The right mindset for a small business owner

I recently finished a powerful book written by Rabbi Daniel Lapin called Thou Shall Prosper: Ten Commandments for Making Money.  Lapin is an Orthodox Jewish rabbi who has spent many years studying the qualities that have made Jewish people excel in business, and he has written this book to make these principles available to everyone regardless of their faith tradition.  As a Christian minister I found his insights into some of the Old Testament texts illuminating, and as a business person I found his application of those texts inspiring. 

Thanks to recent events business owners and successful people have often been painted as greedy, dishonest people who cheat and lie to rob poor people of their possessions.  Watch almost any program on television, any movie that depicts business owners, or watch the national news and see how many times business people are portrayed in that light.  The idea of an honorable wealthy business person is foreign to most people's thinking.  This false mindset of business people has even made some successful people feel guilty for their success.

Lapin writes that every dollar that is earned is a "certificate of appreciation" from one's customers.  This is true whether one works on a factory assembly line, owns a small mom-and-pop business on main street in a small town, or is a CEO of a large multi-national organization.  Everyone who earns a living has a customer, and the money that is earned is the result of satisfying that customer.  Lapin writes, "If you did not rob or steal from anyone to obtain that dollar, if you neither defrauded anyone nor persuaded your government to seize it from a fellow citizen and give it to you, then you could only have obtained that dollar in one other way - you must have pleased someone else."  There is nothing shameful about that nor is there any reason to feel guilty because you have become successful.

This is the mindset we need to instill in people, not the negative ones that attempt to demean business leaders and other wealthy individuals.  You need to understand this blog is not written by a wealthy person.  I am the typical middle-class American who has worked hard all his life to join the middle class, but I appreciate wealthy businesspeople.  No poor person ever gave me a job that allowed me to provide for my family.   When we seek gifts for charities and other worthwhile endeavors do we ask the poor or the wealthy for those funds?  Studies find that the wealthy give vast sums of money to charities, their churches, and other worthwhile needs.  Business owners give to their communities, to their churches, to other endeavors.  They provide employment that allows people to earn an honest living and support their families.  They provide goods and services that people need.  Lapin assures us there is dignity in business for all these reasons and more.

The book provides 10 commandments for making money, but it is not a "get rich quick" book.  It explores centuries of the Jewish mindset regarding money and business based upon teachings from the Bible and the "Oral Torah."  Lapin writes, "Deep within traditional Jewish culture lies the conviction that the only real way to achieve wealth is to attend diligently to the needs of others and to conduct oneself in an honorable and trustworthy fashion."  The 10 commandments found in the book help flesh out aspects of that conviction.

I appreciated the book and recommend it for several reasons.  One, it reminds the reader that honest businesspeople should be honored and respected for their contributions to our society.  Secondly, it gives interesting insights into Jewish beliefs and customs, and, thirdly, it presents some foundational concepts that one needs to believe in if he or she is to enjoy financial success.

Indecision will cripple your business

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Every day leaders are confronted with a variety of decisions they have to make.  Hopefully, your employees have been trained and are empowered to make many of the decisions that need to be made, but there will be those decisions that only you as the owner or manager can make.  The most successful leaders will not postpone making those decisions.  A study conducted by the Harvard Business School once asked "What are the top characteristics of high achievers?"  The persons being asked gave a wide variety of answers, but the top response was the ability to act quickly.  They recognized that leaders who can make quick decisions and act on those decisions were going to be the most successful in their fields.  Those who procrastinate in making the tough decisions would enjoy much less success.

This does not mean that these quick decisions were always the correct ones.  Sometimes these decisions were not the best that could have been made, and occasionally they were completely wrong.  But, the decisions led to actions, and if the actions didn't produce the desired results then new decisions could be made.  In either case, the best solution would be discovered more quickly through not putting off making a tough decision.

These decisions were also not made without input.  Leaders know to acquire as much information as possible before making an important decision, but not to delay that decision until they have every iota of information that might impact the decision.  Leaders never have all the information they need, but they often can't wait until that information is available before making a decision.  If new information becomes available later that would lead to a different decision then the initial decision can be altered.  I once sat in on a meeting when a question was raised about a decision that had been made by a board two years earlier.  One person in the room reminded everyone in the room of the earlier decision when another person responded that decisions can be changed when new information became available.  Few decisions should be written in stone.  Especially in the times in which we now live, decisions made two years earlier should not be seen as Gospel.  They may have been the right decision at the time, but as new information becomes available or things change, then those decisions need to be examined and changed if needed.

When leaders refuse to make necessary decisions they create doubt in the minds of their team members.  These team members wonder who is running the organization and what will happen if their leaders become incapable of making important decisions.  There is a great scene in one of the Pirates of the Caribbean films when, near the end of the movie, two pirate ships go on either side of a British ship and begin firing.  Throughout the movie the commander of the British ship was arrogant in his leadership, but as these pirate ships made a maneuver he never expected he suddenly became frozen and incapable of responding.  The subordinate officer kept demanding an order which never came until the subordinate office assumed control and ordered the men to abandon ship.  The pirate ships kept firing on the British ship as the commander slowly walked across his ship until it finally blew up and sank taking the commander with it.

In business we will always have pirates firing at us.  People will do things we never expected.  New challenges will continually confront us.  Some of these challenges will offer opportunities for our businesses to grow; others will threaten to sink us if we do not react quickly.  In either case, decisions will have to be made, and you as the leader will be responsible for making them.

Network to build your business

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A few years ago a friend asked me to speak to the local Rotary Club about the auction business I had recently started.  My schedule was clear that evening so I agreed.  Despite bad weather a nice group of people were there representing various businesses in our community.  I kept my presentation to about 20 minutes, but I was surprised by their questions that lasted about 30 more minutes.  There was much about the auction business they did not know which led to some very good questions about the details that are involved in having an auction.  It was a great opportunity to showcase my knowledge and my desire to operate a quality auction business that will treat people with respect.  It was also a chance to build relationships with persons I had never met before.  We ate together, we laughed and joked with one another, and by the end of the evening I think we all felt very comfortable with each other. 

The day after that meeting I thought back to the fifteen years I owned a previous business.  Not once did I ever speak to any group about our business nor did I ever join any of the organizations in our community.  We sat back waiting for people to walk into our business, ran an occasional newspaper ad or radio spot, and depended on word-of-mouth advertising from satisfied customers.  I have to wonder how much better could we have done if I had networked with other leaders in our community so they could get to know me on a personal level and get to know more about our company.

Given the option, people will do business with persons they know and trust.  Networking allows others to get to know you on a more personal level.  Networking is more than working a room and passing out business cards; it's about getting to know people and letting them know you.  It's building personal relationships with other people.  It's about building top-of-mind-awareness through relationships.

Are you a member of any of the local service organizations in your community?  Don't misunderstand...you don't join these groups just to get business for your company.  You join to help make a difference in people's lives.  Many of these groups do some great work in their communities, and that is why you want to be a part of that.  However, as you serve alongside others in the organization you are building relationships that may well result in increased business.  Anyway you look at it, that is a win-win situation.  You benefit from the increased business, and your community benefits by your involvement in the organization.

What would you do if someone asked you to present a talk to one of the groups in your community?  For many people, their number one fear in life is to have to stand before a group of people and give a talk.  I've been in ministry for over 35 years so that is not a fear of mine, but I have seen people freeze when they've been asked to speak to a group.  As a business leader you need to conquer that fear because such opportunities are a great way to network with other people and present information about your business they may not have known.  It puts a human face and story on your company that is more appealing than any logo or slogan.

Look for networking opportunities.  I think you'll find they will help grow your business.

To learn about other mistakes I made in my previous business be sure to read my e-book Mistakes: Avoiding the Wrong Decisions That Will Close Your Small Business.

Your online presence needs to be updated regularly

I scan or read well over three dozen blogs each day.  The posts that I find helpful I put on Twitter so others can be directed to the author's site so they can read them if they want to.  One of the things I don't understand is why the people who create these blogs may go for months without ever adding a new message.  Recently, I removed several of the blogs I had been following because nothing new had been published on them in five to six months.  Many of these were business-related blogs that I assume were created to attract people to those businesses.  I don't think most people will find them very attractive.

Since starting this blog a few months ago I try to post on it at least once a week, usually Monday.  Once in awhile I don't do it simply because of my schedule.  I have another blog that is focused on ministry and church leadership.  Because that is my primary focus and the field in which my day job is located I try to post on that blog at least four times a week.  In addition, I post around 15 articles on my Twitter account each business day with a link that directs the reader to the site where they will find the article.  Half of those articles are related to ministry and the other half are focused on small business.  I do this because I want my readers to find fresh information from some of the best thinkers in these two areas of life.  Since my Twitter account links to my Facebook account, those who just follow me on FB are able to be directed to those articles as well.  I continue to struggle getting large numbers of people following my posts; I can't imagine how difficult it is for those blogs that are only updated 3-4 times a year to attract regular followers.

What makes this even sadder is that I have found the articles on these blogs to be quite good.  The authors are people who have something worthwhile to say, and usually a product or service to market, but they are turning away some of their potential clients due to the lack of blog maintenance.

Small businesses and ministries need a presence on social media.  A web site and/or blog (I think both are best.) are becoming more essential to get their messages out to persons who need to know about them.  But, if these are not going to be updated regularly these sites can become more of a detriment than an asset.  Stale messages send a negative signal to your potential clients that you don't want to send.  It tells people that you don't have a lot to say about your product or service or you just don't care to give them the information they might need to do business with you.

I have seen church websites that have not been updated in three or four years.  Their previous pastor is still listed on the church staff page.  If that information is wrong then I can't assume I can trust their service times either.  This has actually kept me from visiting some churches.  Some businesses don't do much better.  Dated information about the company or the product or service doesn't impress potential clients, and it's important to know that the first image some people will make about your company will come from you social media sites.  Create the wrong impression online and you will drive potential business to your competitors.

Businesses have two options.  Either pay someone to manage your site or do it in-house, but your sites must be maintained and updated on a regular basis.  In today's environment your online presence may be a major portion of your marketing depending on the target audience you are going for.  As such, it should be seen as an investment, not an expense.  You are investing money and time in an effort to reach new clients and to encourage your current clientele to do more business with you.  Make your online sites a priority in your planning.  Don't ignore or "forget" them.  They can be a rich source of revenue if they are properly maintained.

Confidence is key to success

A few years ago I decided to get my auctioneer's license. Although I was working full-time I knew I was getting close to retiring (for the second time) and wanted something else to do. I took the 80 hours of training our state requires and took the exam which I passed. A few days later I got my license in the mail.

The next Friday evening I went to an auction conducted by a friend of mine.  As soon as I walked in the building he asked if I could help out in the ring as he was short-handed that night.  After a couple of hours of ring work he asked if I would relieve him for a few minutes and take over the bid-calling.  That was my first time to call bids at an actual auction.  We ended each of our class sessions at the auction school I attended practicing bid calling, but this was my first time to be taking bids from actual buyers.  I can assure you it was not the same!  That few minutes turned into almost an hour before he returned to the microphone for the remainder of the auction.

I learned three things that evening.  One, I enjoyed it as much as I thought I would.  Two, it is harder than it looks like.  Three, I can do this.  That hour behind the microphone gave me confidence that I can be an auctioneer.  Yes, I messed up a couple of times.  (Once I had a $15.00 bid for an item and started asking for $10.00.  We all laughed because everyone knew it was my first time.)  But, that was OK because it taught me that messing up isn't the end of the world.

In anything we try to do in this life confidence is an important key to success.  This is especially true for the entrepreneur starting a new business.  You may have been a technician in the field of your new business or perhaps you've spent years in school learning the nuts and bolts of running a company.  Despite that background you don't KNOW you can do it until you are actually the person in charge.  When the microphone is handed to you, when you are the one responsible for making the final decisions that will determine the direction your business will go, when the employees are dependent upon your judgment for their livelihood then you will find out whether or not you can do this.

For most entrepreneurs it is often best to start part-time until your new endeavor is showing steady profits and growth before completely leaving your old position.  Anyone starting something new will make mistakes, but when you are not totally dependent on that one source of income those mistakes are less deadly.  As your business grows you will become more confident in your ability to manage it.  Perhaps the day will come when you will decide to invest yourself fully in your new business, or, like me, you may see this as something that will remain something you do part-time as a fun diversion.  Either way, as you build confidence it will become much more enjoyable and profitable.

If you want to read what has to be the textbook on entrepreneurship and how to properly start a new business you must read EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches by Dave Ramsey.  An important piece of confidence is learning what you need to know to be successful, and this book will give you the tools you need to start and run your own business.

You must first develop the leader within you.

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In my e-book Mistakes: Avoiding the Wrong Decisions that Will Close Your Small Business I discuss numerous mistakes I made running our small company.  Although I learned a lot from those mistakes, there were enough of them that they eventually proved fatal to the business.  I wrote the book to not only warn the reader to avoid those mistakes but to share the important lessons I learned along the way.  As I begin a new auction business I hope to remember the lessons I learned so I can have a much more productive business this time.

If someone was to sum up all the mistakes I made into one core mistake it would have to be the lack of leadership I provided the business.  When we got the business it had nearly thirty years of successful operation in our community, but with new ownership came new leadership needs which I failed to provide.  All of the various mistakes I cover in the book were merely symptoms of the core problem of a lack of leadership on my part.

John Maxwell insists that "The key to success in any endeavor is the ability to lead others successfully."  Furthermore, he teaches that everything rises and falls on leadership.  I believe he is right on target.  No organization will rise any higher than the lid of its leadership.  As the president of our company I put the lid on how effective our business could be with the leadership I provided, and that turned out to be a very low lid.

Regardless of where your personal leadership lid is right now, it can be raised.  While I do believe some people are born to be leaders, I also believe that leadership can be learned, and that everyone can learn to be a better leader than he or she is right now.  The challenge is that leadership growth is hard work.  It requires much self-discipline.  It requires that one identifies a clear vision of where the company is to go and the steps it will take to get there.  Priorities must be set that will enable that vision to be achieved.  A leader must learn how to solve problems, deal with constant change, work with people who can sometimes be difficult and help develop them into persons who believe in the vision you've set forth.  Everyday he or she must step away from the urgent in order to focus on the most important priorities of the day.  It can get overwhelming, especially when you realize that you will never reach the finish line as long as you are in the leadership role in your organization.  Achieving your vision only means you get to celebrate one day and then it is time to start over with a new vision if you want your business to continue to move forward.

Leading a company is not easy, but the most difficult aspect of leadership is leading yourself.  A leader must always be in a learning mode.  He or she must keep up with the technical changes occurring in the business.  The leader must pay attention to changes in the culture.  You don't want to be the last company still making buggy whips.  Leaders must focus on the needs of their customers and their team members.  Leaders have to control their attitudes when things don't go the way they planned.  There are many things we cannot control regarding our businesses, but we can always control our attitudes.  Staying focused and optimistic isn't easy, but it is necessary, and for some people with certain personalities (like me) it can be a real struggle.

As the head of your business, you must always be growing in your leadership abilities.  That means you have to be a life-long learner of leadership, of people, of culture, and of your business.  You have no choice but to read the current journals, books, and articles relating to what you do.  You have to invest time and money in attending workshops and vendor meetings.  The more you grow as a leader the more confidence you will have in leading, and the more willing others will be to follow your leadership.

For more on this vital subject I recommend you read John Maxwell's book Developing the Leader Within You.  As you apply the recommendations you'll find in this book you will find that you will grow as a leader and your organization will grow alongside you.

Starting right

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A couple of weeks ago I mentioned that I had received my auctioneer's license and was preparing to start an auction business.  Today I met with my attorney to discuss how I should structure the business.  He advised me to create a Limited Liability Company (LLC) that would help protect our personal assets in case there were problems in the future.  It costs very little to set up an LLC and it provides a lot of protection.  He suggested that if I wanted to save money I could do it myself online as it wasn't that difficult, but when I asked what he would charge me to do it I found out it wasn't much more.  I asked him to do it.

I'm all about saving money, and like most small business start-ups I don't have a lot of money to put into this endeavor.  However, I think there is value in knowing that the foundation for the company is being laid correctly.  I could save money by doing my own dentistry too, but I doubt it would be worth it.  I want this company to be set up correctly so why not pay someone who has been trained for this kind of work to do it, especially when it is such a minimal amount?

One of the mistakes I made in my previous company was that I tried to save money in places I shouldn't.  Penny wise and pound foolish I believe the old proverb calls it.  I want this new business to be started right so I've asked my attorney to do the paperwork for the LLC to ensure it is done correctly.  I began today pricing liability insurance.  When the state approves the LLC I will set up two bank accounts for the business: one for business operations and the other for an escrow account as required by state law.  I have started printing business cards and brochures and began handing them out to close friends.  Later this week I will order contract forms and other paperwork needed in the auction business so when I am ready to launch the business I will have everything ready to start. 

And it will be right from the start.  I will not make the mistake again of trying to cut corners that should not be cut in an effort to save a few dollars.  I learned that lesson from my first business.  If you want to know what other lessons I learned from losing that business be sure to read my e-book Mistakes: Avoiding the Wrong Decisions that Will Close Your Small Business.