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This business coaching lesson provides management tools to advance a business.

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Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Maxim #29: When in doubt, focus on and nourish your core business.
  • Lesson Nugget: Before expanding into other branches, make sure you have focused and taken advantage of all avenues in your core business.
  • "Thankfully, persistence is a great substitute for talent." - Steve Martin
  • In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, a corporation, or other business organizations.
  • "You Can Change Your Life With The Priceless Wisdom Of Ten Ancient Scrolls Handed Down For Thousands Of Years" - Og Mandino

lynda.com for training your team, small business management

-So when in doubt, focus on and nourish your core business. Again, 29-- point 29 in this small business management. When in doubt, focus on and nourish your core business. Let's go.

-I have helped so many people, and when I come into this malaise of mass, of lethargy, of confusion and blurriness in their business, what happens here is they got bored with their business. They've been doing the same thing for years. I believe that there's a fortune right under your nose. There's massive growth right under your nose in your core business.

I work with one company that had about an $800,000 business. This is in 2009, right as the bad stuff was hitting the economy. They're in the construction business. They were flat. No growth. Their competitors were going out of business. They had no profits themselves. We began to focus on the core business. He wanted to go somewhere else.

I took four months to get him to get back, focus on his core business. When he began to focus on his core business he grew from $800,000 to $1.2 million. The next year-- and still the economy is just going south-- he went from $1.2 million to $2.2 million dollars.

-This is just like a two year period of time.

-Two year period of time. By focusing on his core business-- he has not changed anything. Now we're working now. We're up over the $3 million mark. We're going towards the $5 million mark with this particular client. He's focused on this. We've got good staff here.

So now we're going to start to really work on his retirement plan, which is buying multifamily dwellings, because he's good with construction. He knows how to do this. He loves the real estate market. So we're going to start to-- it's related to the core business, but he's got strength in his core business. He still continuing to grow that, and now from the core business, he's going to start to grow connected to that.

-If we look up there at Steve Martin, it says persistence. Thankfully persistence is a great substitute for talent. If he was pursuing a ton of different things, he wouldn't have been able to be persistent enough to break through, and I always explain it to people like this. Og Mandino wrote a book called "The Greatest Salesman in the World ."

-Yeah, I love that book.

-And The idea was, if you take an oak tree and you hammer away at it with the blade, and you hit it once, and then you go it didn't fall down. I'm done. You peace out and go to the next tree. Hit it. Didn't fall down. Go to the next tree. Hit it. You might at the end of the day have 400 or 500 swings and not ever knock down a tree. Now, if you took that same 400 swings, and you chopped this way, and you chopped that way, and this way, and that way, and this way. You whittle away at it. The tree falls down.

And it's that focus-- it's just that intense energy. And then the way also-- I remember second, third grade, you remember it was cool when you took a mirror and you'd fry a bug or a worm?

-Oh, yeah.

-I still do that on Thursdays, but that's the deal where you-- it's just the thing where--

-It really works well in Costa Rica.

-I'm going to try to weave Costa Rica into this as much as possible. Just homina homina-- that's where we're headed. So really a big-- I just want to encourage you to focus, though, whether you're for you're frying bugs, whether you're chopping down trees, whether you're growing a business, it's focus.

-Yup, boredom will destroy your business. It'll blind you for the opportunity right under your nose. You're not going to see stuff, and that's-- as a coach, I come in there, and help open their eyes, and say look what's right there. I've got a client right now in a small town, and they've had 13 years of no profits. And we started working with them, and this year they're going to go from $0 to about $300,000-- about $2 million business-- and it's just waking up to the opportunities right under their nose in their core business.

-Now point 30-- point 30. Here we go. Point 30, this is off the coast of the Stroud, Oklahoma. It's a tourism mecca. A lot of people come here. With cash you are positioned with power. What does that mean?

-OK, so when I begin to work with any client-- and all of us professors at Thrive want your business to thrive. We want you be successful in this. So one of the first things we'll do is we'll look at the balance sheet. That's where the assets-- that's what you own. It's what you owe. It's what you're worth.

-Real quick I want clarify just in case I'm not tracking. Your balance sheet is you have all your cash-- like money coming in over on one side, right?

-Right. All your cash, and your assets, your cars, and your trucks, your equipment, and all that kind of stuff.

-And all the stuff that owe on the other side.

-Yeah. Yeah, it's what you owe people, and then if you have anything-- if what you own is greater than what you owe, then you'll have what you're worth.

-I just want to make sure-- and I didn't want to interrupt you at all, but if you have no idea what we're talking about, we have some awesome episodes just on balance sheets. So definitely work your way over to that. We'll make sure we explain that in great detail.

Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Lesson Nugget: When you have that extra cash you are positioned with power to take advantage of great opportunities.
  • "If you live like no one else, in time you will live like no one else." - Dave Ramsey
  • Lesson Nugget: Cash buys you confidence.
  • "A bond, deed, or other document kept in the custody of a third party, taking effect only when a specified condition has been fulfilled." - Escrow
  • Lesson Nugget: Cash helps you deal with emergencies.
  • Lesson Nugget: Cash gives you opportunities.

Learn more about Small Business Management

-Back to you, sir.

-Excellent. So what we want to do is we want to really get them into a mindset where they begin to take cash and store it away even to a point-- well, I need the cash for something. I will actually take some clients, as they build their cash, to say, listen, let's escrow this cash as if we're borrowing it, but let's keep it in the balance sheet. Let's keep it on the books here. And we'll escrow that, and we'll just borrow money against it, because it's usually about a 2% spread.

-What does escrow mean?

-It's to set it aside where you can't spend it, so it's almost like you don't have it. But it looks really good to everybody else that you have all this cash.

Now, when you begin to store up cash and you get a percentage of your gross, you put it aside or a percentage of your net, you put it aside, you live below your means-- it's very important to have cash for bonding if you're a contractor. With cash, you're positioned with power. What that means is you will have deals that come along and you say, listen, I'll negotiate. In 60 days, I'll close this.

Or you'll say, listen, instead of paying you $20,000 for this loan and all this kind of thing, how about if I just give you $15,000 flat cash, be done with it. Bam. You get these great deals. You're positioned with power to take advantage of great opportunities when you have that cash.

Banks look at you better. You feel better about it. Your wife doesn't get upset near as upset with you when they cash in the bank, and you don't kick your dog near as often. So it's a happy life for everybody when you have cash.

And it's hard when you're in a startup. You're thinking, how am I going to do this? There are ways. I am working with a client right now that-- they have not had cash in their bank, and they've been in business since 1950-something in a city far, far away. And this guy, as we began to talk about the need to put cash away, he would find cash.

And before anybody can get their hands on it, he set up-- he'd call it a rainy day fund-- he would grab that, put it in there. After one year-- I've been with him for one year-- he's got $100,000 of cash in the bank just because he decided I'm going to put this aside. I'm going to live below my means. We're going to like oatmeal and beans. Who cares about it? It's very nutritious. Learn to like it.

It's like my good friend Dave Ramsey says-- if you live like no one else, in time, you'll live like no one else.

-I want to give a little nuance. I think we can put it on the screen here for everybody. With cash-- it was explained to me years ago, and I was trying to remember what was said-- but with cash, you can be the CEO. And by that, it means you have confidence. So cash buys you confidence. You don't have to worry if something bad happens and you're like, oh gosh, what are we going to do. You also can deal with emergencies.

-CEO.

-Yeah, so E for emergencies. If you have an emergency, again, you're not worried about it too much. And the final is opportunities. People without cash sell houses cheap. People going through an emotional crisis sell their house. People getting a divorce sell the house. People who desperately need to pay for rent, they'll sell their car. And if you have cash, you can buy those things from people that are on the emotional down cycle. So you can take advantage of a lot of opportunities when you have cash.

-And I've worked with-- I remember working with client who wanted to have a lot of growth. And he had this compulsion to have to-- if he had cash in the bank, he says, my money is not working for me. I got to get it working for me. And he'd buy anything in sight. It's just a compulsiveness. And he kept running into problem after problem.

And instead o being in a position of power, he was in a position of being paralyzed. And he couldn't make the decisions to move his company. When the real deals came along, when the margins were there, he wasn't positioned with any power to take advantage of that, because he was obsessed with this compulsion of getting cash working for him.

I'm telling you-- I've done this with many businesses. It doesn't make sense. You get your cash working for you by putting it in the bank and showing everybody loud and clear that you know how to manage cash, you know how to put it aside, you're a trustworthy person, you can put yourself in a position where you can take advantage of awesome deals... Small Business Management.

-One final example I want to give you. This week-- I just had a call the other day with, again, a client-- we'll say far, far away-- from Delaware. And I'm talking to these guys on the phone. And one of the guys says, well, if we don't pay your $2,500 a month fee, will you still help us, and we'll just pay you commission?

And I said to him-- because I have cash-- I said no. I think you're great guys. But if I don't do your deal, I could basically not work for a long time. And I'm motivated by making sure I can work with clients who value me and that I can offer value for. So if that's a nonnegotiable or you're not willing to pay a monthly fee, then I'm OK. I can move on.

Featured Coaching Excerpt - Notes & Transcript, Part 3
  • Lesson Nugget: Cash gives you the opportunity to choose what/whom you work with, as opposed to HAVING to take every deal, whether you want to or not.
  • Maxim #31: You will go forward more quickly by working backwards.
  • Tim's Favorite Reading Material - "Inc.", "Fast Company", "Harvard Business Review"
  • Lesson Nugget: Working backwards increases your chance for success because it forces you to think through your plan and the upcoming tasks to get done.
  • Maxim #32: What progress are you standing in the way of?

Find Small Business Management

-Well, that guy called back like 10 minutes later, "Hey, hey, oh, I want to make this happen. But it gives you the ability to walk away and not-- it just gives like a confidence to know, hey, there will be another deal coming tomorrow. But if you're not, you're in that stress situation. Now you're making emotional decisions. Like, I have to take that client, or I have to do this, I have that. It just puts that stress. It's like a blanket of stress on you there.

-Right, [INAUDIBLE]

-Now, the next thing here. It says you will go forward-- again, you will go forward-- more quickly by working backwards. What are you talking about?

-All right, that's really beginning your day with, in your mind and in your planning system, you got a master to do list, and then you've got a schedule. When you take these important items, just a few of them, and you put them on your calendar, and you put them in time blocks. So you actually begin to plan ahead. You move forward in your mind and through your planning system by working backwards.

And so, at the end of the day or at the end of the week-- or it may be, hey listen, we need to have $10,000-- talking about being in a position of power. Or we need to have this done before this happens, and this tends to be done within two weeks. You know, I've got a lot of construction clients here. We have these two week and three week look-aheads. And some of them-- What do you mean look ahead?

I mean, just sit down and you look ahead at what's going on. You make sure the materials are there and you make sure the contractors are there. You make sure the subs are there. You're working ahead. You go forward here, and by working backwards through a planning system here, you're going to move forward that much more quickly.

-So you're saying like looking forward at your goal, and then work backwards between the goal and now?

-OK, I want to get here to this way forward position. If I work backwards and say, if I want to be here, then I got to do this.

-OK.

-And to do this, I got to do this. And to do this, I got to do this. So it's a planning mechanism here, where you begin with the end in mind and you work backwards and say, in order to get here, all these things need to work.

-Now, I think this is huge, because all these sort of tie into this next one here. Maxim 32, Tim Redmond's Maxim 32-- What progress are you standing in the way of? So, maybe I'm not a good planner. Maybe that's the problem. Maybe I'm not a good leader. Maybe I'm a--

What are some examples where you say, "I've seen an example where someone's standing in the way of their own progress."

-OK, so two of my favorite business magazines-- one's Inc. magazine. The other one is Fast Company. I still like Harvard Business Review too, as well. But I remember reading-- I would gather a group of people. And I had this software company. I would gather a lot of my managers and key people. We would read these Inc. articles. And I would consistently hear the CEO say, "What's the biggest limit?" or "What's the biggest challenge?" And they'd always say, "Well, I'm the one standing in the way of progress. I'm the one in the way here."

And so, if everybody's saying that, why don't you do something about it? So this question helps me to say, "Well, what progress am I standing in the way of?" That's why I go around to the staff and say what stupid thing am I doing that's-- [INTERPOSING VOICES]

-No matter how good you might be doing at the time.

-And no matter how-- I've got blind sides that, you know-- you know how our wives know all of our blindsides, and they are-- they feel called by the Almighty to make sure they reveal those things to us in a repeated fashion, right?

-Yeah, it's repetition, focus. [INTERPOSING VOICES] Focus, yeah.

-Right. And so we have people, that if you understand you have a lot of blind sides to you, you want to open that up. You want to open yourself up. And so you want to ask people, well, what am I-- what progress am I standing in the way of? What's going on now they I keep having to do over and over again, and it's not going-- What do I want to see happen that I'm just, it's almost like a carrot and stick. I'm running towards it, but it's just out of reach. What progress am I standing in the way of, and how am I standing in the way of that?

And then you begin to remove yourself from that. A lot of times it's-- a typical way to do that is-- One guy was consulting. Let me just say this. One guy was consulting and says, "Nobody's creative in my organization. Nobody's creative. I've got to come up with all the ideas." And he says, I want to follow me around for a couple of days and just help me solve this problem.

And I remember documenting 27 times, 27 communications, that he had conversations with people when he asked their advice. And before they had three words out of their mouth, he butted in and started finishing their sentences and gave them the idea. He wasn't open to any new ideas... Small Business Management.

-Yeah.

-And he said, hey, how am I doing? How can we improve this company? I said, well, do you want a patty-cake answer, or do you want the truth?

You can't handle the truth. And I got that from somewhere. I don't know where I got that. Anyway. So he said, no, really, give me the truth. So I began to tell him the truth. I said, I've got 27 documented times that you shut down the progress in your company, because you knew it

all.

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