Making a million dollars

It’s easy to make a million dollars on paper. I’ve done it a bunch of times. All you need is a spreadsheet and a good imagination. On the surface, this may sound silly. It may sound like a complete waste of time and a trip into fantasy land.

But the truth is, making a million on paper is not a waste of time. In fact, it is a crucial part of making a million in reality.

Any long-term endeavor requires a plan. It requires an identification of the goal and the specific steps required to achieve that goal. And for any plan to be effective, it must be in writing—it must be on paper.

Without a plan, life is like—as Forrest Gump would say—a box of chocolates. You never know what you will get. Without a plan you leave your business at the mercy of whatever happens. Without a plan you are simply wandering aimlessly, taking whatever action seems expedient at the moment.

So, making a million on paper is actually an important step. This doesn’t mean that we should engage in wishful thinking or idle pipe dreams. Our plan must be reasonable, carefully calculated, and then implemented. Without action a plan is useless.

Whatever your goal, you should develop a plan for its achievement. If you can’t do it on paper, you probably can’t do it in reality. If you can’t envision what you want and how you will get it, you will ultimately get whatever happens your way. A plan is a road map for your business.

Making a million on paper is not only an important part of planning, it’s also a lot of fun.

Enlisting employees in changing your small business

Employees are often unwilling to embrace new ideas. This presents a challenge to the owner who wishes to improve his small business. If employees will not make changes in their behavior, improvements are very difficult.

The key to overcoming fear of change is to create an incentive for employees. While money is not the only incentive, it is usually a powerful motivator. If the desired changes will result in increased profits, a bonus system to share those additional profits with employees can help them overcome their fears.

Enlisting employees in the entire process is perhaps the most effective measure that an owner can take. When an owner acts like a benevolent dictator and imposes change on the employees, they often resist. However, if the employees are involved in the process of identifying and planning the needed changes, they are much more likely to “buy in”.

Involving employees can begin by simply asking them what improvements they would like to see. This will do several things: you will be seen as more approachable and caring, employees will feel more appreciated, and you will create a more team like atmosphere.

Owners typically embrace change much more readily than employees. Consequently, the owner must address the concerns and fears of his employees. He must help them see the benefits of new ideas. If he can make them willing participants the changes will be far more effective.

At the same time, he must set realistic expectations regarding the speed and extent of change. In this regard, slow but steady change is ultimately more effective than rapid change that is quickly abandoned.

Employees are a part of your team. If you want them to perform at their best, help them help you. If you work together, not only on the floor or in the factory, but in the “board room” as well they will be much more willing to help you build the business you want to own.

Self-interest and your small business

Mark Forster has an interesting post on acting in one’s self-interest. As he correctly points out, this is often taken to mean “do unto others, before they do unto you.” But as Mark explains:

In fact this is the very reverse of acting in one’s own best interests, since it can hardly be thought to be in anyone’s best interests to alienate other people so that they will not cooperate.

The results of confusing acting in one’s own best interests with a narrow mean-spiritedness are disastrous.

Business is a perfect example of this principle. We own a business with the goal of making a profit—we are pursuing our own self-interest. But we cannot achieve this if we charge outrageous rates, attempt to underpay employees and treat them poorly, cheat customers, and engage in other activities that might seem to have short-term “benefits.” The result of such actions is that we will have difficulty getting customers and keeping employees, which ultimately is not in our self-interest.

Acting in our self-interest means looking at the big picture and the long term implications of our actions.  A classic example is a college student who faces a choice between studying for an important exam or going out with his buddies. Hitting the town for a night of partying can certainly seem appealing, but if he fails the exam it would harm his grades and could ultimately impact his career.

In business we must often choose between the short-term and the long-term. If we want to truly act in our self-interest–to achieve our long-term goals–then we must recognize when the two might conflict. And we must act accordingly.

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