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I entered the work force in September of 1993, just a few months after I turned 21 years old, had gotten married and graduated college with a degree in Accounting.  It’s hard to describe how stupid I was, how much I didn’t know, and that “love” doesn’t pay the bills. 

It’s taken many lessons to get where I am now, some hard, some enjoyable, some rewarding, some embarrassing, some uplifting to those around me and some devastating the very ones I love so dearly.

This post is a rehash of what I’ve learned over the past 15 years, mainly in a business context, but also about life.  I couldn’t possibly list all of my lessons, but I’ll try to list the top 15 so that I can possibly enhance (and expedite) your learning curve.  This post is long, but I hope it helps you avoid some pitfalls.

1.  Seek counsel from others… constantly.  My father has been my business partner for a number of years, and his counsel has been invaluable to the growth of our business.  I’ve made mistakes, some of them very costly, and my father has always stood by me with help, guidance and a non-intrusive word when I’ve needed it.  And my wife has been my greatest supporter and my greatest challenge all at the same time.  Since she loves me, and cares more about my business than anyone else in my life, her counsel is invaluable as well.  She has a lot at stake in my business decisions, so she is often candid, but caring in her discussions about my business.  I go to her often with help, and am learning how and when to approach her with my deep and life-changing decisions.  And I continue to add help from others… such as other clients who are excellent business owners, Christian friends who care about me, my brother who is also in a growing business, and my personal business coach.  A solid business coach has become a needed resource to bounce MANY business ideas and growth strategies off of on a monthly basis.  The investment is much less than the rewards I reap from the time I spend with him.

2.  Your boss has earned the right to enjoy the privileges.  I used to be a little jealous of the perks my bosses enjoyed.  Nice cars, freedom to come and go when they choose, the power available to the upper management, etc.  “They sure are lucky,” I mused.  Shows what I knew.  Now that I’m running two of my own growing companies, I’ve learned that there is no easy path to the privileges those former bosses enjoyed.  They went through hard times, learned hard lessons, stayed awake at night, worried about making payroll on Friday, and many other lessons I currently worry about today.  And even though they seemed to be “lucky” they may have been driving a nice car to work just to make payroll for ungrateful punks like me!  So now I know – those white-haired upper managers have earned the right to enjoy their privileges. 

3.  Figure out what you don’t do well and delegate it or hire it out.  I stink at hiring people.  And sometimes I stink at making the right decisions in business when I have about a hundred new ideas every day.  I’m learning that I have flaws (much to the surprise of my wife), and I need help in many areas of running a business.  I’ve hired and fired a bunch of bad people.  Now my own employees refer friends to me to interview, or I let the staffing agents provide me with who I need to interview.  The staffing agencies cost more, but I’ve been spending too much already training and firing the wrong people.  I wish I had learned this lesson a little earlier in my career.  It’s an important skill to discern where you are deficient as a business owner – and delegate it or hire it out to someone else.  Don’t moan over the extra money it takes to hire these highly skilled people – rejoice over saving a lot of future dollars and time you WON’T have to waste on your inabilities. 

4.  Take calculated risks when you have to, and don’t look back.  As a business owner, you have the privilege and duty to make many decisions each day – some big, some pretty insignificant.  Each decision represents some degree of risk.  Business does not come without risk.  Often, the higher the risk, the higher the payoff can be.  Likewise, that decision could be devastating if the risk is not properly calculated before hand.  But doing nothing in the face of decision is worse than anything.  Sure, there are times you need to simply wait before making decisions.  But I’m speaking of consistently failing to calculate risks, make the decision and then living with the good and/or bad results of the decision.  There is no excuse for inaction.  If you don’t make that failing decision, then you’ve missed that opportunity to learn.  And if you don’t make that winning decision, then you’ve missed the rewards you could have reaped.  Either way, leaders calculate their risks, then move forward with that decision and own the results.  It makes us all better leaders and business owners.  Business ownership is for the courageous, not the timid.

5.  Become a life-long learner.  I’ve been considering an MBA for the last year or so.  I’ve asked many people what they thought about this step during this stage in my career.  It seems like an inevitable step for me to take, but I don’t think now is the right time.  However, I’ve learned so much through the education available to me via technology, that the MBA is not as urgent.  Being a leader requires you to have a vision and a mission behind why and where you want to go in your business.  I find my vision and mission so shaped by the 15 podcasts I listen to constantly (I’m catching up on my Harvard Business Ideacast podcast right now*), the management and business books that I listen to on my iPhone, the 36 blog feeds that I subscribe to in Google Reader that deliver about 300 to 400 feeds per week, along with the continuing professional education my certifications require and the many people I surround myself with for business counsel.  This posture takes some humility, as you have to approach all situations and all contacts as someone to learn from.  Whether you have formal degrees or not, you can become a life-long learner and your ability to manage your business and make better decisions will be evident to your employees, your family and your friends.

6.  Employees are your life blood… To show your employees that they matter, reward them well when they are doing a great job.  When the company wins financially, the employees need to feel this winning spirit in their wallets too.  Protect your employees.  Tell them that you are going to respect them.  I even tell my employees that no one talks to them in a demeaning way.  If anyone gets called down in my company, it’s got to be me calling down my employees… not the clients or customers calling down my employees.  I protect them, tell them that I will always protect them, prove it by doing what I say and making my company a safe place to be, prosper and learn.  I realize now that my employees really are the core of my business, and make the business run efficiently or inefficiently.  This directly correlates to the bottom line.  Employees are the life blood of any company… you will reap considerable benefits when your employees know that you know this.

7.  Be consistent in your service to your customers.  In my experience, consistency really makes your customers or clients feel secure in the delivery of your product to them, or in your ability to serve them.  They tend to adopt a level of comfort with your company when you consistently deliver good product on a consistent basis.  They begin to put trust and comfort in your internal company systems and processes (see point #9).  Consistency should be seen in how you deliver your product or work, when you deliver your product or work, the look behind the delivery (all collateral such as business cards, websites and letterheads look the same), the interface with your employees, the quality of the actual product or service work product, and the internal means by which you manage the flow and creation of the product or service outcome.  Don’t discount the solid trust you can build in your brand by making consistency one of the “flags” you wave each day at your business.

8.  Education opens doors.  In our society it is often sad that this phrase is true, but I believe it more now than ever before.  I know brilliant people, highly skilled people and driven people who simply do not have the same opportunities as those who have degrees and certifications behind their names.  It is sad.  Whether the degree or certification is worthy of the person carrying it or not is beside the point.  The point is that education opensdoors.  Proper market reactions and good business leaders can weed out those who can’t back up their skills OR degrees, but it is certainly true that the interviews for the good jobs more readily go to those that have the paper qualifications to apply for the job in the first place.  The degree is the initial means by which certain high-paying jobs prequalify those who might be a good fit for the job.  In addition, education typically lends itself to providing more specialized services to the general public (such as lawyers, CPAs, doctors, scientists, etc.), which typically come with higher pay; while a lack of education often lends itself to more labor-intensive or skilled jobs, which tend to be more general in nature and pay less.  It’s all about specialization, and education helps you to be a specialist.  I am totally generalizing in this point.  There are examples where some people get degrees and then struggle to have any good job options in our society.  But that may be a result of the degree choice, not the choice to seek after education.  If you are lacking in this important part of your plans for future business growth, then make this a part of your future, if possible.

9.  Discover the freedom in restricting yourself and company to systems and processes.  In life, we often operate without purpose.  We take it a day at a time, with little thought for the future.  The opposite is being intentional… intentional about succeeding in school, or being a good dad, or saving for your future, or being intentional in your business.  When it comes to your enterprise, you don’t have to “hope” the chaos goes away, you can actually create systems and processes to “make” them go away.  I often provide management consulting to clients that are operating without purpose, or without intention.  They began their business, the business began to grow and they were too busy to do anything other than work.  They neglected their processes or systems.  I’ve found that there is great freedom in setting up systems and processes in your company to help you and your employees do the right things at the right times for the right reasons.  Then I explain to my clients that you have to accept some type of restrictions or rules before realizing this freedom.  I know I’ve experienced the joy and freedom of these restrictions in my own firm.  You see, when you are mature enough to set up processes, and then let those systems dictate how you accept new clients, or how you manufacture your product, or how timely you pay your bills, or who calls on new clients and when, or who fills up the copier with paper, or how new clients are thanked for becoming clients, or how your network of the top 25 influencers are reminded that you are still around and accepting new clients, then you are ready to succeed.  Then your enterprise becomes more than simply a reflection of you – it becomes an entity that runs on its own abilities, ready to grow well into the future way past what you could have ever done by yourself.  Accept these restrictions, and enjoy the freedom!  See the beginnings of my original systems posts here

10.  Entrepreneurs must have strong family relationships at home.  Boy, have I learned this one the hard way.  As someone who is always interested in trying my hand at some new endeavor, I find that the burdens being carried by my family at home are greater than I realize or ever anticipate.  Sometimes I interpret those burdens as actual restrictions to my business growth, and I balk at them.  But I’ve learned the opposite is true.  Once I came to understand that my family ties at home have strengthened my decisions, making them wiser and more timely, then I began to prosper and my business reached new levels of growth.  But my heavy work load is still a burden to my family, and my wife in particular.  But she has grown in this area as well, and supports me more than ever to test my wings, knowing that I will strive to make all decisions with my family’s interests in the forefront of my considerations.  You can’t be an entrepreneur when your marriage is struggling, or you are having trouble managing your children.  You can actually try it but, typically, your life will suffer for making that move.  Sometimes, the costs and sacrifices of owning your own business are not worth it.  Consider your family ties at home, notify every one of your intentions, and ask for support through the good and bad times.  The considerations of your family can save or wreck your business. 

11.  Stick to your core services, enhance them, learn about them, and don’t venture outside of them.  I see myself and many clients add just about any service, or try just about any idea to make money.  That flaps directly in the face of a strategic, mission-minded company.  The reason a company develops a mission and core values is to achieve prominence in their market with their target customers.  It’s so a company doesn’t go off base into unprofitable lines of work.  The problem is that a lot of companies don’t actually know what their core services entail.  And even this can seem to change from day to day.  Thus, a wealth of counselors is a requirement for a business owner (see point #1).  You MUST know why your company exists, the “problems” in the market place that your company can solve, and you MUST stick to solving only those problems.  At least, initially.  Sure, you can add new core services, but it should be after a lot of soul-searching for the company, and after meeting with your counselors.  But for now, stick to what you know.  Enhance and continue to study whom you serve right NOW.  Do what you do well before adding other core services that will drain energy, time, synergy and money away from the core services that are feeding your family.  By the way, what is your core service, and why is your presence in the market essential to your customers?

12.  Networking takes time.  You have to pay your dues.  You have to!  Everyone does.  Building a huge enterprise takes time.  And you need relationships to do that.  And you build relationships through networking.  This word has so many meanings, but let’s just refer to it at it’s most basic meaning – building a network… of people.  And, obviously, it has to be the right people to make your business successful.  But you can’t get to those people over night.  Building a network takes years or even longer.  I receive some great referrals for big business now because of my commitment to develop relationships with those referral sources over many years (some go back to when I was in college!).  So who do you want to serve?  Start the process of serving them by getting to know them.  Build that relationship so that your referral sources will develop enough trust in you to send you business.  Trust is a key component to networking.  Network with others to enhance their service and your mutual relationship.  Give a little, instead of taking all the time.  Here is another post on networking I wrote some months ago that speaks to an innovative way to network.  Also, check into social networking, another way to network online (I’m getting clients this way now).

13.  Build every “relationship” bridge wisely.    This point is somewhat related to the point above, but with more of a focus on the quality (or the perceived quality) of the client/network relationship.  You never know who will send you the next big client.  You can try to pre-judge the quality of the relationship, but be careful.  Spend time with the little people until you can determine if they are going to be life-long leaches.  If they are going to eventually be the great client you hope they can be, then give them your time early on to enhance a relationship that will pay big dividends in the future.  Often, some of my new clients “who didn’t have much to offer” in terms of fees and resources have referred me some of my biggest clients.  Build (and end) your relationships wisely and your business is bound to grow. 

14.  Candidly fire bad clients.  You owe it to your good clients and your awesome staff to step up and get rid of the clients that are holding you and your company back.  And be honest with your “bad” clients.  You owe it to them.  To truly help them, tell them why you are not the right match for their needs.  Or explain to them why you can’t serve them anymore.  They’ll respect you, and will possibly still say good things about you in the community even after you’ve gotten rid of them.  If they say bad things about you, then they are just confirming why you got rid of them in the first place.  Releasing bad apples typically does NOT come back to haunt you in any detrimental way.  It will enhance your business offerings to the rest of your customers without bogging you down with clients that can’t be satisfied.

15.  Get rid of poorly performing employees FAST.  Remember, employees are your businesses life blood (see point #6)… if they are GOOD employees.  If they are “bad” and are holding your organization back, put them on notice, give them 30 days to shape up.  If they don’t add to the value and vision of the company, get rid of them fast.  It will make a statement to the rest of your employees that (1) they can expect you to be as quick to get rid of them if they don’t stay the course, and (2) you have the guts to protect the company and the other employees who ARE performing well, and sticking to the vision.  It takes guts and courage to do this, but you will be rewarded over time.

Here’s to the future of your business!

Thanks, Jason M. Blumer

* I just learned in my podcast that UPS implemented new GPS technology and optimization software to make sure their delivery trucks do not make left turns (because the vehicle has to idle while waiting to take a left turn), and have saved 28 million miles in driving and 3 million gallons of gas annually!  Amazing!


1.  You can have someone look over your website, video themselves talking about how to improve your site and it only costs $19 (see a sample of how it works) – GoSee

2.  Google’s G1 phone is out, and the reviews are in (or at least, first impressions).  It’s trying to duel with the iPhone.  Good luck.  Yawn.  No exchange syncing yet (which I totally love), but it does have Google Maps, complete with the cool new Street View – GoSee

3.  Amazing what Google offers that I didn’t even know about.  Check out their full suite of offerings (such as Patent Search, Google Labs, Google Alerts, Google Translate and Google Pack) – GoSee

Thanks, Jason M. Blumer

Three Tax Reasons Why I Won’t Vote for Obama (among other reasons)…

1.  He wants the top dividends rates for high-income earners (with adjusted gross income over $250,000 for married filing joint taxpayers) to increase to 20%.  He wants it to be 39.6% for those with income over $373,100.  My sarcastic editorial comments: since high-income earners are doing something wrong by getting a good education, putting money back into the economy, creating jobs for other people, running their companies effectively and efficiently, contributing to society through medicine, business, entrepreneurial endeavors, science and research, they should be penalized.  Got it.

2.  Obama would possibly raise the cap of wages that are subject to the social security tax.  Currently, up to $97,500 of everyone’s wages are subject to the social security tax.  That cap would be raised under Obama’s plan to shore up the short fall in the social security fund, where the cash is expected to be depleted by 2041.  Taxpayers with incomes over $250,000 would continue to pay the social security tax.  My sarcastic editorial comments: again, tax the rich, blah, blah, blah – see sarcastic comments from point number one.

3.  Obama would mandate more employer health coverage for businesses with 10 or more workers.  Reportedly, a 6% tax would be applied to payroll in those small businesses which do not supply health insurance coverage for their workers.  This tax would go to fund a national health plan.  My sarcastic editorial comments: one good way to stimulate our economy would be to tax the small business operators some more.  They don’t have enough trouble already trying to make payroll, we should fund everybody else who doesn’t pay for health insurance by taxing the small business guy working 80 hours a week.

Additional tax burdens are not what our country needs to sustain mandated health coverage.  These choices (and many others) are best left to the small business owners (micro-businesses) that run our country every day.

See Obama’s Comprehensive Tax Plan here, and try not to hurt anyone with it, okay?

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that (i) any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code; (ii) any such tax advice is written in connection with the promotion or marketing of the matters addressed; and (iii) if you are not the original addressee of this communication, you should seek advice based on your particular circumstances from an independent advisor.

self must be denied, that it may not be destroyed.

Matthew Henry

Wow.  September has truly been rocky for our economy.  Many of the most recent deals and sells will go down in history as some of the largest failures in history.  I’ll comment on the outlook for small business at the end of this post, and how the small business can best weather this storm.

Of the four largest investment/brokerage banks (Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley) in the US, only Goldman Sachs and Morgan Stanley remain as Wall Street investment/brokerages banks are continuing to file for bankruptcy or being bought out.  Lehman filed for bankruptcy protection recently because it could not court a suitor to buy it, though Bank of America was reportedly interested at one point.  The federal government set a precedent when it helped Bear Stearns go through a takeover by JP Morgan Chase back in March (to the tune of $29 Billion).  But there was no such guarantee on the horizon for Lehman Brothers; and this because the federal government would not guarantee the ongoing losses for the would-be purchaser, as they did in the Bear Stearns case.  Why the federal government is involved in guaranteeing these purchase loans is beyond me.  I didn’t authorize this in my last meeting with Bernanke and Paulson.  Nonetheless, Barclays of London is now going to buy the remaining assets and premises of Lehman for $1.75 billion dollars.  And as of today, Goldman and Morgan stock values slid some 20% and 28%, respectively.  They’ll probably hook up with banks soon too to make their balance sheets look better, and avoid the inevitable drag into the mud.

Whats more, Bank of America went on to buy Merrill Lynch for some $50 Billion dollars.  In late 2007, Merrill was having trouble with tons of investments in mortgage-backed securities, and finally decided to sell as opposed to being dragged down like similar brokerage/investment bank houses in America.  This will make Bank of America the largest brokerage house in the world with some 20,000 advisers and an estimated $2.5 trillion in client assets.  Merrill will continue to operate under their name, but with stronger asset-backing from the biggest bank in America.

Now we see the federal government coming to the rescue again with the bailout of the American International Group (AIG).  They will prop up the company with an $85 billion dollar loan so as to (again) try to stay a run on our economy (but with a huge interest rate cost to AIG).  This bridge loan will give the federal government an 80% stake in AIG, and give it power over some future decisions within the company.  The thought is that if insurance companies go under, those citizens relying on that insurance send troubled fears throughout our economy (and world) on unprotected assets and income, along with the inabilities to meet insurance claims obligations.  This bail out still does not seem to make the markets feel all warm and fuzzy (as denoted by today’s trading activities).  But how long will the prop last?  If the company is insolvent, isn’t it still insolvent even though it has a new owner (the federal government)?  Isn’t it even more insolvent now that it has a new $85 billion dollar loan to contend with?  Sounds like the federal government is pretty poor at deciding where it invests its money.

A lot of these troubling issues began a few weeks ago when the Treasury department took over the management of two large mortgage companies, Fannie Mae and Freddie Mac.  With mortgage default rates climbing rapidly for the two quasi-governmental entities, these two organizations were headed to trouble without intervention.  Fannie Mae and Freddie Mac lubricate the mortgage industry by buying up mortgages from other lending institutions around the US.  The housing slump was beginning to takes its toll on these institutions, and now the federal government has the authority to inject money into the troubled companies by buying up stock with “self-created” funds.  If you need money to buy stock, just print it.

These are some troubling times with the future quite murky.  What can the small business owner do to stay the effects of the broader economy in their own company:

Understand who you are.  Large companies used to give us the security we so longed for.  Now, smaller companies, along with self-employed businesses, are sometimes much safer investments.  Smaller companies can turn around quicker, make quicker decisions, make wiser decisions, enter new markets within months, or exit lagging markets immediately.  Our safety is in the small guys now.  Congratulations to the micro businesses who make our economy safe and worth working in!

Watch the interest rates.  These tend to affect small businesses quicker than larger companies.  That is, if your rates go up on your credit line, then your payment on the loan will immediately go up the next month.  This can cause immediate cash-flow problems.

Wait on capital investments.  Related to the point above (and the point below), capital investments usually depend on new loans, and therefore, interest rates.  Riding out this economy for another year will probably prove to be a wise choice, and will let you make better decisions when interest rate volatility is not so high.

Watch your renewals on your annual credit lines with the bank.  A non-fixed payment loan can be called by the bank at any time, depending on your agreements with them.  If you are a company that continually posts losses, and a failing bank has to cut it’s losses, it may just call your loans to get as much as they can from your failing company.  If you are propped up by credit lines, you may be in a dangerous position, especially if you are with a potentially rocky bank that doesn’t like the type of industry you operate in.  We don’t hear about it much, but banks do call loans.

Grow with cash, not debt.  Right now, creating growth with more debt is probably not a good idea.  It is sometimes a viable alternative to future growth and moving into new and exciting markets, but it can strap you when the economy as a whole stops buying.  Hold off on future growth plans unless you can do it with available cash already in your business bank account.

On the other hand, expand NOW if you can.  Somewhat related to the above point, you should expand now if you have the cash to do so.  Thinking about new lines of revenue to get in to?  Do it now when everyone else is shrinking.  Need to spend money on marketing (and you have the cash to do so)? – do it now while everyone else is cutting their marketing budget (an easy budget to cut in hard economic times).  You see an exponentially greater increase in your business when you can expand while the overall economy is shrinking.  You get more for your dollar – products and servies can potentially be bought at bargain prices since everyone else is trying to generate cash in their company too.

Grow the bottom line, not the top line.  To create more money in your business, you should shift your focus to the bottom line – where the profit resides.  When trying to generate more cash, try cutting costs as opposed to just increasing sales.  Cutting costs adds that saved dollar directly to your bottom line, whereas increasing sales means you have to pay for people,  product and/or other general and administrative costs before you ever get a dollar to the bottom line.  Depending on your industry, only 5% to 15% of each top line dollar (sales) ever even makes it to your bottom line in cash profit.  Cut your costs NOW, and increase your profits (and thus, cash).

8  Cash is king.  That is a mantra we often speak in our firm while teaching and training our clients.  Don’t make decisions that hurt your cash flow.  Now more than ever, make decisions that help you keep your cash in the bank.  Things like offering longer terms to larger customers, or working with vendors that demand up front cash payments can find you lacking of that vital commodity when payroll time comes around – CASH!  Begin thinking how each of your decisions affects your immediate cash flow, and how you will recover from the effects of slow payers, new monthly payments on car loans, outstanding receivables, etc.  Giving someone your cash now is NOT an isolated incident.  That move can make for hard decisions one or two months down the road (or longer), when you really need that cash for investment, payroll or buying better positions in your market.

Don’t worry about your home loan.  If you default, the federal government will come to the rescue of the mortgage bank you stick it to, and ultimately bail you out with an offer to swap your loan for a more affordable one.  That’s a joke (or maybe you should do all of us a favor, and not take on any mortgage debt you can’t actually pay for).  It will help the overall economy in the long run.

10  We have probably NOT reached the bottom as an economy.  Who knows when the economy will turn around (I sure don’t).  It’s projected that the end of 2009 is at least as long as we’ll have to wait until we see the US economy start to rebound.  The phrase to drill in your head right now is WAIT.  In any decision you are making, the decision to WAIT is never a decision you can’t eventually greatly benefit from or recover from.

Let me know some of your thoughts on your small business, and feel free to pass along our article to help other microbusinesses out.  Take care.

Thanks, Jason M. Blumer, CPA

P.S.  The first 25 blogs to link to this post or link to their blog via a comment here will receive an autographed copy of the Hermanisms book by John L. Herman, Jr.  His book is awesome and full of wonderful Axioms for Business and Life.  You won’t want to miss this book.  Just let me know where your post is or leave your comment here and we’ll get in touch with you.  Thanks.

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