Thoughts About Life And Business On My 41st Birthday

Aaron Hoos

41. Wow.

My “forties” seemed so far away when I was a kid. Looking back from today’s perspective, life has raced by in a flash.

Don’t worry; this isn’t a blog post where I bemoan getting older or I get all introspective or whatever. I’m actually going to talk about something else: growth, evolution, and change.

MY PERSONAL DEFINITION

It starts when I was a kid: For as long as I can remember, I wanted to be a writer. Other kids wanted to be astronauts or firefighters, I wanted to write.

Every chance I’d get, I’d write. My family and teachers humored encouraged me with it, which I suspect is probably how most kids develop skills in anything. For example, whenever my family played Scrabble, we’d write down all the words played during the game and then I would go write a story with all of those words in it. And a high school teacher let me skip all of those little English writing assignments if I wrote a book by the end of the year (I did). There are many other examples, too.

As I got older, though, the reality of what I could do to earn a living as a writer started to come into question. Book authoring was (and still can be) a who-you-know industry; and journalism wasn’t for me (I tried it and felt like an ambulance chaser). Copywriting wasn’t even something I realized existed (which is probably my biggest regret — that I didn’t start studying copywriting until well after college).

I pursued a different career in college before realizing that I would die if I didn’t write for a living. So, right after college, I started my first business. (I won’t bore you with the details here… you can read about it in my blog post Aaron Hoos — More Than You Need To Know Plus 8 Random Facts About Me.)

Anyway, my point is, I only ever wanted to be a writer. I worked my ass off and I am proudly living my life-long dream today.

All has been good since I started writing full time. Sure, there were some lean years early on but I’ve built enough skill and reputation that things have been pretty good.

But things have taken an unexpected turn lately, in a way I couldn’t have predicted: business has been REALLY good. Almost too good. So good, actually, that it’s a problem.

THE PROBLEM OF GROWTH

For years, my business grew steadily and predictably. But in 2013, after I made some tweaks to my branding and services and my prices and my target market, BOOM — my business started growing exponentially. This year it hit a point where it was too big.

I should have seen the signs throughout 2015 but by December 2015 I had SO much work, regardless of my higher rates, that I was turning away many people. And it was starting to impact my clients, too. At the beginning of 2016, 3 of my biggest clients each came to me and offered to put me on 100% retainer — essentially “buying” 100% of my time. And when I turned them down, they all suggested I think about expanding my business by hiring junior writers because they had so much work to send me and I couldn’t keep up.

And here’s where the problem lies…

… there is a cluster of mental obstacles that prevented me from hiring other writers to do my work:

  • I’ve hired an occasional writer from time to time and was never truly happy with the results.
  • In a previous business I was a manager in charge of a team and I didn’t love it, and later I was an editor-in-chief of a magazine and didn’t love that experience either.
  • I’m a very fast writer with specialized knowledge of my industry, so in the time it would take me to assign a project and then edit it afterward, I could have written the content myself.
  • Perhaps the biggest challenge: I’ve always defined myself as a writer… the person who sits at a keyboard and creates copy… I was afraid I’d be giving that up to become an editor (and editing other peoples’ work is a task I don’t love doing).

These were hurdles. I could ignore them for a long time (years) because it never really impacted me or my clients.

But starting in December, and growing in intensity in the first quarter of this year, I’ve had to make a change; I was my own bottleneck and it was well beyond the crisis point. I may define myself as a writer but I have clients and they need to be served so I’m rethinking how I run and grow my business.

AM I STILL A WRITER?

I’m building a team. I’ll continue to do what I do (writing, consulting, etc.) but I’ll be rearranging my business to work on some of the higher level stuff (and the higher-end copy and consulting) while the smaller stuff gets handed off to a team member. In fact, as I write this, I’ve hired 2 writers and have a short list of 2 more that I will likely hire shortly.

It’s not going to be easy because I’ve spent nearly 41 years defining myself as a writer and right now it feels like I’m giving that part up. (Okay, I’m sure I’m not fully “giving that part up” but it kind of feels that way right now.)

On the other hand, ever since I made the mental shift to grow my business in this way, and I started reaching out to other writers to hire them, I am thrilled by new opportunities that have presented themselves to grow my business in ways I wasn’t thinking about before. I have a number of new ventures that have come to the forefront in the past couple of days because of this, plus I also see the possibility of maybe being able to take a well-earned vacation (sometimes I probably should do more of but always resisted in the past).

I’m a little scared because last year at this time it certainly wasn’t where I expected to be in a year. On the other hand, we have to keep changing and growing and this could very well be the next step in my evolution.

I don’t fear change; I love it. But I also want to find a way to remain aligned with my goals and vision for my life and I’m embarking on the next step of a venture in which the path is less clear and the risk of misalignment feels very high. But I’m taking the step anyway.

Related Post: 37 Lessons About Business On My 37th Birthday

There are only 3 ways to grow your business

Every entrepreneur wants to grow their business and they drink from the deep well of marketing and sales advice to help them. But let’s get one thing clear: All of those marketing- and sales-related tips and ideas and techniques and tricks can contribute to business growth, but there are really only 3 ways that your business can actually grow.

Here they are, in no particular order:

  • Replicate your sales funnel: This can be achieved by (1) hiring employees and managing them, (2) franchising your business, or (3) creating an affiliate program. Financial and real estate businesses may find that the first choice (hiring people to help support your practice) is the easiest and clearest option. The other two choices aren’t unheard of in financial and real estate businesses but can be a little more complicated in these highly regulated industries.

  • Create passive income: This is achieved by creating products (instead of services) that people can buy and receive without any ongoing effort from you. (An ebook is a classic example of this business model). For some ways to help figure out how to turn your active, time-intensive business into a passive one, check out How to be a lazy serial entrepreneur (part 1) and How to be a lazy serial entrepreneur (part 2).

  • Increase some aspect of the purchase: This can be achieved by increasing (1) the number of customers who buy from you at any given time, (2) how much volume you sell per customer, or (3) how much money you earn from each customer. These options are pretty straightforward to implement but their true success can be limited by some factors (such as the amount of time you have in a day to spend with each customer). For ideas on achieving all three methods of increasing some aspect of the purchase, check out this blog post on how to find the best customers in your sales funnel and earn more profit from them.

So, which should you choose? There’s no reason why you can’t select all three options and continually work at implementing them all, over time. But it also depends on who you are and how you like to operate. Each of these options requires something different from you. The first option — replicating your sales funnel — requires some administrative and management skill. The second option — passive income — can be quite profitable but requires a (sometimes considerable) up-front investment of time and money. The third option — increasing some aspect of the purchase — is probably the easiest and fastest to implement but its effects can be dampened by the time you have and whatever the market can bear.

Start by working on whichever option is easiest for you to implement based on who you are and what strengths you have. Then build off of those wins and select another option to grow some more.

Over the next few days, I’ll blog about some additional ideas and tips to help you work through each of these three options.

‘Business Meta-Map’ at MindMeister.com

I was browsing through MindMeister.com’s mindmaps recently and noticed that there were a lot of great maps (especially for small business owners) but there was little order to them. You sometimes really have to search for them!

So I created a meta-map — a mindmap that links out to many maps and provides a sort of taxonomy so business owners can find the information they’re looking for.

Here’s the map:

Or click here to view the Business Meta-Map: The Best Business Mindmaps at MindMeister.com.

The innovation gap between small businesses and big businesses

In a Harvard Business Review blog post, Ron Ashkenas asked the question “Can a Big Company Innovate Like a Start-up?”.

At the time the post was written (a month ago), Google’s Eric Schmidt was stepping down as CEO and Google’s co-founder Larry Page was taking the role instead. Based on the official statements that followed, it became clear that Google was trying to get back to a place of nimble innovation that it once occupied.

On the HBR blog, Ashkenas wondered if it was possible for large companies to achieve the fast, bleeding-edge innovation that start-ups are more commonly known for. And he correctly points out that employees of big businesses probably don’t innovate as often because they have a different set of risk/reward measurements.

WHY SMALL BUSINESSES INNOVATE MORE SUCCESSFULLY THAN BIG BUSINESSES
I see this all the time in the companies of my own clients: The small business entrepreneurs and start-ups are passionate about the business and totally bought-in to the opportunities that exist through innovation. On the other hand, the big business employees are more focused on success in their own specific functions, and in job security, and the CEOs of these companies are often insulated from the innovative side of the business.

As companies grow, they become risk-averse, partly because their employees are no longer bought in to the company in the same way that the early start-up employees were. I’ve been part of start-ups and we were willing to work around-the-clock for next-to-nothing to see the company succeed. There was something thrilling about being part of that creation process. I’ve also been part of big, entrenched companies, and that just doesn’t exist.

Big companies also become risk-averse because their brand has much more equity, and a wound from negative press can cut deeply. Compare that to the start-up that has a brand but very little brand equity. They can make mistakes and they know they’ll get over those bumps.

In the HBR blog post, Ashkenas offers three pieces of advice for big businesses that want to innovate like small businesses: He says they should (1) Set up a venture group, (2) Carve off skunk-works, and (3) Hold innovation contests. (You can read the blog post here: Can a Big Company Innovate Like a Start-up?.)

ADDITIONAL OPPORTUNITIES FOR BIG BUSINESS TO INNOVATE LIKE A SMALL BUSINESS
I think those are great ideas but I also think that big businesses can do so much more: It starts with revising the corporate culture so that all employees are motivated to see the company as a whole succeed but are also willing to accept risk to a greater degree. To make this cultural change, HR’s hiring processes and payroll metrics will need to change. In other words, don’t hire “lifers” who want a salary; hire aggressive entrepreneurs who would prefer to shine while also enjoying a greater degree of control over their remuneration. (I’ve seen this work very successfully in a multi-billion dollar organization).

Another opportunity where big businesses can change is in decision-making. In many of my big-business clients’ hierarchies, decisions rest at the managerial level and the worker-bees end up focusing on job security because they don’t have the authority to take action on innovation opportunities. Grass-roots innovation (the best kind of innovation!) can take place when people have the authority to act quickly.

Which leads me to my next idea: Big businesses need to define innovation appropriately: We tend to think of innovation at the product/service level. However, innovation opportunities exist everywhere. If a front-line staffer discovers a faster way to do their job, they can save the company a small amount of money. But if that innovation is shared among other front-line staff, the company can enjoy larger savings. And that’s just one example. Businesses can innovate in their processes, in their sales funnel, in their technology, and so much more. People will naturally innovate to find ways to make their jobs better; a large organization just needs to pay attention to what its staff is already doing.

Lastly, employees in big businesses are scared of innovating because it could risk their job security. (“What happens if the manager walks by and sees me doing my job this way? It accomplishes the same thing faster but it’s not how I’ve been told to do my job… AND my manager doesn’t have the patience or foresight to allow me to explain why I’m doing it this way”). What businesses need to do is create a framework for evaluating innovation successes and failures in order to empower employees to make changes without fear of reprisal (within reason, of course).

Big businesses can be innovative, and I think they can be as innovative as small businesses. Unfortunately, it requires such a massive cultural shift, I suspect it is next to impossible to achieve.

How to be a lazy serial entrepreneur (Part 1)

Starting businesses is fun. Growing them is also fun but it’s hard work too, especially if you want to grow them profitably.

One client of mine, who is a serial entrepreneur, has a handful of businesses in various stages of start-up and operation. But they were running out of time and money, worn ragged by demands of each business and unable to eke out growing profitability because they couldn’t focus on a single thing. Although I was initially focused on their sales funnel for two of their businesses (obviously), we ended up looking at the bigger picture of ALL of their business(es) to find ways to make them all more profitable.

Here’s a chart I put together to help my client analyze the demands of his time and attention on each new or existing business.

UNDERSTANDING THE TIME-AND-ATTENTION DEMANDS CHART
Across the top, the chart lists three key functions of the business: Administration, Marketing, and Deliverables. The three functions are divided up into 5 segments with “P” for passive on one side and “A” for active on the other. Down the left, are the businesses, business ideas, or projects/initiatives that are being analyzed.

For our purposes, let’s use the following broad definitions:

  • Administration includes the various “housekeeping” functions that keep a business running.
  • Marketing includes all of the sales and marketing efforts to move your contact through the sales funnel to the point of purchase.
  • Deliverables include the things a business does to provide the products or services it sells, such as manufacturing, assembling, shipping, analysis, etc.

(Yes, there are other ways to divide up the business but this provides a quick-and-dirty thumbnail sketch that is suitable for our purposes.)

An example of a passive business:
A business might be passive in the Administration section if everything is outsourced and automated. A business might be passive in the Marketing section if they have a lot of word-of-mouth marketing or advertising that is running without much input from them. A business might be passive in the Deliverable section if they sell digital content.

An example of an active business
A business might be active in the Administration section if it requires a lot of hands-on delegation and management. A business might be active in the Marketing section if they have a lot of social media marketing that requires constant participation and engagement. A business might be active in the Deliverable section if they provide services that require the full attention of the owner – like consulting, freelance writing, or graphic design

I’ve created the above 2 fake examples below:

Now that you know what the chart is about, it’s just a matter of figuring out where the time is being spent for YOUR business. (Or, in the case of business ideas, it’s just a matter of figuring out where the time is GOING to be spent).

These are just estimates to get a general idea of your time. This isn’t an exact science but it is still revealing. Think of each of the five “P” to “A” segments as something like:

ANALYZING THE TIME-AND-ATTENTION DEMANDS OF MY CLIENT’S BUSINESSES
First we drew the chart for his 8 businesses (actually, businesses 1-5 exist and businesses 6-8 are in progress). In the example below, I have removed the names of my client’s businesses and just numbered them.

Then we went through each business and figured out how much time he was spending on Administration, Marketing, and Deliverables.

Administratively, he’s getting his business in order by trying to consolidate and automate his administrative functions. Unfortunately, it’s his marketing and deliverables that are killing him. He’s marketing almost all of these as separate brands with little cross-over or overlap. That means 8 different identities on Twitter, 8 different Facebook pages, 8 different identities in other marketing channels. And on the deliverable side, he’s spending A LOT of time delivering his services, with each business demanding his full attention to provide paid services.

This amount of active administration, marketing, and deliverables might be fine for a business that employs several people or is able to outsource more, but my client is an entrepreneur with some outsourced administration, but he loves to market his businesses himself, and it’s his expertise that is being hired. That means a lot of HIS time in marketing and deliverables.

I’ve highlighted the two key problem areas – he’s spending so much time trying to market and deliver services for 8 different brands.

No wonder he’s feel like he’s running around, and no wonder his profitability is suffering!

Of course, this time-spent is only one side of the equation. Cash flow and profitability should also be taken into account. Businesses that provide more cash flow or profitability to the business owner should be allowed to take more time and attention than those that do not.

So, here’s what we did to solve it this serial entrepreneur’s problem:

Businesses 1 and 2 provide the most cash flow and profitability. Those ones are going to be the key. We also determined that Business 4 could have a positive impact on cash flow and profitability in the near future.

Our goal there was to find ways to reduce the active demands of Administration and Marketing. (You can see our results where I’ve grayed out the previous demand and put the new one in blue. It’s not always possible but it can be done.

Next, we explored some ideas about consolidation. Business 3 is closely linked to Business 2 so there was an opportunity to combine them together. Both Business 2 and Business 3 had a lot of deliverable demands, and my client was worried about losing the income, but since he didn’t have a lot of time to provide the deliverable anyway, we don’t think he’ll see a significant drop. I think he’ll actually see an increase income because he can focus. Business 8 could also be consolidated into the Business 7 brand.

Then, we had a brainstorming session to explore how his new businesses should be focused more on passive administration and passive deliverables. And even if they required some initially active marketing in the beginning, the goal should be in the near-term to make the marketing as passive as possible, too.

The result? My client has gone from 8 businesses that were requiring a lot of his time to 6 businesses that are requiring moderate amounts of his time. This is not a perfect picture but it’s a step in the right direction.

The goal for every business is to move toward the passive side of each of these business functions. That doesn’t necessarily mean that the perfect business requires NO effort for administration, marketing, and deliverables, but rather that these are managed in a way that take less and less time and attention with the goal of providing greater profitability.

Tomorrow, I’ll give some ideas about how your business can increase the “passivity” of each of these three business functions.