Healthcare reform. Most would agree with the idea that it would be nice to rein in the upward-spiraling costs of healthcare and make it accessible to more people, right? That is how this whole thing started out. But where are we now? Let’s think about this together…There are two over-arching reasons for spiraling-upward costs. Number one. Lawsuits have driven up the costs of malpractice insurance and have caused doctor’s to ask for every possible test they can think of to cover their asses so they don’t get sued. So, there needs to be tort reform. Number two. Each state has limits to the number of health insurance companies allowed to offer insurance in the state. This barrier does not exist for other kinds of insurance, we are free to chose any national company. The lack of competing companies keeps costs artificially high. So, there needs to be a lifting of this restriction.

Making health insurance more affordable by these moves would naturally make it more accessible to those who can’t now afford it. Simple and logical. Competition would also drive insurance companies to fill needs, like selling to people with pre-existing conditions by allowing a nationwide pool of such people for the purpose of spreading the risk, something that can’t be done now because of the state-by-state restrictions.

In almost two thousand pages, the House bill could not find room for any of these things discussed here. The bill basically mandates even more restrictions on what insurance companies (private companies) can and cannot do in America. The effect of this is to create a de facto nationalized system, even though it won’t be called that. It’s a government power grab, not reform. They (the people who are supposed to be working for us) do not truly want reform, they want to control (Control is power). If given this power, they will usher in an era of unbelievable control over every minutia of your life under the auspices of controlling costs of health care. What you eat, how much you exercise, what mandatory education you receive (retraining camp, anyone?), what kind of car you drive, how much you drink, what recreational activities you engage in, and on and on.

If you want your life completely controlled, for your own good, by the state, God help you, but please move to Norway, and leave the rest of us alone. Here in America, we abolished tyrannical masters and adopted and died to defend an ideal of the government being an elected servant of the people. I think most people know these things in their gut and are about to re-awaken from the slumber of daily life, get pissed off, and cause some hope and change of their own. What a beautiful time to be alive!

Let me know what you think by leaving a comment below.

photo credit: Jim Frazier

 For every person who starts a business of their own, or has a small business, Michael E. Gerber’s book, “The E Myth Revisited” should be a required read. I’m going to post once a week on ideas from this book. For those who have never read it, I’ll boil it down for you, although you should get a copy anyway, I’m only going to talk about the lessons, yet there is much more. Gerber is a wonderful story-teller. For those who have read it, this will be a refresher of a wonderful business-self-help classic that stands the test of time, and it is one of those few books that you find yourself reading over and over…

The difference when a small business starts out like a mature company is that they start with the entrepreneurial perspective. They have a vision of what the company will look like when it’s finished, when it is done, when it is ready to be sold. They act the way that a big company would act, from day one. In order to become a great company, you have to act the way that a great company would act, right from the start. They know that unless they act mature right from the beginning, they will never get that way.

The entrepreneurial perspective dictates; that what is more important than the product, commodity, or service that a company offers, is the WAY it offers those things, the way it looks, the way it acts. It sees the business as a system for producing certain results for the customer. The typical small business technician-oriented perspective looks only at the work of the business, and how the work is done. The entrepreneur sees the business like a product sitting on a shelf, competing with other products that are other companies. The commodity is not important, the way it is delivered is! 

What is the product your small business delivers? Most people instinctively answer with the product or service they sell, “we make widgets”, “we do plumbing”, whatever. Always the commodity, never the product.

The entrepreneur looks at the world and asks, “what is the opportunity”? The entrepreneur then goes out and invents a solution to a perceived need out there in the marketplace. The entrepreneur asks, “how will my business stand out from all the rest of the businesses that offer that commodity solution”? And so the entrepreneur does not start with a vision of the business, but with a vision of the customer solution. The technician started with what he wanted to do for work and asks, “how can I sell what I am offering”? 

Next time we’ll look at how the concept of a franchise created the turn-key revolution…

For every person who starts a business of their own, or has a small business, Michael E. Gerber’s book, “The E Myth Revisited” should be a required read. I’m going to post once a week on ideas from this book. For those who have never read it, I’ll boil it down for you, although you should get a copy anyway, I’m only going to talk about the lessons, yet there is much more. Gerber is a wonderful story-teller. For those who have read it, this will be a refresher of a wonderful business-self-help classic that stands the test of time, and it is one of those few books that you find yourself reading over and over…

Systems to run the business so that low skill people can run the systems. Let’s take a look at how Gerber came to this brilliant method for small businesses to finally work. Most small businesses start out in what Gerber calls the Infancy stage, where the technician creates a business based on what he or she wants to do, which is not necessarily what the business needs. You can recognize a business in infancy because it’s named after the owner, just like I named my business, Van Cleve Payroll. We infants leave little to the imagination, you know who does what. You-work. And you work and you work and you work. You ARE the business.

After the initial freedom euphoria wears off, things begin to change, gradually. You begin dropping the ball, things are being overlooked, it’s becoming more of a pain to keep it all up. At this point, some give up, quit the self-imposed rat race and go back to a job. Others start letting go of responsibilities and hire people to fill jobs. That next stage is called Adolescence.

In Adolescence, the overwhelmed owner starts hiring people to fill roles formerly done by him/her. Naturally, what are needed are skilled people to fill the skills done by you! Gerber says this may actually be the worst thing to happen to a business. Why? Because skilled workers will be the bain of your existence. Hiring highly trained technicians is expensive and they never quite have your enthusiasm, do they? The relief is nice at first but this is no way to grow a small business into a bigger business. Some adolescent companies fall back to infancy, scaling back the chaos until it’s manageable. Others just keep growing despite the pitfalls. Keep in mind very, very few ever make it this far, to maturity. That does not by definition make them great companies. The great ones did things differently.

The third stage that an adolescent company can grow to is Maturity. A mature business is what we all think of as a really successful business, Apple, Exxon, Crispy Creme, Toyota. But here is Gerber’s brilliant insight, great companies didn’t grow into great companies, they STARTED OUT as mature companies. They built a business out of developing systems, models if you will, and figured out how to be able to duplicate the systems. A system that can be duplicated over and over again cannot be dependent on super-skilled technicians to make it work. No, a system must be able to be done by anyone, with a little training. Gerber saw that the very best and clearest example of this is McDonalds. Next time I’ll talk about this idea of a “turn-key” business, otherwise known as a franchise, and how you might apply it to your own business.

I’m frequently heard lamenting about small businesses that are not “run like a business”. What do I mean by that? In many years I’ve seen very successful businesses and I’ve seen the miserable failures too. Here is a list of traits of people and small business subjects that I think directly contribute to a businesses success. Part 2…

Know your costs. Get a pencil and a calculator and your bills out. Go to work! This is YOUR business! You should know EXACTLY every penny of what goes into your product or service. Figure out the exact costs of everything you do, down to the penny. When quoting work, you will know, with precision, exctly what you need to get to make a profit.

Do not believe your own PR. You are probably not as good in the eyes of your customer as you think you are. You are not the greatest thing since the iPhone. People in meetings within a company tend to engage in a kind of groupthink that sees only the good PR about themselves.

Do not try to do everything yourself.  You can only be good at maybe 3-4 things out of the possible 15 hats a business owner has to wear. At some point you must hire people smarter than you are in certain areas. Be humble. You are not always the smartest person in the room.

Do not abdicate responsibility for the money.  I’ve seen and heard of many instances of fraud that occurred because the owner allowed an employee, usually a bookkeeper/receptionist, or anyone that handles money and and/or accounting, free rein. You have to learn how to implement what accountants call “internal controls”. It’s not a matter of not trusting someone, it’s a matter of not placing temptation in front of someone.

You can’t out-sell your stupidity. Salespeople who go into business usually make bad businesspeople. The reason is that, being sales oriented, they are eternally optimistic, and not very realistic or pragmatic. They typically do not pay as close attention to things other than the prospect of the next sale. Always the next big sale coming next month. Spend a little less time in the future and join us in the here and now.

I’m frequently heard lamenting about small businesses that are not “run like a business”. What do I mean by that? In many years I’ve seen very successful businesses and I’ve seen the miserable failures too. Here is a list of traits of people and small business subjects that I think directly contribute to a businesses success. 

Don’t just operate out of a checkbook. Just gauging the level of cash does not tell you much. You could be paying way too much for certain types of expenses and never realize it and your checkbook won’t tell you that. You must get feedback on the activity of your business in order to run it right. The presence or absence of cash alone tells you virtually nothing about whether your business is successful or is headed for disaster. By the time you notice cash dwindling, it could be too late. Cash could be building while you are missing opportunities. A check register is not a substitute for a P&L.

Have a real location. You can’t run a business from under a bridge or from a park bench. Customers and potential customers have to have some level of trust in you. You have to have a real presence. Having said that, if your business absolutely does not need a physical location, then you better have a kick-butt online presence. You are either serious or you are just playing.

Accounting we will go. You must have a proper accounting system so your business talks back to you. A proper accounting system tells you exactly what kind of income comes in and from where, and exactly what your expenses are and in what category they fall. It is the only way you will ever be able to tell if one part of your business is out of whack. 

Don’t specialize in everything. Don’t be like the car repair place that says, “we specialize in all makes, foreign and domestic.” Huh? How can you specialize in everything? Do the opposite of this. It is tempting to want to include more lines of work to broaden your appeal but resist this temptation. Do the opposite. Specialize. Find a niche that only you do. Be the best damn one there is in that one thing.

Learn to market it right. Don’t just spend money, do the free stuff first. Employ the 3 feet rule. If someone gets within 3 feet of you, tell them about what you do. Be shameless. If you are reluctant to sell yourself, what does that say about you? Don’t you believe in yourself? 

Keep business and personal expenses separate. Don’t mix it up. You have to keep things separate to know your true costs. If you’ve incorporated, your CPA will tell you to do this anyway. 

Tune in tomorrow for more…

For every person who starts a business of their own, or has a small business, Michael E. Gerber’s book, “The E Myth Revisited” should be a required read. I’m going to post once a week on ideas from this book. For those who have never read it, I’ll boil it down for you, although you should get a copy anyway, I’m only going to talk about the lessons, yet there is much more. Gerber is a wonderful story-teller. For those who have read it, this will be a refresher of a wonderful business-self-help classic that stands the test of time, and it is one of those few books that you find yourself reading over and over…

Now that we know of the 3 aspects of personality that make up a businessperson to one degree or another, let’s look at how the tension between them looks. I once heard of an interesting way to look at human behavior, when we question why people act as they do- especially when it does not make sense or is odd behavior, it’s root is two opposing ideas trying to exist at the same time inside our head. When we are acting in a confused manner, it is because we are trying to hold two opposing thoughts or emotions simultaneously. We have a battle inside.

When looking at the three aspects of personality referred to in E-Myth, the conflicts look something like this; the entrepreneur lives in future possibilities, and creates chaos, the manager grimices at the idea dealing with another one of the entrepreneur’s bright (or goofy) ideas, yet the manager would’nt have anything to manage were it not for the entrepreneur. The manager lives in the past and craves order, cleans up the messes left by the entrepreneur. The entrepreneur is irritated that the manager always pours cold water on ideas and says why things won’t work. The technician is the doer, living in the present. The technician just wants to go to work and be left alone. To the technician, the Manager is a meddler to be avoided. The technician certainly hates to be managed, and also has no patience for listening to the entrepreneur talk ideas, not when there is work to be done. 

Gerber says if all three aspects of business personality were in balance, you would be an incredibly effective business person. Very few of us are that lucky. So what do you do? Gerber says the answer lies not in hiring incredibly talented people to fill the gaps in your personality, but rather to create systems that can be run by low skill people. Have people run the system, and the system runs the company. That’s what we’ll get into next time…

To me, simplicity is living with the absence of unnecessary complications. It means developing an awareness of that which complicates our daily life, and doing your best to weed them out. It does not mean to me, as it does for some, anti-technology and living in a mud hut with a garden and a bicycle. No, I live in a house and I drive a car and I have computers and an iPhone. But, I don’t live in a big house, as big as I could afford to. I don’t desire the McMansion because at the root of that is that you are trying to beat other people, to impress somebody with what you have, and that is not simplicity. I want to impress me. Now, I enjoy nice surroundings as much as the next guy and I want better for myself and my family, that is natural and healthy. But when we find ourselves in desperate need to go upscale, examine why you feel that way, what are the real motivations lurking underneath? Is the motivation shallow and superficial? Why do people put strain and complications on themselves by going into such tremendous debt? They turn themselves into slaves, where their appetites are the master, and no longer control their own lives.

Shedding the unneeded has its physical manifestation. This is what most people think simplicity is all about, cleaning out your closets, getting rid of everything. Yes, that can be a part of it, but again, look a little deeper. Why did we become a pack rat? Why do we just let things build up? Simplicity is more about dealing with the internal motivations than it is about dealing with the external. I think we do that because we get mentally lazy about things. It takes mental effort to live simply in this society that is built on consumerism. You have to work at it, constantly. You have to decide- that stuff is nice to have, but I haven’t used it in a year, I’m getting rid of it. I am weeding out of the garden all the things which choke off the few things I really do want in my life. I will enjoy them even more now because they are not diluted by the other stuff. When you’ve weeded your garden, and the junk is no longer choking off the good plants, they thrive, they bring forth good food. A healthy and productive garden (a life, if you will) benefits you, your family, and your neighbor, because you are no longer eyeing his garden! That’s what simplicity means to me, as it relates to materialism. Let’s hear your thoughts.

For every person who starts a business of their own, or has a small business, Michael E. Gerber’s book, “The E Myth Revisited” should be a required read. I’m going to post once a week on ideas from this book. For those who have never read it, I’ll boil it down for you, although you should get a copy anyway, I’m only going to talk about the lessons, yet there is much more. Gerber is a wonderful story-teller. For those who have read it, this will be a refresher of a wonderful business-self-help classic that stands the test of time, and it is one of those few books that you find yourself reading over and over…

First, you have to get over the title. We’ve become accustomed to “E” as a prefix means “electronic”, as in “e-mail” and “e-books”, “e-trade” and “e-commerce”. This “E” stands for entrepreneur. Gerber writes that we hold to a myth that small businesses are started by entrepreneurs, risk takers, risking capital, their own or someone else’s. Brave beings standing stalwart, wind blown, with their dreams, confident and determined. Nope, it’s a myth.

No, typically, a small business is started when an employee of some else’s business has a brain fart. The mental conversation goes something like this, “Why am I working for this guy…I’m running his business (doing the work), I could be collecting the big bucks myself, hell, if it wasn’t for me, he wouldn’t have a business, I want to have MY OWN business!” Scary… very scary.     

In reality, the entrepreneurial spirit usually lasted only in this initial moment and in the flood of ideas that come at first to those who are so possessed. Gerber defines 3 types of people that start and run a business, or, 3 aspects of personality present in a business owner.

The first, already described, is the entrepreneur. The guy (or gal) with the crazy dream. Excitement, pure emotion, elation, a sense of freedom and the pure joy of creation. 

The second is the technician. That’s the expert, the worker bee, who actually does the work of the business, the person who makes the product or service. He or she gets things done.

Then there is the manager. He/she manages the worker bees, keeps all the balls in the air, keeps it all working smoothly, oversees, translates the vision of the owner/entrepreneur into practicality. He or she brings order to chaos. 

Another question, who is your ideal customer? What are the exact specifications of the

ideal; company size, age, gender, income level, hobbies? Identify your top customers in

terms of profitability and profile them. What are their demographics? What companies do

they admire most? Why do your customers hire you? Have you ever surveyed them?

The flip side of this exercise is to outsource all the things you are currently doing that are

not your core competencies and that are not central to income generation. Keep the work

of your business as simple as you can. Concentrate on those activities that are directly

related to revenue generation. Focus your efforts. Every hour of every employee’s time

spent doing chores that are unrelated to generating revenue is actually hurting your

business because not only is it non-productive, there is the opportunity cost- that time

could have been spent doing productive, income generating activities. Even you owners

can only lay claim to being proficient at perhaps 2 of the 15 hats you have to wear, that’s why you

hire the talent you lack, so you can leverage talent for your business.

Now reduce it to one thing that your business excels at in your marketplace. Once you

have that one thing, how can you communicate that to your ideal customer in an

irresistible way. Yes, your goal should be an irresistible offer. Make your marketing

clearly state your irresistible offer related to your core competency, back it up with

testimonials so it’s believable, take away the risk of doing business with you, and you

will have a clear, focused marketing message. Do you have work to do? Has this been

helpful? I hope so.

The key way your business will prosper is to identify those things it does really well and

preferably does better than any other, then find ways to communicate those to potential

customers in a way that makes you the obvious choice to do business with.

I don’t particularly care for the word competency, it is not good enough to merely be

competent. You’re competent, so what? Your customer expects competent. What do you

do better than anyone else? Schedule a meeting with your top people and brainstorm, but

be careful not to believe your own PR. There is a definite danger in sessions like this, a

group meeting in which everyone is trying to say things they think the boss wants to hear.

You might end up with results that sound like, “We’re really competent at providing

custom solutions for our customers.” Huh? What does that mean? Sift out those things

you are merely competent at, can you become better at any of these? What will that take?

Once you have one or two things you do better than anyone else, the next question is does

anyone know it? Are you communicating that to potential customers? How?