Does Your Business Have the “Disease of More?”

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Have you met the person who is always seeking the next “growth opportunity?”  The person who is never satisfied with their results or their company’s results? 

There is a concept in the sports world known as the “Disease of More.”  This phrase was coined by Pat Riley.  Pat was the famous basketball coach of the Los Angeles Lakers and led them to six championships.  He said the “Disease of More” was often what explained why a championship team was dethroned from its winning ways.

After winning the championship, the members of the team would want “more”:  more money, more endorsements, more accolades, more play time, more attention. . . more, more, more.  Consequently, this team of cohesive players broke down and became an entitled toxic mess that ended up failing.

This reminds me of companies or leaders of companies who feel that you either “grow” (i.e., get more) or “die.”  My feeling has been that if a company strives to be the best at what it does, then the “more” or growth will come, and it’s not forced.  The book Small Giants by Bo Burlingham outlines companies that chose to be great instead of big.  The irony is some of the companies outlined in the book do continue to grow larger, but they do so in very intentional ways and not simply for the sake of wanting “more.” 

Do you or a company you know have the Disease of More?  Your cure may be the tradeoff between building a great company or a big company.

Cheers to growing a great business!
Mike

Financial Independence: Another Name For Freedom

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I have been an avid reader of personal finance for over 35 years.  Maybe because of my business finance background or maybe it is something else, but it just seems to resonate with me. 

 

I have devoured books and podcasts about financial independence because I wanted to have the freedom to do the work I enjoy on my time. 

After my triplet girls were born, I became focused on this goal.  A friend of mine told me that in a “blink of an eye” our girls would be grown and away from home.  That seemed crazy after swaddling them in their baby blankets, but wow…. was my friend right!  It has gone fast, but I took his advice and focused on financial independence.

The equation I arrived at to define this freedom is: “Financial freedom” = [passive income + earned income from work I love to do] > my living expenses.

If I solved this equation, then the time freedom that I wanted would be at hand.  I focused on three factors to solve this equation.

  1. Building passive income from investments
  2. Maintain a reasonable standard of living
  3. Earn money doing work that I enjoyed

Generate passive income.   For me this means investments that generate dividends, interest, or capital gains from stocks and bonds.  I am comfortable with investing in the stock market using a simple approach with index mutual fund investments.  Others have invested in real estate with collecting rents or other assets that generate income without the need for labor hours.  Whatever works best for you and your risk profile is the right choice.  The idea is to create income streams that don’t require your labor effort (or at least a minimal amount).

Keep your living costs reasonable.  It was so easy for me and my family to inflate our lifestyle when the kids came along.  My wife and I worked hard for many years and felt the desire to have certain things that we could afford, and were “nice to have”, but not “gotta have.”  Being able to defer some spending that really was not going to make any difference to us in the long run made sense.  We lived below our means, but never felt deprived.  Simple family experiences were cherished versus the nice electronic gadgets that would not buy me my freedom.

Earn money doing work you enjoy.  So often I would hear friends or colleagues complain about their jobs, but they would not change.  Why?  Not always sure, but some may have felt stuck given lifestyle choices or fear of the unknown at the next business.  I didn’t always enjoy my work at times, but my attitude was one that I always took away some learning.  How could each new job or position help me get closer to financial independence and at the same time enjoy the journey?

Financial independence or freedom, whichever rings true to you, is both a mindset and a math equation.  If I had the right mindset and I understood the math behind it, then the time freedom with my family would be solved.  Are you ready for take your time back?  Let me know if I can help you.

Cheers to your freedom!
Mike

Should You Ever Stop Learning?

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As kids are heading back to school (at least here in Georgia), it brings to mind the question of “Are you ever too old to stop learning?”  The answer, of course, is no.  The notion that the CEO of a business should “know all” is a relic of the past.  Given the rapid pace of change in today’s digital world, the CEO needs to be a person who embraces the ideal of lifelong learning and realizes that they “don’t know what they don’t know.” 

Some of the best leaders consider themselves constantly learning and they never want to stop learning.  This should not just resonate at the top level of leadership but also throughout an organization.  Creating this type of environment is one of the qualities that sets “great” companies apart from “good” companies, according to Jim Collins’ classic Good to Great.

How do you set up an environment to model lifelong learning?  One method I have seen successfully implemented is the CEO who models the behavior of self-improvement.  I have met leaders who are at the pinnacle of their careers, and they have engaged with seeking out mentors and coaches to improve themselves.  In 2015, Harvard Business Review did a study of 45 CEOs with formal mentoring relationships and found that through these relationships their company performed better financially.  They also made better decisions and an demonstrated an improved ability to meet the needs of its stakeholders.

The mentor or coach is not necessarily senior to you and can run across generational divides for the person to gain insights from a wide range of perspectives.  I have been a part of a business roundtable, Vistage, for over 15 years and engage monthly with other local peers who are both senior and junior to me.  I learn from all of them because they help me understand issues from many different perspectives.  I have also recently engaged a personal business coach to help me better understand my blind spots and where I need to focus to improve my skills.

These relationships helps facilitate the exchange of ideas and information that I may not otherwise get exposed to.  I know of companies who hold regular offsite learning meetings with the sole purpose of providing their teams with information that helps them improve their leadership.

There is also no substitute for accountability.  Meeting on a regular basis with a coach, mentor, or mastermind group that holds you accountable can make the difference between success or failure both professionally and personally.

Cheers to a lifetime of learning!
Mike

How Is Your 2nd Half Shaping Up?

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I read a book a while back titled Halftime by Bob Buford.  It spoke to me because at the time I was turning 50, and the book outlined the difference between the first half of our life versus the second half. 

Now that I am further along in my second half, I find myself reading articles about how to stay vibrant physically and mentally.  It’s been said that “health equals wealth” and my intention is to be on the journey with continued health as a focus. 

Below are six habits that resonated with me from a recent article on this topic.

Mindset of Abundance

Worrying about money at any age is not fun.  I sure don’t want to worry about it in my older years.  The abundant mindset was a game changer for me, and it not only included financial, but also spiritual, work, and relationships.  The way I practice this comes with making sure any business opportunity is sourced with the right resource.  If a referral comes to me, but it’s not quite the right fit or maybe my bandwidth is such that I couldn’t meet the client needs properly, then I actively help them find the right resource.  Even if that means referring them to a competitor.  It’s the “pay it forward mentality” and the idea that there is an abundance of work out there for everyone, and what comes around goes around.

Take Care of Your Spirit

Do you ever feel not present, or your mind is racing all over the place?  Or someone asks you a question, but you really didn’t hear it, and you must ask them to repeat it again?  I have been working on a practice where I focus on my “active listening” skills and intentional mindful exercises to be present.  It is not easy, but in today’s fast paced world, it is necessary.  As I age, I am realizing that spiritual fitness is just as important as physical fitness.

Goals

I have generally had goals most of my life.  Not always written down, but goals that helped me go to where I wanted to take my career.  Eventually as I got older, I began to write down my goals and reviewing intermittently during the year.  I have kept copies for the past 15 years and it’s amazing what I accomplished towards the life that I wanted to lead.  The goals kept me focused, engaged, and motivated.  Where I needed to pivot, I did.  Some goals changed or were dropped, but I had a goal because I wanted to be “intentional” with my life and business.

Take Care Physically

When I was young, I took a lot for granted and didn’t feel that I would ever wear out.  I pushed myself physically as an athlete.  Well, I did better than some…my weight is still good, nutrition is on solid ground (except for the chocolate that I enjoy), and my strength is rebounding.  Get a good night sleep.  It is the most underrated aspect of recovery that is necessary for us to continue running the marathon of life.

Do Work You Enjoy

Enjoying what you do as a profession nourishes the body and your spirit.  Long-term health and happiness are a function of a healthy and satisfied mind, and work that fulfills these attributes will give you inner satisfaction.

Choose Your Relationships Wisely

The emotions of others are contagious.  Be mindful of who you hang out with because as Jim Rohn once said, “You are the 5 people you hang around the most with.”  If you are not hanging around with people who you want to emulate, then time for a reset.

Cheers to your 2nd half!

Mike

Step Up Your Interview Questions

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As companies are struggling to hire qualified people these days, recruiting has taken on new challenges. That being said, are you still asking the same old recruiting questions? Do you feel that the questions you ask still don’t elicit the information that you need from a candidate? Does the interview process seem like a “show up and throw up?” If any of these or other similar questions pop into your head about your current interview process, then consider the following questions that award-winning marketing consultant Jano le Roux (https://janoleroux.com/about) asks his candidates. Some of these questions seem off the beaten path and at first you may wonder how they may be applicable to your business but think through the “why” of the question and how you can adjust it for your situation.

  1. Do you have a screen protector on your phone?. . .Why? Asking this question seems strange and may have nothing to do with the position for which you are hiring. However, for Le Roux, the answer to the question would provide insight into how careful and intentional a person is with a simple device like your phone. Protecting it shows that you are careful. If you don’t have one…. why not? This may show a lack of intentionally caring about a device that while replaceable, isn’t necessarily inexpensive to replace.
  2. How do you criticize people? As Le Roux says, it’s not easy to criticize people, even if it’s constructive criticism. How they do it shows well that they can deliver a tough message. He even asks the candidate to criticize him during the interview to see their skills at work. Can they be honest without being a jerk?
  3. Teach me something fascinating that I don’t know? This is a prompt for him to see if the candidate has done any research on Le Roux or if they are simply flying by the “seat of their pants” to see if what they say he just happens to not know. One candidate Le Roux interviewed in answering this question asked Le Roux….” What are you into right now?” Le Roux responded, “Right now, it’s productivity.” With that answer, the candidate showed Le Roux an app on their phone for enhancing productivity. He hired the person on the spot.
  4. What would you do to implement trust among coworkers in a remote setting? Given our flexible work environment today with many knowledge workers having the option to work remotely, building trust on teams can be a challenge. This question drives to the candidate’s creativity to think on the spot how to address this issue.
  5. What do you want written on your gravestone and how does this position help you get there? Everyone’s time here is short, and we spend a large part of our lives at work. Working somewhere with meaning is part of the ingredient for self-motivation. Typically, a business owner does not want an employee coming to work who feels miserable at their job and is not reaching their full potential. These are just a few interview questions that I found interesting for me to consider in my business. Recruiting good talent on our teams is more of an art than science. We can teach “skills,” but it’s difficult to teach “attitude.”

Cheers to your talent search!
Mike

Want More Cash Flow? Check your EBITDA

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The life blood of any business is its ability to generate solid cash flow. Without positive cash flow, a company will eventually go out of business. This TIP will focus on one of four key pillars that drive cash flow. In this case we will look at “Earnings Before Interest, Taxes, Depreciation, and Amortization,” or more commonly known by the moniker EBITDA.

Where do you find this metric? One of the financial statements that you can get from your accounting system is the profit and loss statement. The very last number of this statement is typically labeled “net income.” Net income is the profit you have left over after paying all your expenses. When we add back to net income the interest expense, depreciation expense, amortization expense, and income tax expense we get the number for EBITDA.

EBITDA formula:

Net income +

  • Interest expense
  • Depreciation expense
  • Amortization expense
  • Income tax expense

= EBITDA

EBITDA is important for two reasons:

  1. It is a general indicator of your company’s ability to generate cash flow from the operations of your business
  2. It is used as part of the formula for valuing a business. Often someone who wants to buy a business will value it based on a “multiple” of EBITDA. In other words, they are buying your company’s ability to produce cash flow now and into the future.

To generate positive cash flow, you need to have a positive EBITDA. Otherwise, you are generally finding yourself starting your cash flow conversation in the negative position and will likely need to borrow money or find investors to provide capital to keep the company going.

Start with a positive EBITDA number and you can be more confident with your company’s ability to generate positive cash flow. Do you know your EBITDA?

Let us know if we can help you with this important metric.

Are You Living in the Blue Zone?

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I recently completed reading a book titled The Blue Zones by Dan Buettner. The book is about the research Buettner did around longevity and how certain areas around the globe have a much higher density of people over the age of 100. He teamed with researchers from different countries and the National Geographic to study their lifestyles and habits. He was looking for unique traits or commonalities for why some areas exhibited a higher life expectancy compared to other regions of the world.

Habits for a long life

Here are some highlights that I gathered from the book and other articles around it for living a life in the “Blue Zone”:

  • Move Throughout the Day Naturally. The Blue Zone centenarians move every day. It’s the moderate exercise of working in the garden, walking through the pastures, and walking around town to see friends and family. They are not running marathons or pumping iron to bulk up. They are doing moderate work by lifting things or weights and walking a lot.
  • Eat in Moderation. They don’t eat in excess and a lot of veggies and fruits are in their diet. The Okinawans have a saying. “Hara hachi bu,” which means to eat until you are 80% full. This helps them eat intentionally in a moderate manner. I have adopted the mostly veggie and fruit intake with meat and fish interspersed during a week. I have come to really enjoy a nice salad at the end of a day.
  • Socialize and Belong. These Blue Zone centenarians have an emphasis on family, friends, and faith that underpins their daily life. They stay in touch with friends and socialize on a regular basis in person. They find purpose with their family and stay active in their kids’ family life.
  • Manage Stress. Saying “No” to things that don’t serve them is an attribute that helps centenarians have a lower level of stress. They relax with naps, prayer, or a happy hour. Getting a good night’s rest is one characteristic that seemed to be common among these centenarians. Even if some get up at the crack of dawn, they still managed to get 7-8 hours of sleep per day.
  • Choose the Right Tribe. They surround themselves with people of similar values and practices in their everyday lives. Having a group of people you can regularly socialize with creates the connection that is needed as part of our biological make-up.

These are just a few take-away concepts from the book. I recommend reading or listening to the book yourself so you can use those habits that resonate with you to live a Blue Zone life.

Grit Is the Key to Entrepreneurial Success

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Earlier this year, I ran across an interesting article on the most important attribute for career success. What would you imagine it to be?

If you ask the general public, intelligence is widely believed to provide the greatest advantage when it comes to business success.  Certainly, it is an important attribute for a business owner to have.  But, the psychologist whose work was the focus of the article found that intelligence is not nearly as important as a characteristic she calls “grit.”

Psychologist Angela Duckworth had studied high achievers for several years in her efforts to understand exactly what made them so successful.  When pressed to describe what she meant by grit, Duckworth said it’s a combination of persistence and passion.  

In other words, people with grit love what they do and do whatever it takes to get the job done.  To my way of thinking, that is as sure a path to career success as exists.  Not coincidentally, it describes the mindsets of the most successful entrepreneurs I have had the pleasure of meeting.

Passion, Perseverance

If we accept passion as an important aspect of grit (and I think we should), we need to consider the source of that passion.  I believe entrepreneurs are passionate because they invest so much in their work lives. 

A business owner is not just punching a clock; the business’s performance is a direct (although sometimes imperfect) reflection of the owner’s presence and efforts. His or her beliefs, ideas, worries, inspirations and perspiration are all tied to the business and reflected in business results.

Many owners I know are passionate about generating good results because of the personal sacrifices they make for the growth of their businesses. They are competitive about generating good results as a means of validation.  They also believe in the notion of legacy. By building successful businesses, they hope to make the world a better place.  Building businesses that provide opportunities for employees is a great way to do so.  

The quality I most admire in entrepreneurs is their perseverance. Duckworth describes high achievers as being unusually resilient and hardworking.  I cannot think of a successful entrepreneur who does not possess those characteristics in abundance.   

Perseverance goes beyond what is commonly thought of as resilience and hard work. It’s a mindset of never giving up even when everything seems to be working against you. A never-quit attitude is a fantastic leadership quality.  Any setback is seen as a temporary obstacle to be overcome. Overcoming obstacles large and small is the only way to improve the business over the long haul. 

An entrepreneur who can instill that kind of attitude in the workplace has a real chance of building a business that is focused on continuous improvement.  Continuous improvement is often rewarded with financial success and opportunities for growth.  That’s the kind of business most employees hope to find one day.

To discuss how your business can encourage the development of grit-filled employees, give Trillium Financial a call at (404) 353-2148 or email us

7 Little Strategies that Equal Big Success

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It is often practicing the simple habits that result in running a successful business. There are proven leadership methods that can make the difference between a growing and profitable business that stays afloat, and one that sinks. You’ve heard it before: Work smarter, not harder.

Here are 7 tips to do just that in this new year:

  1. Watch cash flow. Poor finances can ruin any business, so it is imperative that a small business owner understands how to keep the cash flow steady, spend intelligently, and grow the business intentionally. Regular cash flow projections are an important ingredient to ensure you don’t run out of cash.
  2. Follow the leader. It’s key to learn from people who have achieved goals like yours. It’s lonely at the top, but having a mentor, or being in a business leader program, are smart and simple options.
  3. Track spending! It’s easy to go overboard on certain areas of your business, such as marketing. Pay close attention and track spending to determine what spend activities work and why.
  4. Know your strengths and hire for your weaknesses. Hire people who can complement your skills and help fill in your blind spots. Think efficient use of energy and resources.
  5. Take a minute to plan. Strategizing and planning can oftentimes be easier said than done. However, spending time on this activity up front will lead to greater successes and less risk in the long run. Successful companies have vision and execution.
  6. Get in the right mindset. Having confidence in your ability and knowing you can achieve success matters. Don’t underestimate your subconscious’ s ability to impact goals. Visualization techniques and the use of mantras you can live by can drive that impact. “Slow is smooth, and smooth is fast” is a mantra used by the Navy SEALS when they are under pressure situations.
  7. Delegate, delegate, delegate. There are people who can do it as well, if not better, than you can. Hiring the right people and clearly outlining their responsibilities will make your job easier and your company more effective. Micromanaging can be detrimental to your success.

Some successes in life are owed to good luck and good timing, but the majority are the result of good leadership, efficient use of resources, and seeing opportunities to take. The strategic habits we implement in our business are an important part of its success.

Should the ability to simplify be considered a superpower? Yes!

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The ability to simplify an issue is a skill that I feel is under appreciated these days.  We tend to add actions on processes thinking that it will improve it when it’s just making in more complicated and inefficient.  Why do we fall towards complexity?  The feeling is that all progress is the result of action.  But it’s the right action that needs to be implemented, not necessarily more actions.  For example, studies show that people who trade equity stocks frequently make less money than those who invest in a few equities and sit tight.

Isaac Newton once said, “truth is ever to be found in simplicity, and not in the multiplicity of things….”  For me this brings home the concept of the Pareto rule which states that 80% of your results comes from only 20% of your actions.  In other words, to get most of your results you can remove 80% of your activity.  Getting rid of distractions helps me feel less overloaded and more focused.

It’s interesting that Leonardo Da Vinci referred to simplicity as the ultimate sophistication.  It comes from subtraction–not addition–of activities.  Intentional subtraction from a process can make it more efficient.  One of the keys to this though is as Einstein said, “Everything should be made as simple as possible, but no simpler.”

Implementing this habit requires reflection and introspection on our part to see where we can remove the complexity from our business processes or your life design.  Once you do, you might find your work and personal pursuits more fulfilling.

Want to simplify your business planning? Check out our free one-page business plan template

Are You Open to Re-Examining Your Methods?

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Several years ago, I read an article about things in everyday life that most people do incorrectly. Why do they do them incorrectly?  In many instances, it’s simply the way they’ve always done them. 

For example, would you believe that only 5 percent of all Americans wash their hands correctly? The correct way involves 20 seconds of vigorous rubbing with soap and water.  Most people learn to wash their hands as children.  Although soap and water are parts of the routine, only 5 to 10 seconds of washing is the norm in my observation.  But, washing the right way lessens your chances of contracting flu and other illnesses.

It seems that some of the instruction we get at various points in life is of dubious value.  One of my favorite quotes is from the great American author Mark Twain. “It isn’t what you don’t know that gets you into trouble. It’s what you know for sure that just isn’t so.”

People tend to latch onto an idea, often learned at a young age, and never let go of it. They believe it to be the truth, and it’s extremely difficult to convince them otherwise – even when the evidence against their idea is overwhelming. 

If you like the idea of constant improvement, as most entrepreneurs do, you have to keep an open mind and reexamine notions about the things you do daily.

What You Re-Examine Might Be Age Dependent

So, what are the things you do every day in your business that ought to be re-examined? The answer can depend on how long you have been in business. 

Business owners in their fifties came into business in an entirely different economic and technology environment than we have today.  Many notions about avoidance of debt are rooted in the double-digit interest rate environment of the 1980s.  Obviously, the interest rate scenario has changed greatly, meaning carrying debt is less of an issue than when they got started in business.

Some owners in their fifties are also slow to update websites because of outdated ideas about the costs involved.  Website development costs are significantly lower than they were just a few years ago. If an owner has been putting off a refresh of capital or technology, it’s time to revisit these issues.

Many business owners in their forties will benefit from paying more attention to accounting and legal issues. In their early years of business, most entrepreneurs are pretty casual about their business relationships.  At this stage of your business life, the stakes are a bit higher; it’s time to put your important business agreements in writing. 

For example, did you choose to operate as a proprietorship because it was the cheap and easy choice to make ten years ago?  You might want to revisit the matter depending on your goals.  If you are worried about scaling a company and limiting your liability, a Limited Liability Company, S-Corp. or C-Corp would be the better choice.  A proprietorship is unlimited liability.   Also, it might make sense, now, to take a course in accounting from a local college.  It’s hard to achieve peak performance unless you are well-versed in how to keep score and the numbers in business is how you measure winning from losing.

As you re-examine your business make sure that you have a written plan with strategies and numbers.  A plan helps provide important guidepost for making decisions about the business, or to explain your thought process, and your vision to employees and business partners.  The plan does not have to be a 100 page novel.  As a matter of fact, good plans can be one or a few pages of well thought out information and numbers.  Being concise and clear with your vision can help you execute and iterate faster.

What does your second half look like?

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I read a book a while back titled Halftime by Bob Buford. It spoke to me because at the time I was turning 50, and the book outlined the difference between the first half of our life versus the second half.

Now that I am further along in my second half, I find myself reading articles about how to stay vibrant physically and mentally. It’s been said that “health equals wealth” and my intention is to be on the journey with continued health as a focus.

Below are six habits that resonated with me from a recent article on this topic:

  1. Mindset of Abundance
    Worrying about money at any age is not fun. I sure don’t want to worry about it in my older years. The abundant mindset was a game changer for me, and it not only included financial, but also spiritual, work, and relationships. The way I practice this comes with making sure any business opportunity is sourced with the right resource. If a referral comes to me, but it’s not quite the right fit or maybe my bandwidth is such that I couldn’t meet the client needs properly, then I actively help them find a better resource. Even if that means referring them to a competitor. It’s the “Pay it forward” mentality and the idea that there is an abundance of work out there for everyone, and what comes around goes around.
  2. Take Care of Your Spirit
    Do you ever feel not present, or your mind is racing all over the place? Or someone asks you a question, but you really didn’t hear it, and you must ask them to repeat it again? I have been working on a practice where I focus on my “active listening” skills and intentional mindfulness exercises to be present. It is not easy, but in today’s fast paced world, it is necessary. As I age, I am realizing that spiritual fitness is just as important as physical fitness.
  3. Goals
    I have generally had goals most of my life. Not always written down, but goals that helped me go to where I wanted to take my career. Eventually as I got older, I began to write down my goals and reviewing intermittently during the year. I have kept copies for the past 15 years and it’s amazing what I accomplished towards the life that I wanted to lead. The goals kept me focused, engaged, and motivated. Where I needed to pivot, I did. Some goals changed or were dropped, but I had a goal because I wanted to be “intentional” with my life and business.
  4. Take Care Physically
    When I was young, I took a lot for granted and didn’t feel that I would ever wear out. I pushed myself physically as an athlete. Well, I did better than some…my weight is still good, nutrition is on solid ground (except for the chocolate that I enjoy), and my strength is rebounding. Get a good night sleep. It is the most underrated aspect of recovery that is necessary for us to continue running the marathon of life.
  5. Do Work You Enjoy
    Enjoying what you do as a profession nourishes the body and your spirit. Long-term health and happiness are a function of a healthy and satisfied mind, and work that fulfills these attributes will give you inner satisfaction.
  6. Choose Your Relationships Wisely
    The emotions of others are contagious. Be mindful of who you hang out with because as Jim Rohn once said, “You are the five people you hang around the most with.” If you are not hanging around with people who you want to emulate, then time for a reset.

Cheers to your 2nd half!