Build a profitable business- the baby steps part 8

It´s about time we took a moment to discuss the importance of time for the hardworking entrepreneur. So in this part of our guide, “Build a profitable business- the baby steps part 8″, we are going to provide you with some advice reagrding how to make the most out of your day, and how to manage your time in the most efficient manner possible.

When you start out you are probably as semi-effective in terms of time. The upside is that most new entrepreneurs are super-motivated and aren´t afraid to dig in. The downside is that they usually spend a lot of time doing the wrong things in terms of what´s best for their business. Many entrepreneurs that are just starting out tend to confuse doing a lot of work, with building a profitable business, of course this is only true to a certain degree. We could tell you about quite a few entrepreneurs that have immersed themselves into plenty of work, only to find themselves out of business after a short period of time. The reason: they worked long hours and were always busy doing something, but the things they were doing had little value for their business. In some cases, the things they did were of no value whatsoever to their chances of success. That is actually quite uncommon. The most common mishandling of time is to consume to much time on trivial matters that add but little value to your bottom line.

There is a solution to this dilemma. And since we are kind spirits we would like to share some practical advice regarding how we are coping with the situation. We all have different solutions to the problem but we found some common denominators that we believe are a good start. It´s not exactly rocket science. But if you follow these practical advice, your bottom line will be in way better shape than if you employ a shoot from the hip approach:

1. To-Do list. We guess most of you are already using a to-do list. Good. Just because something is mainstream doesn´t mean it´s no good. We too use to-do lists. But we think we use them in slightly different ways than most other folks. First of all we are quite restrictive as to what gets to land on those pages. We know people who have never-ending lists of things to do at any one time. It seems that a simple 5-minute discussion with those people result in 10 new bullets they need to get done. And we have also noticed that many of these people like the fact that they have tons of things they are supposed to get done. They like meetings (if you haven´t figured it out yet most of us hate meetings, unless they are very short, to the point and deal with something specific- preferably somebody writing us a check) and they like to spend time reading and improving their to-do lists. We each spend less than 10 minutes on our lists. Personally I do it in less than two minutes. I update it throughout the day once or twice, but that takes a minimum of time.

2. Evaluate. You might have noticed that we are all restrictive as to what eventually ends up on our list. That´s because we know the importance of being in motion as an entrepreneur. And you can´t really be in motion if you have too many things nailing you down, holding you back. On any given day we could probably write a book regarding the things we feel need to be done on each of our enterprises. Naturally, that isn´t an option. Everything that could potentially be on our to-do list doesn´t deserve to be listed there. In general you want to decide what is most important. Take mer for example.  Typically, I have a list of 30 things on my list on any given day. Out of those 30 things I usually pick 5-10 that I want to focus on. Out of those 5-10 things 1 or 2 are daily recurring activities that bring major value to my enterprises. After I´ve done that I will give everything I´ve got to accomplish the things I have on my list. I will not allow myself to back down. Sometimes everything runs smoothly and I´m done by noon. Other times I will work all day and all night long. But I want those things on my list done. No matter what.

3. Prioritize. This is probabably the step which most new entrepreneurs fail at miserably. Most uf us did anyway. And that´s understandably so. There are so many things you want to do and there just seems to be so little time. Most of us simply tried to get as many things of our lists as possible. Some days we didn´t go by the list at all. We just made sure we worked. A lot. While the results did materialize, we realize today that we could have accomplished a lot more in less time, had we just been aware of your fawlty strategy. Today the number of our items on our lists are typically less, but we make sure each item adds value. Lots of value. What we look for these days is things that increase the cash flow of our company, increase the balance sheet value of our company, gives us the best possible pay-off for the least amount of time and effort.

Aside from these characteristics, we also consider what type of value-adding tasks we wish to focus on, shorter-term value or longer-termvalue. This depends largely on where we are in the life-cycle of the company, where we are in terms of our own financial status, and what we are trying to achieve. In general, if it´s a new enterprise and you arejust starting out as an entrepreneur you should go for things that provide short-term value. Another way to put this is that you should try to get that cash flow flowing. There will be time to build up your balance sheet asset column later on. Basically what this means is that selling should be your core focus in the beginning. Selling before strategic marketing. Selling before product development. Selling before brand management. If you only manage to move some stuff off the shelves and out the door, you have plenty of options and time to figure out the rest of the stuff later on. As you and your company grow older you begin to realize that truly good things take time. And that´s the perfect time to start perfecting some of the longer-term value adding activities. things like education, exceptional customer care, a more complex web page with additional features, and other types of longer-term investments.

4. Reward yourself. Each day as I check the things that I need to get done I feel a deep sense of accomplishment. Also, I know that once I´ve done all the things on my to-do list I get to reward myself. Each day that reward may look different, but it is important it´s there. In general I tend to work harder and with more focus if I have something to look forward to once I´ve completed all my tasks. Besides these daily goals I use some longer-term ones. Each month that goes by that I conclude all my tasks I reward myself. It may sound peculiar, but it works for me, and I wouldn´t have it any other way. Determine what msut be done. Do it. Then give yourself a nice pat on the back. Not exactly rocket science. But who said it needs to be complicated?

5. Rebalance. As time passes by you want to start rebalancing your efforts. During the first year or so, you should be thinking mostly about keeping your cash flow in good shape. After a while you should start to rebalance your time to include items of a longer-term nature on your to-do list. We would advice you to include at least 20% longer-term activities on your to-do list after a while. While shorter-term efforts are paramount in order to get things going, longer-term activities is what will keep things going. And by paying attention to the longer-term, you are really building the foundation for your business. The trick is to time the switch from shorter-term efforts to longer-term efforts in order to maximize the value of your business. We feel strongly about longer-term efforts. Our advice is clear. Focus on shorter-term activities until you get the wheels rolling. As soon as they are in motion start adding longer-term exercises to your daily routines. Start out small and then keep adding to them. After a while we feel a 50-50 split is probably a good place to be. That way you make sure your solid cash flow is backed up by some promising assets in your balance sheet. As time passes by, you will come to recognize the value of thinking longer-term. In fact, paradoxically enough, we have found that some of our best short-term profits have come from moves that were intended as longer-term in nature.

That concludes our discussion on time. We will now move on to, “Build a profitable business- the baby steps part 9″, where we will explore the challenges of being an entrepreneur even further. Come along!