Mind Your Stress, Increase Your Revenue: 7 Strategies for the Powerful Entrepreneur

This is a guest post from Julieta Macias, LCSW-C, Ph.D. See below for her bio and contact information. 

*****

Do you find yourself energized?  Busy?  Juggling a wide myriad of projects?

Are you multi-tasking and staying up late hours to get everything done? Are there just not enough hours in the day?

Yes, you are busy, powerful, and engaged in your passion and vision. You are managing your company and serving your clients. Have you taken time to appraise your most valuable asset? Have you taken time to consider your health and wellness market value?  You may say, “I am young, energetic, and powerful; I do not have time for that.” Do your friends and loved ones tell you to slow down? Are you getting or feeling sick? Do you feel off balanced and overwhelmed?

In the article Stress, satisfaction, and the work-family interface: A comparison of self-employed business owners, independents, and organizational employees, published in the  Journal of Occupational Health Psychology, 2006, the researchers found that self-employment allows business owners to achieve greater autonomy as compared to people employed by someone else (employees). Yet, the greater pressure and demands of owning one’s own business may detract from the advantages. Therefore, business ownership truly may (can) be a “double-edged sword.”

Entrepreneurs have autonomy and job satisfaction. Yet, they can suffer from work exhaustion or job-related stress. To maintain your business venture, it is important to focus on reducing/managing the stress.

In the article Effective and viable mind-body stress reduction in the workplace: A randomized controlled trial, in the Journal of Occupational Health Psychology, 2012, findings were consistent with the results of other mind-body worksite stress management programs indicating reduction in stress symptoms. Improvement was found in mood, resilience, and  psychological well being of participants. In addition, the researchers found decreased stress reactivity and sympathetic nervous system activation.

Science tells us that we hurt ourselves when we overload and abuse our bodies and minds.  When we bombard our psyches with too many “balls to juggle” and artificial stimulants to perform our jobs and tasks faster, we are causing damage to ourselves.  For instance, if  we skip meals and/or lose sleep just to get through that extra email, phone call or meeting, we are abusing our body and mind.

You pay the price.  You cannot afford to run yourself into the ground. Do not overload your creative mind and your precious body.  You are your number one commodity. Therefore, an investment in a mental health audit will produce a high return. The more calm and steady you allow your mind to be, the clearer and more productive your business will be. Consider this process, your capital improvement. When calm, you will be productive and earn more.  It makes good business sense.

You say, “Tomorrow,  I’ll do it differently.”

I say, “Tomorrow is today.” I say, “Less stress = more revenue!”

I recommend seven tips to keep your stress levels at a healthy level. Realize, believe, and see yourself as your most important business asset. Stay encouraged, take care of yourself!

  • Take Inventory – Begin by keeping track of your stress level on a daily basis.  On a scale of 0 (calm and peaceful) to 10 (so stressed that you can’t function), where are you today? Take that inventory and keep track for 7 days.
  • Partner with a Health/Medical Provider – Discuss how much water to drink and starting or maintain your exercise program. Work collaboratively on prevention care.
  • Relax Daily – Carve out time to use your five senses: Nurture your eyes by looking at beautiful pictures or live scenery. I love Cate’s pictures of her travels. These beautiful places bring calm and enjoyment. Nurture your sense of smell by smelling roses, spices, and oils; they have benefits. The field of aromatherapy supports the value of scents. Nurture your sense of touch by feeling the texture of a tree, a leaf, or the skin of a loved one. Nurture your sense of taste by giving yourself edibles of fruits, veggies, or a carb that you love and enjoy. Nurture your sense of hearing by listening to sounds (natural or on iTunes), calming music, or energizing music that will give you pleasure.
  • Sleep – Sleep is a powerful tool you cannot ignore.  Factors of age, heath, and genetics influence the number of hours of sleep we need.  The Mayo Clinic website report studies found that getting less than seven or more than nine hours of sleep per night increases the risk of health problems, psychiatric disorders, and a higher mortality rate. How many hours do you need? Work towards a range of 7-8 hours per night.
  • Meditate for 10 minutes – If you are already practicing meditation, you are on your way. Bringing the breath to an easy, steady in and out flow will boost many endorphins. Your body will thank you and reward you.  Dr. Herbert Benson, director of the Benson-Henry Institute for Mind Body Medicine at Massachusetts General Hospital has researched the relaxation response. The techniques for relaxation include deep abdominal breathing, visualization, yoga, and tai chi.
  • Love – Relationships offer valuable connections, whether you love your pet, friend, or family member.  Visualize them whether close or near. Spend time with them if you can. This will generate pleasure hormones.
  • Exercise – Get your body moving in a sport you love or through walking.  Get in touch with your pulse and  heart beat.; keep it at a good rate. Start or maintain a minimum of 30 minutes per day, three days per week of your favorite activity.

These seven strategies will help reduce your stress, thereby making your thoughts clearer and your management more effective.  You will find a more optimal balance in your life between work and play and have more peace within yourself. Additionally, you will find that you have more time and energy to effectively problem-solve. Keep me informed, I look forward to hearing about your success.

 *****

Julieta MaciasJulieta Macias LCSW-C, Ph.D. is a stress coach and psychotherapist dedicated to helping successful professionals champion over their daily stress. She keeps clients accountable and empowers them to reach personal and professional goals.

Find Julieta at: www.maciasconsultingphd.com and on Twitter and Facebook.

What Should Be In A Shareholders’ or Partnership Agreement

One of the biggest mistakes I see new entrepreneurs make is not setting up a solid foundation for success between themselves and their partners or cofounders when they start building their business in the form of a shareholders’ or partnership agreement. Now, just in case you’re new to my blog, I am not a lawyer so I cannot give you legal advice. But I have seen many an entrepreneur stuck with ulcers and migraines because they didn’t have an agreement in place from the beginning and then the relationship with his or her cofounders fell apart. In order to make sure that the new business is on sound footing and that you won’t be in hot water when the going gets tough you absolutely have to have a few items spelled out in a formal legal document before jumping in.

When it’s just you and your cofounders high on startup euphoria and loving life and loving each other, it seems like nothing could ever go wrong, but I guarantee there will be disagreements and the road will get a bit rockier down the line, so having a document that clearly spells everything out will save you from a potential nightmare.

In your agreement make sure that you clearly spell out the following:

  • First, you need to identify who contributed what – This includes everything from office space to computers or equipment to actual cash. If anyone chipped in, you should identify who it was and what they added.
  • Next, you need to say who owns what – Not all companies are split up exactly in line with the monetary contributions each person made. You need to be clear in your document about who owns how much of the company
  • Along those same lines, you need to say when they own that much. It’s in everyone’s best interest to set up a vesting schedule for anyone whose contributions that earn him or her equity are non-monetary. If you don’t, you run the risk of someone signing on as a key contributor but then walking away with his or chunk of equity and not actually adding any value. If you create a vesting schedule and someone turns out to be a total slacker, you’re not stuck handing over part of your company anyway. Be clear about what they have to do to vest, when they vest, and what would give you grounds to kick them out without allowing them to vest.
  • You also need to identify who controls what – and this is on a few different levels…The first bit of this relates to voting rights and classes of stock. Just because I own 50% of the stock of a company does not mean I necessarily have a 50% say in what that company can do. There are numerous ways of structuring ownership and control so that they are not necessarily directly in line. Look at examples like Zuckerberg’s control of Facebook. The next bit relates to decision making outside of the most major company decisions and you need to decide who is allowed to make what type of calls for the company – i.e., who can sign contracts, who can take on debt, who can spend money, etc. It’s normal to set limits on what certain team members can do or spend – for example, cofounder A is allowed to spend up to $500 without talking to the others but anything over that amount requires a vote. You need to clearly define which decisions can be made unilaterally, by who, and which need agreement. Then you want to be clear about how any of these decisions that need consensus are made and what percentage of the votes are required to make it happen.
  • Next up, you need to identify who is responsible for what. This will probably tie in closely with both the vesting schedule and the discussion about decision making power. If you’re bringing team members in to help you build your business and sharing equity with them, it needs to be clear what their roles are and what they are responsible for so everyone is clear on who is in charge of what.
  • Finally you need to discuss the possibility of someone departing from the company, and that means whether they leave on good terms, bad terms, or perhaps even pass away. What are all of the shareholders’ rights when it comes to selling or transferring ownership, what are their rights in terms of transferring power, and what happens to their ownership and control if they die.

It can seem stressful and be a bit uncomfortable to hash all of this out when you’re at the very beginning stages of your business, but if you don’t do it now, it will almost certainly come back to bite you in the butt. Put in the necessary time and energy so that your business has a solid foundation and you and your cofounders can move forward with everyone on the same page.

 

Now I’d like to hear from you. Do you have a story of when not having a shareholder or partnership agreement screwed you or when having one saved you? What other important elements do you think should be in an agreement of this kind? Let us know in the comments below and, if you found this video helpful or you think someone you know would be interested, please spread the love by liking and sharing it.

Don’t Let Sunk Costs Sink Your Business

I’ve been in the entrepreneurship world from every angle: as an employee, as a business owner, as a consultant, and as part of the investment team, and one thing that I see every single stakeholder make that can have very negative consequences for the business is succumbing to the trap of sunk costs.

Sunk costs are those costs that are already gone. It’s money already spent that you can’t get back and, therefore, isn’t actually relevant to your future strategy…yet it somehow seems to always keep weaseling its way back into the conversation. Have you ever caught yourself saying something like, “We’ve already put so much into this initiative, we can’t turn back now,” or, “I know we’ve invested a lot of time in this marketing campaign and it doesn’t seem to be working, but we’re in too deep to give up now so let’s just give it a bit more time”? If you have, then you’ve fallen victim to the sunk costs trap.

It’s a natural human reaction to have a negative emotional response to loss, and when you’ve sunk time or money into a project or initiative that isn’t paying off, you feel the loss of those resources. The trouble here, is that that negative emotional reaction causes you to think irrationally and try to eliminate the feeling of loss by sinking more resources into a bad project or throwing good money after bad.

So how do you pull yourself out of this trap so you can manage your business effectively and not run it into the ground because you refuse to walk away from projects or initiatives that aren’t working just because you’ve already invested in them?

Firstly: recognize that money spent is not relevant to the conversation about what to do moving forward. Now I mean this, really recognize that fact and accept it. For example, if someone came to you and said they had an advertising program and for every $500 you spent on ads you would generate $100 in sales, would you do it? Of course not, because it has a negative return on investment and, therefore, makes no sense for your business. So now let’s say you decided to pay for some Facebook ads to promote your new product and you spent $500 on the ad campaign but only made 2 $50 sales as a result of it…would you continue the campaign because it was planned to last for a month and you’re only a week into it? Hopefully no! Assuming you’ve let the ad run for long enough that you have valid data about the way it converts, the $500 you already spent is not relevant. The only thing that is relevant is that the return on investment is negative.

Secondly: set clear expectations for any new project or initiative. Agree on clear goals that will indicate the success of the initiative or project and timelines for when those goals must be reached by. If you get to the deadline and you’re not reaching the goals you agreed upon at the outset, it’s time to terminate the project, period. Don’t allow yourself the option to get caught in the sunk costs trap. Just stick to what you decided before the emotion of lost resources and a failed project entered the picture and muddied your decision making.

Finally: have an outsider spot check you from time to time. An outsider doesn’t have the same emotional investment in the sunk costs of your business, so they will more easily be able to tell you where you’re wasting resources by falling into the trap. You may feel like you can’t invest in new customer relationship management software because you just paid for the system you have now last year, but an outsider will point out that your current CRM system is making you lose money by missing opportunities and making costly errors without feeling any attachment to the system or taking the cost of the current system into account when determining if a new system is worth the cost.

The sunk costs trap gets the best of us and I have yet to meet any entrepreneur who hasn’t fallen victim to it at least once. However, if you employ these methods you can drastically reduce the likelihood that you will continue to be suckered by it and drastically increase the likelihood of succeeding with your business.

 

Now I’d like to hear from you. Tell me an example of a time that you fell victim to the sunk costs trap and what the consequences were. Then tell me what techniques you use to avoid it. Let me know in the comments section below and, if you found this video helpful or you know someone else who would, please spread the love by liking it and sharing it.

Tips to Lower Personnel Costs at Your Small Business or Startup

Any good entrepreneur or manager knows that having a great team of people working for you is the key to succeeding in your business. Great employees are a huge expense, however, and entrepreneurs need to always be vigilant about keeping costs in check, so here are some tips for controlling payroll costs without screwing your employees.

Firstly, consider hiring teleworkers and/or allowing your current employees to work remotely. If you’re in an expensive location like New York City, having the flexibility to hire someone in a less expensive locale could allow you to get top notch talent for a lower price simply because the cost of living and average salaries are lower in some parts of the country or the world as compared to others. That programmer from Missouri may be just as talented as the one in Greenwich Village, but is probably quite a bit less expensive.

Secondly, if you provide a kick-ass work environment and non-cash perks to your employees, they’ll probably be a little more forgiving when you can’t offer huge raises or bonuses every year. Really listen to your employees and try to get creative about offering the perks that they want and keeping salaries in line with what your small operation can handle.

Along those same lines, offer your employees great opportunities for training and development. Helping someone pay for a part-time MBA program, for example, and being flexible about letting them leave early once a week to get to class is much less expensive than a hefty salary hike, but the benefits are clear to the employee and s/he will be less inclined to make a fuss about salary when they see the future benefits they’ll reap by sticking around. For some tips on creating great employee training and development programs without breaking the bank, see my post here

Finally, make sure that you’ve taken a hard look at your operations and that everyone working for you is really necessary. This isn’t to say you should go out of your way to fire people, but it’s often in the best interest of your company’s bottom line to give each employee a bit more responsibility and a bit more salary as opposed to hiring another employee. If you have shift workers, take a look at traffic vs. shift hours and make sure you don’t have more people than necessary scheduled at once.

Employees are always going to be a major cost to any business but, if you manage them intelligently, you can keep a great team happy without over-spending.

Now I’d like to hear from you: What tips can you share for keeping personnel costs down while still having a great team and keeping your business flowing smoothly? Let me know in the comments below.

Did you like this video? If so, please spread the love by liking it and sharing it with any of your friends or colleagues whom you think would be interested in the discussion. Thanks in advance for your support!

How to Create Target Customer Personas to Maximize Your Marketing

Understanding who your ideal customer is, where he or she is, and what he or she is motivated by is key to a successful marketing strategy. If you don’t understand who you’re selling to, it will be pretty difficult to sell. Therefore, creating target customer profiles or personas can be a great way to get started with your marketing strategy development.

Customer personas are quite common in the development of marketing strategies and they’re basically character sketches designed to help you understand your customer and his or her needs and motivations.

To create one, begin with some solid market research so you will be basing your persona on facts instead of just making things up. If you’re not sure how to begin with conducting market research, you can check out my video about that topic.

Next, you want to keep the information you gained from market research close at hand and sit down and begin brainstorming about your ideal customers. You can start with the easy stuff like demographic information: is your customer male or female? How old? What type of job do they have and how much money do they make? Are they well educated? Where do they live? What is their family structure like? Then start moving on to deeper information about the target customer’s personality and motivations: What are their morals and values? What does a typical day look like? What do they do in their free time? What are their habits and likes – i.e. is this a vegan yoga addict or a martini-drinking club-hopper? Do they want to go to the spa on the weekend or go hiking and camping? Where do they hang out and who are they there with?

Be as detailed as possible when you describe your target customer. If you need help structuring the brainstorm, grab my Ideal Customer Worksheet to help you. It’s over on the Free Downloads page.

Once you’ve created a full persona for your ideal customer you can use that persona to inform your marketing strategy because now you understand who it is you’re selling too. If you want this person to actually buy from you, you need to look at their lifestyle and target your marketing so that it hits at the right time in their buying schedule, appeals to their needs and desires, and fits in with their lifestyle and self-image.

When you come up with ideas for new marketing campaigns, go back to your ideal customer persona and think, “Would this campaign appeal to this customer? Would they see it? Would they remember it? Would it motivate them to buy?” If not, it’s not going to be a successful marketing campaign and you need to go back to the drawing board.

 

Now I want to hear from you: Who is your ideal customer and have you used personas in your marketing planning in the past? Let me know in the comments section below. 

Did you like this video? If so, please remember to like it and to share it with anyone whom you think would it find it helpful. And don’t forget to follow me on social media and sign up for my newsletter so you never miss any info that will help you grow your business.

 

Are You Financially Ready for Entrepreneurship?

One of the first things you need to examine before deciding if entrepreneurship is right for you right now is your finances. When starting a new business, you’re more than likely going to spend at least a few months in the hole and, despite the fact that your business will be losing money, there will be startup costs and your living expenses that will need to be paid anyway.

When you’re deciding if you’re financially ready to start a company, begin by looking at your savings. Until you start generating a profit, you’ll be living off those savings. How much do you already have saved up that’s available for your living and startup expenses? Are you comfortable spending it and depleting your nest egg to get your business off the ground?

Also take a look at your monthly living expenses. All of your regular expenses: rent, utilities, cell phone, tv and internet, health insurance, food, gas, and everything else will still need to be paid. The bills don’t disappear just because you quit your job and launch your own business. You need to figure out, in advance, how much you need to survive each month so you can compare that to what you have saved up and see if leaving your day job is doable right now.

While you’re thinking about living expenses, also think about an emergency fund. Your monthly budget is what you’ll spend if all goes well. What if your car breaks down or your roof starts to leak? Will you be able to handle these little emergencies if you don’t have your regular paycheck coming in?

Finally, you need to factor in the costs of actually starting up the business. You need to estimate how much you’ll need to get started and combine that with your living expenses, emergency fund, and savings to decide if you can walk away from the day job yet or not.

Now, if this money talk has crushed your dream a bit already, shake it off. It’s important to be realistic about your finances, but, as I mentioned, realizing you’re not ready to turn in your resignation letter tomorrow doesn’t mean your entrepreneurship dreams are dead just yet. It just means your path to fulfilling them will be a little longer or more circuitous. If you want this, you should keep moving forward. You’ll just have to also maintain your current job until you’ve saved a bit more.

After thinking about your financial situation, are you ready to take the plunge into entrepreneurship or not? Leave me a comment and let me know if you think you’re prepared to jump in. If not, tell me why and what you plan to do to make it happen in the future.

If you found this video helpful, please remember to like it and share it with any of your friends or colleagues who would also get something out of it. 

Distinguishing Between Employees and Independent Contractors

You all know I’m a big fan of bootstrapping and utilizing independent contractors is one technique to help entrepreneurs accomplish that. However, it’s important to remember that, while the use of independent contractors can be of great benefit to businesses in certain situations, you need to make sure that these independent contractors are actually independent contractors and not employees whom you’re just avoiding classifying as such. This week’s video shares some basic rules that you can use to help you decide if a particular role should be classified as an employee or as an independent contractor so that you don’t get in trouble with the IRS.

The first criterion that the IRS uses to decide if someone is an employee or an independent contractor is behavior control: do you control how the person does the job they’re assigned to do or do you just care about the output? If you tell someone when, where, and how to work or provide detailed training, s/he is probably an employee.

The second criterion is financial control: if the person working for you is in control of his or her own business expenses, sends you an invoice for work, and can decide how much to charge and whether that rate means he or she makes or loses money, the person is probably an independent contractor. If, however, you provide all of the equipment and materials, set the rates, and pay without being invoiced, the person is probably an employee.

Finally, the way you structure the relationship is key to whether the person is considered an employee or an independent contractor. Does s/he work for you indefinitely at a set rate or are is s/he contracted on a per project basis? If someone is hired to do a specific project in a specific timeframe for a specific price, s/he is probably a contractor. If, however, you hire him or her for an indefinite number of projects lasting an undetermined amount of time and pay what amounts to a salary, you probably have an employee.

It’s important to make sure that you don’t mis-classify employees as independent contractors because the IRS is cracking down and you can wind up in a lot of trouble and facing stiff penalties if the IRS decides that you should have classified some or all of your independent contractors as employees and followed the relevant tax and employment laws.

Tools for Nomadic Entrepreneurship

Last week I talked about how to manage your business from anywhere so that you can take full advantage of the freedom that entrepreneurship gives you and travel the world if you’d like. This week, as promised, I want to share some of the tools I use to help me while I manage my businesses remotely. Some of them may be familiar to you while some may be brand new but they’re all incredibly useful so check out the video below and then let me know in the comments what tools you use to help you manage your business(es) as you travel.

How to Manage Your Business from Anywhere

As you’ll know if you’ve explored the other pages on my website, I’m a full-time nomad and I’ve spent this year traveling through Latin America to explore the entrepreneurial ecosystems in the region. The fact that I have no real home base hasn’t stopped me from running my businesses, so I was recently asked to write a guest post for Under30CEO about how to live life as an entrepreneurial nomad. I got such a great response from that piece that I figured I should adapt it for video and share it here, in case some of you would love the freedom of being a nomad.

How to Apply SWOT Analysis and Porter’s 5 Forces Model

Two of my most watched videos are those about Porter’s 5 Forces Analysis and SWOT Analysis and I’ve gotten a lot of feedback about how helpful both are. I have also, however, received quite a few questions that imply a number of you are still confused about how to use them. When multiple people have the same question it always means one thing for me: it’s time to make a video to answer it. So this week I’ll give you a little more explanation about how to apply Porter’s 5 Forces Model and SWOT Analysis.