Gain Independence From Your Business By Putting Profit First

toilet-paper-entrepreneurFresh off the Fourth of July holiday and a celebration of our country’s independence, it’s a good time to ask whether your business is giving you the independence you hoped it would.

Too many of us start our businesses with the goal of achieving financial freedom, only to discover that many months (even years!) of hard work, long hours and an out-of-balance life later, the business “owns” us rather than the other way around. In addition to the mental and physical toll business ownership takes on us, it very often stresses us financially too.

ProfitFirst_BooksDeclaring independence on your business doesn’t require going to war with it though. In fact, best-selling author Mike Michalowicz offers a simple, practical solution for taking back control of your business. In his latest book Profit First, released today, Michalowicz asserts that any business can be transformed from a cash-eating monster to a money-making machine. Moreover, Michalowicz says you can start the process with your very next deposit.

Far from a “get rich quick” scheme, the system Michalowicz outlines in Profit First turns the commonly accepted accounting formula Sales – Expenses = Profits on its head. Rather than pay expenses first and see if any profit remains, he advises business owners to subtract profits first and set them aside; what’s left is the money available for expenses.

Subtracting profit first forces business owners to become ruthless about expenses, Michalowicz says. Most business owners, even those who think they are already operating lean and mean, can find more ways to be more frugal. In Profit First, Michalowicz leads business owners step-by-step through the basics of putting profits first, destroying debt, and more advanced techniques for actually living profit first and achieving the financial freedom you went into business to gain in the first place.

Anything but a “talking head” business expert, Michalowicz learned the hard way the necessity of putting profit first. He built and sold two multi-million dollar companies, won the  Young Entrepreneur of the Year Award and was heralded for his business acumen. Behind the scenes, though, he was taking out loan after loan and racking up credit card debt to cover payroll. Eventually, he lost his fortunes.

When he regrouped to start yet another venture, Michalowicz thought long and hard about what he needed to do for his new company to prosper. That’s when he came up with the Profit First system. After riding the system to success and experiencing how it literally pays off, Michalowicz has become a Profit First consultant, working with business owners to share how to bring profitability to themselves, their families and their communities.

As Michalowicz challenges in the introduction to Profit First: “Today is the day we draw a line in the sand and never accept it again. Today is the day we make your business (and your life, in the process) financially strong. Permanently.”

Declare your independence. Check out the first few chapters of Profit First, download the audio version, and listen to my radio interview with Mike to learn how you can have not only a financially healthy business, but a seriously profitable one as well.

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Telling Kansas City’s Entrepreneurial Story

Kansas City is abuzz with entrepreneurial activity. Historically, it always has been. The last few years, though, have seen a renewed entrepreneurial energy that’s catapulted Kansas City into the national spotlight.

At Thinking Bigger Business Media, we ask ourselves every day how to best capture Kansas City’s entrepreneurial story, and three things come up consistently.

First, there’s no one way to tell the story. There are so many players, programs, events, and entrepreneurs at various stages of growth for any one media outlet or platform to get its arms around. But the good news is that there are more coverage sources today than there were in 1991 when our magazine was the only one exclusively covering entrepreneurs and small businesses. Today, all of us must play a role in the story telling—from traditional and online media, to resource providers that produce monthly newsletters, to corporations that publicly acknowledge the successes of their small business vendors. And each of you who attend business events also play a role, and even have a responsibility, to post to social media and share the stories as they unfold in real time.

Second, it’s important to keep in mind that we can’t tell the story by focusing on one group in the ecosystem to the exclusion of others. Granted, some businesses may generate more interest, some owners may exude more charisma, and some may have more well-established PR machines. Still, our entrepreneurial ecosystem is a collection of all different kinds of entrepreneurial “species,” if you will—startups, traditional businesses, second-stage companies, corporations, resource providers and others—and no one of them is more important to the ecosystem than another.

Finally, in the telling of the story, we must aim for providing more than visibility. We must strive to connect the various segments of the ecosystem so they can work with and learn from each other. The challenges and failures that occur in business building are as much a powerful and important part of the story as the successes. Traditional businesses would do well to pay attention to what’s occurring in the startup community – those businesses may be their next customers. Additionally, a startup’s way of approaching challenges may be different than that of a traditional business, sparking the traditional business to try something that could revitalize their business. Likewise, startups can learn from the practical blocking and tackling experiences that the owner of a more established, traditional business could provide. But these dialogues can’t take place unless part of the storytelling includes introductions across the ecosystem. Only then will the true growth occur that will allow us to write the next chapter of Kansas City’s entrepreneurial story.

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Brewing Up a Backlash . . .

When the founder of the 12th largest microbrewery in the United States announces its sale, it gets attention. John McDonald revealed Boulevard Brewery’s sale to Belgian-based Duvel Moortgat in late October, and media around the world picked up the story. Locally, the backlash was immediate.

Within minutes of the announcement social media erupted with comments from people saying they’d never drink another Boulevard beer, that McDonald had “sold out,” that the “foreign takeover was starting.”

I have to admit I wasn’t ready for that kind of rancor. It looked to me like McDonald had done his due diligence and found an exit strategy that benefited not only himself, but the business, his employees, his customers and Kansas City.

To a large extent, the vitriol is a byproduct of Boulevard’s wild success. When a brand builds a fan following as large and as intense as Boulevard’s, there’s bound to be a deeply personal connection to the brand, even a sense of ownership. And no one asked all those “brand owners” whether they wanted “their” brand to be sold.

The fact of the matter is that McDonald spent 25 years dedicating his life to building Boulevard. Sure, we savored the beer, bought the merchandise, took the tours. But he took all the risk. And now, at age 60, he appears to have found the perfect exit in another family-owned craft brewery known for its dedication to quality. He remains a minority partner, and has a seat on the board of directors. The deal opens up international distribution channels, and the brewery, already operating at capacity, benefits from a capital infusion that allows it to expand in Kansas City. Plus, he retains his hometown team of employees.

McDonald has spent a lifetime pleasing his customers, brewing quality products, and creating a memorable brand experience. There’s no reason to believe he’s going to stop now.

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Be All You Can Be . . . But Be Who You Are

To call today’s marketplace competitive is an understatement. Just about every business owner I know is focused on how to stay relevant, provide quality, streamline processes and make a profit—all things any business owner should pay attention to, but today there seems to be additional urgency.

One caveat: You must still stay true to your core mission and strengths. Strive to make your business everything it can be, but don’t lose sight of what you do well and who your target customer is.

Here at Thinking Bigger Business Media, we are making a lot of changes. But one thing we never forget is whom we serve: growth-minded small business owners, primarily those with 100 or fewer employees. Our editorial doesn’t try to be everything to everyone—it serves small business owners who want to grow their businesses. We don’t go for trendy, bandwagon product offerings that don’t serve this core audience, just to bring in additional revenue. So, bottom line, literally, we are about small business owners.

With that in mind, we are excited to announce the launch of the Smart Companies Thinking Bigger® Radio Network in October. Each day you’ll find a lineup of hosts bringing you expert advice on some aspect of running your business, offering tips for being a smart business person, showcasing successful entrepreneurs and generally sharing the kind of in-the-trenches experiences that will make a difference for your business. You can tune in daily at http://www.blogtalkradio.com. We will be adding new hosts each month, so stay tuned! You can find the current lineup at www.blogtalkradio.com/smartcompaniesthinkingbigger.

To roll out this lineup, long-time radio personality and producer Mary McKenna has joined our staff full time as executive producer. We also welcome Jen Ross, a new graphic designer who joins our team this month, and Darcie Blake and Todd Rein, who have joined us as business development associates. We’re excited to have them on board, and we’re even more excited that their contributions will allow us to serve our core audience of growth-minded small business owners even better!

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It Can Wait

Entrepreneurs, for all their self-motivation and drive, are also well-known procrastinators.

How many times have you lost yourself in your Twitter feed, took an unnecessary walk around the office to “see what your staff is doing,” or immersed yourself in easy, non-meaningful “work” because you’re avoiding a challenging task or one you don’t especially like doing?

Through these diversions we are simply saying “It Can Wait” to a more relevant undertaking. Sooner or later, though, a successful entrepreneur has to stop saying “It Can Wait” to get anything substantial done, and that takes discipline. It also takes discipline to actually encourage an “It Can Wait” attitude in one critical instance.

When it comes to texting and driving.

Texting drivers are 23 times more likely to be in an accident, and it’s not just a teen thing—49 percent of commuters self-report texting while driving, compared to 43 percent of teens.

It only takes a second to change the lives of many forever. That change could include your business too. If your employees drive “in the course and scope of their employment,” you can be liable and sued if an employee causes an accident while texting and driving, whether the employee drove a company car or used his own vehicle.

To end texting and driving, AT&T, Sprint, T-Mobile USA, Inc. and Verizon, as well as more than 200 other organizations and thousands of caring individuals have launched the “It Can Wait” campaign. The movement has inspired more than 2 million pledges through ItCanWait.com, on Facebook, through text-to-pledge and tweet-to-pledge, and at events.

The campaign will culminate on Sept. 19, a national day of action to get people to take the pledge to not text and drive.

If you’re still not convinced that saving lives, and possibly saving your business, should be one of your highest priorities, then go to YouTube and watch the new documentary directed by acclaimed film maker Werner Herzog “From One Second to the Next,” which highlights the aftermath of texting and driving.

Hold your team accountable. Hold yourself accountable. Join me in taking the pledge to never text and drive at www.itcanwait.com. That can’t wait.

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Who’s Laboring in America?

For some interesting Labor Day reading, here are some labor force facts recently released by the U.S. Census Bureau.

Who Are We Celebrating?
According to the U.S. Bureau of Labor Statistics, the number of people 16 and older in the nation’s labor force as of May 2013 was 155.7 million.

Our Jobs
The occupation with the highest number of employees is retail sales with 4,340,000 workers (May 2012), followed by cashiers with 3,314,010. By comparison, the occupation with the largest number of employees in 1910 was farmers (owners and tenants) with 6,132,000.

The number of wage and salary workers age 16 and over represented by a union in 2012 was 15.9 million. This group includes both union members (14.4 million) and workers who report no union affiliation but whose jobs are covered by a union contract (1.6 million).

The number of female workers age 16 and older in service occupations in 2011 was 14.5 million, compared to 11.2 million male workers.

Another Day, Another Dollar
The 2011 real median earnings for male and female full-time, year-round workers, was $48,202 and $37,118, respectively.

The percentage of full-time workers 18 to 64 covered by health insurance during all or part of 2011 was 84.7 percent.

Say Goodbye to Summer
As parents gear up to outfit their kids for school, they have quite a selection of stores to choose from. There were 25,448 shoe stores for back-to-school shopping in 2011. Additionally, there were 28,128 family clothing stores, 7,093 children and infants clothing stores, 8,144 office supply and stationery stores, 8,407 bookstores and 8,625 department stores.

The Commute to Work
And you think you have to get up early? One Census Bureau report shows that 5.7 million commuters left for work between midnight and 4:59 a.m. in 2011, representing 4.3 percent of all commuters.

Similarly, the percentage of workers 16 and over who worked from home in 2011 was also 4.3 percent.

The same survey revealed that 76.4 percent of workers 16 and over drove alone to work in 2011, while only 9.7 percent carpooled and 2.8 percent walked from home.

And how long did all this commuting take? The average time in 2011 was 25.5 minutes.

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Connecting the Dots of Entrepreneurship

We have been covering Kansas City small businesses and entrepreneurs for more than 20 years. We were the first to connect the dots on the resources available to aspiring and existing Kansas City business owners, and we publish hundreds of those local, state and national organizations each year in our annual Thinking Bigger Guide for Entrepreneurs and on our website.

We were doing this before anyone was really paying much attention to small businesses and their contributions to the economy.

My, how things have changed in two decades . . . the Kansas City entrepreneurial community has the attention of our corporate and civic leaders, an initiative to be America’s Most Entrepreneurial City, ongoing coverage from the national media, and increasingly the ear and the interest of high profile serial entrepreneurs and VCs like Brad Feld.

Yes, suddenly, being an entrepreneur in Kansas City, particularly a startup, is the “cool kid” thing to do. But as Maria Meyers points out in our August 2013 Open Mike column, a city that aspires to be America’s Most Entrepreneurial City needs an ecosystem comprised not just of the tech startups, but also the microenterprises, Main Street businesses and more mature businesses. Further, it needs the resource organizations that can assist the businesses at crucial stages of business development, and it needs the support of the corporate community as well.

Recently I’ve sensed that some traditional businesses wonder what all the fuss is about over the startup community, especially when it comes to resources and media coverage. Startups are a different kind of animal than traditional businesses, which means they also have some different needs. That’s why Kansas City’s business leaders and resource organizations are working hard to create support systems for these kinds of ventures.

On the flipside, some of the startups really aren’t familiar with many of the successful traditional business owners Kansas City has nurtured over the years. There are a lot of blocking and tackling skills these traditional entrepreneurs can share with startups. Some of the older successful business owners could be mentors, and even investors, in these businesses. And the startups are a source of customers for the traditional businesses—after all, they still eat at restaurants, meet at coffee houses, and eventually hire accountants and lawyers.

As a community, we just need to keep connecting the dots, keep fostering ties between the big guys, the new kids and everybody else who contributes to the business ecosystem here. Kansas City is lucky to have a lot of entrepreneurial stars. But with effort, we could build an entire constellation of success.

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