Be a Visionary: Dream Big, Think Long-Term

In the earliest days of starting up a business (an earlier company, long before IAC-EZ) my focus was on “today”. Each day – “today” – was a new challenge and I would sit down at my desk and work hard that day to make “today” count. It sounds like a good plan. And, if you add up the successes of each “today”, you end up with something significant at the end of the year.

In retrospect, though, I didn’t give enough attention to “tomorrow” in my earliest business ventures. I was too focused on now to think of later. It’s an easy habit to get into as a business owner because you’re just starting up and just trying to make sales and all you can do is make right now count for something.

But there does a come a point (and it’s different for every entrepreneur, I’ve found), when you realize you’re on a bit of a treadmill. Yes, you might be building a strong foundation of good “todays” but every day starts at zero and you try to do something significant and never quite finish everything you’d like to do. And, by focusing on “today”, it’s harder to make investment decisions for your business for the long term.

Everyone might start by thinking about “today” but eventually smart business owners make the switch to thinking about “tomorrow”. They go from building the foundation of the business to building the future of the business. They make decisions that might slightly increase short-term expenses but ultimately improve long-term profitability.

I just read an interesting (but perhaps controversial) article called “What Every Entrepreneur Can Learn from Mark Zuckerberg“. Zuckerberg, the founder of Facebook, has received a lot of bad press from the privacy-related missteps he’s made in recent months, but you do have to credit him with building such a game-changing site. The article talks about Zuckerberg’s vision for his company and the web, which the article’s author says is measured in decades, not weeks or months.

I think this is a great step to work towards, although I also recognize that it’s not going to be easy for entrepreneurs who are busy focusing on “today”. So, start with this: Why not take a few minutes to write down your vision for the rest of this year. Let it percolate for a couple of days then take a few minutes to write down your vision for next year. Let that percolate for a couple of days. Then take a few minutes to write down your vision for the next 2-3 years. Then the next 5 years. Then the next decade. Give some time between each exercise so you can think it and live with it for a while. And don’t be afraid to be bold. We live in a world that changes fast and we may be using resources in 5 years that we can’t even conceive of today.

This isn’t a technique that will change how you think overnight, but it can change how you think (and how your business grows) over the long-term.

Jessica Routier, IAC-EZ

The problem with scale

When business owners start out, they invest in solutions and services and products that can meet their needs at the time. Of course they have dreams for running a big organization but until they get there, they only need to solve the problems of a small organization.

For that reason, business owners invest in horizontal solutions – from accounting services to payroll services to delivery services, and so on. The business owner just buys solutions that they think will do the job. However, as the company grows, their real needs become more apparent. Industry specific requirements arise and a more targeted (or “vertical”) solution becomes necessary. Those businesses then tend to shed their horizontal solution for a vertical solution at some point along their growth trajectory.

Years ago, that transition from horizontal solution to vertical solution happened as businesses got into the millions of dollars of revenue. But, thanks to a variety of consumer trends and technologies, vertical solutions are moving down the price ladder and becoming more and more available to smaller businesses, too.

Take us, for example. We don’t try to be all things to all businesses. We’re a great solution for small businesses and especially for freelancers, entrepreneurs, and coaches. Or consider a solution like Freshbooks, which offers really easy and useful invoicing for a similar market. A giant bricks-and-mortar company with zero online presence but thousands of employees and millions in revenue might not find us or Freshbooks very valuable. We’re both vertical solutions for a specific market at a fairly small-business level.

And we’re not alone. Many other vertical solutions – from accounting solutions to payroll to delivery and fulfillment solutions are moving down the price ladder to become accessible to smaller and smaller companies.

So what does that mean for the horizontal solutions market? It’s shrinking. There are still plenty of providers in that market but they are starting to realize that vertical solutions are the answer to keeping business owners who started with them (but have grown to the point where a horizontal solution is no longer meeting their needs). Take a company like SAP which has traditionally provided vertical solutions to REALLY big companies. They’ve introduced services for small businesses, too, leveraging their vertical solutions into mid-markets.

There are a few reasons for this shift and if you want to read more information about horizontal accounting and what the trends are, check out this article from Accounting Software Advice blogger Austin Merritt: “Is Horizontal Accounting Software Dead?”

Jessica Routier, IAC-EZ

You should be spending more time on your financials than you are

Financials, bookkeeping, and accounting are an often-avoided part of business. After all, most business owners we know would rather be building their business, innovating, marketing, selling, and counting their cash than sitting down with their books and filling in spreadsheets. In fact, I believe that if we were to measure the knowledge and time spent on various aspects of business, the financial side of the business would be abysmally low.

Yet I would argue that your business’ financials are critical. They make sure that your sales will actually turn into profit. They make sure that your taxes are paid and you won’t be hit with tax liens and fines.

Wherever I see businesses fail, it’s often in the area of financials. Sure, some businesses fail because they don’t sell enough product and other businesses fail because they are poorly managed, but many businesses simply have to shut down because their financials weren’t in order: Expenses were too high, prices were too low, there was never enough money to fund operations, there was never enough money to invest a little on growth.

One business I know of struggled for long time before finally deciding to do something about its financials. A quick look revealed that its expenses were keeping up with income. As soon as the business owner knew that, she raised her prices slightly and got control of her expenses, and completely transformed her business.

Another business I know of was really successful, selling a lot. But at the end of the year, they were hit with a tax bill that was higher than they anticipated and it took them years to pay it off. Had they used better financial management, their tax issue would have been minimized considerably.

Yet another business I know does fairly well, even through the most recent recession. The owner couldn’t understand why he was barely getting by. A quick look at his financials revealed, however, that his receivables were a mess and he may have been earning an on-paper income and paying taxes on it, but few customers were paying him.

So, what should you do in your business?

Step 1: Get your finances in order! Presumably that’s why you’re even at IAC-EZ. Bring some order to your finances and get that aspect of your business under control.

Step 2: Spend more time than you currently are on finances. Yes, I realize no one really wants to spend a lot of time on their finances but it will make a huge difference in your business. (Check back next week because I’ve got an entire blog post just on this topic!)

Jessica Routier, IAC-EZ

Goals: What, why, and what next

Once you know how to ride a bicycle, it’s hard to get much better. Unless you end up training for a competition, bicycle riding yesterday is going to be pretty much the same as bicycle riding tomorrow. A lot of skills are like that: Once you can do them, you’re not likely going to get better.

But some skills do get better with training and practice. Goal-setting is one of them. In this article by career coach Stacey Chadwell, Ms. Chadwell talks about the seven reasons why we need to make goals. I like reading these lists, not because they are really practical but because they are good reminders about why goals need to be made. Read Ms. Chadwell’s list to get refreshed about goals and goal-setting.

So, how can you make better goals? You’ve probably heard of the term “SMART Goals” – the beloved acronym that reminds people to create goals that are specific, measurable, actionable, realistic, and time- or team-oriented. But sometimes it’s hard to remember to make goals SMART. And sometimes it’s easy to miss important parts of our lives that should have goals but don’t.

Instead, here’s what I suggest: Start by listing all of your roles in life. (Disclosure: I got this idea from Stephen Covey). Perhaps your roles include: Boss, business owner, parent, child, sibling, friend, spouse, volunteer, vendor, etc. You can even break it down further by taking a role like “business owner” and turning it into “marketer”, “bookkeeper”, “customer service”, etc.

With your big list of roles, create at least one goal. And to make it easier on yourself, use the phrase: I will achieve ________ by ________.

Here are a couple of examples:

Role: Marketer. Goal: “I will achieve 1000 pageviews per day on my website by December 2010.”

Role: Bookkeeper. Goal: “I will catch up on my bookkeeping by the end of the second quarter.”

Once you’ve written these roles and goals then put in specific actions to take to accomplish them. Some actions for the bookkeeper role might include:

• Spend 10 minutes per weekday on entries
• Spend 20 minutes weekend on review of spreadsheets
• Spend 15 minutes per month on updating customer profiles

These actions should be specific and something you can schedule. Then schedule them in and do them! It’s that easy and this is a really effective system to grow your business.

Jessica Routier, IAC-EZ