When we go out into the world and try to connect with others and tell them about growing our business, we tend to do it in a way that it is all about us rather than about them. We say how great, wonderful, and life changing our product or service is going to be for them. The problem with this is that they don’t care about all the features your product or service offers. They want to know how it will specifically help them solve their pain points.

In a meeting earlier this week, my business associate Alex Lavidge boiled it down to three key issues. He asked whether it will:

1) SAVE ME TIME

2) SAVE ME MONEY

3) GROW A NEW REVENUE STREAM

When you think about it, you’ll find this is so relevant to how we approach most of what we do, especially if we are business owners. Aren’t these the things that really motivate us to take action? If someone is coming into your business and says they can really save you a lot of money, does this not peak your interest? If they tell you their new widget will increase your sales by 10%, wouldn’t your eyes leave your computer screen and look them in the eye?

Conversely, when we think about what activities we are going to undertake for the day, we should focus most of our time and effort on these actions. Aren’t we ultimately working toward one of these goals?

What are you doing or who are you talking with that will save you time, save you money, or grow a new revenue stream?

In previous blogs, I have shared my admiration for Robin Sharma, best-selling author and business coach, and when I viewed some of the mostly highly watched videos from him, I wanted to share one that most resonated with me. The video “How Remarkable Entrepreneurs Build Winning Teams” had a great message and had accumulated almost 18,000 views.

I have been working for years to build a great team, and I am excited about the one that is in place today! We have gone through different team members, and it seemed to be an evolution on the talent that we were attracting. Today, the team is full of highly skilled and dedicated people that want to give their all to make the company improve and grow.

Here are the 5 things entrepreneurs do to build a winning team:

1) Appreciation – show appreciation and give praise. A gallop study said that the #1 reason companies lose talent is that employees don’t feel appreciated. I am thankful for my team and could do more to share that with them.

2) Belonging – create a sense of belonging. People like to feel like they belong to a special community. Our team just seems to like each other by the way they joke and laugh so often.

3) Develop Your People – grow their talents, challenge them to be better, and take them where they want to go. Mentor and help them be better. We ask them weekly what they have learned, and we pay for educational programs for our team.

4) Celebrate Your Team – celebrate the big things but also the little things that happen along the way. We have had little celebrations such as going to lunch together and even a coupon book that can save over a $1,000 to local retailers. We could do more to celebrate our team and will work on this.

5) Communicate a Compelling Purpose – share a common goal and passion. People like to feel like they are making a difference. Here at Efficience, we believe that there is a better way to leverage technology in your business. We are passionate about creating life-improving solutions, such as more affordable mobile apps for small businesses, so they can connect with their customers and grow their business.

I know I could do more and I will work harder in these areas. What are you doing to help your team to be the winners you know they can be?

Mary Meeker recently released her annual overview of internet trends, and I found it to be very insightful. You may remember that I have discussed Mary’s research and opinions on this topic in some of my previous blogs. She pushed forward as a leader in this space with different investment banking firms and is now a partner at one of the most prestigious venture capital firms, Kleiner Perkins.

Meeker’s overview includes more than one-hundred slides, so I have summarized some of what jumped out at me. The general theme is that internet growth is still significant and mobile adoption is still in the early stages. Many of the slides show examples of how this connected world is creating the Re-Imagination of everything.

The Smartphone has penetrated only 953 million users when compared to the 6.1 billion mobile phone subscriptions as shown on slide 11. This is a huge upside. Think about all the new businesses and people considering apps moving forward. Is your business prepared to benefit from this growth?

Next, on slide 10, compare the global penetration between the Android and iPhone shipments. Android has over 250 million compared to over 60 million with the iPhone. This is a four times difference, and it makes you think about for which one you would build an app. Looking at your demographic, area, and global reach will help to determine if you choose to create an app for one or both.

Slide 18 shows India’s usage of the internet on a desktop has decreased over time, and their usage of internet on mobile devices has increased over the period 12/08 to 5/12. Mobile usage has currently surpassed that of desktops, which should be considered for the monetization of sites. Most sites make more money from ads on the desktop than on mobile. This will changes things.

Mary also makes several points about how things are changing in the world with the internet. In 2010, after 305 years, newspaper ad revenue was surpassed by internet (slide 32). The trend lines for the newspaper ad revenue were declining much faster than the internet was sloping up.

From a technology investment perspective, be careful. Look at slide 108. Out of the 1,720 IPOs over the periods 1980 and 2002, only 2% of these companies accounted for 100% of net wealth creation.

Mary states that the “Magnitude of upcoming change will be stunning. We are still in spring training.” She gives a long list of reasons in slide 85. A few key elements include nearly ubiquitous high speed wireless access in developed countries, fearless and connected entrepreneurs, and inexpensive devices and services, including apps.

How are you benefiting from these major trends taking place right before our eyes?

Since the material in Greg Crabtree’s book “Simple Numbers, Straight Talk, Big Profits” has been so enlightening, I want to share more from his book to help us all out in the financial arena. This is not the stuff they teach you in school. It has real world understanding of how to look at your business financials from an entrepreneurial perspective.

As I read the book, I was most recently struck by his comparison between businesses and the NFL. Like the NFL, we as business owners have salary caps. The NFL created a salary cap to max out what each team can spend on their players in an effort to create a fair shot amongst all the teams. Now, you may have not thought that you have a salary cap. I didn’t either. However, in reality, we cannot pay ourselves more than we generate in revenue, and we also shouldn’t pay out more than what would be a respectable profit margin.

Greg points out that every business needs to strive for profit. In general, a company with less than 5% profit margin is on life support. One that is greater than 10% is a good business, and a profit margin above 15% reflects a great business. You need profit to pay your debt and to have cash flow to grow the business.

Let’s look at an example of how this works to determine what your salary cap would look like:

Revenue $ 1,000,000

Salaries $ XXX,XXX

Non-Salary Expenses $ YYY,YYY

Pre-Tax Profit $ 100,000 (10% of revenue, the percentage you want to have to be a good business)

Now you can determine your business’ salary cap. Start by adding up all your non-salary expenses and plug them into Y. Then, subtract your pre-tax profit and the non salary expenses (Y) from your revenue, and the number you have left over is your salary cap (X). This is the number you don’t want to exceed in order to maintain the appropriate profit margin to increase your business. Remember, breaking even is dying, and having less than a 5% profit margin means the business is on life support. If this is not clear, get his book, and it will break it down for you very clearly.

What do you do if your salary number is higher than what it should be to maintain an appropriate profit margin? You go back and look at the productivity of your people and determine who is getting it done and who is not. As we grow, we tend to hire quickly and sometimes hire people into roles that do not meet their strengths. As business owners or CEOs, we need to make sure we have the right people performing in the right roles for optimal productivity.

What is your salary cap, and does it give you the profit margin you desire and one that will grow your business?

In business we refer to a sandbox as the area in which you play or conduct business. It consists of three things: your geographical boundaries, your products or services, and either your client description if you sell direct or your distribution channel if you sell there.

When determining your sandbox, one area of thought is to make sure that the sandbox you are playing in is capable of getting you to the goals you have created for yourself. Problems could include not having enough customers or not having the right customers in your geographical boundaries. The product or service may have saturated the market you’re in, and the client description could have changed or expanded.

In our situation, we found that to reach our goals we need to add a geographical boundary that is larger and more diverse than our existing one in Knoxville, TN. We have the opportunity to open another office in a market that provides this, and we feel this will open the sandbox for us to get where we want to go.

April Cox, my partner and co-founder of Efficience, will be going to Dubai in the beginning of June to start our new office in that fast growing and dynamic city. April has contacts there from her husband and EO members that we have met over the years, so she will be off and running to network and increase our reach in our new expanded sandbox.

Not only will she be in fast growing market, it is also a modern city adapting to the latest technologies. This will be a plus for us at Efficience because we believe there is a better way to leverage technology and growing in a new environment with other companies that believe this also will be mutually beneficial. It takes four hours by plane to get to our office in India from Dubai, so working with our team there will be more “local” for the companies we connect with as we work together.

We are excited for this expansion and the chance to open the door to new relationships, customers, and product opportunities.

Is your sand box big enough to get you where you want to go?

As discussed in the X-Factor Blog, I attended and spoke at the Nerve Conference in Atlanta just over a week ago and had a great time! We listened to some interesting speakers and had a fun spending time with our EO friends and meeting some young aspiring entrepreneurs. The breakout went well! The X-Factor content leads to such powerful discussions and opens us up to the possibilities of creating breakthrough opportunities for our businesses.

The conference theme “Dream, Challenge, and Lead” was inspiring. They kicked it off with video of Martin Luther King, Jr. Then a gentleman came up on stage looking like a young Dr. King and orated the “I Have a Dream” speech. What a powerful experience!

We later listened to the three young international workers that had been captured and held hostage for over a year because they had been hiking near Iran. It was seriously challenging to listen to them share their stories, let alone be in their situation for that amount of time. They spent much of the time in solitary confinement, and they spoke in depth about how incredibly difficult that was for them. Their stories on this hit me hard and reinforced how social a species we really are. When we don’t have human contact, we are driven to a psychological breaking point.

The natural instincts we have to be social would explain the success of social networking and the intrigue we have around the success of Facebook. So when we were told the Winklevoss Brothers were speaking, we packed the conference room. They came up with the idea of a social website and asked Mark Zuckerburg to try and build it, and then he went off and built one himself. The twins talked about their work habits and the challenges of being Olympic caliber rowers. They did a great job comparing Olympic sport to the business world and what they are doing today.

They didn’t really break out into the issue we all wanted to hear about and what really happened with the Facebook before Q&A. However, we jumped right in and asked when they took questions. They shared that they felt it was pure fraud, and they were very disturbed by his actions. I would say they don’t have much to complain about with Facebook stock getting ready to go public, and they also got rich while training for the Olympics. They have new ideas (shhh it’s a secret) that they are exploring with all that money they have now.

I find it very beneficial to be at these conferences (being social) and to gain exposure to the experiences of proven and successful people, whether they are the speakers or the members attending. I was excited to meet a couple of young entrepreneurs with that look in their eyes that says they’re ready to go after something big and create something from nothing. Quinn and Michelle go out and make the world a better place with your budding entrepreneurial spirit!

What are you doing to let that inner entrepreneur to come out?

Something exciting has happened in the entrepreneurial world, and I want to share it with everyone. The JOBS Act, passed by both houses of Congress in March and signed into law on April 5th, will generate big changes for the growth of small and mid-sized businesses. One of the major amendments in this bill would allow crowdfunding. I see this evolving into a significant means for companies to access increased funding, and it is a great way for small investors to find more opportunities to devote their money to companies with which they are more closely involved. Given how connected we are through social media and the internet, this is ripe for the times!

So what is crowdfunding? It is the opportunity for your business to use a website and social media to allow others with an interest and small sums of money to invest. Prior to this bill, the Securities and Exchange Commission (SEC) would only let a small number of people invest in one business, but once your business passed that limit, other investors were required to have a large income or net worth, or you would have to register as a security with the SEC. Crowdfunding will eliminate all this red tape and provide the opportunity to truly democratize the investment process.

This can be compared to a New York law which passed in 1811, changing the liability requirements for corporations and making it easier to establish one with minimal requirements. This allowed investors to hold a diversified portfolio of stocks without regard to the debts of the companies in which they invested. This freed up money to move in areas it was needed, which at the time included textile mills due to our challenges with Britain (War of 1812) reducing trade.

That timely law allowed money to flow where it was needed. Today, we have a similar environment where businesses can’t get the funding they need to grow because of all the bank problems. Banks withhold lending because they fear the bad economy, have experienced many losses already, and must hold more money in reserves due to increased government regulation. This starves the entrepreneur from the funding needed to take advantage of various opportunities.

Given my history with investments as well as the historical results when we democratize people, government, business, and investments, I see the start of a new era. Investing in a portfolio of startups will become as common as mutual fund investments! Does your business need capital to grow and could crowdfunding be the advantage you have been looking for to explore new opportunities?

Theophylline

I have been working on putting together some content for a breakout session I’ll be doing at the EO Nerve Conference in Atlanta next week. This content was created for Insignia and Quantum leap EO programs to help Forums engage in more stimulating discussions around your businesses with the other business owners. I really enjoy these events, catching up, and sharing with my existing EO friends and meeting new ones.

The topic has to do with discovering your X-Factor, which is not an easy task. Your X-Factor is a decision or strategy that solves an industry bottleneck and gives you 10 to 30 times the competitive advantage. This is something that is not visible to your customers. In fact, you don’t want to share it with anyone outside your organization. Treat your X-Factor like your company’s top secret magic ingredient, which will greatly increase your profitability compared to your competitors.

What are some of the industry bottlenecks? Bottlenecks can come from delivery, largest cost, innovation, process flow, customer retention, employee retention, selection, or people reduction. There are so many options, the ones listed and some that may not be thought of right now. That’s the beauty of it! Seize the opportunity to seek out and develop your X-Factor.

Now, what are a few examples of X-Factors? Outback Steakhouse created a compensation plan to retain restaurant managers (an industry bottleneck), keeping them for 5 years or longer when the average was around 6 months. AutoNation offered all the brands of the various cars to break the bottleneck of customers not returning four out of five times. Starbucks focused on higher prices, giving them unbelievable margins.

So, what process can you follow to help discover your X-Factor? This takes some analysis and digging. Sometimes, you discover it at the industry trade shows. Looking at all the breakouts, you will see the problems they are trying to solve, and that may be just the clue you need. You can brainstorm around these questions: What is the biggest cost in my industry? What are the people problems? Where is innovation not happening? And how do I keep my customers and employees happy? Once you think you have a handle on it, then ask yourself, “Why?” five times and watch the onion open up and reveal itself.

When you latch onto your X-Factor, you will be ready to jump on and ride the rocket, so be prepared to hang on. What are you doing to discover your X-Factor?

Anti Herpes

Being an entrepreneur, I have a mind set to create something better and to “maximize” the future. One of the things that I like to maximize is time. The problem with that is time is not scalable; it cannot be expanded with increased use. What do we do then? Since you and I can’t change the fact that we all have 24 hours to utilize in a day, we need to approach it differently.

From the perspective of the majority, we all go to work and put out a certain number of hours. If you want more money, then you work more hours, right? This is because you are paid for being at work, either by the amount of time worked or by the project or production. For example, when we are building a custom software project, we receive payment for the hours we work on the project or, if we quote a fixed price, for the completion of the project itself.

When you work this way, you must ramp up each project and exert the time and energy into understanding each client situation, becoming familiar with the client’s environment, solving the problems, writing the code , testing the code, getting it stable, and then you do it all again. In order to grow and expand your profits, you need to acquire more time, more resources, or both.

We have the opportunity to build one software project and sell it over and over again. You build it once, but you can sell, lease, or give the software to a couple or even a few billion people at minimal to no additional cost to the company. This would be the same as a contractor building an apartment complex with 5 units but leasing the same space to thousands of users.

We are building software tools such as Sluice, which we are able to lease, thus multiplying the revenue as more people use them. This only works if you create real value for people by solving a big pain that is so troubling that they will spend money to get rid of that pain.

To be scalable outside of software may take some creativity, but even with fixed assets it is possible. For example, think of turning a condo unit into a time share unit. You can sell the unit to one person for lower revenue or to 52 people buying a week for more revenue.

What are you doing to make your time scalable?

So much of what we do in business is about the things we need to get done.  I need to write a report.  I need to send e-mails to my clients.  I need to create a budget.  I need to put a plan together for the next quarterly meeting.  On and on it goes with stuff we need to do in order to make progress in our business.  Nothing is wrong with this, especially when it creates progress.  Progress has been determined to be the number one motivator of both business owners and employees.

However, we really ought to find the things that we need to STOP doing!  It is the one thing we, myself included, often neglect to do.  What is it in my business or my world that I need to stop doing?  Business guru Jim Collins and coach to the Fortune CEO Marshall Goldsmith emphasize this topic frequently.  They ask, “What is on your STOP doing list?”

When we want to create value, we want to DO something.  At times, we can create value by stopping the things that are wasting our time, distracting us from important work, and keeping us from clients and other people vital to our business. 

There are various things I find myself doing that I should stop.  I should stop having my e-mail open all day long because I get distracted from what I am working on every time I receive a new e-mail.  I need to stop not writing the important things on my calendar because time management is event management.  I write my blog when I happen to get around to it rather than putting it on the calendar and letting the calendar manage my events.

I also need to stop looking at things once, leaving them, and then coming back to spend more time on them.  I will read an e-mail, leave it to do something else, and continue this process by moving on to something else again instead of taking care of it right then.  This is a major waste of time, and I need to STOP it.  When something comes up, I should get it done now, move it to the calendar to do at a later time, delegate it to someone else, or delete it and move on.

What do you need to STOP doing?