Build a Team That Lasts
and now we're switching gears because one thing that people don't realize is if you don't build a team that you can work with, you just can't do it alone. I know that we start alone, but you have to really have other people. When I say building a team, I don't actually mean employees. The nature of work really has changed. This could be freelances. This could be other lawyers or accountants or consultants, so it's of critical importance. And Carol Roth says it's very well in her book called The Entrepreneur Equation. And I'm a huge fan of Carl Roth. If you ever wanna watch her, she's usually on CNBC and what she discusses that unless you have a team, unless you have leverage, really, you're just That, C says is she's a your job be. You just have a job. You really don't have a business, and you Onley find leverage when you actually have a business. So remember why you started this right? Has your dream really been realized? You wanted to create something, right? You want to use your pas...
sion. I'm talking to arena here, right? You want to make more money. You wanted control over your daily life. And so think about you only really have a job when every every dollar you want to get out of every transaction, right When you're not willing to build long term relationships and this one is not obvious. When you'll do anything that a customer asks, why is that bad to do anything that a customer asked for you. Why is that? Not really building a company? Why is that bad? Yeah. Arena. Shane A sorry. Tomorrow I'm gonna switch you guys. No, I haven't made any mistakes from milk. Oh, and Karyn. So Shane and Raina? Yes, too close together. Um, if you do anything a customer ask, you might be sacrificing your own mission statement in your own purposes just to meet a particular need, which in some cases may not be a bad thing. If you're doing something that they asked, it falls within what you're sort of allowing yourself to provide. But if you're going outside of that box too much, then you may be setting yourself up for future bad expectations from that Customers, wells, others. It goes back to striving for minimal achievement, to focus, right? This is exactly what Chris was saying earlier in the day, is that we have to make sure that we focus on what we want to do when what we're good at. And many times customers will pull us in all sorts of different directions because the next thing you know with Karen business business, they're going to say, Wow, why don't you do Pallotti stream dot tv? Right? Probably not a really good idea. Uh, the same thing with money, many of us who have a job and not a business. What we do is we don't have a long term plan for money. We're constantly worrying about what the next payroll is really going to be. You also have a job when you just hire anybody that you just pick the first person that really comes along again, whether you hire more employees or you get them as a consultant or a vendor, that with vendors, you try to negotiate every last nickel added transaction, and you don't think about it long term, and you also have a job when you pay yourself last, and that's of critical importance. Tomorrow we're gonna be talking with Mike McCalla wit, so I know it's done a session with Creative Live, and he's come out with a new book called Profit First, and he's gonna discuss how it's so important that pay ourselves first and so many entrepreneurs really don't do that. So you have a business versus a job We didn't go on vacation. Many of us are afraid to go on vacation. Does what's gonna happen to our quote unquote business. You'll actually make more money if you can build value outside of just you if you're just not the business. So here's how we're gonna get unstuck in this area and jumpstart our business. We're gonna articulate a long term vision, right? We're going to figure out as we've done earlier, what pain does our business solved? I'm gonna have. And I know Miyoko is all for this. We're gonna have annual financial goals, right? That's of critical importance. And we're gonna think about the three crew. CFC asked the three critical success factors for a business. So take a minute right now in right down three critical success factors. Three things that have toe happen for your business. So you know how you could move that business forward? What's the three things that's really gotta happen. Now, those you out there, these things might be that I need to get to be a certain size or I need to be able to sell my whatever I sell over the Internet. I need to get that first customer. I need to get that first investor. I've got to get someone who really is a brand so I can stand on their shoulders. A lot of times there are two or three critical assess factors. And the reason that we put this together is we actually put that up on our bulletin board because every action, every distraction, Chris, that we're gonna take, we see does it filters through one of those crows? Sestak, Doesn't you guys just throw it out? Because there's so many things out there, they're going to get in the way of doing exactly what you want to do, which is really built a business and not get a job. So who would like to mention one of their critical success factors? Yes, Shana. Yes. Good for you. Uh, out with the old in with the new, um, in particular, this business that I work at now has been around for over 30 years, and there's a lot of old filing boxes and equipment and things that have just sort of gotten stored in the back and never really been gone back through and prioritize. What should we keep? What should we go ahead and sell off? What can we throw away? God forbid, Um, and so I know Number one. It would clear up space when we get rid of the things that we don't need and are just sort of dead weight for our business in the back of the store. But it also makes room for new endeavors, new lesson rooms, more space for new product to come in and just be a little more organized. Overall, that's one of Christie's that factors. So, Karen, what is yours? One of mine is that partnerships To continue to have more content, we need other yoga studios. We need partnerships with corporations and people who want to be part of it so that we can serve them corporate wellness programs. So then we have clientele cash flow, all of Epsom because you're not going to get the distribution, and already you want lunch together. Partnerships so local. What is one of your critical success factors. 25 contacts today. 25 contacts per day. So you constantly have to go out and reach new people. All right, you know, what about for you, for me having a revenue generating system in place that people can can interact with with my services in a variety of different ways and not get overwhelmed or confused? OK, so a simple way for people to be able to interact with you that produces revenue. So get said the reason that this is important is because we get distracted by many different things that we put up three things. I always say three things because most of us can't. Most guys can't keep more than three things in our head, Really. At one time, it's also very critical toe. Understand? Actually, how your business makes money Right now I know that that may be a little bit simplistic, but do you make the money based on a number of customers? Do you make money based on? Well, I just need to have more revenue per customer. Do I make it? Cause I very caught low cost of sales. Think about video games. Why do they make so much money because they have a very large upfront cost. But then the cost of service, especially when you download a game or piece of software, is almost nothing. What's the cost to acquire customer versus was their lifetime value over a long period of time. So think about where is the leverage in making money. And I will tell you, I know a lot of us do this, especially those air listening out there. It's very hard to make money actually selling your time, because there's a limited amount of time you have to sell value for that time. So don't try to charge per hour. Try to find leverage in some of these other things. And again, that could be experience or something something like that so sometimes leverages in the more people I hire or my intellectual property. Or, as you were talking about Karen, the kind of distribution agreements that you have, especially if you proprietary, maybe their customer annuities. That's how it works. Really miracle in your business where if you keep doing business with people the same people year after year, on year, you get a percentage of that and So you're trying to build up your base. That's how the financial industry really works, right? You can never be satisfied with a job if you can't go on vacation. If you can't make money right, you've got to be able to do those things because then it just becomes really something around your neck now. So we gotta find people, right? And even though the unemployment is still pretty high, it's hard to find people because And let's admit it, some of you repeat some of these yourself privately, right? I can't find good people. I always have high turnover. Employees will never work as hard as I do. Most people suck, right? You said that yourself. Can I run a business? That's the dream business of a lot of monsters. Kind of run a business that doesn't have employees, right? Admit it that sometimes we think that way and again, I'm gonna use the word employ a lot here. But remember, the nature of employees has really changed. Could be a freelancer. Could be a vendor. Could be a company, could be a consultant, but we've got to find our team. Remember, Here's the golden rule of building a team. It's when the company goals match the employee goals. People stay when those deviate people leave. To constantly have to know, though, the company goals match with that vendors goals that freelancers goals with that employee's goals. That's the critical do, and they're really four steps I'm gonna take with you through toe. Find the perfect match. The 1st 1 is hiring and then training, managing and firing, right, so the 1st 1 is hiring. Unfortunately, most of us do a very lousy job of hiring either employees or freelancers or companies, right? The first thing we do is we don't know what they should do for us. A lot of us are hiring our first employee, our first freelancer, and we say, Well, I'm just getting started. Where is that greatest need? You should think about where someone else can do a job better than you, and it's hard to give up these kinds of things, right? I mean, I remember when I started companies and there was no email you could tell the pulse of the business by opening up the mail every single day, and it was hard to let go of that. But pretty soon as John was saying, He's not allowed to work on certain things. So you have to give up that kind of stuff. The biggest hiring mistake people make and I love this graphic is that they consider themselves a player who here considers themselves in a player. Miyoko Urinate player. Raise your hand right where you guys are good at what you do, right, and if you're taking action, you're watching creativelive. You are one of those that are really good at what you do. But here's the problem. You have an A player and what is the A player? Do the eight players a tendency to hire a B player? And why is that? Because entrepreneurs, sometimes we got big egos, right, and we're a little nervous about hiring people that aren't as good as us. And so what is the B player do? The B player hires the seat player in the seat player hires a deep player and your company collapse. I was asked to help a corporation find out why they're sales. People weren't able to close deals, right? So what happened was I met with the CEO, hired me, and I met with each of the sales people, and they told me basically, what happened was every single time they tried to close the deal, the CEO would come in and sabotage the deal so he could come in and close it right. That's what happened. Well, I then told the CEO, and then what happened? He fired me, right? So you've got to make sure that this doesn't get in the way. You want to hire people that are complementary to you, right? For those who don't know, it's a complimentary angle. That's the connection. I know it's late the day, right. We want to hire people that are better at something than I am. That's really critical. So how do you hire people? The most important thing is to get referrals and give incentives to people that, you know people hang out with other people that are like them. So if you have an employee or an associate of freelancer, have them refer other people to you. Now what's also really important people don't do this step, and so so critical is you've got a Google or Facebook, then there's so much information that's out there that you can find out not only what their true experience really is. But what did they act when everybody is looking, you'll know how they're going basically fit in the culture and nothing that's critical asked them for a credit check and a criminal check. You'll be surprised what you find in those areas. You also have to talk about money early. A lot of people go through this whole processing and they never talk about money, right? The other thing is, you gotta shut up and listen. We as small business owners and I'm guilty of this, we talk way too much, right? And then how do they ask you any questions? Have they really done their work? Now here's the key question. To really ask if you want to interview someone and find out if they're for real. Key question is tell me about a time when a lot of us can talk in generalities. But if we asked people to mention a specific experience, let's say you're hiring for a sales position, for you might say, telling about a time when you're able to land a big account, you want them to mention one single incident or tell me a time when you resolve the conflict with other employees? Tell me about a time when you beat the competition, have them come up with a particular examples. Now here's another mistake that folks make. Do you hire based on attitude? Would you hire based on skills? I will tell you that most people hire based on skills they don't pay the higher based on attitude. Why is it important to hire based on attitude instead of skills? Skills can be learned. Attitude is really tough. I mean, if you ever in this situation, we sell well, someone's It would be a great employee, but they really need an attitude adjustment. That's tough, right? But you can always teach them the skills. And there's a lot of early warning signs when you hire someone that it's not gonna work out from attitude standpoint. Now, Um, I was a big watcher of lost in space than any of you guys. Watch that lost in space. Right, Sally? So here's a Here's a test for you, Sally. Lost in space. All right, now, now, in the chat room, I don't want you to give her the answer. Okay, so this is really important. OK? What What was the name of the robot in Lost in space? Born and grow Robinson. What was the name? Well, that's what they did. So do that salad. Can we get that? Here we go. Warning. We're about what was his name? No warning. I don't know. It was right about right Bodies? Yes. You got pretty early in day to get past Sally, I gotta tell you so. But there are a lot of early warning signs, like bad attitude, frequent job changes than ask any questions. Or quite honestly, if your expectations of this person saving your company is too high, they're never gonna be able match up to it. We all have saviors well on. People come in and on a white horse, right? The next part you guide trained them. And I remember my first cos I didn't train anybody. I haven't had them build their own desk, right, because I just wanted to come in hit, hit the ground running. But if you don't train them to master your system than how good are they really ever gonna be? As just like with everything else, systems are really critical. You've got to make sure they know how to really do that, because then you can measure based against that system. We talked about McDonald's, their systems, of course. The delicious, delicious burger. You could have systems in each one of the areas in your business, but after 28 days, you know, if that relationship with that employer freelancer vendor is gonna work out or it's not gonna work out, you know that. And why don't mention 28 days now. I know that it's different in California because, of course, the employment laws different in California than the rest of the world. But in many states, it's 28 days that you have to be employed somewhere before your response for that person's unemployment. I also believe that you know, within that first month, because I think that people, when they work within a unit, they really don't change. Ah, lot of us have a hard time firing people because we don't want to admit that we actually made a mistake. It's quite interesting, because is that's famous story of Zappos when actually and sent people to leave. Do you know that story, Chris. So what happens? Their kind offer them sort of an out if you worked there for a certain amount of time and you want to leave that give you a sort of like a bonus for leaving. You get paid to leave, right? You actually get paid to leave it. You don't want to work here. And I think that's works out really well, because I have to tell you, anybody that would take a $3000 bonus to leave probably is gonna be a pretty good, pretty good employees. And remember, if you have a employ that isn't effective, it is better than it's not better than it better have nobody, quite honestly, right. And so you're probably saving yourself money a long run. One of the biggest mistakes. As we build organizations in the Karen, I think you're gonna find this is when we start our business. This is what our organization chart looks like. Right is just the dot that's really all it is. So when I start, this is really what it is, right? Sorry. It's really just a dot right. And for those of you that can't see it, you want to blow up your screen. It looks like that That's the dot Right? And then when you start to hire people and Karen, let's how many people do have any organization? Three. You have three. Okay, so give us their first names. And what do they dio? Steven? He is our chief technical officer. Okay. And who does he work for? Freely Street. No. He works for you, right? Yes. Okay. Who else you have? Charlie, Charlie or Charlie? Charlie. Charlie. Okay, we're gonna get you with names today. Really? And he worked, and she she works for you. Yes. And this is very, very common, because what you do is and this is if you have two people, that makes sense, right? But what happens when you get more people? You get this kind of thing where you get the hub and spoke organization, and this is really on the next chart, where everybody really works for the founder. And the problem is, is that there's no leverage here that every single time that this person has to talk to this person, they've got to go through you and everything. All the important decisions go through you, and there's not a lot of leverage there. We've got to get to a point, or organizations where their arm or hierarchies now hierarchies don't just have to look like this. But Harvey's had can be this person and talk to this person and make a decision, this person, to talk to this person to make a decision. It all doesn't have to go through you. This is the single most difficult thing for small business owners to make because they feel imported, their ego gets in the way and they want everything to go through them. But there's not enough time for that really toe happen. So some of the management keys are. And again, this is management of all of resource is not just employees. There has to be clear management lines with no back channels. And what do I mean by that in an organization you'll have? Let's say you have Karen here. And then as she builds her organization, she's gonna have some managers here. Manners 12 and three, and then they're gonna have employees, right? And then, somewhere along the line, this employee here is going to get this satisfied with their manager. So where they gonna dio? They're gonna go talk Teoh, Karen right there and What Karen needs to do is carry needs to send it right back down to the manager and not have any conversation. This is really what's called back Channel now. What happens in a lot of organizations that have partners is this is that you have to partners, right? And you have a bunt. You have an organization down here and this employee talks to this partner doesn't like the answer they get and then they talk to this partner. What does that seem like Mom and Dad? Exactly. Arena is that if you don't like the answer you get from Mom, you go to Dad and you've got to make sure that you manage these kinds of things appropriately. The other thing is, we have to understand that quarterly and annual performance reviews are really a thing of the past. You have to give people feedback, and this is important when we talk to Shamma, especially gen wires are looking for feedback on a consistent and ongoing basis. Right? That and the only way you gonna do that's really walk around, get to know those people, and sometimes you can do that. And if they're virtually, you gotta figure out another way to do that. That's of critical importance. So really, really, you have to remember that people respect what you inspect. People respect what you inspect. If you don't inspect what's going on, people aren't going to do it. So you have to make sure you have various metrics. Now, one of the things that people have the most problem with is firing people. You have to be slow to hire and quick to fire. Haven't have you ever fired folks? Yes. Talk about that for a second. Um, just had a part time worker who was also teaching a couple of very young students cues, very inexperienced himself, but teaching a couple of young students, but working wise, he would not necessarily come in. It wasn't It wasn't a cut and dry clock in. When you came in, it was okay. You can come in on Fridays and Saturdays at this sort of time frame, but occasionally we would say it's really slow. We don't need you today and so he wouldn't come in. But then it started to get where he would just text. So I'm going to go to Tahoe this weekend. I won't be in. It was like, Wait a minute, you don't get it doesn't work. So, you know, we kind of basically sit him down ago. I don't think this is really working out. And I think it be better if if if you just, you know, found another position somewhere else there. Many of us who don't fire people when they should get fired, right? This is this famous Ross Perot saying is that there's a giant sucking sound right coming from the economy. This is really coming started company. And they're the employees, the freelancers, the vendors that really aren't doing the job they're getting paid to do. And we have a hard time firing people. Because why, why we uncomfortable firing people? Because we think we messed up because we think we messed up, right? What we're gonna say, selling people like it's very hard to his heart. Someone, as you know, without remembering that they're also of it stressed there, people that they've got a family, right? You hire them. Maybe you made a mistake. But here's the issue. Most people inside your company or that you associate with they know they're not doing their job. So people say? Well, how do I know who I should fire? Well, I have a method called the cringe factor. All right? And this is the way the cringe factor goes. All right, So, clo, everyone close your eyes. I want everyone out there close, allies, unless you're driving. OK, then don't close your eyes. Right. Close your eyes. Think of one employee freelancer vendor that you really should should fire. Okay, think about that right now. Think about if that person got hit by a bus, would you miss them? Now? If your answer is you would hire the bus driver. You have your answer there, right? Or think of another one. When you go to pay that person at the end of the month, we have to pay their invoice If you cringe when you sign the check or hit the enter button to send it And thats another person that you should fire. Let go. You open your eyes. Now we all have those kinds of people our lives that we shouldn't really be working with. So I want each of you to make a commitment toe one person that you're no longer the subject yourself or is not gonna be inside your company or really is not doing their job because the longer you wait, they are taking money really out of your pocket.