Category Archives: Business Management

Protect Intellectual Property Before You Start-up

Entrepreneurs must understand the different types of intellectual property and how to protect each type. Entrepreneurs should then take action to protect their intellectual property as soon as possible – before launch is best.

Protectable intellectual property includes patents, trademarks, copyrights, and trade secrets.  Each of these categories protects a different aspect of your ideas. In this article, I will only discuss how to protect your intellectual property in the United States.  The laws and schemes of other jurisdictions will vary.

Patents protect useful inventions that solve a specific technological problem. In return for disclosing your solution to that problem (the solution may be a product or a process), you are granted exclusive rights to exploit the invention for a period.  After the patent expires, anyone can use the invention.

Trademarks protect the brand names, logos, and slogans you use to sell your product. A trademark grants you the exclusive use of the name, logo or slogan you use, and permits you to stop anyone else from using a name, logo or slogan that is confusingly similar.

Copyrights protect your original artistic or literary works. Like patents, the copyright gives the author certain exclusive rights to use or exploit the copyrighted work for a period.

Trade Secrets are business information, processes, practices, formulas and the like that a business owner has chosen not to patent and that the business owner seeks to protect by limiting access to them.  Trade Secrets are secret as long as you can protect them.  Business owners use laws like the Uniform Trade Secrets Act (in most US States) to help them protect their trade secrets.

Entrepreneurs should take the time – up front – to determine what intellectual property they have and to protect that intellectual property.

For inventors, patent registration is imperative. Not only must your invention be novel and useful, but also you cannot patent an invention once it has been publicly disclosed.  Therefore, patenting your product or process is not something that can be put off until later. You apply to register your patent at the United States Patent and Trademark Office. Before you register, you or your patent attorney must conduct a thorough patent search. You may also need professional drawings and detailed specifications.  Patents are by far the most complex of the intellectual property schemes, and there are many options, including provisional patents, utility patents, design patents and plant patents.  Unless you have considerable patent experience, you should get a patent attorney to help you with this process.

Trademark registration should be thought of as a mandatory, basic expense for almost any small business.  You are going to be putting a great deal of time and money into growing your business’s name recognition in the marketplace. It always hurts when you have finally gotten some traction, and you get that nasty letter from some trademark attorney telling you to “cease and desist” infringing on their client’s trademark. At a minimum, you will be changing your name, possibly your logo, and losing all the traction you have gained in the marketplace. The fact that a state had allowed you to use a name when you formed your business does not give you a trademark.  The fact that you were able to buy the ‘.com’ of the name does not give you a trademark.  In either case, the trademark owner can come along later and make you change the name or give up the web address.  Trademarks are obtained by filing a trademark application online at the United States Patent and Trademark Office.  As with a patent, you or your attorney should conduct a thorough search first, and you may need a professional drawing if you’re trademarking a logo. You may be able to make it through trademark registration without an attorney, but an attorney who knows trademark procedure and has registered trademarks will be money well spent.

Copyrights are the easiest protection to do yourself. The forms are relatively simple, and if you are a person who can follow detailed instructions carefully, you can do it.  One registers a copyright at the United States Copyright Office – a department of the Library of Congress.  There are at least five different type of copyrights (literary, visual art, performing art, sound and serial). Sometimes, this can get a little confusing (a computer program is a ‘literary work’, for example), and a good copyright attorney can be useful.  This is especially the case because there are often sticky issues of ownership, rights, licensure, etc. that surround a copyright.  These issues create a fertile source of small business litigation – better get this right the first time.

A small business protects trade secrets by keeping the information confidential, by identifying what information you consider as secret (marking any document it appears in is a good way) and by including trade secret protection language in your employment agreements, your employee handbook, or your job offer letters, as the case may be.  Trade secret law is local – each US State is different – unlike patent, trademark and copyright law, which is federal and the same in each state.  Your business attorney should be familiar with your state’s particular trade secret law and how to best protect you.

Intellectual property gives your business value, and a well curated portfolio of intellectual property will impress potential buyers and make exit easier and more profitable.  Protecting your intellectual property will also enable you to get full value from your thoughts and ideas, realize the benefits of your marketing efforts, and protect your investment from dead ends like infringement.  The wise entrepreneur protects intellectual property up front, budgeted as a start-up cost, and does not put intellectual property protection off until later.

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Create Business Value Now – For a Successful Exit Later

Entrepreneurs create and grow businesses. Eventually, most will want to exit that business, at least partially. Perhaps your dream is to sell your company to a third-party. Perhaps you want to be able to sell the company to a key employee, or even to have your children buy the company from you. Perhaps you just want partners to buy in and take some of the burden off your hands. Unless your goal is just to shut the company down when you’re done, or to give the business to your children without taking any significant cash out for yourself, you will want your company to have value.

Companies don’t just intrinsically have value.

You have to work intentionally to create value.

Creating value is not something that happens overnight. Creating real value in your business takes time – a few years at least – and to be successful you need to understand what factors prospective buyers or investors and their professional advisers (especially their lenders) will be looking at to determine your company’s worth (let’s just call all of them ‘buyers’ for the rest of this article).  The first thing you should note is, when these buyers start looking at your company’s financial and legal information, they are not going to look just at the present year and your projections. The buyers are going to be looking at historical data – 3-5 years at a minimum – and they are looking for trends and for evidence you have done something to artificially improve the company’s financial picture just before the sale. The buyers will look at historical data because it is harder to fake several years.

As an entrepreneur who wants to realize value for your business, then, it is imperative that you start building value early. In any case several years before you think you will want to sell your company or otherwise get some of that value (my friend Brad Cunningham calls it ‘taking some of your chips off the table’. Brad, in addition to being a successful serial entrepreneur, is a poker player).

Here, then, are my top ten ways for entrepreneurs to begin to create that business value now:

  1. Show a Profit. Your tax adviser will disagree, but this is the most common mistake entrepreneurs make. Small business owners reduce their annual profit to zero every year and are shocked when they are told their company isn’t worth anything.
  2. Focus on Revenues. It isn’t all about the bottom line – the top line matters as well. Buyers will want to see consistent gross revenue increase over time. You can’t get comfortable – if you want to sell eventually, you must continually grow those revenues.
  3. Maintain Good Corporate Records. Whether you will eventually sell assets or your company as whole the buyer will be buying from your entity. Most likely, you own either a limited liability company or a corporation. Make sure you have all your corporate records in good shape early.
  4. Protect Intellectual Property. All businesses have intellectual property, even if it’s just a trademark for their name or slogan. You may also have copyrights or patents. Act early to actually file for formal registration of all your intellectual property.
  5. Keep Contracts up to Date. Most businesses will start with some contractual relationships – with suppliers or vendors or customers or landlords or tenants or contractors or employees or even with owners. Someone in your organization needs to have all of your contracts organized, available and kept up to date, and make sure they are renewed when they expire.
  6. Attract and Retain Good Employees. Companies don’t make things, sell things or perform services – people do. If you want your business to have value, it must have good people. Nothing will sour a deal faster than the buyer getting the feeling that employees are unhappy, disgruntled or unproductive. Treat your rank and file well and make sure key employees are not only happy and well compensated but also that you have protected the business with reasonable employment agreements.
  7. Identify Customers. In some businesses, this one is easy – you may have only a few large customers. Often, though, you may have many customers, hundreds or even thousands. A buyer is going to want information on your customer base and buying habits. You should take steps to identify customers, track their spending and habits, and nurture relationships with key customers if you want to build value.
  8. Professionalize Management. There comes a point in the life-cycle of the start-up where the founder (or founders) cannot do it all anymore. You must make the transition from entrepreneur to CEO, and hire some key employees to take over key management tasks. You go from doing it all to managing those who do it. This can be a tough transition, but to realize significant value from your business, it is a transition you need to make.
  9. Replace Yourself. The last step of professionalizing your management is to make the final transition from CEO to owner. You may not take this final step before you sell, but you should be prepared to. If you can demonstrate to a third-party buyer that you have a successor CEO already trained and in your business, you open the door to potential buyers that want to buy a company, but not a job. If you are selling to a key employee, you need to be able to show that employee’s bankers or backers that he is up to the task of filling your shoes. If you can’t do this, be prepared for a buyer to demand that you stick around after the sale as an employee – exactly what you became an entrepreneur to avoid in the first place.
  10. Know Why You’re Leaving. I learned this last one from Brad Cunningham, who has successfully grown and sold several businesses. Brad says he is always asked why he is selling and getting out, and that his answer is important. The buyer wants to know you’re not a rat jumping off a sinking ship – especially if you are selling before you’re over 65. Being clear on this answer will also help you deal with the almost inevitable post-deal blues.

Tie Your Knot With Care – 5 Areas You Must Discuss Before Partnering

Entrepreneurial partnerships can be hard. If you have ever been in one, you know. I wrote earlier about the origin of the Company and the reasons to choose your business companions carefully. Choosing the right companion, or partner, is only the beginning. If you want to maximize the chances of your business partnership thriving and succeeding, you have to begin to talk early on about some really important issues. Here are my top five areas prospective business partners need to discuss and agree on:

The Exit Strategy. It may seem odd to put last things first, but it is hard to have a successful journey together if you haven’t agreed on where you are headed. Solo entrepreneurs need to know their intended exit as well – it will help them make consistent decisions that uniformly move the company toward the intended goal – but for partners it is imperative. Many of the decisions you will make together as you go forward, about raising capital, salaries, employees, loans, expansion, dividends, accounting, capital investment, all will impact the viability of the exit. Know where you’re headed together and you reduce the number of fights over these issues dramatically.

The Governance Model. Agree up front on how hard decisions will be made. Early on, there is likely to be a lot of agreement.  Everyone is excited and getting along. Do not fool yourself – there will be times ahead where you do not all agree. How will you make decisions when you do not all agree.  There are several viable decision making models – and a good business attorney, business consultant, or mentor can guide you through the choices – but you should agree on a model up front, while everyone is getting along.

Pro Tip: You must make sure your legal governance document (Bylaws and perhaps a Shareholder Management Agreement for a corporation, an Operating Agreement for a limited liability company, a Partnership Agreement for a true partnership) reflect the governance model you have chosen.  Too often attorneys simply draft a boilerplate agreement and the voting and duties provisions in that agreement do not match what the partners are actually doing. This can be a very expensive mistake. Take the time to go through the governance documents, all together, with your attorney, and make him put those provisions in plain English you all understand.

Adding Partners. Will the initial group of partners be the only permitted owners, or do you plan to expand? Can spouses or children become owners? Will key employees be offered ownership? If the answer to any of these questions is ‘yes’, or even ‘maybe’, you must agree now on a fair mechanism to handle these important events. What vote is required? How is the buy-in price determined? How are the votes redistributed (hint: you have to know your governance model before you can answer that question). Once the actual situation comes up, it will be nearly impossible to come up with a fair system, because each partner will have a stake in the outcome of that particular situation.  Better to put a system in place before a real world decision needs to be made, and then follow the system when the situation arises.

Caution: The decisions whether to allow spouses or children to receive, be transferred or inherit shares and become partners can be a difficult one. Partners who get along with each other may not get along with their partner’s spouse, or be impressed by their partners’ children. These discussions can be emotional and must be handled with care, but that is all the more reason to have them and have them before the issue arises. There are several ways to handle this issue – including allowing spouses or children to receive or inherit non-voting shares that allow them to benefit economically without participating in governing the company, but in those cases the non-voting partners’ rights to records and information must be carefully spelled out.

Capital. Agreements on capital is more complicated than just agreeing on how much money each partner must put into the business at the start. Small businesses must be flexible, and there are a variety of capital needs that may arise. You must be prepared for all of them. If the company needs more capital, for example, can the partners be forced to put in more money (a ‘capital call’, and what happens if a partner cannot, or will not, meet a capital call? Often, partners meeting a capital call can get extra voting and profit rights over those who fail to meet a capital call. Take care, however – in a partnership where some partners have significantly more personal financial resources than other partners, this can be used to squeeze partners out unfairly.  The mechanism for calling in capital and handling failure to meet capital calls must be carefully crafted based on the makeup of each particular partnership. Capital can also come from third parties – in the form of investors or lenders. These eventualities must be planned for.  If the company decides to raise capital by selling shares, will partners be permitted to buy shares themselves and increase their own voting and profits rights (so called “preemptive rights”).  If the company decides to raise money by borrowing, must partners agree up front that they will sign a personal guaranty (almost a given in a start-up) and is there a penalty if a partner does not sign a personal guaranty? Work these issues out up front.

Personal Exits. The only constant in this world is change. You may all agree on the exit strategy and you may all be committed to the company at its inception, but your plan must allow for that to change. Someone may want to leave. Maybe they are not happy. Maybe their spouse got a job in another city and they have to move. Maybe they die, or become disabled. Maybe they want to retire. Maybe they just want to go teach, or join the Peace Corps. Whatever. The more partners you have, the more likelihood someone wants out, or is forced out, before you expected. A good agreement covers these situations.  Know up front that these are probably the most emotional decisions that your partnership will face. It is critical to have a detailed plan for handling these situations. Is someone who is leaving allowed to sell their shares? To whom? Must they offer the shares to the company or the other partners first? Must they, instead, leave their capital in the business until a certain term expires (common in LLC’s)? If so, how is that to be handled? If the company is to buy back their interest, how is the price determined and how will the company pay for it – insurance? Over time, and on what terms? Will there be a non-compete? Do different exits trigger different terms? If you do not have an answer to these questions, you are likely to find that a Judge will be providing them for you. Expensively.

Bonus Tip: Intellectual Property. Does your partnership have intellectual property? Sure it does.  Trademarks. Copyrights. Patents. Most companies have at least some of these. More importantly, some companies – like tech companies – have copyrights or patents the author or inventor of which is one of the partners.  In this case, it is absolutely essential that the ownership and rights to the intellectual property be spelled out from the beginning. Some of the most titanic struggles I have seen have been between former partners who did not agree, clearly and in writing, up front, who would own the copyright on a software program or the patent on an invention. Decide up front. Get the help of a competent intellectual property attorney to formalize your decision properly. Save yourself a giant headache later.

These are not the only areas where agreement up front can help smooth the path for a potential business partnership. Partner time and duties, growth and expansion plans, partner compensation formulas, employee management issues, record keeping and record access, and competitive advantage are all areas where open and early discussion is merited. If you can discuss and agree on these five, though, you will be far ahead of the bulk of your contemporaries, and on your way to a successful partnership venture.

Breaking Bread Together – Choose Business Companions Wisely

Europe emerged slowly from the Dark Ages that followed the fall of the Roman Empire. Trade during that time virtually ceased. Growth was stagnant. Most people rarely traveled more than a few miles from where they were born.

As Europe revived, trade across regions began to blossom. Intrepid merchants traveled across Europe and returned home with new products. Locals began producing excess goods and selling them to merchants for trade. In the beginning, these new businesses – traders and producers – were family affairs. It was rare to have a business partner that was not a close family member.

Over time, however, businesses grew and the family was no longer able to produce all of the partners needed to make the enterprise run. The Company was created, and it became more common for non-family members to become owners of the enterprise.

The term company itself reveals the enterprise’s family origins. The word “company” is derived from the Latin “cum panis” – “with bread”. A member of a company is your “companion” – someone you share bread with. The new partners, not bound by ties of blood, were chosen very carefully, and became like family – permitted to take in the hospitality and protection of the home, symbolized by the sharing of bread.

Today most business enterprises are still owned by a single individual. In 2000, there were 27.2 million business tax returns filed with the Internal Revenue Service. Of those 27 million enterprises filing returns, 17.9 million – 66% – were sole proprietorships. Widely held, publicly traded firms made up less than one percent of enterprises. The remainder, about 32%, were closely held businesses owned jointly by a small group of people, often not in the same family. True companies.

There are many advantages to the company over the sole proprietorship. Companies allow entrepreneurs to get more done – spreading out the work of the firm among more owners. Companies allow for more entrepreneurial talent to be added to the firm, with each partner bringing a unique set of skills and perspectives to the group. Companies spread financial risk, with more partners to put in capital or guarantee loans. While many of these can be done by adding employees, an employee rarely has the loyalty and buy-in of a partner.

The family-owned businesses of the late middle ages found that non-family owners were needed to expand the business into new areas, and to access new talents. The same can be true today. Those early companies were careful about who they added, though. New partners became a part of the family, and were selected with great care. If you are an entrepreneur or professional operating a sole proprietorship or a family business, and you are thinking of offering ownership interests in your firm to non-family members, you should consider the wisdom of those earlier business pioneers, and take such a course of action cautiously.

Here is why:

1. Time. You are going to be spending a great deal of time with this person, and in a more intimate way that if they were your employee. You will be sharing more of your thoughts, hopes, dreams and finances with this person than with most any other. Make sure you like the person you are partnering with enough that you don’t seek to avoid spending this time with them – over time that will cause major problems in your business.

2. Privacy. Most people tend to be very private about certain things, like finances. Talking frankly about money can be hard inside a family, and can be harder with non-family members. As business partners, you will have to openly and frankly discuss the company’s money and how to spend or save it. You will also need to trust this person with some sensitive financial and personal information. If they have a history of business relationships gone bad, you will want to proceed with caution.

3. Control. Entrepreneurs are, quite often, control people. You became an entrepreneur because you wanted to be in control of your own destiny – to call the shots. Taking on a partner means losing some of that control. Make sure you are comfortable with some level of collegial decision making and that you are prepared not to get your way all the time.

4. Divorce. When spouses split, they go through a divorce. When business partners split, there is the business equivalent of a divorce. Like real divorces, they can be amicable, but they are never fun and quite often they end up acrimonious and in court, with lawyers.

Partnering has great advantages for a small business, and for many entrepreneurs it is an excellent way to grow. Solo entrepreneurs often reach a point where they just can’t do any more, and bringing in partners is often a preferred method of growth over professionalizing management too early. Choosing those partners wisely, and engaging in some frank up-front planning will help keep you and your new partners happily breaking bread together for years to come.

What is a Corporate Secretary, and Do I Need One?

A secretary is a “person entrusted with secrets”. The term came into use in the early 1400’s, and was used to describe a person who kept records and write letters for a king. In the late 1500’s, as parliaments took control of government from the kings, it began to be used as a title for ministers presiding over the executive departments of the state – such as our Secretary of State or of Defense.  The word itself comes from the from Medieval Latin secretarius, derived from the Latin secretum “a secret, a hidden thing”.  We derive our English word “secret” from the same latin root.

What is a Corporate Secretary?

A “Corporate Secretary” is an officer of a business corporation. All corporations are required to have at least three officers: a President, a Treasurer and a Secretary.

The primary responsibility of the Corporate Secretary is to ensure that Board members have the proper advice and resources for discharging their fiduciary duties to the shareholders. The Corporate Secretary is also responsible for ensuring that the minutes of each Board meeting reflect the proper exercise of those fiduciary duties.

The Corporate Secretary is also a confidante and resource to the Board and senior management, providing advice on board responsibilities and logistics. The Corporate Secretary is a senior, strategic-level corporate officer who plays a leading role in the company’s corporate governance.

What are the Corporate Secretary’s Specific Roles and Responsibilities?

  • Corporate Record Keeping: The Secretary maintains a current record of key corporate documents, including bylaws, meeting minutes and records of actions, shareholder records, records of required state corporation and regulatory filings, and key contracts;
  • Corporate Filings: The Secretary is responsible for ensuring the Corporation is current on state corporation law and regulatory filings;
  • Board and Shareholder Meetings: The Secretary manages all board and shareholder meeting logistics, ensures proper notices have been sent, attends and records the minutes of all board and shareholder meetings, advises the Board on its roles and responsibilities and facilitates the orientation of new Directors and assists in Director training and development;
  • Stock Records: The Secretary oversees the logistics of stock issuance and transfer, including the issuance and cancellation of share certificates and keeping the shareholder records up to date.

Do small businesses need a Corporate Secretary?

All corporations must have a corporate secretary.  Often, in small businesses, the attorney appoints one of the founders as Secretary and that person never knows what they are supposed to do or does any of it. Signs that a small business should have had an active corporate secretary is when the corporation is sued and cannot produce the required business records to show it was not merely the alter ego of its founders, or when a regulatory filing is not made, or when there is a lawsuit between the partners and the records are out of date and do not reflect the reality of how the company was governed.  In other words, the owners discover that they need a Corporate Secretary when it is too late and the oversight is expensive.

If the small business has shareholders that are not active employees or managers of the corporation, an active corporate secretary is imperative. If the small business is a business partnership that has more than one owner/manager, then having an active Corporate Secretary is imperative. If the small business is in an industry where there are numerous regulatory filings to track, such as the requirement to file annual reports in several states or to file annual or biannual licensing renewal, then having an active Corporate Secretary is imperative. The only corporation that can reasonably afford to do without an active Corporate Secretary is a solo entrepreneur operating in just one or two states in a business with few regulatory hassles.

What about LLC’s?

There is no required office of “Secretary” in a limited liability company, and LLCs generally have more relaxed record keeping and reporting requirements than corporations.  However, if your small business LLC has members who are not active in the business, or has multiple members, or  is in an industry where there are numerous regulatory filings to track, then it is a good idea to create a Company Secretary position.

Does the Secretary need to be full time?

The Secretary needs to be able to devote as much time to record keeping and governance as your company needs. Active Corporate Secretaries can also play key roles in staying abreast of and recommending new governance ‘best-practices’ to the management team and board, and can help the board keep their focus on long-term strategy rather than getting too focused on near term imperatives.  That being said, for many small businesses, Corporate Secretary is not a full time position. The solution is either to make one of your full time partners or employees also the Secretary, or to hire an outsourced Corporate Secretary. Should you decide to stay in-house, the key is to make sure the person selected has the knowledge and skills to do the job, and has the time to devote to it, so that the required record keeping is not overlooked while the person focuses on their primary responsibility.

Should our lawyer be our Corporate Secretary?

A legal background is not required to carry out the duties of the Corporate Secretary. The corporation’s attorneys are responsible for giving the company legal advice.  The Corporate Secretary is responsible for giving the company governance advice.  In fact, having a Corporate Secretary who also provides legal advice creates difficult questions about whether a particular communication made to management is legal advice – which may be subject to the attorney-client privilege – or general corporate/business advice, which is not.

The “dual hat” corporate secretary/lawyer must always be careful to distinguish (and, as secretary, record) which “hat” is being worn, and whether it is legal or governance advice that is being given. If there is litigation between the partners or between management and non-managing shareholders in the future, you can be sure that the dual role will become litigated, the lawyer is likely to be disqualified, and the entire mess will be expensive.

The corporate lawyer has a key role to play in the life of the corporation, even a small business corporation.  The lawyer must help to train the Corporate Secretary and help the Corporate Secretary identify the line between governance advice and legal advice, so that the Corporate Secretary does not unwittingly engage in the unauthorized practice of law.

Final Words

Corporate Secretary, or Company Secretary in an LLC, is a key role that requires someone with the training, and the time, to perform it well. Read any account of the causes of expensive business litigation and you will find poor record keeping, especially of ownership and governance records, to be cited as one of the most common factors leading to protracted lawsuits.  Good records allow cases to settle more quickly. Poor record keeping can also be the cause of a corporation’s shareholders losing their limited liability, or of a company losing its regulatory authority or state licensure to do business.  Finally, poor record keeping distracts the board from long term planning and causes the boards to lose their focus and their institutional memories. A good Corporate Secretary is an asset to your business.

Getting Work Done

Some people just get things done.  Real things.  They know how to move the ball.  I talked with some of these guys this week, and we talked about strategies for getting things done.  Some of it was personal experience.  Some of it came from books they had read.  All of it was battle tested.  In the end, it is about preparing yourself and your workspace for work, and then getting the work done in a persistent and predictable way.  Every person’s tactics for getting these things done are as different as they are from each other, but the strategies are the same.

Prepare Yourself for Work

You are the one who does your work.  You do the work with your own body and your own mind.  In order to really get work done, you must get your body and mind ready.  Our bodies are not machines; we have natural biorhythms that we must respect.  Our bodies need sleep and food and oxygen.  Here are some ways to prepare your body for work:

Sleep.  Your brain needs fuel.  A tired brain just can’t perform high levels of thinking.  A well rested brain just functions better.  Most people need 7-8 hours of consistent nightly sleep to work at peak levels. If you have had less than 7 hours, you are probably better off sleeping one more hour than working one more hour – your remaining work time will be that much more productive.

Know Yourself.  Everyone’s biorhythms are a bit different, but we all have them.  Some people get their best, most creative work done in the morning.  For some, it is the afternoon.  Some do not peak until the sun goes down.  Figure out when your most productive 2-4 hour stretch is.  These are the Golden Hours.  You must use them if you can.

For me, my time is from 9:00AM – 1:00PM.  That’s when I am really cranking.  When I worked in an office, I would get in before 9 and get some coffee and say hello, but at 9 I was at my computer, working.  I shut my door and worked until I came up for air at 1.  I did not like interruptions (my former co-workers, like Ralph Gleaton and David Wyatt, can attest for this.  They called me “Lucifeiffer” in the morning, because of the rough welcome anyone got if they opened my door before lunch time!).

Take a Break.  When we are busy, we often cannot see the forest for the trees.  We can go into information overload.  Our brains can’t focus on anything not directly in front of us.  I can tell when this happens to me.  I usually can see the long-term effects of a decision, but when my brain is overloaded, I just can’t.   I read and the words just slide off my brain.  People talk to me and I feel like words are bouncing off me.  Time for a break.  Brain rest during the day is important, if you want to be productive.  Take a walk.  Go to lunch.  Meditate.  Exercise.  Don’t take your smart phone.  The world will survive for half an hour.  The tactics change, but the strategy remains the same.  Give your brain time to reset.

Eliminate Open Loops.  Our brains are cool.  They don’t want us to forget things.  In order not to forget what we have left them with, they will loop information in our subconscious.  The more loops we have going, the less brain power we have available for work.  Worse yet, when our brains have a lot of loops, it let’s us know it may forget something be creating worry.  Now we are really in trouble.  Eliminating open loops is critical if you are a busy person who wants to be able to actually think.

Eliminate open loops by working on tasks until you are at a natural stopping point, creating and maintaining a task list in a trusted place, and one that you will regularly check, and by simply doing any small task that comes your way right then, and not leaving one more thing for later.  Take this test:  think of 12 items you need from the grocery store.   Then go to the store, without a list, and shop.  Later, do the same thing, but with a list.  Were the experiences different?  It is for me.  Way less stress if I close the open loop by writing the list in a trusted place.  

Prepare Your Environment for Work

So, you’re well rested and ready to work.  When and where we work, however, are also important.  We live in an amazingly connected, demanding world.  EVERYTHING is competing for our attention – social media, the news, spouses children – co-workers – clients – vendors . . . .  The phone beeps and buzzes and shows you angry red numbers next to the apps that are being ignored.  Email stacks up.  Calendars send alerts and reminders.  We only have so much attention to go around, and these things take away a little piece of our brains, a piece that’s then not available to get things done.  The good news is that we can reduce these demands and focus for work without moving out the Walden Pond.  Here are a few ways:

Divide Your Work Day. Every hour is not golden hour.  Our bodies don’t work that way.  If you have figured out when golden time is, set that time aside for what’s important, and use the rest of the day for reactive work: e-mails, phone calls, meetings, administration, paying bills, etc.

Decide What’s Important to Do.  Setting aside golden time to work on what’s important doesn’t help if you don’t know what is important.  First and foremost, for entrepreneurs, what’s important is what is closest to money – what task can I do now that will result as soon as possible in revenue?  For me, my mantra is “money in the morning” – morning is my most productive time, and I try to set aside morning to work on things people are paying me to do.  Afternoons are for business development, administration, etc.

Avoid the Culture of Done.  Our culture is laser focused on “done”.  We love to cross things off the to do list.  This can lead to spending our golden time doing simple, easily done tasks – respond to email, return a phone call, write a short, simple letter – but those tasks are often unimportant.  Important work languishes.  Often, the important stuff languishes because it’s too large, it’s too daunting.  It won’t be done today.  Avoid that culture.  Take the big, important task and divide it into smaller, do-able components and only put the next step on your to-do list.          

Create a Distraction Free Environment for Golden Time. Golden time requires a distraction-free environment for our best work.  What this means to you will vary wildly from what it means to me.  Some people need a clean desk; some do not.  Some people need a change of scenery to work – a conference room or a different place altogether from the place where the busy work gets done.  Most people like to do their best work in the same place every time; some have to change it up from time to time.  Some people like music, some want silence.  Figure out for yourself what you need and create that environment.  Whatever your distraction-free environment is, it does not need interruptions.  Interruptions kill productivity.  No phone, no Facebook, no email, no staff intrusions.  Just work.

Use Your Tech.  Limiting interruptions seems nearly impossible these days.  We are just too connected to every device, and they are insatiable at demanding our attention.  Tech may be the enemy of focus, but we can also use tech to help us.  Take time (but not golden time) to learn how to use your tech.  Devices these days have a lot of cool features that can help you.  Most devices have settings that allow you to turn off, temporarily, these interrupting notifications.  These devices even allow you to designate certain people who can interrupt you, and filter everyone else out.  Work with your tech to help you create your best environment for work.[1]         

Do The Work

You are well rested and ready to work during golden time in a distraction-free environment on important work.  How do you get it done?

Do not clear the decks.  If you are like me, or like some of the other people I was talking to, your brain will try one last time to trick you into not working.  You just need to clear the decks before you get at it, your brain will say.  Close the open loops of “I might have a Facebook post I am missing”, or “Let’s just empty the email in-box real quick”.  Don’t do it.  Once golden time starts, it’s all about the work.  Don’t clean.  Don’t check.  Don’t peek.  Just get to it.

Do not multitask.  Multitasking is a myth.  Or at least a misnomer.  When we do two or more things at one, we do each of them less efficiently than if we would have just done them serially.  I know – you’re different.   Good for you!  Take this test:

Write out, longhand, you’re ABC’s.  Time yourself.  Now, write out, longhand, the numbers 1-26.  Time yourself.  Not, write out the ABC’s and the numbers 1-26 at the same time, alternating between the lists. A-1-B-2-C-3 etc.  Not one jumbled list – two lists done at the same time.  Time yourself.  Most people take longer to write the combined list than they took to make the first two lists added together.  Just focus on one important task at a time.

Be Invictus.  Golden time is what separates the do’ers from distracted.  It is game time.  It is the battle.  Be Invictus during golden time.  It’s what matters.  So schedule golden time regularly – a regular, steady, predictable half hour per day, every day gets more done than a once-per-week binge.  Make golden time a high value activity.  It’s not the thing you do if nothing else comes up.  It is your work, the rest is reacting to other’s priorities.  Finally, don’t give in to distractions.  Your brain will try to get you back to just eating empty calories.  Don’t let it.  Be Invictus.  Focusing and getting work done will get easier and easier as you do your work on a regular basis.


[1] This also works in preparing yourself for work.  Our devices have blurred or even eliminated the lines between work and home.  Our bodies, our minds and out souls need downtime, however.  Our families and friends need our attention.  We need time not thinking about work.  You can use your tech to create down times where interruptions are limited.  Next time you go on a date, set your phone so only the kids or the babysitter can interrupt.

Perfect is the Enemy of Good

Le mieux est l’ennemi du bien.

–  Voltaire “La Bégueule”

 Deep (or not so deep) within the hearts of many entrepreneurs lies the perfectionist.  The one who is constantly striving to get it right.  To make it better.  To seek . . . perfection.

 Often, it is why we become entrepreneurs in the first place: we can’t stand to work for the other guy when we can see better ways of doing it, but don’t have the power to make changes.

  But this quest for perfection can lead to and endless tinkering with processes that are already good enough, to the exclusion of actually doing the work.  We can spend an inordinate amount of time getting from 96% right to 99% right, without any real increase in revenues.

 Worse yet, we don’t actually do the task at 96% while we tinker.  We don’t hit “send” on the email campaign.  We delay meetings.  We don’t schedule speaking engagements .  We delay sales calls.  A product launch sits on the desk.  All while we work to perfect something that would have worked if we had done it.

 When perfect keeps us from executing a plan that was good enough to work, perfect has become the enemy.

 My friend and fellow MasterMind participant Matt Stocking brought this to my attention this week.  Matt, who owns ColorHammer, said he had a great month of sales, because he stopped tinkering with a process that was 96% right and just focused on executing the plan.  The plan was good.  The plan worked.  The 4% that was driving him crazy was stuff his customers would never notice or miss.  By stopping thinking and wrestling and worrying over perfection, and just concentrating on executing a good enough process, he not only had his best sales month ever – he also had one of his least stressful months.

 My son, Henry, is an artist and a musician.  We talked this weekend about putting some of his music up on the internet.  He has been waiting until he felt it was perfect.  But perfect is not the point.  He has decided to make one new piece of music per week, and put it up there.  If he sticks with it, he will have 52 pieces of music on his website by the end of the year.  The music may not be perfect, but it will be good enough: he already is a talented guy.  And making 52 pieces of music will make him better all by itself.  He could wait 52 weeks, make all that music in private, and then put up his best piece next year, but how would anyone find him or hire him in the meantime?  They won’t.  Perfect would be the enemy of good enough.  Don’t wait for perfect – get good enough out there and join the conversation.

This is not to say we can rest on our laurels and stop innovating.  The key attribute of small business – the one that allows us to compete with the megacorporation – is agility.  We must be able to adapt to changing circumstances.  There is, however, no end to things to improve.  No end to new ways to engage with our customers.  No end to new developments and innovations to explore.

This month, take that thing you have been worrying to death and just do it.  The doing of it will make you better at it all by itself, while you spend your creative powers elsewhere.  Allow yourself to call good enough – good enough.  Allow yourself to execute the plan that is great but not perfect, and move your mental focus to something else – something new and exciting you can take from 0 to 96.

 Maybe you’ll have your best month ever.