The Art Of Self Discipline and Success

What is the secrete to success? How can I get there the fastest way possible?

I am sure we all have thought about these questions at one point in our lives. Unfortunately there is no secrete and there is no overnight success. There is only discipline. 

I have worked all my life to become an overnight success

Success is Always Uphill

With discipline you will have success because what is worthwhile in life is always uphill. It is never easy, but all you have to do is simply climb. The only problem is that people do not want to climb, they want to coast. They want success to come to them. You cannot win the lottery by hope and you will not be successful if you do not make the effort.

1 Day of Coasting Ruins Everything

You do not need a break! Success does not coast and the hill you climb does not level out or plateau. Every day should be one step forward towards your goal, not one step backwards and one step down.

You cannot sit down, you must get up, stay up, and climb up! And you must do it every day!

As Jerry Seindfeild once said to a newly starting comedian who asked what was your secrete to success? Jerry had replied, every day I write a joke and place a big red X on my calendar. Then I do it again, and again and never break the chain.

Self Discipline is an Every Day Effort

Your Credit Score: Why It Matters to Entrepreneurs

Being an entrepreneur with a startup there will be times (and most likely more than one) where you need to borrow money. It could be your startup seed money to get off the ground for your latest idea, or a loan to keep the lights on and prevent your business from pending doom. No matter what it is, your credit score is essential in determining if you will get that loan or face financial rejection.

What Is My Credit Score?

You credit score is a 3 digit number that ranges from 300-850 and somehow has all the power over your personal finances. It is the first place lenders look to determine if you are trustworthy for a line of credit and will be able to pay them back. 

The higher the score, the more confidence lenders will have in your ability to repay the loan as you have demonstrated responsible credit behavior. Having a score closer to 850 will open up lower annual interest rates and possibly other additional benefits.

What Is Your Score?

While some of you may avoid looking up your score, and others may be checking it daily, it is important to know what your score is. According to ValuePenguin, the average FICO credit score in the United States is 695. Do you know where do you stand?

Here is an overview look at credit score ranges to give you some more insight:

  • 300-579: Poor
  • 580-669: Fair
  • 670-739: Good
  • 740-799: Very good
  • 800-850: Excellent

Why is My Credit Score Important?

Well if you are in need of money for your startup business, your credit score will determine whether you pay low interest or higher interest, that is if your score is good enough in the first place.

For example, a startup entrepreneur looking to take out a small business loan with a Very Good score of 745 may get an annual percentage rate (APR) of 6% while another entrepreneur with a Fair score of 630 may get an APR of 11%.

In numbers that can mean paying either $4,000 a month or $6,000 a month depending on the loan amount and interest rate. That few dollars difference could mean a profitable business or one that is in the red.

So in short, a good credit score puts money back in your pocket! It decreases the amount you have to pay back in interest to the creditor.

What Can You Do?

The best approach is to learn how your credit score is calculated. Good news is it’s not a trade secret formula or something that only bankers know. In fact, it is actually just five factors that are considered in the credit score calculation. And the best part is you can control all of these.

So let’s dive in!

What Makes Up My Credit Score?

Payment History - 35%

This factor considers all of your payments you have made over the life of your credit. It includes both on time and late payments. Just one late payment here can significantly decrease your credit score dramatically. So you don’t fall late, setup auto payments or at least payment reminders to stay on track.

Credit Utilization - 30%

Your credit utilization is the amount of credit you have used compared to the total amount available. The lower the credit utilization, the better your score will be. The target is to be below 30% utilization for a positive impact. – This does not mean max out your card!

Length of Credit History - 15%

This factor looks at how long you have had your line of credit open. The longer you have had your credit, the better your score will be. So if you just opened your first line, take some time to build up your credit length. – That does not mean keep opening and closing new ones!

Types of Credit - 10%

This is considered by the credit bureaus as your “credit mix”. This is a mix of all the various types of credit you have open such as loans, mortgages, retail cards, etc.. The target is to have a healthy mix but since it only accounts for 10% of your score, it does not mean open up some new lines of credit.

New Credit Inquires- 10%

Every time you apply for a new store card or seeking to get the latest airline points promotion counts as a credit inquiry. The more inquiries you have over a short period of time, the more of a negative impact you will have with your score. To creditors, this could appear like you are thirsty for credit which is never a good sign. – Prevent yourself from opening the latest store cards and keep your inquiries to a minimum.

Take Control of Your Credit Score!

The more you learn, the more you will earn! Understanding these five factors will allow you to get the lowest interest rate when you need to get a business loan or open a new credit card. Focus on optimizing each one of these factor to get that perfect 850.

Additionally if you are looking to monitor your score, try the CreditKarma app to monitor for any changes and learn ways to improve.

Good luck and next time save yourself money by optimizing your credit score!

Contracting Basics For Beginners

Lesson 101: The basics of business law – What makes up a simple contract?

While your contracting skills may not be the strongest, every startup entrepreneur must understand the basics in order to be successful. You will come across contracts of all sorts and having a standard understanding of them will allow you to negotiate your next contract to your advantage.

What is a contract?

According to the proper definition, a contract is:

A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

In much more simple context:

A contract is nothing more than an agreement between two parties where there is an exchange of goods or services for something of value (i.e. money).

Contracts are your own set of personal laws that you create. Just about anything you can come up with and both sides agree will work.

Of course you must negotiate in good faith and the subject of the contract is legal; meaning it cannot be a contract that is breaking any laws.

Each contract will contain a promise or multiple promises for something in exchange. However, not every promise is legally enforceable. In order to have a legally enforceable promise, three requirements must be met to create a legal binding contract.

3 Requirements for a Legally Binding Contract

1. An Offer Must Be Made

The first requirement for any legally binding agreement is an offer must be made. An offer must be clear and specific regarding the type of service or quantity of product(s) for an exchange of something else.

Example 1:
"I will purchase 100 chairs from Company XYZ for $55 dollars each.

A more realistic applied example could look something like this:

Example 2:
"Company ABC will provide repair services for Company XYZ on a monthly basis. Services will be provided for 24 months and will be invoiced annually"

An important note here is the offer must be a clear. Something like “I think I would like to buy some chairs” is not an offer because it is neither specific or unambiguous of providing clear terms.   

The offer will remain open until is is accepted by the counter party. While the offer is open, you will have the ability to revoke it if a better offer is found elsewhere. 

Once the offer is accepted, it cannot be revoked.

2. The Offer Must Be Accepted

Just like the offer, an acceptance must be clear and unambiguous. For example “I Accept” is clear but “That sounds good, I will get back to you shortly” is not. You must have a clear understanding of acceptance.

The sole purpose of a contract is to allow the willing buyer and seller to enter into a commercial transaction with clearly defined terms.

Acceptance Is Negotiated

In order to have acceptance, offers and counter offers will go continue until negotiations are in agreement. This dance can go on indefinitely and can become a lengthly process with larger more complex agreements.

Chairs Example Continued:
In the chairs example, a seller may decide to up his price from $55 to $75. In that situation, my offer of $55 is rejected and a counter offer of $75 has been made. I can either accept this offer or reject it.

Acceptance Upon Receipt

There also can be a situation where the offer may not be accepted directly but can still be enforceable. Instead acceptance is based on performance such as “upon receipt of delivery”.

Chairs Example Upon Delivery:
Using the chairs example again, if the 100 chairs is delivered and I accept the delivery, then that can be legally taken as acceptance.

Additionally non-material changes – meaning changes that do not affect the commercial agreement may also be taking place at the same time. These I would recommend connecting with a laywer or speaking with legalzoom.

3. Consideration Of Exchange

Lastly, to create a valid legally enforceable contract you have to show an exchange. In legal terms this is call “quid-pro-quo“. Or in simple terms, and exchange this for that. This is known as “Consideration“.

Chairs Example:
My money for your chairs

Service Example 2:
My money for your repair services

If I said “I want to buy your chairs” and you said “sure” that would not count as a contract. With this statement we do have an offer and acceptance but no consideration.  You cannot get something for nothing. 

In order to be legally binding, you must have an offer, acceptance of that offer, and a bargained-for exchange.

Additional Helpful Notes About Contracts

Additionally, here are a few other things you should know about contracts:

Get Everything In Writing

If it’s not in the contract, it does not exist. An agreement on a handshake basis is not a legally binding agreement. Overtime memories will fade and people may remember promises incorrectly. Without the promise in writing, there is no record of what is correct. Avoid oral agreements and get it in writing.

Contracts Can Be Changed or Modified

You have the ability to make changes to a contract before and after it is “executed” – finally agreed upon and signed by both parties. 

While the contract is going through negotiations, you have the ability to change any item you see fit. That is why it is also call an “agreement” because both parties must agree to all terms.

Changing or modifying a contract after it has been signed/executed is called “amending” the agreement. This is done through an “Amendment” which is an additional document that outlines any changes to be made.

Be Specific As Possible - Never Leave Anything to Chance

When creating your agreement, never leave anything to chance. Think of any possible area that could affect your contractual agreement and make sure you are covered. This is why you see extensively long agreements for sometimes simple things.

Also later down the road the agreement becomes the path for clarity. If the agreement is ambiguous, you will certainly find yourself in trouble down the road potentially ending up in litigation or worse.

Protect yourself and be as specific as possible.

Contracts Can Be Breached

Breach means breaking the terms of the agreement. Contracts can be broken as there are legitimate reasons such as poor performance, fraud, bankruptcy, and plenty of others. Items like this should be defined in your agreement to keep either side protected.

You Can Exit A Contract Early

Lastly, a contract for a certain length of time can be exited early if defined in the terms of the agreement. For example your agreement should include a “Termination for Convenience” or at least have the ability to exit in some manner. 

Sometimes this may include penalties but it could be far more worth discontinuing than taking an additional loss.

Critical Traits of Startup Entrepreneurs

Are you planning on becoming a startup entrepreneur? Do you think you have what it takes to be the next greatest success? Well it is not all luck, but instead it is all about you and who you are. 

Learning how to grow yourself and focusing on these key critical traits will certainly help you survive the entrepreneurial roller coaster yet to come.

If you lack these traits, or they may not be your strong points, then work on them, and focus on building them up each day.

Focusing on growing your skills in these traits will get your startup out of the red and into a positive cash flow. Or in other words, become successful.

Grow in Self-awareness

The single most important factor to a successful startup is YOU. It starts with your idea, and your ability to execute successfully. But what makes YOU? 

Well it is your self-awareness that creates who you are. It is your ability to know your strengths and weaknesses. Learning what you are good at and leveraging it to your benefit is how you can excel. 

This also goes for knowing your weaknesses so you can focus on improving them. No one is perfect but when you understand yourself, you are able to begin working on making improvements. Be mindful of your flaws and seek to develop them into skills.

After all it all starts with YOU and it takes YOU to make yourself, so become self-aware of who you are and how you can grow further.

Learn to Stand Through the Hits

Every day your startup will be taking hits left and right. Some will be harder than others. Become resilient and learn how to keep standing through all the punches. 

Being an entrepreneur in a startup is not easy. It’s a roller coaster ride that will hit you in the gut a few times over and over. Learn to get aquatinted to sudden hits and become mentally stronger within yourself.

One day the economy might suddenly crash, or your banker decides you are now in default of your small business loan, or a sudden legal situation may erupt in your face. This is all part of the startup roller coaster ride. Getting yourself accustomed to these hits will make you stronger the next time they come.

Be aware these hits are going to come randomly without prediction, so don’t live in fear and prevent yourself from success, but instead push ever forward towards your end goal.

If you would like to learn more about overcoming your fear, check out this great guide!

Be Patient with Results

Nothing happens all at once and results generally never instantaneously come. If you are seeking success, you must be in it for the long game!

With any startup, there are no shortcuts, and there is no easy way. Cutting corners only leads to poor performance in the long run. If you decide to reduce your staffing levels, customer service or overall production will be negatively impacted. Using lower quality products in place of higher quality will decrease the value of your brand. Impatience leads to disappointment and dissatisfaction.

Impatience roots back to unrealistic expectations and lack of cash in your startup. You should not expect to be sitting on a beach cash flowing six figures a month any time soon. It takes time to nurture, grow, and develop your business into the next multi-national conglomerate. 

Instead focus on having patience with the goal in mind. Work each day towards the development of your startup. With patience and persistence your startup will thrive. 

Be Humble, Curious & Ready to Learn

When starting your new endeavor, the only thing you know is that you know nothing. Going into your new venture with a mindset that you already know it all will only guarantee failure. No one knows everything when they are starting out, and neither will you.

You may have been successful in another area of your life, but starting a new venture puts you back at the bottom. Be humble and curious to learn more. The only thing you know is that you do not know how to be successful just yet.

Successful startup entrepreneurs understand they must continuously learn and sharpen their craft. As their businesses evolve, they too must develop. An entrepreneur’s business can only grow to the skills they contain. Thus to be successful, an entrepreneur must always be humble, curious, and continue to learn.

In any new venture, your strongest asset will be knowing you have much more to learn. Be committed to developing yourself and your business. Spend the time learning your business and build the asset value of your venture.

Muster Massive Amounts of Energy & Enthusiasm

Energy and enthusiasm are the life blood to any startup. When times get tough and things are not looking good, it is your positive energy and enthusiasm that will keep your startup going. After all, you are the fuel that powers the vehicle.

If you elect to take a day off, or start your day late, your startup does the same. And how can your business be successful if you aren’t working on it? 

Instead build the momentum waking up every day devoting the energy and enthusiasm to keep going. When you have momentum, it becomes easier. Success naturally follows.

Your business is a mirror image of you. If you stop, so does your business. Keep yourself going, be positive, devote the energy building momentum, and your business will follow.

For anyone who may be an introvert or lacking the energy, then fake it! The expression fake it till you make is works here. The whole point is to push for a winning business, as no one wants to be associated with a failing one.

Model Dependability & Dedication

Your business is a reflection of you. If your startup business is not performing, then look at yourself. Practice extreme ownership in your business as everything falls back on you.

This is even more amplified when you have employees. The saying “Show, don’t tell” goes to play here. Lead by example and set the stage for how things are to be run. If you show up late or let small things slide by, so will your team. This always leads to poor performance.

Instead set the example on how things should be run. Get into the business with your team and over perform. Your team must see and feel the dedication you have. This dedication must overflow into your all of your relationships both personal and professional giving off an additive dedicated glow.

Unfortunately this also means passing up that vacation, or night out with the guys. There are no breaks. Either you are working towards your goal, or working against it.

Master the Power of Focus

I have talked about the power of focus several times now. It is the essential key to success. When you are able to master it, suddenly everything becomes clear and straight forward.

Focus gives you clarity on one thing. It removes the distractions and drives all of your energy into one goal. Here less is more. For example Apple is focused on selling a limited line of products that that creates their success instead of venturing too far away from their core line. Per Steve Jobs, he has been quoted for saying:

Focus is narrowing down what is essential and profitable and putting all of your attention in that area. An easy way to figure out what should be cut is: if it does not relate to selling your core product, it should not be sold. Focus on building your brand by providing specific exceptional products that define you.

Keep your business simple and don’t try to bolt on more and more things. When you get exceptionally good, maybe you could look into expanding out further. I wouldn’t do that thought until after you have successfully saturated your current market.

Nothing Is Perfect - Lighten Up Your Control Freak

Perfection is a double edged sword. Not enough and you have an incomplete business, too much and you haven’t progressively moved forward. There is a fine line with startups where too much perfection will will distract you from the underlying goal of making money.

The general rule of thumb here is 80% is better than 100%. Or in Sheryl Sanberg’s words: “Done is better than perfect”. Follow the Pareto principle and selectively procrastinate what you do and do not need to make money. A cash flowing business is a growing business!

Many times startup entrepreneurs find themselves overwhelmed with too many ancillary things to get done. They need to negotiate the best lease for their store, or come up with the best business plan, or design the perfect logo. All of this is nonsense and takes away from the core reason why they are going into business, and that is to make money!

Leave Your Ego Behind

Check your ego at the door! Starting your own business means you are not out to impress, but instead to prove. Being a startup entrepreneur involves ignoring what others think and instead focusing on what you want. Your ego is only justified by what others think, and in a startup we don’t care what others think. We only care about results.

When you are starting your business, you are not going to be that top successful CEO and Founder. You are not going to have that easy fun living on a beach lifestyle. Instead you will be working, failing, growing, learning, and developing.

A startup entrepreneur will be the first in and the last out. They will be doing the jobs no one else wants to do because it is essential to their business. Most importantly, entrepreneurs will be selling!

In a startup, entrepreneurs must sell to survive. Without incoming cashflow, you have no business!

In sales, you are going to hear many people’s opinions and what they think. Many of those will include “No’s” and other forms of rejection. Here in these situations, your ego will serve you no purpose and only put you down and prevent you from achieving.

Put that ego away and look at every no as a sense of empowerment to do better next time. Getting a “No” only means you did not do your job right.

Having an ego will only get in the way of you learning and developing. Don’t be afraid to ask for help and ignore what others think. Put that ego away and you will succeed.

Recommend Reading
We highly recommend this book for any startup entrepreneur. There are many great examples that you can apply within your own entrepreneurial experience.

Begin with the End in Mind

Where do you want to be in five or ten years? Have you put much thought into this?

Setting a goal and living into that goal everyday is essential for success. When starting out, begin by picking your destination. Do you want to be a billionaire and own your own island? Or maybe you want to create the greatest market changer.

No matter what you think of, push yourself everyday to live into that dream. Every day you will be given a chance to either contribute to your goal, or take away from it. You decide!

The whole point here is you are focusing on an end goal. The total end game for you that will say you made it. Think big, as you only cap your potential with what you are able to dream up.

Each you work towards that end goal and everyday you will find yourself getting closer and closer.

LEARN MORE

Additional Resources

Book Cover: Grind: A No-Bullshit Approach to Take Your Business from Concept to Cash Flow
by Michael J. McFall

A successful startup entrepreneur Michael J. McFall lays down the facts to starting your own business. As he goes into his experience starting his own coffee shop franchise, Michael lays out a clear to the point down to earth approach.

We highly recommend this book for any startup entrepreneur looking to gain some additional insight on what it is like for others struggling as well.

by Zig Ziglar

A legend when it comes to personal development, Zig Ziglar will always seek to inspire you over an over again. 

This book we actually recommend getting the audio book version so you can pick up on all of Zig’s humor. It is a joy to listen to this book and will open your mind with great common sense we all should have known by now in our lives. You will enjoy this one!

by Ryan Holiday

Ryan Holiday is the master at pointing out your failure because of your own limiting walls, also known as your ego!

This book is an essential to have in your library and should be re-read to keep your ego in check. 

The Do’s and Don’ts of Writing A Business Plan

Developing your business plan is one of the first steps in gaining clarity for your business venture vision. When writing a business plan, you will be faced with questions of what should you include or exclude, or what to focus on and what to avoid. 

To prevent you from making the common mistakes every starting entrepreneur makes when writing a business plan, here are the Do’s and Don’ts of writing a business plan. 

When Preparing Your Business Plan, These Are Must Do's

Involve Your Entire Management Team

It is essential when preparing your business plan to have your full management team involved. Everyone has a say and a view. Work together as a team and you will arrive at the greater solution. 

Make Your Plan Logical, Comprehensive, Readable, and Keep it Short!

You business plan is going to be read by others including potential investors, venture capitalist, and the rest of management. Keep away from writing a book and focus on the clear points and overall objective. 

Make your plan easy to read and understandable. Others will have to assist executing that plan as well. A successful plan is a simple plan. 

K.I.S.S = Keep It Simple Stupid

Spend the Time & Money Developing Your Business Plan

Show the commitment and put in the effort to create a solid plan. Utilize assistance to create your plan if needed. There are great tools and templates out there to get you started.

Articulate the critical risks, assumptions, and how your business will tolerate these

Know your weaknesses and areas that your company will be exposed. It’s essential to know where your gaps are ahead of time being proactive instead of learning after your competition has overcome your market. 

This is also a key bonus when venture capitalist and investors are looking for possible areas of exposure.

Disclose any current issues and current problems with your business

Similar to above point except focused on any internal issues or potential problems your business may have. Know these and be prepared to work through them. Identify possible approaches to overcome your challenges.

Identify Areas of Possible Financing

Proactively identify every area you can find financing for your business. Not every opportunity may turn out with cash. Plan that it will take longer than you think to get all of the money needed for your business. The fund raising process will be much harder than you ever thought it will be.

Spell Out The Opportunity For Investors

Create a section of your business plan to include the benefits for outside investors. Highlight the total ownership available to them and outline the overall deal. Make it easy for investors to see the opportunity that exists for them. This should help you with finding additional investment capital for your business.

Be Creative, Capture Attention

Don’t create a business plan like everyone else. If you want to be the 1% that standout, you cannot be like the 99% of business plans that investors come across every day. Make your business a purple cow and stand out of the crowd.

The Plan is Not the Business - Take Action and Start The Business!

As entrepreneurs we can all get lost in our minds and dreams, but an idea is worthless if you do not implement. Take the initiative and get your business started. You will learn more in just a few months of actively working in your business instead of working on your business.

This will save you tremendous amounts of time an effort when developing your business plan as you will now have had actual experience instead of ideas and concepts that haven’t been tested.

If Customers are Coming and Orders are Flowing, Delay the Business Plan

If your able to begin cash flowing your business before a full business plan can be created, that is great! Don’t work on the business, work in the business to get is going. A business is not a business if you cannot cashflow!

You can always pick up writing the business plan when orders and sales begin to slow down.

Taylor Your Business Plan to Your Target Investor Group

Similar to writing a resume for a specific job, write your business plan to appeal to your target investor group. Taylor the business plan to read towards their interest, understanding, and typical language used. This will make it much easier for your target investors to connect and understand all details in their mindset.

Potential Investors To Target:

  • Angel Investors
  • Venture Capitalists
  • Banks
  • Leasing Companies
  • Government Funding

Be Realistic with Market and Sales Projections

It is great to think you have no competition or that everyone will want your product, but that is not always the case. Use detailed market data to show the opportunities, drive the spreadsheets, and pin point the bottom line.

Anyone can fluff up their numbers, but that will show through when you cannot hit your expected results.

When Preparing Your Business Plan Avoid making these mistakes

Have Unnamed Individuals Appointed to Management

Invisible friends do not produce results! Same goes with your management team. When preparing your business plan, make sure all management is clearly identified in advance. Include resumes or profile highlights applicable to your business.

Adding someone who will join you later is no guarantee they are part of the company. They could come up with a better option and never actually join you. Your management appointments must be committed in stone.

Make ambiguous, vague, or unsubstantiated statements

Avoid putting anything on your business plan that you cannot backup with actual data. Stay away from estimated sales figures that your team is unable to produce. Prevent yourself from failure by knowing your numbers and understanding what you can do and what you cannot do! It will save you from a tremendous headache down the road.

Use Jargon That Only An Expert Can Understand

Not everyone is an industry expert. Stay away from using jargon that only a few could understand. Keep in mind others who do not know your industry will be reading this and have to understand it.

Work to simplify your business plan. Avoid describing technical products or manufacturing processes that are hard to follow. Your business plan will be useless if investors and management cannot understand it.

Spend Time & Money on Fancy Brochures, Elaborate Presentations, And Anything That is Not Meat

Fancy “flair and sizzle” is great for marketing but not for a business plan. This only waste valuable time and money that only add fluff instead of meat. Your business plan should be all meat and no fat. Adding flair will only lengthen your business plan and make it harder to follow. 

Waste Time Writing The Plan When You Can Be Making Sales

Time spent in the business to generate cash flow is time well spent. The Return on Investment you put into generating cash flow will be tremendously more than working out the best business plan ever. Your business plan will not be able to predict the future, so focus on the now and get cash flowing!

Assume Anything!

Never assume anything about your business. Anytime you assume something, it will most likely be wrong. Assumptions are based on perceptions, not facts.

Never assume you have the deal without the money in the bank. Don’t assume the market will turn in your favor without hard evidence.

The worst thing you can do is assume. It creates a false perception that always leads to failure.

Legal Structure Options For Your Business

So you are starting a business and looking to learn more on business legal structures! Great let’s get you going with the right business entity for you.

To clear things up right away, what does the word “entity” mean? In short, it refers to an organization which has a legal identity separate from its members. Each entity is a legal structure that indicates how the business will operate, be governed, and taxed. Some options are simplistic and inexpensive to set up while others will require additional paperwork and various registration & renewal fees.

In this article we are going to review the four most common types of business entities. If you are either starting your business or looking to grow, one of these entities options will most likely best suite you: 

  1. Sole Proprietor
  2. Partnership
  3. Limited Liability Company (LLC)
  4. Corporation

There is no right or wrong choice as each has their advantages and disadvantages and the best choice is not always the most obvious one either. 

To assist you with picking the right legal structure that meets your business’s needs, we put together this overview guide to the most common legal structure options for your business. 

Starting Notes

While this article is very informative, after reading this you may also decide to speak with a lawyer or accountant for additional guidance. There is no one size fits all so make sure you select the best option for you.

Also please keep in mind your initial choice for your business legal structure does not need to be permanent. You do have the option to change as your business grows and develops. For example a sole proprietor may become an LLC, and an LLC may convert to an S-Corp. 

Additionally, there are alternative business structure options available depending on the special situational need. For example a pair of doctors looking to limit their personal liability may need to set up a professional corporation or professional limited liability company. These alternative options are outlined in: Unique Business Structure Options.

Legal Structure Options For Your Business

Sole-Proprietorship vs LLC vs S-Corp vs C-Corp

Sole Proprietor

For many individuals starting their small business, the typical default legal structure is a Sole Proprietorship. That is because a sole proprietorship is the most simplistic legal structure of them all that is very inexpensive to create and straightforward to operate. That is because it is not really a separate entity compared to to a Corporation or LLC. We will get into that further down.

What is a Sole Proprietorship?

A sole proprietorship is one individual with 100% responsibility with their business. All profits and losses will be reported on the owners individual tax return.

How is a Sole Proprietorship created?

Sole proprietorships do not require any additional paperwork to establish outside of your standard tax documents. Most states do not require registering a sole proprietorship.

Typically startup’s begin with this while the business is in early stage development and later transition to another legal entity as additional debts and liabilities are taken on. If your business does not have any potential exposure to signifiant debts and court judgements, then you can stay as a sole proprietorship.

How am I paid in a Sole Proprietorship?

In a sole proprietorship, the owner of the business will be paid 100% of the profits generated. Since a Sole Proprietorship is not recognized as a separate entity, it cannot retain any form of income.

How is a Sole Proprietorship Taxed?

All income generated is considered pass through and will be taxed as ordinary income on the individuals tax return.

Sole Proprietor Overview

When is a Sole Proprietorship The Best Choice?

A sole proprietorship makes great sense for a small business where personal liability is not a concern. For example if your business is not going to be taking on any significant debts, and will not be exposed to any legal binds (lawsuits, ownership or other disputes, etc..), then a sole proprietor is a great start. 

If you are looking to scale your business further and take on exposure that insurance cannot cover, then you want to consider an LLC, or Corporation.

Are there any drawbacks of a Sole Proprietorship?

While the only primary benefit of a sole proprietorship is simplicity, there are many disadvantages you must be aware of.

No Asset Protection

A sole proprietorship provides absolutely no asset protection. That means under a sole proprietorship you the business owner are 100% liable for actions of the business. This is a massive risk if you are in a business that is exposed to lawsuits as all personal assets owned by the business owner will be threatened. 

The business owner is personally liable for every claim the business incurs and in turn, that business owner could end up losing their home, life savings and end up bankrupt (not a fun situation to be in). This is because the business owner and the legal entity are treated as one and are not separate.

Additionally sole proprietorships do not have any tax advantages that corporations have, thus owning a business structure like this only benefits because of simplicity.

No Tax Advantages

Additionally sole proprietorships do not have any tax advantages that corporations have, thus owning a business structure like this only benefits because of simplicity.

You Cannot Sell A Sole Proprietorship

It is extremely hard to sell a sole proprietorship as the value is based on the owner and not the business. The only items that can be sold are the assets of the business. Nothing else can be transferred and when the business owner dies, the sole proprietorship will terminate.

There can only be one (1) owner

By way of name, a sole proprietorship can only be one owner. If you desire to bring on additional owners, you will need to change entities to either a partnership, LLC, or corporation. 

Partnership

If you are looking to go into business with another individual or group of individuals, then you would look into starting a partnership. 

What is a Partnership?

A partnership is simply going into business with someone else besides yourself. It can either be a simplistic partnership with minimal protections similar to a sole proprietorship, or a full corporation partnership governed by a board of directors and providing limited liability. 

How is a partnership created?

Partnerships must be setup as any of the following business entities:

A general partnership is similar to a sole proprietorship except it now has more than one individual involved. This is also a very simplistic and inexpensive option to start up your business and can be created with a simple handshake.

Under a general partnership all profits and losses generated will be reported on each of the participating individuals personal tax returns. 

This legal structure does start to present some risks as now personal liability is shared between all individuals involved in the partnership.  

In a partnership, each partner is personally liable for the business related activities of the other partner(s) either good or bad.

Limited liability can be in the form of either:

  1. Limited Liability Company
  2. Limited Liability Partnership

Either option will provide more protection limiting the owners’ personal liability for business debts and court judgements against the business. They also both provide a more formal structure outlining the roles and responsibilities involved with each of the partners typically outlined in the Operating Agreement.

Additionally, owners have the ability to elect how they will be taxed (either as a corporation, or as a sole proprietorship) which allows them to take advantage of some favorable tax rates.

For more details on limited liability options, see below.

Forming a corporation is much more complicated and costly but it can be far worth it in the long run. Corporations receive much more favorable tax rates as well as provide the limited liability. 

Although less flexible than a limited liability in how profits are paid out and overall management (corporations require more oversight), they do give you the ease and ability to scale. When seeking funding for your business, most investors look for corporations compared to LLC’s.

 

Partnership Overview

How am I paid in a Partnership?

Getting paid in a partnership is dependent upon how the entity is structured. If is is structured as a general partnership or LLC, 100% of the profits will be distributed as pass through to the owners/members.

If the partnership is structured as a corporation, owners will be able to take a “reasonable” salary as well as be paid a dividend distribution.

How is a partnership taxed?

Partnerships are taxed either two ways:

  • Sole Proprietorship
  • Corporation

If taxed as a sole proprietorship, all income will be passed through as ordinary income.

Under a corporation, the partnership will face double taxation but will have more tax advantages available compared to a sole proprietorship. 

When is a partnership the best choice?

In simple terms, a partnership is the best choice if you are looking to go into business with someone besides yourself.

Are there any drawbacks of a partnership?

Any potential drawbacks are based on the elected partnership option (General, Limited Liability, Corporation) and how the business entity will be utilized. 

If you are considering a General Partnership to keep things simple, similar to a sole proprietorship, there is no asset protection and each partner is 100% liable for the actions and debts of the other.  

Limited Liability Company (LLC)

The next step towards a more formal business legal structure would be a limited liability company (LLC). LLC’s are the most commonly selected as they provide many benefits for small business owners where a sole proprietorship lacks while also being more flexible than a corporation. 

What is an LLC?

The LLC provides the flexibility of a sole proprietorship or partnership with the additional benefit of a corporate shield (called a corporate veil). More importantly, the LLC provides the limited liability where a sole proprietorship does not. 

Under a limited liability business structure, the owner(s) known as “members” of the business are now protected from any business debts and court judgements that may go against the business.

When starting an LLC, it can be a single member (similar to a sole proprietor except now has a corporate shield) and multi-member LLC’s with more than one individual involved (Similar to a partnership).

Additionally, owners will now be able to take advantage of some favorable tax rates depending on how the LLC is created and how profits are shared.

LLC Overview

How is an LLC created?

The LLC will need to be registered with your state of business and will require any legal licenses & permits. Additionally the LLC is required to file the Articles of Organization with the secretary of state.

While an operating agreement is not always required with each state, it is highly recommended as it will clearly lay out the rules and responsibilities of each owner involved.

Additionally, LLC’s have the ability to be structured either as a sole proprietorship (single owner) or a partnership (multi-owner) depending on how many individuals will be involved. In some states, single owner LLC’s are still considered sole proprietorships thus making it easy to pierce the corporate veil that the LLC provides.

 

How do I get paid in an LLC?

Members of the LLC are not employees. An LLC cannot have employees as the LLC does not pay a salary. Instead members are paid in distributions of the total profits. This income will then be passed through on the individual member’s tax return. 

How is an LLC Taxed?

Generally, under the typical partnership tax election, income generated from the LLC will be passed through to the members and counted as ordinary income. Members will then file their own tax returns each year.

Alternatively, an LLC can be taxed as a corporation opening up for various tax advantages. With a corporation tax elective, the LLC will run the exposure of a double taxation. 

It is recommended you speak with a tax advisor to discuss which election is best for your business.

When is an LLC the best choice?

LLC’s work well for startup’s and small business’ as they bring forward the benefits of a corporation and the flexibility of a sole proprietorship. You will also often see LLC’s used in real estate as they provide great business structures in this space.

Are there any drawbacks of an LLC?

LLC’s are limited on their ability to scale. Since an LLC does not payout shares of stock, outside investors are not as easily inclined to get involved. 

Additionally, as the LLC generates more revenue, the LLC could face paying some significant taxes if is it not registered as corporation.

Lastly, an LLC is not permanent and will need to be renewed every 2 years (renewing your LLC is a very simple process and can be completely managed by your registered agent).

SETTING UP YOUR LLC

How do I get Started?

Forming an LLC takes some additional paperwork but it is not very complicated to create. On average most LLC’s take under 30 minutes to set up online using a Registered Agent and will cost you anywhere from $50 – $300 depending on the state. 

Although you can set up your LLC on your own, we recommend using a registered agent as they will simplify the process dramatically for you.

Here are some possible registered agents that work well.  

Corporations

Corporations have been around the longest and were created to provide legal protection for the owners and operators of the business. A key difference from all other business structures is corporations will issue shares of stock that can be distributed to outside investors and loyal employees. They also will allow a salary to be paid to the employees compared to LLC’s distribution of profits.

Since we are focused on startup’s and small business’ we will not be discussing large publicly traded corporations and instead focus on smaller entities with one or several incorporators.

What is a Corporation?

A corporation is a legally separate entity from the individual(s) who own and operate it. You may own 100% of the stock in your corporation but as long as the operating procedures are followed correctly, the corporation will be recognized as a completely separate entity. 

This in turn provides limited liability protecting each of the operators from personal damages that may be caused by any misdeeds within the corporation such as:

  • Debts including bills, outstanding payments for equipment, etc.. (excludes outstanding taxes and personal guarantees)
  • Injuries suffered by individuals that could not be covered under insurance
  • Misdeeds of an individual within the organization

Corporation Overview

How is a Corporation Created?

A corporation can be created by a single or many incorporators and will be formed under the laws of the state where it will be registered. For example to file a Delaware corporation (most commonly used) you will need to file a Certificate of Incorporation with the Delaware Department of State.

The Certificate of incorporation includes: 

  • The name of the corporation
  • Name and address of the registered agent 
  • A statement of the purpose of the corporation
  • Total number of shares of stock being issued and the par / nominal value of each share.

Once the Certificate of Incorporation is filed, the corporation comes into existence.

Additional documentation will also need to be created appointing the first board of directors where they elect the appointment of officers, issuance of stock to the founders and initial investors, adoption of corporate bylaws, and the opening of bank accounts.

Finally to complete the process, the corporate must also obtain an EIN number and have all founders and employees sign confidentiality and invention agreements while all share holders will sign a shareholder agreement.

How am I Paid In A Corporation?

A typical for profit corporation will pay a salary to employees and dividends to shareholders. If you own 100% of the shares and are the only employee of the corporation, you will get paid twice.

How is a Corporation Taxed?

Unless a corporation is provided special treatment from the IRS, the corporation will be required to pay federal, state, and possibly local taxes.

When shareholders receive a dividend, each shareholder will pay taxes on the dividends received. 

When is a Corporation the Best Choice?

Corporations work well for cash-flowing startup’s and small businesses looking to scale and seek outside investors. Their primary benefits include providing the limited liability for the stockholders, give the ability to raise capital through the sale of stock, and corporate tax treatments.

Are there any drawbacks to a corporation?

Corporations are very structured and will require more paperwork and costs to set up and manage. For someone looking for a more simplistic business structure, a corporation would not be the first choice.

Client Retention Strategies To Grow Your Business

In the service industry, a focus on client retention is an absolute requirement. To get a new client takes an immense amount of time, money, and energy invested upfront before they typically begin to provide any return. Once established, your business depends on keeping that client as long as possible – if not for life!

If a client is lost, it will have harmful effects on team morale, decreased profitability, and even worse – damage your reputation!

Learning how to focus your efforts on a client retention culture will dramatically improve profitability, build a positive reputation, and continue your business in an upward growth direction.

To assist you with retaining more clients, growing your business, and increasing profitability, we put together these key client retention strategies you need that to keep your clients longer and build your company to the next level. 

Applying the right attitude and proper action will allow you to begin retaining more clients and scaling your business successfully. After all, success is not measured by the amount of clients you have, it is measured on how profitable you are.

1. Client Retention Starts With You

To help clear things up, client retention is your ability to keep a client coming back for more. It is your ability continue working with that client or customer over and over again.

The emphasis is on YOU, meaning it is your responsibility to take ownership no matter what level you are in the organization. This is even more important the further up the ladder you go.

Your Attitude is Everything

Your attitude is what sets the path on if that client stays or goes. A leader of a firm must have a 100% client retention attitude and no exceptions. Without this mindset, excuses will come up, exceptions will be made and the client will be lost. It all comes down to what you are willing to tolerate. 

If an organization’s leadership allows for excuses and tolerates any possible reason why a client was lost, that mindset will end up destroying the underlying goal with the team, and that goal is profitable sustained growth.

There should be no excuses and only one attitude that this client is for life. If a client is not critical, you should not be doing business with them in the first place.

A Client Is For Life Philosophy

When you are engaging a potential client, and working to gain their trust, you must approach each an every client as a for life relationship. Your attitude will set this path on if that client will keep coming back to you or not. Your goal is to keep them for life!

Applying the client for life philosophy allows for you to look at each engagement as a relationship looking to flourish together. You are their partner and will assist providing new value and innovation pushing to accomplish your shared goals together. 

You must look at each client as a for life relationship because repeat business is what creates profitability and sustainability.

2. Pick Your Clients Wisely

There is an endless list of potential clients out there for you, but not all of them are the right client for your business. You must find the right clients that match your business model in order for you to be successful. 

A client that does not match your defined typical client and matches your terms will always become more of a burden than you originally anticipated. Bad clients end up becoming black holes of destruction on your business draining profits, decreasing employee morale, and most devastatingly destroying your business’ reputation.

Not every opportunity is a good opportunity, so pick your clients wisely.

Define Your Client

When you are seeking improvements in client retention, start with defining the type of clients that fit your model. Work with the key leaders within the organization to assist brainstorming what that client should be. 

Your organization may need to niche down further to give your business more focus, or maybe you should standardize your terms of client engagement. Each client you engage should require the same amount of defined effort and resources if you are seeking to scale the model in the future.

Some possible examples to consider:

  • Quantitative qualifications – Only engage clients that match a threshold (i.e. annual revenue, size, etc…)
  • Qualitative qualifications – Only engage clients that provide qualitative benefits (i.e. positive reputation, referral ability, market category, etc…)

Overall, defining the right client and right terms will give more clarity and focus for your team in order to succeed.

Mold Existing Clients to Your Terms

After defining the right clients for you and creating the right terms they should abide, you are on your way to increasing your client retention.

For your existing clients, work with them to negotiate any new terms needed in order for you to be successful. Seek a solution that provides a win-win for both of you. A note here, a successful negotiation is one where you are willing to walk away if it does not go the way you want.

The whole purpose here is you need to be successful in order to do your job right, thus your clients need to work with you to match that criteria.

Exit Bad Clients

For any clients that do not match your definition or cannot meet your terms, it is best to exit these relationships. It is far better to have a client wish they could continue doing business with you than to be fired by them.

Your reputation is critical to your organization’s success and its essential to pull out of any no-win situations as soon as possible. It is not worth risking your reputation for a few extra dollars in profits.

3. Manage Client Expectations

Being able to manage your client’s expectations is absolutely critical for your success. A client will not come back again and again if their expectations are not met.

A client’s expectations are set based on prior experience and all forms of communication provided to them. This is especially true during the sales process when your client is learning all about your offerings and envisioning how the relationship will work together.

Align On Expectations

Going into a new client relationship, it is absolutely important to align on all expectations. This must happen on both sides in order for everyone to have a full understanding of what is to be provided.

The most important rule to understanding a client’s expectations is to ASK

This practice should be done during the kick-off of an engagement, and continue throughout the life of that client. As the business progresses and evolves, plan for some expectations to change.  Setting up a 30-60-90 day expectation plan will assist with aligning on all upcoming expectations.

Always act in the best interest of the client as they should be your interest as well.

Start According To Expectations

Especially at the start of an engagement, is important to realign as some expectations may have changed. For example a new decision maker may have come aboard since the sales process started, business requirements could have changed, or assumptions could have been made.

It is best to expect there will be expectations you were not aware of. Here you will have to work with the client to renegotiate for alignment to your terms and abilities, or set up an exit plan if unable to come to alignment. 

If you find yourself running into delays or other issues that conflict with the success of the engagement, revise your process in order to meet all expectations. For example delay some of your standard operating procedures if needed in order to meet essential steps or deadlines in the process. 

Continually Check-in

Throughout the engagement, communication and transparency is essential for overall success.

Conducting a weekly, monthly, or quarterly review will allow for both sides to realign on all expectations as well as discuss any new advancements that may have changed. Using communication and influence will assist with managing expectations but note, you will never be able to control them.

Overall clients will judge your performance on what they expect to happen and not on what actually happened. Be prepared to clarify any expectations throughout the process.

Avoid The Expectations Paradox

While exceeding client expectations is a good thing, it could also cause harm in the long run if continually over exceeding. This is known as the expectations paradox.

When expectations are continually over exceeded, a new bar of expectation will be set with the client where over exceeding is the standard. Eventually when your organization is unable to continually over perform, the client will be disappointed.

To prevent the expectations paradox, push to slightly exceed expectations each time but do not continually over exceed. If you find yourself in this position, reiterate with the client that you are now performing up to the aligned expectations previously agreed upon.

4. Focus On Relationships

The world we live in is based off relationships. When seeking to increase client retention, we must change our view of how we look at a client. A client is not the company name or building it resides in, but instead it is the people who make up that organization we call a client.

In order to increase client retention, it is essential to build a strong amount of rapport with each individual within the organization. This can be done through a mix of several approaches noted below.

Build Trust through Nurturing Relationships

Building and establishing a level of trust between you and your client is the base for all relationships. When trust is established, you will be able to move more freely within the organization acting as a partner.

Trust takes a long time to establish and can all be lost in a second, so be mindful on how your team acts.

To build trust between the client and your organization, focus on consistently implementing the following specific behaviors:

Candor is your ability to tell the client what they need to hear even through it may not be what they would like to hear.

 Competence is your ability to deliver exceptionally without falling into the expectation paradox trap.

Concern is your ability to treat the client’s business decisions as if it was your own business.

Establish Multiple Relationships Within Your Client

When engaged with your client, it is essential to establish more than one contact to hold the relationship together. If only one relationship exist, there is a high risk for potential loss of the client.

For example if the client executive sponsoring the engagement is removed or elects to move on, there is a high risk the relationship will not continue. Instead focus on integrating a Web of Influence between the two organizations.

Web of Influence

Similar to a zipper being pulled up joining two disjointed pieces together, the Web of Influence joins both organizations together on multiple levels. 

Within the web of influence, each team member is matched with their respectful counterpart. Also within the web, each team member will also be connected to an individual both one level higher and one level lower than them. 

This level of integration between both organizations allows for clear communication, transparency, and in depth integration. After all, most communications happen in the hallways rather than the conference rooms.

Without a web of influence in place, the relationship is at high risk if any of the key members depart either organization.

Exhibit from What Your Clients Won't Tell You and Your Managers Don't Know by John Gamble and Steve Wurzbacher

Build A Customer Relationship Database (CRM)

To further strengthen your relationships, spend the time to get to know the people within your client organization. It is recommended to set up a customer relationship management system (CRM). 

The CRM system will allow you to keep track of your clients throughout their career. Also if anyone happens to change on the client assigned team, this tool will help get them acquainted sooner than later on the basic details.

With your CRM system in place, ask clients about some personal details such as birthday and home town that would allow your team to connect on a more personal level. This approach applies the human factor and assist with establishing rapport. 

Here are some example items your team could inquire an track as you get to know your clients:

  • General Details (Phone, Email, Title, Department)
  • Important Dates (Birthdays, Anniversaries)
  • Interest (Hobbies, Leisure Activities)
  • Relationships (Marital Status, Children)
  • Past History (Home Town, College Attended, Area of Study)
Building a CRM database also allows you to stay in contact with your clients after they may elect to move on from the organization.

Continue The Relationship Afterwards

After a client engagement comes to an end, keep your client relationship going. If a client departs an organization, or if the contract comes to completion, maintaining a positive relationship with that client will always open more doors in the future.

For example if the client moves to a new organization, they might open the door for you to continue working with them again.

Overall, the relationship does not end when the engagement  ends. It will continue into the future where that client may become a great reference for you, and open many doors.

5. New Business Is Not The Focus

It takes 3 new clients of the same size to equal the revenue of one existing client. – This is when you take in account all sales and startup costs associated.

It does not make sense to focus on new clients until after you have met the expectations of the existing clients. Chasing new business prevents you to perform your best for the existing clients.

Success is based on profitability, not based the number of clients you are able to get.

6. Document Your Success

As the life of the client continues with you, people in the organization will change. Your successes and the memories of those successes stay with the individuals leaving the organization. 

To sustain a strong reputation with the client, it is essential to track all successes. 

Failures will document themselves as people remember, but your successes will go forgotten.

Also having a document trail of successes will support the overall value you have brought forward to the client further reinforcing your need to continue the relationship.

7. Changing Decision Markers Requires Revisiting the Account

When leadership or any key decision makers change in the process, the account faces possible jeopardy of loss. Be proactive in this case and get back together in front of the account to review and realign. 

Typical reasons you should be prepared to discuss with the new decision makers are:

Budget changes are one of the most common reasons why engagements are terminated. This could be due to the client realigning on their needs.

To be prepared for this, make sure you have had open discussions with the client to understand any financial limitations and work with them as needed. There may be a need to renegotiate the engagement.

When a client does not understand your value, it is time to pull out all documented successes recently had. This review must show both quantitative and qualitative value your team provided.

Sometimes the execution and overall delivery of a solution is not up to the expectations of the client. A technical delivery would include your ability to bring forward new innovations they client did not previously have.

If you run into this issue, sit with the client’s decision makers and align on where any technical delivery gaps currently exist. Proactively discuss how you will work to resolve these in the near future.

If you are not meeting client expectations the client will begin seeking your replacement.

Use your weekly, monthly, or quarterly business reviews to get insight on where expectations are not matched. If you find yourself unable to meet these expectations, sit with the client and outline what needs to be done in order to correct this.

Remember client expectations are set based on prior experiences and what was communicated to them at the start of the engagement.

If your Web of Influence is not tightly threaded, you may face a gap in your ability to secure that client. When a new client decision make comes in, immediately set up time to build your relationship with that individual or any other new members.

It is possible the new decision maker has a past relationship or alternate preference. 

The best approach here is to once again review the value your organization has been providing the client and the expected future value still yet to happen.

The most important aspect to retaining your client here is to get in front of them as soon as possible and realign on any possible changes or needs. Never leave client retention to chance and take ownership before it is lost.

Provide A Time Machine Report

A great method to provide any new client decision makers on the team, or anyone looking to get caught up on your engagement is to provide a “Time Machine Report”.

The Time Machine Report provides a summary of the engagement thus far, highlights all the successes, and outlines where you are going in the future. This report is your tool to highlighting all value delivered and 

Realign on Budgets and Seek Approvals

As noted above, one of the most common reasons an engagement is terminated is due to budgetary reasons. For example a change in budget, or termination altogether. 

When sitting with the new client decision makers, get aligned on all upcoming budgets and seek approvals. This will give you the green light to continue moving forward further retaining the client.

8. Assess Your Performance

Your ability to understand how your team is performing both before and after an engagement is beneficial towards your client retention process. 

Conducting assessments on both during and after an engagement provides insight on adjustments to the business model, identify gaps, and most importantly prevent future repetition of any mistakes previously conducted.

Assess During Client Engagement

As a proactive measure to ensure client retention, assessments and evaluations are to be conducted throughout the engagement. This process would involve quarterly or annual reviews assessing the following areas:

  1. Are all client expectations being met?
  2. How is the quality of all relationships?
  3. Are you properly meeting all technical aspects and delivering up to all service levels?

Additionally a neutral third party could be used for these evaluations in order to prevent any bias reporting.

Conduct A Postmortem

After a client engagement ends, a Postmortem should be conducted within two months. The process would include all contributing team members involved with the previous client engagement to assess the following areas:

  1. Where did you fail to meet expectations?
  2. Where did your relationships fall weak?
  3. Where did any technical aspects fall short?

With a postmortem review, your team will be able to identify where your team did not meet any of the following areas above. Mistakes can only be corrected after they are acknowledged.

 

9. Share the Lessons Learned

Success is accomplished through a process of failures and corrections. Applying lessons learned so the past mistakes will not be repeated. Educating your team on those past failures and what works well will certainly improve client retention.

Focus on educating your team on how to manage the balance client expectations through relationships and technical delivery.

 

Technical Delivery

This is the process bringing forward new innovation and overall value that the client did not have previously. This also includes overall execution success as well.

Nurturing Relationships

Relationships are critical to the overall success of the engagement. Focus on educating your team in these areas.

Expectations

Expectations are what set the stage for an engagement's success. Being able to balance this between relationships and overall delivery are critical.

10. Closing Is Just As Important As Starting

A critical area most individuals do not think about is properly closing down an engagement.

If your engagement is coming to an end, closing down is just as important as starting. This is where your final interactions are on display for all to see and your actions will be remembered for years to come. Although the engagement may be over, the client relationship will continue.

Assist With The Transition

In order to preserve the client relationship as well as keep a positive reputation in the market, work with your client on any transition that may be required. Do not immediately pull out of the engagement until after the client is satisfied with the transition. A poor transition is not only harmful to the client, but it will reflect poorly on you further resulting in negative side effects on your reputation.

Focus on making the transition as smooth as possible showing you are their partner the entire way. When things turn out later where they need you again, you will be the first one they think about. 

Past clients also make great references!

11. Client Retention Is A Daily Activity

Client retention is not a one time event but instead a daily practice. Through delivering the technical value and securing the relationships, client retention is an everyday process. This is not something you ever leave to chance, it is something you are 100% committed and engaged with on multiple levels.

The End Date Is Never The Renewal Date

Never wait to begin renewal discussions until the agreement is about to expire. This is the absolute worst possible time is to begin renewal discussions. By waiting until the contract is up for renewal will lose you the incumbent advantage and valuable time securing your partnership.

A note here, a contract end date is something anyone can find out, including your competitors, thus they will be working even harder when they know your agreement is coming up for expiration.

Be prepared for your competitors to exploit any potential weaknesses they try to find, and you must be prepared to do the same to them.

Do not let your competition in the door and leverage your relationship and success to retain your valuable client!

Additional Resources

If you would like to learn more about client retention, below are some additional resources to assist you along your path.

by John Gamble

Known as the nations leading client retention consultant, John Gamble tells the story of the clients for life philosophy.

This book is a great quick read that covers the key aspects to client retention. If you are looking to improve your client retention and bottom line profitability, check out this book.

by Kevin Stirtz

Kevin Stirtz provides a great book providing 6 powerful steps you can do to keep customers coming back. Starting with customer loyalty, Kevin provides real-world tips, tricks, and examples on how you can build your customer base. The book as been very useful and will give you some valuable suggestions that you can use immediately. 

How “Group Flow” Maximizes Team Performance

Group Flow? What is that?

Well have you ever wondered why some teams perform better than others? Or how they are able to synchronize so well with one another?

Did you know there is a term called “Group Flow“, and that this “Group Flow” makes all the difference between a top performing success story and an unsuccessful disaster?

To learn more on how you can turn your team into the next greatest success story, we will explain what “Group Flow” is, and how you can implement it into your team.

Let’s take the step into the next generation of high performers that will provide enhanced performance, driving revenue, and optimized efficiency for your organization.

What's In This Article?

HOW "GROUP FLOW" MAXIMIZES TEAM PERFORMANCE
OVERVIEW

What Is Group Flow?

“Group Flow” driven from a state of “flow” meaning a mental state of operation in which an individual is able to perform an activity immersed in a feeling of full enjoyment, energized focus, and complete involvement.

Group Flow is the ability for a group to simultaneously experience a state of flow together. The group will appear to be of one mind and one goal, where each member continually builds off the other.

In group flow, a team is completely focused “in the now” on the task at hand without distraction. Some would say it appears the group enters and altered state of mind as one together.

With Group flow, a team will be able to perform at their peak levels pushing innovation and productivity to the highest extremes. 

Background On the Study of "Flow"

Originally studied by psychologist Mihaly Csikszentmihalyi on the subject of flow, Mihaly’s investigations of “optimal experience” uncovered what makes an experience genuinely satisfying is a state of consciousness called he called “flow“.

When in a state of flow, individuals experience deep enjoyment, creativity, and feel a total involvement in life. 

Similarly compared to the passion hypothesis, as people get lost in a task or subject they love, individuals in flow experience complete focus and peak levels of enjoyment while performing. 

GROUP FLOW USE EXAMPLES

Where Has Group Flow Been Used?

Group flow has been studied and implemented by some of the most elite organizations today and continues to be a topic of conversation. A few excellent examples of group flow in action range from navy seals, to improv stage performers, and from Fortune 100 business’, to small startup’s, and so much more.  

When you look for Group Flow in action, it can be seen all over where these teams are the highest performers becoming the best at what they do.

HOW YOU CAN APPLY IT

How Do You Create Group Flow?

In order to create Group Flow and turn your team into peak performers, a team must experience the following 10 criteria. Achieving this will sync a team into a Group Flow state maximizing overall performance and pushing innovation and creation to new levels.

10 Components of Group Flow

Share A Clear Goal

When a group comes together, aligning on a clear overarching goal is critical for Group Flow. Known as “The Group’s Goal” a team is able to focus together in order to reach positive results.

The goal itself does not need to be known in advance. For example as a company will make many pivots along its path in order to succeed; a team will push innovations and creativity in order to achieve.  

Deep Listening

A successful team should be completely engaged with one another. That would imply they are actively listening to one another and building form there. The concept of “Deep Listening” involves active engagement where members do not plan ahead on what they will do or say creating unplanned but productive responses.

A great example of this would be to look at some of the best improv performances. Here one member of the improv performers makes a statement, and the others build off that statement. It is all completely ad lib yet it yields remarkably innovative results.

If one or more of the participants has a pre-planned response or preconceived idea to be suggested, all innovation will be lost. This is referred to as “writing the script in your head” and is frowned upon.

Complete Focus

As Mihaly has explained, “Flow” is achieved when there is complete focus/concentration on the task at hand. This is considered “living in the now” and could also be referred to as mindfulness.

For complete concentration to work, it is essential for the group to be focused on the task at hand with absolutely no distractions. This would require either a physical or mental barrier to be placed between the group’s activity and anything else.

In order to focus a team’s concentration, they should have a unique location or mental practice that will allow the flow state to occur. 

With complete focus, natural progress of the group’s innovation will develop as the team synchronizes together.

Any time constraints, deadlines, or other limitations will only cause distraction resulting in harm to the group’s focus. 

Autonomy & Control Balance

It has been studied that flow is heightened when individuals feel autonomy, competence, and relatedness. But in group flow, members must act as one confirming to one another.

In order to maximize group flow, members must both be able to feel autonomy while also being flexible to confirm with the group. 

Open Mindset

A stated with autonomy and control balance, group flow requires team members to be open minded to each others input. This allows one another to build off each individual’s contribution. 

There is no room for high ego’s and divided thoughts as that will only harm the flow state.

Equal Participation

All members of the group should be of equal experience and equally participate in all roles a functions needed for the creation and delivery of the goal. This does not imply each member must be exactly the same, as that will not benefit the group, but instead have equal skill levels for the role they are filling. 

If a member’s skill level is below another’s it will diminish returns for the team.

An example here is why professionals do not integrate with amateurs, or why CEO’s only want to deal with other CEO’s. The individuals of a group must all be of similar level with another even if the role is not the same.

Clear Communication & Transparency

Clear communication and transparency among the group is essential for flow. Here it is more than just weekly meetings but more so constant chatter and alignment throughout the day.

Team Familiarity

Each member of the group should have familiarity with each other’s key attributes, skills, and weaknesses. Team members will have a full understanding of one another’s performance abilities allowing one another to synchronize as needed.

Using Navy Seals as an example: Team members are trained to understand one another’s habits, strengths, and weaknesses. With this level of familiarity, team members are able to support each other sustaining group flow.

Forward Movement

A group must always push for progressive continuation. Each member building off one another continually moving the collective forward as one. 

A team in flow can not take any steps backward to rest or reset as that will interrupt the state and slow momentum.

As each other member adds to the group’s forward progress, flow is created.

High Risk / High Danger

When a team is in a relaxed non-pressure state, errors and mishaps are inevitable. This can be seen when watching performers in practice compared to the full production. 

The key difference here is pressure and the risk of failure or danger that exist.

When a team is under pressure to perform at their peak, all focus and senses are “in the now” state limiting out any distractions.

This can be seen all over from olympic athletes to Navy Seals on a rescue mission, and from professional stages to extreme sports enthusiasts. 

Overall, without a high risk of failure or elicit danger that persists, a group will not be able to enter the flow state.

LEARN MORE

Additional Resources

If you enjoy learning about Group Flow and would like to read more about the use of “Flow”, here are some great resources and books for you to check out.

The Rise of Superman Book Cover
by Steven Kotler

A New York Times – Best Selling Author – Steven Kotler uncovers what creates super human performance through a state of “Flow”.

Exploring the world of action and adventure sports, Steven Kotler unlocks the key for finding our optimal state of consciousness in which we perform and feel our best.

This book was a great “adventure” while providing signifiant insight to how we can find “flow” in our lives.

Steeling Fire Book Cover
By Steven Kotler, Jamie Wheal

A great book by any means! The authors go into altered states of consciousness and how they can ignite passion, fuel creativity, and accelerate problem solving.

This book will help you understand that you too can find “flow” as well as learn how elite organizations – Navy Seals, Googlers, Fortune 100 CEOs are all using alternate states to accelerate performance, improve their skills.

This is an excellent book that will walk open your mind to new methods that will enhance your ability.

by Mihaly Csikszentmihalyi

The original book of its day, Mihaly Csikszentmihalyi famously investigates “the optimal experience” through a state of flow.

During flow, people typically experience deep enjoyment, creativity, and a total involvement with life.

If you are new to learning about flow, this quick read will certainly open a new path in your life.

Best Entrepreneurial Quotes to Live By

Starting a business is one of the greatest adventures you can ever go on. With all the up’s and down’s like a roller coaster, sometimes entrepreneurs need a little motivational pick me up. To help, we compiled this list of the best entrepreneurial quotes every entrepreneur should live by.

If you like any of the quotes, click the tweet button to share with someone else.

What's In This Article?

BEST ENTREPRENEURIAL QUOTES TO LIVE BY
FAILURE BECOMES SUCCESS

Quotes About Failure

EDUCATE YOUR MIND

Quotes About Learning

SEEK PASSION

Quotes About Passion

WHO DO YOU KNOW

Quotes About Associations

START NOW

Quotes About Taking Action

SEEK A CHANGE

Quotes About Change

EMPOWER FOCUS

Quotes About Focus

MONEY IS NEVER THE END GOAL

Quotes About Money

A CHANCE IS BETTER THAN NONE

Quotes About Taking A Risk

EMPOWER YOUR CREATIVITY

Quotes About Creativity

LEAD THE WORLD

Quotes About Leadership

IT STARTS WITH MINDSET

Quotes About Mindset

WORK HARD

Quotes About Hard Work

WHAT IS SUCCESS?

Quotes About Success

We hope you enjoyed this every growing list of the best entrepreneurial quotes to live by. If there are any other entrepreneurial quotes you think should be on this list, please send us a note or comment below. 

How to Set Goals: A Simple Guide for Success

We all have great dreams in our lives, but without setting them into a plan of action, they will never evolve into reality. By setting a goal, you will be able to take that dream or idea into reality. To assist you with turning your dreams or ideas into something more, we created this simple guide on how to set goals to get you started.

HOW TO SET GOALS

What's In This Article?

WHERE TO START

What can goals do for YOU?

Goals Create the Future Today

To get started, first let’s think about what a goal really does. In essence, a goal gives you the ability to take control over your life and create your future. What does that mean exactly?

Well, by setting a goal today, and later taking action and accountability, you will be able to work your way to achieving that dream. It all starts with taking that dream and writing it down. 

A goal sets the end point on a map to guide you forward into the future

As David Allen once said “The great secrete about goals and visions is not the future they describe but the change in the present they engender.” 

If You Can Dream It, You Can Obtain It

Did you know everything in this world has been designed twice, once in the mind, and second in reality?

Anything you see, hear, touch in this world was first created within the mind.  Each achiever had to believe it is possible first before they could bring it to reality and create it.

You have to imagine yourself achieving that goal and then believe it can be achieved. The best method is to begin visualizing what it would be like to achieve your goal and how it will make you feel. Dreaming up your goals allows you to become your own visionary!

For an entrepreneur, this could be dreaming up a the latest innovation for a new tech giant, or something smaller such as getting initial funding to start their business. The most important part is they are creating within their own mind and believing it can accomplished.

In a more general context, athletes, movie stars, presidents, and anyone who has accomplished anything first had to imagine themselves achieving their goal, believe it can be accomplished, and later place a plan taking action to bring it to reality.

Create Your Life

The best part of creating a goal is exactly that. You get to make it up! You have the ability to decide what goals you would like, and you decide if you would like to go after them.

An important point here is you create your goals just like you create your life’s journey. Thus, in other words, you make up your goals based on what you desire most! 

Tell A True Lie

Another way to look at goal development is telling yourself a true lie of what you would like to be, or how you would like people to view you.  

By lying to yourself that you have already achieved that goal, you are able to create a vision and later live into that vision.

When you believe in a version of a higher self, you begin to live into that self.

EXAMPLE

Think Like Arnold

An great real world example of how imagining and then achieving, let’s look at Arnold Schwarzenegger who said:

"I am going to be the number one box office start in all of Hollywood."

At the beginning of his movie career, Arnold explained how he would do that by creating a vision of what he wants to be and then live into that vision as if it were already true. 

Arnold then went on landing years of blockbuster movie roles, becoming governor of the state of California, and continually achieving his goals.

LET'S BEGIN!

How To Plan Your Goals

As you may have heard before, Warren Buffet and many other great inspirations have all said similar things, make a list of all the goals you want to achieve in the upcoming future from most important to least, and when completed cross off everything but the top five.

Following this advice is great for a start as it gives you focus on the most important goals in your life, and it prevents you from becoming goal diffused. Unfortunately, this simplified process does not seek clarity and create an organized balanced lifestyle which is necessary to focus on life as a whole.

Instead, the best approach on how to set goals is to seek balance by focusing your list into three main areas.

3 Areas To Focus Your Goals

Below are the 3 areas of focus you should use when developing your goals. The approach here is to create a balanced life style with clear targets you are seeking for yourself. 

If one area or another is focused on more, your life will end up leaning in that direction causing you to miss out on life’s overall enjoyment. 

These are goals that directly impact your personal life. Things such as skills, learning & knowledge, overall self-improvements.  

Some examples of personal development goals:

  • Working on a relationship
  • Learning a new language
  • Improving your overall health and wellness

These are goals focused around your career and financial dreams. Work & Career goals are aimed at more quantitative areas for improvement. 

Work / Career goals are things like:

  • How much money do you want to make a year from now
  • Getting that promotion, and the time you will take to get there
  • Getting your business to be profitable

Fun and Relaxation Goals are things that focus on your ability to unwind and enjoy life. After all, life is not all about work and personal development, it is about what makes you happy. If you aren’t happy, you will never have proper balance in your life in order to focus and stay on track towards success. 

Fun and relaxation goals are things like:

  • Where you would like to travel to on your next vacation
  • Getting that new car, boat, or other toy desired
  • Buying a bigger house or vacation home

Triangle Example

When you are developing your goals, it is best to think of them as points on a triangle. Each point covers one area of focus (Work, Fun & Relaxation, Personal Development). Your goal is to create an equilateral triangle symbolizing symmetry and balance in your life. 

If one area is focused on more than the others, your triangle will pull in one direction causing an imbalance within your lifestyle and leading to overall unhappiness.

EXAMPLE 1

Balanced Life

Balance of work, fun, and personal development = Success

The equilateral triangle represents a balanced life where all key areas are equally managed.  Here you will be able to excel towards success while having equal focus and balance in your life.

EXAMPLE 2

Imbalanced Life

All play and no work & development will make you fall behind

The above examples show an imbalanced life where focusing too heavily on one area will cause another to fall behind.  This can be seen in work and family life with overly worked employees, or individuals who only play and never achieve their goals.

START WRITING!

Let's Get Started!

Now that you understand the structure, let’s take action and begin writing down our goals. 

“A goal without an action plan is a daydream"

Your Past Does NOT equal Your Future

As you get started, it is important to remember you are the product of the choices and decisions you have made up until today.  If you are unhappy with your life today, that is based on your past thinking, past decisions, past relationships, past influences, and any other areas of your past. 

A key word here is PAST and not FUTURE

Your past does not equal your future.  Instead you can change your future at any time by changing the way you think and all other areas of your life will follow. 

What is real in your life is based on what you have achieved in the past. What becomes real in your future is what you set yourself to achieve.

Think Unrealistic and Dream Big

In order to change the way you think, you can no longer think realistic, but instead think unrealistic.  Thinking realistic is based on you PAST experiences and past thoughts while thinking unrealistic opens the mind to higher achievements of places and things you have never obtained before. 

In order to set your goals, you must think with the unrealistic and get yourself inspired. Motivate yourself to believe anything is possible.

Try listening to motivating music, go for a run, and get your heart excited. Motivate yourself to create yourself! By thinking anything is possible you will achieve results. 

With an unrealistic thinking approach you will be successful. Think of the example with Arnold Schwarzenegger above by creating that vision, and living into it!

Now it is your turn.

Seek Clarity

As you begin to think about your goals, many thoughts will come to your head. When you begin to develop your wants, needs, and desires it is important to place focus on what is it you truly desire out of life.

To assist you with seeking clarity, below are some suggested questions to guide you in the process.

Questions To Guide You

When you begin writing down your goals, focus on each of the three areas that balance your life (Personal Development, Work, Fun & Relaxation). Ask yourself some common questions that aim to what you want most in life.

Answer questions such as:

  • What do I want most in my personal life/career/relaxation?
  • Where would I like to go?
  • What do I want to become? 
  • Is there anything I want to change?
  • What do I want to have?
  • Is there anything I want to do?
  • How much money would I like to make?
  • What do I want to contribute towards this world?

How Do You Want To Be Viewed?

If you are seeking some additional help identifying your goals, ask yourself this key question: 

When I die, what do I want people to say about me?

This question is asking how would you like to be remembered. What impression would you like to leave behind? What do you want people to say? Or if you only had 30 more days to live, how would your priorities change?

This question should help you think about what you want to become, do, accomplish, and be known for on this world. What you think of here will help guide you on what goals to write down.

This question is inspired by the book: The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey

Remember, your goals can be anything you desire most. They can be simple or they can be complex challenges. You set them, and can accomplish them.

Overall, it is up to you to use your imagination and create your future. Become your own visionary for your life!

All Goals Must Have Deadlines

When planning your goals it is essential to apply a timeline.  An easy method for setting your goals is to list out short term and long-term goals.

With this approach you can focus on the immediate, while working towards the bigger picture. Overall it is much easier to focus on the smaller task that build up to the larger end goal. Start with the stepping stones and work your way up!

To assist with planning your goals, here is an example layout you could follow:

Without a deadline, Parkinson’s law and procrastination will take over. 

Instead, it is best to give yourself accountability by setting a deadline allowing you to stay on track to accomplish your goals. 

With this in mind, you have to understand what is actually achievable by setting a realistic manageable timeline and hold yourself to it. You are your own boss of your life here. Only you can decide if you should be promoted or passed up with the rest.

Parkinson’s law – “Work expands so as to fill the time available for its completion”.  

This means a project, task, or goal will take the full amount of time you allow for it.

As you hit each small victory, the great long-term goal will become closer and appear more obtainable. Keeping yourself on track with the small wins will encourage yourself to continue with the challenge gets harder.

Additional Challenge - Stretch Goals

If you are up for adding an additional level when setting your goals, add a challenge by creating a stretch goal. A stretch goal is when you take your current goal and expand an additional target to reach.

For example: A goal to read 50 books in a year, the stretch goal would be to read 60 books. Another would be to push to increase your sales quota by tenfold, or take your goal of making six figures and making it six and a half figures.

Overall, the stretch goal allows you to see that you can go above and beyond your initial goal. The concept here is thinking big and accomplishing more than you thought you could previously. 

Leave with Excitement

Lastly if you are not excited after you have completed writing down your goals, then you MUST go back and do this exercise again.  You must be able to walk away feeling like a kid again with all new dreams wants and desires.  Get yourself in a state refusing to take anything less. 

WHAT'S NEXT?

What's Next After I Wrote Down My Goals?

First great work writing down your goals! If you do this every morning or night, it will naturally become a habit and later you will be teaching others on how to set goals.

As for next steps, once your goals are written, you now need to create a plan using your timeline and then follow through by taking action. Overtime you will accomplish your short-term goals eventually working your way up to achieving the long-term goals. 

Nothing happens all at once, but you can make a significant amount of progress when taken in small steps!

As Albert Einstein once said, “nothing happens until something moves” – So take action on your plan and turn your goals into reality.

LEARN MORE!

Additional Resources

If you are looking for more great materials to assist you on how to set goals and develop yourself further, here are some suggested resources to check out.

by Brian Tracy

Written by one of our inspirations and mentors, this is only one of many of Brian Tracy’s books we will recommend here. 

By far, this is a great book to assist you along your path of development. You will find some helpful insights in here that will help guide your path in life forward. We hope it brings you as much value as it has done for us.

by Zig Ziglar

A legend when it comes to personal development, Zig Ziglar will always seek to inspire you over an over again. 

This book we actually recommend getting the audio book version so you can pick up on all of Zig’s humor. It is a joy to listen to this book and will open your mind with great common sense we all should have known by now in our lives. You will enjoy this one!

by Stephen R. Covey

This is a must read if you are looking to develop yourself further. Stephen Covey does an excellent job of of approaching life’s problems with a principle-centric approach. 

This book will help you on developing your goals as well as simplifying your mindset to give you security to adapt to change and provide you wisdom and power to take advantage of opportunities as they arise.