The ways early success can set you up for future failure

Show notes from Sweaty Startup podcast episode 43.

  • Your ego begins to cloud your judgement

Ego is a touchy balancing act. Early on the ego is what leads to success. It’s what suppresses the fear of failure and the anxiety that goes along with a new business. It’s what allows someone to be comfortable doing something that only .01% of people do successfully.

Nothing is clear cut in entrepreneurship. There is no best practice guaranteed to produce results. Its fluid and it changes often. Every situation is different and the decision that turned out to be great a few weeks ago could no longer work.

Changing your mind quickly is a key attribute of a successful entrepreneur. You are never pot committed. You are always ready to accept defeat and change the plan. The ego challenges this. The ego clouds your sense of perception and can drive you deep into a dark dark place and bring everything crashing down.

Instead of looking at the markets with a humble open mind you now have on a pair of rose colored glasses. You get overconfident. You think it’s easy. You trust your gut a lot more than you should.

Being “right” when arguing with someone who disagrees with you becomes more important than uncovering truth and facts with logic.

  • You forget that luck plays a big part in business.

You win some and you lose some. Being at the right place at the right time is a lot more important than being an exceptional person. Some of the wealthiest entrepreneurs of all time are just your average people who worked smart and caught some big breaks and had the brains to recognize opportunities. Skill can’t always save a failing business. If the market doesn’t want what you are offering its time to cut your losses and move on.

  • Unrealistic timelines

After early success its easy to forget that it took a long time to build what worked for you the first time. You forget that its a long process and the dip is real. Business isn’t always fun and pushing through the slow unexcited time is not easy.

So you set unrealistic timelines and get discouraged when things take time to develop.

  • A big failure can ruin a lot of small successes

After early success you get comfortable with risk. Instead of starting local and small you decide to start national and big. So you double down on the next venture to make it all happen even faster and make even more money. What could go wrong?

  • You surround yourself with “yes” men

It’s natural for people to seek information that supports their opinion. Thats why the democrats watch CNN and the republicans watch Fox. Business is no different. After an early success its often easy to get caught up hiring a bunch of “yes” people into your inner circle.

Along those same lines people are less likely to challenge you when you have a track record of success. You are less likely to ask for help or advice as well. You start talking more and listening a whole lot less.

  • You don’t take the time to learn the service the second time through

Your first business you started at the bottom and learned the service. You learned what your customers wanted. You learned the methods that worked best. You adjusted and refined everything.

The second time through you think you have it all figured out and you can hire employees right off the bat. You already know what the customers want. You already know the most efficient way to do something. No need to spend time actually learning it right?

  • Lifestyle creep

A few years in a row earning a few hundred thousand dollars a year can lead to some bad habits. You lose your scrappy frugal attitude and you start to indulge a bit in the finer things. You buy a nice car. You buy a big house. You start frequenting the best restaurants and maybe even join the expensive golf club in town.

The lean lifestyle that led to a healthy and adjustable business is now gone. You need to be earning $15k a month just to pay your bills. If things get hard you are stuck with all that overhead and it can all be gone in a heartbeat.

  • More distractions arise in the form of “opportunities”

You got to where you are today by saying yes to basically everything. Any opportunity that came a knocking you jumped on it full speed ahead.

After some success opportunities start to come at you out of nowhere. More people reach out to you with ideas. With a little money you are suddenly in the market for several different businesses or assets that may be for sale. You are suddenly committed to several meetings a week. You are being pulled in thousands of directions. Your life becomes hectic and stressful.

It’s easy to forget that time is your most valuable asset and the only thing you’ll never get back.

  • Money becomes the driving factor and the measuring stick

Great entrepreneurs recognize value and understand how to measure it, grow it and eventually exchange it for money. Thinking about things in terms of value and not money is a great way to stay grounded and keep working towards long term goals. When money arrives its incredibly hard to maintain this mindset.

  • Moochers appear

All of the sudden you are expected to get the tab when you go out for drinks with friends. Then people start calling you to borrow money. Then before you know it you have 11 netflix accounts being charged to your credit card. You definitely find out who your true friends are.

  • You forget how much suffering is out there

It’s easy to forget how bad a lot of people in this world have it. The poorest of the poor in America have it 10x better than the middle class in most 3rd world countries. Being able to feed your family is far from a stress on your list but thats not the case for a lot of people. It’s easy to get blinded into thinking anyone can succeed in this world and write off those in tough positions as lazy or unworthy people.

  • What am I here for again?

After a big success and an emotional victory it becomes harder and harder to quench the desire for that next big high. You’ve made the money and accomplished your goals. What now? What is my purpose now?

You see rock stars and famous people struggle with depression and addiction. It’s no different for entrepreneurs coming down from that first big success.

Want more? Subscribe here to get short, concise emails from me once a week to help you build a better business. I also share a business idea like this each week to get you fired up and get your gears turning.

April 16, 2019 6:40 am

How to overcome analysis paralysis (episode 42)

Show notes from The Sweaty Startup podcast episode 42.

Analysis paralysis is the act of over-analyzing and over-researching a potential business venture to the point of taking no action at all for long periods of time.

Ready… Aim. Aim. Aim. Aim. Aim.

Never firing a shot.

I would say this (along with the fear of failure) is the main reason many otherwise brilliant and high-potential people never end up starting a business and building the life they want.

Diving in and committing to one business and pushing onward can be hard for a number of reasons:

  1. The opportunities are endless. The number of businesses you could potentially start, even in a small town with a limited skillset, ranges in the hundreds.
  2. The resources for analysis are endless. The internet is amazing but it can be the cause for information overload. You can find and read amazing content on any question you could ever consider asking. I find myself addicted to google. I get curious about something and start searching. The next thing I know 30 minutes is gone and I’m learning about ancient chinese martial arts. Not only the the internet but podcasts (like this one), self help books and online courses.
  3. The number of markets and companies out there to study are endless. You can always find more competitors in other cities to study and research.
  4. There is no perfect opportunity. There will always be hair. It’s hard starting something. You want it to be hard or everyone would be doing it.
  5. After the initial high of getting started when everything is fun and you are learning quickly there is a long slow moving period where things happen slowly. It takes a while to get momentum. It takes a while to get your website on the first page of google. It takes a while to get word of mouth churning. You’ll be out there sweating, toiling away laboring for a year or even longer in the early days.
  6. Its uncomfortable being different. You might be seeking validation from the wrong people. Take advice from everyone but only apply what resonates with you and aligns with your mission and your goals. Starting a business is doing exactly the opposite of what 99.9% of people do.

So how can we combat analysis paralysis and just make something happen?

Understand that most of the resources are broadly applicable and if you don’t have a project to apply them to they are nearly worthless and will be forgotten in a few days. Simply put you can listen to podcasts about how to ski, read reddit articles like this about how to ski, read blogs about how to ski and if you don’t get out there and actually ski you will never learn how to ski. Business is the same.

You must understand that time (not money) is your most valuable asset. Every day (beyond a reasonable amount) you waste doing research should be viewed as lost earning potential.

We’re not re-inventing the wheel here. A strong healthy competitor is a good sign. That means the market is there. The customers are there. We know it can work. Don’t let a strong competitor scare you off if you believe the market is large and growing every day.

Just because there is a good strong competitor doesn’t mean you can’t carve out a piece of the pie and build a successful business. If the market is large and growing every day, like most services, you might not need to steal a single customer from that strong competitor. You might not even need to get all the new customers. You might just need to get a few of the many at first to get some momentum.

Consider setting up a few businesses. It takes just a few days of focused work to get a Google My Business location, logo, website and the essential set of the tools set up for customers to find you. You don’t have to learn it yet. You don’t have to buy the equipment yet. You don’t have to form an LLC and get insurance yet. I did this with lawn care, painting and athletic training along the same time frame I was building my first successful business. The lawn care website stuck and now my brother is operating a successful business there.

Understand that value and money aren’t always equal and successful entrepreneurs are really good at understanding value. They are good at seeing beyond the bank account when devoting energy and resources towards building something that will be worth something in the future. If you are focused on money in the near term you’ll get discouraged and give up quickly.

Fight the urge to be “busy” doing small menial tasks and instead work on the things that are important but not urgent to propel your business forward as quickly as possible. Don’t worry about the fluff initially. Don’t spend weeks writing a business plan. Don’t make your training videos before you have customers. Get the big stuff done so you can get to market as quick as possible with a simplified version of your service.

Its low risk if you do it the right way. We’re talking $500 or less to get the tools to let customers find you. Time and opportunity cost is the real factor here. Buy things used. Keep your expenses variable.

Work quickly and efficiently. For a low skilled and low investment business you can do a sufficient market analysis in a day or two. Don’t drag on and on working on things that you can easily learn on the fly while out servicing customers. Everything takes time to develop so its critical you get the ball rolling as soon as you can.

Continue to consume material but spend time applying it. The real value from self help material like this comes from spending time thinking about how to apply it to your own experiences. This is general stuff for a reason. Its meant for you to grasp the overall concepts and pass on the stuff that doesn’t apply and get serious about the stuff that does.

When you launch be sure to set goals. Get serious about your marketing so you have a chance to succeed but if it isn’t working move on just as quickly as you started.

If it is working get serious about buckling down and working on something that is going to take time to develop. It won’t be fun all the time. You won’t get paid right away. Its a 3-5 year plan. Power through the dip until you reach the light at the end of the tunnel.

Look at each venture as taking a shot. Ready. Aim. Fire.

A shot is only a few days work and a few bucks for hosting. Why wouldn’t you take a lot of shots?

I can see spending more time aiming in the tech world when you are investing years and years or in the product world where you are investing thousands of dollars. But this is low risk stuff we’re talking about here.

Ready. Aim. Fire. Aim. Fire. Aim. Fire. Aim. Fire.

You’ll hit a target that way and the momentum will get behind you.

April 12, 2019 6:54 am

Overcoming anxiety and the fear of failure (episode 30)

We all know that feeling of failure. That feeling of inadequacy. The feeling of rejection. The feeling of embarrassment. The anxiety that comes along with entrepreneurship and generally anything that is worth doing in life.

Mine was a basketball game in southern Indiana. Basketball is intense in southern indiana. I was a sophomore and I was a role player on the varsity team. I was our second leading scorer but I think it was only 8 or 10 points per game. We had a star player who ended up getting a full ride D1 scholarship at Indiana state. We passed the ball to him. He averaged 25 points per game. Because he was on our team and just because of the general culture in Indiana our games were popular. On friday and saturday nights people went to local basketball games. Thats just what they did for fun. It was common for 2-3 thousand people to show up and pack a small gymnasium and the atmospheres were electric. Picture the movie hoosiers.

Its the biggest game of the year. Against our rivals on the other side of the county. On their court so we were away. Its extra crazy. There were full student sections standing and screaming the entire game. It was standing room only in the gymnasium.

Star player gets in foul trouble before half time. The first time he got taken out of the game all season. All of us young kids were just looking at each other. I think we were winning the game by a few points when he went out.

About two minutes to go in the half. One trip down the court I get passed the ball in the corner and shoot a three. Airball. The entire crowd starts chanting Airball, Airball, airball. I start to get a little nervous now. The other team comes down and drills a three pointer. The crowd goes nuts. Next time down the ball gets passed around a few times and ends up in my hands again. I drive to the middle leave my feet for a shot and realize its going to get blocked and make a bad pass. The ball gets picked off and the other team goes down and gets a fast break dunk.

Dunks aren’t that common in high school basketball so now the crowd is really going nuts. Our coach calls a time out. We try to regroup.

We go down the floor the next time and I end up driving to the basket and taking a contested layup that wasn’t even close. The other team was turning up the defensive intensity knowing we weren’t comfortable and weren’t going to be able to get aggressive. The other team goes down and scores again.

With just a few seconds before halftime I once again get thrown the ball and I drive the sideline and go up for a layup. A defender got a great position and took a charge. Foul on me. Another turnover. Clock expires and its halftime. We’re now down by 10 points.

As we walk off the court with our heads down the people there in our cheering section begin to boo our team. Our own fans begin to boo me. A few fans stood up and started pointing and yelling at me.

We go to the locker room and sit there in silence. After a minute or two, which seemed like an eternity, our coach storms in with a red face and a clipboard. He walks right up to where I’m sitting and points at me. He screams “you are not our best player! You will never be our best player! Stop trying to be our best player!” Then he slammed down his clipboard and walked out. That was the extent of our halftime talk.

I will never ever forget those 10 minutes of my life. That voice is deeply ingrained in my mind and I’ll never forget the look in my coach’s eye. All this as a 16 year old kid just trying to figure out life and where I fit in.

That experience pales in comparison to what some people deal with.

Its ingrained in our mind from a traumatic experience as a kid. A cruel bully. Maybe its a parent who just didn’t build us up and instead tore us down and criticised our every move. Maybe an abusive girlfriend or boyfriend. A sports moment or just the insane sport environment in general growing up where every action we take is measured and failure is obvious.

It still plagues us today. That inadequacy. That voice inside our head that is telling us that we just don’t have what it takes to be successful. That we’ll never be good enough. That we just don’t measure up. Other people can do it. Other people can win but I never will.

This isn’t just men. Not just women. It is extremely common for all human beings.

Every single one of us, at times, have that anxiety that arrives and that self doubt that arrives when we are in an uncomfortable or unpredictable situation. That heightened sense of self criticism. That voice telling us that we just aren’t quite good enough. That reluctance to trust ourselves and instead trust what that one bully or that one coach told us when we were 12. Trust that we just aren’t good enough and we can’t do this. The anxiety is crippling.

This is incredibly prevalent in our personal relationships. Maybe somebody is doing something amazing but we are afraid to tell them that because of our own insecurities and our own inadequacies and thus our own jealousy. Maybe our own insecurities lead to trust issues and kill most relationships before they get serious.

Maybe its the inclination in our lives to conform to what other people are doing. In middle school we call that peer pressure. That goes away when we get older right? Wrong. Now its called keeping up with the Joneses. Thats called getting an expensive college degree so we can afford the car payment on a $60k Chevy Tahoe and the payments on a $500k house in the swanky part of town and the credit card payments on the bills we rack up while dining with our friends at the expensive restaurants three times a week.

Maybe that fear of rejection cripples us and keeps us playing the safe game. Maybe our #1 goal in life is to make sure those feelings of failure and inadequacy never show their faces again. Those feelings of being the target of boos from a crowd and a screaming coach never happens again.

There is nowhere in life this is more prevalent than when it comes to entrepreneurship. Entrepreneurship is just like that basketball game. The stakes are high. Failure is obvious when it happens. Its uncomfortable. Its risky. Your friends are going to make jokes and talk down to you when you buy that first $1500 cargo van on craigslist. They sure did to me.

That failure is scary.

Maybe it affects you in the opposite way and forces you to overcompensate. The anxiety forces you to try the long shot venture capital backed company. To try to be the next steve jobs. To try to be the next elon musk. To try to change the world.

Maybe you just want to prove to everyone that you are indeed spectacular and they were all wrong. That your coach was wrong. Your dad was wrong.

In either case there is a fear that you will lose your status. There is a fear of failure. There is a fear of what other people will think of you.

So how do we manage this fear of insecurity and failure and rejection? How do we surpress those negative emotions so we can achieve our goals and find happiness in life? It starts with answering one simple question.

Who am I seeking approval from?

I have news for you. The only person you need approval from is yourself. You are the person that controls your emotions. You are the person that determines if you are happy or not. You are the leader of your own life.

The sooner you stop chasing stamps of approval from other people you will be much much better off and happier. Instead of letting the joneses set your standards you need to feel good about yourself its time to set your own.

How do you want to live? What 20% of activities do you do in life that bring you 80% of your joy? What moral code do you want to live by? What makes you happy.

What about other people? What about my husband or wife? What about my best friends? What about my family members?

These people love you and care about you because of who you are. Because of your moral compass. Because of what drives you. Because of what makes you happy.

So if you approve of yourself and you are happy and confident in your own skin these people will automatically love you and stick beside you. You will get their approval as a byproduct of only needing your own approval.

Let me repeat that. You will get the approval of the people closest to you as a byproduct of only needing approval from yourself.

Set your own standards of success and work towards them. If you can train yourself to realize that other people’s opinions don’t matter failure really isn’t that bad.


A funny thing about that basketball game. The second half I obviously played horribly. I was rattled. I cried on the bus ride home from the game. I cried later that night at the kitchen table as my father and I talked over the game. Luckily he worked hard to build me up. He focused on the positives. The next night I had the best game of the season. I scored 26 points including a steal and a layup as time expired to win the game. The same fans who bood me the night before cheered me on and celebrated the win the very next night.

Now I have even more news for you.

Getting uncomfortable and facing uncertainty is fun.

What is the worst that could possibly happen if you take a leap and start a business? I’m serious. Think about it and answer this. If you’re in America you surely won’t starve to death. In most places in the world you won’t miss a meal. If you do it right and in a low risk way you might lose a little bit of time and money. Its not so bad. Its probably not even as bad as getting yelled at in front of your peers by your high school basketball coach.

Its the possible failure that makes the victory so sweet.

Building something is fun. Entrepreneurship is so amazingly fun because you never know what is around the corner. You never know what is on the horizon. You never know if the phone is going to ring and an employee is going to let you know he just rear ended a mercedes benz on the highway or ripped the top off the company box truck. I’ve gotten both of those calls.

I’ve also gotten the call from a school administrator letting us know that we won the contract to be the preferred provider at a big ten university. I’ve seen the email inbox go nuts with new customer signups beyond our wildest dreams. I’ve had a customer send a thank you card to my house after she packed her passport in her storage squad box and didn’t realize it until it was 3AM and she woke up to catch her 7am flight to China. We answered the call at 3am, dug through the box, and delivered the passport to Boston Logan just in time for her  student to catch their flight back to china.

So what drives you?

Is it the money? You might think its the money and the things you can buy with money but I bet it isn’t. The scientific data on happiness would disagree with you as well. How much money do you need? Really how much money do you need in order to spend your time doing what you enjoy most? Get your number. Write it down. I bet its a lot smaller than you think. Most of the 40 somethings grinding 60 hours a week have already surpassed the money mark long ago but they keep working. Why? This leads me to the next one.

Is it the status? Maybe. That drives a lot of people. But those people are rarely happy. There will always be something else someone has that you don’t have. There will always be that next level of wealth. There will always be someone who has more than you do. Someone who went on a more expensive vacation than you did and put the photos on facebook for you to scroll through. If you chase status you’ll spend your life chasing something that is impossible to fully quantify.

Is it time? Do you want to get your time back so you can spend it with people who mean the most to you? Do you want to watch your kids grow up? Do you want to be at their little league games? Do you want to go on Daddy daughter dates once a week with your amazing 5 year old? Most children don’t get to ever experience timelessness with their dads. Will your children?

The first step is to find out what drives you. Build out your own sets of standards and your own goals. Your own stamp of approval.

I’m going to send you with a challenge. Tomorrow morning wake up an hour earlier than normal. Make a cup of coffee and have a snack. Don’t touch your phone or computer. No input. Go to a quiet place in your house and think. Get a pad and a pen and write.

What do you want your day to look like 5 years from now? What do you spend your time doing? How much money do you need?

Don’t let your anxiety and insecurities hold you back. Don’t let the fear of rejection hold you back. Don’t let standards put on you by society keep you from making decisions that align with your own personal goals. Get comfortable with and embrace the uncomfortable. Buck the 9-5. Embrace the possibility of failure. Get out and build the life you want.

April 9, 2019 9:37 am

Successful people aren’t busy (episode 41)

Successful business owners are assumed to be busy. They hear “I know you are very very busy” all the time.

Successful people aren’t busy.

It’s great that people respect their time but successful people are not busy. They just say no a lot. They prioritize what they spend their time doing. They don’t do things that don’t bring them closer to their goals. They aren’t reactionary. They are always on offense.

Successful people understand that time is the #1 asset in life. It’s way more valuable than money or property. It’s the only thing they will never get back.

The most successful business owners are good at deciding how to spend their money and they are even better at deciding how to spend their time.

Are you on offense or defense in this game of life?

The defensive minded person is reactionary. Someone else has the ball and they are making the decisions. Someone else determines if it is a pass play or a run play. Something outside of my control dictates my actions, my schedule and my life.

The defensive minded person simply waits for things to happen and then tries their best to make the most of the situation. They are exhausted. Always busy but never getting much of anything important done. Pulled in a thousand directions.

Defensive people get a pass because they were going non-stop all week. They were stressed out moving quickly from one fire to another fire. Spending time on the important and the urgent stuff. Never taking a break to have some personal time. Always exhausted.

No points for playing defense.

Points for working on the hard stuff. Points for saying no. Points for taking control of your time.

No points for playing defense.

Playing defense is a safe place. Being busy is easy. Most people find security in being told what to do. No hard decisions. No forward thinking. Just live in the moment and react to what is in front of you.

Play offense instead.

Work on the stuff that matters. The important stuff that isn’t yet urgent. Solve problems way before they become raging forest fires. Make the one decisions that cuts out 100 future decisions. Say no to people or things who try to dictate your life and put you in a reactionary state. Spend some time each day forward thinking and planning.

Thats how you play offense.

Lets go a little deeper and give you something actionable. Next time you have a decision in front of you realize there are only two possible answers:

HELL YES or no.

There is no maybe. There is no yes. There is no okay. There is no I guess. You are either eager and excited to do it because it’s important or the answer is no.

I get it. We all get ahead in life, especially early in our careers, by saying yes to everything. Yes I’ll take on that project. Yes I’ll spend some time on that possible opportunity. Yes I’ll join that club. I’ll do it. Yes yes yes.

But as we all know this spirals out of control. Before we know it we are playing defense. Events every night of the week. Activities all weekend every weekend. Obligations at work that aren’t important to us and our advancement but somebody has to do them. Putting out fires because we ignore the small problems until they become big.

Step one is to lay out your 5 year plan.

When you have this plan in place you will begin to use it as a reference and framework for every decision you make in life.

When a decision presents itself ask the following question:

Will saying yes to this help me take a step closer to achieving my career or relationship goals?

If the answer is “HELL YES” then you say yes and you do the thing.

If the answer is no you politely decline the invitation. If the answer is maybe you politely decline the invitation. If its a guilty or emotional yes you politely decline the invitation. If there is pressure to make a quick decision the answer is no.

NOTE: I’m not asking you to be selfish. I’m not asking you not to help others. Helping other people and developing meaningful relationships should be a part of achieving your goals. But don’t let others take advantage of you. Don’t let other people disrespect your time. Saying no more often will actually allow you to do WAY MORE important work helping others and making a difference. Be selective with your time here.

Make time every week to work on things that will free up time in the future. Spend an hour making a decision now that will save you an hour a week for the next year. Make time for training the new employee so that new employee can save you 2 hours a day every day indefinitely.

Its all about shifting from spending your time on things out of your control to spending time on things in your control. To calling the shots when it comes to your own actions. From playing defense to playing offense.

The most successful business owners are good at deciding how to spend their money and they are even better at deciding how to spend their time.

A personal note:

Many people think I am very busy. I manage a lot at work. I race my bicycle and spend hours each week training. I release two podcast episodes a week and write a few thousand words a day. I brew beer and fish. I play guitar along with countless other hobbies. I read a lot. I spend a lot time with my family and socializing with my close friends.

I’m not busy. If a close friend comes to town I can clear several days with absolutely no stress. I can make time for a new opportunity in a heart beat. I can get obsessed with a new hobby for a few days or weeks without falling behind in any way.

I say no a lot. I don’t watch TV or movies (unless it coincides with quality time with family/close friends). I don’t schedule meetings. I say no to my family and friends when it comes to activities that I don’t believe are in the 80/20. I respectfully voice my frustrations when I feel someone isn’t respecting my time.

I focus on working on what I’m best at so I can be efficient and get a lot done in a short amount of time. I don’t nitpick and reread and reread. I’m not a perfectionist. I work really hard on my communication skills so I can successfully delegate and lead others.

I try to spend my time playing offense.

Are you on offense or defense in this game of life?

The defensive minded person is reactionary. Someone else has the ball and they are making the decisions. Someone else determines if it is a pass play or a run play. Something outside of my control dictates my actions, my schedule and my life.

The defensive minded person simply waits for things to happen and then tries their best to make the most of the situation. They are exhausted. Always busy but never getting much of anything important done. Pulled in a thousand directions.

Defensive people get a pass because they were going non-stop all week. They were stressed out moving quickly from one fire to another fire. Spending time on the important and the urgent stuff. Never taking a break to have some personal time. Always exhausted.

No points for playing defense.

Points for working on the hard stuff. Points for saying no. Points for taking control of your time.

No points for playing defense.

Playing defense is a safe place. Being busy is easy. Most people find security in being told what to do. No hard decisions. No forward thinking. Just live in the moment and react to what is in front of you.

Play offense instead.

Work on the stuff that matters. The important stuff that isn’t yet urgent. Solve problems way before they become raging forest fires. Make the one decisions that cuts out 100 future decisions. Say no to people or things who try to dictate your life and put you in a reactionary state. Spend some time each day forward thinking and planning.

Thats how you play offense.

Lets go a little deeper and give you something actionable. Next time you have a decision in front of you realize there are only two possible answers:

HELL YES or no.

There is no maybe. There is no yes. There is no okay. There is no I guess. You are either eager and excited to do it because it’s important or the answer is no.

I get it. We all get ahead in life, especially early in our careers, by saying yes to everything. Yes I’ll take on that project. Yes I’ll spend some time on that possible opportunity. Yes I’ll join that club. I’ll do it. Yes yes yes.

But as we all know this spirals out of control. Before we know it we are playing defense. Events every night of the week. Activities all weekend every weekend. Obligations at work that aren’t important to us and our advancement but somebody has to do them. Putting out fires because we ignore the small problems until they become big.

Step one is to lay out your 5 year plan.

When you have this plan in place you will begin to use it as a reference and framework for every decision you make in life.

When a decision presents itself ask the following question:

Will saying yes to this help me take a step closer to achieving my career or relationship goals?

If the answer is “HELL YES” then you say yes and you do the thing.

If the answer is no you politely decline the invitation. If the answer is maybe you politely decline the invitation. If its a guilty or emotional yes you politely decline the invitation. If there is pressure to make a quick decision the answer is no.

NOTE: I’m not asking you to be selfish. I’m not asking you not to help others. Helping other people and developing meaningful relationships should be a part of achieving your goals. But don’t let others take advantage of you. Don’t let other people disrespect your time. Saying no more often will actually allow you to do WAY MORE important work helping others and making a difference. Be selective with your time here.

Make time every week to work on things that will free up time in the future. Spend an hour making a decision now that will save you an hour a week for the next year. Make time for training the new employee so that new employee can save you 2 hours a day every day indefinitely.

Its all about shifting from spending your time on things out of your control to spending time on things in your control. To calling the shots when it comes to your own actions. From playing defense to playing offense.

The most successful business owners are good at deciding how to spend their money and they are even better at deciding how to spend their time.

A personal note:

Many people think I am very busy. I manage a lot at work. I race my bicycle and spend hours each week training. I release two podcast episodes a week and write a few thousand words a day. I brew beer and fish. I play guitar along with countless other hobbies. I read a lot. I spend a lot time with my family and socializing with my close friends.

I’m not busy. If a close friend comes to town I can clear several days with absolutely no stress. I can make time for a new opportunity in a heart beat. I can get obsessed with a new hobby for a few days or weeks without falling behind in any way.

I say no a lot. I don’t watch TV or movies (unless it coincides with quality time with family/close friends). I don’t schedule meetings. I say no to my family and friends when it comes to activities that I don’t believe are in the 80/20. I respectfully voice my frustrations when I feel someone isn’t respecting my time.

I focus on working on what I’m best at so I can be efficient and get a lot done in a short amount of time. I don’t nitpick and reread and reread. I’m not a perfectionist. I work really hard on my communication skills so I can successfully delegate and lead others.

I try to spend my time playing offense.

April 5, 2019 6:47 am

Silent partner in a roofing business?

I live in Seattle. My girlfriend’s brother has a lot of expertise in the roofing industry and wants to start a business with me. Heres the catch – he doesn’t have citizenship so he would need me to form the business, get insurance, run the administrative side of things, and set it all up. I have a full time job so I’m looking to do this on the side. He wants to get 80% of the profits since he is doing the work and give me 20% for doing the setup.

Oh man this is Juicy. I love the roofing business.

Lets start with my concerns:

A couple things you should know – roofing has the highest workers compensation rate of any industry in America. Its the only one higher than moving and storage. Its an extremely dangerous job. People die on the job. You’ll pay upwards of 40% on top of payroll in the form of workers compensation. So if you pay guys $20/hr to do the work you’ll pay an additional $8 per hour in workers compensation.

Don’t do a single job without liability and workers compensation insurance. Make sure to form an LLC for liability purposes.

You need to talk to a lawyer about the concerns sharing profits and ownership with someone who doesn’t have a social security number. I don’t know if its possible for them to be a part owner. I’m assuming they aren’t here legally or they would have a work visa and a temporary social? This is all research you need to do.

A hands off role with 20% of profits doesn’t sound worth the risk to me. You need to either be involved and own the business outright and set up a profit sharing plan with him or you need to not do it.

You are basically partnering so sit down and have the hard talks with him. You can set up performance hurdles to make it fair. If no profit he doesn’t get paid. If the business starts to get profitable he is paid a fair salary for his work (based on revenue and commission). Everything above and beyond that salary you get until your initial investment is recouped. After that you split the profit based on value added.

There is only so much value in doing the roofing. You could get the best roofer in the world for $75k a year. The real value is in building the processes and bringing in the business. If he is a competent business manager and can build out training systems thats a lot of value. If you are doing that and he is just on the roof sweating and thats his glass ceiling then that should be considered when sharing profits.

If I were you I would want to be very involved on the quoting and selling side of things and take more of the profit. An 80/20 split is in no way worth your time, effort or risk. Sit down and have the hard conversations with him and how you see it happening.

Lets talk about what I would do if you did decide to move forward:

You aren’t going to compete on price. Your competitive advantage is going to be a quick turnaround, ultra responsive customer serviceeager professionalism and quality work. If you are looking for the cheapest, we are not your company. If you are looking for great value and a quick timeline, we are your company.

You do not want to be a subcontractor. General Contractors only care about one thing – money. They will beat you up on price. Plus, acting as a sub does not put to use any of your competitive advantages. Your great website, your accessibility, your responsiveness, your professionalism, your customer service. You’re competing with the guys who don’t do any of that and its a race to the bottom. Don’t get involved there. Work directly with home and business owners who need a new roof.

Find your target customer. Homeowners? Business owners? Storm victims? Go and get in front of them with marketing. Find the homes in the high end neighborhood that are 20 years old and you know need a new roof.

Go and do some networking. Anybody who could potentially recommend your business you need to stop and see. Realtors. Home lenders. Insurance agents. These three could be huge. Go into their business and talk to them and drop off a card. Make friends with them. Try to refer them some business from your network and let them know you plan to do that. Get their cards and send them follow up emails. If you had great conversation with them send them a box of chocolates and a thank you card for referring business.

Consider working a niche. Maybe get really really good at working with insurance companies after storms. You can get customers a free roof if they sustain damage. That’s a good play and a skill most roofers aren’t interested in learning because it takes work.

Start a lean business and buy your equipment used so you can sell later if necessary without eating a ton of depreciation. Keep your expenses variable.

Do a market analysis and study competitors. Look for the best roofing company in the USA and model your business after them. Call them and play a customer. Learn how they charge and how everything works.

Get serious about content marketing and SEO. Nurture your google my business location. Build a great website full of amazing content. All the questions someone would ask when they are putting on their own roof, dealing with insurance, or whatever. Answer all those questions!

Make sure the employees are professionally dressed and have good manners when on the job. No smoking on the job. No using customers bathrooms. No untrimmed beards or showing tattoos. A collared shirt.

Quote high. Be okay losing most of the jobs you quote. Convert fewer jobs but make more profit on each. Make sure to do a phenomenal job and you’ll do great.

April 4, 2019 6:18 am

Small business content marketing (episode 37)

Show notes from podcast episode 37.

What is content marketing?

The practice of creating articles and videos designed to be helpful and of genuine interest to your target customer without explicitly promoting your services or products.

This is a case in point example of my favorite business principle of all time – adding value first. You are giving away value without expectation.

We talk a lot about doing the work that is important but not urgent. The hard work that other companies aren’t doing. The stuff that is important to grow and scale your small business. Content marketing is one of those things.

The good news is that content marketing is mainly implemented by hyper competitive online businesses and it is still virtually unheard of by all but a select few small businesses. If you do this you will be at a huge advantage when it comes to online presence and search engine optimization at a local level.

Most businesses write content like college kids network. Selfishly. They walk around with their hand out. Buy from me! Help me! Me me me me me!

I have news for you. The customers don’t care about you! They are selfish!

Think about the customer and their goals? What if a customer wants to understand a service before they buy it? What if a customer wants to make sure the service provider knows their stuff and is genuinely an authority that can be trusted with such an important job?

But what about the learners? What about the people who don’t want to buy yet and they are just researching and trying to learn something and figure out who they can trust? The people who will be customers a week from now or a month from now but aren’t yet sure who to pick?

These are the customers we’re targeting and this is how we can stand out with great content marketing for our small businesses.

A content marketing campaign is beneficial in two ways:

  1. Gain trust with your target customers and make them more likely to choose you among the crowd of pushy sales people
  2. Help you rank for target keywords. Get your company website on the first page of Google

Gaining trust – content marketing is a beautiful non-pushy sales strategy. Its an opportunity for you to prove to add value first for a potential customer in the form of knowledge. It proves to them that you know your stuff and that you are an authority that can be trusted and hired with confidence.

Google is getting smarter. It’s not just about keyword repetition, bolded headlines, links, alternate photo text, the quantity of reviews on your Google Location, etc. It’s about engagement and bounce rate. What does that mean? A bounce rate is the percentage of website visitors who leave your site after viewing only one page. Google measures this.

Say you google something and you’re looking for an answer to a problem you are having. You click on the first link but its a crappy website and isn’t going to help you but instead is just trying to sell you something. You back out after about 5 seconds and click on the second link. This one is helpful and you spend 5 minutes reading and browsing the site.

Google will recognize this and eventually put that second link you clicked ahead of the first. Google’s goal as a search engine is to put the most helpful websites at the top of search results. That’s what makes it a good search engine. It’s beginning to punish the selfish content writers who are only interested in selling something and reward the content writers who are trying to help viewers solve problems and find the information they are looking for.

The million dollar question – how do we create valuable, relevant compelling content on a consistent basis to our targeted audience to see some profitable action?

Step 1: Find the keywords your potential customers are using to look for businesses like yours:

Do people in your town search power washing, pressure washing or driveway cleaning most? Do they search lawn care, grass cutting or yard mowing most? What words do they use when they type? We don’t know so we need to do some research to find out.

Ahrefs.com is one great resource. Its a paid service that will provide search volume by keyword in your area so you know the most commonly searched terms. Its $7 for a 7 day trial on the site. Your freelance content marketing hire or SEO specialist will likely have an Ahrefs.com account and will be able to help you target the right keywords.

Trends.Google.com is a great free resource for casual studying. You can see what terms have higher search volume in a comparison to one another on a state by state basis.

Watch a YouTube video on Ahrefs and Trends and learn the ropes and how to navigate them.

Step 2: Research your competitors and their content:

Think of a question that a potential customer of yours might type into Google. Lets use the lawn care example again. Type “How to mow a lawn” into Google. The first result (if you skip past the videos on YouTube) is “how to mow a lawn – lawn mowing tips – Scotts”. The company that makes Scotts Turf Builder fertilizer and weed control products. Its a list of 8 tips on how to mow a lawn. Look at any nationwide home services franchise and you’ll see great examples of content marketing.

The goal will be to build out an article that is 10x better than that top result. A better guide means more value and more engagement from your potential customers. More trust from your potential customers.

You can use Ahrefs to analyze the keywords your competitors are ranking for.

Step 3: Think about the DIYers and build guides for them that answer their questions

Remember – someone searching for DIY is still a potential customer. They are just checking out their options.

Make a list of the many questions they might ask your customer service team. Make a list of the many questions a friend would ask you if they were about to try to do the service themselves.

Instead of the sales oriented tight lipped approach you should spill your guts trying to help them. All the knowledge you’ve built up over the years about your specific service should be shared. Build the best resource that you can. Use your keywords and your city name in the title and body of your article. Spend some time on making great content that will truly help them. Next time you offer your service make a little how to video to accompany the article.

Step 4: Intertwine your guides and landing pages with links

Don’t make your landing page 1000+ words. Link to your guides so curious customers can click on them and read more if they desire. Also consider putting them lower on your page so they can stumble upon them as they learn more. Link from your guide to your other guides and other landing pages. Link from your landing pages to other landing pages. Anywhere that you can provide a helpful link with more information you should do so.

Notes:

Content Marketing is a marathon, not a sprint. It takes a long time to kick in and achieve desired profitabile actions from your customers. It’s all about consistent delivery over time. It takes at least 9 months to start feeling the positive effects of great content marketing on your bottom line. It takes an average of 13-17 months. That’s not quick. You have to be willing to delay gratification and do the work that is important but not urgent.

Since this takes time it should be one of the first things you do as you explore starting a business. Don’t wait until you are fully operational and desperate for customers to pay the bills to get started on this strategy. Start it day 1. Its low risk if you do the writing yourself. Worst case that content sits and ages well and the phone starts ringing a few years from now and you re-visit the idea.

If you aren’t a great writer or you just don’t have time don’t be afraid to outsource this to a freelancer who specializes in content marketing. Look at it as an investment. You might need to spend $30 a day on Google Adwords for eternity to get customers or you could spend $1000 a month for great content marketing for a year and be on the first page of Google indefinitely. I’d take option #2 anytime.

Don’t use sales lingo. Write as if you are writing to a friend. No need to hire me. This is everything I know and I just want to help you with no expectation.

Think quality over quantity. It’s much better to put out one great article a week for two years than one small brief not-noteworthy article every day. The ultimate guide to a weed free lawn in Bloomington Indiana. The ultimate guide to a perfect landscaping project in Bloomington Indiana.

Top lists and tip lists are great. 10 tips to a better lawn in Bloomington Indiana. 10 ways you can keep your lawn weed free in Bloomington Indiana. The 10 most common weeds and how to prevent them in Bloomington Indiana. You get the point.

Don’t forget YouTube videos. It’s the largest search engine in the world and a great way to show up on the first page of Google. Don’t believe me? Search “Indiana University Student Storage” on Google and take a look at what shows up. Thats my partner Dan doing a little talk about our business. We made one of those for every school and within about 6 months they were on the fist page of Google. Is it great content? We definitely should have done better. But it has helped us over the years no doubt.

Evergreen content is best. Content that will always be relevant and will drive traffic over time. Don’t put a time stamp on content or talk about information that has a shelf life. Write something that will still be a valuable asset a few years from now.

This is a very dense topic and I’ve barely touched the surface.

Some additional information on this topic – Joe Pulizzi is widely known as the premier authority on the subject. He has a great book called Epic Content Marketing. It’s a little older now so I’d recommend hopping on YouTube and searching “Content Marketing Strategy by Joe Pulizzi”. Phenomenal video that touches on a lot of these topics, why it’s so important and how you should think about it. Go on Google and type in “The Ultimate Guide to Content Marketing”. I guarantee you that first result is a great piece of content.

April 2, 2019 6:37 am

The 5 year plan.

5 years is plenty of time to design the life you wan’t. You don’t need to work 45 years just to retire to then finally get to design your schedule and do what you want to do.

Five years from now, if you have the best 5 years of your life from today forward, what does your day look like?

If you had the opportunity to design your life and more money wasn’t a necessity and a job wasn’t a necessity what would a day look like?

What do you spend your time doing? What is your schedule like? Who do you spend time with? Where do you live? What activities do you do?

How much money do you need coming in on a monthly or yearly basis to live that life?

Make it happen. Make every decision (in the short term) with these goals in mind. If an activity doesn’t get you closer to your goal then the answer is no.

The first thing you need to do is really think on this question. What 20% of your activities give you 80% of your joy? Who is most important to you and what relationships do you want to invest in?

Wake up tomorrow morning an hour before you have any obligations. Don’t check your phone. Don’t check your email or social media. No input.

Sit down and think and write about your goal. Answer these questions. Design your life.

Then work backwards and make it happen.

March 31, 2019 8:11 am

The dangers of relying on a third party platform to drive revenue (episode 39)

It’s dangerous to depend on someone else’s platform to market and sell to your customers.

We’ll start with a few stories.

Facebook first.

In his awesome talk on content marketing, Joe Pulizzi told a fascinating story about Starbucks and their Facebook following. They spent 10 years spending big money each year, I’m guessing 10s of millions of dollars, getting followers on Facebook. The plan was simple. Get followers and then reach them organically and drive value over time.

Right now they have 36 million followers on Facebook. They are in the top 5 of all business pages on Facebook when it comes to likes.

Well it turns out Facebook likes making ad revenue. It turns out Facebook owns the platform and has all the control. Slowly over time Starbucks started noticing their Facebook posts were only reaching 1% of their following. How could this be? We spent all this money to get these followers and now we can’t reach them. Facebook’s response?

You can reach the last 99% if you boost your posts and continue to pay for ads. Facebook has every right to do this. Its their platform. Its their algorithm. They have the users and they call the shots.

Starbucks spent millions getting the followers on someone else’s platform with no control and now they are paying again to reach them.

Organic doesn’t work anymore. Facebook and other social channels care about one thing. Ad revenue. They’ll find a way to keep making you pay. Advertising may still be a good decision for your business but you can kiss organic followers goodbye.

You have no control over your own destiny.

Now YouTube.

Another great example. People are building big businesses putting content on YouTube and depending on YouTube to allow them to get a cut of the advertising and depending on YouTube to continue to let their videos show up in the search rankings.

They’re now trying to get all content makers on YouTube Red. No choice. Do this or die. What if tomorrow you wake up and YouTube changed their search algorithm and your organic traffic stops. What then? You are SOL and your business is dead. What if YouTube decides they want more of the advertising revenue? What if they cut your take by 50% and your revenue cuts in half?

They control the platform and they own the platform. They have every right to make changes and you are along for the ride. Sitting, hoping, waiting, wishing.

And Google.

Lets talk about Google and the August 1st 2018 algorithm update. Earlier this year on Reddit I saw several posts on the entrepreneur thread from bloggers desperately trying to figure out what happened to their traffic. Overnight it was gone. Overnight they had no way to pay their staff. Overnight their revenue was halved or worse.

Turns out somebody at Google thought it was a little bit dangerous to have all these health blogs touting aggressive diets, unique supplements and generally a ton of medical advice by people who are not doctors. All of this right on the first page of results for some big keywords. A lot of click bait titles with totally false information that was contradicted by actual medical doctors and journals were ranking really high.

So they changed it on August 1st 2018.

All of the sudden you needed to have your outlandish claims backed by real science. Links from real journals. Oh baby. There was a mad rush to recover and a big business developed sourcing subject matter experts who could validate all the claims. Simply put it was a huge mess for these people.

Their entire business was build depending on Google’s rankings to make money. Not their algorithm. No control. Risky.

Can’t leave this without talking about the fall of Yelp. For years it dominated reviews of restaurants and basically all home services. It was on the first page of Google when you typed in basically anything. Went public in 2012. Share price went from $20 to almost $100. Big money was made.

Then Google Maps and Google in general started to have a bigger stake in reviews and selling ads to businesses looking to reach consumers. Now remember Google is Yelp’s primary source of traffic. Yelp makes money by getting a click from somebody searching on Google and then selling ads to businesses looking to reach them. Can you guess what’s coming?

Google owns the search. Google owns the traffic. Google owns the algorithm and Google likes to sell ads and make money.

So they did what any smart business would do and started to cut out the middleman. They started to rank yelp lower so more people were using the Google Reviews to decide on businesses and they could sell more ads.

I give it 3 years or less until Yelp is in bankruptcy and 5 years until its a distant memory on the 5th page of Google results. They have a business that is largly dependent on another business for its traffic and thus revenue and it turned out that other business became a competitor.

Brutal brutal turn of events for Yelp and another example of the dangers of building on someone else’s platform.

Along those same lines I personally believe that lead generation is next. People are tired of seeing Home Advisor, Thumbtack, Angie’s List and other sites that offer very little in the way of value and are direct competitors to Google. Nearly every business has Google reviews now. If you have a bad experience and a company rips you off you can leave a Google review. You don’t need a service like Home Advisor or the others to tell you who is trustworthy – Google is starting to do that.

Add to that the fact that Home Advisor isn’t actual value. Whoever pays to get on Home Advisor and whoever pays for ads shows up. Same with Thumbtack. Same with Angies List. Its all about advertising first and value second.

Three things are going to kill these companies. Google is a direct competitor, Google likes selling ads and Google is starting to rank valuable content higher than the sites that game the system. It’s only a matter of time until those sites die just like Yelp did.

Amazon – the biggest and baddest of them all.

Lastly let’s talk about Amazon and the big businesses that are built around being a part of that platform. Let’s run a hypothetical.

Your business is going well and you are selling a lot of stuff on Amazon. You have millions in revenue, a full time staff and maybe even a warehouse or garage full of stuff. You have a very profitable item that is on the first page of Amazon results – things are going well. Maybe you have even invested a lot in getting reviews and building that ranking.

You wake up one day and your item is now on the third page of results. On the first page is the same item branded “AmazonBasics”. Amazon noticed. They tracked the data and the volume. They calculated the profitability. They entered the market as your competitor.

They control everything. You control nothing. They crush you. Your warehouse stays full. You lay off your employees. Hopefully you salvage the business in time to pay all of your bills and keep your home.

So how can we fight back?

You have to find a way to build a business that isn’t overly dependent on one customer acquisition method. Is 95% of your sales derived from pay per click advertising? What will you do when that click goes from costing $2.50 to $5 and your margin is gone? Will you be able to salvage something out of the company or will you go bankrupt? That would keep me up at night.

I’m not suggesting you don’t double down and take advantage of certain marketing channels when they’re working. Just be mindful of the risks of dependency.

Businesses with sales that are driven by actual interaction that goes beyond a click or a search are most insulated from the above risks. If you can speak to your customers on the phone or by email it’s a lot easier to control that and nurture that on your own terms.

Taking that one step further if your business reaches customers on a local level and those customers can interact with each other in the form of word of mouth marketing you are further protected. Your customers are not only face to face with you but they rely on each other for recommendations and there are synergies with all the different marketing drivers.

As part of the strategy you should still reach your customers physically with good old fashioned targeted marketing. Where are your customers and what other businesses do your customers interact with? Go see them in person, meet them and sell them on your service or referring your service (u/mmaher13).

You can’t get away from being dependent on Google so its important to understand it. Google is leaning more and more towards ranking value over other factors. Make sure your content is valuable and you put that value ahead of your sales pitches and your agenda. Build your website and YouTube library around what the customers want and you’ll continue to thrive and you’ll remain protected to some degree.

Drive email signups and get subscribers on a platform you can control. You can email customers and email isn’t going to change. Don’t focus all of your energy on building followers on platforms you don’t control.

If you must operate a business that depends on things outside of your control be mindful. Run a lean business. Keep your expenses variable and avoid overhead. Buy equipment used so you can resell it without eating depreciation. Keep your employees aware of the risks. Avoid lifestyle creep.

March 29, 2019 8:15 am

How to keep going when business isn’t fun anymore (episode 36)

Show notes from podcast episode 36.

I recently read The Dip by Seth Godin. A short book (about 75 pages) that took me just a few hours to read. I took some notes and did some thinking and writing. Let’s talk about how it relates to entrepreneurship.

Everything in life has a dip. At first it’s fun and exciting. You make a lot of progress really quickly. The learning and early achievements keep you engaged.

Then the dip happens. The learning slows down. The excitement wears off.

There is a dip with everything in life – especially the things worth doing. Think about a new relationship and the excitement and bliss that comes along with that. Then once the new wears off relationships take work and dedication like anything else. Think about weight loss. Losing that first 10 pounds is easy and exciting. Sometimes you can do this in a week or two. Losing that last 10 pounds can take months of sacrifice. Picking up any hobby. Doing any job.

As we’ve talked about there is no perfect opportunity. There is no home run. There is no open uncontested market where we have a red carpet laid out in front of us to success. It takes hard work for a long time to grow something special and build the life we want.

The dip is incredibly real in entrepreneurship. Once the fun and excitement wears off it becomes work. SEO takes a long time to kick in. Word of mouth marketing takes momentum and a solid customer base before it starts to work. You may need some degree of volume before you reach profitability. It’s a long term game and it isn’t always fun.

Winners know when to buckle down and push through the dip and when to fold the cards and move on. Winners know when to turn down opportunities. Winners have the guts to stick with the right stuff and give up on the wrong stuff and the logic to make good decisions on which is which.

Its all about consistent delivery over time. Joe Pulizzi, the author of epic content marketing talked about the content marketing timeframe. The amount of time between when you start delivering consistent valuable content to when you can monetize it. The shortest time frame is 9 months. The average time frame is 15-17 months. You have to add value first and build that base before you can profit.

Business is no different. You are going to have to work hard for 9 months before the traction starts to pick up. Before the SEO kicks in. Another year before the word of mouth marketing takes off. Another year after that before you can build out systems and step away and start spending your time doing what you want. Its a long game.

Dan and I didn’t pull any money at all out of Storage Squad for the first three seasons. We put every dollar back in. We did a food budget for $5 per day when we were living in his uncle’s house in Chicago working for a year. We slept in warehouses or on friend’s couches because we couldn’t afford hotels while we were on the road.

Things move very very slowly for a long time and then they all happen at once. Its crazy how this works. You might be working on several different business deals at once and they all move very slowly. Some fizzle. Some continue to develop. Working hard on processes or just simply putting your nose down and working for a little while to push through when all of the sudden a lot of big things happen at the same time. I think this is common among entrepreneurs and most people feel like they have big wins suddenly and in rapid succession when you least expect it.

How do you know when you should push through?

Before you start you need to do a thorough market analysis to verify that the customers are plentiful and the competition is weak. I’ll quickly go over the basics:

Make sure competitors are out there doing exactly what you are thinking of doing. This means there is a market for it. This means customers exist. If there are no competitors you have a new idea. New ideas are risky and I don’t like spending a bunch of time and money on something that is risky. You are stuck trying to convince customers that they need what you are offering. You are creating a market. That takes money and risk and I don’t like it.

Make sure the competitors have more customers than they can handle. The best way to do this is call them on the phone and find out their lead time. You can get a feel very quickly for their volume. Luckily – most in person services are growing as companies and people outsource more and more. This is a good sign. Check this box.

Find some flaws in the competitors that you can gain a competitive advantage on. My favorite here is online presence, content marketing and customer service. You need to be able to be more accessible, have more eager professionalism and less lead time. People are willing to pay more for service tomorrow vs next week. Make sure there is a hole there.

If you haven’t done this market analysis stop now and go do it. You can’t make an accurate decision without it.

Is the light at the end of the tunnel worth working towards? What are the odds of success?

This is why I hate new ideas. The gains can be massive but the odds are against you. Working hard for years and investing money on a 5% chance of success is not a game I’m interested in playing. That light at the end of the tunnel is not worth working towards – I’m quitting and moving on.

Do you understand that value isn’t the same as money?

The hard and important work is understanding value. It’s easy to ignore value because we can’t see it, touch it or count it. It isn’t liquid this very moment. In order to trade it for money we need to nurture it and invest in it and make it legible to others. The successful entrepreneurs know this all too well. They know how to recognize it. They know how to measure it. They know how to grow it. They know how to invest in it and build it.

What is your definition of success?

How much money do you need to live the life you want? What is your number? Get this number and work backwards. Can this business achieve this for me? Professional track and field. If the answer is no I’m quitting and moving on.

How good do you need to be to get there?

This is why I don’t like online businesses. You can definitely win and people do win big but its hyper competitive and you have to be in the top 1% to win. I don’t like those odds.

An important part of this is that you have to realize not all value is measurable in money and this business doesn’t have to be the end life goal. Too many people don’t start or finish a business because they have big dreams to change the world.

Understand that your business is simply a stepping stone to what is next. You are doing the long hard work without instant gratification so you have more OPPORTUNITY later and you LEARN A LOT. Your network will grow. You will learn more about management. You will buck your 9-5. You will do something bigger and more specialized next time. You will make more money down the road. You don’t need it all right now.

Not every dip is worth pushing through. Time is your most valuable asset and it’s very limited. When should you give up?

The people who win in life are really good at making the decisions to give up.

How do you frame the decisions and what should you keep in mind? When the going gets tough how do you make the decision?

Set measurable goals with time stamps. Don’t just fly by the seat of your pants and treat every day as a new day. Think a few years ahead and work backwards with measurable goals that you can quantify. Customer numbers. Revenue figures.

Don’t be afraid to cast a wide net and specialize as opportunities develop. Look at all the side gigs I’ve explored simultaneously. Be careful not to spread yourself too thin and have the courage to say NO when your energy is best used in the most promising endeavour.

Keep your emotions out of it. It is so easy to pursue something because its your passion and not because it makes logical sense and there is market need. Be a stoic and look at things with a clear mind. This is absolutely critical. Fear, anger, greed, passion can all cloud your decision making.

Avoid the sunk cost fallacy. Don’t waste another precious second if you realize the outlook is bleak and its time to move on.

Trust the process. Trust your instinct. Power through it if the light at the end of the tunnel is bright and the odds of reaching it are worth pursuing.

Embrace the struggle and realize that if it were easy everyone would do it. It’s the dip that creates opportunity and scarcity. There is a hole in the market precisely because of the dip and the long period between initial launch and profitability and sustainability.

I’m at the dip with this podcast. The excitement has worn off. The number of downloads over the last few weeks has leveled off and even dropped a little. I’m investing about 5 hours of my valuable time per week in this – so how do I frame the decision if its still worth it?

I came into this knowing that the dip would happen. That it wouldn’t be fun all the time. That it would take years to gain a significant following.

I started with a goal. In 5 or 10 years I want to be a public speaker, a teacher and a writer. And I want to do this for fun and not money. I’m on a mission to spread this type of entrepreneurship to people who initially just glossed over it and wrote it off. I want to leverage this platform someday to help and influence a lot of people and help them change for the better.

What are the benefits? I’m learning a lot about myself and entrepreneurship as I study and prepare the content for this podcast. My thoughts and life goals are more organized. I’m getting better at speaking and presenting my thoughts to listeners. I’m getting better at telling stories. I’m getting more confidence. All of this translates directly to my business and personal life as a major benefit.

I’m meeting amazing people from all over the world already. I’m developing relationships with people who have a very diverse skill set and we may be able to collaborate someday.

So I’m sticking with it and fighting through the dip because it’s worth it and I am certain that 3 years from now I’ll have some opportunities that will make it all very worth it.

March 28, 2019 6:21 am

Focus on value – not money (episode 38)

Show notes from podcast episode 38.

I talk a lot about doing the important but not urgent work it takes to be successful as a business owner. I believe it takes a certain mindset to know what the hardest work is or even exists and needs attention. That’s the type of work that separates the people who run and scale successful businesses and those that fail or simply create themselves a job they can’t escape.

As an entrepreneur it’s easy to get caught up focusing on money and profits and what you can buy with the money and profits. After all – money is tangible. We can see it in our accounts. We can spend it. We can buy things we like.

The hard and important work is understanding value. It’s easy to ignore value because we can’t see it, touch it or count it. It isn’t liquid this very moment. In order to trade it for money we need to nurture it and invest in it and make it legible to others. The successful entrepreneurs know this all too well. They know how to recognize it. They know how to measure it. They know how to grow it. They know how to invest in it and build it.

After all – money isn’t the same as value. It just moves value around. Value is different for all people. The value is in the things, the time, the experiences or whatever you decide is valuable to you.

So why is this important and how does it relate to entrepreneurship?

If you think about life and business in terms of money it’s easy to be short sighted. It’s easy to make decisions based on maximizing near term money. This is why so many people trade their time for money and watch 5 hours of TV per day. Work an hour now get paid $15 now. Do what I want tonight. Think about tomorrow tomorrow.

Value is different in how it relates to money. Value is money, happiness and opportunity later. Add an hour worth of value now and get paid $20 per day for the rest of your life starting a year from now? Add value now and enjoy opportunities two years from now? Add value now and spend your time doing what you want to be doing five years from now?

Estimating and determining how much value is being produced is a skill and a practice. It takes forward thinking. It takes making educated guesses. It takes thinking 5 years down the line at all times.

So you started a business. Is the goal to maximize profits today? Well that would be nice. But if you think like that you’ll give up the second week when you realize that’s not how entrepreneurship works. It takes focused energy over a long period of time.

There are many many examples of value. I’m only going to highlight a few. A few things that you can do now that will add value that aren’t immediately tradable for money.

Time saving systems

Time is money and most people don’t realize that. Why else would the average person waste so much?

Entrepreneurs understand that anything they can do now to save them time later is extremely valuable. While it might not directly affect the bottom line right now it will definitely do so over time.

Make the one decision that cuts out 100 future decisions. Do the one task that cuts out 100 future tasks.

An employee training video series is one of many great examples of the value mindset when it comes to time savers.

Making a youtube training video series for your employees might cost you a lot of time in the near term. A typical small business owner might not see the reason to do it. It’s important but not urgent. It won’t directly lead to higher profits or more customers. It’s not measurable in dollar signs today.

It’s the one task that cuts out 100 future task. Instead of running through the 2 hour training spiel with each new hire once every two weeks for the next two years you can spend a full day one time and have that asset forever. Instead of using the emotional and mental energy putting a new employee through the process you just sit them down at a computer, tell them there will be a quiz afterwards and they are expected to ask 5 questions so they better take notes and you get back to work.

So instead of spending 104 hours over the next two years training employees you spend 8 hours one time and you have 96 hours over the next two years to do other important things to grow the business. Thats long term value.

Quality improvements

Not only does a training video series save you time but it also increases the quality of the training and thus the work drastically. The video can be perfected. No stutters. No missed topics. No unclear statements. The employee can pause, rewind, take notes and revisit later if he or she has questions. Simply put – it’s a lot better end result. Not measurable now – but measurable over time in value.

Quality control is another great example. Maybe you put in a system that requires an employee to upload photos and notes of their work for management review and record keeping. In the near term this only slows you down but in the long term it would prevent complaints, refunds, negative reviews, unhappy customers and all the administrative headache and time associated with dealing with these things. Thats long term value.

Long term profit potential

Money is here, now, what have you done for me lately? Value is measured in long term potential.

Amazon is the classic example of this – it’s one of the most valuable businesses in the world and it has yet to make a profit. Its wildly profitable in the United States but it continues to make long term investments overseas with the goal to have even greater profits later. The markets recognize this potential and this value and the share price reflects that.

It’s the marshmallow game. Eat the marshmallow now or wait 5 minutes and get two marshmallows.

Dan and I operated Storage Squad basically at cost for several years knowing there was long term value in having brand awareness at each school we operated at. The volume, while not producing profit now, was worth something later. We would have had a really hard time growing the business if we priced our service at market rates right off the bat. We learned the systems, reinvested, gained momentum, added value first and now we are enjoying the fruits of those sacrifices.

The longer you can go without pulling money from your business the better off you will be and the faster you will grow. Either invest in volume by offering a low cost service for a while or re-invest the profit back into the business to build systems, brand awareness and set yourself up for future profits. Thats long term value.

Recurring business

If you are lucky enough to operate a business with recurring revenue on a scheduled basis then you have serious value in each signed on customer.

The self storage business is a perfect example of this. The average self storage customer stays in their storage unit for 18 months. That means they’ll pay the rent each month 18 times on average. Many others will stay for several years.

The big storage players recognize this so they are willing to spend big bucks on marketing and offer deep discounts to get customers in the door. They understand that they don’t need to profit on customers month 1 or 2 but they can wait for months 3-18 to profit and there is significant value in waiting a while to cash in.

The mom and pop operators nickel and dime the tenants upon move in. A $20 admin fee. A required $20 lock fee. A security deposit.

The real operators make it basically free to move in and offer a free month. They understand it’s not about profit right this second. Its about long term value.

Adopt this mindset in your business.

Open market resale value

It’s easy to forget that your business (if built the right way) is a valuable entity that someone else could buy from you down the road. The value in the business is gained over time and isn’t liquid or measurable in money in the early days. But that doesn’t mean its not there.

Expanding on the previous point, if you have a book of recurring business it can be very valuable to a competitor or potential purchaser. Getting customers is one of the hardest parts about business.

Say you spend 4 years building a small business from scratch and then you sell the business for $500,000. Thats an additional $125k a year in value you have added over time above and beyond profits and future profits. Thinking in terms of value vs money in this sense is a really good way to push through hard (or tiresome) times when the excitement wears off and you have to put your head and work through the dip.

Experience

Learning and getting comfortable with business is half the battle. This is why I’m such a firm believer in starting small and starting in college. Just get the toes wet with something low risk.

I believe that if any self made wealthy individual lost it all it would only take a few years for them to get wealthy again. Knowing how value works and how to create it and multiply it is a skill that you can only fully understand by practicing.

Your first business won’t change the world. You shouldn’t try. You should use it to learn and get better and treat money as a means to an end. The sooner you can stop relying on a paycheck from somebody to live the better.

Network

We’ve talked about networks before. If you don’t bring anything to the table a network is useless. Your network grows as you gain experience and skills and – you guessed it – can add value. When you get really good at something powerful people who need your expertise start to show more interest in working with you. They’ll invest in your next company if you have a track record. They’ll partner with you on the next real estate deal. Thats long term value.

A few side benefits:

Understanding value separated from money can help you make very wise purchasing decisions. If a 5 year old base model truck and a brand new loaded truck have exactly the same utility and value but one costs $12,000 and the other costs $55,000 a wise entrepreneur won’t think twice. It’s easier to take emotions like ego out of the equation when you look at something in terms of value vs monetary price.

Understanding value can help you set priorities and goals in life. Money is simply a means to the end. Value is up to you.

Be careful.

Early on its easy because you have no profit. You are forced to think in terms of value. As you gain momentum and money starts to appear it gets harder. There is a lot of pressure to focus on money alone.

Its harder to focus on long term value when money is easily gained, especially if investors are involved. They want money and they want it now. What value was created that ultimately lead to that money and how to create more of if isn’t always obvious.

Understanding that something is valuable and working hard to make that value manifest itself in the form of money over time is the hard work of a successful entrepreneur.

Want more? Subscribe here to get short, concise emails from me once a week to help you build a better business. I also share a business idea like this each week to get you fired up and get your gears turning.

March 27, 2019 6:45 am

Home painting startup guide

Doing this while you have a full time job is the perfect way to start. More on that here.

Step 1: Do a quick and dirty market study – start searching and calling competitors. Use trends.google.com to find out which company in your town is the largest (most search volume) and study them. Are they doing digital marketing? Are they putting out good content (content marketing) on their website? Call them and play a customer. Ask them 100 questions about their process and their lead time. Lead time is the most important. If they are booked out a few weeks you know they are overloaded with customers. Thats a good sign. Move on to step 2.

Step 2: Buy a web domain and hosting for $1.99 per month and build a WordPress site. Get a Google My Business location at your home. Get some reviews on here as fast as possible. I wrote down all the early tools I used here if you’d like to check it out. Google is going to power your business early on. Get a logo and some door hanging flyers put together using a freelancing site. Get your logo embroidered on a nice polo shirt.

Step 3: Write some great content focused around keywords in your town here. Use ahrefs.com to research the keywords you want to target and build some DIY guides for homeowners in your town using those keywords. Some really useful stuff that people will engage with. Thats content marketing and its the best way to get a leg up on google. More on that here.

Step 4: Consider getting a part time for a painting company that specializes in interior and/or exterior on the weekends. Get a feel for the sprayers, rollers equipment, methods and get better at painting. Speed is the key in this business. Offer to do some painting for friends for free (if they buy the paint). Get those friends to take pictures of your work and leave you a nice detailed review on your Google My Business location. Get at least 5 reviews. Have them call you and get directions to your location and click through to your website before leaving the review so Google knows it isn’t fake.

Step 5: Marketing. Watch Zillow and Realtor.com and filter for homes that are recently sold in your target areas. New homeowners are exponentially more likely to want interior and exterior painting services than a random joe off the street. Put on your polo and a pair of khakis and go to the homes that recently sold and knock on the door. Smile at them and shake their hand firmly. Tell them about yourself and that you’d love to offer them a free quote to touch up or re-paint some rooms. If they don’t answer hang the flyer on the door and go to the next house.

Go to a paint store and make friends with the employees there. Give them your business cards and your flyers and ask them to spread the word. Offer them $20 cash each time they bring a customer that says they sent you.

Get some nice lawn signs made and ask customers if you can put them in the lawn. Some will let you if they like you. If they don’t offer them a discount on a future painting.

Ignore getting a social media following. Not worth your time or money. Post videos of your work on youtube with local keywords instead. Experiment with social media marketing and PPC marketing by hiring a freelancer who specializes in this sort of thing.

Get creative with your marketing. You know where your customers are and who your perfect customer is. Go find them.

When you get some interest move on to step 6.

Step 6: Purchase used equipment and a cargo van. Here is my used cargo van buying guide (i’ve purchased 15 or so used vans all under $7500 and they are amazing assets. Get a sprayer, rollers, brushes, a ladder etc. You’re about ready to go.

Step 7: Housekeeping stuff. Register with the state as a sole proprietor and get liability insurance. Before you hire your first employee get workers compensation insurance and consider incorporating. Get accounting software like quickbooks and outsource your payroll to a service like Gusto or Paychex. Keep very detailed records of everything and read this book. Consider hiring a bookkeeper but make sure you understand most of it yourself as well. Become a licensed contractor in your state.

Step 8: Get out and paint.

A few notes:

Its competitive. A lot of companies are painting. Answer the phone every time with friendly, eager professionalism and enthusiasm and you’ll be in the top 10%. Nurture your Google Business location. Its your most important asset. Reviews with photos are worth 10 regular reviews.

Play around with the pricing you charge. Price your time at what you estimate would be $40 per hour at first but make sure to charge by the job and not by the hour. You will get better at quoting over time and you will also get much faster at painting.

When you start to get some momentum set up a CRM like Jobber. It allows you to look way more professional than you are. Do all of your billing online. Attach photos of the jobs as they are completed.

You are not going to compete on price. You are going to compete on speed, professionalism, customer service and quality. They are going to like you as a person and want to do business with you. Learn more about this concept in my episode#13 “never compete on price again”.

How about a text message when you are on the way to service a customer? How about a link in that text to a picture of the smiling clean cut person who will be stepping onto their property? And a note about what you can expect from the person and how the appointment will go? How about instead of a t-shirt and dirty jeans you have a collared shirt and khakis? How about hair up in a pony tail, tattoos covered, and beard neatly trimmed? How about a giant smile, a firm handshake and an enthusiastic opening statement?

Eventually you will get some momentum. You will be able to upgrade your equipment and get a nicer sprayer. You’ll need to hire some help on the weekends you work. Pay well, $15+ per hour, and get competent people. Oversee them for a while until you trust them to paint without you being there.

Avoid being a subcontractor. General contractors only care about one thing – price. You aren’t competing on price. You are adding service the the equation so your business only deals with the customers one on one.

Focus on what you do best and outsource everything else.

Form a personal relationship with your customers. Know the names of everyone in the family. Show up with a teddy bear for the little guy. Send a thank you note a few weeks after the job.

Maybe partner with a few realty shops in town or watch the MLS and visit homeowners the week before an open house. A home looks a lot newer with a fresh coat of paint. Use google maps and street view to quote exterior jobs instantly over the phone with customers.

Consider learning Spanish so your customer and employee base is expanded.

Consider expanding to other services like sealcoating and deck staining. Partner with deck builders and pavers and send them business and they will return the favor by sending business your way.

Eventually you will build a great little business. You will compete on speed and quality and not price. You will charge more than the average joes who offer painting on craigslist and people will be happy to pay it. You can chose to stay small and charge a high price or try to grow and scale the business.

“On demand” is going to be your competitive advantage so you can charge a higher price. Make sure you can offer next day service or same day service. As soon as you get too busy to do that you need to raise your prices or hire another employee. Make sure that person is presentable and clean cut. Simplify the job so your employees can thrive. Train them to do their core task really well. Don’t ask them to do 20 things or they’ll do them all poorly. Don’t forget workers comp.

Now spend all of your time answering the phone, dealing with clients, and quoting jobs and managing the marketing. Build a series of youtube videos targeting your city and the keywords so you show up on the second largest search engine in the world (Youtube).

When do you quit your job? That is all up to you. Lean out your life and your business so its less risky and you can get by on earning less. Stay lean as you grow and keep your expenses variable so you can change, pivot and close up shop if things go poorly.

Don’t like painting? Check out this list and take your pick.

March 26, 2019 5:24 am

15 (not so common) principles of entrepreneurial success

1. Add value first

Gain trust by providing something of value first without expectation. This gets you very far with customers and personal relationships. Don’t squeeze your customers for every penny, especially early. Too many people are tight lipped with helpful advice. Share it. Gain trust and thus loyalty and profit later.

2. 80 percent of your results will come from 20 percent of your effort

Same with profit and customers. Don’t get lost in the weeds. Work in your wheelhouse and continue to double down on what is generating the highest ROI for you and your business.

3. Say NO more often

Early on saying yes is what leads to small wins and momentum. Casting a wide net early on can be a great strategy. As you get more successful guard your time and stay focused. Scope creep is a real thing with all business. Don’t be afraid to turn away customers to stay focused. There will be many many customers who reach out to you that aren’t in your wheelhouse and your service isn’t for them. Tell them so and focus on the people who you built it for.

4. Outsource your weaknesses

Don’t try to be a jack of all trades – you’ll end up being a master of none. Get really really good at what you do best and outsource everything else.

5. Start small and start local

You don’t need to touch millions to make millions. Start with 10 true customers. Then 20. Some great businesses can be build with 100 true fans. Don’t try to build your product/service for everyone or it will end up not working for anyone. Customers want you to specialize.

6. Passion doesn’t move product

Too many people start businesses based on their own selfish desires. If you are passionate about it chances are so are thousands of other people. The market doesn’t care what you want to spend your time doing. Build a business based on a gap and a need. Don’t try to turn your passions into business. Be passionate about building something and entrepreneurship. Think with your head – not your heart. These businesses are targets for passionate illogical people so be careful.

7. Ego is the enemy

A lot of business is being in the right place at the right time. An early win can lead to an amplified failure. Your ego can lead to filtering the incoming information based only on what you want to hear. It can cloud your judgement. Being right is more important than finding the BEST solution. Stay humble. Encourage those around you to challenge you. Change your mind quickly and often if the data points to it.

8. Work on the stuff that is important but not urgent

Everybody works hard. You can’t succeed by out working the next guy. You have to work on the things that are important but not urgent. Make the decision that removes a thousand future decisions. Think ahead. Do the uncommon work.

9. Its not about finding great people. Its about simplifying the job

I know there are exceptions to this. But to do anything at scale you need to simplify what you are asking out of your employees. They need to specialize. Ask them to be very good at one or two things and ignore everything else. Set up your systems so NORMAL people can do very well at your company.

10. Keep your emotions out of your decisions

Be a stoic. Think logically and calmly in the face of stress, uncertainty, anger and fear. This is the skill that will get you very very far and save you tons in damage control. Read Ryan Holiday’s The Daily Stoic and The Obstacle is the Way.

11. Don’t sleep on service businesses

Choose your competition wisely. Its a lot easier to compete on a local level with the mom and pop down the street than on a global level with venture capital and big money. Here is a list of service businesses I love.

12. Control your own platform

Don’t rely on other platforms to bring you customers. Starbucks spent hundreds of millions getting facebook followers. Then facebook changed the algorithm and now Starbucks still has to pay to reach them. Amazon Basics comes out with new products daily that completely crush businesses who previously dominated. YouTube is changing the way it interacts with its content producers daily. When you are dependent on a third party you are at risk.

13. Know the difference between value and money

The hard and important work of a successful entrepreneur is understanding value. It’s easy to ignore value because we can’t see it, touch it or count it. It isn’t liquid this very moment. The successful entrepreneurs know it all too well. They know how to recognize it. They know how to measure it. They know how to grow it. They know how to invest in it and build it.

14. You don’t build a network – you earn a network

Networking is important – don’t get me wrong. Your network will become valuable only after you bring something to the table. Build your first company. Get really good at something. Then your network will be fruitful.

15. Frugality wins.

Start a lean business that can survive change. Keep your expenses variable. Buy things used. The longer you can operate without taking a profit the better off you will be.

March 23, 2019 2:26 pm

Its never a double blind test

Wine sommeliers often can’t tell the difference between a $20 bottle and a $2,000 bottle in a double blind test. The food at the $20/person restaurant and the food at the $200/person restaurant. The beer at the top rated brewery or the guy brewing in his basement.

In a double blind test – who has the better service? 

It doesn’t matter. It’s never a double blind test. There are always so many more factors at play. Remember the following:

People aren’t just buying a service – they are buying a feeling.

Some people are willing to pay for status and often get more intrinsic value by paying more money for similar services.

There is a lot of perceived value that comes along with a higher price. Its a placebo effect that makes people FEEL like they are getting more for their dollar.

I’m not suggesting you price gauge people and try to rip them off around every bend. Just realize you can choose to compete in many many ways. Don’t make the choice to compete on price. 

This week on the podcast

On Monday’s podcast episode I tell the story of graduation weekend in 2012 when I made $10k brokering rooms. On Wednesday I talk about craft beer in New England!

March 19, 2019 6:30 am

Ego is the Enemy

Ego is good early on. The confidence. The drive for status and image.

It gets us far. It gives us the courage to disregard the anxiety and fear of failure. The lizard brain that tells us to run for cover when things get scary.

We all agree that you don’t need to be a superhuman or brilliant person to build a successful business. Listen to one episode of the podcast “How I Built This” with Guy Raz and one thing will become strikingly clear. These people are normal. The founders of these unicorn companies, often billionaires, are completely normal people.

Ego drives us to take the most important step. That first step. To just do something. To get out and try something that might not work. To get out of the comfort zone and just try something and begin working towards it.

Thats half the battle, especially with these service businesses. Just put yourself out there and start doing the work.

On one end of the spectrum is anxiety, insecurity and fear. The prevalence of these emotions cripples a lot of people and is the main reason why people play the safe route. Work at the job they hate without making any changes, etc. Its crippling.

On the other end of the spectrum we have ego. Everybody has an ego – its perfectly normal. For the sake of this article I’m referring to ego as the overconfidence. The big head. The belief in oneself that is not healthy or rational or logical.

One business works. A lot of hypothesis turned out to be correct. Money was made.

This is when the ego becomes the enemy and can be a very dangerous thing. Its an emotion that can lead to very poor decision making.

Here is what happens when the ego takes the reins:

  1. You surround yourself with yes-people and attack people who disagree with you
  2. You sort incoming information based on your bias and only accept the stuff that supports your goal and your hypothesis
  3. You make very poor decisions and money is lost

How do you combat this?

You keep in mind that every hypothesis is just that. An educated guess.

Encourage those around you to challenge you and question you. Start every meeting with an encouragement to your trusted advisors to make you change your mind.

Treat all incoming data the same – whether it supports your hypothesis or not.

Change your mind often and quickly when logic and data point to it.

Understand that ego is an emotion. Its a desire and will to be correct in the presence of your peers. You have to recognize the emotion, feel it and then choose to act logically and ignore it when necessary.

Continue to have confidence. Trust your decisions. Its very important. But be grounded and be prepared for it not to work.

Remember – one cannot learn what they think they already know.

March 14, 2019 6:11 pm

The Lawn Squad Case Study

Back in 2012, when I was unsure of the success of my storage venture, I casted a few other nets. One of them was a Lawn Care google place and wordpress website with a few pages. As you know I had mowed a few lawns in high school so I got a few of those old customers to leave me Google Reviews.

I then forgot about the site. Each week during the spring I would ignore a few calls coming to my cell phone from that Google Place.

My brother decided to take over the website and give it a shot. The site was actually lost when I forget to pay for hosting so he started over and built this. An even crappier website.

In May of 2017 he started answering the calls and started slowly adding clients. He bought a mower. He bought a nice 2009 Ford F150 with 50k miles on it for $7900 in the spring of 2018 using this guide. He bought a used mower for $5k that a guy had bought for $12k two years (and only 60 hours) prior.

In 2017 he did about $10k in revenue and had 15 solid clients on a bi-weekly schedule by the end of the year.

In 2018 that turned into $30k in revenue (about 20k profit) and 32 solid clients. This is with no adwords. No advertising. He was a full time student and and athlete at Indiana University in Bloomington.

December of 2018 I got him a little excited and he decided to get his herbicide / pesticide applicators license. Studied a few hours each week, took the two day course and three weeks later he passed both tests in the 90th percentile.

Yesterday we bought the X Theme on wordpress and built this site using Cornerstone (a free page builder that comes with the theme) and some stock images we found for free online. We got the logo done in 2 days on Fiverr for $49. He got a student version of Adobe Illustrator and put together all the graphics.

Follow along here as he works through this checklist and lets see how far he gets this year.

March 9, 2019 6:15 am

Think LOCAL and start SMALL

Don’t forget to think LOCAL and don’t be afraid to start VERY SMALL.

Even if you plan to start an internet company. Start LOCAL. Start a business where you can interact with your customers face to face. Even Zuck founded facebook only at Harvard. Roll out a city at a time. Sell something local at first to gather data and get in front of your customers.And more importantly you can target them with direct advertising on a local level.

Business is a long game and takes years to build success.

There is no get rich quick method. And I know people might be tired of preaching this but if you are willing to sweat and provide an actual physical service that is required in person you can really find massive holes in the market.

If you pick up your phone every time with eager professionalism and have a google my business location you are ahead of 90% of the competition out there making great money.

February 28, 2019 6:17 am

How to start a pest control company

On Friday after work instead of meeting friends for drinks go home and get to work. Buy a domain and get hosting for $1.99 per month. Set up a website on WordPress. Pay someone on a freelancing site to create a simple logo for you and some marketing material.

Decide what type of pest control or extermination you want to focus on initially. Most states have different certification, licensing and exams for different types. Termites, rodents, insects, commercial, residential, agriculture etc. Use your state related resources to decide. Termite treatment is huge where I am (south eastern USA).

Consider differentiating yourself by doing natural no-kill pest control.

Read, study, and complete your training requirements to sit for your exam and get certified. In my state to become a technician you need 10 hours of classroom training, 70 hours of on-the job experience, and a score of 70% or higher on the exam. You are also on the hook for some minor licensing fees. You’re now ready to work for a company offering pest control. This is a great way to learn the business and get experience so you should consider doing this.

There are likely additional training, exam, and certification requirements to start your own business. You will also need liability, errors and omissions, property, auto and workers compensation insurance. There are companies that specialize in providing this industry with the necessary insurance.

Now that you are covered and have the required knowledge its time to get the equipment you need. Consider buying a 5 year old Ford E-series cargo van. They are a great value and here’s a decent guide. Dont be afraid to use your personal vehicle at first.

Get the equipment needed to apply your type of chemicals and to protect your body while doing the application. For termites this involves digging and putting bait stations in the ground. For rodents you will need the bait stations. For cock roaches you will need sprayers.

Buy your chemicals off doyourownpestcontrol at first. When you get some momentum and start doing more you can get a supplier and negotiate better terms.

Crush you competitors with amazing customer service.

Any service business is all about eager professionalism. If you answer the phone every time with a great attitude and a genuine feeling of excitement to help people solve their problems you will be ahead of 95% of the businesses in this field. Show up with a clean cut technician wearing a polo and khakis and you’re golden. Put shoe covers on before walking in someones home. The little things matter.

Lets talk marketing. What type of person is likely in the market for pest control services? Who is your most likely customer?

Like most home services we’re going to target people who recently moved into a new home. They are the most likely to buy what you are selling. Follow the “recently sold” listings on realtor, redfin, and zillow. Go knock on the door or hang a flyer on the door knob. Consider sending a hand written note by mail. Get creative on how to reach these people.

This is an old school industry so a lot of businesses are operated like its 1985. No website. No digital marketing. No sales tracking systems. You may also be able to get very cheap clicks on Google Adwords. Make sure to set up conversion tracking so you can measure your spend and calculate your ROI.

The thing about this business is that new customers are very valuable because its a subscription based business model. Customers are going to pay you $40 a month or more for this service and if you treat them well they’ll be on board for years and years to come.

Knowing this consider doing what nobody in this space does and offer the termite installation free. Or the bait station installation free. Or the first month of cockroach treatments free. Add value first and profit later. Its about gaining trust and brand awareness in the early days. The leaner you can operate and the longer you can go without pulling profit out of the business the better. Look at these free services as marketing spend. Track your time and your material against your conversions and the value of those customers and get to your ROI.

When a customer calls analyze the home on zillow. Look at the square footage. They likely just bought the house so it likely has a lot of photos online for you to view. Does it have a basement? How old is it? Provide a quote instantly. The quicker you can provide a quote the higher your conversion rate will be. Soon you’ll be able to quote 25%-50% higher than you competitors but since you turn around a quote in 10 minutes and they take 48 hours you’ll get the work.

Get your early customers to leave reviews on your google location. That will be huge for you and when it kicks in you will feel the instant turbo boost. Make videos and target keywords in your area on Youtube, the second largest search engine in the world.

Give a customer a few bucks off a service to leave a yard sign in their yard for 10 days.

Target your facebook advertising to customers who recently changed their city location and are now in your area. They just moved here and you can target your ideal customer.

Make friends with realtors in town and service their homes at a discount to get them to hand your brochure to a new homeowner when they move in. Remember that people do business with people they like. Be likable and spend time on developing personal relationships with your clients.

Watch the local planning board schedule for new apartment developments. Go to the meeting and talk to the owners and get your card in their hand so you are the first call when it comes time to sign on a pest control contract. Watch for new restaurants opening up and do the same.

Lets talk operations.

Get very good at selling customers on additional pest control subscriptions while walking around their home with them. Give away a lot of knowledge for free to gain trust.

Your customer base will start to grow and you will be ready to quit your job. Continue to offer the service yourself until you have a full schedule and then make a hire.

Simplify the job for your employees so normal people can do it really well. You don’t want to have to have great employees to succeed. You want to set up average joes to thrive at your company. Take as much off their plate as possible. They don’t quote services. They don’t take payment. They are paperless. They show up looking professional and do their job and leave.

Differentiate yourself from your competitors by getting some out of the box software that allows you to communicate with your customers very effectively. When you’re on your way to their home or business they should get a text message or an email. In that should be a link and a photo of the technician thats on the way and a description of how the service will go and what to expect along with frequent questions answered.

When you leave they should get a receipt emailed to them instantly with a report. You can charge their card on file instantly. Jobber can do all of this.

Have your employees install a time tracking app on their phone that tracks their location and their hours for your review. Use a digital on-boarding and payroll company like Gusto or Paychex. Stay very organized using quickbooks online. Hire an accountant and bookkeeper for $500 per month or less.

Outsource what you aren’t good at so you can focus on sales, training and managing your employees.

Make speed your competitive advantage. Don’t compete on price. Be able to get a quote to a customer within 30 minutes and meet the customer to walk around their home and answer questions the same day. Be extremely likable and professional. Focus less on selling and more on educating and helping. This is something your highest trained employees (and you initially) should be doing. You can charge double what your competitors charge by offering this type of service.

This is a beautiful business because the revenue comes in on a subscription basis. Its reliable. You can build processes around it and automate it a lot easier than high skilled labor jobs. Your business is also more valuable because you have a bunch of recurring business so you can sell it to a competitor if you want to go that route.

A few notes before you start:

Don’t forget your market research. My favorite way to do this is to call around the top 5 google ranked pest control companies in your city. Ask them a ton of questions. Find out how busy they are. How long does it take them to put together a quote?

Run your cashflow projections on a month to month basis. Buy your equipment used so you can operate as lean as possible and sell it if you decide to close up shop. Budget all of the expenses you will have and then add 10%. Make sure you still have the cash to operate for several months with no sales.

Want more? Subscribe here to get short, concise emails from me once a week to help you build a better business. I also share a business idea like this each week to get you fired up and get your gears turning.

February 26, 2019 6:30 am

Read this before you bring on a partner

Show notes from podcast episode 28

First of all there are a lot of different types of partnerships. In this article we discuss the co-founder. Someone who you bring on initially and they get ownership no matter what. No vesting schedule. No cliff. No way out if things go wrong.

This article is the cautious approach. Partnerships can be wonderful. Many of the most successful companies out there were founded by more than one person. I founded my own company with a 50/50 partner and I’m much better off because of it. Don’t be afraid to bring on a partner. Just make sure to think things over and consider the following first.

Partnering with someone 50/50 is just as important as getting married. Your financial life will be tied together forever. You’ll spend every day from 8am-5pm and possibly a lot more working with each other. You’ll be trusting the other person with your present and your future. Its a huge deal.

People date and court each other for years now and still the majority of marriages fail. Business partnerships fail even more often. It kills businesses. It ruins potential. It kills friendships. It costs a lot of money.

Why is this? Its because partnerships are very very hard. Every problem with relationships in general, and especially partnerships, boils down to two main factors:

The first is character. Does this other person genuinely have my best interest in mind or are they acting selfishly?

The second is value. Are we bringing equal value to the table and are we both able to see that the value is fair?

Partnerships are so hard and fail so often because many people are naturally selfish and greedy. These traits get highlighted when large amounts of money come into the equation. These traits get highlighted when tough times come and people get desperate.

On the value side of the equation everyone is so different and their skills are so different. Its rare that two humans can add the same exact amount of value to a businesses overall success. Its also natural that people overvalue their own work and undervalue everyone else’s.

We’re talking about several years in the trenches and then possibly decades running and living off of this business. We’re talking about managing each other’s money. Partnerships are a big deal and shouldn’t be taken lightly.

So lets start with a few questions we can ask right off the bat to try to help us figure out the character and the value.

What is the moral compass of the person? Do they cheat on their wife? They’ll cheat on you.

Do they steal from the gas station when they were kids? How are you going to trust them with access to your bank account?

What is their work ethic like? Are they willing to really put their nose down and grind?

How is their time management? Do they overthink and waste time on non essential tasks?

Are they driven? Would they rather watch reality TV, play video games, and watch football all weekend or do they spend time making themselves better and growing as a person?

Are they a grump all the time? They’ll drag you down and give up when the going gets hard. Now I’m not talking about unwarranted delusional positivity. I’m just pointing out that negativity is contagious and rubs off on everyone around you.

When something unexpected happens do they get emotional and irrational? Can they think with a level head when something stressful happens or do they have a mental breakdown?

Do they spend a lot of time yelling or arguing with their spouse or girlfriend? This is often a tell tale sign of manipulation, selfishness or insecurity.

Do they feed off drama and gossip? Remember that gossip is cancer. If they talk bad about their friends to you they will talk bad about you to their friends.

Do they have an addictive personality? When they play a new video game do they binge and play it for 20 hours a day for a few days? When you go out drinking do you constantly have to take care of them, keep them out of fights and carry them home?

Do they procrastinate and put off the stuff that is important but not fun? Are they constantly cramming to get things done at the last possible moment?

Do they shy away from difficult conversations and uncomfortable situations? Business is uncomfortable a lot. The people who can get comfortable in these situations are the ones that can add the most value.

What drives them? Do they talk about the riches and the boat they’ll buy with the riches? Or do they talk about the process and the excitement and how big the business can become?

What are their career goals? Do they have other plans and opportunities? Did they already take a full time job after graduation? Do they have other projects taking their attention?

Does their personality and skill set align directly with yours? Does the business really need two of the exact same people?

Do they constantly over promise and under deliver? Are they generally late or early for things? Do they think they can be ready to meet you at 8pm but end up rushing around and not being ready until 8:15?

Finding the answer to these questions doesn’t happen right away. It takes years. It takes working with someone in a professional setting for a long time.

That’s why this whole thing is so tricky. Figuring out the answers to these questions isnt easy. It takes a working professional relationship. It takes a friendship that goes beyond the surface level. It takes truly knowing someone.

So say you are considering partnering with someone and you are unsure how it all should look. Lets talk about a few basics.

The person investing the money should get the ownership. They take the risk therefore they should get the reward. Sweat equity is cheap and cash is king.

The spouse of your partner is critical. They are your 25% partner and will be entitled to 25% of the value of your business in the event of a divorce. They’ll also be the person your partner lives with and deals with when work is over for the day. Are they supportive? Are they trustworthy? Do they have healthy spending habits? Do they have a solid moral compass? Are they grumpy and miserable for your partner to be around? A partner with an unsupportive or miserable spouse will not be worth a darn on a day to day basis and is destined for failure.

The delegators and communicators and smart workers are more valuable than the hard workers.

Don’t partner with someone in a tree trimming business just because they are good at trimming trees. There is a big difference between trimming trees and managing a bunch of people trimming trees. You can get a good tree trimmer for $30 per hour. A few years from now you’ll each be earning $100 per hour. You’re losing $70 for every hour your partner spends out trimming trees. The value equation will be thrown off really quickly if this is your criteria for partnership. Putting your head down and working hard is easy. Making the decisions that can cut a hundred decisions and building processes so the work gets easier is the hard part and the valuable part.

Don’t partner with someone who is broke. Broke people make bad partners. If they don’t know how to manage their own money what makes you think they can manage your money? What are their spending habits? Do they have a nice new financed car while living paycheck to paycheck? Do they order a soft drink and a side of guac and turn a $7 lunch into a $14 lunch? Did they work for money as a kid or did their parents hand them money as needed?

In the early days of the business there will be no money to spit off. The longer you can go without needing to pull money out of the business the more long term value you can build and the more momentum you’ll gain. If your partner needs cash to pay off a credit card and you are ready and willing to keep adding value with the goal of profiting later things aren’t going to work out.

Think about the future prospects of your business. How many mouths do you want to feed? You’ll need double the business and double the profit to feed two owners vs feeding only yourself. Does a lawn care company have enough potential to feed two people? Does the business really need two founders? If you are starting small and simple in one town the answer to that is likely no.

So many people rush right into bringing on a partner. Its the natural thing to do. You get excited about something and you run right to a friend and talk to them about it. They get excited too. Next thing you know you have a partner and you haven’t considered any of the questions we just spoke about. You haven’t considered the key traits that make a partner valuable. You haven’t considered the skill sets. You haven’t considered the complexities down the road.

Like anything in life the key here is to stop and think. Don’t let your emotions affect your decision making. Ask yourself if you really need a partner or you are just latching on to a friend to subdue your own anxiety and share everything with someone else?

Alright so let’s say you analyzed everything and asked all the right questions and you have someone in mind that you want to partner with. What now?

Sit down and have the really hard talks early on. What if this happens? What if that happens? What if we disagree? What if we want out? What if we get a divorce? What do you think are wise investments? What type of lifestyle do you want to have? How much money do you need to pull from the business and when? What are your 5 year goals? What are the things that you value most? What do you want your life to be like 5 years from now? How do you see your roles changing and evolving? What are your strengths? What if you or I can’t perform as we initially thought?

As part of the operating agreement put a buy sell agreement in place that explains how shares can be bought or sold and make sure it includes a schedule of the payment. Make sure the partners can’t demand payment for their ownership in a manner that will cripple the business. Put financing terms in the buy sell agreement.

Put a valuation method in place as part of the buy sell. It can be different depending on the situation. Agree upon metrics you will use to value the business in case one of you wants out. This might be a multiple of earnings. Something that will keep you from arguing in the event of ownership changes. If someone requests to be bought out it can be an agreed upon multiple. If someone is forced out it can be different multiple. If someone fails to perform the key duties of the business, etc.

Consider getting life insurance and key man insurance on one another as partners. My partner and I have this in place because if I pass away my partner would be required to pay out my estate according to the overall value of the business. That is what the life insurance policy is for. We have key man insurance to help us pay for a new employee to come in and fill the roles each of us have within the business. This way if one of us passes away the business can survive and it won’t miss a beat.

If you are considering bringing on a partner after the business is already up and running consider sharing the profits at first and make the ownership vest over time so you have a trial period to make sure it is working out.

Partnerships are much more likely to work out when the two people have had a previous working relationship with one another. They know how they operate. They know their strengths. They know each other’s’ weaknesses. Basically they have the answers to the questions above.

Put simple and easy systems in place to check each other. Make rules like no outside expenses on the company credit card. No meals and entertainment. No expenses over $100 without notifying each other. Credit card statement audits done on each other quarterly. Bank Safepass codes sent to both partners anytime an auto payment is set up. No cash transactions between customers and employees.

Very simple things that can keep people honest and close any doors to small infractions that can grow later.

Before we wrap up on this topic lets talk a little about my personal experiences.

I got very lucky with my partner who is still my partner today. We knew each other as friends for three years prior to starting the business but there were still a lot of critical questions I didn’t even think to ask. I just got excited, ran to a friend and agreed to partner.

He just happened to be a great communicator, extremely frugal like me, great in uncomfortable situations and incredibly level headed when the going gets tough. Our personalities mesh perfectly as I’m more dominate and he is more agreeable. He has an amazing ability to think extremely logically and make great decisions when others would get all emotional and worked up. He does not have a temper. He wants what is best for both of us, not just him. He’s not greedy or selfish. And he adds a ton of value. Hes an excellent communicator and delegator. He always has a positive attitude and treats others with respect. We accomplish more together than we ever could have alone. Finding this partner was a huge stroke of luck.

We brought on three other partners over the years that are no longer with us. The first we foolishly gave 20% ownership of the company right off the bat before we even had a real company. Luckily he got discouraged and had other career goals and walked away without asking for any money. We hadn’t really made any yet and it was a long road ahead.

The second partner, who happened to be one of my best friends at the time, got 20% ownership in return for sweat equity when our business was about 2 years old. We thought this person would be able to help us grow the business a lot faster and help us expand to a lot more locations.

About 6 months in we realized the value equation was way off. The partner just wasn’t hacking it on a level that we needed or thought to be fair. Quickly the environment became cancerous and was about to explode. Luckily we all had the courage to sit down around a table and have a very difficult conversation several days in a row. It was clear that the person was getting pushed out. He was heartbroken. So were we. We didn’t try to screw anyone. He didn’t try to screw us. We wrote him a check and sent him on his way. It set us back a good ways financially and we learned never to give away ownership unless you are absolutely positive the value is there.

The last partner didn’t have actual ownership in the company but helped us open up a few new branches in exchange for a profit sharing plan. It worked well initially but then we all realized the business simply didn’t have the potential to support us all and couldn’t really grow to the level that we had initially hoped. The partner wasn’t exploring new avenues to add value and wasn’t willing to relocate to give us 100% of his energy so it also got very testy very quickly. Luckily we all saw this and parted ways in a very agreeable manner and are still great friends to this day. We’re glad we didn’t make the same ownership mistake again because it would have made it much more complicated.

Remember every problem with relationships in general, and especially partnerships, boils down to two main factors: Character and value.

Luckily all three of these were around value. Value issues are much more straightforward to solve. Character problems are much different. Its impossible to deal with a selfish or greedy person who does not have your best interest in mind. Those types of problems kill businesses all together. If that would have happened to us we would have likely not survived it.

When a partnership is deteriorating you can FEEL it. You know something is up. You know there is animosity. You know there is resentment. You know there is something off with the character or the value add equilibriums.

Talk about it and address it right away. Don’t get emotional. Listen more than you talk. Realize its a process and takes a little bit of time. Don’t make a person feel as if you are going to try to rip them off or they will get defensive and it will be a battle. Find a fair solution and try to pick up the pieces afterwards.

Keep in mind that these problems are a lot easier to solve before they happen.

Like anything else you should apply these principles to your situation but you must realize every situation is so different its not a one size fits all approach. Make the best decision that you can and try keep your emotions out of it. Partnerships can be great if you go about them the right way.

If you have a particular situation that you want my thoughts on send me an email to nick@sweatystartup.com and I’ll be happy to shed some light. As always – thanks for reading.

Want more? Subscribe here to get short, concise emails from me once a week to help you build a better business. I also share a business idea like thiseach week to get you fired up and get your gears turning.

February 25, 2019 5:59 am

An interesting reflection on the podcast so far

An interesting thing is happening with the podcast. I’m getting a lot of emails from people who have found holes in markets. But their solution is to help the businesses get more customers. Lead generation, website consulting, SEO work, etc for child care centers, HVAC contractors, doctors and all the other 1985 businesses.

They don’t understand that getting customers isn’t something the companies need help with. There is an oversupply of customers and not enough companies. They are trying to sell customers to the businesses and its not working. They want to sit behind a computer and consult and type and not do any work. The people willing to get out and do it and actually compete with these businesses will be the winners.

That has been my point from day 1. There isn’t a shortage in websites and software and programs and SEO. There is a shortage in companies offering services.

I used to think I wanted to teach my kids to code and write software and code. Too many people are doing that. Coding is getting cheaper and cheaper and cheaper and I think it will get automated over the years in ways like WordPress automated web development.

The average age of a small business owner in America is 50 years old. What will happen when they want to retire in 10 or 15 years?

I’m going to teach my kids to work and grind and sweat.

February 21, 2019 6:22 am

What we can all learn from Chick-fil-A

Simplicity

A small menu done really really well. Three types of sandwiches (fried, spicy fried, and grilled). Nuggets. Fries and shakes. Boom. Thats it. They take most of their orders with the walk up servers and 90% of customers don’t even need to look at a menu because after you’ve visited once you know it by heart.

Speed

The simplicity allows them to crank out the food. They know they’ll serve 300 chicken sandwiches per hour so the kitchen doesn’t wait for orders. They crank out the food baby.

The drive through moves 3x as fast as any other fast food restaurant I’ve ever seen. They’ve identified the bottleneck (the order board with speaker where McDonalds customers are overwhelmed, take forever, and change their minds) and gotten rid of it. Instead they have walking order takers that can take payment on the spot.

Nothing slows down the process. If it ever slowed it down they have already changed it. Their process is a well oiled machine that is predictable and blazing fast.

Eager professionalism

They are all super clean cut, take orders with a smile and have a genuine sense of excitement. I don’t know if they love their job but they are sure made to act like they do. I don’t know if they make more than the workers at taco bell but they sure act like they do. They are eager and professional. Its amazing how far that combination will get you in business.

Consistency

The culmination of all this is that it tastes exactly the same every time. Its never slow. Its never grumpy. Its always a great experience.

Want more? Subscribe here to get short, concise emails from me once a week to help you build a better business. I also share a business idea like this each week to get you fired up and get your gears turning.

February 20, 2019 7:00 am