Business Owners-Train Managers, not Leaders:

We have all known someone we consider to be a “born leader”.  But can leaders be made as well as born?

Maybe yes, maybe no… but definitely not within a time frame you can afford.

If you own a small business, don’t waste time and money trying to develop leaders within your staff. Since the average person is likely to have 11 different jobs by the time they are 44 years old, any skills an employee gains from money you spent on leadership training is almost guaranteed to benefit some other company, not yours.

And there’s another reason to stop trying to teach your employees to be better leaders.  Leadership “skills” are traits that are difficult to develop.  The ability to stay cool under fire and make smart decisions is hard to teach.  The ability to motivate and inspire employees is very hard to teach.  Charisma is impossible to teach.

Leadership skills are also extremely difficult to measure.  “What” is easy to measure; “how” is another proposition entirely since soft skills are involved. Compared to leadership skills, management skills are more easily measured because they produce measurable outcomes.  The act of managing a process might be difficult, but measuring the results of that process should be straightforward.

So as a small business owner, what should you teach your staff?

Teach management, not leadership.  Teach employees, whether in “leadership” positions or not, to follow processes and guidelines:  Processes and guidelines you establish and maintain.  Teach skills like decision making (within parameters you establish) and attention to detail (based on metrics you develop) and follow-up and feedback (based on goals and targets you set).

That doesn’t mean managers or supervisors must be automatons that rigidly follow checklists.  Regardless of position, every employee can make judgment calls as long as their decisions fall within established parameters.  The farther up the food chain, the broader the parameters and the greater the latitude.  Then every employee, but especially managers who should be allowed to operate with broad authority, can be creative within boundaries you establish.

For example, every manager can be cool under fire if taught to prioritize effectively and make smart decisions.  What is a smart decision?  The decision you want your employees to make.

So quit trying to create leaders.  Pass on ropes courses and experiential training and transformational leadership retreats.  You don’t need more leaders.  You are the head of your company.  Teach employees in positions of authority to extend your ideas, your approach, your goals, and your vision to the rest of your team.

Setting Your Goals:

Setting goals is a popular topic:  Google lists nearly 20 million results for “goal setting” and Amazon.com lists 1,600 results for “goal setting” alone.

Clearly millions are desperately trying to achieve their goals.

Too bad most of the advice they get is wrong:  Otherwise every guy would be fit, trim, erudite, wealthy, and married to Pamela Cruz and every woman would — well, I don’t know other than I’m sure my name wouldn’t show up on that particular list.

Most people fail to reach their goals — and then beat themselves up for lacking the willpower, drive, and persistence to achieve their goals.

If that’s you, stop.  Now.  The problem isn’t a lack of willpower or drive; the problem is how you’ve been taught to think about goals.

For example, did you get to work on time today?  Did you get the kids to their activities on time?  Did you get dinner on the table and cut the grass and do the laundry and all that other stuff?  Of course you did.  Why?

You didn’t really have a choice.

That’s the main problem:  Most goals give us a choice.

Tasks are what we have to do. Goals are things we want to do.  That’s why we fail to achieve goals.  We make it to work on time because we have to; punctuality is non-negotiable.  We don’t make it to the gym because we don’t have to; we can negotiate, if only with ourselves, and make other choices.

Other poor goal setting advice:

We’re told, “Make goals meaningful” (the “M” in the SMART goals approach.)  No goal can be “made” meaningful.  A goal either has meaning or not.  The more you work to find or contrive some meaning the less likely you are to achieve the goal.  Face it:  It’s impossible to “find” the meaning in a particular goal.  Meaningful goals always find you.

We’re told, “Setting goals helps you focus.” Goals tend to make an already complicated life even more complicated.  Think about the last time you wrote a list of business or personal goals.  When you finished did you think, “Wow, this is awesome because I have a clear direction and purpose,” or did you think, “Oh crap, how will I ever get all this done?”  I’m guessing you thought the latter — if not right away, certainly after a day or two.

We’re told, “Make goals personal.” Every goal has a personal component, but it’s a lot easier to achieve a goal when you share and work towards that goal with others.  Watch youth swimmers:  Almost every kid swims faster when part of a relay team than in solo races.  Why?  If nothing else, they don’t want to let their teammates down.  It’s a lot easier to let us down than it is to let others down. Peer pressure — and peer support — is a wonderful thing.

We’re told, “Make goals attainable” (the “A” in SMART.)  There’s nothing inspiring about an attainable goal.  Attainable goals are targets, not goals.  “I will cold call twenty prospects today” is a target; just pick up the phone twenty times and you meet the target.  Valuable, but not inspirational.

Think of it this way:  Your boss tells you to finish a report by noon.  Meaning, focus, personal, attainable… your boss provides all the “important” aspects of a “great goal.”  But anything your boss asks you to do is a task, not a goal.

Only you can set a goal.  Here’s a better way:

Make a list of all the things you currently consider to be goals: Career, business, personal, health… whatever.  Now look at each entry.  How many are really tasks?  For example, basic health — eating well, getting a little exercise, and keeping your weight under control — is a task, not a goal.  Basic health should be non-negotiable.   (World-class athlete?-Goal, Basic level of health?-Task.)

Same with career or business:  The steps you take to succeed are tasks, not goals.  (If you have to work, shouldn’t you get the most out of it you possibly can?)

When you turn what you thought was a goal into a task, and treat it as a non-negotiable item (like getting to work on time), completing the task will be a lot easier.  That’s what we’re programmed to do.

I realize you’ll probably end up with a seemingly overwhelming number of tasks on your list.  That’s okay.  Cut some of the stuff you currently do that is unnecessary.  You’re smart.  You can figure out what should go.

Then list your dreams. Review your list, think big, and pick one dream.  Pick a dream that won’t feel like work to try to achieve.  Pick a dream you can share with someone, even if from afar.  Pick a dream you would “work” for because you feel like you have to, that if you don’t chase it will someday cause you to feel your life was incomplete.  Pick a dream you would strive for even though the odds of success are slim.

When you have to — when you’re compelled to because it comes from inside — then you’re chasing a real goal, not jut completing a task.

When you chase a goal that comes from inside you, when you chase a goal that finds you, the effort itself becomes a reward, even if ultimately you “fail.”   Weed out the tasks so you can see your goals for what they really are — dreams you will do anything to achieve.

Will you achieve the goal you choose?  Maybe yes, maybe no… but at least the trying part will be easy.

Expos and Conferences-Your Point?

I recently attended a business conference and from the minute the conference ended, I started asking myself why I had spent the time and money to attend. The conference had all the right pieces that typically make a successful conference — big name speakers, a fabulous location, a fancy resort, and lots of like-minded people from similar industries. So why did I leave with a sense that I would have been better off just staying at home?

I realized that I had accepted the invitation without fully thinking through whether the event would be worth my time. I flew halfway across the country, lost three days in the office, and had to incur the cost of a plane ticket and three nights in a hotel; All for not much in return.

In order to not repeat this mistake again, I’ve laid out the six questions I’m going to ask myself before I commit to another corporate conference.

1. Who will you meet at this conference?

Will you find potential career contacts, new clients, new products, or innovations that could make your firm more efficient or more profitable? The best conferences provide plenty of time for networking at receptions, happy hours, and mixers. Some conferences will even make introductions for you before the conference begins. If the agenda shows little time for networking opportunities, be skeptical.

2. Will you learn something?

Good speakers can teach you about industries, opportunities or trends that you would never know about otherwise. Or they can stimulate your thinking in new ways and help get your creative juices flowing.

Conferences that seem to only offer a bunch of big name speakers raise a red flag for me. Recently, a conference in my area featured Bill Cosby, Laura Bush and Colin Powell all speaking at the same event. Though I’m sure they are all great speakers, what are these three disparate “celebrities” really going to teach me about how to improve my business?

The best speakers at events are often ones that might not necessarily grab the biggest headlines. Politicians, CEOs, athletes, and movie stars might get people excited, but they rarely leave audiences with the most concrete knowledge. I look at the speakers just below the headliners — they are more likely to impart real knowledge and advice that will be most helpful.

3. Will you gain a new skill or certification?

Many conferences are geared around teaching a particular skill or offering certification to perform a particular procedure. This is most often the case in the healthcare field where doctors, dentists, or physical therapists spend a weekend learning a new procedure. If you’re going to refresh your skills or learn something new that will help improve your bottom line and give you an advantage over your competition, go.

4. What are the intangible benefits of going?

Let’s be honest — many people use conferences as an excuse to play golf, relax by the pool, or hit the ski slopes in some fabulous location. But just because you are having fun while at a conference doesn’t mean you or your team won’t benefit.

Getting out of the office can promote new thinking and creativity. I know that when I’ve gathered with co-workers in one of these settings, our meetings seem to be much more insightful and productive than if we were all sitting in the office. Plus, riding in a golf cart together or sitting on a ski lift with a colleague can create bonding time and teambuilding without having to resort to trust falls or cheesy icebreaking exercises.

5. What is my opportunity cost if I don’t attend?

Will your competition gain an advantage because you weren’t there representing your product or service? Will this be the year that your dream client shows up and you won’t be there to make the deal? Will all of your colleagues be talking about how much better this year’s conference was than last year’s?

Consider, too, the opportunity cost in the other direction. What are you going to miss by being out of the office for a few days? What will you not be able to accomplish due to your attendance at the conference?  Will you miss key events at home with family or friends? A simple cost-benefit analysis works for me every time.

6. What will attending this conference do for your bottom line?

Ultimately, it all comes down to the bottom line. The most important question to ask when considering if you or your team should attend a conference is, will it have a positive impact on your bottom line. If there’s no connection — however distant — to your bottom line, what’s the point?

Taxes…The Everyday Business Agenda!

Sandy Botkin the author of “Lower Your Taxes — Big Time 2011-2012.” Botkin shared 10 common tax misconceptions that both fledgling and experienced small business owners are guilty of. How many of these phrases have you uttered?

1. “I can do it myself.” “Most small business owners do not have the tax knowledge they need to stay out of trouble, but they won’t pay for planning,” says Botkin. “They’re cheap so they use TurboTax.  But TurboTax won’t represent them if they get into trouble.” Sure, as a member of the profession, Botkin has a vested interest in recommending that you hire a CPA. Maybe you really are capable of doing your own tax planning. Maybe you can also rewire your office, build your own website, and represent yourself in court. That doesn’t mean you should. Just saying’.

2. “I keep my receipts so I don’t need a tax diary.” Every small business owner must keep an accurate tax organizer, says Botkin, and it’s not the same thing as an expense log. “A tax organizer has all the questions that the IRS requires you to answer about travel, entertainment, and other expenses. It will bulletproof your records and eliminate procrastination, and if you’re audited, it shifts the burden of proof to the IRS,” he says. Anything that allows you to feel smug in the presence of an auditor has got to be worth its price, which is not cheap in this case. You’ll spend over $100 for a decent tax organizer/diary.

3. “YES! A big fat refund.” Many people are thrilled when they get a big check from the IRS. Wrong reaction, says Botkin.  “A refund means you’ve given the government interest-free money for a long time,” he says. “If you have withholding, you want to adjust it to the point where you get very little refund.”

4. “I’ll just borrow a little from employee withholding.” When they’re short on cash, it’s often tempting for small business owners to dip into the trust fund that’s used for employee withholding and Social Security. “Many employers think ‘ this is my money,’” says Botkin. “It isn’t. If they borrow from withholding or Social Security, they are personally liable, with huge potential penalties.”

5. “Let’s make everyone an independent contractor.” Employees are expensive, Independent contractors, not so much. So why not make everyone independent contractor? It’s not that easy, says Botkin.  “If you’re going to designate a worker as independent you have to treat him as independent,” say Botkin.  Typically, independent contractors can make their own hours and have control over where, when, and how work is completed. If the IRS determines that you incorrectly designated an employee as independent, you may be subject to penalties for not collecting Social Security taxes, and for more than 40% of workers compensation for the specified time period.

6. “I can pay myself whatever I please.” If you’re incorporated, this is not a reality. Say you typically pay yourself $100,000 a year. After a good year, you decide to increase that to $300,000. “You have to substantiate a reason for the increase, or part of the money can be disallowed by the IRS as unreasonable compensation,” says Botkin. “Then it can be taxed at the corporate level, and distributed as a dividend. And then you’ll pay tax on the dividend.” Ouch!

7. “My bookkeeper would never steal from me.” “It’s vital for every small business person to have one person who writes the checks and another person doing the accounting, and never the two shall meet,” says Botkin. He says that he’s met hundreds of small business owners who have had their bank accounts cleaned out by embezzlers. So unless you have a trusted family member handling all your finances, make sure that you have different people handling accounting and accounts payable. Nope, this isn’t a tax tip per se, but drop the ball on this one and you won’t have to worry about paying taxes because you may not have a business.

8. “That can’t possibly be deductible.” Not so fast! The dry cleaning for the suits you wore at that business conference in Duluth?  If you were away overnight, it’s deductible, says Botkin; A movie and dinner with friends, with whom you also talked business? Also deductible he says, even if your business discussion didn’t occur at dinner, but within the same 24-hour period as the social engagement.  Just make sure it’s all documented in your tax diary (see #2). Educate yourself on all the deductions you may be missing.

9. “This isn’t a hobby, it’s a business.” Say the “business” you started, selling seashell picture frames online, consistently loses money (those trips to Cape Cod are expensive, after all). The IRS may decide that you don’t have a business at all, but merely a hobby. In that case, you’ll no longer be entitled to the same deductions. “They’ll also disallow your losses,” says Botkin. “The government is the biggest bookie — they’ll subsidize your losses, but they want part of your profits.”

10. “I can’t afford to hire my kids.” Well, sure you can, especially your kids who are in college. Pay them a reasonable wage for the work they perform (Botkin paid his daughter to build and maintain his website, for instance), and you’ll be able to deduct their wages as a business expense. Then, suggests Botkin, have them use the wages to pay for college. Voila! You’ve just made college tuition deductible. Also, remember that up to $5,800 in income is tax-free for your children.

Do you have some tax advice to share with your fellow entrepreneurs? Let’s hear it.