Two things a business owner should never do.

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The 2nd is worse than the 1st.

One of the worst things you can ever do is write a business plan. But easily the worst thing you could do is follow it. It’s a great way to go out of business. It’s the 97% rule.

97% of all businesses leave their prime objective in order to find the thing that eventually makes them money. Good businesses almost always start with a bad plan.

You just can’t make this stuff up.

Harmonica Tuners Gave us Silicon Valley
In the late 1930’s two guys started a company for $538 and were messing around in a garage. They made an automated bowling lane violator, a harmonica tuner, an automated toilet bowl flusher and a few other stupid products. Somebody came along with something called an oscillator and asked them to build it. They didn’t think it was a very good idea, but that bad idea became the first thing they made money at – HP was born and became the foundation of silicon valley.

Model Rockets Gave us the First Personal Computer
In the very early 70’s a couple guys were messing around with a simple automated launching system for model rockets. They put the kit in a magazine and thought they would sell a few dozen. They sold thousands. They used that experience to focus more on technology than on model rockets. In 1975 they put another kit in a magazine for something called the Altair 8800, and thought they would sell a few dozen. It was the first personal computer and it sold thousands. They ended up building the kits and selling them as finished computers. Five years later this stuff became the basis for Microsoft’s Altair BASIC language.

HP Gave us Apple
Around the same time some 12 year old kid called HP and demanded to talk directly with Bill Hewlett because he wanted to buy parts (for his Altair?). Bill took the call, was really impressed and a few years later gave the kid an internship. Later in his life that kid, Steve Jobs, who also met Steve Wozniak at HP, said, “Without HP, there would be no Apple.”

Xerox’s Business Plan Gave Apple the GUI
In 1979 Jobs visited Xerox and saw something called a graphical user interface – GUI. Xerox invented it but couldn’t find it on their business plan, so they sold it to Jobs for $50,000. Bill Gates visited Apple later and poached the idea.

All of this, from the 1930s to the 1980s involving a few dozen people from all walks of life in many different places, came together to give us the personal computer. It wasn’t on a business plan, and the only guys with a business plan – Xerox – ignored it because it wasn’t on their business plan.

Bagels or Ice Cream?
Ben and Jerry make ice cream. What few people know is that the ONLY reason they make ice cream is that a bagel machine was too expensive. They were all set to go into the bagel business but hadn’t bothered to price out the machine. When they did, they found out an ice cream machine would be cheaper, so they did that instead. Wasn’t on the business plan.

Panty Lines or Millions of Dollars?
Sara Blakely looked in the mirror just a few years ago and saw panty lines under her slacks. She couldn’t find underwear that didn’t show, so she started Spanx, which is now a huge international clothing line success. Not a business plan – a mirror.

Webvan Followed Their Plan
In the late 1990’s Webvan decided people would buy groceries on the internet and have them delivered by van. They put together one of the most elaborate and detailed business plans ever concocted, raised $2billion, hired the best talent in the technology and distribution businesses, and followed their business plan right off the end of the earth. They took $2billion of investor money with them – a lot of people were really impressed with their business plan.

Let it Collect Dust!
97% of businesses leave their prime objective to become profitable. Webvan stuck to theirs, none of the others above had one, or if they did, they left it behind as the world interacted with their “plan”. If you can’t help yourself and just have to do a business plan, at least have the common sense to put it on the shelf and ignore it like most people.

You won’t find success in a business plan or in an MBA program. You’ll find it in the trenches by being willing to adapt and execute exceptionally on what may seem ordinary or throw-away ideas.

Do Something.
Ask the successful people. It’s never how good your plan is that matters. It’s how committed you are to the bad plan you’ve got.

Speed of execution. Stop planning. Get moving.

You never run out of money.

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Perception is not reality.

We experience running out of money all the time. But that experience is not reality. Nobody runs out of money, we just think we do.

What is the real issue? We experience running out of money but what we really run out of is time.

Money can be printed and you can always figure out how to get more of it yourself. There are almost endless ways to increase your income.

You Can’t Manage Time
But you only have 168 hours in every week. No matter what you do, you can’t print or accumulate any more of it. However, “Time Management” is not even possible. If someone is selling you a Time Management seminar – run.

The only thing you can manage is your priorities. There are no excuses, there aren’t even reasons, there are just priorities. You eat, sleep, breathe and go to the bathroom because they are priorities. Time can’t be managed, but you can decide what is most important to do with the 168 hours you have each week.

More Money In Less Time
The business owner’s game (and really everyone’s game in business) is “How do I make MORE money in LESS time?” If we are playing the “More money in MORE time” game that we were all taught to play – “just work really hard and you’ll be successful” – you’re going to wear yourself out and not ever make the kind of money you want.

If you could create another 168 hours in your week, you could easily double your income. But again, you can’t manage time, only your priorities. What are you doing to make MORE money in LESS time? To do that, you’re going to need to figure out how to make money come in while you’re sleeping or on vacation. There are a few dozen ways to do that (outlined in my first book, Making Money Is Killing Your Business) – only one of them includes hiring employees.

Stop Playing Office
Stop trying to manage your time. Successful people figure out how to make more money in less time by changing their priorities and deciding the money-making part of their business is more important than the “playing office” part of their business.

Almost all of us waste at least 50% of our time playing office – doing things that will never make us more money, and doing things that are not the highest and best use of our time. But we “feel” productive doing them.

Manage Your Priorities
Stop trying to manage time. Manage your priorities. You’re likely to make a lot more money that way.

What is one way you are playing office right now? What other priority could you focus on to make MORE money in LESS time? Answering that question is a great way to start making money while you’re sleeping or on vacation.

Don’t experience running out of money. Figure out the few priorities for the 168 hours you have each week that will make you more money in less time.

Management is a Bad Idea.

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Who decides what?

In the late 1990s I was courted for 11 months to join someone else’s business. The biggest red flag was that the CEO was a Harvard MBA in his early 60s. Not much could make me more cautious than working for someone with that kind of ivory tower pedigree..

I said no a number of times. My biggest concern was how he, and by extension the company he had built, would make decisions. Would they let those most affected be involved in decision-making, or would they make top-down decisions like other companies stuck in bankrupt Industrial Age thinking?

I finally said if he spent a few million to build a new operations center, and committed to investing $500k or so each year each year that the company grew, that I would join the company. To my surprise he committed the first few million to the ops center, so I joined up.

We took the company from $8.5 million to $13 million the first year, but when it came time to put just $500k more in to support the next year’s growth, the CEO decided not to do it. Later that year when I asked for workstations and employees to support more growth, he emailed me and said I hadn’t put it in the capital expenditure forecast 10 months earlier – request denied. The golden handcuffs clouded me into staying for almost three more years, but two years after I left, the company went bankrupt and was sold in a fire sale.

What happened? Exactly what I had feared up front – the people closest to the ground were not involved in the decision-making process and had to implement decisions in which they had no say. Management knew best and didn’t need any help making decisions. Classic, but broken management practices.

Management is a Bankrupt Industrial Age Idea
“Management” as a function wasn’t common before 1900. Frederick W. Taylor (1911) popularized the separation of decision-making from the worker, who he felt didn’t have the smarts to be involved in decisions. He emphasized having Management make decisions that workers then simply carried out. My Harvard MBA CEO carried that practice right through to bankruptcy.

None of us is as smart as all of us.
In the real world, none of us is as smart as all of us. If you push through 112 years of bad management practice, you find that people who are most affected by a decision are most likely to have the best input. This should be a major leadership principle followed by all business owners. It doesn’t mean everyone just makes decisions by themselves, any more than having management make it by themselves. It means the owner/implementer of a decision should have the most say.

I Got Over-ruled
We’re designing the messaging and cool stuff that goes on the walls of our new Business Transformation Center. I had specific ideas of what I thought should go on the walls. When the designer came, the other staff there that day had wildly divergent ideas, and they would live with the results every bit as much as me, in some ways more. My ideas aren’t going to be implemented, but I got a few things that I wanted, too. The Chief Results Officer will make the decision.

What do you Believe?
We don’t believe in management and workers. We believe in the Wisdom of Crowds, which says that in a team there is a better answer than any one expert can give on their own. We don’t believe in consensus, either. A giraffe is a horse designed by consensus – close, but no cigar.

Make More Money – Trust Others to Make Great Decisions
Those with the most at risk get the most say. Even if someone doesn’t own stock in the business, they should own their work and their results. In MANY cases the business owner(s) has less at risk than those who will have to carry out the decision. And they will make more money if they let others who are closer to the ground make the decision.

Leadership 101
1) Know you don’t know everything – none of us is as smart as all of us.
2) Respect the input of others
3) Whoever has to live most with the decision should have the most input.
4) There is still a Chief for each decision, but many times it should NOT be the Chief Exec. Officer. Everyone in our business has the title “Chief” of something, and the decisions get made by the Chief closest to the ground and most affected by the decision.
5) All of us should get input, aggregate information, and deeply respect the input of those most likely to have to carry out the decision.

The art of leadership is to know how few times the leader should actually make the decision.

It’s a great way to avoid bankruptcy.