Leadership

The following post was written by my good friend John Dini in San Antonio, TX.

There was an interesting report on National Public Radio earlier this week about Haiti. I tried to link it here, but I couldn't find it in the hundreds of archived earthquake stories. If someone locates it, please let me know so I can post the link.

The story was about the neighborhoods that had not seen any aid workers days after the quake, but were functioning without outside help. They weren't fine by any means, but they had managed to marshal resources, care for the injured and distribute food and water. There were no roving gangs or crime, even though they were in the middle of Port O' Prince.

The neighborhood the story focused on had been organized by a small business owner. (Are you surprised?) This shopkeeper, shortly after the temblor, has gathered the stunned people and started directing them to move the injured. He organized stretcher bearer teams. He consolidated the water and food and had it guarded and distributed fairly. He commandeered a place for the wounded, where they were stabilized within the locals' limited means. He sent out people to search for the nearest functioning medical facility, and began transporting the worst cases to it.

I'm extrapolating a bit. The story didn't describe the step by step process of organizing the neighborhood, they just talked about the result. Any of us who direct people for a living know how it happened. One person stood up and took responsibility for impacting his environment. When others were saying "Why me?" or "Who will help us?" he said "What can I do?" and "How should we deal with this?"

The third and fourth questions are ones that small business owners ask every day. The first two are the ones asked by people who can't or won't take control of their lives. I highly recommend John Miller's "QBQ- The Question Before the Question." I've met John, and he leads a crusade for personal accountability. He points out that "Why?" and "Who" questions are usually about avoiding accountability, and "What?" or "How?" questions are about taking on the responsibility for a solution.

Leadership begins with accountability. The story of neighborhoods in Haiti is a great example of how one man (or woman, in many cases) can simply decide to change things, and others will follow. In my next blog I'll talk about my friend Sam, who has changed the lives of hundreds of people forever, without publicity, notice, or giving up his active life.style.

In the meantime, remember the words of Henry Ford. "Asking why a man should be the boss is like asking why he should sing Tenor in the choir."

Creating Your First Small Business Budget

As you start and build your business, it seems that there are a million things to take care of. Having a budget and knowing how to keep a budget are key elements for business success. If you don’t know how to budget or how to manage a budget, your business may not survive. Being able to cover your expenses, make payroll and still be able to give yourself a paycheck can be a very challenging task. Having good budgeting skills can help ensure you’ll be able to do these things. It will take some business strategy and planning, but it will be well worth it in the end.

Trent Hamm with OpenForum.com talks about creating your budget and provides tips on how to do it with success.

I'm going to make a prediction about your small business.

You didn't get into that business because you were excited and enthralled by the idea of managing your finances and setting up a budget.

I certainly didn't, and I've yet to run across a small businessperson who got started with their business out of a great excitement for budgeting and financial management.

Small businesses - the ones that succeed - are borne out of passion for something, whether it be a particular topic area, a particular methodology, or something else. Businesses succeed when people love what they're doing so much that they pour their heart and soul into it and the business grows in new and unexpected and powerful ways.

Suddenly - quite often, in fact - small businesspeople find themselves in a whole new world in which their lovely pet business has suddenly grown into a giant bull, surging forward into new directions with them holding on for dear life as things charge into new areas and experiences they never anticipated.

For almost all of us, one of these areas is budgeting. Quite often, the nucleus of a small business comes from a shoestring. A person figures out a passion and they seek ways to continue following that passion. They find others that share that passion (ideally) and they conceive of a way to make money from that passion. A book lover opens an independent bookstore. A gear head opens an automotive shop. Their dreams are filled with days chock full of their passion - and then the realities of billing, money management, and so forth burst in.

It's time to make a budget to get some sort of control over this new flood of money moving both into and out of the business. Here are five key pointers for people who find themselves in this brave new world.

First, the purpose of a budget is to simply consider carefully how you're spending your money. There are many, many formal ways to organize a small business budget, but they all have that same central goal in mind. A budget works if it reveals to you the ways in which you're overspending and the ways in which you're under-spending. Keep that in mind throughout the process.

Second, a budget plots your financial path to where you want to be. It's not merely a replication of how you spent money over the past year, even if that year was successful. If you just finished a year in which you went from 200 loyal customers to 1,000, you don't just multiply last year's budget by five. Some areas won't grow at all, while others will grow rapidly. Ask yourself what areas you felt were truly vital for the growth of your business - and, more importantly, will be vital going forward as you gain more customers and strive to maintain your level of quality.

Third, don't get bogged down in formality. The most important element of any budget is that the people who actually have to use it understand it. If the budget you're planning is getting so complicated and specific that you no longer find it useful to you, then it's not a worthwhile exercise. By all means, dig deeply into budgeting for specific areas that you want to streamline. Just avoid reaching a level of detail and complexity that takes the usefulness out of the document.

Fourth, remember that this is a living document. If you're budgeting for the next year, you're merely coming up with guidelines for where you want your business to go in the next year. Of course, we all know that quite often businesses zig when you expect them to zag. Don't just discard your budget and start shooting from the hip. Evaluate those changes, adjust your budget, and stick to the new guidelines you've developed.

Finally, seek some help if you're feeling overwhelmed by all of this. You can turn to an accountant, to a trusted (and wise) family member or friend, or even to your spouse. The more eyeballs you get on your goals and plans for future spending along with your records of how you currently spend, the better off you are.

A budget is not something to be feared. A budget is merely a document you develop for your own needs to help you keep your spending on a reasonable track to help your business to go where you want it to go. If it's not serving that need for you, it needs rethought from the ground up.

Egyptian Pyramids and Small Business

I was having dinner with friends over the weekend and were started talking about upcoming travel or tripe we wanted to take. One friend had just returned from India, another couple was just in Thailand and I had been in Mexico. Africa came up and while I have already been to Africa twice, I was sharing that I had to go to Africa at least twice more – once to see the mountain gorillas and the other to see the great pyramids in Egypt. The more we got into the conversation, the more I started mapping the pyramids to small businesses.

How could I make a leap like this? Well, in order to construct the pyramids, the teamwork required b y the labor force (which was anywhere from 20,000-30,000 people at a time) was, well nothing short of amazing. The architecture is extremely sophisticated. In this case, the architecture is equivalent to the business plan. The Egyptians knew their strengths and weaknesses – no doubt about that.

When it came to the actual construction, well the Egyptians were specific in what they had to do, when and how. Think about it – they figured out how to move very large, heavy blocks of stone, and not just move them but move them to the required height. While there is dispute as to how they did it, they figured out how to build ramps on an incline so they could move the blocks of stone. I always admire innovation.

If you understand your strengths and weaknesses (not to mention opportunities and threats – SWOT) then you can create your architecture or plan. Many business owners let the challenges of achieving their plan get in the way of planning so they either don’t plan at all or the plan isn’t as aggressive as it should be. Just think – if the Egyptians had let the challenges of building pyramids get in the way of their elaborate design, then we wouldn’t have them to appreciate and wonder in amazement. Once you know what you want the final outcome to be (your company vision), you don’t have to figure out how to get there right away. In fact, you won’t! But you can start by breaking down the first steps into bite size baby pieces and then build from there. The Egyptians figured out how to build their pyramids so you can build your company. You just need to update your SWOT, create your company vision and then focus on breaking things down into bite size baby steps that most likely will take you years to achieve. Just think – you are building your own pyramid/monument.

I haven’t schedule my trip to Egypt for anytime soon but I do have the architecture or business plan in place that lets me know when I will be able to go!

Keep Your 2010 Resolutions Simple

As we start the New Year there is usually excitement, optimism and renewal in the air. Some people set very loft resolutions and goals, others don’t do any goal setting, some aren’t goal setters, period and then there are those like myself who are continually setting goals thus setting “New Year’s Resolutions” is relatively meaningless.

I want you to be successful in the goals that you set. The trick is to set goals that are achievable and then keep building or adding on to those goals. In short – take lots of baby steps that will allow you to achieve your bigger picture goal. Way too many business owners don’t do any planning or goal setting because it then becomes this heavy weight that they are unable to execute on (or don’t know how to execute).

The secret is K.I.S. – Keep It Simple. Try breaking your goal down into small weekly bite size pieces. Just focus on one part of your goal each week. An example many can relate to – if your goal is to lose a certain amount of weight, during one week just focus on cutting out soda drinks. Add water and tea to your diet. That is it. In the following week you can add or change something else in your diet that will help you achieve your goal.

From a business perspective you might have a goal that says you want to implement and execute a marketing plan. Great, break it down – one week focus on defining the elements of the marketing plan, the following week focus on completing certain sections of the marketing plan and so on until the plan is complete. From an execution perspective, again start simple. If your marketing plan includes social media – start simple. For a week or maybe a month, focus on making Twitter part of your regular marketing activities. Then add another component of your social media plan. Start slowly adding in various components of your marketing plan until performing marketing activities becomes part of your company behavior/culture. When the year comes to an end you will have achieved your goal!

Make sure that you include others in helping you achieve your goals. Having people there to help and support you will make it that much easier to accomplish your 2010 resolutions. And don’t forget to celebrate your victories along the way! There is no need to wait until the end of the year to acknowledge that you got things done! For every baby step you complete, do some sort of celebration. This can be a little personal thing you do for yourself or something bigger that you share with team members.

I wish you well on your journey in 2010. You have the potential for greatness in you! Go for it! Start small. Make a promise and keep it.