A few weeks ago, I was speaking with a new franchisee. He had been in business for around 6 months. During our conversation, he shared some of the challenges he was facing as he tried to grow in his new role as an owner. His experiences reminded me of a previous life experience I had in the early 1990s when I worked in Japan.
My job in Japan was to work with senior-level Japanese leaders who would soon be taking over large manufacturing facilities in the United States. I was tasked with preparing them for what would be a new, and very different, life. We spent a lot of time discussing the various challenges they would face upon their arrival in the United States.
Initially, they would be dealing with physical challenges. They would be confused by how to set up a bank account, decipher labels in the grocery store, or choose appropriate gifts when visiting someone’s house. Everything would be foreign to them, and they would need to deal with these physical challenges first. However, we also talked extensively about the fact that the physical challenges were the easy part. The harder challenges were the psychological ones.
The psychological challenges begin to occur once the physical challenges subside. They revolve around feelings of not fitting in, not knowing what they are doing, or doubting if they were the right person for the job. In many ways, these psychological challenges related to the idea of not feeling like they were in the right place. However, over time, they would get past both the physical and psychological challenges and start to feel comfortable, productive, and at home.
In many ways, opening a business presents the same types of challenges. In the first six months, new business owners are trying to figure out how to hire people, run the billing system, and respond to customers. These are the physical challenges. However, just like moving to a different country, eventually, the psychological challenges come into play. Doubts such as, “I’m not sure I’m cut out to be a business owner,” or “This doesn’t feel like I expected it to,” or even, “Why did I do this?” start to arise.
The good news is that eventually, with patience, you get past these challenges and become comfortable, productive, and in the right place. It’s important to understand that there is nothing abnormal about these stages. Everyone goes through them, to varying degrees. The key is to remain present, taking it day by day, and not getting too far ahead of ourselves. Just like climbing a mountain, it’s one step at a time.
This month, I’d like to talk a little bit about establishing a personal vision statement.
Step One in The Franchise Playbook is all about defining your personal vision. When I work with individuals who are exploring business ownership, one of the first things we do is work on our personal vision. Some people embrace this process, while others find it either frustrating or don’t see the point. My suggestion would be that opening a business without a clear personal vision is like driving your car without any destination. Despite what many people think, opening a business is not the objective for 95% of the folks out there. In most cases, the business is simply a vehicle to get you where you want to go. However, if you don’t know where you are going, it’s almost impossible to know if you have the right business.
The Franchisee Playbook’s Vision Exercise is designed to get you thinking about legacy and impact. In many ways, it’s the same as a business’s mission statement. Businesses establish mission statements so that, as they make investment and growth decisions, they have a baseline to determine if those decisions are moving the business in the right direction. Without a clearly defined vision, a business would never be able to make the kind of decisions that are required to grow, expand, and succeed.
Unfortunately, as individuals and families, we don’t often spend time thinking about what our mission statement might be. We simply let the river of life push us downstream, opportunistically accepting jobs when they come our way, and bemoaning the fact that we always feel a little bit out of control.
My suggestion would be to download Step One from The Franchisee Playbook and work through the exercise. It doesn’t matter if you intend to be a business owner, wish to start a nonprofit, or play pickleball every day, a well-developed vision statement will give you clarity and confidence to make decisions that are in line with your goals and objectives.
One last thing—something that you will not find in The Franchisee Playbook. Exercise 1.6 suggests you write a vision statement that is approximately one paragraph long. If you have the inclination, once you have developed your vision statement, work on shortening the statement. The ideal result would be a personal vision statement that only one sentence long. Just so you know, this is exceptionally difficult to do. It took me 10 years before I could confidently verbalize a personal vision statement that was only one sentence long. However, if you eventually are able to do this, you’ll find it incredibly powerful in all aspects of life.
Should you wish to take on this challenge, I wish you the very best and stand ready to assist if needed.
As those of you who have read my book know, I really do enjoy sayings that neatly and cleanly summarize a thought or mindset. This month, I’d like to share one of my sayings with you:
“The art of business ownership is the ability to make timely,
confident decisions with incomplete information.”
Why do I share this with you? I share this because I’ve noticed that it’s one of the most difficult things for new business owners to do. Many folks begin their career as an employee. As an employee, you quickly learn that making ‘halfcocked decisions’ spending your employer’s money with incomplete information is a recipe for having to find a new job.
In addition, many professions out there require exactness and precision. Being an engineer requires knowing exactly what’s going to happen before you begin building the bridge. Being a surgeon requires knowing exactly what you’re going to do before you make the first incision. In life, we are often rewarded for making careful, thoughtful decisions and always being right.
Unfortunately, as a business owner, you don’t have that luxury. You’re constantly having to make decisions with incomplete information. When you hire a new employee, do you know if they’re going to work out? Obviously, you don’t. You simply hire the best person you can and hope that you’re able to train, coach, and motivate the rest. In other words, you start with raw material and you try to build a great employee.
The same thing applies to marketing programs. A new marketing approach is presented. Do you know if it’s going to work out? Obviously not. You make a measured investment and you adjust as you go. You track and improve. Over time, you continue to make decisions as to whether it’s something that you should continue to focus on or redirect you time and focus.
The challenge lies mostly in being able to make these decisions in a timely, confident manner. If you’re not able to do this, you’ll spend too much time trying to decide and not nearly enough time moving the business forward.
When I work with people, I let them know that at the end of the process there’ll be a time where making a decision is the right thing to do. If you’re able to recognize that point in time and make a timely, confident decision, it bodes well for your ability to be successful as a business owner. On the other hand, if it comes to that point and you continue to ask more and more questions that are less and less relevant, if you’re unable to sleep at night worried about possibly making the wrong decision, if your primary emotion is worry and fear, don’t do it!
Being a business owner isn’t for everyone. Being comfortable with uncertainty is a prerequisite. The confidence to adjust, correct, and grow is foundational to success. For those of you exploring business ownership, I hope this blog helps you determine whether the path of ownership is suitable for you.
It’s been a minute since my last newsletter. I’ve been super busy with graduations, family events, and a business that thankfully continues to grow and expand.
This month I thought I would share a story. Many years ago, back in college, I severely tore my ACL while playing soccer—an injury that I finally had repaired about five years ago. Part of my rehabilitation has been Pilates. I never thought I’d say it, but Pilates has made a significant difference in my overall physical and mental health. I would strongly suggest Pilates to anyone looking to get back in shape, or simply to those who spend a lot of time sitting at a desk in front of a computer like I do.
A few weeks ago, I was in class and I noticed for the first time a chalkboard that said:
‘When You feel like quitting,
Think About Why you started.’
I don’t know why I didn’t notice it months, or even years earlier, but there it was. As I continued through the class, I kept thinking about the saying. I began to realize that it has to do with much more than just exercise. It applies equally well to what I do every day—starting and growing businesses.
As you may recall, a year ago we opened an Ellie Mental Health franchise in our local community. As much as I’d like to say it was all roses, it was not. As with anything in life worth achieving, it has been a fight. There were times my partners and I questioned ourselves: “Why did we bother to open the business?” We didn’t need to, and we already had plenty on our plate to keep us busy. Every time we asked this question, we refocused on our long-term vision: Where do we want to be in 5 years, or even 10 years from now, and are we on the right path to get there? Each time we asked that question, we realized that we are both on track and achieving good things. This mind set allowed us, in the heat of the moment, to gain perspective, focus, and the resilience that’s occasionally necessary to carry on.
Today, after 12 months in business, our Ellie Mental Health is breaking even and we are on track to achieve our goals and objectives. We realize that there will continue to be challenges. That’s life. But we’re keeping our eye on our long-term goals.
For those business owners who are reading this, you know this story isn’t unusual. In fact, it’s pretty much the norm. We open with a business plan. We execute the plan. Things don’t go as planned and we question ourselves. We then put our heads down, and push forward.
Let’s delve into the concept of ‘Capital’. Not a county, state or national capital, but the type of capital we amass over a lifetime.
Financial Capital
When posed with the question, “Tell me about the capital you can bring to the business,” many immediately think of ‘financial capital’. Most of us begin life with modest means. And, throughout our life, we work to accumulate greater financial resources. This type of capital is relatively easy to measure – a glance at your net worth statement swiftly reveals whether your financial standing is improving. When it comes to financial capital, our goal might be to become ‘financially unbreakable’. This is the point where we no longer need to worry about our financial position.
Intellectual Capital
Yet, not everyone defaults to financial capital. Occasionally, when I mention capital, people consider ‘intellectual capital’. This form of capital is cultivated over years of study, often represented by academic degrees such as a college, master’s, or even a doctorate degree. Intellectual capital can also be acquired through the school of Hard Knocks, with the adage that 10,000 hours of experience is necessary to become an expert at something. Intellectual capital focuses on the importance of what lies between the ears. The intriguing aspect of intellectual capital is its resilience – it cannot be easily taken away, and it typically does not diminish during one’s work life.
Social Capital
However, there’s another type of capital that often goes unnoticed – ‘social capital’. In essence, social capital is defined by who you know and how effectively you can get things done. Those with a robust social capital network can make a couple of phone calls and promptly connect with the right person. They are individuals who can text community leaders, with responses arriving by day’s end. For most people, social capital revolves around the communities they have been part of for years – beginning with school friends, expanding with work acquaintances, and maturing through community involvement and giving back. Those who invest significantly in their communities tend to possess substantial social networks, facilitating the opening of doors with ease.
When establishing a business, financial resources and necessary skill sets are undoubtedly crucial. However, the power of social capital should never be underestimated. Being able to open doors and speak with the right person has real value. If you are new to a community, focus on building social capital. If you have lived in a community for many years, continue to expand your social capital. Get involved, give back and makes friends. Not only does it feel good, but it is also good for you and your business.
Earlier this month, I had a coaching call with a franchised business owner whom I had worked with many years ago. We delved into the importance of maintaining a robust mental mindset, sparking a recollection of a story from the early days of my career as a franchise coach.
Over two decades ago, at the onset of my journey as a franchise coach, I had a trainer whose name, regrettably, escapes me. Despite her brief tenure, she left an indelible mark through a conversation that still resonates with me today.
After a couple of months in the business, she asked about the number of people I was working with. I provided a figure. Then came a probing question, “How many of those people were genuinely committed? How many are real?” I chuckled, took a moment to reflect, and conceded that probably only half were truly serious. Surprisingly, she inquired about why I continued working with those who weren’t serious. I explained, “being a new franchise coach, I need the experience. I am confident that I will navigate the learning curve faster with these additional interactions.”
It was at this juncture that she imparted something invaluable, a piece of advice that has guided me for over two decades. She said, “Rick, every morning you wake up with a finite amount of positive energy. It’s not unlimited; it’s a precious resource that you spend throughout the day. If your initial interactions in the morning are with individuals who aren’t serious and only drain your positive energy, you won’t have the energy needed for those who truly deserve your time. My suggestion is to part ways with those who are not serious or exist solely to deplete your positive energy. It’s a precious, finite resource—spend it wisely. Your business will flourish, and you’ll find yourself happier and more energized at the day’s end.”
In essence, life is too short to waste time on individuals lacking work ethic, focus, or respect for your time. Allow these individuals to find happiness elsewhere and dedicate yourself to those where you can genuinely make a difference.
More than 20 years have passed since she shared this advice, and I continue to apply it to this day.
The question this month is whether you would rather have a baseball team full of home run sluggers or a team that is great at getting on base. Which approach wins more games? Well, the studies are clear. Home runs are fun to watch but if you want to build a successful baseball team, you want a dugout full of players that can reliably get on base. When you are on base, positive things can happen. When you swing for the fence and strike out, you are back on the bench. (Ref: Study)
Let’s take the metaphor one step further. Imagine you’ve never played baseball before. You are up to bat the very first time. What is the chance you’re going to hit a home run? Not very good right? Simply getting on base would be considered a success.
Connecting the Dots
Why am I talking about this? Because often I work with first time business owners who are swinging for the fences. When I asked them what their goals and objectives are, they provide a long list including paying off the first house, buying a second house on the beach, buying a boat they can go deep sea fishing with, buying their mother a house, buying their siblings cars, and a variety of other ‘must haves’. I then asked them how they are planning to achieve these goals. Their response normally includes opening a business for $150,000 that can eventually produce millions of dollars a year in revenue. In addition, they want to keep their job while dedicating around 10 hours per week to the business. Has this ever been done. Sure. Is it likely to be a winning strategy? Nope. It is swinging for the fences when the goal should be to just get on base.
Better Approach
The better approach is to focus on getting on base. Your very first business does not have to solve every financial desire you have in life. Quite often it doesn’t not. The first business needs to grow to the point where you can cover your living expenses. This delivers freedom. At the same time, the first business needs to teach you all the critical lessons necessary to be an independent business owner. Once this is achieved, then you are on base, and, for a first-time hitter, you can consider that a success.
Just like swinging a bat, being a successful business owner is an acquired skill. Through education and experience, we improve. The goal over time is to grow a variety of income producing assets allowing you to have diversified income and become, as I mentioned in my August E-mail, ‘financially unbreakable’.
Swinging for the fences rarely works out. Focus on reliable, predictable singles and before you know it, you will be standing on home plate.
Last month we lost an American icon. Jimmy Buffett, the leader of the Parrotheads and the mayor of the mythical paradise of Margaritaville. Jimmy passed away at the age of 76.
The Back Story
While everybody knows at least one of his songs and can visualize Jimmy Buffett sitting on a beach with a margarita in his hand, not everybody knows his back story.
Jimmy Buffett was born in 1946 in Mississippi and was raised in Alabama. He began his career in an acid rock band but evolved over time towards country music. In the early 70s he moved to Nashville but unfortunately his style of singing didn’t fit any of the pre-established genres. He paid his bills by waiting tables and working as a music critic.
After failing in Nashville and going through a divorce, he moved to Key West. He spent his days working on fishing boats and his evenings singing in the local bars. He began to truly study the Key West bar clientele. Over time, his singing and song writing began to reflect both his life and the escapism that the clientele wanted. His breakout hit was Margaritaville in 1977. It was 37 years until his next big hit.
During those 37 years, touring small venues across the country, Jimmy Buffett catered to what his followers wanted. Jimmy was protective of his brand and diligent in watching the bottom line. He was careful to curate, but not over, expose his brand.
Overnight Success
In the 2003 hit, It’s 5 O’Clock Somewhere, Alan Jackson laments about his job and asks ‘What would Jimmy Buffett do?’ Jimmy Buffett suggested Alan pour a hurricane and spend some time in Margaritaville. That was Jimmy Buffett’s break out moment. Eight weeks at #1 on the Billboard chart and the Country Music Award for Vocal Event of the Year. This was the very first award that Jimmy Buffett had ever received for any song.
From that point forward Jimmy Buffett we know today was born. Selling out stadiums and becoming a folk icon. Restaurants, movies, books, retail stores and websites evolved and grew. However, what’s important to remember is the 37 years that he spent earning the opportunity to become a folk icon.
The Secret to Success
When interviewing Jimmy Buffett, 60 Minutes asked him what his secret to success was. Jimmy Buffett began by saying that his is mostly a businessman. Creating the mythical paradise of Margaritaville took decades. He also admitted that he is not a great musician. He dreams of playing the guitar like Eric Clapton and he still takes singing lessons. According to Jimmy Buffett, the secret to success in life comes down to three simple things.
Discussing his raving fans, the Parrotheads, Jimmy said something very interesting. ‘(paraphrased) At my concerts I see the craziest things and sometimes I wonder who are these people? They’re having a great time at the concert, but my guess is that every one of them shows up for work on Monday morning. They love the escapism of Margaritaville, but they also understand what it means to get up and work hard each day. In many ways they’re just like me’
Take a moment this weekend to drink a margarita and listen to a Jimmy Buffet song. And, when you are done, get back to work because … that is what Jimmy Buffet would do.
I don’t know about you but I am constantly reading. I am normally reading a few books at the same time and, with the weather being as hot as it is, I’ve been spending more time than normal in my reading chair. Currently I’m reading a book on Bayes Law, a second book is on Real Estate Syndications, and the third book is The Psychology of Money by Morgan Housel. It’s this third book that I’d like to highlight this month.
Over the years one of the things I learned is that saving money isn’t that difficult. Saving is all about maintaining a lifestyle that costs less than your earnings. With discipline and time, you will save money. The challenge is making good investment decisions once you have saved money. Chapter five outlines three financial survival characteristics of highly successful individuals. These characteristics apply not only to investing but also to business ownership.
Financially Unbreakable.
The goal is to become financially unbreakable. Most individuals place all their chips on one roll of the dice. All their income comes from one source. All their investments are in one place. If anything happens to either the income source or the investment, they have a serious financial issue. I know you’re saying that’s not you but how many people reading this newsletter have one job (one source of income) and invest all their money in the stock market (one place). The point of this first item is that being one-dimensional is highly risky. Life happens. The larger your diversity of income sources and the larger the diversity of your investment vehicles, the more unbreakable you will be.
You Plan, God Laughs.
The second point relates to planning. ‘Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.’ Remember Mike Tyson quote, ‘Everyone has a plan until they get punched in the face.’ Well, things never go according to plan. For a plan to be useful, it must be able to survive the vagaries of reality. In other words, it must have a significant ‘margin of safety’. Margin of safety is different from being conservative. Conservative is avoiding risk. Margin of safety is raising the odds of success at a given level of risk by increasing your chances of survival. The magic is that the higher your margin of safety, the greater your chance for a favorable outcome. Margin of Safety drives risk reduction.
Barbelled Personality
A ‘barbelled personality’ is a personality that is both optimistic about the future but also paranoid about what can go wrong. Successful individuals believe the future is bright and that everything is moving upwards and to the right, while also understanding lots of things will go wrong and you need to be vigilant, prepared and even paranoid. Individuals who are solely optimistic tend to take foolhardy risks leading to loss. Individuals who are solely paranoid believe that everyone is out to get them and never take any risks. Neither path works. The only path to success is both optimism and paranoia.
Hopefully these three thoughts give you a little something to chew on as you sit out by the pool trying to stay cool this summer. Wishing you and yours the very best.
First, an most importantly, Happy 4th of July!. I hope you have time set aside with family and friends. Enjoy and stay safe.
At it’s core, the 4th of July is about freedom and self-determination. It is about the willingness to bet on ourselves. Over a decade ago I published a blog summarizing a talk by Tom Shay. Today, his message is even more relevant so I am republishing this poignant essay.
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Last week I had the distinct honor to hear Tom Shay, CEO of Right Management, Florida/Caribbean speak on the topic of job transition and career management. What an interesting discussion. Mr. Shay has held this position for 31 years and during his tenure Mr. Shay has seen exceptional change in the employer/employee relationship.
Mr. Shay began by sharing a very simple statistic. During his father’s generation (presumably 40 years ago), the average tenure for a manager or higher, was 27 years. Losing a job was considered taboo. As a matter of fact, it was hard to lose a job. You really had to do something wrong. Today the average tenure for that same employee is 3.7 years (update – 3.1 years in 2022). Doing a good job does not mean you will keep your job. Job transition is commonplace and expected. Does that surprise you? From 27 years to an average of 3.7 (3.1)years. Wow.
Mr Shay went on to state that what used to be ‘one job for life’ has disappeared. Today it is one boss for life – yourself. You need to look at yourself as a company and intelligently apply your personal brand to the marketplace. Mr. Shay’s point is that we are all ‘free agents’ or ‘businesses’. Companies may contract with you if they think you can solve their problem. Once the problem is fixed, you will need to find another application for your skills.
Finally, Mr. Shay spoke about the important of investing in yourself. Going to conferences, staying current and learning new things is what allows us to remain relevant. Don’t expect someone else to pay for you to improve yourself. We are all ‘free agents’ or ‘businesses’ and as such, we need to focus on doing those things that allow us to best achieve our personal goals
As you know, I spend most of my time discussing business ownership, but Mr. Shay’s points are well stated. The world is a different place. Business ownership may or may not be the right path for you but regardless, you need to think of yourself as a business.
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This message from Tom Shay goes to the heart of what freedom and self-determination is all about. A great message for each and everyone one of us on this 4th of July holiday.
