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3 Smart Reinvestments Into Your Business

The growth of your business depends on your ability to maximize each gain. That’s why knowing how to reinvest profits is a must-have skill. Profits are great, but without reinvestment, they’re partially wasted. As in so many aspects of business, the long-term view is most important. With smart reinvestments, you can make your regular gains exponential in their effects- and support the growth of your business for years to come.

After paying overhead, employee salaries, and yourself, hopefully you have something left over. It’s a good idea to build reinvestment funds into your business plan, and set a target for what you’d like to have on hand to accomplish your reinvestment goals. As for what those goals should be, I’ve found that smart reinvestment falls into three basic categories:

1. Investing in yourself. Take some of those profits, and add some tools to your own arsenal. By furthering your own education and skill set, you create a stronger business for the long haul. You also add value to your own product, especially if your product is informational or educational. When I worked in education, it was mandated that teachers go through a certain amount of professional development every year. That’s because in education, as in business, the professional that isn’t developing is stagnating.

For example, here at Business Republic I’m particularly glad to have reinvested in one particular skill of my own: public speaking. As my business-education ideas were bearing fruit, I realized that between podcasting, webinars, and speaking engagements, my whole future depended largely on mine and my partner’s communication skills. We signed up for public speaking training with Michael Port and Amy Mead. Now, I don’t only consider that training worth every penny, I consider it a real factor in the subsequent growth of our business.

The key was in identifying what training would provide a tangible, measurable impact on that growth. It’s not about simply taking classes in any old skill; it’s about finding skills you can apply directly to your business plan. Port and Mead’s course was a demonstrably good investment, measurable in everything from podcast-induced traffic to payments for speaking engagements. It’s clear that this reinvestment added customers and helped generate sales.

Whatever your business is, identify the skills that you’ll need most- be they web design, writing, coding, or rock climbing. Every cent you spend wisely will come back to you in revenue.

2. Investing in someone else. Of course, no growing business can move forward without a strong team. Ideally, your business grows to the point where you’ll needmore people to take on the workload. Those personnel investments may be the most important ones you make. The key is to hire for specific skill sets, particularly the ones that aren’t your personal forte.

That may mean hiring a social media specialist who understands the whims of Facebook better than you ever could. It may mean hiring a web designer to take your site beyond the standard templates available to amateurs. It may mean hiring writers and editors who can articulate your vision even better than you can. You can even hire remote virtual employees with no geographical limitations. Whatever they do, your new hires will free you up to focus on other, bigger things.

By investing in specified help, you can focus on new projects, new products, and new horizons for your business. Again, make sure that the contribution from this kind of reinvestment is demonstrable and measurable. If you hire wisely, the difference your new employees make should be reflected in revenue- even to the point where they pay for themselves.

3. Investing in the business itself. Finally, that extra revenue might best serve your business by a more direct investment in equipment, infrastructure, or even marketing. The advertising budget can be increased to widen the search for new customers. The website can be improved in its functionality or design. For a physical business, a remodeling or equipment purchase can breathe new life into your location. Even buying new computers or software could make a dramatic difference.

As always, deciding what to buy for your business comes down to maximizing the impact of the dollars you invest. Pay for that bold new storefront if it will make your business stand out on a crowded street, not because it looks cool. Get those new laptops because they improve productivity- only if they would improve productivity. Something as simple as your wardrobe could be a worthwhile investment; just be careful that it’s a business investment and not a personal one. It all comes down to the specific goals you want your reinvestments to help materialize.

Which reinvestment strategy you pursue will depend on the priorities of your business. Make a list of the most important improvements, the ones that you and your team predict would generate the most revenue. Invest in those first. Once your business is growing steadily, you can even rotate between the three types of reinvestment.

Sometimes, what pays off may surprise you, as well as what doesn’t. Track the progress of your reinvestments, and use that data to inform your next ones. Learn as you grow, and grow as you learn.

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Crazy Enough to Work? How Insanity Can Help Your Business

A little crazy can go a long way. That’s one of the key lessons I’ve learned by studying the “hows” and “whys” of success. One of the common threads in the stories of successful entrepreneurs is that they aren’t afraid to take an approach that most people would consider unorthodox at best, and ridiculous at worst. Some people are willing to leave the confines of conventional thought and find new paths to profit. More importantly, they don’t mind being called crazy along the way. Often, it works.

One of the best examples of this is Walt Disney. Today, his name is synonymous with corporate power, but in 1959, he was struggling with the prospects of his California theme park. It was missing out on business from the East Coast, where the vast majority of Americans lived. It was also facing stiff competition from other vacation destinations that were springing up in the ideal California climate. His solution? Open a second park on the other side of the country. He decided to buy thousands of acres of land near Orlando, Florida.

Barely populated, hot, humid, swampland that few people would consider for a vacation was cheap, and for good reasons. Disney was able to buy 43 square miles of land for only $5 million, because the idea of that land having any commercial value was crazy. As Disney’s various dummy corporations sent real estate agents (who had no idea who their mysterious clients actually worked for) out to buy each parcel, there was speculation that Disney might be behind it all- but the sheer insanity of the concept did what Disney wanted it to. It kept the price of the land low until he had secured it all.

We all know how that worked out. Rather than going to the customers by purchasing expensive real estate near civilization, Disney had an idea: go somewhere remote enough to make overhead minimal, and use the money you save to build the biggest, most shamelessly elaborate spectacle in the country. Now, Disney World gets over 50 million visitors a year- because a man who figured he could draw cartoon mice for a living also figured people would fly to a swamp to ride roller coasters.

Crazy, right?

Crazy Works!

Cultivating your own personal crazy is an art and a skill. Obviously, being a little fearless and creative is much different from being irrational or unwise. In fact, the right kind of crazy is an extremely rational thing. What’s more irrational than being held back by assumptions, prejudices or fears just because everyone else is? The key is to have the courage to seriously consider those outside-the-box options that represent logical, if uncommon, risks.

The $100 MBA itself provides an example. When we first started talking about offering ultra-affordable business education, not everyone we spoke to thought it would work. Some, in fact, thought it was a little ridiculous- mostly because of the price point. I was told we could easily charge double, triple, or ten times the amount, and that I’d be crazy not to. In the end, though, we thought differently. We felt that accessibility was what could make the $100 MBA unique in the role it would serve. In the end, what’s crazy about it is what’s made it successful. Now, what we lose in revenue-per-customer we gain in tapping an almost entirely ignored market of would-be entrepreneurs who don’t want to be saddled with excessive debt for overpriced formal education.

Crazy, right?

And for a true understanding of how insanity can breed success, there’s no better model than Jason Zook. Entirely unsuited for the standard business models, Zook came up with wildly original ways to utilize social media; namely, he turned himself into ad space. First, he secured sponsorship deals to wear T-shirts with various internet company names and logos on them. When that ran its course, he decided to sell his own last name to the highest bidder, legally changing it to the name of whichever companies would pay him the most to do so.

Neither of these models was exactly sustainable, but the sheer weirdness of them garnered him so great a following that he’s now a fixture in the world of online entrepreneurship, making a fantastic living through book sales and workshops on creative marketing. He also “sells” his future, attracting investors in whatever ludicrous project will bring about his next pile of strangely-earned money.

Crazy, right?

Making Your Crazy Move

Of course, just because an idea is strange or unheard of doesn’t mean it will be profitable. The crazy has to be weighed, measured, and applied with intelligence and savvy.

For a truly unique idea to work, there has to be a market for it. That’s the line separating the “crazy” but ultimately successful ideas from the truly baseless ones. Unique and creative ideas should be based on the needs of a neglected market- some group of people who would be willing to open their wallets, if only somebody were crazy enough to provide what they want. For example, no one was making quality eyewear designed specifically for pets until Doggles came along. That company works not just because its founders had guts, but because they were able to identify an underserved market.

Before you jump headfirst into your own crazy idea, take the time and do the research necessary to validate it. Make sure a market exists. Make sure that whatever it is you want to sell isn’t just original, but actually adds value to people’s lives. Here at the $100 MBA we even have a 5 step process designed to validate ideas, both orthodox and otherwise. Click the link for the free course and workbook, and even if your idea is from deep in left field, you’ll be able to see if it can work.

Crazy ideas happen all the time, in the minds of potential entrepreneurs everywhere. Most are thought up, disregarded, and forgotten. Some are attempted. Some become a source of wealth- but only when they’re executed on a foundation of viability, honesty, and courage. As long as you have those things, no idea is too crazy to work.

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Decision-Making For the Entrepreneur

Decisions, decisions. If you’re venturing into the world of entrepreneurship, you’ve already made a huge one: you’ve decided to leave the security and predictability of standard employment behind. It shows that you have the capacity to take on uncertainty and face a range of unpredictable results with confidence, or at least with guts. It’s a skill you’ll need over and over again. Being able to make and commit to big decisions might be the most important fundamental skill you can develop.

I’m particularly passionate on this subject, because in my view the thing that most holds independent business people back is indecision. Decisions move businesses forward; that’s not hard to understand. What many don’t realize, however, is that no one moves forward without all kinds of decisions, including the bad ones. From studying the example of the entrepreneurs I look up to, I’ve learned that none of them got where they are by trying to make perfect decisions. They got where they are by making lots of decisions, from brilliant to regrettable and everything in between.

That’s not to understate how stressful decision-making can be. From experience, I know exactly how daunting it is. When your livelihood is in the balance, it’s pretty hard to imagine being comfortable with the idea of making a wrong move. However, almost every great entrepreneur has succeeded precisely because they would rather move in the wrong direction than stand still. Rather than trying to make perfect decisions, they used each decision’s result as a stepping stone towards their broader goals.

I’ll be the first to admit: I’ve made some business decisions that did not turn out to be the best. However, I recognize those missteps as part of the process. In the end, I’d rather have made those mistakes and ended up where I am than have allowed myself to be paralyzed. If I had, you might not be reading this.

The Decision-Making Process

From experience and the wisdom of others, I’ve learned that there is a way to get over one’s natural hesitancy and make timely, wise decisions. While nothing will guarantee the outcomes of those decisions, there is a formula that makes decision-making an easier, more informed process, regardless of what kind of business you’re in. By considering just a few key factors, you can empower yourself to make confident decisions, exactly when they need to be made.

It’s important to remember one thing: not deciding is a decision in itself. A lack of a decision is a choice, if only to maintain the status quo. For example, as I write this I’m faced with a decision regarding the price of one of my products, the webinar platform Webinar Ninja. I’m convinced I should adjust the price, but it remains to be decided by how much. The price I set will determine all kinds of things, from how much revenue we bring in, to the kinds of customers we attract, to our branding and image. I have to make a decision about this, because doing nothing is still doing something. In other words, the longer I keep the price where it is, the more I commit to the exact model I’m already using- for better or worse.

To break out of the tentative stage of a decision and fully commit, I use a three-step process:

1. Ask yourself if the decision (and its effects) would be permanent. Whichever path you choose, can you turn around if you don’t like where it leads? Is the decision reversible? Sometimes, simply planning an exit strategy in the event that things don’t work out is the best way to feel confident moving forward. Most of the time, with almost all types of decisions, you’ll find that the answer is usually yes. Prices can be adjusted. Projects can be reassigned. Different approaches can be tried and discarded if they don’t pan out.

In the case that a decision would be permanent, just make sure that it aligns with the overall mission of your business, is consistent with your business culture, and that all available information has been factored in. Accepting risk is part of the entrepreneur’s lot. Speaking of which…

2. Assess the risk. Establish “worst case” and “best case” scenarios and perform a risk/reward comparison. If the risk far outweighs the potential reward, it’s time to adjust your plans. In my price-adjustment example, I know that by raising prices I risk alienating a certain number of customers, and losing some. The potential reward in revenue, however, could allow my company to make greater strides. If the number I’m considering will price half my customers out of the service (in the worst case), I need to lower the number.

Adjust your plan, and repeatedly concoct best and worst case scenarios until you find one that feels comfortable. If you could live with the worst case, and the potential best case is a game-changer, do it. Some of this is intuition -you can’t predict everything accurately- but if you train yourself to decide things within a fairly accurate range of possibilities, you’re likely to plot a relatively safe course forward.

3. Set a deadline. This is what separates the thinkers from the doers. By setting firm deadlines and adhering to them, whether you feel completely ready or not, you shake the reticence that holds so many back. This is where it’s most important to remember that you can’t control everything. This habit is one that truly requires a person to accept the reality of risk, and grow steadily more comfortable with it.

When you’ve done your calculations, you’ve weighed the possibilities, and you’ve factored in all the known variables, it’s time to mark the calendar. Whichever move it is, you’re moving on this date, come Hell or high water. The best and most successful entrepreneurs I’ve known aren’t cavalier or overly casual, but when they’ve settled on a course of action, they move. Sometimes it goes well, sometimes it doesn’t, and in either case they respond by moving again. Make your call, set your date, and then immediately take some concrete step towards implementation, even if it’s a small one.

The most important decision you can make is the decision to make a decision. Lead yourself, and remember that after years in business, the most successful people have usually racked up a pretty significant list of regrettable moves, all of which turned out to be worth it in the long run. If you’re new to decision-making, start small. Exercise your decision-making muscles on less intimidating decisions like the font on your website or the color of your business card. Get used to making calls, and to the idea that each is just one small part of a bigger story.

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Disagreements at Work (And How to Resolve Them)

In business, colleagues don’t always see eye-to-eye. Partners disagree with each other and with their employees. Employees disagree with each other and with their employers. No team is exempt from this, no matter how well they normally work together, and no matter how much is at stake. In fact, it’s just the opposite- the more passionate and committed the members of your team are, the more earnestly they’ll want to defend their position when it’s opposed.

As a leader, what should you do when someone disagrees with you, especially an equal partner or a trusted employee? How can you do what’s best for your business without sacrificing the good working relationships your business depends on? How can you help to mediate when members of your team are in a tiff?

It all comes down to reaffirming everyone’s commitment to the overall mission of your business. In a healthy business culture, where mutual respect is the expectation and everyone feels knows that their viewpoints are welcome and valued, it’s never impossible to resolve a dispute. It’s only a matter of having a process in place to determine the best way to go when the business is at a crossroads.

From experience, I’ve found that a few key steps can bring almost any disagreement to a fair resolution:

1. Know that disagreements are inevitable. This is the most proactive step you and the members of your team can take, from day one. To perceive disagreements as a crisis, or to be taken aback when they arise, is already adding a layer of angst and drama to the proceedings that’s completely unnecessary and counter-productive. Don’t fuel conflicts by enlarging them in your perception (and in everyone else’s).

In fact, disagreements are not only normal, they’re a healthy sign! People who are willing to argue for their point of view are people who care about what they’re doing. Employees who feel the need to advocate for their ideas in strong terms are employees who have clearly invested the kind of thought and passion into their work that makes them valuable. And when opposing viewpoints are talked through, analyzed, and dissected appropriately, they usually lead to growth on both sides of the argument- as well as valuable revelations for the business as a whole.

2. Step back and look at the big picture. When there’s a dispute over what the next move is, all parties should take the time to think about it in context. The context is your business’s overall mission, it’s raison d’etre. A disagreement is a good opportunity to revisit that. How would each possible course of action affect the business’s ability to achieve its main goal? This is why having a mission statement in the first place is a necessity, to act as a guidepost when the path isn’t completely clear.

Each person involved in the dispute should ask themselves “What is the purpose of this business? What are we trying to achieve here?” If one course of action brings everyone closer to the goal, then the right move is clear. If both parties think that their preferred course best serves the mission, then it’s time for further examination. In the end, no matter which side prevails, it’s important that everyone keep one larger truth in mind: that your relationship with each other is more important to the business than any single decision. Even if someone has to accept that their preferred course of action isn’t being taken, it doesn’t mean that they’ve “lost” the debate- it means that they’re professional enough to be supportive of their teammates even when they disagree.

3. Give everyone a voice. In a dispute, it’s vital for morale and for the work environment that everyone have a say. A good policy that I’ve found effective is to give each person involved 2 full minutes to state their case without interruption from anyone. It’s not a trial, and it’s not for cross-examination; it’s simply a way for each person to vocalize their position.

Doing so can often resolve the dispute on its own. There may be some point of clarification that, when understood, turns out not to be a point of contention after all. It may force someone who’s too bent on saying what they have to say to actually hear the other side. In some cases, a person who vocalizes (or even writes down) their rationale realizes a flaw in their own position, just by articulating it!

4. Have each side propose a way forward. Too often, disagreements devolve into a question of who’s right and who’s wrong. There is nothing productive in determining who “wins” a disagreement. A disagreement, handled professionally, is a discourse meant to determine what should be done, not a contest to elevate one person over another.

For example, say the person writing your blogs (normally considered to be competent, even witty, and- let’s be honest- downright handsome) has produced a post that’s well-written and informative, but strikes a tone you find inappropriate. Maybe it’s abrasive or condescending. Maybe it’s a great post, but it doesn’t speak with your business’s voice.

In a dispute, you would “win” if the post was scrapped. The writer would “win” if the post went up. In either case, someone walks away having asserted themselves, and someone walks away defeated. Neither is a resolution. Neither is productive, because no matter what effect the post will have, it’s damaged the dynamic.

Instead, if both parties can communicate effectively and respectfully, it might just be determined that some minor re-wording or adjustment in tone would make the post acceptable to all. You may learn to appreciate what goes into a good blog, or be convinced that a somewhat edgier tone could be a bold and positive decision. The writer may learn that he’s not just speaking for himself, but for the business, or admit that bad feelings over a personal situation have infected his writing. Whatever happens, by seeing a disagreement as an opportunity to evolve, and not a contest between combatants, you move towards the best outcome.

5. Bring in a third party. If the disagreement can’t seem to be resolved by the two sides alone, it may be best to consult someone outside the argument. The credibility of someone who’s respected by both sides, with no bias or anything to gain from any particular outcome, might be the first thing opponents agree on. By seeking an objective outside perspective, both sides may be alerted to things neither had considered, or simply be shown how their own biases have colored their understanding of the opposing view.

The third party doesn’t necessarily have to have the power to choose the course of action, but the perspective alone could radically alter the trajectory of the conversation- especially if it’s headed in an unpleasant direction.

6. Shelve it. As a last resort, if no resolution can be reached, it’s sometimes necessary to simply retire the argument- but not permanently. When a disagreement has reached such a pitch as to become detrimental, or the parties are at such an impasse that no solution seems visible, it may be time to put a pin in it. As long as there’s not a deadline or some required course of action, letting a dispute rest for a while can be very helpful.

Temporarily backing away from a dispute can give everyone involved the time needed to let the emotions fall away from it, ponder the different viewpoints, and align their argument with the overall goals of the business. Especially if people are becoming emotional or heated, the back burner can be the best option. This is not a failure to resolve the issue, so long as everyone remains committed to resolving it. Schedule a revisitation of the issue at an agreed-upon time, and simply try again later.

By taking these steps, you can resolve almost any disagreement that will come up in your business. Above all, never allow yourself to lash out, and always be honest with yourself in determining if your own ego is standing in the way of a solution. Disputes are uncomfortable for most non-sociopaths, so recognize that that discomfort breeds defensiveness, and be patient.

Commit yourself to resolving disputes with compassion and equanimity, and everyone in your business will see them as part of the process of succeeding together.

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Finding the Right Employees

The search for good employees is a lot like dating. The pool of applicants is huge, and it can seem impossible to tell the ones you’d like to introduce to your parents from the ones that’ll leave you lying on the couch watching Love Actually and sobbing into your morning vodka. With so many job-seekers (especially in a global field of potential remote employees), how can you sift through the crowd to find the people who will help your business reach its potential?

The key is to establish the image, culture and “personality” of your business as clearly as possible, so that only those who would make a good match for you and your operation will be likely to apply. Rather than trying to seek out and hire the “best” in the field, it’s better to broadcast what your company is about in a way that attracts the right people for your business. As in love, the best policy is to be yourself. Put your company’s individual character on display, and let it reel in the most compatible.

Putting Culture First

Even if you’re not hiring yet, it’s important to lay the groundwork for finding employees in an efficient way. From my own experience, I can tell you that turnover is one of the biggest wastes of resources in business. Hiring, firing, and sifting through legions of applicants’ costs time and money. When businesses don’t take the necessary steps to attract the right applicants in the first place, it’s rarely well spent. That’s why it’s best to be proactive.

Here at Business Republic, we’ve managed to assemble a fantastic team that we believe will do more than just show up and work. By wearing our particular culture on our sleeve, we’ve attracted people whose commitment goes beyond their paycheck. It might sound a little idealistic, but experience has proven that people want to work somewhere that they like just as badly as they want certain salaries and benefits.

Of course pay, benefits, vacation time, and all the other rewards of a given job are going to factor heavily in who your business attracts, but neglecting culture and climate is the surest way to attract people who only care about those things. This is limiting. Get the culture right, and employees who are intrinsically motivated are more likely to come your way. That’s not to suggest that there’s a standard “right” or “wrong” culture; each business’s is different. The trick is to attract people who will thrive in yours.

With clear cultural expectations in place, employees are more likely to fit in with your existing staff and add to a powerful team dynamic. People may be content at a job that pays the bills, but they’re happiest when they’re legitimately excited about what they do every day. While content employees might simply work, happy employees care. By applying for a position at least partially because they believe in a certain vision, rooted in culture, employees are making a statement. They don’t just want to make a living. They want to help build something they see as meaningful.

Drawing Applicants In

The first step in broadcasting your culture (for hiring purposes) is to build a proper Careers page. Whether you’re hiring yet or not, your business website should include a page devoted to the experience of working for you. This is potential applicants’ first introduction to your company’s character. What does working for you mean? What does it look like? Use this page to try to give applicants a sense of what the experience is, or at least what you want it to be.

On the page, have a direct, bold headline that sums up your company’s vibe. For example, the Careers page of our webinar company, Webinar Ninja, starts with a simple declaration: “Driven, passionate professionals love working here!” We don’t start by touting the pay or the benefits; we start by identifying exactly who we think will jell with our team.

We also don’t start by identifying any particular skill set, level of education, or other indicator of previous achievement. Instead, we focus on attitude. Our most important qualifications are drive, passion and professionalism. If an applicant doesn’t have that, it doesn’t matter if they hold three doctorates and a recommendation letter from the President- it’s the attitude that counts, and the attitude we ultimately hire for. Skills can be trained. Experience can be gained. Our business culture focuses primarily on enthusiasm, and that’s the first thing we want applicants to know.

The banner over our benefits section further affirms our driven but fun culture: “Working at Webinar Ninja ROCKS!” We then show the applicants why. Six graphic representations of what makes Webinar Ninja such a great place to work, followed by brief descriptions, entice the applicant (or at least the type of applicant we’re looking for). Of the six, only one of the benefits is monetary. While we’re clear about offering competitive pay and bonuses, the vast majority of the page is devoted to what’s inherently enjoyableabout the way we do business, and what matters to us in terms of outlook.

For example, we highlight our commitment to training and development. “We invest in our teammates” isn’t just a slogan. It’s a statement of principle. We don’t see employment simply as a transaction (work for money), we see it as a symbiotic relationship (helping our business grow and evolve for helping our employees grow and evolve). The employee gets more than just pay, and we get more than just work.

In another of the benefits, we tout our idea of what makes a dynamic team. “We believe talented people can be found anywhere in the world.” We highlight our remote team, stretching from California to India to the Philippines, and our commitment to diversity. Those who like the idea of coming together with people from all over the globe on a shared mission know that our company is the place to do it. Those who prefer monoculture need not apply.

Already, before they’ve scrolled halfway down the page, we’re filtering for the kind of enthusiastic, progressive go-getters that want to be “part of something special.”

Using Your Own Employees 

Attracting and hiring people in a culture-based way can have a multiplier effect. By encouraging a certain kind of team dynamic based on attitude and outlook, you’re likely to hire people who will bring in more good candidates.

People who thrive at your business probably have others in their network with a similar approach to their work. With your own team’s recommendations, you may not have to search very hard for great candidates. Ultimately, your company’s reputation as a great place to work for a certain sort will become a beacon that attracts all the candidates you’ll ever need, without your having to solicit applications. You can also encourage this to happen with rewards, like our “Rock Star Recruitment” policy at Webinar Ninja, which offers bonuses for bringing in new hires that end up staying.

As they say, business is about relationships. I believe that’s not limited to the ones you have with clients, but extends to your team. Building a great team requires truly thinking of it as a team, and of your business as a group endeavor in which everyone’s role is vital. If you can create a culture of appreciation that makes your employees feel valued, it will pay off both in productivity and in the quality of applicants you attract.

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The 5 Keys to Managing a Remote Team

Remote teams are well on their way to becoming the norm in modern business. With global interconnectivity eliminating the distance between everywhere and everywhere else, the 20th century office model is quickly going the way of the fax machine. While it may sound strange, it’s likely that the concept of “going to work” will soon be as irrelevant as it was in our not-too-distant past. Therefore, knowing how to adjust to this new paradigm is a must for new entrepreneurs.

Here at Business Republic, we like to think we have a pretty amazing remote team dynamic, with employees living and working everywhere from California to India to the Philippine Islands. That dynamic is no accident. It requires assembling the right team, and it’s only possible with competent, mindful management. Managing a remote or virtual team is very different from managing a traditional office, as we’ve been forced to learn in helping to pioneer it. With little literature out on the topic, our experience has been our best teacher. Through it, we’ve discovered these 5 key concepts to remote team management:

1. Don’t Herd Cats

Before the Internet, the traditional office was a necessity in order for employees to be able to communicate and work together efficiently. It also became a way for management to constantly “keep an eye” on their employees, like wardens in a prison made of cubicles. While the efficacy of this approach is debatable even for an old-fashioned office, it’s not even a possibility for a remote team. If your virtual employees are goofing off at the water cooler, you’re never going to know- partially because they’re miles away, but mostly because there’s no water cooler in the first place.

In Remote: Office Not Required by Jason Fried and David Heinemeier Hansson, the founders of Basecamp argue that excessive oversight is a fool’s errand. They liken the effort to control your employees’ every movement to herding cats: as pointless as it is impossible. Instead, the remote manager’s job is to verify results, not monitor the process. All that matters is what comes back, and that it comes back by the deadline you’ve given.

With this approach, communication is clear and precise, but it’s succinct. A remote manager doesn’t need to know how long an employee’s lunch break was, or offer any instruction as to how they manage their time. They only need to know what they’re expected to produce and when. What they do in the meantime is their decision- a liberating, modern approach to management that sees employees as adults capable of more self-management, and attracts self-motivating people.

2. Clear and Consistent Communication

Since remote management allows such freedom and independence for employees, it becomes more important to communicate effectively. Instructions have to be almost excessively clear and explicit, but they also have to be to the point. Brevity and clarity have to rule the day, as your team needs to know exactly what they’re expected to do, without being able to pop by your office or be shown in person.

At Business Republic, we use Gmail, Slack and Skype. Gmails are for the day-to-day communication, and the central hub through which projects are assigned, tracked, turned in and modified through Google Docs and Sheets. To make emails more efficient, we have a standard language of subject lines that automatically clarify their intent. Our “EOD” (End of Day) emails are summative, while “Action Needed” in the subject line makes it clear that whatever’s in the body has to be addressed as soon as possible. By keeping it clear from the subject line, our email communication is faster, more clear, and more effective.

Slack is our messaging app for quick, spur-of-the-moment or minor questions and clarifications. This allows us to carry a running conversation with remote employees in between emails. Again, it’s concise, it’s smooth, and it’s functional above all; not a second is wasted, and our team can work together as efficiently as a group of people sharing a physical space. When we need to have meetings or a live dialogue, we simply use Skype- no airfare or conference room required.

3. Organized and Efficient Systems

Since a remote manager doesn’t directly guide the course of their team’s work, it’s imperative to have the most self-sustaining systems and procedures in place. They can take time and a great deal of thought to build and perfect, but clear and organized procedures replace the need to “manage” in the traditional sense by acting as a standing guide for employees.

Your systems and procedures are the support infrastructure that keeps your team on track. Therefore, they’ve got to be as simple and reductive as possible, while also being intuitive. At Business Republic, we write out all of our procedures for every task in detail. We create shared documents on Google Drive, create short tutorials on ScreenFlow, and use LastPass to keep everything cohesive and secure.

It’s a relatively short list of tools, and there are many great remote management resources like Basecamp and Asana, with different variations on the same features. Whatever you use, all that matters is that it enables each employee to access their work quickly and complete it smoothly.

What you put into these systems will determine what you get out of them. It can be pretty time-consuming to establish your procedures at the beginning; for instance, a task that only takes a team member 10 minutes to complete may require an hour’s worth of work to describe and write into the systems. It’s less efficient on the manager’s end, but the net gain in efficiency by the team is well worth the effort. As your employees become more familiar with your systems, they can also be invited to suggest modifications that will increase their efficiency even further, perfecting the workflow collaboratively.

4. Create a Strong Culture

What holds a great company together and attracts the best and brightest is its office culture. But without an office, it takes a more conscious effort to establish and maintain that culture. Companies like Airbnb and buffer.com have perfected this art, and as a result people flock to work for them. Just by reading the emails of a company with a great culture (remote or otherwise), you can get a sense of how upbeat and uplifting the attitude is.

Great attitudes among team members is no accident; it’s the product of conscientious culture management. Positivity, mutual supportiveness, inclusiveness and encouragement can be shared just as easily (if differently) through an email or Slack message as in a physical meeting, if you take the time. Learn to recognize the difference between efficient communication and communication that’s terse or impersonal. Take the time to foster good culture not as an aside, but as an integral part of your management strategy.

You’ll soon find what we found- that your own employees will draw more and more talent your way, because of the happy experience they’ve lived firsthand.

5. Honest and Abundant Praise

Part of your business’s culture should involve your making time for praise. Somewhere between absent-minded pats on the virtual back and insincere flattery lies the genuine expression of your appreciation for great work. That appreciation creates a feedback loop in which team members, feeling appreciated, want to give their best for more than just monetary gain.

The art of effective praise is detailed in Dale Carnegie’s How to Win Friends and Influence People. Honest praise and well-earned rewards have an exponential effect on motivation and work quality that will be reflected in your team’s productivity. While some managers see praise as something to be held back, in my experience it’s best to let loose with it, so long as it’s sincere. A good manager doesn’t need to be reserved in order to maintain their authority. They need only be honest.

In the end, good managerial policies and practices are all that you need, even without your hands on the reins of a physical team confined to an office space. You’ll discover which employees thrive under more or less supervision and guidance, which ones have the attitude that supersedes all experience or learnable skills, and how to best motivate each individual.

Take the time to get to know your team personally. Without seeing them or having those interstitial water-cooler moments, it takes a mindful effort to build human relationships with them. Building those relationships is important, and not a detraction from your efficiency. In fact, strong interpersonal relationships will breed loyalty and motivation more than anything. With the right approach, that’s just as doable online as in the office.

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Entrepreneurship Leadership Uncategorized

The Right-Sized Team

American entrepreneurship has a certain mythos to it. It involves a lot of historical figures like Andrew Carnegie and John Rockefeller pulling themselves up by their bootstraps, fighting against insurmountable odds, and sacrificing all comforts in pursuit of success. That success comes in the form of massive wealth, the product of a huge company employing thousands of people, the hero’s name emblazoned on the front of a massive corporate headquarters for all to marvel at.

Is this the only model for success? Is the sheer size of a company, the size of its revenue stream, or the number of its employees the only definition of whether an entrepreneur has “made it?”

When a small business is growing, it has to grow carefully. It has to grow at an appropriate rate, and to an appropriate size. What size is appropriate for your business is a question worth putting thought into. Everyone wants to reach their fullest potential, but relentlessly pursuing growth for its own sake can be counterproductive.

Deciding on the size of your team, then, means carefully balancing the potential benefits of expansion against the daunting challenges that come with it.

Is Bigger Better?

Deciding on the right amount of people for your business team will depend on what kind of business you’re running, and what its ultimate mission is. Many like to assume that bigger is better, but 21st-century business models make it clear that sometimes, leaner is meaner. Instagram, for example, sold to Facebook for a staggering amount (hint: it starts with a “b” and rhymes with million) of money. That company was comprised of 13 people.

Instagram is an extreme case, but small businesses regularly make big-time profits in today’s web-driven market. Jason Fried and David Heinemeier Hansson’s Basecamp (formerly 37 Signals) is a twenty-person team making millions through their various business products. Noah Kagan’s AppSumo is a nine-person teaming pulling seven figures as well. Clearly, size isn’t everything when it comes to putting together the most effective team.

When starting out as an independent business person, either by yourself or with a partner, it’s important to explore this issue from the outset. Once you add members to your team, it can be very difficult and very costly to change your mind. Especially once people depend on you and your business for a living, downsizing is painful. At the same time, small teams are capable of working wonders- provided they’re part of well-designed system.

This doesn’t only hold true for “soft” online products like education or software; brick-and-mortar businesses with physical products can follow the Mighty Mouse Model too. Especially in the right markets, small businesses like restaurants can rake in incredible profits with no more people than it takes to play a pickup game of halfcourt basketball. Morandi’s in Manhattan has a single location in the West Village and a small staff, but makes more profit than restaurants several times its size. The key is that their little team is part of an effective and well-managed system, a formula that they’ve perfected over time.

Deciding How Many to Hire

Once you’re convinced that it’s time to add members to the team, proceed with what I like to call “optimistic caution,” a more positive spin on cautious optimism. Understand that expansion comes with inherent extra responsibilities, expenses, and demands on your time. Realize that eternal growth for growth’s sake isn’t a real goal, unless you’re measuring yourself only in comparison to others- a very counterproductive approach. Remember that it’s possible to grow in revenue without growing in overall size.

The key is to start by setting reasonable goals. How big do you really want your business to be? How much of your time are you willing to spend doing managerial and administrative tasks? Is your business a way to do something you love for a living, like web design or the culinary arts, or are you happy being in the business of business, further removed from the actual production? This will help you estimate how many people you’ll want to end up with ultimately.

To avoid raising overhead unnecessarily, it’s important to keep your team streamlined. Never hire someone just to increase the number of employees under your umbrella. Instead, look for multi-talented people with a diverse range of skills, especially in the early stages of the company’s growth. If you can pay one person for two or three skill sets, that’s far better than paying two or three people.

Make your goal to have as close to one person per department as possible. Sales, marketing, tech and customer service may need only one person each. Take advantage of the shrinking world of telecommunications we live in, and don’t be afraid to hire freelancers, contractors and part-timers who can contribute smaller amounts of work from all over the map. Keep the team lean, and pick up the slack yourself where extra support is needed temporarily, rather than hiring someone during a busy time only to leave them idling later.

The Advantage of Small Teams

The beauty of small teams is that the fewer people work together, the more powerful a dynamic they can create. Members of small teams tend to work more closely with each other, and develop interpersonal bonds and dynamics that have a multiplying effect on the quality of their work. Like a family or a sports team, they come to know each other’s strengths, weaknesses, and dispositions, adjusting and compensating to achieve the best results as a group.

For the head of the business, it’s much less stressful, and even enjoyable. People you know personally are easier to manage and to motivate, because you have the time to develop strong relationships- relationships that can turn out to be a company’s greatest asset. With creativity, flexibility, and the loyalty engendered by a small amount of people feeling as though they rely on each other, a pint-sized team can outperform dozens of cubicles’ worth of large-firm employees.

The Bigger Question

In deciding how large you want your team and your business to be, you’ll have to confront your own personal philosophy of success. Is size what you really want from your business, or is the desire to be at the helm of a big operation merely your ego talking? Do you want to pursue a passion, or confine yourself to the endless administrative duties necessary to run a big operation? Ask yourself what it is you want to do as well as what you want to have.

The best advice I’ve gotten and given in my years as an independent business person is this: define success for yourself, and then question that definition. Be honest with yourself about what would truly make you happy, and what would only be a status symbol. “Success” is a social construct; it is whatever we decide it is. Maybe success doesn’t mean huge revenues or armies of employees. Maybe it means the freedom and flexibility to be your own boss. Maybe it means having more time off to fish. Maybe it means contributing something of value to the world.

Whatever it is, it’s up to you, and no one else. Bear that in mind when deciding on the size of your team. At the end of the day, there are more options than going big or going home.