When people take a mechanical view of business, or life for that matter, problems are always seen as a sign of failure.  When we view business from this perspective, we are constantly frustrated because there are always problems.  If we take a more mature and organic perspective, we start to see that problems are more often a sign of growth than failure.  When we grow and evolve our processes, we will constantly be finding new problems and issues we just plain didn't notice before.

The Illusion of Perfection

From old-farts who sit around talking about the "good 'ol days" to lizard brain finger pointers, humans seem to be obsessed with the idea that everything was fine until YOU broke it.  Of course solutions and alternatives seldom follow the accusations, just a declaration to "fit it!"  The reality is that nothing is perfect, but seldom is it broken.  Most of the problems we have don't exist because something broke, they just exist because we haven't solved them yet.

The Soul of Business

My dad said it best, "My goal isn't to be perfect, it's to make less mistakes than the other guy."  Businesses are about fixing problems and creating systems to fix problems.  Problems are our opportunities to fill a need.  As we continue to fix our own problems and perfect our systems, we become better businesses.  Often, on the road to fixing our own problems, we come up with new business ideas.

Maybe you aren't "having" problems, maybe you are "discovering" problems.  Those are two very different things.  Sadly the only way to tell the difference between the two is to ask if these are new problems or the same problems over and over.  If they are new problems, then relax, you are on the right track!

Whether you know it or not, whenever you call a plumber, dine out at a restaurant, or go out to movie you are looking for leadership.  We all have a little time in our short lives to become experts in something, but we can’t be experts in everything.  The quality of life we experience today is that we have learned to rely on the expertise of others to show us what we need, how to fix something, or how to have a good time.  When it comes down to it, everyone is looking for leadership.  Your business will live or die on your ability to lead.

The Customer Isn’t Right, They Don’t Even Know What They Want

If you really think about it, we don’t even dress ourselves.  We rely on clothing stores and fashion media to tell us how to dress.  Sure, we pick out which of the available styles we will associate ourselves with, but we are still being led.  Imagine if clothing stores were just stocked fabric and then asked us, “What clothes would you like?”

When referring to clothing, this need seems obvious, but in more service oriented businesses this understanding starts to fall apart.  Consultants and contractors hang themselves by asking clients, “What do you want?”  The point is, clients don’t know what they want, that is why they need you!

Learning to Listen and Lead

The Consultant’s Haiku:
Tell me what you want
Tell me what you can afford
Here is what you need

When you are starting with a clean slate, the imagination is limitless... and expensive.  Customers don’t know what things cost in your area of expertise, and they don’t know what is hard and what is easy.  All they know is that if they “just had _____” life would be better.  While it may seem like people are demanding and unrealistic, usually the problem is that they simply aren’t experts in your field.  The key to listening is t0 hear the core necessities behind all their wants and wishes.

A good consulting relationship starts with, “I can’t give you X, Y, and Z within your budget.  However, I am hearing that you really need Y.  Also, you are really going to need A in order for Y to work.”  Now you are meeting the need, being the expert, and leading the relationship.

As the saying goes, “There are two sides to every coin.” My last post discussed why you should keep your day job...so now you get the other side. I once had an analogy for a company I worked for; the company was a beautiful cruise ship with a great crew but the rudder was broken and the captain was drunk (guess you can imagine I didn’t stay there long).

If you have ever felt that way, maybe it is time you stop complaining and do something about it. Becoming an entrepreneur sounds hard, but I believe, with the right plan, you can accomplish anything.

1. You’re unemployable.

Job jumping stinks. If your resume contains more than two pages of job history, maybe you should look at starting your own business. Society tells us to work for someone from 9 to 5 for 25 years and then life will be good. If that sounds as terrifying to you as it does to me, you should be an entrepreneur.

2. There is a need for what you want to sell.

Identifying a niche product or service is important but you don’t have to recreate the wheel. Many new business have been started because an existing business has poor service or quality; another is started that trumps it.

3. Money isn’t everything to you.

Yes, there is more to life than money. Being an entrepreneur doesn’t guarantee anyone a millionaire’s bank account, but it might give you their lifestyle. Taking time off when you want or working the hours you desire sometimes is more important to people than a fat paycheck.

4. You’re young and single.

Let’s face it, being a family man (or woman) has its challenges. Priorities, in my opinion, should always be placed on what is best for the family. Having said that, being young and single is the best time to venture out on your own. Not only are your expenses going to be less, but your time investment can be more substantial because of your lack of commitments.

5. You desire to “be the man”.

Some people just want the ball. They thrive on pressure, excel in battle and when beaten to a pulp, they can wipe off the dust and get back up without having to be coddled. Sound like you? If so, you’re gonna love being the man.

6. You love sales.

Let’s face it, everyone is selling something...and if you are good at it, why do it for someone else's benefit? If you have a tattoo that says “ABC” on your arm you very well could be the next Mark Cuban.

It is in our nature to personify everything.  We think our computers hate us, we accuse stoplights of picking on us, and don't get me started on "the universe"... the jerk.  When you get your company's brand solidified, you have just created a "person."  From now on, every single encounter a human being has with your brand will be translated as personality now accredited to your entire company.

One bad experience means that your whole company is now seen as a mean, inconsiderate, or incompetent person.  We have all said or heard someone say, "I hate {insert company}, they are {insert inappropriate expression}."  Every company has to deal with this reality, and you can't make everyone happy.  However, there is a lot you can do to make sure your brand is seen as a positive "person" to others.

Make Sure Your Customers Can Quickly Get to an Empowered Individual

To be realistic, as companies grow in size it is impossible to make sure that everyone at the customer interaction level is going to provide a 100% positive experience.  The worst thing a company can do is keep unhappy customers from moving up the ladder.  Once the everyday business model has failed to provide a good customer experience, customers need to be able to access someone with decision making abilities quickly.  Businesses need to make sure there are enough people with enough authority available to handle customer issues.  There is nothing more insulting than a store manager who is only authorized to shrug and say, "I am sorry, there is nothing I can do."

Have Actual People Take Over the Role of Your Brand

When something has gone very wrong, the worst thing to do is interact with the customer or audience in the voice of your "brand".  Have an actual individual in your company come to the front and take responsibility.  They need to personally apologize and take action to resolve the issue.  This does two things.  One, it takes the heat off of your brand.  Two, it calms the customer or audience down by knowing a real person is actually paying attention.

Treat Your Brand's Relation with Customers Like It Really IS a Person

When real people are trying to form a positive relationship with other people, they act a certain way.  They send "thank you" cards and ask if "everything is OK" when they sense tension.  They pay attention to the other person's interests, likes, and dislikes.  They "check up" if they haven't heard from them in a while.  The most well thought of brands are from companies who have developed processes to imitate these behaviors.  It isn't going the extra mile, it is doing what is expected of any relationship.

Ever had a rough day at the office? Sometimes do you say to yourself that now is the time to start that business and take a chance on that brilliant idea your friends all think is a home-run? Have thoughts swirled around your head about walking into your boss’s office in the morning and saying a few choice words, such as, “I QUIT!”?

Well let me give you some free advice…don’t. Becoming an entrepreneur sounds exciting in theory, but carving your own path, leaving that 9 to 5 job and being your own boss isn’t for everyone. I’d say stay put…and here are my top six reasons why.

1. It takes a long time to start making a profit.

The initial phase of starting your own business is extremely frustrating and demanding. It could take years for you to break even, much less make a profit. The level of uncertainty in creating your own business is extremely high, and it is never set in stone how quickly you will start making money, if ever.

2. You have to invest a lot of time.

Starting your own venture means hours upon hours of work. While a 9 to 5 job sounds stale, at least you know how many hours you will be working. With a new business, you’ll have to invest a lot more time, especially at the beginning. (You hate working 8 hours a day, let alone 14!)

3. Initial financing is difficult to attain.

A substantial investment is often required in opening your own businesses, and for some entrepreneurs this may be difficult to obtain. And since making a profit usually takes a while, it’ll be even harder to pay back your original loan. Don’t even get me started on the practice of how banks lend money and collateral.

4. There is a lack of benefits.

No longer working for a “normal” company means losing out on the benefits you receive with your employment: 401k, health benefits, life insurance, etc. You do have the option of purchasing them, but at a much higher price.

5. Guess who does everything? You.

Just because you’re the boss doesn’t mean you get to skip out on all the mundane, boring work required. Accounting, HR, Legal, Operations, Sales, Customer Support, are all areas that you would be responsible for, and while you could hire people to help you, that would bring a whole new paradigm to having a business…employees. Don’t get me started there.

6. Selling yourself is difficult.

Becoming a successful entrepreneur relies on your ability to sell your company, garner buzz and attract attention. If you’re even the least bit introverted, shy or lazy, you’ll find yourself at a big disadvantage when trying to vie for business against a seasoned, confident business owner.

A friend of mine introduced me to a book called A Whole New Mind: Why the Right-Brainers Will Rule the Future, by Daniel H. Pink. It presents powerful evidence that creativity, inspiration, and innovation are the true keys to business and personal success. Companies that foster these qualities thrive even in today's terrible economy. However, most CEOs and business leaders are still running their workplaces in such a way as to punish and discourage creativity and innovation.

Just Like the Body, the Brain Is Not a Machine

How does an athlete train? They work their bodies and push them to the limit, but then they pamper and feed their bodies to recover. An athlete would know better than to starve themselves. Brainthletes have similar needs. One the one hand, they need to create personal goals and disciplines. On the other hand, they need to make sure there is time to recharge and rest the mind. Just ask someone who lives completely off the products of the mind how difficult it is. Artists and writers know very well that the most valuable and limited resource is their own ability to find inspiration.

You Can't Get "Outside the Box" While in the Box

The best ideas don't come from sitting at a desk or in a cubicle. They come while jogging, taking a shower, at a favorite cafe, etc. Creative minds know they have to develop personal habits to nurture inspiration. These habits often cause a lot of tension in a traditional work environment. Managers and business owners have to learn to compromise with good talent to give them the freedom needed to do what they do best without having complete chaos.

Having Fun is Good for Business

Everyone does better with less mental stress, and nothing relieves mental stress more than play. Workaholics tend to look at play as irresponsible and unproductive. The truth is that play is right up there with sleep on the "you have to have it" scale of mental health. If people can have fun with their job, they will do better at it.

"Pleasure in the job puts perfection in the work." - Aristotle

Personal Time is Profitable

Since its inception, Google has allowed its employees to spend 20% of their time on personal projects. Google now says that 50% of its products have come from that 20% of time employees had to develop ideas. It can seem counter intuitive and wasteful to give employees time to work on ideas that are not directly income related, but it is ultimately what keeps modern businesses relevant and ahead of the game. Without that time, you are doomed to see another company surpass your products and services "while you were working".

Read More:

Lifehacker - Set Up Your Own Google Style 20-Percent Time to Try New Projects

A Whole New Mind by Daniel H. Pink on Amazon.com

I had a rough day today. I made a decision to lease a space for our new business, The Catapult Project. I had looked at space all over downtown Carmel. I put a LOI (Letter of Intent) on a space I thought was perfect. I bid fifty cents higher per square foot than the other two ‘bidders’, but was told that the owners of the building decided to go with someone else.

I had a backup plan and, although it was “ok”, it wasn’t my first preference by far. Nonetheless, it was on Main Street and seemed to get some foot traffic. I met with the landlords and, over the course of a week, talked through all the items we needed to and had a handshake agreement on terms. Finally, a new place to call home!

That’s what I thought, anyway. Yesterday I get a phone call from a nice lady that said she heard I was looking to rent a space and she wanted me to come see it. I said, "No." She persisted, I said, "No." More persisitence and then I thought, "What do I have to lose? It’s a one minute walk out my door." I was there in five minutes.

The building was in a nice location and would get, in my opinion, the same amount of foot traffic and drive by traffic as the other location, but it had two and a half times the other space in square feet, would require no renovation and had two “apartments” I could lease out or let my two kids live in. It had a two car garage, which I really could use since I have downsized from a house to an apartment in the last week…it really was a better location for our new business.

The dilemma then is, does a verbal agreement and handshake hold up in the moral court of law? Did I do something unethical by not signing with the original landlord? Do I feel bad?... YES, this is the second time  that I had talked through a lease with the same person but then found a much better deal/location. I signed nothing. They have no legal ground to stand on. But morally, do they?

I have thought about it and I think they do. I would not want to be treated that way, nor do I treat my clients that way. But on the other hand, Fat Atom has deals with clients all the time that throw around numbers, proposals and statements of work, investing sometimes eight to ten hours in meeting time….and the deal doesn’t go through for one reason or another. And sometimes even after deals have been signed and paid for, people change their minds… None of this sat well with me of course, but it wasn’t personal, it was business.

So as I wrap up this diatribe of mixed emotions, I am trying to find a lesson in all this. Is it better to sometimes break a verbal agreement for the greater good of your business? My gut tells me yes, but I still don’t feel any better.

Give me a "G"

Business owners all over are in a debate about the merits of using Groupon. If you don’t know what Groupon is by now, you either live in a cave or don’t ever use the Internet. Either way, you can learn more here if needed: www.groupon.com.

The media does its part to vilify the company, finding business owners who have used the coupon service and went bankrupt, broke or are just unhappy. By being paraded about as victims, these business owners flaunt their lack of understanding of their own business and more over, sales and marketing in general. Here is a simple yet realistic overview of how I helped a local company decide whether or not they should use Groupon.

Fun Bunny (names have been changed to protect the innocent) sells a service that retails for $70. The cost to deliver this service, including overhead, labor and cost associated with the sale of the service are $30. The Groupon model allows for discounted service to be purchased by consumers, and Fun Bunny wanted to do a 50% off deal...that leaves $35 (keep up with me, this math can get confusing).

Now, the consumer bought the deal for $35, money that goes to Groupon and then gets split 50/50 with Fun Bunny, or $17.50 each. Fun Bunny expects that a minimum of 1000 deals will be bought, for a grand total of $17,500 in revenue, against $30,000 in expenses ($30 times 1000; see, I told you this gets tricky). The results left at this stage of the story would be a net loss of $12,500 to Fun Bunny...which would make them very sad. But wait, there's more...and this is the part that gets tricky.

Fun Bunny estimates, conservatively, that they can get 25% of the Groupon users to come back and pay “full price” for the next service they will need. But I am even more of a “numbers nazi” and push them down to a more realistic number of 10% or 100 return clients. Taking that into consideration and the fact the the average client uses their service 12 times a year (and of course, I immediately sliced that number in half to be safe)....here is how the numbers would total out.

One hundred new clients getting a service that costs $70 (profit of $40) 6 times per year each, equals $24,000 in PROFIT. Take into consideration the initial loss of $12,500 and you have a net profit of $11,500.

There are a lot of variables here, and yes, sometimes experience is the best teacher. Where I think most business owners get this equation wrong is that they don’t know their true cost of goods sold, overestimate how many coupons they will sell or they don’t know how to funnel each coupon customer into a sales process that will drive them back into the store. For Fun Bunny, it was an easy decision and I for one can’t wait to discuss their real life results.