Last time I told you about the 80/20 principle and recommended you read The 80/20 Principle. Take a minute to review that post on Pareto’s Law. Today I want you take action on improving your life and beating frustration that often sets in. It’s the beginning of a new week and there is no better time to get started.

The 80/20 principle tells us approximately 20 percent of sources cause 80 percent of outcomes. Let’s apply that to your day, today or this week. You will see that 20 percent of the people in your life will propel you forward, invigorate and inspire you.  On the other hand, another 20 percent of the people in your life will cause you heartache, grief, frustration, and worry. Which group do you want to spend time with?

The reality is, most of us spend our time dealing with the group that brings us down. It seems we need to deal with the problems and we tend to focus on that. At the end of the day we are spent (especially Mondays!) rather than being motivated and excited for what lays ahead. When we step back and look at it, is this what we would choose for our life? Would we choose frustration over motivation? Unfortunately we usually do.

You need to eliminate as much contact with the 20 percent down group and maximize your time with the 20 percent up group. Makes sense, but HOW DO I DO IT??

Evaluate the 20 percent down group. Are there customers in that group? Like I said in my last post, they are likely not your most profitable group of clients and it wouldn’t cost you much if anything to send them on their way. Replace them with customers that aren’t a headache.

Are there employees in that group? They are likely not in the 20 percent group that produces 80 percent of results. Either eliminate the job since they aren’t producing much or replace them. That bad attitude doesn’t just infect you … it infects all the other employees and customers they come in contact with.

When you eliminate that 20 percent down group and begin to spend your time with the 20 percent up group you’ll find your life is changes. It is truly amazing the difference it makes. Send frustration away. You really can have more time, more joy, and less headache if you only listen to Mr. Pareto and apply his 80/20 principle to your life. Share some thoughts about how you applied this principle in your life in the comments section. You’ll inspire others and be inspired by their stories!

Want to change your life? I did when I “met” Italian economist Vilfredo Pareto. Actually he passed away in 1923 but I was introduced to him the great book The 80/20 Principle. Get a copy, it’s a must read. Pareto was the economist who came up with the 80/20 principle, the idea that 80 percent of outcomes flow from 20 percent of causes.

A simple example is to look at any church, 20 percent of the people do 80 percent of the work.  So how does this apply to your small business? Could 80 percent of your problems flow from 20 percent of your customers, employees or vendors? Maybe so I thought … this needed further study.

It turns out that Pareto’s law has been proven over many years to really be a law that applies not just to economics but to all of life. In many businesses 20 percent of customers generate 80 percent of sales or 80 percent of profits. Employees? Yes, even there I found that 20 percent of employees produce 80 percent of results. Which means 80 percent of employees aren’t producing much!

That’s all interesting, but how does it apply to your business today? I started out by looking at my customer base and tried to identify that 20 percent that generated the most problems, headaches or difficulties.  You know, the high maintenance ones. Sure enough, 80 percent of problems came from that group. So should I quit doing business with them?

Interestingly, as I studied more on this I found that the high maintenance group was also be the lowest in profitability (or sometimes generated losses).  So the real cost of eliminating the high maintenance customer was virtually nonexistent.  In fact the 80/20 principle freed up significant time for three things:

1. Better serving the low maintenance high profitability customer;
2. Acquiring more low maintenance high profitability customers;
3. And best of all, more time to pursue personal goals and family time!

I’ll share more on this with you over the next few weeks, but for now you need to look at your customers. You’ll find there is a group, a 20 percent group that is causing the majority of your headaches and preventing you from achieving those three benefits that the 80/20 principle gives you.

The actual numbers for you might not be exactly 80/20, it could be 90/10 or 70/30, but whatever it is, a small number of your customers are holding you back from real success. Take action today to free yourself from that bondage and lighten your load while improving profitability and gaining more time for the things you really want to do!

We all know our world is changing rapidly (who can believe that in 2003, YouTube did not exist? Nor did Facebook or iPhones or geolocation). Competition in the current economy is fierce, the rules and technology keep changing and if you don’t continually reevaluate your systems and management, I’m sorry to say you increase your chances of failure.  You cannot stay competitive, regardless of your business, if you do not stay caught up on the newest research, trends, and laws in business. From time to time, I will point you towards some of the best books and sites to stay abreast of small business and technology news. Devote 15 minutes each day to reading something to increase your general business knowledge.

Books:

Switch: How to Change Things When Change is Hard:. I found this book incredibly encouraging. It turns out humans really are capable of great change, and if humans are, then so are organizations. Focus on examining and then repeating successes and not on avoiding failure.

Drive: The Surprising Truth About What Motivates Us: Yes, I’ve talked about this one before. Have you read it? If you have even a single employee (or child), you must read this book.

Presentation Zen:   One of the most popular posts ever presented on this site was called Snooze Proof Your Power Point Presentation. There’s a reason why! We know our presentations are often dull. Presentation Zen helps you engage your audience by not resorting to reading a list of bullet points to them.

WordPress for Dummies: If you want to save money and build a dynamic blog/site, you’ll need a guide. This is the best and this brand new edition is about to release.

The Complete Guide to Email Marketing: Email marketing is a routine part of business now. Whether you are simply announcing special promotions or you are writing an informative newsletter, you will need some help. This book is highly rated and will give you the information you need to write effective headlines, build an email list and not violate any spam laws.

Magazines:

Harvard Business Review Yes. It is expensive. But some of the greatest business minds in the world contribute to this publication. Get it from the library if you don’t want to buy it.

Wired. It isn’t just technology. It is cutting-edge business and trends. And it has a killer iPad app!

Fast Company. Cheap subscription. Great community and site. Engaging and informative business writing.

You can find websites/blogs that are associated with nearly all of these materials as well. Stay educated, stay ahead! What do YOU read that I overlooked?

I’ve relayed a lot of information to you about small business issues: marketing, branding, legalities, human resources and management. I think it is time for a summary of the key components you should really be sure you are aware of and practicing. You should be building a business and not a job and your business should support your personal dreams. Here are ten things every small business owner should know and act on:

1. What your USP is and why it’s important. If you don’t know what makes your business unique in some way and why customers should come to you and not your competitor, than how should they? Nail this down.

2. That you must have aptitude in addition to passion. Passion is important but if you are out of your league in terms of skills, your business may be sunk. Make sure new endeavors do not involve a huge learning curve. Passion, aptitude and USP are the ways to success!

3. That marketing no longer goes one way-it must be relational. Billboards, yellow page and newspaper ads are one way marketing. People demand more these days. Blogs, websites, video, podcasts, social media, in-person networking and exemplary customer service are the way your potential customers want to be approached.

4. How to use a video camera and why it’s important. Smartphones and tablet computers like the iPad are changing our world. Are you going to keep up or are you going to be left behind? Grab a video camera and tell a story. Get your nearest teenager to help with editing if necessary. But take this important next step.

5. How to incorporate time off to stay innovative. The first few years of starting and operating your new business were probably grueling and you may have set bad personal habits during that time. You must incorporate healthy habits including adequate sleep and time off to continue to innovate and thrive.

6.  What truly motivates employees. It is the rare employee in a rare position who is motivated by just money and/or discipline. Do you know how to motivate your team?

7. What are your calls to action? If a viewer of your website or printed material is not encouraged to DO something, they leave. End of story. Is there a newsletter sign up, a video to watch, something to encourage comments or a special promotion. Do you even know what a “call to action” is? Time to brush up on this!

8. How to measure and compare marketing efforts and why it is important. You have to have a system of measuring so you know if you are wasting your marketing dollars on a particular campaign or method. Don’t run one, run several and always measure their success or failure. Be prepared to try something different as needed.

9. Who should be on your personal success team. Your team should include a top-notch mentor or coach, a qualified CPA and attorney you trust. Additionally, you should have a strong relationship with your banker.

10. What customers want.  They want to be noticed, cared for and have one or all of their problems solved. That is really it in a nutshell. In what ways could you do this better? Always be looking for the answer to that and you will always be ahead of your competitors.

Becoming comfortable with public speaking takes time. Most small business owners and other professionals are called upon at some point to do some sort of presentation or other public speaking. Polls generally show that more people are afraid of public speaking than dying! If this is you, here’s some quick help to take some of the pain out of your upcoming gig and to make you more comfortable: 

1. First, I always recommend that you watch Guy Kawasaki’s take on presentations. Crucial and entertaining:

2. Know your audience. Tailor the presentation message to them. Younger audiences like graphics heavy, text “light” presentations and a more casual style. Older, more mature audiences have more patience during longer presentations.

3. Understand your end goal and the needs of the audience. What do you want them to walk away knowing or feeling? Work backwards from that and remove any content that doesn’t move them towards that goal.

4. Video tape yourself giving your presentation. This will help you clarify content, identify transitions that need improving, and highlight those little hiccups we all have (throat-clearing, “uhm’s”, difficulty with eye contact, etc.).

5. Join Toastmasters International. They hold meetings all over the world that allow their members to practice public speaking in a safe environment and get presentation feedback on the spot.

6. Technology can be intimidating. Work out the kinks in your presentation software, projectors, and microphones as much as possible before the event. HOWEVER, things WILL go wrong and you need to prepare for that. A contingency plan is always recommended and will increase your comfort level.

7. Remember that your audience really IS rooting for you. There is generally a great deal of empathy and support out there. Identify some warm faces and when you get really nervous during your presentation, land on them for a few for encouragement.

8. Picture the absolute worst-case scenario for your presentation (people sleeping? heckling? getting up a leaving? you trip and fall?) and realize 2 things: a)you will live through that scenario b)it is really unlikely to happen. Now, build a plan on how to manage those possible issues.

9. Be passionate, warm and friendly and above all, put the audience’s needs above your own. Add stories, anecdotes and humor to your presentation to keep them engaged. Watch public speakers on YouTube or on TED.com and practice some of their methods.

10. The absolute BEST way to manage your fear of public speaking is to practice and prepare. You simply cannot do it enough. Go back and watch Guy repeatedly. Do not rely on Power Point. Do not read to your audience. Practice, practice, practice and then report back in and let me know which of these public speaking tips helped you. 

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Get More Business: Show Them You’re the Expert

PR for the Little Guy

When you start a small business blog that centers around your business, you can stumble and falter when it comes to knowing what to write about. One of the secrets to a lively blog that develops your search engine ranking is consistency. But that can be problematic when you have no idea what to write about.

Let’s say you are Jim and Dave’s Auto Body Shop and your marketing consultant (aka “me”) has suggested you start a blog. How are you going to write 2-3 blog posts per week (or more) of 150-400 words and not run out of content? Here are some suggestions:

1. First, go to Google’s keyword tool and enter your business type, eg. “heating and plumbing”, “office supplies”, “auto mechanic”, “hair stylist” and copy/paste every single one of those keywords into a spreadsheet. I used “auto body” and came up with 100 phrases.

2. Comb through those for ideas. Auto body results include paint, estimates, fiberglass, restoration, supplies, DIY, dent repair, collisions, classic cars, detailing, technicians.

3. You can reenter some of these terms to fuel even more topics, but in using JUST Google keyword tools, a small business owner could write about:

• the different paint options for vehicles
• how do auto body shops estimate their services
• how to find a reputable auto body shop
• best resources fo classic car restoration
• how to DIY for small dings, scratches (video would be great for this)
• trendy paint colors
• what to do if you’ve had a collision
• how to detail your own car

(I could keep going)

4. The next helpful step is to set up Google Alerts for some key topics like “auto industry”, “auto repair”, “highway safety” and have results sent to you daily. Google will comb cyberspace for the most relevant news stories and blog posts about your topics. These will invariably spark some ideas for blog posts of your own.

5. Do a Google blog search for blogs about your target words. You can check out auto body results here. I use Evernote and Google Reader to track posts/articles of interest online.

6. Keep notes of your customers FAQ’s (frequently asked questions) and write blog posts with the answers.

There’s no doubt that there are days you are going to feel more challenged to come up with content. Writers with the world at their feet struggle, so why shouldn’t you when you are dealing with a niche’ market? Use these tools and you will find it much easier to stay consistent with your blogging.

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Google Tools for Small Business Owners

Building Your Online Presence

Most businesses have a customer database. Are you tapping this gold mine of a resource for “new” business? One of the best things you can do to market your small business is to reach out to former customers and remind them that they are missed. Are you asking for what you want in your business? Do you want your former customers to come back? Then why aren’t you asking them for their business?

To do this, set up a reminder for yourself to review your customer database once or twice per year. Sort your customers by activity and consistently reach out to customers who have lapsed for a certain period of time. This will vary by business-a small grocer might reach out to customers who have lapsed for 90 days, an HVAC contractor after one year or more. Reach out by phone, by letter, or by email. Let them know you’ve noticed their absence and you’d love them back. Offer an incentive and be sure to include YOUR phone number and a reminder that you value their feedback (there could be a legitimate reason why they haven’t done business with you in awhile).

It is also effective (and important) to stay in touch with the top 20% of your customers. When sorting, look for the customers who are the most active and have spent the most with your business. Send them a thank you (and small gift or offer) for being one of your best customers. Let them know you appreciate their referrals, but don’t always ask for more business. A simple thank you is enough to spur them to recommend you on their own.

Use your customer database effectively and remember to market to people you know have done business with you already.

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What Makes YOUR Offer Compelling?

Start Your Daily Marketing Habit

1. Start your day earlier. I talked about that here.

2. Wait to open email. Review for important projects/tasks left over from the previous day instead. Hit email in the afternoon.

3. Take frequent breaks. We can only focus well for 30-45 minutes before our brains stop processing and need a break.

4. Figure out what days/times you are most effective and plan accordingly. Save harder tasks for mornings, if you work best that way.

5. Break large products into smaller steps. Baby step your way through larger projects.

6. Do the hardest/most-dreaded item first. It will energize you to have that off your shoulders.

7. Make sure you need to actually complete everything on your list…and then….

8. Make sure you are delegating enough (is the thing you are doing most efficiently done by you?)

9. Do one thing at a time. Studies show we really aren’t more effective when we multi-task.

10. Start with a clean desk. Which means, straighten your desk before you leave with perhaps a note of your top 3 most important “to do’s” for the next day.

11. “Create windows of non-stimulation” (via Zen Habits). In other words, create small (and sometimes larger) periods of time to just sit and think: no computer, tv, phone, music. Nothing but quiet.

12. Set a timer. I think timers work best for physical projects but they can also help you focus on the immediate task at hand (I have to work on this blog post for the next 30 minutes, I have to file for the next 15 minutes, etc.).

13. Build routines. When we don’t have to think about “what’s next?” but go to it instinctively, our lives become easier and less time is wasted. Particularly helpful are routines built around getting started and routines built around finishing for the day.

14. Remember the 80/20 rule (i.e. 20% of your customers take up 80% of your time, 20% of your employees take up 80% of your time, 20% of your tasks take up 80% of your time). Look at your 20% and ask what can be eliminated or changed.

15. Lighten up. Stop taking it all so seriously. You will not productively fill every minute of every day. We weren’t meant to operate that way. Kick off and go play with your kids (or your dog or a friend). Clear your head. When you head back to work, you’ll feel more focused and be more productive.

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Small Business Success Habits

Make Time for Time Off

“Early to bed and early to rise makes a man (woman) healthy, wealthy and wise.” – Ben Franklin

Wow. Is managing sleep a hot topic! From Steve Pavlina (polyphasic sleep) to Dave Navarro ($47 e-book on becoming an early riser) to Tim Ferris (“hacking your sleep”) some of our leading thinkers, motivators and productivity gurus are preaching the benefits of controlling our sleep in a variety of ways-some of which are pretty drastic.

The reality is most of us don’t get enough sleep (totally guilty of working until 2 am) and constant studies prove that adequate sleep is imperative for creativity and productivity. Not to mention you treat your family much, much better. I suspect entrepreneurs and business owners sleep less than your average employee. Such is the price…

Let’s look at what these three folks have to say about improving/managing your sleep:

Steve Pavlina got loads of traction from his blog posts on polyphasic sleep. What is it? Sleeping frequently in short doses (the most extreme is 20-30 minutes at a time, 6 times per day, thus reducing sleep to about 3 hours per day). Supposedly this leads to more creative insights and alertness. Pavlina did it for a year before returning to his normal early-rise schedule of 6.5 hours of sleep per night.

Dave Navarro recommends (and teaches) early-rising for several (common) reasons: we are less fatigued in the morning, it is quieter in the morning, and there are fewer distractions. I think this varies by individual (I mean, if you live alone it is just as quiet at night as it is in the morning) and that you should map and follow your own productivity patterns versus feeling required to rise early.

Finally, personal development king Tim Ferriss offers some downright weird steps to needing less sleep,  including ice baths to lower body temperature (though being out in the snow and then warming up does make me sleepy), eating on a very strict schedule, “caffeine naps” and ingesting low-glycemic index foods before bed.

If you just want to sleep well and feel better all day, consensus says: sleep in a cool, dark room, turn off all electronics at least an hour before bed, go to bed and get up at the same time every day, and don’t exercise or get involved in highly stimulating activities right before you try to sleep.

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Make Time for Time Off

Get Out of Your Own Way!

I recently read a great piece by Brian Tracy (author of Eat that Frog! about procrastination and worth your time) about creating your own security. The gist is that there is no inherent security in the work or business world so you’d better create some of your own. Tracy says “knowledge in your field is probably doubling every five years. That means your knowledge must double every five years just for you to stay even.”  Wow. That is intimidating.

Self-development can seem like fluffy, new-age hype. It isn’t. You must keep learning and growing to stay on top of your business, your family, your faith. We don’t flourish in a vacuum. You must gain the knowledge but also the skills and discipline to utilize and implement that knowledge. Learning and reading keep our minds sharp. Building new skills makes us more marketable.

Never before in history have the words “knowledge is power” been more accurate. Creative and innovative knowledge counts as much as traditional learning so maybe fly-fishing and fly-tying don’t seem to apply to business, learning a skill that uses your body instead of your brain can make you more creative. Creativity solves problems. Solving problems is all your customer needs!

If you don’t have a continuous learning plan in place, build one. Decide on a new skill that you will learn this year and/or an old one you will shore up. Stay on top of technological, business and your specific industry trends. Stay interesting and active to build your own personal security.