, President Trump and the 115th Congress can’t say they don’t know where to start helping small business owners. Indeed, they’re neck deep in the Obamacare “repeal and replace” debate right now. But here’s some breaking news: We polled our online audience about that issue and 94% said “Yes” to repeal and replace, but half said, “Take the time to do it right this time.”

There’s no doubt that 26 million American small business owners—with healthcare costs on their minds—had a significant impact on the November election. So my advice to the political class of all three parties—Democrats, Republicans and Trumpicans—is to take the time to get healthcare right this time. And then quickly start reducing the other eight non-operating challenges government is imposing on the most important job creators in America: the heroes of the Main Street economy—small businesses.

Jim Blasingame, one of the world’s foremost thought leaders on small business and entrepreneurship, is the author of “The Age of the Customer: Prepare for the Moment of Relevance.” Jim helps small business owners have the maximum opportunity to be successful, and teaches big businesses how to speak small business as a second language.

When Is It Time To Fire A Client?

There are lots of reasons why a business relationship may not work out. Watch for these signs that you should cut a customer loose.

How would you describe your business?No one wants to lose business. We put our blood, sweat and tears into building a thriving company, and turning away customers seems to be antithetical to that effort. But it’s not.

The customer is not always right. That age-old golden rule of business has never been the true test of how well your run your company. Not all clients are a good fit for all companies. Personality conflicts, unrealistic expectations or just plain meanness are all very good reasons that a business relationship may not work out.

It’s not always easy to know when it’s time to sever ties with a client, but there are some telltale signs that you should consider cutting a customer loose.

  • When communication with them creates anxiety for you and your staff.You are responsible for maintaining a happy, healthy work environment. If you have a client who continuously wreaks havoc on your team, it may be time to direct them elsewhere.
  • When they are rude and disrespectful.This is a non-starter for me. If a customer can’t deal with me and my team in a way that is respectful, they have to go. Period. You have no obligation to be subjected to a toxic relationship.
  • Despite clear instructions to the contrary, they continue to operate outside the scope of work outlined at the onset of the project.Managing expectations is key to a smooth relationship. It’s one thing to make changes to the scope of work. It is another to make changes and not expect to pay for it.
  • When they continuously question rates and servicesWe charge what we’re worth. If they are looking for a cheap solution, they should look somewhere else. We only want to work with clients who value what we bring to the table.

We had a client that despite many, many, many conversations refused to understand the concept of “no.” She had champagne taste on a beer budget but refused to understand that changes cost money and the more complicated something is to create, the more it costs to produce. I pride myself on being able to work with even the most difficult personalities, but it became obvious that we weren’t the right firm for her.

For me, my piece of mind and that of my staff outweighed any potential profit. So, I politely suggested that she might be happier with a different company. There are ways to sever the relationship without it being contentious. Ultimately, that’s the goal.

A few tips for a smooth break up:

  • When it’s about working styles: Sometimes the breakdown in communication is less a function of conflicts in personality and more to do with working styles. In this case, referring and introducing another firm is the easiest way to transition the client away from your company without creating undo animosity.
  • When it’s about personality: In the case where the client is just generally unbearable, it is obviously a more difficult problem to traverse. But if you position yourself as a problem solver for their needs you can leave the relationship intact. By acknowledging that you are not a good fit for their project and that they might be better served with a different firm who could more effectively solve their problems, they are less likely to leave feeling rejected or angry.
  • When it’s about money: This is probably the easiest of the three situations to manage effectively. Never compromise on your worth. If the client is focused solely on the bottom line then the value that you provide as a company is lost. Suggest alternative options but be sure to emphasize the value you provide to your customers and leave the door open for them to return when that value is foremost in their minds.

When you follow your brand promise, a culture will emerge that aligns with your brand and tells not only your clients but your staff as well what they can expect.

Remember, you are on the front lines. Your staff relies on you to protect them. If you want them to stick around, make certain that you maintain a culture of mutual understanding and respect.

If you would like learn more about how you can make an evaluation of your current client to find the ones you should fire , call Coach Michael Stelter at Advanced Business Coaching, Inc. (262) 293.3166.

How Will You Value the Sale of Your Business

9881157_sWhen deciding whether to sell your business you probably have one question: How much will I get?

There are different ways to find the answer.

The value of your business is constantly changing. Some industries have standard valuing practices, such as selling for three times estimated book value or a multiple of cash flow, but transaction specialists use several standard ways to value your business.

1. Income Approach

This is a standard valuation. The buyer of a business looks at the transaction as an investment, so they focus on cash generating and growth metrics.

Pro Tip: Ask your analyst to focus on the Discounted Cash Flow Analysis approach. This approach factors in the future value of the cash-generating potential of your business and not the standard five- to 10-year outlook.

2. Market Approach

Under this approach analysts will compare your business to other businesses. They make comparisons to public companies or, similar to residential real estate, they will look at recent transactions in your area.

Pro Tip: Obtaining a valuation on a routine basis will help you take immediate advantage of market opportunities.

3. Asset Approach

Use this approach as a last measure. Analysts will use this method to determine the value of your company’s assets. No potential value-adds or growth will be reflected in the sales price using this method.

Pro Tip: Know your definition of financial independence. When the sale of your business meets your definition of financial independence, don’t hesitate to sell!

Knowing how transaction specialists calculate the value of your business allows you to focus on the key metrics that will ultimately impact the sales price of your business. 

I found this tool while looking to find ways to measure the growth of some of my clients business.  We found it really helpful and I would like to invite you to get your Value Builder Score.  There is no cost or obligation.  It will only take 13 minutes to complete.
Our research shows that companies achieving a score of 80+ out of a possible 100 get offers that are 71% higher than the average company. Whether you want to sell soon or run your business for decades, getting and growing your score makes economic sense.

Get your copy of the FREE REPORT… “12 Fatal Mistakes You Can Make When Transitioning Your Business”

I wish you all the insight and wisdom need to set your plans in place.  Until next week.

Health, Happiness and Abundance

Michael Stelter   Advanced Business Coaching, Inc.

“We help entrepreneurs leave their businesses with health, sanity and fair compensation for what they’ve created”

Watch the video and download your Free Report to learn how we can help!

6 Habits Business Owners DON’T Want

Learn how to avoid these common small business pitfalls so you can work smarter and truly enjoy being your own boss.

Advanced Business Coaching Vision Mission and CultureAs a small business owner, you’re building a company from the ground up, and there are a lot of competing priorities and pressures. When you’re caught up in the day-to-day hustle and bustle of running your business, it can be easy to fall into some bad habits along the way.

Below we’ll explore six of the biggest bad business habits and reveal how to break them.

1. The Habit: Wearing Too Many Hats

In a recent survey, 35% of small business owners said they wished they could take on fewer roles and responsibilities.

Numerous studies show that multitasking is harmful for a variety of reasons—it increases stress, decreases productivity, and you’re far more likely to make mistakes in your work—but many entrepreneurs find themselves trapped wearing too many hats.

How to Break It: Delegation is key, but having someone to delegate to is the first step. Building a strong team that you trust allows you to feel more comfortable placing responsibilities in their capable hands. So, take your time during the hiring process. Reach out to reliable contacts in your industry to widen your net, and consider not only work history, but also disposition and personality when interviewing.

2. The Habit: Getting Hung Up on Old Ideas

You probably dreamed about your company for a long time before you actually opened for business, and that means you have a strong vision for what you want it to be. While it’s important to have vision, trying to stick to a plan for achieving that vision—even when the plan has proven itself outdated or flawed—can cause big issues.

How to Break It: In order to change course, you have to be willing to let go of what was once a brilliant idea. As Dr. Alex Lickerman notes in Psychology Today, we tend to form biases towards our own ideas and opinions. Releasing those biases allows you the latitude to regroup and re-strategize as your company changes and grows.

3. The Habit: Over-Promising

Many small business owners have the urge to say yes to every request. However, agreeing to something that your company’s infrastructure or team can’t support ends up creating more ill will than just saying no in the first place.

How to Break It: Know your limits and stick to them. Take time to consider the request, but if it’s really something you can’t do, then offer a firm and simple “no.” Don’t go into details, as that invites the requestor to push the issue, and try to decline in-person or over the phone, since the tone of an email can sometimes be misconstrued.

4. The Habit: Not Taking Risks

The flip side of over-promising is not taking enough risks. Whether it’s fear of rejection, embarrassment, or financial failure, some small business owners lose their nerve just as their company is on the brink of a big breakthrough, thereby becoming their own worst enemies.

How to Break It: The first step to overcoming fear of failure is acknowledging that it exists; speak to trusted colleagues, friends, or family about your fears. The next step is focusing on things that are within your control. Turn your attention to tangibles, like redesigning your website or creating a new organizational tool for your merchandise.

5. The Habit: Micromanaging

Your business is your baby, and you want to do everything possible to make sure it succeeds. But micromanaging your employees is a guaranteed way to breed disengagement and resentment amongst your staff.

How to Break It: The urge to micromanage frequently springs from your own fear of failure or feelings of powerlessness. Facing those fears (see habit No. 4 above) will allow you to let go of those control-freak tendencies. Also strive to create a workplace culture of open communication; if your employees feel comfortable speaking to you when an issue arises, you’ll be at ease granting them more freedom.

6. The Habit: Not Taking Care of Yourself

With only 24 hours in the day, many small business owners aim to dedicate as many of those hours as possible to their business. Sleep, healthy eating, exercise and vacation time are de-prioritized or forsaken altogether. Not only is this dangerous for your physical and mental health, it can also take a toll on the health of your company.

How to Break It: The normative social influence, a force defined in social psychology, drives us to conform to a societal standard or preconceived notion of our role. Since the entrepreneurial role is seen as someone who works day and night, that’s what entrepreneurs feel pressured to do. Letting go of this pressure frees you up to achieve a healthy work-life balance, and to work with more focus and efficiency during the hours you do dedicate to your business.

Running your own business can be challenging, but it can also be one of the most rewarding endeavors you ever pursue. When you know how to avoid these common pitfalls, you’re able to work smarter and truly enjoy being your own boss.

Ways To Fight The Impact Of Dementia For Business Leaders (or anyone)

3D running manHaving lost my father to dementia in the recent past, I’ve had a keen interest in learning more about the disease and it impact on the quality of life for me, and my clients.  I’m finding myself going to more events and programs providing information on the current state of the illness and what we can do to combat its affects.
As I walked around the poster presentations and listened to the different scientific sessions, I noticed an increasing number of studies that suggest exercise can boost brain function and protect against dementia. The Washington Post published an article recently about another new study that showed how interrupted sleep may lead to Alzheimer’s disease, and sleep will be the second topic in this four part series of articles about what everyone can do to protect against Dementia, including Alzheimer’s Disease.
A recent study published in the Journal of Alzheimer’s disease, which was reported in Time magazine, showed that people who did more moderate-intensity physical activity were more likely to have healthy patterns of glucose metabolism in their brains – a sign of healthy brain activity – compared to people who exercised less.
But this shouldn’t be shocking news.
The Federal Government published its first guidelines, regarding the recommended amount of physical activity for Americans ages 6 and over back in 2008. These guidelines also include individuals at increased risk of chronic disease – and provides science-based advice on how physical activity can help promote health and reduce the risk of chronic disease, including dementia.
The Physical Activity Guidelines for Americans suggests that adults should exercise for at least 2.5 hours per week, compared to children who need at least an hour per day. Exercise not only improves your physical health, but also cognition. It has global effects on the brain, enriching function in areas that traditionally have not been thought to be related to exercise.
 
How does exercise improve brain health?
There are many ideas about how exercise helps improve cognitive health. Aerobic exercise (also known as cardio), raises your heart rate and increases blood flow to your brain. This leads to neurogenesis – or the production of neurons — in certain parts of your brain that control memory and thinking. Your increased heart rate is accompanied you breathing harder and faster depending on the intensity of your workout. As more oxygen enters the bloodstream due to faster breathing — more oxygen is delivered to your brain.
If we really want to get technical, another factor that mediates the link between cognition and exercise is neurotrophins. You’re probably thinking great – but what the heck is that?
Neurotrophins are proteins that aid neuron survival and function. It has been noted that exercise promotes the production of neurotrophins, leading to greater brain plasticity and therefore — better memory and learning. As well as neurotrophins, exercise drives an increase of neurotransmitters in the brain, specifically serotonin and norepinephrine, which boost information processing.
Numerous studies support the notion that maintaining an active lifestyle provides a cognitive advantage over being sedentary. Obese adults and obese children are overall outperformed on cognitive tests by their more fit counterparts. If you sustain an active lifestyle, this has benefits that can last for decades.
In a study conducted by Dr. David Jacobs, exercise tests were administered to a group of subjects to determine their fitness levels. Those who were the most active in 1985 tended to still be on the fit side of the spectrum decades later. That same “fit” cohort also performed better on cognitive tests decades later. These data suggest that activity in early and mid life may produce protective cognitive effects across the life span.
Physical activity serves as a protective factor against Alzheimer’s disease, because exercise increases brain volume through neurogenesis, and it is thought that this cognitive reserve helps buffer against the effects of dementia.
 
Does the type of workout matter?
Yes. Both the type of workout and method of staying fit are important to whether or not there are cognitive benefits. If you’re one of those lucky people that can eat whatever and stay thin, just staying thin and counting calories isn’t enough. You still have to do exercise. In fact, there is a term in medicine for people that are not healthy overall but stay thin: TOFI.
Between three sets of people—individuals losing weight through restrictive eating, people who lost weight through exercise, and another group that used a combination of the two—only the groups who had exercise as part of their weight loss regimen noted an improvement in cognition.
Exercise’s effects on cognition aren’t necessarily dose-dependent, so working out five hours a day won’t generate a massive leap in cognitive ability.
In closing, it’s more important to concentrate on the type of exercise if you’re looking to maximize your cognitive health. A multi-component routine focusing on balance, flexibility, and aerobic fitness is better than focusing on just one type of exercise.
So pick your mode of choice! Go walking, running, swimming, hiking or biking. Enjoy the fresh air. Get in touch with nature. There are so many health benefits – both physical and mental, to exercise.
If you would like learn more about how you can make exercise work for you for increased health and productivity , call Coach Michael Stelter at Advanced Business Coaching, Inc. (262) 293.3166.