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Are You Fit to Be an Entrepreneur?

Are you fit for entrepreneurial endeavors or to be an entrepreneur? 2 Small Biz Guys explore the path to profitable returns. We explore considerations and questions regarding small business start ups. Some folks want to start their own business but may not be a good fit for becoming an entrepreneur. You can take a brief quiz and see where you stand on the scale before launching into something you may regret. On the other hand, you may be a perfect match for taking the leap. Find out here.

If you are a self-starter, can create good relationships and lead others you are on the right track. There are some recommended steps, though. We often leap without looking, especially when we accept and engage risk. When we plan strategically, looking for and filling the holes in the plan effectively, we have a much greater chance for success. Here’s the steps:

  1. Write a Business Plan
  2. Get Business Assistance and Training
  3. Choose a Business Location
  4. Finance Your Business
  5. Determine the Legal Structure of Your Business
  6. Register a Business Name
  7. Get a Tax Identification Number
  8. Register for State and Local Taxes
  9. Obtain a Business License and Permits
  10. Understand Employer Responsibilities

Often the latter is not fully appreciated until the business owner is taken off track because there are now employees to manage. Competitors, rather than wish you ill, may wish you more employees. Human resources are often the most important aspect of a business that is growing, maintaining good employee relations being imperative.

Cash flow is most important, though, and without it your business will suffer greatly and potentially fall without great fanfare. There are some key considerations in this article. There are also some excellent resources for short-term on-demand small business education at Practical Business University. We also discussed sales strategies briefly and these made the top ten, from the author of How to Say It: Business to Business Selling.

On to the show:

Woodstock – The Apex of a Social Revolution

August 18, 1969 is a date that was the apex of a social revolution. That was the date of Woodstock, a weekend music festival whose impact was felt around the world. The music festival occurred forty years ago but is still remembered not only by the sixties generation, but by those who followed. Many who attended said it was a “life changing event.”

Woodstock is remembered as a time of hippies, drugs, love, peace, freedom of ideas and revolution of accepted mores. In short, youthful hedonism and 60’s excess. But, I want to examine Woodstock from an entrepreneurial point of view.

I recently went to visit friends who live in Livingston Manor, New York. Little did I realize that they live not far from Bethel, the site of Woodstock. My friend spent his summers in a home adjacent to Max Yasgur’s pasture, where Woodstock was held.

The setting today is a pastoral hillside with a small marker indicating where Woodstock took place. On the hillside is the Woodstock Museum and a small outdoor concert area, mostly for classical music. What a change but still worth seeing.

Woodstock was pure entrepreneurship–people with an idea and a passion! For sure, this was not a MBA mentality. They were, as Tom Peters states “Ready, Fire, Aim.” The concept came together very quickly. Although they had some business experience, it was not great experience. The original goal was to raise enough money from the festival to fund a music recording studio in upstate New York, where some of the artists lived.

The original site was an industrial park in Wallkill, New York. Contracts were already signed, but town people became nervous about the potential crowd. An audience of 50,000 was the initial target. But these young entrepreneurs were adaptable. In June, Wallkill town people were still raising issues and Woodstock Ventures quickly found another location that was willing to accept them. Imagine, changing locations with less than 75 days to concert time!

The major marketing activity would be word of mouth. And, there was no internet to spread the word. They thought they would need three major acts to get the buzz going. Jefferson Airplane was the first to sign at the incredible amount of $12,000. At that time, they usually received $5,000 to $6,000. The next to sign was Creedence Clearwater for $11,500 and then, The Who, for $12,500. In total they spent $180,000 on talent. These promoters were risk takers. Just think…a concert in a pasture, over 100 miles from New York and without any major population nearby.

The concept slogan of “Three Days of Peace and Music” was cultivated very carefully in the underground press. Publications like the Village Voice and Rolling Stone were used along with some ads in the New York Times. Artie Kornfeld, one of the original Woodstock producers said, “The cool PR image was intentional,” using counterculture symbols and phrases. This is another entrepreneurial cornerstone; you must identify your market. The advertising and public relations was targeted for a specific group—young, peace loving and hip. This audience spread the word from the east to west coast.

Woodstock was over the top successful. It is estimated 400,000 to 500,000 people attended on a rain soaked, muddy field. The New York Thruway was clogged and created one of the worst traffic jams experienced.

Woodstock is now a brand. These promoters had an idea and were passionate, adaptive risk takers who identified an audience. They had a message targeted to that audience and were proactive in creating word of mouth marketing that was “cool” and easy to spread.

To be successful in tough times, you need similar traits. You need ideas and a passion to execute them. You need to be adaptive when necessary and make investments (risk taking) to promote the concept. Lastly, you need to identify your audience and choose the best vehicle to get attention.

The Power of Habit – Part 3

Starbucks And The Habit Of Success—When Willpower Becomes Automatic:

Starbucks has succeeded in teaching life skills to its employees,  All new employees spent at least fifty hours in Starbucks classrooms, and dozens more at home with Starbucks’ workbooks and taking to the Starbucks mentors assigned to them.

At the core of that education is an intense focus on an all-important habit:  willpower.  Dozens of studies show that willpower is the single most important Keystone habit for individual success.  Self-discipline has a bigger effect on academic performance than does intellectual talent.  And the best way to strengthen willpower and give students a let up, studies indicate, is to make it into a habit.

Howard Behar, former president of Starbucks told the author, “We’re in the people business serving coffee.  We’re not in the coffee business serving people.  The solution Starbucks discovered, was turning self-discipline into an organization habit.

This enabled Starbucks to effectively successfully achieve its rapid expansion.

Willpower isn’t just a skill.  It’s a muscle, like muscles in your arms or legs, and it gets tired as it works harder, so there’s less power left over for other things.

What employees really needed were clear instructions about how to deal with inflection points.  So the company developed new training materials that spelled out routines for employees to use when they hit rough patches.  The manuals taught workers how to respond to specific cues, such as a screaming customer or a long line at a cash register.  Mangers drilled employees, role playing with them until the responses became automatic.  The company identified specific rewards—grateful customers, praise from a manager—that employees could look to as evidence of a job well done.

Starbucks taught their employees how to handle moments of adversity by giving them willpower habit loops.  This is how willpower becomes a habit: by choosing a certain behavior ahead of time, and then following that routine when an inflection point arrives.  In essence, they decided ahead of time how to react to a cue.  When the cue arrived, the routine occurred.

Studies have shown some people were able to create willpower habits relatively easily.  Others, however, struggled no matter how much training and support they received.  What was causing the difference?

When people are asked to do something that takes self-control, if they think they are doing it for personal reason—if they feel like it’s a choice or something they enjoy because it helps someone else—it’s much less taxing.  If they feel like they have no autonomy, if they are just following order, their willpower muscles get tired much faster.

For companies and organizations, this insight has enormous implication.  Simply giving employees a sense of agency—a feeling that they are in control, that they have genuine decision-making authority—can radically increase how much energy and focus they bring to their jobs.  Giving employees a sense of control improved how much self-discipline they brought to their jobs.  People want to be in control of their lives.

The Power Of A Crisis:

Crises are so valuable, in fact, that sometimes it’s worth stirring up a sense of looming catastrophe rather than letting it die down.  Good leaders seize crises to remake organization habits.  In fact, crisis are such valuable opportunities that a wise leader often prolongs a sense of emergency on purpose.

A company with dysfunctional habits can’t turn around simply because a leader orders it.  Rather, wise executives seek out moments of crisis—or create the perception of crisis—and cultivate the sense that something must change, until everyone is finally ready to overhaul the patterns they live with each day.  Rahm Emanuel stated,” You never want a serious crisis to go to waste.”

The Power of Habits – Part 2

The Golden Rule of Habit Change:  Use the same cue, and provide the same reward, you can shift the routine and change the habit.  Almost any behavior can be transformed if the cue and the reward stay the same.  But to change an old habit, you must address an old craving.  You have to keep the same cues and rewards as before, and feed the craving by inserting a new routine.

Asking patients to describe what triggers their habitual behavior is called awareness training and it’s the first step in habit reversal training.  It seems ridiculously simple, but once you’re aware of how your habit works, once you recognize the cues and rewards, you’re halfway to changing it.  The brain can be reprogrammed.  You just have to be deliberate about it.

If you identify the cues and rewards you can change the routine,  at least, most of the time.  For some habits, however, there’s one other ingredient that’s necessary.  Belief.

The precise mechanisms of belief are still little understood.  But we do know that for habits to permanently change, people must believe that change is feasible. This process makes AA so effective.  Belief is also easier when it occurs within a community.  A community can be as few as two people.

The Habits of Successful Organizations—Keystone Habits:

Paul O’Neil—1987 became CEO of Aluminum Company of American, Alcoa. His  opening address to Wall Street, “I want to talk to you about worker safety.”

So how did O’Neill make one of the largest, stodgiest and most potentially dangerous companies into a profit machine and a bastion of safety?  By attacking one habit and then watching the changes ripple through the organization.

O’Neil figured his top priority would have to be something that everybody—unions and executives—could agree was important.  He needed a focus that would bring people together that would give him leverage to change how people worked and communicated.

O’Neil believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization.  Some habits, in other words, matter more than others in remaking businesses and lives.  These are “Keystone Habits,” and they can influence how people work, eat, play. Live, spend, and communicate.  Keystone habits start a process that, over time, transforms everything.  Keystone habits say that success doesn’t depend on getting every single thing right, but instead relies on identifying a few key priorities and fashioning them into powerful levers.  The habits that matter most are the ones that, when they start to shift, dislodge and remake other patterns.

If you focus on changing or cultivating Keystone habits, you can cause widespread shifts.  However, identifying Keystone habits is tricky.  To find the, you have to know where to look.  Detecting Keystone habits means searching out certain characteristics.  Keystone habits offer what is know within academic literature as small wins.  They help other habits to flourish by creating new structures, and they establish cultures where change becomes contagious.  On an individual basis, exercise can be a Keystone habit.

Small Wins are a steady application of a small advantage.  Once a small win has been accomplished, forces are set in motion that favors another small win.  Small wins fuel transformative changes by leveraging advantages into patters that convince people that bigger achievements are within reach.

Small wins do not combine in a neat, linear, serial form, with each step being demonstrable step closer to some predetermined goal.  More common is the circumstance where small wins are scattered.

 

The Power of Habits – Part 1

All of life, is but a mass of habits.  Most of the choices we make each day may feel like the products of well-considered decision making, but they’re not.  They’re habits.  And though each habit means relatively little on its own, over time impacts on our health, productivity, financial security, and happiness.  One paper published by a Duke University researcher in 2006 found that more than 40 percent of the action people performed each day weren’t actual decisions, but habits.  Only in the past two decades have scientists and marketers really begun understanding how habits work—more important, how they change.  Habits can be changed, if we understand how they work.

When you woke up this morning, what did you do first?  Which route did you drive to work?  When you got to your desk, did you deal with e-mail, chat with a colleague, or jump into writing a memo?  When you got home what did you do first?  Your actions were habits.

The Habits of Individuals:  The habit Loop—How Habits Work: 

Habits, scientists say, emerge because the brain is constantly looking for ways to save effort.  Left to its own devices, the brain will try to make almost any routine into a habit, because habits allow our minds to ramp down more often.

“An efficient brain also allows us to stop thinking constantly about basic behaviors, such as walking and choosing what to eat, so we can devote mental energy to inventing spears, irrigation systems, and eventually airplanes and video games.

But conserving mental effort is tricky, because if our brains power down at the wrong moment, we might fail to notice something important, such as a predator.  So our basal ganglia have devised a lever system to determine when to let habits take over.  It’s something that happens whenever a chunk of behavior starts or ends.”

The process in which the brain converts a sequence of actions into an automatic routine is known as chunking and it is the root of how habits are formed.  This process within our brains is a three-step loop.  First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use.  Then, there is the routine, which can be physical or mental or emotional.  Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future.

Over time this loop—cue, routine, reward; cue, routine, reward become intertwined until a powerful sense of anticipation and craving emerges.  The discovery of the habit loop is so important is that it reveals a basic truth:  When habit emerges, the brain

stops fully participating in decision making.  It stops working so hard, or diverts focus to other tasks.  So unless you deliberately fight a habit—unless you find new routines—the pattern will unfold automatically.  Habits never really disappear.  They’re encoded into the structures of our brain.  The problem is that your brain can’t tell the difference between bad and good habits, and so if you have a bad one, it’s always lurking there, waiting for the right cues and rewards.

This explains why it’s so hard to create exercise habits, for instance, or change what we eat.  By the same rule, though, if we learn to create new neurological routines that overpower those behaviors—if we take control of the habit loop—we can force those bad tendencies into the background.  And once someone creates a new pattern, studies have demonstrated, going for a jog or ignoring the doughnuts becomes as automatic as any other habit.

Without habit loops, our brains would shut down, overwhelmed by the minutiae of daily life.  People whose basal ganglia are damaged by injury or disease often become mentally paralyzed.  Without our basal ganglia, we lose access to the hundreds of habits we rely on every day.  As long as your basal ganglia is intact and the cues remain constant, the behavior will occur unthinkingly.

Researchers have learned that cues can be almost anything, from a visual trigger such as a candy bar or a television commercial.  Routines can be incredibly complex or fantastically simple.  Rewards can range from food or drugs that cause physical sensations, to emotional payoffs such as the feelings of pride that accompany praise or self-congratulations.

Habits are powerful, but delicate.  They can emerge outside our consciousness, or can be deliberately designed.  They often occur without our permission, but can be reshaped by fiddling with their parts.  They shape our lives far more than we realize—they are so strong, in fact, that they cause our brains to cling to them at the exclusion of all else, including common sense.  By learning to observe the cues and rewards we can change the routines.

The Craving Brain—How To Create New Habits:

Claude Hopkins, a famous marketer in the early 1900’s, was best known for a series of rules he coined explaining how to create new habits among consumers.  These rules would transform industries and eventually became conventional wisdom among marketers.  Throughout his career one of his signature tactics was to find simple triggers to convince consumers to use his products every day.  Craving, it turns out, is what makes cues and rewards work.  That craving is what powers the habit loop.

His most famous product was Pepsodent toothpaste.  This was at a time people did not use toothpaste.  The cue he related to was film on teeth and the reward was a

bright smile and the routine was to use Pepsodent toothpaste everyday.  Hopkins first rule was to find a simple and obvious cue and secondly, clearly define the rewards, and lastly to generate a craving.

Habits are so powerful because they create neurological cravings.   Most of the time, these cravings emerge so gradually that we’re not really aware they exist, so we’re often blind to their influence.  But as we associate cues with certain reward, a subconscious craving emerges in our brain starts the habit loop spinning.

Craving example—email.  When a computer chimes or a smartphone vibrates with a new message, the brain starts anticipating the momentary distraction that opening an email provides.  That expectation, if unsatisfied, can build until a meeting is filled with antsy executives checking their buzzing smartphones under the table, even if they know it’s probably only their latest fantasy football results.  (On the other hand, if someone disables the buzzing—and thus, removes the cue—people can work for hours without thinking to check their in-boxes.)

Countless studies have shown that a cue and a reward, on their own, aren’t enough for a new habit to last.  Only when your brain starts expecting the reward—craving the endorphins or sense of accomplish.  The cue, in addition to triggering a routine, must also trigger a craving for the reward to come.  Craving is an essential part of the formula for creating new habits.  And figuring out how to spark a craving makes creating a new habit easier.

The Golden Rule Of Habit Change:

Tony Dungy’s coaching philosophy and belief “the key to winning was changing players’ habits.  He wanted to get players to stop making so many decision during a game.  He wanted them to react automatically, habitually.  If he could instill the right habits his team would win.  Champions don’t do extraordinary things, they do ordinary things, but they do them without thinking, too fast for the other team to react.  They follow the habits they’ve learned.”

So rather than creating new habits, Dungy was going to change players old ones.  And the secret to changing old habits was using what was already inside players’ heads.  Habits are a three-step loop—the cue, the routine, and the reward—but Dungy wanted to only to attack the middle step, the routine.  He knew from experience that it was easier to convince someone to adopt a new behavior if there was something familiar at the beginning and the end.

How to Diffuse Workplace Conflict

I recently conducted a workshop on a highly emotional topic: humans in the workplace. After all, every human being—employees and bosses—shows up for work accompanied by their unique drives, triggers, and tendencies. All things considered, it’s a wonder we get any work done at all.

My message to the attendees may be of value to you, too. As your company leader, it’s your job to boost productivity, which means it’s also your job to diffuse workplace conflicts and create consensus, keeping your teamed focused on achieving your goals.

There are many theories on how to accomplish this. Based on what I’ve learned from my small business peer groups and my own experience as a CEO, I’ve identified up four main strategies for dealing with difficult people and creating an emotionally-healthy, productive workplace. I’ve summarized these briefly below, and you can download my complete PowerPoint presentation at http://propres.com/difficult-people-ppt/.

Understand Yourself

Do you know what makes you tick? Do you know what ticks you off? The best managers are those who are aware of their emotions but not enslaved by them.

Good managers typically have a high Emotional Intelligence Quotient (EQ)—that is, a high level of self-awareness regarding their emotional reactions and the emotions of others. Self-awareness is the first step toward self-management, the conscious management of one’s behavior.

To raise your EQ, check out Emotional Intelligence 2.0 by Travis Bradberry and Jean Greaves.

Understand Others

Good managers also have good social awareness. They not only pick up on other people’s emotions but know why they act the way they do. More and more employers are using personality assessment programs to better understand how their employees think.

One program I like is the DiSC® personality assessment system. DiSC is based on a four-part model of human behavior: the Dominant, Influencing, Steady, and Compliant traits. The DiSC test measures patterns of behavior, and then creates a personality profile that reflects an employee’s strengths, weaknesses, and drives.

Use Your Understanding to Manage Behavior

The whole point of understanding your emotions is that it will allow you to manage your behavior consciously and positively, as opposed to reacting emotionally in the moment.

The whole point of understanding the emotions of others is that it will allow you to behave in a manner that will get the desired response from others. In the workplace, this often comes down to diffusing conflict and creating consensus among employees.

Remember the old adage about counting to 10 when you’re angry? Turns out, it’s right on target.

For more about managing behavior, read Dealing with People You Can’t Stand: How to Bring Out the Best in People at their Worst by Dr. Rick Brinkman and Dr. Rick Kirschner.

Use Your Understanding to Hire Wisely  

You can also apply these principals to make more successful hires. Instead of hiring new employees on the basis of a resume, look for people whose values and communication styles are harmonious with your own. Do they hold themselves accountable? Will they “get” your company culture?

If you’re seriously interested in a candidate, you can use a personality assessment to see if they’d make a good match for the position and your company. By choosing the right people, you can proactively diffuse conflict before it happens and create consensus from the get-go. Which means you’ll have to do a little less of the other three strategies further down the road.

Get More from LinkedIn

How to Get More Sales from LinkedIn

By Ray Silverstein

Everyone who uses LinkedIn suspects that they could get more from it, sales-wise, if they could only knew how.

So, my company recently sponsored a workshop presented by Larry Kaufman, a LinkedIn keynote speaker and one of LinkedIn’s Top 250 most-connected Americans. Larry is Chief Sales Officer and Partner of Sales Empowerment Group. He’s also a long-term member of my PRO peer groups, and in true peer group fashion, is generous sharing his knowledge.

Now, I’m paying it forward by sharing my top takeaways with you.

Polish Your LinkedIn Profile

Before anything else, make sure you’re presenting yourself at your best. This sounds basic, but it’s easy to overlook.

  • Update Your Profile – Chances are, you created your profile years ago and haven’t done much since. Things change; your profile should, too.
  • Take Your Time – A good update takes several sessions, so deactivate your “activity broadcasts” (under Privacy Settings) for now. You don’t want contacts receiving notice of every little change. Wait until you’re done.
  • Capitalize Your Name – It helps you stand out in any list.
  • Expand Your Headline – In addition to your title, add other notable credentials.
  • Use a REALLY Good Photo – First, you must feature a photo…no silhouettes. And if don’t have a great business portrait, get one.
  • Embed Keywords – Approach your profile the way you would a webpage or blog: use keywords.
  • Add Content – Did you know you can upload articles, PDFs, and videos, not to mention website links to get more exposure for your business? (Look for an icon/drop down box throughout your profile page.)

Build Your LinkedIn Presence

  • Create a Corporate Page – If you don’t have a company page, create one…yes, even if you’re a solopreneur. (This is one of LinkedIn’s most underutilized features.)
  • Use LinkedIn’s “Status Update” feature – It’s a quick, easy way to keep your name out there. If you’re excited about a new product or have industry news, share it.
  • Join Relevant Groups –You may learn something, and it’s more exposure. Plus, it puts you in touch with people you may want to know.

Start Connecting

  • Use InMail – InMail is LinkedIn-style email. The top reason to pay for an premium LinkedIn account is InMail access, but even a basic (free) membership lets you use InMail when sending inviting new connections. Instead of using LinkedIn’s default invitation, always craft a personal note.
  • Use “People You May Know” – This feature allows you to expand your network quickly. It draws from the former employers and schools listed in your summary, among other things. When you invite these people to connect, remind them of your shared history.

Leverage Your Connections to Kick-Start Sales

You probably use LinkedIn to mine information about existing prospects, but you can also use it to find—and cozy up to—new ones. Remember ‘six degrees of separation’? Well, two degrees is even better.

The idea: use your first-degree connections’ connections. Are there prospects for you there?

To find out, visit a contact’s profile and view his/her Connections box. If his/her network isn’t hidden, browse it or search it by title.

Make a list of, say, five people you’d like to connect with. Then, send your first degree connection an email, requesting introductions. Include a one-paragraph summary of yourself, and ask your contact to include it in his/her introductory emails. This makes things easy for your contact and lets you control how you’re presented.

Ask that you be cc’d, and as soon as the introduction has been sent, follow up with the prospect. You know how to take it from there. Always thank your contact, and offer to return the favor. Instead of cold calls, you now have warm, personal introductions!

Bottom line: your connections are invaluable to your sales. Tools like LinkedIn let us leverage relationships in fresh, new ways…when we’re willing to take the time to learn how to use them.

If you are interested in a great workbook I’d recommend a great one from another cohort, Zen Benefiel, who compiled it for a workshop in Phoenix. How to Grow Your Business Using LinkedIn.

Measuring Risk – Don’t Be A Seymour

Growing a business means taking risks and making changes. But that’s not as easy as it sounds. And for most people, the longer you are in business, the harder risk-taking gets.

When you first started your business, you were willing to take some big risks. You had to. But ironically, as you grow more successful, chances are, you’re becoming more risk-adverse.

It’s simple: back then, you had less to lose. Now, you have something worth protecting. Along with success comes a growing sense of caution. Now, you’re invested in the status quo.

But too much caution is deadly for entrepreneurs. That’s best left to the professionals, namely, your attorney and accountant. They’re professionally trained to eliminate risk. Once you start thinking the way they do, your entrepreneurial spirit—the driving force behind your business—starts to dries up.

If you want to stay successful, you need to keep your edge. That means taking risks. Carefully calculated risks. Risks with a high probability of success.

So yes, you need to evaluate prospective risks thoroughly. But sometimes, the evaluation process becomes a reason for stalling. It’s something I see all the time in my small business peer groups.

Realistically, we can’t expect to obtain all the data needed to make a 100% foolproof decision. It’s tempting to delay taking action because we continually want to “see more” facts and information. Don’t be a “Seymour”…when it’s time, take the plunge!

Or, in the words of iconic business expert Tom Peters: “Ready, fire, aim!”

Okay, maybe that’s a slight overstatement. The point is, what you don’t want to do is “get ready…aim…check your sites…check the wind…re-aim…check the elevation…and fire.”

If you do that, by the time you finally get around to squeezing the trigger, your target will have moved out of range. Or someone else will have bagged it first. Opportunities are transient things. You have to seize them when you see them.

If you have goals, you’ll have to take calculated risks to achieve them. So, are you weighing some risks now? What’s keeping you from moving forward? What will it take to move you toward achieving your goal?

If you’ve been stuck in place for a while, request my free Goal-Setting Worksheet, and take a first step toward taking action. Don’t be a Seymour. Email me at Ray@ProPres.com.

 

Generations in the Workforce

One of the advantages of running a small business is that you can manage your employees on an individualized basis. A savvy boss identifies each worker’s hot buttons and work style, and manages accordingly. And if you’re super-savvy, you’ll factor in the cultural generation your employees belong to as well.

Like it or not, the era we’re raised in shapes our attitudes and behaviors. While stereotyping is not a good thing, several recent workplace studies indicate that employees of the same generation often share common values and traits, which set them apart from other generations.

This is information you can use to keep your employees motivated and challenged. You can also use it to create a more harmonious, collaborative culture. Because when employees clash or fail to communicate, it may be generational differences at work.

We’ve been discussing this topic in my small business peer advisory groups. After measuring some of the research against our own managerial experiences, these are the profiles we agreed on regarding different workforce generations.

Generation Y (aka Millennial) Workers (born 1978-1997) – Chances are, the youngest members of your workforce are adept with technology and most comfortable when multi-tasking. They’re fluent in social media, but may need guidance setting boundaries. Many Gen Y’ers chaff under rigid management, so if you want to keep them happy, offer a flexible work environment. They enjoy working in teams, but prefer communicating via brief emails and voicemails rather than traditional meetings.

Generation X Workers (born 1965-1977) – Many Gen X workers tend to be independent minded. They may question established work processes and challenge the status quo, which can either be a healthy thing or a source of conflict with colleagues. Gen X’s gravitate toward flexibility and informality (they also tend to look at meetings as a waste of time), but do want feedback and recognition for a job well done.

Baby Boomer Workers (born 1946-1964) – Typically, Baby Boomer employees work hard in the conventional sense, and are proud of it. Boomers tend to measure dedication in terms of putting in long hours (after all, they were the inspiration for the term ‘workaholic’). Boomers often prefer communicating face-to-face or via meetings rather than electronically, and would rather be rewarded with a bonus than comp time.

One generational group isn’t better or harder working than the other; it’s more a matter of style. However, by recognizing what makes different generations tick, you can manage and motivate more effectively and get the best from all of your people.

One key thing to remember: you belong to one of these generations, too, and it undoubtedly impacts your managerial mindset to one degree or another. The more open you can be to work styles unlike your own, the more it can benefit your business.

Employee differences enrich your workforce, and generational diversity is a good thing. It’s your job to ensure that everyone is working toward the same goal, even if they’re getting there by different routes. (Speaking of goals: be a savvy boss and request my free Goal-Setting Worksheet! Email me at Ray@ProPres.com.)

Tracking Critical Numbers

How often do you review your critical numbers, those all-important figures that indicate how your business is doing? Do you wait until the end of the month, quarterly, or year to find out where you’ve been and how you’ve been doing? Or do you keep a constant eye on them?

And what numbers are you measuring and tracking? Because what’s truly ‘critical’ varies for every business, and sometimes it isn’t what you think.

Take profit and loss statements. They’re universally recognized as a key measurement tool, but they’re not without limitations. Because they’re historical snapshots in time, they don’t tell the whole story or reflect the here and now. They don’t tell you where you are going, until sometimes it’s too late.

As you know, I’m all about planning ahead. But you can’t do that effectively without knowing where you are and understanding your day-to-day progress.

So don’t wait for your financial statements to become available to assess the state of your business. Use other numbers closer at hand to keep a pulse on how it’s going. Like…

Cash on Hand – Cash is King. Do you know your cash, the cash you expect to collect in the short term, and the bills that you must pay?

Bookings – The orders you receive, and in some cases, the number of quotes you issue, reflect your success rate. If your bookings, quotes, or proposals are down, you can anticipate that you will have less business coming in and therefore less receivables and cash.

Order Backlog – Do you keep track of what’s in your pipeline?  Is your backlog made up of backorders or late shipments or fulfillment? While backlog becomes cash, remember that this is also a measure of service level. I often tell the story of a busy restaurant that only has four waiters, but really needs five. Pretty soon, they will only need three.

Inventory – If you have stock, how well do you know your actual inventory?  Wrong inventory estimates will throw off your profitability expectations. Inventory lower than your expectation means your cost of goods sold is higher than you expect or your selling prices too low, which results in a reduced gross profit percentage.

Open Purchase Order – Some people call this ‘open to buy.’ Are your open purchase orders in line with the business you are getting or expect to get?

Service Level – How do know or measure you are doing a good job? Keeping tabs on service levels is essential to continued success (see ‘Order Backlog’ above!).

Payroll vs. Revenue – Is your workforce becoming more less productive? Or is your business down? This is a quick and dirty test and that will ultimately show up your cash. Tracking payroll and revenue side by side tells you at a glance which way you’re headed.  If your revenue is up and payroll is down, life is good. If the opposite is true, you must find a way to change that!

In addition, some critical numbers may be meaningful only to you.

For example, one of my peer group members is a builder. He keeps a close eye on, of all things, his site managers’ monthly receipts from Home Depot and Lowe’s.

Why? Because if his crews keep running to local stores for supplies, they’re not properly planning ahead. It reflects their efficiency, which in turn impacts everything from customer satisfaction to profitability.

The same applies to forecasting future market conditions. One RV dealer I know keeps an eye on the fur industry. If fall and winter fur sales are high, he predicts a booming spring RV market. To him, it signals that consumers are confidently buying luxury items.

So ask yourself, what measurements are particularly meaningful to your business, both internally and externally? Make appointments with yourself to check these numbers on a regular basis. Don’t wait for P&L statements. The most critical numbers are right at your fingertips.

When it comes to numbers, are you on your game? Ask for my 10-question Financial Tracking Worksheet. Email Ray@propres.com for a copy.