February 2019 • Anthony Tumbiolo

Building a Business

Part 5: Ensuring Profits By Taking Control of The Financial System

Written by: Anthony Tumbiolo|February 28, 2019

The financial system is the final post of a 5-part mini-series on the four systems that your business is comprised of.

Want to get all caught up and get more context?

Part 1 – The 4 Systems Every Business Owner Should Know About.

Part 2 – An Inside Look On The New Business System.

Part 3 – Increasing Your Client’s LTV Through The Production System

And Part 4 – The Importance Of The Back-Office System

In this article, I want to cover the missing piece of the puzzle:

The Financial System

Part 5: Ensuring Profits By Taking Control of The Financial System

In January 2019, Jakt released its 2018 yearly financial results.

As a private company, we are under no obligation to do this. But we believe in being transparent and helping upcoming agencies that would appreciate some type of industry standards.

If you check them out, you’ll see that we grew by 134% from $1.7M to $3.94M. We also had a gross margin of 50% and a net profit of 20%.

Did we get lucky?

Are these just random numbers?

While it might seem like that, this was actually very intentional from our side. In fact, at the start of the year, our goals were the following:

$4M in revenue, 50% gross margin, and 15-20% net profit. And we hit them by…

Reverse-engineering your financial system.

I’ve been talking to many agency owners lately. And something that’s got my attention is this:

Many of them aren’t making a profit. And there are others that, even if they are, they have no idea how much money they’re really making. Or how they increase their profits. Or how much they can re-invest in marketing.

In short, they don’t have a good grasp on their financials. Which means they can’t make the best financial decisions for their company.

Do you want to have to call up your accountant at the end of the year and ask: “so, how much money do I have left over? Please, tell me there’s at least some money.”

No, you want to know what your numbers well be beforehand, right?

And, of course, there are things that have to go your way such as closing a deal. But keeping a certain profit level is something you can control.

That’s why understanding how to manage this system is so important for business owners and entrepreneurs. It gives you predictability, and it ensures that you’re making a profit each month and each year.

Working backward.

I always start from the bottom. Instead of leaving a profit to whatever’s left, I like to ask: How much do I want to make? And then I design all the parts around it so that I can get there.

Here’s what we did last year:

Our objective for 2018 was to hit a 15-20% profit margin. Why the variance? Because we knew we might want to re-invest a bit heavier in marketing. And that gave us a little window to play in. And everything is connected to that.

(As you’ll see below, this “window” isn’t a guess or a hope that we will hit that range.)

Profit for agencies is a simple equation if you really break it down into it’s simplest form:

Part 5: Ensuring Profits By Taking Control of The Financial System

Profit = Revenue – Cost of Goods Sold – Operating Expenses (all other expenses).

If you look at it as a pie, you start with 100%. Then, to make the margin you want, COGS and Operating Expenses both take up a % of the pie. What’s left over is your profit %.

Based on the market and our historical numbers, we know a 50% COGS is a reasonable amount. So, if we take 50% of the pie for that, we know we have another 50% to spend.

To maintain a 15-20% profit margin, that means we can spend another 30-35% on all other expenses.

Then, as long as we are maintaining a 50% COGS and 30-35% on all other expenses each month, we will hit our desired profit target. It’s really that simple.

Note: There are nuances such as utilization and other factors that you will have to account for to maintain the margins you want, but that’s outside the scope of this post.

Knowing your numbers and margins helps you make all sorts of decisions, such as:

– How much do I need to charge?

– How much can I pay employees or contractors?

– How much can I spend on marketing?

– What utilization do I need to maintain?

– Can I hire XYZ person?

And the list goes on…

Managing revenue and expenses:

At its most basic equation, the financial system is profits = revenue – expenses.

In order to hit your profit target, you need to understand what are the different revenue and expense streams.

Where does revenue come from?

Revenue comes from two different places:

First, it comes from the New Business System. When you close a client –whether that is for a one-time or recurring payment– you are growing your bottom line.

And the second channel is the Production System. Once your client has transitioned to the production team, you have four different ways to extract more revenue from them: upselling, cross-selling, extending the contract, and selling to another division/brand.

And where do expenses come from?

Expenses are generated by three systems –including the two mentioned above.

Expenses from the New Business System include everything you spent money on to close the client. Paid ads, your marketing team, networking events, conferences… they all go here.

The Production System expense is the Cost of Goods Sold. For example, if you run a web development agency, then web developers and designers. Aka, whoever does the project work, plus any tools that they need.

And finally, the Back-Office System. While the other two systems generate both revenue and expenses, the back-office is an expense center. But it’s also very necessary to run the business. It includes things such as rent, HR, accountants, lawyers, etc.

Managing your expenses.

Your revenue needs to be more than your expenses. And go ‘head, roll your eyes at me.

But here are the stats:

40% of small businesses are profitable. And I’m not saying they hit 6 or 7 figures, just “profitable.”
30% break even.
And 30% are continuously losing money.

So it’s not such an obvious thing, is it? And your business won’t survive if you don’t manage your finances accordingly.

Be thoughtful about where you’re allocating funds month over month, and don’t spend money you don’t have. Keep track of financial indicators, and put effort into financial reporting and analysis.

I’ve Decided To Help Agency Owners Be Profitable

There are a couple of things that I’ve realized from running an agency for the last 7 years:

Financial engineering, discipline, literacy, and understanding are critical when running an agency.
No outside firm I’ve ever worked with understood my business well enough to provide the tailor-fit service that we needed. Either they didn’t truly understand the agency model, or they didn’t understand how important every dollar was to a small business owner like myself. And, typically, it was both.

We decided to manage our finances –including everything I touched on here– in-house.

Over time, I realized there were plenty of other agency owners that needed help on the financial side of things –and who better to help them than a fellow agency owner?

So, we decided to break out the part of Jakt that runs the financial system and turn it into its own company, servicing only agencies.

Polpo Finance is an Accounting + CFO service for Agencies that want to outsource their financial system and be more profitable and predictable.

If you are interested, email me at [email protected] and we can see if it makes sense to work together.

In conclusion of part 5: the financial system,

The financial system is focused on the financial engineering needed to ensure you are making a profit each month and each year.
Work backward from the profit margin that you want to hit. Then design the rest of the elements –pricing, expenses, etc.– so that you can reach that percentage.
Expenses come from the New Business, the Production, and the Back-Office System. Revenue comes from the New Business and the Production System.

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Leadership

Your Vision and Mission Alone DO NOT Keep Employees: Here’s What Does

Written by: Anthony Tumbiolo|February 26, 2019

Every month we have a management meeting where we look back and audit the previous 30 days. We audit what worked best and what didn’t, compare numbers to the forecast, go over all the most important metrics, and plan for the next month.

In our last one –end of January 2019– we sensed that something was off. We had this feeling that management just wasn’t on the same page as everyone else.

Our first thought was that our mission and vision might not be clear or supported enough. However, I realized that those might not be the most important factors that drive our team.

What they were, however, I didn’t know.

So I asked the management team: “Why are you all still here?”

Why People Stay At Our Company:

After the initial blank stares, each of them started sharing their own personal reasons. And I learned that it wasn’t the company’s mission and vision. It wasn’t any one thing, really.

What came out in the discussion were 7 fundamental things that drew people in and kept them as part of the team:

Opportunity

Multiple people in the room mentioned this in different ways. As we all talked through it, we started to understand that it wasn’t just the obvious forms of opportunity –progressing in their careers, for instance.

But also the opportunity to grow. To do something different. The opportunity they have at Polpo to take on new challenges.

High Accountability

High-performers love being held accountable. They want someone that pushes them to be better and always stay on top of their game.

I really valued that they considered this a positive element of our culture. We don’t want things to get too comfortable. We don’t want to accept mediocrity. We don’t want “good enough” to be, well, good enough.

That’s the kind of people I want in my corner –and that’s what my leadership team enjoys. I do, however, think we can do better in this area. And we will focus on this moving forward.

Freedom

Freedom can be shown in many different ways: freedom to express yourself, freedom of choice, freedom of responsibility, etc. That’s something I was very intentional about when I started the company.

I believe it’s a sign of mutual respect. I consider my employees capable of performing at the highest level, and I will give them room to play.

But, at the same time, it comes with the understanding that they will be accounted for and held to the highest standards.

Creativity

Several people specifically touched on the opportunity to be creative on a daily basis. That they weren’t told exactly how to do things or the specific form a given work project should take.

We work with different clients which means that things change over time. And, after all, they fly the ship that they built. Executing the ideas and strategies they came up with.

It allows people to be creative regularly, to flex that muscle and work it out. More than just being fun, it creates ownership.

People

The people at Polpo and Jakt like working with each other because they share a culture, a goal and, underneath all, a drive to do more and go further.

High-performers prefer being around other high-performers because they can sharpen themselves on each other. They level up.

We make an emphasis on only letting people in if they share our values –as professionals but also as human beings. Obviously, it doesn’t always work. But we want to have people that we enjoy being around.

Problem Solving

Polpo and Jakt provided plenty of unique opportunities to solve complex problems. Many of the managers in the group mentioned this as one of the perks of their job: that there’s always a new, exciting challenge to solve.

I get it because that’s something that also drives me. Solving a complicated, smoke-off-your-head problem is very fulfilling –and one of the biggest rushes you can experience.

Adaptability

Jakt (a company under Polpo) has changed a lot over the years. What we do and who we are now is not the same as 7 years ago.

The willingness to adapt, to change strategies when the business requires it, is needed for our company. But it’s also good for all the people who appreciate new and different job experiences.

These seven elements were recurring themes over our conversation. Interestingly, you’d also see a lot of similarities between them and our company’s values –just worded differently.

All of them were important for feeding into the bigger picture –the culture of the company. And they mix to form a compelling environment that pulls people in for the long haul.

But what about your mission/vision?

Once you list the reasons people are here, you can see the negative image clearly. And it reveals what doesn’t make people stay.

I always thought that what made people want to be here was our vision and our mission. Maybe it’s why they joined us –I don’t know– but it doesn’t seem to be what keeps them here.

What I learned through this exercise is that is not what they get out of bed for.

Nobody said, “the mission and the vision of the company are just so compelling.” After all, we’re not solving world hunger, and we’re not landing a man on Mars. And that’s OK.

I think there’s a lie we keep telling ourselves in the startup world, and it’s that the grand vision is why people will keep at it day-in and day-out.

But it’s not. It’s the privilege of working, living really, within a culture that provides you with those 7 pillars above each and every day.

Note: I’m talking about my company. And yours might be different. Just saying that it’s important to know what really drives your people.

Why do I stay at the company?

They ended up turning the question around to me.

And funnily enough, a lot of the same reasons they gave apply to me as well.

Here’s what I said:

I like to create something out of nothing.
I like to have a group of great people and work together to build a company bigger than ourselves.
I want to have freedom and be able to work on what I want so I can express my creativity.
I want to be held accountable, and I want to solve meaningful problems.
I want to provide a space for people to grow and realize their potential.

At the same time, I feel a responsibility to my team and their families. I built this thing from the ground up, and now there’s a lot of people that it supports, and that’s a big part of what keeps me here.

Why people really stay, from my view.

I’ve never been an employee. It’s not easy for me to put myself in their shoes. Which makes it really hard to fully understand why they’re here.

I know this though: My intention from the start was always to create a company with people and a culture that I’d work at myself.

And it was very interesting to realize that mission and vision might not be the most crucial elements that keep my team working together.

What came out instead were 7 things people valued across the room: opportunity, high-accountability, freedom, adaptability, problem-solving, people, and creativity.

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Decision Making

Why I Negotiate Everything But NOT With Service Businesses

Written by: Anthony Tumbiolo|February 24, 2019

When it comes to negotiating, it’s easy to fall on either side of the spectrum. I know some people who try and negotiate everything they buy. And I know others that just the thought of it makes them cringe. In my opinion, negotiation is part of the game. I like doing it –but I don’t blindly do it at all times. It depends on the circumstances.

(I wasn’t always this way – I used to negotiate absolutely everything – but that has changed over time. I’ll explain why.)

Here’s when I think you should negotiate and when you shouldn’t:

Why I negotiate all products I buy:

Products are inanimate objects and a change in price doesn’t correlate to a change in value. Here’s what I mean by that:

Let’s say I’m looking to buy a purse for my girlfriend. If the original price is $1,300 and I negotiate it down to $1,100 — what’s changed?

Other than how thick my wallet is, nothing, really. It’s still the same purse. It’s not a worse purse just because I paid less for it. The product itself doesn’t have a direct relationship with the price it’s sold at.

In the end, I’m negotiating for a thing. If I pay less, I’m still leaving with the same exact “thing” everyone else leaves with.

Let me give you another example:

I just moved to Miami from NYC and I’m currently apartment shopping here. When I go tour this place tomorrow, the real estate agent will give me a monthly rent of $4,000, for example.

Again, if I am able to reduce it to $3,000/month after negotiating with them — I will have saved $12,000 for the year. But, most importantly, it won’t come with any attached negative repercussions.

The apartment is still the same apartment whether I pay 3 or 4 grand. It will have the same bedrooms. The same kitchen. It will be on the same floor… I will just pay less for it.

And that’s why I negotiate as much as I can when it comes to products.

Is negotiating… good and fair?

I honestly love to negotiate. It’s really not even about the money that I save –even tho it’s obviously an added benefit.

I just have a passion for it –and I’ve seen that many entrepreneurs do too. I just enjoy the thrill of the hunt, the mental debate, the persuasion, even the emotional battle.

For example, I’ve always thought of a price tag as a “starting point” of a negotiation. It’s what the other part wants for it, not what they’ll accept for it. Big difference.

It’s a game. Can I go outside of my comfort zone, ask for a better price, and get away with it?

But… And this is a big but…

I only do this with products and objects. I do not negotiate services (although I used to).

Why I do NOT negotiate with service businesses, anymore:

When it comes to services, this is a completely different story.

Why?

When you are paying someone to perform a service, you are not buying an inanimate product. You’re partnering with someone –a human being–and things get more complex.

If you negotiate to pay less for a service, something has to give. Something else will be reduced along with the price.

It’s usually the quality of the service you get in return. But it also can be the speed of delivery or even the customer service and how responsive they are.

Just last year I commissioned a painting for my place in NYC. When the artist quoted me a price, I could’ve negotiated. And sure, I probably would’ve saved a few hundred bucks. But the result would not have been anywhere close to what it was.

Another negotiation example:

Let’s say you need to hire an accountant to file your taxes. His rate is $10,000 for this particular project, but you offer him $5,000.

For whatever reason, he decides to take it and you leave his office with a huge smile on your face. You just saved $5,000 –cool, right?

More than likely, however, he won’t go the extra mile for you. He’ll take longer to finish the project. He won’t respond quickly when you email him. And he won’t be there when you need to make a last minute change.

Maybe that even makes your tax savings smaller — so how much did you really save here?

Put yourself in their perspective:

If you run a service-based business, think about how you deal with people trying to negotiate your prices.

Where will you invest more of your time: on the client who’s paying you $100 or the one paying you $50…for the same service?

It’s human nature (and makes business sense) to make sure the largest sources of revenue are taken care of first.

So I apply that to myself as well. If I’m doing business with someone for a particular service, I don’t negotiate. If I don’t think it’s worth the value I’ll get, I don’t take it. And if I do, I move forward with it.

At the same time, if I accepted your price, I now can hold you to a higher standard. There’s no excuse to provide the value we agreed on.

You set the price. I didn’t. So I can expect the quality, customer service, speed and all these other elements to be at the level we agreed upon.

Negotiate for certain things, but not everything

I try to get a better deal when it comes to products because the price I pay doesn’t affect the value of what I get. The object –an iPhone, an apartment, a TV– is still the same. All that changed was how much it cost me.
But services are a different story. If you push for a price reduction, you’ll more than likely receive less of another variable –quality, customer service, speed, etc. Take the deal or don’t, but be very mindful when you negotiate.

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Self Care

The Difference Between Struggling And Suffering

Written by: Anthony Tumbiolo|February 21, 2019

I’ve written about working with an executive coach before. I think it’s a way to constantly grow and push yourself to get better. It’s also helped me figure things out I wouldn’t ordinarily have the time or ability to stop and work through. One of my 2019 objectives is to focus on having an abundant mindset. I want to let things flow to me easily and effortlessly. At the same, I know that the Law of Attraction doesn’t work unless, well, I do.

So the other day I was talking to my coach when I asked her:

How can something flow easily and effortlessly when I also know I can’t just sit on the couch doing nothing my whole life and things will happen? How can I make sense of this?

There is work need to make things happen, yes. But it doesn’t have to be hard? Where does that leave us?

What she told me was this:

There’s struggling. And then there’s suffering.

There’s a HUGE difference between them. And you need to audit what you are doing and feeling on a daily basis to know where they’re coming from.

Let me give you a quick example:

After 7 years, I decided to take a step back here at Jakt. I didn’t want (or needed) to be involved in the day-to-day operations. It’s not that I was an apathetic sloth — it goes much deeper than that.

The Difference Between Struggling And Suffering

Was I struggling? Or was I suffering? And what’s the difference?…

Struggling is good, but suffering is bad

Do you go to the gym?

If so, I’m sure you’ll understand what it’s like to have that constant battle with yourself. First, there’s the willpower to actually go.

Then there’s the work involved: figuring out your program and what you’re going to actually do while you’re there. How to move up in speed, distance, strength…

And then, there’s the payoff.

Bench pressing a new personal record. Running your first marathon.

These achievements are set up by the work you put in at the gym. The constant struggle against what your body might say it wants. To stay in bed. To quit just one set, or one mile, early.

When you go to the gym and struggle through a workout, you do it because you know you’re heading for achievement. The goal.

It’s something you want. And the progress, the work, it’s actually fun. Okay, maybe not super fun, but it’s satisfying. It’s time well spent.

That’s struggling.

But consider this: someone steps into your life and says “you know what, you’re going to run a marathon.”

If you don’t want to, if it’s an external force making you do it, then that time spent at the gym is something else. It becomes a prison. A kind of punishment.

That’s suffering.

The Difference Between Struggling And Suffering

Whether you’re struggling vs suffering is determined by if that goal or thing is something you want.

Struggling vs. Suffering In Business:

I can think of –and I’m sure you can too– so many late nights planning sales calls for the next day. So many spreadsheets. So many hours of infinite meetings. So many ounces of pressure on our backs.

And I loved every second of it. Sure, they were a struggle because we wanted the deal, or to hit our targets… or anything else that motivated us.

But what if we didn’t really want that deal? Or if every minute felt like Chinese water torture? Or if we didn’t find meaning on it? Then it might feel more like suffering.

And yes, there are challenging moments in life.

But do we really need to suffer instead of struggle?

Suffering can be avoided.

My coach and I defined “suffering” as judging the struggle. And judging it poorly. Resenting it, really.

The problem is that, since they are somewhat connected, it’s hard to distinguish what it is you’re feeling.

I believe listening to your body and emotions is the key.

When you’re suffering, it sucks. You don’t feel good. You ask yourself things like: “Why do I have to do this again?” or “Why is it this way?” You’re just going through the motions, and you feel like Sisyphus rolling his stone up the hill.

So, that’s part of it: learning to understand if you’re struggling… or resenting it and suffering.

And your feelings can change.

Just because you loved the struggle of something doesn’t mean you will ALWAYS enjoy it.

Hear me out:

For me, this meant stepping out of the day-to-day at Jakt–going from working in the business to working on the business.

Not because it was a bad work environment, or because the company was doing poorly, but because I no longer enjoyed it.

After that, wading through it just… wasn’t satisfying anymore. It was an intimidating change. But, in the end, it was the best for both the company and myself.

Jakt was getting to the size it badly needed more of that strategic level of thinking. And I had been growing to the point that I was ready to help in a different way.

I went from struggling to suffering, and back to struggling but with a new set of challenges.

And here’s why:

Seeking the Struggle

The one thing I do NOT want you to get out of this article is this:

“I should step away from anything that’s difficult.”

Seriously, if that’s how I came across — I’ll punch myself in the face. Because I honestly believe quite the opposite.

Yes, if you’re suffering, you have a responsibility to yourself –and to your business– to change that.

But.

You also owe it to yourself to seek out the struggle.

And so that’s the last thing I’d leave you with here:

There’s growth in struggling.

Moving outside of your comfort zone is the best for both you and your company’s continued advancement.

When you’re too comfortable, you’ll get complacent. Some people like to live in that state — do what makes you happy. (Although I don’t think anyone in that state is truly happy — but it’s scary to move forward).

But for all of us that don’t want to settle, you’ll find happiness and growth when you seek the struggle.

Suffering vs Struggling:

Struggling and suffering are not equal. Stop, audit your feelings, and figure out which one you are operating in.
Suffering is about judging the struggle. When you resent what you do (which is not the same as it is difficult), you need to take a step back and find the issue behind it.
Struggling takes you outside of your comfort zone. Embrace it and use it to help you grow.

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Decision Making

Why Making Fewer Decisions Will Help Your Business

Written by: Anthony Tumbiolo|February 19, 2019

In part 3 of my “decision-making” mini-series, I’m going to talk about making fewer decisions. It may seem a bit contradictory to the first two, but bear with me… I swear I’m making sense here. In my first piece, I talked about the importance of making decisions out of abundance, not fear and lack. Then, I discussed the impact and influence of your emotions in your decision-making.

Now, I’m making a 180 shift – this post will focus on pushing decisions outwards and to the edges. Aka, making FEWER decisions.

“But Anthony, you just told us in two articles HOW to make decisions. Wtf, man?”

Good point. But first, let me ask you something:

Are you your company’s bottle-neck?

Delegating is necessary when running a business, but I didn’t always feel this way.

When I started Jakt over seven years ago, I thought the best way to run my business was for me to make each and every decision. Even when I started hiring people, they would keep on coming to me so that I’d make decisions for them.

I’m not going to lie to you: there was something about it that tickled my ego. I got caught in this trap where I thought I had all the answers. I mean, it’s my company, right?

At the same, it was quicker. When we were a small team, it was just much faster for me to go ahead and make decisions than wait for my employees.

But, as we added more members to our team, I started to realize that there was no way we could scale like this. People were waiting to get to me and for me to make a choice, and I stopped the processes’ flow because I had so many decisions to make.

I was the bottleneck.

I had invested so much effort in making decisions for everyone else that I had employees who weren’t used to taking initiative on their own.

I hadn’t empowered them to think critically and individually. They were used to coming to me for answers — but not to reach their own. And that, in hindsight, limited and capped Jakt’s growth potential. Things had to change… I had to make fewer decisions.

“But they don’t do it like I do it?”

You’re right.

No one will do things the exact same way you do them (I’ll touch on letting go of control later).

And sure, I know pushing decisions back to people might slow you down at first. I also know the results may not be perfect from the jump.

But, you have to be okay with things taking a little longer in the beginning. The truth is, if you don’t make your employees think critically, you’re just creating a larger problem.

Why?

Honestly, there are a few reasons:

Because, as your company grew bigger, there is a larger disconnect between you and all day-to-day activities. Back in the day, it was impossible for me to be aware of things that I wasn’t even directly interacting with — how could I make a decision, then?

I also came to the difficult realization that I may not have all the answers. Yeah, believe it or not, your employees may actually make better decisions than you. And they probably will, especially if they are closer to the problem.

I didn’t want to be the one breaking the news to you but, you’re not that special. (Neither am I, by the way). Yes, even if you founded the company. And yes, even if you’re the CEO.

Helping others make their own decisions may be slower in the short-term. But, in the long run, it will develop into a faster, more streamlined process.

And, this starts with…

Letting go of control = Fewer decisions

I totally get that this is not an easy concept to implement — but you just have to do it. It’s super important if your goal is to not have a You-dependent business. There are ways you can help smooth out that transition:

As you know, every business system is comprised of tools, people, and processes. Putting them into place will give your employees the ability to gain context, understand what is needed from them, and clarify their decision-making.

I also began to appreciate that everyone had a different lens in which they look through. It’s only natural that they don’t do things the exact same way I would — but you have to be cool with that!

That’s why it’s so important that you are…

Coaching over directing.

I have recently launched a new company, Polpo Finance, within The Polpo Group. Long story short: it’s a CFO + Accounting service for agencies (wanna hear more?).

My goal is to involve my team as much as possible —and give them the freedom to grow and be resourceful.

Just a few weeks back, they had to handle a problem that came up. It wasn’t a huge deal, but they just didn’t approach the situation the way I would’ve.

Old me would’ve told them how it “had to be done” —and to deal with it like I said moving forward.

But what would’ve happened?

They would’ve lost their confidence, and they’d be terrified to try something new and take initiative next time. And with good reason.

When you’re coaching instead of directing, you take the time to talk through their decision-making. You can offer feedback, but you don’t want to impose your beliefs on them.

Big difference.

Not all decisions are created equally.

I know you think every decision is important. At least that’s what I thought when I was starting out.

Look, I get it. It’s your business — and no ones gives as much of a fuck about it as you do.

But honestly, 95% of all the choices you make on a daily basis are not make-or-breakers. It’s not that they don’t matter, it’s that you’ll be alright either way.

You can (and should) pass those to your team. They’ll deal with them just as good as you could — and they’ll free up time for you to face the ones that really matter.

Think about it — what are the decisions that will make a bigger impact on your company?

Who are the people in your leadership/executive team?
What is the vision you want for your company?
What is your long-term strategy?
What type of culture do you want to foster?

These are your responsibility — and the ones I focus on at Jakt. Within my company, there are hundreds of decisions made every day that I don’t know about. That’s fine. I don’t want to know. These are theirs, and I have mine.

Other than a selected group of monumental decisions, shit’s not going to break without you.

What should you do when people come to you with a decision?

First, do NOT try to give them an answer.

You’d just be further enabling them to come to you over and over again. And you don’t want to reinforce that they’ll get an easy answer from you, right? Instead, push it back to them. Have them make a decision by themselves from now on.

But hey, they must know they have your cover and you have their back. And that you won’t get mad or upset at them if it doesn’t go so well. When you talk to them about it, make sure you are genuinely looking to coach them —not berate them. Otherwise, they won’t try to take initiative next time around.

THAT is how you start building it into your culture.

Took me years and years to learn to make fewer decisions. But I hope you can take this, implement it, and reap the benefits sooner than I did.

Don’t get caught in the same bottle-neck I did. Delegating is necessary when running a business, and you are stopping the flow by making it You-centric.
Coaching is not about imposing your way on your employees. It’s about helping them by listening to their perspective and offering non-determinant feedback.
Understand that all decisions are not created equally. Let go of control and focus on the few decisions that matter the most.

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