Ok, be honest, how many nights have you stayed up staring at the ceiling scared sh**less about payroll…

I’ve definitely had times in the past where “I” did…I remember the questions:

• Where is the money going to come from?
• Should I lay someone off? But, that’s horrible…
• Should I try to raise money? But that’ll take so long…
• Should I go borrow money? But, I already have so much debt…
• Maybe that big account will close this week?

I always used to tell myself, “this must just be a problem that ‘I’ have because I’m a small business, once I get bigger it’ll go away…” Little did I know, it gets worse!

I was recently talking to the CFO and VP of Business Development of a company that does over $20 Million in revenue a year and has 120 employees. I was cracking jokes about the days that I’ve scrambled to launch a product just to get enough money to make payroll…honestly, I was looking for a glazed look on their face.

What did I get?

I got a loud, “Oh man, we know how THAT feels…hahahahahahaha” as they smiled and winked at each other.

I thought to myself, “what the heck? are you serious, how in the WORLD can you guys have payroll problems doing $20 Million a year?”

The more thinking I’ve done, I realized that actually the faster you grow, the more you hire, the more your expenses go up. It seems that BIG corporations really do run quite tight most of the time.

It’s not even bad financial management, it’s just the results of aggressive growth.

So, tell me, have you ever stayed up at night thinking about payroll?

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A question I asked many times a few years back but not so much lately. I always felt that it was their “ego” that was hiding their smile and playful nature. Personally, I promised myself that I would remain who I am and be everyone’s “friend” as I grew into this role.

Year 1: I kept to that commitment, being goofy, fun and everyone’s best friend was working (considering I had zero employees and vendors).

Year 2: Still kept hard to that commitment, maybe even more committed - all our partners LOVED me and worked harder for me (maybe I had about 3 employees, all great people).

Year 3: “Hmm…this person is so used to being my friend, I can’t get them to take me seriously…” or “I just got taken advantage of and swindled by that vendor.”

Fast forward to today, I see myself slowly becoming more resolved, quiet and “businessy” - you must be thinking “No! Don’t do that! You have to be yourself, don’t become one of those people…”

Honestly, I probably never will - I just don’t see it in myself. HOWEVER, with that said, I’m also seeing that the need to reflect authority, decisiveness and control are incredibly important as the team grows, business grows and more parties get involved.

The vulchers are out there and you need to let them see that you have a few fangs too in case you need to defend yourself and your company.

Bottom line is that I have realized that it’s not that the CEOs are cold and rude by nature. A CEO (at least a genuine one) has many pressures on his mind, for example, payroll. The faster you grow, the more people you have (employees and their families) relying on you for their livelihood.

Add to that hungry investors, contractors, vendors, office politics and the 800 other things that can go wrong and I wonder why the heck anyone even WANTS this job? Well, some of us crazy people get “off” on the adrenaline it creates.

It brings the question to mind: “Would you rather be loved or feared as a leader?”

My answer: I’d rather be respected for which I have to inspire love and infect just the right amount of fear.

Not trying to sound cynical, but by “infect fear” I simply mean that everyone in your company and around it HAS to know that you mean business and won’t take “crap.” You have to show action and you have to prove that you easily make tough calls - that in and of itself puts just the right amount of “fear” in people.

But, again, perhaps fear is not the right word, I think respect covers it much better.

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I had to talk about this today because a statement that a friend/adviser/mentor had made to me once came screaming back in force and punched me in the face as I listened to a friend talk about a business partnership he’s currently in.

Here’s the advice I had received long back:

“The minute one partner starts to think he/she is doing more than the other, that’s the very moment that you better either address it right away and resolve it or walk away from the partnership - nothing good comes after that first feeling unless it’s resolved…”

I know, a bit of a long statement and I paraphrased because I don’t remember the exact quote. But boy is this true!

I, myself had experience with this last year and my partner was courteous and “ballsy” enough to catch this himself and come to me and ask to leave the partnership. He was very fair about it  and actually made it very equitable for me so I could not really argue or get mad.

But, he saved the both of us MONTHS of pain and trouble.

Today, this was the same advice I gave my friend - either resolve it immediately or find a way to walk, we go into business to IMPROVE our lives, not make them worse… 

Popularity: 55% [?]

Do yourself a favor and read “The Ultimate Question” by Fred Reichfeld IMMEDIATELY. I’m not even all the way through it (not even 1/2 yet) and it’s already completely changing the way I look at company growth, customer care and culture.

This is one of the simplest books I’ve ever read, yet it’s having the most profound effect - the ENTIRE book is around teaching you to ask all your customers ONE question. Your customers’ (collectively) answer to this question will reveal the health of your company and predict the company’s future.

What is the question?

Wouldn’t YOU love to know, you have to read - if I tell you that here, the book won’t pack as much PUNCH.

The book is structured around teaching you how to care for your customer and uses countless examples of major Fortune 500 companies and what they are doing to take their business to the next level.

All the examples I’m reading have my brain running WILD with ideas on what to implement into the next version of our platform…

Popularity: 61% [?]

This is a very interesting question that came to my mind recently.

If you’re selling a high-value service and you close the contract…now, in order to want to deliver FAST to the client, you stay up all day and night and get the project done in HALF the time it was expected in.

Quality is great.
Timing was great.
No problems…

Right?

Well, then why is it that the next time the client doesn’t come running with his tail between his legs to give you his business? Hmmm…that’s interesting. What the heck just happened?

This question just came to mind the other night when going to bed - could it be that by delivering something TOO fast you’re under-valuing your work and making the client think that it was “easy” work that he/she got overcharged for?

Something to think about eh?  Kind of a bit of a business mind psychology politics…

Popularity: 50% [?]

So I’m sitting at a seminar this past weekend and someone I truly trust tells me, “hey you should do the kolbe…”

What the hell is a kolbe? Sounds like some Jewish dance.

He was referring to a “Kolbe Index” - it’s basically 36 questions you answer - this thing then does a FULL analysis of you and tells you what kind of person you are and what your strengths are.

Why the heck do I need to know who “I” am…

I mean who knows you better than you know yourself. Well, it’s not for that. There are 2 purposes to use it for:

1. Self-Validation

It’s nice to know that you’re not crazy and that it’s OK to be the way you are - Kolbe tells you how to work WITH who you are rather than changing yourself.

2. Hiring!

This is where I’m going to be using it the most. You can make all your potential hires go through it first and review the evaluation - it will really help you better understand what you’re getting into.

It only took me about 20 minutes, I did it while I was waiting for my flight at an airport. It’s even kind of fun to do…

I was blown away…

They were right. This thing had me PINNED! The evaluation was VERY specific, let me show you a few things…

This is the BASIC rating they gave me: I don’t like doing research (TRUE), I’m OK at following-through with things after launching them (ALSO TRUE - this is why I always have product managers), I’m GREAT at coming up with ideas and JUMPING on them (SOOO VERY TRUE) and I’m a pretty bad IMPLEMENTOR (Here, I disagree a bit). I find I’m very good at execution and implementing, but maybe I’m not?

They do warn not to argue with the results and NOT TO GET OFFENDED.

Now, that is general stuff right? Well, here, let’s get into the details…

This is just ONE of many examples where I got freaked out. It was DEAD on, I SERIOUSLY do work better LAST minute, I HATE conforming and even more, I hate sticking to scripts - I’m a “winger” - I like winging things.

Bottom line, this Kolbe Index was great. Once you take the 36 questions you can buy all sorts of evaluations, career, personal relationships and many more. For hiring, I’m going to use the main Kolbe Index and the “Career MO.” The main Kolbe Index is only $50 and the Careero MO was like $30.

So, for a total of $80, I validated myself - feel good and can stop trying to change myself!

Visit http://www.Kolbe.com

Popularity: 78% [?]

I’ve said it before on this blog that the bigger your company gets and the more hiring you do, you can expect YOUR role as the CEO to move towards more “management.” Management may sound fun, but it can make any “true” entrepreneur want to ram their head into a wall.

As boring as it may seem, I am now convinced that it is a truly vital part of the business - without it, an entrepreneur will simply run the company bankrupt.

Some of the “not so fun” parts of being management include (but are not limited to) the following…

1. Financial modeling (for you, your company, the investors)

2. Financial tracking - One of the main key roles of the CEO and CFO are really “cash flow management” and making sure that the company has money and is not in any hot water. By tracking your actuals vs. your model, you have the ability to predict any cash problems months in advance.

A good CEO will catch these and solve the problem early rather than getting caught by surprise (a pure entrepreneur would probably have no idea until the lights went out).

3. Hiring - This means spending MORE time doing modeling and negotiating for key hires.

4. Management Meetings - “So…what color tissue paper should we get for the bathroom?” This is an on-going joke that the bigger companies get, the more meetings their management has over silly things - the more time they waste, etc…

Meetings are vital and important - but if you plan on using them to discuss “junk” - you’re killing your company.

5. Strategy Development - Yet again, more time with spreadsheets and “data” trying to figure out what products to launch and which direction to go in.

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What sparked this post?

One of our executive team members just recently made an observation that I was lately either spending all my time in spreadsheets and modeling or on the phone. When she said that I had one of those “AH HA” moments where I thought … “it’s begun…there’s no turning back now.”

I’ve learned more about Excel in the last 2 weeks than I ever wanted to know or planned on learning. But, at the same time, this is the first time where I truly feel like I have a good grasp on the “health” of our business. I know EXACTLY when to expect problems and even better, I know exactly when we can raise or need to lower our spending.

For the first time, I feel like I have my fingers on the pulse of the business - all hail Excel!

Popularity: 45% [?]

I used to be an avid “Business 2.0″ magazine reader, I’d wait at the door like an excited dog, waiving my tail the day it came to my mailbox. The day I found out that it was being discontinued, I think I may have actually shed a tear. Well, long story short, I just now convinced myself to start reading Entrepreneur magazine.

Nope, it’s not the same at all (I’ll do a full review later)…but, it’s not THAT bad either.

The April 2008 issue is the first one I’ve actually sat down to read and I was immediately caught by the Editor’s Note.

She repeats a statement that was made by an entrepreneur and her friend: “Every day I go to work, I’m either excited or I’m afraid…” This sentence really caught my attention because it was the quickest way I’ve ever seen someone else sum up my day!

The more I think about it, I bet LOTS of Entrepreneurs feel this way - if you really think hard, you’ll find that it’s true.

I either have days where I run into work high on my horses, ready to “close the big deal” and take over the world.

The other days, I’m worried about payroll, growth, meeting deadlines, board meetings and god knows what else.

She actually continues to talk about how both excitement and fear are the same emotion (physiologically) and that your environment and how you REACT to it is what either converts the emotion into excitement of fear (that part was a bit over my head).

So, what about you? Do you find yourself either excited or afraid?

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So as I mentioned yesterday, right before I snuck out of the office I was visiting a couple of days ago, the manage of the office asked me to make an “inspirational and motivational speech” to the group. Speaking to the group is one thing. Motivating a group is another thing…

However, he added the phrase “motivate them so that they don’t leave us for 10 years…”

NOW my eyes gouged out a bit - what the hell am I going to say that will motivate a group of people I have never met to stay with us for 10 years!?

At first I fought it and tried to get out of it, but quickly I had one of my famous “AH HA” moments. If you think about it, what is the main job of a leader? To inspire and motivate!

So, I took up the challenge and plunged into the speech.

The group was actually very attentive, everyone quickly turned around (they actually stood up first), as I spoke I could see heads nodding and many really understanding our big picture as I explained it - I quickly felt very welcomed and comfortable and got into a rhythm.

Here is the outline I used:

1. Thanked them for everything they are doing for us.
2. Discussed the “big” picture of the company.
3. Gave details of how what they are doing fits the company’s growth and how important it is.
4. Talked about some of the great feets we have crossed and why 2008 is the biggest year yet.
5. Asked questions (which I think they were still too shy to ask).
6. Mentioned my open door policy and gave everyone my personal contact information.
7. Ended the talk with another great thank you!

The entire talk was less than 5 minutes, which I think was perfect, I meant it to be fast.

In self-review, I feel I did “OK,” I could have done a much better job in each of the 7 points above (I feel my nervousness probably showed a bit). As I finished up, our CTO who was present there gave me some great suggestions.

Here is what he said verbatim:

“You should have talked about how the company started and what the vision/mission behind the company is…”

He is absolutely right. I spend so much time around those who know how we started and who know our vision/mission that I took it for granted! One of the most unique aspects of our company is how we started and how strongly we believe in our vision/mission.

Before I discussed the “big picture” of the company, I should have spent time talking about our vision/mission and how we started. I will definitely fix this the next time…

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A Tip: Use some humor in your “speech” to lighten the mood and make everyone feel more comfortable with you. A smile and a laugh can help others receive your message better but can also give you that much more confidence to deliver your message.

Popularity: 41% [?]

Here is a very interesting note that came out of the last board meeting I had on Friday. The way I’ve thought about business is always to think:

“There must ALWAYS be profit…”

Now, not that I’m saying your company shouldn’t have a profit - but the real question here is:

“Does a YOUNG, GROWING company want to declare millions in profit right from the get go?”

The short answer is no.

Before you start disagreeing and thinking I’m an idiot, let me explain what I define as “profit” first. I’m talking about profit in terms of your tax statements.

Before I went into the board meeting, we had a financial “plan” that could potentially show a VERY large sum in profit at the end of 2008 and I was very happy to report it. I thought I’d get a “pat on the back” - but the reaction from the board was:

“Do we really want to have this much money just sitting around in the bank at the end of the year?”

Firstly - we have to pay a HUGE sum in taxes that goes bye bye.

Secondly (and this was the point that made me go AH HA!) - A shareholder would argue that wouldn’t the money be best used by the company and achieve a higher return on investment if it was invested by the company in it’s growth?

See, the whole point here is to create “share holder value” - money sitting in a bank account can (at max) make you 4-5%. But, a fast growing company may be able to invest that money in many places that could return much higher, such as…

- New product development
- Expansion into new businesses
- New hires
- Acquisitions
- etc…

So, think again if you’re a very young company looking to get acquired one day or even to build to that $100M a year business.

Rather than thinking “PROFIT” - think “MONEY TO RE-INVEST FOR FASTER GROWTH!”

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