Thursday, December 20, 2012

Cottage Food Businesses- Awake!

imageThis article was written by Tom Snell, SCORE Orange County Business Mentor

Sweep out your cottages, the law has changed! But don’t open the door yet, we’re not quite there.

Until recently, California state law prohibited sales of food products from home production facilities. However, starting on 1 January 2013, a change will allow small home-based operations to produce non-hazardous materials for sale. But not until 1 January 2013, and you will require a permit to do so. A shorthand version of the non-hazardous rules means that anything that requires for refrigeration is a no-no. This whole new deal is called cottage food operations.

Remember, everything that follows here is to ensure food safety for all of us.

While this is good news for some of you, as yet there are no application forms developed nor have the fees been fixed. The OC health department is feverishly working on both of these and hopefully there should be information on this any day now. When they are ready, you will be advised are two separate programs, trickily called programs A and B:

A) This allows you to produce at home and sell directly to consumers. That would apply to bake sales farmers markets, swap meets, church functions etc. For this you will simply have to register with the health department.

B) This is for sales made by you to another party who in turn sells to the consumer. For example, you sell hamburger buns to Joe’s gourmet hamburger outlet. Then the complete hamburger is sold by Joe to the consumer. For this you will require a permit from the health department. There will be a one-time startup inspection of your facilities. You also allow them the right to inspect your inspection under carefully controlled conditions.

This is small business, not big business. There is a limit of $35,000 of sales per calendar year for 2013. But Mama, that’s a lot of cupcakes! The limit goes to $45,000 in year 2014. You are expected to keep track of your sales against this limit.

So what might you be able to do in the meantime, while we wait for the pot to boil? Here’s a couple of ideas for you:

1) Determine exactly what it is you want to make. If it’s cookies you will have to say cookies not baked goods which can include a lot of things. For either A or B you will have to tell them what you will be making on your application and if you change it later, you will have to notify them.

2) Determine how you plan to sell your goods, since it makes a difference as to which program you are applying for. If you’re selling it yourself it will be A), but if you’re selling it to a retail outlet it will be B).

3) Figure out how you’re going to package your goods. You will have to have an informational label on them which will include ingredients, allergen warnings, indications that this is a homemade product etc. Hopefully, soon we will be able to provide a sample label. You can count on it that it will be a lot of information on a very small space, and that is attached to your package with something stronger than bubblegum.

4) Insurance! Aaargh!! Lawsuits against food producers are frequent, big, nasty and expensive. You will need very extensive liability insurance.. First you can check with your homeowners policy, but I think in most cases you will find they will not provide this coverage to you. This means you must check with another insurance company that provides it. This is important. If you want to do one of these programs you could start this investigation right now.

5 ) Get an authorized food handlers certification, you’re going to need one.

Since food safety is so important, the California Public Health Department food section is working on a specific list of products that can be made as well as a new training class for a mandatory certificate on food management, a considerably expanded version over the current food handlers document. Stay tuned, this could be fun!

The ink is only half dry on the new law. Be patient. There is much more to tell even if you don’t really have a cottage.

An opportunity awaits for those that wish to try this new program. We at SCORE will be here to help you implement your own success.

Obamacare Pre-Existing Condition Fee To Cost Companies $63 Per Person

This article was written by RICARDO ALONSO-ZALDIVAR 12/10/12, Associated Press, Reprinted by Permission

Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The Art of Delegation, Part 2 of 2

This article was written by Barry Mc Kinley, SCORE Orange County Business Mentor

imageIn last month’s article we discussed the need for entrepreneurs to learn the art of delegation. We covered the most common excuses used for not delegating, and we highlighted when to delegate. This article will cover some of the other questions you must consider before and during delegation.

The first question you must ask is, by delegating would failure be critical? As in learning any new skill the person will be slower and very cautious at the start. As they develop more proficiency they will become more confident and accurate. With that being said would it make sense to delegate a first solo flight in a thunder storm to a brand new pilot? This would be no more effective then teaching somebody how to swim by throwing them in the deep end of the pool and telling them, ‘learn to swim or drown’.

There are some tasks that should not be delegated. For example, one of the most common mistakes business owners make is delegating hiring employees to other employees. By doing this the interviewing employee will hire who they like and who will not challenge them in their job. But what business owner would want weak, unskilled and non-motivated employees?

When choosing a person to delegate tasks to consider the following: Do they have the experience, skills and knowledge to complete the assigned task? Do you have the time and resources to provide the training needed? Does the employee have the work style and independence to accept the challenge? Does the employee’s job interest and long term goals align with the job proposed?

You must also consider the current workload of the employee. Will they have enough time to take on and complete the work or will this just require reshuffling and not completing other tasks. Will you work with them to decide what tasks to start and what can be put to the side? This is also a great opportunity to explain to the employee how to prioritize their workload and just as important, why.

To be successful at delegation you must;

· Clearly explain the desired outcome.

· Define constraints and boundaries.

· Clarify the lines of authority and accountability.

· Explain what to do if the employee runs into a problem.

· Be reasonable on the work load that you are delegating.

· Expect the employee not to be able to work at your level or standard.

· Provided adequate support and be available to answer questions.

· Be focused on results (your way may not be the best way).

· Do not micro-manage.

· Establish and maintain control.

· Discuss timelines and deadlines.

· Agree on a schedule of checkpoints where you will review the process.

· Be willing to make adjustments.

The Art of Delegation at the start can feel like it is more hassle then it’s worth, however by delegating effectively, you can greatly expand the amount of work that you can deliver.

To delegate effectively, choose the right tasks to delegate, identify the right people to delegate to, and delegate the right way. With experience you will become better at delegation just as the people you delegate to become more skilled. Together you will develop a winning team.

Effective Delegators: Work Less---Accomplish More!

Turn High-Traffic Day Visitors Into Regular Customers

This article was written by Connie Certusi , BusinessNewsDaily Contributor, 7 Dec 2012, reprinted by permission

High-traffic days, such as holidays, are an opportunity for small businesses to establish themselves as a shopping location/website of choice and increase their customer base. And these do not need to be only seasonal windows of opportunity. Busy times can be a launch pad to increased visibility and more engaged customers while providing momentum for the rest of the year. Connie Certusi, Executive Vice President and General Manager of Sage Small Business Accounting Solutions, suggests the following for making the most of high-traffic days and leveraging the customer insights gained:

Be on your best behavior — High-selling seasons such as holidays or back-to-school shopping have the potential to attract new customers and, as such, you should be prepared to shine. Be ready to showcase or offer samples of your best products or services and pay particular attention to your customer service. You get one shot at impressing visitors so don't spare any effort or appropriate expense in achieving this goal.

Incentivize your customers — If you want to increase the probability of first-time customers purchasing your products or services again, you may want to offer a gift or discount that can be redeemed on their next visit. One efficient way to give out coupons is investing in a payment terminal that automatically prints discounts along with the customer's receipt. Coupon details can be programmed and customized in advance, saving you the time and trouble of remembering to provide the coupon every time you help with customers' purchases.

Social Media — Use social media tools like Facebook, Twitter and Pinterest to promote your deals and encourage conversations about your business . Present your followers with a discount or gift when they visit you, bring a friend along or recommend your business on their profiles. After those high-traffic days, encourage people to write reviews of your business and their customer experience.

Track customers and best-selling items — Keeping records of the clients who visit your business on busy days can aid customer retention. For starters, be sure to get their email address, and put systems in place to track their purchases. This information gives you an opportunity to thank customers for shopping and reward them with exclusive offers. It also helps you understand customers' shopping behaviors better when planning how to retain their business. Additionally, track what sells best and what extra inventory is leftover afterward to identify sales trends, potential discount items and if additional staffing will be needed in the next busy period. Depending on your size and needs, consider either a contact management or customer relationship management tool to track these relationships more effectively, and an accounting system that can track inventory details and purchasing habits for your customers.

Cash in on mobility — Worldwide, businesses big and small are experiencing the many benefits of integrating mobility into their operations. Canadian menswear retailer Harry Rosen Inc., for example, uses a Sage customer management system its sales associate's access via in-store kiosks or their personal devices. Associates have customers' preferences about garments and tailoring sizes as well as details about average purchases per visit at hand whenever assisting someone. Since the mobile app is web-based, associates never need to download information to their devices and are disconnected from each store's network once they step outside. The CRM strategy has helped the company capture 40% of its market.

If you haven't tried mobility yet, consider testing a few tools during your business' next high-selling season. Have your employees use a mobile payment tool via smartphone while assisting customers in the store, or look up inventory on a trial mobile app. You can also mobilize your customer data onto smartphones and tablets so sales associates can use the information to make purchase recommendations when speaking with loyal customers. After the trial, you can better determine if implementing mobile tools can further help improve your sales and customer service

Sunday, November 25, 2012

Symantec: Cybercriminals make £3m from ransomware

This article was written by Rene Millman, 9 Nov 2012 Reprinted by Permission

Criminals are making £3 million a year from holding people’s computers to ransom, according to a new study.

Research from IT security company Symantec revealed that 2.8 per cent of victims pay up to £280 to unlock computers infected with malware that locks screens and prevents them from accessing their PCs.

Cybercriminals often use social engineering tricks, such as displaying fake messages purporting to be from local police authorities, to convince victims to pay up. Such messages often include warnings such as, “you have browsed illicit materials and must pay a fine.”

The research found that one gang was observed attempting to infect 495,000 computers over the course of just 18 days. The first instances of this type of cyber-attack were observed in 2009, and - until recently - it was largely limited to Russia and Eastern Europe.

“It has increasingly become a popular ploy among numerous international online criminal gangs, spreading the threat to Western Europe, the United States and Canada over the past year,” said the company.

Symantec said ransomware will surpass fake anti-virus software as the leading cybercrime strategy in the coming year. It said there are other signs that ransomware is becoming increasingly professional.

Several different ransomware families, sold to what appear to be separate gangs, have all been tracked back to a single individual.

“That individual, who we have been unable to identify, is seemingly working full-time on programming ransomware on request” said the company.

“This dedicated development of multiple different versions of the same type of malware is reminiscent of how fake antivirus was developed.”

The company also predicted that as users shift to mobile and cloud so will attackers to exploit Secure Sockets Layer (SSL) Certificates used by mobile devices and applications.

Earlier this week IT Pro reported that security researchers have identified a new malware strand that steals image files from computers and sends them to a remote server.

The Art of Delegation, Part 1 of 2

This article was written by Barry Mc Kinley, SCORE Orange County Business Mentor

imageOne of the major differences between a small business that doesn’t grow and a company that is constantly growing is that the management has mastered the Art of Delegation. Using effective delegation allows many more tasks to get completed while developing more knowledgeable and inspired employees. If you are a sports fan you get frustrated and angry when your teams “super-star” hogs the ball and all the glory. To be effective in sports you have to play as a team, this is certainly no different in business. If you work on your own, there’s only a limited amount of what you can do, no matter how hard you work. Your growth and income becomes limited to the amount of hours in a day. You quickly will feel the pressure and work overload.

Without building your business via delegation if you become sick or take a vacation your business collapses. Nobody has any idea what to do nor has the confidence to try to do it. The smart manager is constantly challenging employees with new jobs and responsibilities. By effective delegation you are building a stronger team and are prepared in the event that a key employee leaves your company.

Over the years I have heard many excuses for not utilizing delegation, to list just a few;

· It takes too long to train the person

· I can do it better

· I don’t trust somebody else

· I don’t want them to know about my business

· I don’t want somebody trying to change things

Almost without exception I heard these responses from business owners who also told me almost in the same breath they were overworked and their business was not growing. Do you think that Steve Jobs build Apple by doing everything himself? Or about Henry Ford, Bill Gates, Donald Trump, or Stanley Messedup. Never heard of Stanley that is because he tried to do it all himself including meeting with the bankruptcy attorney for his company.

When to Delegate

To determine when delegation is most appropriate there are five key questions you need to ask yourself.

· Is it a task that somebody else can do, or is it critical you do it yourself?

· Does the skill provide an opportunity to grow and develop an employee’s skills?

· Is this a recurring job in the future either in this or a similar form?

· Do you have enough time to delegate the job effectively?

· Is this a task that I should delegate?


This article was written by Rodger Dean Duncan, November 9, 2012 Reprited by Permission

So you think you're trustworthy? Think again. Here's how to evaluate your credibility--and build trust among your colleagues.

You wouldn’t deliberately dilute your own credibility. But it’s possible that some of your innocent behaviors are producing precisely that unintended consequence.

Credibility problems can come in the form of trust busters. Let’s consider two of the most common ones, along with their fixes that I call trust builders.

Trust Buster #1: Double Talk

This takes many forms, all of which damage or destroy trust:

“Spin”: We communicate with others by sharing our opinions and championing our causes. That’s fair and understandable and a natural part of human interaction. “Spin,” on the other hand, is often used as a pejorative term, and rightfully so. “Spin” usually describes a heavily biased portrayal in one’s own favor of an event, situation, or topic. Although it’s possible to spin information honestly, the term as used here implies disingenuous, deceptive, and even manipulative tactics. An obvious example would be the state-run media in some countries that selectively allow news stories that are favorable to the government while censoring anything deemed critical. A common example closer to home is the blather that tries to pass itself off as helpful information in the annual reports of public companies. When a letter to shareholders begins with “This was a challenging year for our company . . .” it’s a pretty safe bet that what follows is the rhetorical equivalent of putting lipstick on a pig--the company’s performance nose-dived, targets were missed, and it can all be blamed on market conditions and political intrigue beyond the control of management.

Cherry picking: This is a close cousin of spin, and takes the form of selectively presenting facts and quotes to support a particular position. The result is often a false impression. Politicians do it all the time. A member of Congress might highlight a piece of legislation he claims to have co-sponsored. The way he tells the story you’d think he was riding into town on a white horse as the primary champion of the cause. In reality, he fails to mention that the legislation is also co-sponsored by more than a hundred other Congressmen and that his actual involvement amounted to little more than adding his name to the list. In the corporate world, cherry picking often occurs when restructuring is announced, when performance initiatives are rolled out, and when organization charts are reshuffled. Trust suffers.

Euphemisms: These are words designed to deflect attention from something considered distasteful or unpleasant. In some families, nobody ever dies, they “pass away.” In some social circles, nobody is insulted or disrespected, they are “marginalized.” In some companies, people don’t get fired or dismissed, they are “outplaced.” As one writer said, euphemisms are like secret agents on a delicate mission, they are unpleasant truths wearing diplomatic cologne. The trouble with euphemisms is that despite the cologne they still stink.

Jargon: Much like slang, jargon is terminology that often develops as a kind of shorthand used by members of a group--like computer people talk about RAM, CPU, URLs, and related things. Acronyms--abbreviations formed from initial letters or a term or phrase--are another kind of jargon. These are not inherently a problem, but they tend to fog up communication when used to excess or with people unfamiliar with the code.

Buzzwords: Buzzwords are in a class by themselves. These overused terms are common to corporate, technical, administrative, and political environments, but they’re evident in other places, too. While jargon (ideally) at least has a defined technical meaning, buzzwords are often used primarily to impress with a pretense of knowledge. Instead, they usually result in opaque sentences with mushy meaning. I saw one organization’s so-called mission statement that read something like this: “In a spirit of continuous improvement, it is our responsibility to provide access to low-risk high-yield benefits to our customers and to administrate economically sound policies while promoting personal growth and fulfillment for our associates.” My ninth grade English teacher would have kicked me out of class for writing a sentence like that. When used sanely, words like leverage, passion, bandwidth, paradigm, empowerment, framework, and space have a welcome place in our language. But when strung together in a cobweb of obfuscation, the result is bewilderment, not communication; suspicion, not trust.

Vague commitments: When a boy picks up your teenage daughter for a date, you’ll likely want some information about what’s on the agenda for the evening--things like where they’re going, who will be there, what the activity will be, and when you can expect your daughter to return home. You want your daughter to have fun and, above all, you want her to be safe. If the guy gives you no more data than “I’ll bring her back,” you’ll have second thoughts about letting your daughter out the front door. In the business world, vague commitments are no less of a trust buster. Some people pay lip service to clarifying expectations, but then they fail to provide specifics on results, deadlines, budgets, or most anything else about performance. It makes no difference whether this failure is inadvertent or by design. The effect is the same: fragile trust.

Trust Builder #1: Clear the Fog

Honesty and clarity are the best prevention against double talk. Simply don’t engage in double talk in the first place. Avoid ambiguous or evasive language. Use simple words. Lay out the whole story, warts and all. Billionaire Warren Buffett, chairman of Berkshire Hathaway, is a model of straight talk in all his business dealings. It’s especially evident in his annual “management letter” to shareholders. Buffett’s phenomenal success is something he gladly shares with his vice chairman Charles Unger, his small staff, and the managers of his various companies. He’s also quick to shoulder responsibility for the negative. He says things like “If Charlie and I fail, we will have no excuses,” and “When Charlie and I make mistakes, they are--in tennis parlance--unforced errors.”

Clearing the fog is not complicated:

  • To avoid “spin,” be sure that all sides to an issue get a fair hearing. Remember that a pig with a lipstick is still a pig. Play it straight. People appreciate--and trust--plain talk.
  • Use examples that are plausible, relevant, and real. People trust illustrations that connect to their world.
  • Use language that stands up straight. Words that lurk behind corners or tiptoe around issues are neither credible nor convincing. Political correctness is a particular offender.
  • Make specific, realistic commitments. Then honor them.

Trust Buster #2: Pulling Rank

Some people try to exert influence by using the power of their position or authority. Maybe their ego gets in the way. Maybe they delight in the role of bully. Maybe they’re impatient and just want others to do things their way. Maybe they simply lack confidence and are reluctant to entertain the views of others. Whatever the reasons, pulling rank is never effective in engaging peoples’ heads, hearts, and hopes. In fact, it does just the reverse.

During my years at Campbell Soup Company I worked for two CEOs--Harold Shaub and Gordon McGovern. They were worlds apart in virtually every aspect of leadership. Harold Shaub was an old-school executive whose closest colleagues--even those who had worked with him for more than 35 years--still called him “Mr.” He clearly preferred surrounding himself with “yes men,” people who blindly followed his orders with no alternatives offered and no questions asked. He seemed to relish the perks of his office, and was none-too-subtle about reminding people that he was the boss. When Shaub retired, he was replaced in the corner office by Gordon McGovern. Gordon was nearly a direct opposite. He preferred the employee cafeteria over the executive dining room with its silver and china and deferential butlers. Though well-bred and Ivy League educated, Gordon was informal and approachable. He thrived on lively conversation, especially with people who offered opposing views. He was as comfortable chatting with a worker on the plant production line as he was in talking with a member of the board of directors. In fact, because Gordon was so approachable, he got some of his best ideas from people who operated at several rungs lower on the organization chart. He seemed totally blind to the issues of rank. Though this seemed to annoy some of the Harold Shaub holdovers in the executive suite, it endeared Gordon to nearly everyone else in the company. He was, by far, more effective than his predecessor in bringing out the best in others.

Trust Builder #2: Drop the Pretense

Using one’s higher status to compel obedience or obtain privileges is guaranteed to spawn resentment. When a boss pulls rank, people respond more out of compliance than out of commitment. Besides, pulling rank often comes across not as a sign of strength but as a sign of weakness. Pulling rank looks like a last resort, even when used early. After all, the reasoning goes, why would anyone need to pull rank if his viewpoint could stand on its own merits?

Let’s get real. Even though you may have position, title, a reserved parking space, and maybe a bigger desk lamp than the guy next door, you’re really no smarter than most of the people in your organization. You may have “paid your dues,” to get where you are. But that doesn’t mean you have more brain cells. So drop the pretense. You’re all in this together. And the better you are at exercising influence rather than authority, the better you’ll be at engaging the heads, hearts, and hopes of your colleagues.

Here are five steps to help you drop the pretense:

  • Question your motives. Are you using your position or authority to browbeat people into doing things your way? Are you trying to stifle open discussion? Are you using the leverage of your position just because you can? Do you somehow feel threatened--for example, by someone who offers a view difference from yours? If the roles were reversed and someone tried to pull rank on you, how would you feel?
  • Examine your case. Are there leaks in the case you’re trying to make for adopting your view? Is pulling rank just a way to camouflage those leaks?
  • Inspect your language. Are you using words like “It’s my way or the highway . . .” or “Remember that I’m the boss . . .” or “Just do what you’re told . . .” or “I thought you liked working here”? These are blatant examples of pulling rank, with bullying thrown in.
  • Consider the desired outcomes. If mutual purpose and mutual respect are what you really want in your relationships, you’ll realize that pulling rank introduces a tone that’s contrary to mutuality.
  • Practice your conversation skills. Remember that true dialogue cannot occur in an atmosphere where one person tries to exert power over another. Beware the temptation to shift gears from collaboration to command-and-control. Listen with empathy. This means listening to understand, not to judge or rebut. Inquire to discover. Advocate with respect. All of these dialogue skills reinforce a “we’re all in this together” tone and diminish the temptation to exercise unrighteous dominion by pulling rank.

Rodger Dean Duncan is an expert on leadership development and strategic change management. Since he founded Duncan Worldwide in 1972, his clients have included senior executives at major companies in several industries and cabinet officers in two White House administrations. His best-selling book is Change-Friendly Leadership: How to Transform Good Intentions into Great Performance. Follow him on Twitter.

Three Good Reasons for Going Into Business – Not!

This article was written by Mike Capsuto, SCORE Orange County Business Mentor

imageThe most common reasons people express a desire to go into business are:

  • Financial security
  • Job security
  • Become their own boss.

None of these are entirely good reasons.

First, it takes three to five years of intense work and frustration before a business generates sufficient cash flow to provide a comfortable level of financial security for you and your family. I once asked a businessperson how he became so successful. He said that it took years of hard work and having to overcome many failures to be an overnight success. He also said that it was financially well worth it.

Second, when self employed you start every morning unemployed. Sales do not miraculously appear at your door. You have to get out, meet customers and close sales before your competition does.

Third, there are many outside pressures preventing you from being entirely your own boss, many of which you never had to contend with as an employee, such as:

  • Expectations of family, investors and creditors
  • Compliance with local, state and federal laws and regulations
  • Skills of the labor supply
  • Changing technology
  • Lack of financing
  • Customer demands
  • Competition

With all these conflicting factors, how does one become successful?

Though important, success does not entirely come by forming a business entity, conducting market surveys, writing a business plan, etc. as literature may suggest. Businesses are run by people and their personalities.

Do you have or had an activity in the past such as a hobby, playing golf or any other fun pursuit that got you excited? You could not wait to get started. You looked forward to facing the competition. You had no fear of failure yet, every time you failed, you created new winning strategies. People were attracted to you by your energy. Successful entrepreneurs have similar personality traits and understanding these traits will increase your chances of your business succeeding.

· Emotional Intelligence: All clients or customers have a level of anxiety when dealing with your business. They are thinking: “Can I afford it?”; “Is it healthy?”; “Can I find it elsewhere for less?”; or “Does it make me look fat?”. Successful people have a high level of emotional intelligence. They have the ability to identify and understand a customer’s emotions and communicate in a positive way in to overcome their anxieties. This understanding of emotions helps you relate better to other people, forming strong business relationships and achieve greater success. Some literature call this the Likeability Index.

  • Persistence and Confidence: Many successful people failed more often than they had successes. They treat each failure whether large or small as a new learning experience. Adjusted their approach and went after the solution with enthusiasm. More people fail because they just give up. Believe in yourself and continue to try even though giving up seems the simplest solution. If you give up it will always be in the back of your mind “What if I had done ….”.
  • Creativity: Creativity is the ability to solve problems in new and interesting ways. Whether you are developing new business strategies, improving daily operations or finding ways of resolving a customer’s problems, creativity will allow you to find the unique solutions for success.
  • Ability to Handle Fear: Fear holds people back. People don't try due to the fear of losing money, making a costly mistake, ridicule from family, friends and peers, and the fear of not having a regular pay check. Others have fear of meting people and having to sell them on your product or idea. To not to try is the same as giving up. Successful entrepreneurs have fear. They have learned to become educated about their problems and suppress that fear when times are difficult.
  • An Inquisitive Nature: People succeed because they have the ability to ask why? They want to know why something happens and move to improve that method. Their inquisitive nature allows them to achieve a deeper understanding of problems faced in their business and in turn allows them to become more efficient. They solve problems by asking why?

If you define your business as a fun pursuit, the business will have its own momentum. Your attitude will change from the stress of having to make your business grow to knowing that it will be growing on its own, and you will be enjoying every minute of it.

Labor Law Change Would Threaten U.S. Businesses

This article was written by Michael J. Lotito, employment and labor law attorney - 10/19/12 from MSN Reprinted by Permission

Employers nationwide, take notice: The U.S. Department of Labor is bringing partisan politics to your lawyer’s office. The DOL is close to making a change to an obscure labor law. If it is enacted, you should prepare to make some of your company’s most private information public. This issue, buried deep in territory well known only to a few labor-law specialists, is on the front lines of the ongoing struggle between management and unions. Since 1959 the Labor Management Reporting and Disclosure Act has protected workers who want to unionize by making sure a company cannot organize a stealth antiunion campaign. The law says an employer must disclose certain information to the DOL when it hires someone to communicate with employees about unionization and labor-related issues. For example, if a company is concerned that its workers might unionize and calls in a consultant to present information to employees, the company must report that it has hired a “persuader” and how much it paid in fees.

But in June 2011 the DOL said it believed companies had been “underreporting” those relationships. It then proposed changing the definition of persuader to extend far beyond anyone who communicates directly with employees to include attorneys who work with companies on a number of issues that affect the workplace.

The proposed rule is clearly aimed at companies that could be involved in a union-organizing campaign, but it would ultimately muzzle an employer’s proactive efforts to foster a positive workplace environment. For instance, a company might ask its legal counsel to evaluate its vulnerabilities and make recommendations for improvement. As a client, a company would expect this work to be done confidentially. But under the proposed rule, it could no longer conduct such evaluations in private. If a company were to hire a law firm, a union would likely pay close attention and could gain access to previously confidential information.

The proposed rule is so broad that it could entrap companies that have no union-related issues at all. The change would make public an astonishing number of the day-to-day private actions of running a business. “Virtually nothing involving labor relations will be exempt,” stated the Society for Human Resource Management, which represents human resource professionals, in comments written to the DOL.

Does your company have a policy regarding how your employees use Facebook, Twitter and the like? The proposed rule effectively says that if your company hires outside counsel to get advice on a labor issue, including a social media policy, you would have to disclose the relationship in a report detailing whom you hired, why, and how much you paid. That report would be available to unions, your competitors and your customers. Do you share a lawyer with a company that has unionization issues? The DOL’s proposed rule also affects you. Once a law firm or consultant is labeled a persuader, all labor-related work it does for any client has to be disclosed at the risk of criminal penalties. What will many rganizations do as a result? Call no one—which is exactly what proponents of the rule hope will take place. The proposed change would fundamentally alter the confidential attorney-client relationship that has existed since this nation was formed. The American Bar Association, careful to take the side of neither unions nor management, has come out against the proposal, calling it “an unjustified and intrusive burden on lawyers and law firms and their clients.” The Association of Corporate Counsel says it runs “directly contrary to an attorney’s ethical obligations in maintaining client confidences” and, citing the 50 years of precedent, requests that the DOL “explain why its predecessors for over a half-century have been ‘wrong.’”

Beyond the enormous privacy implications, this rule would have a big economic cost. In a July 19 report, the U.S. House Committee on Oversight and Government Reform describes a flood of federal regulation that is holding back economic growth. This rule was one of 18 problematic new regulations it cited, and its estimated annual cost was $100 million. The fear is that partisan politics will push this change through, perhaps after the presidential election, when there is less concern about alienating voters. To prevent that, it is imperative that employers take on this issue directly. Employers successfully defeated another union-related proposal put forth last year by the National Labor Relations Board that would have expedited the union election process, making it easier and faster for unions to win a union campaign. The rule was finalized, but the U.S. Chamber of Commerce sued, and the U.S. District Court for the District of Columbia ultimately found it invalid. Employers need to step up and heed this example to prevent this rule change from becoming law. The sanctity of your relationship with one of your most trusted advisors—your counsel—and the fundamental right to attorney-client confidentiality are at stake.

Tuesday, October 16, 2012

5 Rules for Training Employees

This article was written by Geoffrey James, in Inc. Magazine, October 5, 2012, reprinted by permission

Companies spend billions of dollars a year on training. Unfortunately, a lot of that training is simply wasted effort, according to sales guru Duane Sparks. A while back, he gave me a set of principles or rules for training employees. Our conversation was mostly about sales training, but it applies to any kind of training. Here are those rules:

1. Teach Skills Not Traits

Rather than trying to change the personality of the individual, focus on training skills that can be taught and learned.

For example, suppose you're responsible for a field engineer whose duties entail going on customer calls. If she is naturally introverted (a trait) don't try to convince her to be more extroverted (a trait) in order to help you sell. Instead, train her how to listen actively (a skill) and how to use terminology customers will understand (a skill).

2. Teach the Appropriate Skill

Only teach employees skills that you're certain will produce tangible results, within the context of that employee's job.

For example, if a sales team consists of hunters (who find new business) and farmers (who develop existing accounts), it's wasteful to train everybody on the team on cold-calling techniques. Limit such training to the hunters and provide training in other skills (like account management) to the farmers.

3. Reinforce and Support the Skill

Whenever you train a skill, provide multiple opportunities to check on how well that employee is executing that skill and provide coaching as necessary.

Learning a new skill entails making it into a habit. Unfortunately, doing so usually involves overcoming existing habits, which is inherently difficult. Coaching allows you gradually reinforce the skill and overcome the habits it replaces.

4. Implement Skill-based Metrics

There are no truer words in business than "What gets measured gets done." If you really want employees to integrate a skill into their day-to-day performance, you must, must, must measure the results of the application of that skill.

For example, if you're providing training on some aspect of your sales process, you should measure the conversion rate at that stage of the sales process, rather than just measuring the total revenue that's booked at the end of the quarter.

5. Consistently Measure Progress

If you do all of the above, you should be able to watch the metrics improve as the new skill becomes second nature. If you don't get the expected improvement, there's something wrong. Either you've been training the wrong skill or not providing enough reinforcement and coaching.

Can This Business Be Saved?

This article was written by Tory Johnson, in Success Magazine, November 2012, reprinted by permission

With 2012 about to end, one big regret has been expecting business to come to me instead of finding strategies to build awareness of what I offer. I’m committed to getting exposure, but if I can focus on only five things—and have a limited budget—what should I pursue?

I’m glad you are honest about analyzing what went wrong and are thinking now about how to dramatically improve results in the months ahead. Keep in mind, however, that planning alone won’t generate sales; only taking action will. I can give you tried-and-true ideas, but if you don’t execute effectively, none will work.

Getting your name “out there” won’t necessarily result in sales, but it brings your ideal prospects closer to you. Pursue opportunities in these areas to put yourself in front of your target market, which is different from being in front of just any warm body. Focusing will give you a greater bang for your buck.

1. Solicit media coverage.

Every week I feature small businesses on Good Morning America. If you have something perfect to pitch, let me know at Otherwise, start by identifying local media outlets (print, radio, blogs and TV) that serve your target market. Study what they cover and connect with the reporters and producers who have the greatest interest in your topic. Craft a short pitch that’s not self-serving; your content must greatly benefit the audience more than it benefits you.

2. Enter contests.

Competitions, which exist in nearly every industry, offer extensive exposure—among other prizes—to the winners. An online search can help you identify contests that apply to you based on business type, geography, and even age or gender. You could receive priceless promotion as an active participant.

3. Host teleclasses.

Every couple of months I host a free 20-minute teleclass through in which I offer advice on a specific small-business topic that showcases my style and expertise. I promote the call to my database and through social media.

During teleclasses I provide valuable tips and tricks, no strings attached, as an ideal way to stay connected to my followers and expand my reach. Some participants are impressed by what they hear, so they ask for ways to work with me. For more details on hosting a successful teleclass, search with keywords “Tory publicist.”

4. Pursue cross-promotions.

Think of the companies or organizations that share your target market—and reach out to them for cross-promotional opportunities. My Spark & Hustle programs are promoted by groups serving women entrepreneurs, including Make Mine a Million, Crave and Little Pink Book. Instead of viewing one another as competitors, we see the value in championing one another’s success. Reach out now to three groups in your line of work and discuss win-win cross-promotions. Don’t ignore organizations or companies that are significantly larger than you. If you have a solid pitch delivered with confidence, even the big guns will want to play ball because they also want to reach new prospects.

5. Secure speaking gigs.

When you speak authentically to an audience interested in your expertise, you have the opportunity to attract partnerships, referrals and sales. Find groups you can serve with your message, then deliver value that allows listeners to know, like and trust you, which is the first step in generating a sale.

You can identify potential gigs several ways. For instance, look at the websites of leaders in your field to see where they’ll be speaking and then reach out to organizers about becoming a speaker yourself. You also can do online searches to find industry associations and private conferences in your field; contact them to inquire about their speaker selection process. If you’re just starting out as a speaker, stick to more modest venues close to home. If parents of young kids are your target market, then you might contact elementary schools’ parent-teacher groups about presenting at a meeting.

Social Media and Your Small Business

clip_image002[1]This article was written by Rieva Lesonsky – CEO, GrowBiz Media

How are you using social media in your small business? If you’re like most small business owners, you’re spending more time and money on social media and accepting that it’s not a fad, but an essential part of your marketing mix. So say the results of a recent Vocus survey of 400 small and midsized businesses (SMBs) and their use of social media.

Vocus partnered with John Jantsch of Duct Tape Marketing to analyze the data and here’s some of what they found:

Spending More

The average SMB uses three different software tools to manage social media and spends $845 per month.

Spending is set to rise, with 84 percent of SMBs reporting plans to increase their use of social media at least a little in the future.

Help Wanted?

Slightly more than one in five (22 percent) SMBs use a consultant to help with their social media marketing efforts.

However, the majority (73 percent) of SMBs have simply added social media to the existing duties of a marketing person.

Value Plus Frustration

SMBs recognize the value of social media; 77 percent say it currently accounts for 25 percent or more of their overall marketing efforts.

However, there are still challenges in marketing through social media. The study didn’t pinpoint one outstanding problem, but says that “many smaller nuisances add up to overall frustration.”

What Are They Measuring?

SMBs are looking for tangible results from their social media efforts, and are capturing lots of metrics to measure this. The most common metric was increased traffic to a website, which 76 percent of SMBs regularly measure.

What do they want from their audience? While 40 percent of SMBs want a smaller but highly engaged audience, 27 percent say they’d rather have a huge following with little engagement.

Where Are They Socializing?

While Facebook is still the top social media currently used by SMBs, the study suggests it may be saturated. When SMBs were asked about future social media plans, Facebook ranked second to last.

In contrast, while 44 percent of SMBs now use Google+, that site and Instagram topped the list in terms of future plans (14 percent).

What’s It Mean?

I was heartened to see how many small businesses are already using social media, and interested to see their plans for the future. As an avid social media user, I can relate to the challenges involved. Social media can be overwhelming, especially since it’s often portrayed as “free” and easy.

Whether you need help getting your feet wet in social media, or would like some input on your future social strategy, SCORE mentors can help. If you don’t have a mentor, visit the SCORE website to get matched with one and get free business help 24/7.

Requirements for Religious Holidays

This article was written by Keisha-Ann G. Gray

Question: We employ people of many different religious faiths. With a lot of religious holidays coming up, are we as employers required to give our employees days off for their religious holidays? If so, do we have to give them paid time off?

Answer: Employees often request days off for religious observances/holidays. Although there is no federal law that requires an employer to give employees days off for religious holidays, employers may not treat employees more or less favorably because of their religion affiliations, and employees cannot be required to participate or refrain from participating in religious activity as a condition of employment. Specifically, under Title VII of the Civil Rights Act of 1964 ("Title VII"), employers have an affirmative duty to provide a reasonable accommodation to employees for religious observances, such as requesting a day off to observe a religious holiday, unless the employer can demonstrate that providing such a reasonable accommodation would result in an "undue hardship" on the employer. 42 U.S.C. § 2000e(j). Title VII prohibits employers from discriminating against employees on the basis of religion. 42 U.S.C. § 2000e-2)(a). Title VII defines "religion" as "all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee's or prospective employee's religious observance or practice without undue hardship on the conduct of the employer's business."42 U.S.C. § 2000e(j). Many states and local laws also include requirements for employers to provide a reasonable accommodation for employees' religious observance.

Reasonable Accommodation for Religious Holidays

The Equal Employment Opportunity Commission defines "reasonable accommodation" as "[a]ny adjustment to the work environment that will allow the employee to comply with his or her religious beliefs."See EEOC Compliance Manual, "Section 12: Religious Discrimination," at 46. However, a reasonable accommodation is "subject to the limit of more than de minimis cost or burden." Id. First, an employee must notify his or her employer regarding a request for a day off for religious observance for the employer to recognize that the religious observance will conflict with work. The EEOC has recognized that an employee's need for an accommodation frequently arises as related to work schedule, and the "[e]mployer's duty to accommodate will usually entail making a special exception from, or adjustment to, the particular requirement so that the employee or applicant will be able to practice his or her religion." See EEOC Compliance Manual, at 46. The EEOC Guidelines ("Guidelines") provide examples of methods employers may use to accommodate employees' religious observances as related to work schedule. 29 C.F.R. § 1605.2(d). Some examples include:

*"Volunteer Substitutes and Swaps -- reasonable accommodation without undue hardship is generally possible where a voluntary substitute with substantially similar qualifications is available. . .the Commission believes that the obligation to accommodate requires that employers and labor organizations facilitate the securing of a voluntary substitute with substantially similar qualifications."29 C.F.R. § 1605.2(d)(i).

*"Flexible Scheduling -- . . .[t]he following list is an example of areas in which flexibility might be introduced: flexible arrival and departure times; floating or optional holidays; flexible work breaks; use of lunch time in exchange for early departure; staggered work hours; and permitting an employee to make up time lost due to the observance of religious practices."29 C.F.R. § 1605.2(d)(ii).

An accommodation will not be considered "reasonable" if it "merely lessens rather than eliminates the conflict between religion and work" unless the employer can demonstrate that eliminating the conflict would result in an undue burden. See EEOC v. Ilona of Hungary, Inc., 108 F.3d 1569 (7th Cir. 1997) (employer who refused to grant employees' request for day off on Yom Kippur, but offered other day off instead, failed to provide a reasonable accommodation because accommodation would not eliminate the conflict between the employees' religious beliefs and their duties). Ultimately, reasonableness is a fact-specific determination. EEOC Compliance Manual, at 53.

"A refusal to accommodate is justified only when an employer or labor organization can demonstrate that an undue hardship would in fact result from each available alternative method of accommodation. A mere assumption that many more people, with the same religious practices as the person being accommodated, may also need accommodation is not evidence of an undue hardship." 29 C.F.R. § 1605.2(c)(1). In very limited circumstances, employers have been able to demonstrate the existence of an undue burden that would excuse it from providing a "reasonable" accommodation/day off for a religious holiday. Indeed, to demonstrate an undue hardship, an employer must show "more than de minimis cost or burden." See, e.g., EEOC v. BJ Servs. Co., 921 F. Supp. 1509 (N.D. Tex. 1995) (finding that employer demonstrated an undue burden by showing that cost of employee's requested accommodation to take a day off for religious observance was more than de minimis when it required co-workers to assume plaintiff's share of the hazardous work); compare Opuku-Boateng v. California, 95 F.3d 1461 (9th Cir. 1996) (finding that complaints by employee's co-workers did not establish an undue hardship on the employer, and employer failed to reasonably accommodate employee's religious observance where employee offered to switch schedule as employer did not demonstrate hardship on other employees or more than de minimis cost).

In New York, for example, the recent enactment of the NYC Workplace Religious Freedom Act in 2011 makes it much more difficult for an employer to demonstrate undue hardship resulting from requests for religious accommodations. NYC employees, in particular, must show more than a de minimis expense in order to avoid being required to provide religious accommodations.

Religious Holidays and Pay

Granting an employee time off for religious observance, with or without pay, is a form of reasonable accommodation. Employers are not required to give employees paid time off for religious observance. Specifically, pursuant to the Fair Labor Standards Act (29 U.S.C. 201 , et seq.), an employer is not required to pay non-exempt (hourly) employees for time off on a holiday. An employer is only required to pay hourly employees for time actually worked. On the other hand, exempt employees (salaried employees who do not receive overtime), who are given the day off, must be paid their full weekly salary if they work any hours during the week in which the holiday falls.

Normally, simply giving hourly employees the day off without pay will usually suffice as a reasonable accommodation. Courts have found that employers were not acting unreasonably if they gave the employee time off for religious observances, however, refused to compensate the employee for such time off. For example, in Ansonia Bd. Of Educ. v. Philbrook et al, 479 U.S. 60, 70 (1986), the Supreme Court found that a school board policy requiring a teacher to take unpaid leave for a holy day observance that exceeded the amount allowed by his collective-bargaining agreement constituted a reasonable accommodation. 47 U.S. 60, 70 (1986) ("The provision of unpaid leave eliminates the conflict between employment requirements and religious practices by allowing the individual to observe fully religious holy days and requires him only to give up compensation for a day that he did not in fact work."). However, employers must be aware that unpaid leave for days off cannot be discriminatorily applied, and "[u]npaid leave is not a reasonable accommodation when paid leave is provided for all purposes except religious ones." Id. at 71.

Therefore, although Title VII does not require that the employer accommodate an employee's religious practices in a way that spares the employee any cost whatsoever, employers should strive to reasonably accommodate employees' requests for days off for religious holidays, unless they can demonstrate an undue burden.

Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer in New York and co-chair of the Department's Employment Litigation and Arbitration Practice Group.

One Size Does Not Fit All

This article was written by Stephen Shapiro, in Success Magazine, October 2012, reprinted by permission

For business innovation, embrace contrarian views and listen to and observe your customers

Every company knows the importance of innovation, but few know how to make it a reality. For 25 years, Stephen Shapiro has helped hundreds of Fortune 500 corporations and countless individuals innovate. He believes innovation happens only when divergent points of view are brought together in an efficient manner. The following discussion reveals some of his guiding principles.

Q: Stephen, what would be your one piece of advice for a small-business owner or entrepreneur who wants to be more innovative?

A: Ignore all advice. They may think otherwise, but most people have no clue about the real reason they are successful. More important, even if they did know, what worked for them may not be appropriate for you. Unless you know the context for a given practice, you won’t know whether it applies to your situation.

There’s a reason my latest book is called Best Practices Are Stupidclip_image001. Everyone wants to be more like Apple, or 3M. But each company that tries has failed miserably. Competitors that attempt to replicate market leaders are constantly playing catch-up. Besides, every business has its unique culture, financial situation, industry position, brand and more. Although it is useful to learn from others, don’t replicate what they do without healthy skepticism and rational thinking. When listening to advice, consider your situation, your needs and your aspirations, and apply only what feels right to you.

Q: Why do you believe expertise is the enemy of innovation?

A: Innovation requires “fresh thinking.” You need to look at challenges and opportunities from different angles. Unfortunately, when you’re an expert and know a topic well, it’s difficult to examine it from a different perspective. As a result, the best breakthroughs are often found by connecting with entirely different areas of expertise.

Airlines reduced plane turnaround times after studying Indianapolis 500 pit crews. Hospitals improved check-in processes by consulting hotels. Oil transmission companies found better ways to seal cracked pipelines once they examined the self-healing properties of capillaries. Medical device manufacturers better understood how angioplasty balloons expand and contract in blood vessels by analyzing automobile airbag deployment.

Experts are great at finding incremental improvements that build on past successes. Instead of their best practices, we need “next practices” for new challenges.

The issue is depth vs. breadth. Depth is useful for incremental improvements. But breadth is often needed for breakthroughs. Or as Steve Jobs once said, “Creativity is having enough dots to connect.” Experts focus deeply on one dot. You’re probably an expert at your dot; you know your business better than anyone else. But that makes it difficult for you to look at your business with fresh eyes.

How can you add more breadth to your experience so you can see different perspectives? Here are three suggestions:

- Try new things. This may seem obvious, but the more experience you have, the more “dots” you have to connect. One tip: In addition to reading trade journals from your industry, read different and unrelated magazines.

- Ask, “Who else has solved a problem like this?” Consider looking outside your industry for solutions. A boat rental company, for example, developed a successful model like Netflix’s DVD subscription service.

- Connect with people who think differently. When working on a problem, bring in people from different, but related, industries. What can a dentist learn from a chiropractor? Or consider crowdsourcing and open innovation [ideas from sources outside your business] to gather ideas from a broad group of people with varied backgrounds.

Q: So why should you work with people who are not like you?

A: Conventional wisdom says opposites attract, but irrefutable scientific evidence proves that in relationships, opposites repel. Look at our political system: If opposites attracted, Democrats and Republicans would hug in the aisles. Simply put, we prefer to be around people who are similar to us. In business, this means we’re apt to surround ourselves with those who think and act as we do.

Working with people who are like us improves efficiency and makes relationships easier, but the commonality destroys innovation. Innovation occurs only when different and divergent points of view come together in an efficient way to create something new of value. In other words, collaborate with individuals and organizations that complement your style and address your innovation inadequacies.

To help organizations do this effectively, I developed a card-based system called Personality Poker. Here is a simplified version to help you pinpoint your style. Identify the set of words below that most resonates with you and best describes you:

A. Intellectual, knowledgeable, philosophical, logical, realistic, rational, skeptical.

B. Adventurous, spontaneous, flexible, creative, open-minded, insightful, curious.

C. Goal-oriented, driven, decisive, competitive, disciplined, organized, systematic.

D. Diplomatic, sociable, gregarious, popular, nurturing, empathetic, compassionate.

The list that best describes you is your primary innovation style (people have more than one style). A’s tend to be more data-driven and analytical, B’s like new ideas and experiences, C’s like to plan the work and work the plan, and D’s are into people and relationships.

But who you are NOT is more important than who you are. Look at the word lists again: Which are the opposite of your style? Which are traits you don’t possess? You may find that people having those attributes can rub you the wrong way, that their differences irritate you. But these differences can round you out, making you more successful in business and innovation.

I am creative, spontaneous and people-oriented. While heading a project years ago, I chose a co-leader with a similar style. It was a disaster. We never accomplished anything because we were too enamored with having a good time and doing cool things. Learning from that misstep, on my next project I selected a co-leader who was an organized, results-oriented planner—my opposite. At first I found him to be annoying, but what we ultimately created exceeded all expectations.

The next time you tackle a complex problem, seek someone who is different, someone who has attributes that are the opposite of yours. Appreciate their contribution. This will be the key to your success.

Q: Besides complementary differences, what should someone look for in partnerships?

A: Consider which relationships will create the most leverage, which goes way beyond doing more with less. It is a mindset for generating disproportionately large returns with a minimal investment. Which partners can help you accomplish that?

This month’s issue of SUCCESS focuses on selling. If you want to sell more, traditionally you identify your prospects, create sales and marketing materials, and then email, call or mail your potential buyers. This is a linear strategy. If you make a sale, it is one sale.

To create exponential growth, think differently. Most businesses operate as though they are B2B (selling to other businesses) or B2C (selling to consumers). For leverage, I treat my B2B business as a B2B2B business. Instead of trying to gain access to potential buyers directly, I build relationships with businesses that already have these connections. One partnership through the right distribution channel can lead to hundreds or thousands of sales.

And I’m not just talking about creating leverage within my sales channel. I also want partners that can develop and deliver as well as distribute. This gives me maximum leverage. For example, I’ve forged a partnership with a major training company that licenses my content. This company has an excellent distribution channel because it is positioned in nearly every major U.S. corporation. But it’s also developing, delivering and funding a completely new training program from my intellectual property. In this case, each sale puts money in my pocket without any extra effort.

Think about your business. If you are a restaurant, for example, working with Groupon or is a great way to generate sales. But if you go a step further, you could find a catering business that licenses your recipes and brand. They do all the work while you get a chunk of the revenues.

I understand that with these kinds of partners, I’m choosing to forgo potential revenue—unlike business deals in which I book and deliver all of the work myself, doing 100 percent of the work and retaining 100 percent of the income, less costs.

Leverage is getting exponential results from minimal or no effort. Others can help you accomplish this. But to do so, consider following my personal mantra: “Before you can multiply, you must first learn to divide.” Before you can really grow your business, you must be willing to give others a slice of your business. When their success depends on your success, you will have built an effective partnership and an exceptional leverage point for growing your business.

Q: Is innovation always about creating products and services that are better and faster?

A: We are in a world of too much to do, too little time and too many distractions. Chances are your customers and employees are overwhelmed and have short attention spans. Because of this, simplifying your products, services and processe This means that casual users must wade through a sea of complexity to do what they want. One reason for Apple’s success is it hid complexity from users.

To serve your customers, can you simplify what your business offers? How can you make yourself easy to do business with? When communicating, simplify your message. Businesses are notorious for using jargon and making things sound overly complicated. Prospects want you to get to the point. Keep your website simple, with few distractions and limited navigation.

Simplification is the best innovation.

Q: What is the No. 1 cause of innovation failure?

A: Studies find that the main cause of innovation failure is an inability to meet customer needs. Detroit car manufacturers learned this the hard way. For years they ignored the needs of customers, believing they knew best. And even when U.S. automakers thought they were listening, they ignored what they didn’t believe to be true.

Our brains are designed to hear what we want to hear, not what is really being said. Our biases and beliefs cloud our ability to truly listen.

Although you gladly accept positive feedback, are you equally happy to receive criticism? If you see negative Yelp reviews, do you assume customers were wrong? Or do you embrace their feedback as a contribution? What about lost customers? Are you willing to hear and proactively seek their negative perspectives?

Biases not only affect what you listen to but to whom. I’ve seen executives dismiss brilliant ideas proposed by employees. But when consultants said the same things, they were considered geniuses.

Even if you are a master at listening, you must remember that customers don’t always know what they really want. So it’s vital to take things a step further. Leave your desk and observe your customers to discover some of their unarticulated needs and wants. Whirlpool developed pedestals and storage units for its Duet washers and dryers by observing a woman who placed her dryer on cinderblocks so she could load and unload without bending. A drugstore learned the difficulty in opening its prescription bottles by watching a woman use a hacksaw to cut into one. Customers never provided this feedback during focus-group sessions and surveys.

Bottom line: Innovation is about connecting the dots: applying solutions from different industries, partnering with people who think differently, building relationships that give you greater leverage, and connecting with customer needs. Only by looking at the world differently will you be able to stay ahead of your competition.

Tuesday, September 25, 2012

All I Need To Know About Running My Business Is In My Head

imageThis article was written by Mike Capsuto, SCORE Orange County Management Counselor

When entrepreneurs are asked why they do not keep financial records current, common replies are that they are too busy with day to day operations, they do not have the expertise or cannot afford the staff, and most commonly “I built this business from the ground up. All I need to know about running my business is in my head”.

Without current financial records important decisions end up based on mentally retained or verbally obtained information. Relying on this form of record keeping may be adequate for a small business with simple processes, but for most other businesses maintaining current financial records is necessary.

What are the benefits of current financial records?

There are many benefits:

First it is a management tool. Up to date financial records allow you to measure how efficiently you are using your business resources and whether you are making a sufficient profit to meet family expenses, retirement planning, and other needs and desires. Financial success is determined by profitability. If a business is not profitable it may not be sustainable.

Second it is a planning tool. One of the greatest weaknesses from verbally or mentally obtained information is the inability to do accurate planning. Few people have sufficient memory retention to make operational or financial comparisons. One can usually remember facts and figures from current operations but have difficulty remembering their expectations of previous periods except in a hazy way. Good planning can warn of possible future crises. Steps can be taken to prevent these crises, making day to day operations smoother. A small company can benefit from simple planning as much as a large company can from an elaborate one.

Third, it is a tax tool. Good financial records simplify reporting and help increase after tax income. Relying on memory for certain financial transactions, can cause lost deductions and tax credits.

Fourth it is a tool for raising capital. Properly kept financial records provide bankers and investor with information necessary to make decisions in your favor. It also demonstrates your management ability.

When does it become necessary to keep financial records current?

The answer is “Day One”! Outside of that, there are several telltale signs:

· Forgetfulness – This is not the forgetfulness associated with a total lapse of memory but from fuzziness of memory. One usually remembers the general information but not the details that were provided at the time. The details are now forgotten and no longer available for management use.

· Inefficiencies – It is time to change when you notice that machines or workers are idle despite having back-orders. Other indicators include frequent stock-outs, product recalls and warranty work.

· Inaccuracy – When information obtained verbally is inaccurate to make competent decisions.

· Lack of time – When there is not sufficient time to look up critical information it is a signal that the information needs to be formally developed and easily retrieved.

· Poor cash flow - You are investing more money into the business to keep it operating.

What financial records are necessary? There are two sets of records needed to be kept current. First are the financial reports – The Statement of Income, The Statement of Financial Position and Statement of Cash Flows. These are report cards used as feed back to compare your business's performance against your expectations. They are also used by investors and creditors to make informative decisions concerning the stewardship of your business.

The second set of records/reports is needed to develop managerial analysis and control. These reports have no set format as required in financial reporting but are designed to aid in making important operational and strategic business decisions. Typical reports are used to develop budgets, control costs, establish competitive prices, accept special orders and determine the financial feasibility of capital investments.

However, no one form of reporting system fits every business. Many factors must be considered - the size of the business (large, medium or small); the type of business (manufacturing, retail, service or agriculture); the form of organization (sole proprietor, partnership, corporation, family, etc). It also depends on whether you currently have or anticipate having employees, fringe benefits or pension plans. Having the wrong system can become a less useful tool wasting your time and money.

The best method to establish a financial record keeping system is to obtain the advice of a professional familiar with your business and applicable tax laws. They can set up a system that will provide both the management control and financial reports necessary to run a successful business. Once established you will find your business running more efficiently and profitably.

Crowd Funding

This article was written by Amy Feldman in NEW YORK (Reuters) – August 11, 2012, reprinted by permission

When Julie Uhrman, chief executive of gaming start-up Ouya Inc, went looking for funding to launch a new video gaming console, she turned to crowdfunding site Kickstarter Inc.

The goal: $950,000. Instead, when the campaign ended August 8, so many gamers and game developers had pledged $99 (or more) to get the new Android-based Ouya that the company raised $8.6 million, making it one of the biggest crowdfunding success stories ever.

"We've been in the public consciousness for only 30 days, and we sold over 60,000 boxes," Uhrman says. "There's a good audience (on Kickstarter) for the product we're trying to build, and it allowed us to move very quickly."

But one important thing has been overlooked: taxes.

"We've been talking about that, but we have been so busy," she says. "Luckily, we have good accountants, so they'll sort it out for us."


Crowdfunding on sites like Kickstarter or Indiegogo Inc is a relatively new way to raise funds. It allows an entrepreneur to get proceeds for a specific project, often offering "rewards" to those who pledge.

When Kickstarter began in 2009, crowdfunding was largely used by musicians, film makers and other creative types to raise small sums of money for projects that might not make any money. But as it's grown — in some cases, becoming an alternative to venture capital — the dollars involved have gotten bigger.

Ouya is one of eight campaigns to raise at least $1 million on Kickstarter. All told, Kickstarter backers have pledged more than $300 million since its launch, while competitors like Indiegogo have also grown rapidly.

"Crowdsourcing is becoming a popular way for start-ups to raise cash, and the companies that receive the cash may not realize the proceeds are taxable," says Murray Solomon, a tax partner at accounting firm EisnerAmper. "They may get a very unpleasant surprise when they build all their prototypes and spend all the money."

In fact, if you raise more than $20,000 on Kickstarter from more than 200 people, you'll get a Form 1099-K (a new tax form introduced in 2011 and required for third-party payments above that threshold), courtesy of Amazon Payments, which processes transactions for the site.

Indiegogo, which allows pledges by PayPal or credit card, notes in its agreement that users "shall have full responsibility for applicable taxes" on their projects' funding. (Kickstarter and Indiegogo both declined to discuss tax issues.)


If you're planning to crowdfund, here's what you need to know:

If it's a sale, it's taxable.

Say, for example, a startup uses a crowdfunding site to raise money to develop a new iPhone accessory, and offers "rewards" — as these campaigns typically do — of those accessories in various combinations for different pledged amounts.

"That's the most common situation, and it's taxable because you get something in return," says EisnerAmper's Solomon.

Even funds below the 1099-K reporting threshold remain taxable, says Solomon.

This spring, Pizza Delicious, a New York-style pizza place in New Orleans, raised $18,300 on Kickstarter for a new pizza oven, offering pizzas, bumper stickers and T-shirts to those who pledged.

"We thought it would be a cool way to get people excited and drum up support for projects," says co-owner Greg Augarten. "It's taxed like any other income, but it's still worth it."

Just because the funds are taxable, though, doesn't mean you'll actually owe tax on them. If your business expenses are higher than the money you bring in, you may not owe anything.

Michael Guenther, a certified public accountant in Sacramento, who works with video game companies and has three Kickstarter clients, says most such startups would not owe tax in the first year because of the combination of business costs and tax benefits, such as the research and development tax credit.

"Most Kickstarter companies would use nearly 100 percent of their Kickstarter funds to build whatever it is they're looking to build," he says.

That's generally the case for musicians and other creative types raising small sums for specific projects.

Ken Thomson, a Brooklyn-based composer and saxophonist, raised $2,665 last December for a new album. Most of his 89 backers paid $25 and will get the CD when it's done.

"It casts a wider net, and we were able to get more pre-orders," Thomson says.

But the idea that he'll owe taxes after spending at least $10,000 to produce the CD makes Thomson laugh. He figures he won't owe taxes since he expects his expenses to dwarf the money he raised.

"I dumped the entire amount of money I got from Kickstarter into the studio, and then I have to figure out how to give everyone CDs," he says. "When you make a record, you assume you are going to lose money on it."


There are situations in which crowdfunded pledges may not be taxable. Some may be considered gifts, others donations. Once the JOBS Act, which allows startups to solicit investors online as a way to encourage funding of small businesses, takes effect, some contributions may be considered "capital contributions," and not taxable when they're received.

In general, a gift is a contribution in which the giver gets nothing in return. Gifts are not taxable to the recipient, and gift givers are allowed $13,000 a year per recipient tax-free. A recent do-gooder campaign on Indiegogo raised more than $700,000 for a bullied school bus monitor to take a vacation.

"That's the perfect example of what would be a gift," EisnerAmper's Solomon says.

Charitable donations, to a registered 501c3, are another exception. Donations may be both tax-free to the non-profit and tax-deductible to the donor.

With crowdfunding still a niche business, accountants are puzzling over the lines between different tax situations. As EisnerAmper's Solomon puts it: "I think it's so new that there are going to be some gray areas."

(This story in 8th paragraph, corrects description of eight $1 million-plus efforts to campaigns, because they were not all start-ups.)

Let Your Imagination Fuel Your Success

imageThis article was written by Harvey McKay, author and lecturer

Take a close look at the back of a dollar bill. On the left side is a pyramid, with an eye at the top. Over the pyramid is the Latin inscription “annuit coeptis.” It means: “Providence has Favored Our Undertakings.”

The pyramid symbolizes the strength of the union of the states. The top of the pyramid is unfinished, meaning there is still work to be done to make our system even better. The eye stands for the all-seeing God, Supreme Builder of the Universe. Benjamin Franklin chose this motto because he believed imagination was the singular characteristic of the people he helped to forge into a new nation.

I think Ben Franklin would be pleasantly surprised where imagination got this great nation.

“The most interesting people are the people with the most interesting pictures in their minds,” said Earl Nightingale, one of the pioneers of the motivational movement.

I’m always fascinated listening to people who see the world through a different lens. Most of us have ideas of what we’d like to change, but not necessarily the vision to make it happen. People who can clear the negative clutter from problems will always be successful.

The famous inventor Thomas Edison used to say his deafness was his greatest blessing. A blessing because it saved him from having to listen to reasons why things couldn’t be done.

Curtis Carlson, founder of the Carlson Companies and one of my mentors, spent his life building and expanding. When asked what personal qualities contributed to the building of his successful empire, Curt responded, “I think my success is the result of my ability to see and to imagine how things can be. I’m not distracted by how things are.”

It’s never too late to develop your imagination, although I believe that the longer you suppress it, the more challenging it will be. Consider this lesson that was shared by Gordon McKenzie, a well-known creative force at Hallmark Cards.

McKenzie often visited schools to talk about his work. He usually introduced himself as an artist, and then would ask the students, “How many of you are artists?”

In kindergarten and first grade, almost every hand was enthusiastically raised. In second grade classrooms, about three-fourths of the children would raise their hands, but not as eagerly. Just a few third-graders admitted their artistic talent.

By the time he interviewed the sixth graders, he said not one of them raised a hand. They thought being an artist was “uncool.” (My guess is that Curt Carlson was one of those kids who didn’t mind being “uncool.”)

So if we want to cultivate creativity and imagination, a good place to start is with children. Children don’t recognize limits on possibilities. They look through that different lens, that is, until we train them to focus on the practical.

Children are open to trying all kinds of solutions. We would do well to learn from them that there is rarely just one way to get a job done.

A friend shared a story from the NewsOK website about two parents working on their Christmas cards with their 6-year-old son. The son’s job was to lick the stamps (back before self-adhesive stamps were available.) But the little boy balked because he didn’t like the taste of the glue on the stamps. His parents prevailed, and reluctantly, he went to his room to finish his assignment.

Before long, he emerged from his room with a big smile on his face and handed his father the pile. Every envelope was stamped. His stunned father said, “But I thought you didn’t like the way the stamps tasted when you licked them!”

“Yeah, that was yucky,” the son replied. “So I just licked the envelopes and then stuck the stamps on.”

Of course, I love a good story about envelopes!

From Napoleon Hill’s famous book Law of Success, comes this summarizing thought: “Just as the oak tree develops from the germ that lies in the acorn, and the bird develops from the germ that lies asleep in the egg, so will your material achievements grow out of the organized plans that you create in your imagination. First comes the thought; then organization of that thought into ideas and plans; then transformation of those plans into reality. The beginning, as you will observe, is in your imagination.”

Room to Grow

imageIn Success Magazine, October 2012 edition, reprinted by permission

John Maxwell woke with a start. It was 3:30 a.m. and he had an idea. He tossed and turned, but couldn’t let it go. “I put my robe on, went down in my office and said, ‘I have got to write this book now,’ ” he says. “From 5:30 to noon, I sat at my desk and basically set out those laws.”

Two years later, the book Maxwell began that morning, The 15 Invaluable Laws of Growth, is about to hit bookstores nationwide.

Maxwell is visibly excited about the book when we meet for lunch at a marina restaurant in Palm Beach County, Fla., just minutes from his home overlooking the Atlantic Ocean. In fact, he tells me that he had his publisher push back another of his books so this one could be published first. “It was a passion of mine more than I think any other book I’ve ever written,” he says in his booming baritone voice.

And that’s saying a lot, because Maxwell has already sold more than 19 million copies of his other books, including three that have sold more than 1 million apiece: The 21 Irrefutable Laws of Leadership, Developing the Leader Within Youclip_image001 and The 21 Indispensable Qualities of a Leader. But the common denominator of those titles—leadership—is not the primary focus of his new work.

“This book is for everybody. Because everybody needs to grow,” he says. “And once that happens, their whole world begins to change.”

And he should know. After a light-bulb moment 40 years ago, Maxwell has been following a personal-growth plan. “I feel that a great percentage of my success today is based on that one simple decision to continue to develop and personally grow myself,” he says.

With success as an author, speaker, entrepreneur and leadership consultant whose organizations have trained more than 5 million people around the world, Maxwell, now 65, could take it easy. Tanned and well-groomed, wearing sports jacket, slacks and open-collared shirt, he appears comfortable and relaxed. He is an active golfer and grandfather. “When he’s not writing, speaking or leading in some capacity,” according to his website, “John can most likely be found at the golf course concession stand buying his grandchildren hot dogs, pop and candy (just don’t tell their parents).”

But Maxwell also follows a disciplined routine that involves daily activities that bring him closer to his goals.

“I wish, when I started out, somebody would have said, ‘Here are the laws of growth for you. Take these laws and apply them to your life, and off you go,’ ” he says, with a flick of the hand as if to send a younger version of himself on his way. “Obviously, that didn’t happen to me, so this is really exciting to me to have this book launch. If a person wants to grow, then this is going to be the key that unlocks the door. I know what it’s done for me, and I know what it’ll do for the reader.”

The Epiphany

When he started his career, Maxwell says he had a strong work ethic and a desire to be successful. “I had a strategy: hard work. I hoped that would get me where I wanted to go. But working hard doesn’t guarantee success. And hope isn’t a strategy.”

In the early ’70s, as a 24-year-old pastor, Maxwell faced a challenge. He had been offered the chance to lead one of the biggest churches in his denomination, but he didn’t feel experienced enough for the task. “I was in way over my head, and I knew that if I didn’t rise to the occasion, I would fail spectacularly,” he writes.

So he sought help from an executive coach who asked him about his plan for personal growth. “I had no plan,” Maxwell recalls, his palms opening to the umbrella shading our dockside table. “I didn’t know I was supposed to have a plan. But that stimulated me. He went on and said, ‘Growth isn’t an automatic process. You’re going to grow because you intentionally grow, not by accident.’ So that was life-changing for me.”

That’s why his “Law of Intentionality” is No. 1 on his list. “If you want your life to improve, you must improve yourself,” he says. Setting your intentions to begin growing deliberately and regularly is the first step to realizing your potential.

Having read several of his books as well as interviewing him on the phone for SUCCESS, I’m familiar with Maxwell’s works and message. But I tell him when we meet that this book really spoke to me in ways the others didn’t.

Maxwell says he thinks this kind of learning will resonate with lots of people, particularly because of the global recession and poor job market. “Because we look at our outward circumstances and say, ‘What can we do with them?’ And, honestly, a lot of times, we can’t do much about them. But we can do everything about ourselves.”

He points to a lesson learned from the book As a Man Thinketh by James Allen, one of many his father paid him to read as a child (“That’s how I got my allowance,” he says). “Allen wrote, ‘Men are anxious to improve their circumstances, but are unwilling to improve themselves.’ I read that in the seventh grade and remember thinking, ‘Wow.’ ”

While he doesn’t have answers for curing society’s ills overnight, Maxwell is confident about the power of personal growth: “What I’ve discovered is, if the right things happen in me, I can begin to control some of the things that happen outside of me.”

Growing Pains

In writing Laws of Growth, Maxwell drew from his own experiences. “I found each and every law to be true in my life,” he says. “And once I taught others to practice these laws, I found that they worked for other people, too.”

For example, he says one of the earliest principles he learned related to his “Law of Reflection.” As a child, his father would take him on various excursions, always wrapping up the experience with two questions: “What did you love and what did you learn?”

“The second question really caused me to reflect,” he says. “When somebody tells you experience is the best teacher, that’s not true. The best teacher is evaluated experience, which is reflection.” Now he spends dedicated time every day, if only for 10 minutes, to reflect, ask questions and put things in perspective.

Over and over in his life, Maxwell has experienced his “Law of Pain,” which he explains as “good management of bad experiences [that] leads to great growth.” Examples he cites include the “Pain of Conflict”: “One church I led experienced a split in the congregation, and some people left the church. That experience made me dig deeper as a leader.” Another is his “Pain of Bad Health”: “My heart attack at age 51 was excruciating. It was also an eye-opener. I immediately changed my eating habits and bought into the practice of daily exercise.”

Looking back, Maxwell says most of his personal development has occurred during times of pain or conflict, and that the outcome ultimately depended on his reactions. “Successful people take every difficult experience and learn from it; unsuccessful people take difficult experience and leave it. They run, and they don’t learn. So they repeat it again and again.”

During our lunch, it’s evident that Maxwell has been to this restaurant before. He calls waiters and waitresses by first name; if he doesn’t know a name, he asks what it is and repeats it to himself. In fact, by the end of our conversation, he’s used my name about two dozen times.

It quickly becomes clear that Maxwell practices what he preaches: He wants to connect with people. He wants to help people wherever they are.

One group he hopes will benefit from Laws of Growth is small-business owners, especially those struggling in this economy. In the face of slashed budgets, skeleton staffs and uncertain futures, Maxwell says it’s natural to become paralyzed with fear.

He points to his time with a stewardship company that helped nonprofits raise money. As the largest organization of its kind in the United States, the company typically signed a contract every day, he says. In 2001, they were on par, until 9/11. “From 9/11 to the end of the year, we didn’t sign one contract,” he says. “What happened? Everyone froze.”

His “Law of Consistency” addresses that tendency, he says. “Motivation gets you going—discipline keeps you growing.”

Applying the law involves asking key questions—such as “Do you know what you need to improve?” and “Do you know how you are supposed to improve?”—to develop daily growth practices. “Small disciplines repeated with consistency every day lead to great achievements gained slowly over time.”

He recommends starting with small changes so as not to become overwhelmed and to be patient, as progress occurs over time. “Value the process,” he says. “It is going to take a long time, so you might as well enjoy the journey.” Also, contrary to what most of us have been taught, Maxwell suggests switching our thinking from goal-consciousness to growth-consciousness. Focusing solely on goals is seasonal, he says, while concentrating on growth is lifelong.

Maxwell also refers to his “Law of Curiosity” as being essential for small-business owners. Beyond simply solving problems, “Asking why fires the imagination. It leads to discovery. It opens up options,” he writes. “People say not to cross a bridge until we come to it, but as someone once said, ‘This world is owned by people who have crossed bridges in their imagination before anyone else has.’ ”

Tools for Tough Times

Maxwell also hopes others struggling in today’s economy will pick up the book. Recent college graduates, for example, could benefit from practicing his “Law of Awareness,” which states, “You must know yourself to grow yourself,” Maxwell says.

“Because they’re young, they don’t know themselves,” he says. “And it’s OK. But they really need to allow that to happen in their life.” Some key questions in the application section of the chapter can help readers focus on their talents, goals and motivations, “and get on course to do what you were made to do in life.”

“People say there are two great days in a person’s life: the day you were born and the day you discover why,” Maxwell writes. “I want to encourage you to seek what you were put on this earth to do. Then pursue it with all your effort.”

Flipping through his iPad to get the wording just right, Maxwell says another principle that’s crucial for recent grads is his “Law of Environment,” which suggests that “growth thrives in conducive surroundings.” Right out of college, a young adult may have to settle for a job that isn’t a great fit. “The odds of them getting in a non-conducive environment are very high, and they have to have the confidence in themselves to recognize that,” he says.

Maxwell describes a growth environment as one in which “others are ahead of me, I am continually challenged, my focus is forward, the atmosphere is affirming, I am often out of my comfort zone, I wake up excited, failure is not my enemy, others are growing, people desire change, and growth is modeled and expected.”

While changing jobs is never easy, he suggests it’s essential for anyone seeking to learn and grow to be looking for those opportunities. Even for people who seem to do well in an environment, it’s important to keep in mind that the “best place to learn is always where others are ahead of you.”

Spending time with more successful people is also a component of his “Law of Modeling,” which says, “It’s hard to improve when you have no one but yourself to follow.”

“Find somebody who does well and find out why they do well,” he says. “A lot of people have never had somebody to show them how to succeed, so all they dwell on is failure. They need to get around somebody who can help them.”

The unemployed and underemployed should also follow his “Law of the Mirror,” which states, “You must see value in yourself to add value to yourself.” Maxwell illustrates his point this way: Say, for example, you’ve just been fired. So you used to think of yourself as an 8, but your confidence drops, you value yourself less and you now consider yourself a 3. Consequently, people will treat you like a 3, you’ll respond to people like a 3, you’ll perform tasks like a 3—and you’re in trouble.

“If you lower your self-image, you won’t go beyond it,” Maxwell says. “The lower the lid, the less you will accomplish and do. I think it’s very true in this economy. It causes people to self-doubt.”

Building Momentum

“One of the great things about a personal-growth plan is that it’s like a diet,” Maxwell says. You lose the first five pounds and all of a sudden you’re motivated. With a personal growth plan, one of the first things you’ll say is, ‘Wow, this is starting to work for me,’ which will also keep you going.” Essentially, by making deliberate, daily efforts to improve ourselves and our lives, we slowly build momentum, which typically results in more accumulated achievements. These incremental successes help build esteem, which enables us to pursue larger goals—overall, a powerful snowball effect.

Today, Maxwell is intent on creating his own snowball effect by focusing on his legacy. “My growth plan now is, How do I expand and extend my influence?” he says, his tone sober, his speech deliberate. “I’m purposely training and equipping other people with my principles and my values so that they can carry them on.”

A major part of that is EQUIP, his international leadership training organization. Leaders in various sectors of society—from government and education to business and religion—receive Maxwell’s training and then develop strategies to target specific problems. “We’re hoping in two years to be in every country in the world, and we think we will be,” he says. “We’re training a million leaders a year, and now we’re on a 10-year strategy of transformation.”

Plus, in March 2011, he founded the John Maxwell Team, which trains and certifies coaches, teachers and speakers. These team members go on to spread Maxwell’s teachings through workshops, seminars, speaking and coaching. Also part of the John Maxwell Team is YouthMAX, a program that sends coaches into schools to discuss with students issues such as bullying, self-image, character development and attitude; the program had reached 150,000 kids by early 2012.

And what about the book that got pushed back to make way for The 15 Invaluable Laws of Growth? That’s in the pipeline, too. Called Sometimes You Win, Sometimes You Learn—“Isn’t that a great title?” he asks giddily—Maxwell describes it as the sequel to Failing Forward in 2000.

“What’s funny is, in this book, I did more dumb things since then than I did in the first one,” he says with a chuckle, leaning back in his chair. “If you thought I was really stupid back then, I’m taking you to failure graduate school. I tell all these stories in the book and what I learn from them, because, in the end, the whole point is to learn something, right?”