Category Archives for "Uncategorized"

May 17

PRICING YOUR PRODUCT OR SERVICE

Uncategorized

PRICING YOUR PRODUCT OR SERVICE

When I consult with a start-up business owner, I know the conversation will eventually turn toward pricing. The question they always ask me is: How do I establish my prices?

The question is as old as time itself. Unfortunately, my standard response is not what most aspiring entrepreneurs are looking for. The answer?

IT ALL DEPENDS

While this answer may seem deflating, at least initially, understand that the conversation never ends there. You see, when establishing your pricing there are a number of factors to consider.

Obviously, it has to start with examining your costs in order to determine what your break-even point is. After that, it comes down to a number of other variables:

  • Are you a commodity?
  • Is your business model volume based?
  • Are you offering a premium product or service?
  • How much demand is there for your product or service?
I will address each of these questions individually.

If you are a service-based business, you are not a commodity. The market place may try to commoditize your business, but you cannot allow that to happen.

WHY?

Because consumers buy commodities based on price and you do not want your services to be judged solely on price. I would also argue that consumers should not buy commodities based exclusively on price, but I that is a conversation for another day.

I have seen many new businesses struggle because they allowed the market to commoditize their business. Worse yet, I’ve seen business owners do this to themselves. They do a bit of market research, assume everything is an apples to apples comparison, and establish their rates to undercut the competition. DO NOT DO THIS.

You need to value yourself and the services you provide. If you don’t, no one else will.

#2 – Is your business model volume based?

If your business is selling a typical commodity, it is likely volume based. A volume based business is usually transactional in nature. The goal is to keep COGS (Cost of Goods Sold) low, maximize efficiency in operations and distribution, and sell to the masses.

If your business is volume based, price almost certainly will be heavily influenced based on the market. Unless you invest time and energy into educating the market on why your product is better and worth more, you have to be priced competitively in order to maximize market share. It doesn’t mean you have to be the cheapest, but you will need to be comparable with the market averages.

#3 – Are you offering a premium product or service?

The answer to this question is important. When you offer a premium product or service, price becomes less of a factor. You are marketing to a select group of people who value quality and can afford to pay for it.

Because your ideal customer may be the higher income earners, your market is smaller. It will be critical to maintain higher profit margins because your sales totals will typically be much less than volume based businesses.

Businesses offering premium products or services must allocate significant time and resources toward product/service development, quality control, and exceptional customer service. They must also invest in educating the market on what sets their product or service apart, making it superior to what the competition offers.

#4 – How much demand is there for your product or service?

The driving force behind any ecosystem is simple: SUPPLY AND DEMAND.

I know entrepreneurs who have developed some incredible products and services only to find out that there isn’t much of a market for what they are offering.

Conversely, I’ve seen existing businesses shift their efforts to underserved markets simply because the demand outpaced what current providers could supply. They recognized that an opportunity existed, and they pivoted in order to take advantage.

Before you can establish your pricing, you have to determine how big the market is for your respective product or service. Once you know how big the market is and what others in the market are charging for their product or service, you can begin to evaluate what your particular market will bear.

As you work through this process, remember that there aren’t right or wrong answers to any of these questions. You, and your business, have the potential to be unique and as such, you have value within your industry. You should consider your value proposition and how it may set you apart from your competition.

I’ve worked through this process many times and the information I’ve just shared with you is only a small piece of it. If you feel stuck in this area and would like to discuss it further, I’d love to speak with you. You can reach me at kent@kentgustafson.com.

May 17

How To Build A Network

Uncategorized

When I consult with a start-up business owner, I know the conversation will eventually turn toward pricing. The question they always ask me is: How do I establish my prices?

The question is as old as time itself. Unfortunately, my standard response is not what most aspiring entrepreneurs are looking for. The answer?

IT ALL DEPENDS

While this answer may seem deflating, at least initially, understand that the conversation never ends there. You see, when establishing your pricing there are a number of factors to consider.

Obviously, it has to start with examining your costs in order to determine what your break-even point is. After that, it comes down to a number of other variables:

  • Are you a commodity?
  • Is your business model volume based?
  • Are you offering a premium product or service?
  • How much demand is there for your product or service?

I will address each of these questions individually.

#1 – Are you a commodity?

If you are a service-based business, you are not a commodity. The market place may try to commoditize your business, but you cannot allow that to happen.

WHY?

Because consumers buy commodities based on price and you do not want your services to be judged solely on price. I would also argue that consumers should not buy commodities based exclusively on price, but I that is a conversation for another day.

I have seen many new businesses struggle because they allowed the market to commoditize their business. Worse yet, I’ve seen business owners do this to themselves. They do a bit of market research, assume everything is an apples to apples comparison, and establish their rates to undercut the competition. DO NOT DO THIS.

You need to value yourself and the services you provide. If you don’t, no one else will.

#2 – Is your business model volume based?

If your business is selling a typical commodity, it is likely volume based. A volume based business is usually transactional in nature. The goal is to keep COGS (Cost of Goods Sold) low, maximize efficiency in operations and distribution, and sell to the masses.

If your business is volume based, price almost certainly will be heavily influenced based on the market. Unless you invest time and energy into educating the market on why your product is better and worth more, you have to be priced competitively in order to maximize market share. It doesn’t mean you have to be the cheapest, but you will need to be comparable with the market averages.

#3 – Are you offering a premium product or service?

The answer to this question is important. When you offer a premium product or service, price becomes less of a factor. You are marketing to a select group of people who value quality and can afford to pay for it.

Because your ideal customer may be the higher income earners, your market is smaller. It will be critical to maintain higher profit margins because your sales totals will typically be much less than volume based businesses.

Businesses offering premium products or services must allocate significant time and resources toward product/service development, quality control, and exceptional customer service. They must also invest in educating the market on what sets their product or service apart, making it superior to what the competition offers.

#4 – How much demand is there for your product or service?

The driving force behind any ecosystem is simple: SUPPLY AND DEMAND.

I know entrepreneurs who have developed some incredible products and services only to find out that there isn’t much of a market for what they are offering.

Conversely, I’ve seen existing businesses shift their efforts to underserved markets simply because the demand outpaced what current providers could supply. They recognized that an opportunity existed, and they pivoted in order to take advantage.

Before you can establish your pricing, you have to determine how big the market is for your respective product or service. Once you know how big the market is and what others in the market are charging for their product or service, you can begin to evaluate what your particular market will bear.

As you work through this process, remember that there aren’t right or wrong answers to any of these questions. You, and your business, have the potential to be unique and as such, you have value within your industry. You should consider your value proposition and how it may set you apart from your competition.

I’ve worked through this process many times and the information I’ve just shared with you is only a small piece of it. If you feel stuck in this area and would like to discuss it further, I’d love to speak with you. You can reach me at kent@kentgustafson.com.

May 17

Tax Structure

Uncategorized

TAX STRUCTURE

I get it, a blog article about tax structure probably doesn’t sound very exciting. If I’m being fully transparent, it isn’t exciting… but it IS important.

When first starting out, every business owner has to make the decision regarding how their business will be taxed. While each situation is different, there are certain factors that we all must consider when making this decision. The most common tax structures are:

  • Sole Proprietorship
  • Partnership
  • S-Corporation

SOLE PROPRIETORSHIP

The Sole Proprietorship option is quite common for Solopreneurs and other small business operations. When a single individual is the sole owner of the business, whether that be an LLC (Limited Liability Company) or an unincorporated business, the owner may choose to be taxed as a Sole Proprietor.

When a business is taxed as a Sole Proprietorship, the business itself does not file a tax return. The net profit or loss of the business for the calendar year simply flows onto a Schedule C that is attached to the owner’s personal tax return. In my experience, this is a really good option for many business owners when they are first starting out if they don’t know how profitable the business will be or even IF the business will be profitable early on.

Many people choose Sole Proprietorship status for the sake of simplicity, but there is also a drawback. When a business owner chooses to be taxed as a Sole Proprietorship, the individual owner pays self-employment income tax (social security) on 100% of the profits. While this may seem logical, the reality is that there are other options that can help the business owner save on taxes. I will be addressing that within this article.

PARTNERSHIP

If the business has multiple owners, whether it be an LLC or unincorporated, it’s common for the owners to choose a Partnership tax structure for the business. Like the Sole Proprietorship, the Partnership does not pay taxes and the net profit or loss of the business still flows to the owner’s personal tax returns.

However, the business is required to file a Partnership tax return and issue K1 Statements to the business owners. The K1 Statement shows the net profit or loss of the business and also reflects the percentage that each owner is responsible for on their individual tax return, based on their percentage of ownership in the company.

Like the Sole Proprietorship, the drawback of the Partnership tax structure is that the owners are paying self-employment tax on 100% of the profits of the business. Depending on their level of profitability, they could potentially save themselves a lot of money in taxes.

S-CORPORATION

When a business owner chooses to incorporate their business, they may choose the subchapter S-Corporation tax status. This tax structure requires the business to file a corporate tax return with the IRS, but the business itself is not taxed. Like the Sole Proprietorship and Partnership options, the net profit or loss of the business flows to the owner’s personal tax return… BUT the S-Corporation provides the business owner with a mechanism to pay less in taxes.

HOW?

As the operator of the S-Corporation, the business owner must pay themselves a salary. Per the IRS tax code, that salary must be commensurate with the market for operating a business of that size and scale. However, the business owner is able to pay themselves distributions of the remaining profits and the distributions are not subject to self-employment tax.

Example: Let’s say my business makes $200,000 in net profit in a calendar year. If the market calls for me to pay myself a $100,000 salary to operate the business, I am able to pay out the remaining $100,000 in profits as a distribution. This allows me to save roughly 15% in taxes on the $100,000 I paid myself in distributions.

I think most of us can recognize the benefits that come with the S-Corporation option, but it obviously requires the business to reach a certain level of profitability before the tax benefits may be realized.

Many business owners who start out as an LLC, taxed as a Sole Proprietorship, transition to the S-Corporation structure as their income grows. An LLC has the flexibility to opt for S-Corp status without changing the LLC entity structure. They simply submit paperwork to the IRS requesting that they be treated as an S-Corporation for tax purposes.

C-CORPORATION

The final tax structure I will address is the C-Corporation, though I won’t spend too much time on this one. With the C-Corporation tax structure, both the business and the shareholders pay taxes on the income of the business, which is commonly referred to as double taxation.

SO WHY WOULD ANYONE CHOOSE DOUBLE TAXATION?

99% of the time the simple answer for a small business owner is, they wouldn’t. The reality is that the C-Corporation is rarely the right tax structure for a small business. That said, there are some rare instances when it makes sense.

One of the benefits of the C-Corporation tax status is that the business owner can deduct their medical insurance premiums. If standard premiums are high and the business owner doesn’t expect their profits too far exceed what they would need to pay themselves in salary, this option could be right for them.

Additionally, the C-Corporation allows the business owner to hold a significant amount of money in retained earnings. This can be a benefit to business owners who are focused on building cash reserves and/or need to hold onto cash to cover a slow season the business may have or other interruptions in cash flow.

As I stated at the beginning, it isn’t the most exciting content, but hopefully you gained a bit of insight that might be beneficial to you going forward. If you are struggling to determine which tax structure is best for your business and would like some help, I’d love to speak with you. You can reach me at kent@kentgustafson.com.

TAX STRUCTURE



I get it, a blog article about tax structure probably doesn’t sound very exciting. If I’m being fully transparent, it isn’t exciting… but it IS important.

When first starting out, every business owner has to make the decision regarding how their business will be taxed. While each situation is different, there are certain factors that we all must consider when making this decision. The most common tax structures are:

Sole Proprietorship
Partnership
S-Corporation
C-Corporation
 
SOLE PROPRIETORSHIP

The Sole Proprietorship option is quite common for Solopreneurs and other small business operations. When a single individual is the sole owner of the business, whether that be an LLC (Limited Liability Company) or an unincorporated business, the owner may choose to be taxed as a Sole Proprietor.



When a business is taxed as a Sole Proprietorship, the business itself does not file a tax return. The net profit or loss of the business for the calendar year simply flows onto a Schedule C that is attached to the owner’s personal tax return. In my experience, this is a really good option for many business owners when they are first starting out if they don’t know how profitable the business will be or even IF the business will be profitable early on.



Many people choose Sole Proprietorship status for the sake of simplicity, but there is also a drawback. When a business owner chooses to be taxed as a Sole Proprietorship, the individual owner pays self-employment income tax (social security) on 100% of the profits. While this may seem logical, the reality is that there are other options that can help the business owner save on taxes. I will be addressing that within this article.



PARTNERSHIP

If the business has multiple owners, whether it be an LLC or unincorporated, it’s common for the owners to choose a Partnership tax structure for the business. Like the Sole Proprietorship, the Partnership does not pay taxes and the net profit or loss of the business still flows to the owner’s personal tax returns.



However, the business is required to file a Partnership tax return and issue K1 Statements to the business owners. The K1 Statement shows the net profit or loss of the business and also reflects the percentage that each owner is responsible for on their individual tax return, based on their percentage of ownership in the company.



Like the Sole Proprietorship, the drawback of the Partnership tax structure is that the owners are paying self-employment tax on 100% of the profits of the business. Depending on their level of profitability, they could potentially save themselves a lot of money in taxes.



S-CORPORATION

When a business owner chooses to incorporate their business, they may choose the subchapter S-Corporation tax status. This tax structure requires the business to file a corporate tax return with the IRS, but the business itself is not taxed. Like the Sole Proprietorship and Partnership options, the net profit or loss of the business flows to the owner’s personal tax return… BUT the S-Corporation provides the business owner with a mechanism to pay less in taxes.



HOW?

As the operator of the S-Corporation, the business owner must pay themselves a salary. Per the IRS tax code, that salary must be commensurate with the market for operating a business of that size and scale. However, the business owner is able to pay themselves distributions of the remaining profits and the distributions are not subject to self-employment tax.



Example: Let’s say my business makes $200,000 in net profit in a calendar year. If the market calls for me to pay myself a $100,000 salary to operate the business, I am able to pay out the remaining $100,000 in profits as a distribution. This allows me to save roughly 15% in taxes on the $100,000 I paid myself in distributions.



I think most of us can recognize the benefits that come with the S-Corporation option, but it obviously requires the business to reach a certain level of profitability before the tax benefits may be realized.



Many business owners who start out as an LLC, taxed as a Sole Proprietorship, transition to the S-Corporation structure as their income grows. An LLC has the flexibility to opt for S-Corp status without changing the LLC entity structure. They simply submit paperwork to the IRS requesting that they be treated as an S-Corporation for tax purposes.



C-CORPORATION

The final tax structure I will address is the C-Corporation, though I won’t spend too much time on this one. With the C-Corporation tax structure, both the business and the shareholders pay taxes on the income of the business, which is commonly referred to as double taxation.



SO WHY WOULD ANYONE CHOOSE DOUBLE TAXATION?

99% of the time the simple answer for a small business owner is, they wouldn’t. The reality is that the C-Corporation is rarely the right tax structure for a small business. That said, there are some rare instances when it makes sense.



One of the benefits of the C-Corporation tax status is that the business owner can deduct their medical insurance premiums. If standard premiums are high and the business owner doesn’t expect their profits too far exceed what they would need to pay themselves in salary, this option could be right for them.



Additionally, the C-Corporation allows the business owner to hold a significant amount of money in retained earnings. This can be a benefit to business owners who are focused on building cash reserves and/or need to hold onto cash to cover a slow season the business may have or other interruptions in cash flow.



As I stated at the beginning, it isn’t the most exciting content, but hopefully you gained a bit of insight that might be beneficial to you going forward. If you are struggling to determine which tax structure is best for your business and would like some help, I’d love to speak with you. You can reach me at kent@kentgustafson.com.
May 17

Building Confidence

Uncategorized

BUILDING CONFIDENCE

Over the years, I have been asked the same question from aspiring entrepreneurs:

“When you are starting out and trying to grow your business, how do you build confidence in yourself and your business?”

I believe this is a fair question and after 15 years as a business owner, I can say that my answer hasn’t really changed. If you are able to apply the following formula to your business model and “stay the course” I am confident you will achieve the desired result.

BELIEVE

This may seem rudimentary, but the unfortunate reality is that MANY people who start out with the goal of becoming a successful entrepreneur do so without ever developing a deep conviction in themselves or their product or service. This is a recipe for failure, and you simply cannot expect to achieve your goals if you don’t believe in yourself and your business model.

I’ve heard numerous business owners say how much they believe in themselves and what their product or service will do for others, but sometimes this is nothing more than lip service. You WILL face countless obstacles and hardships as an entrepreneur, and it is paramount to your success that you possess a true determination to succeed that is unwavering.

It all begins with a foundational belief that your product or service is valuable, and there is a real market that wants AND needs whatever you are selling. Furthermore, you must hold a level of resolve that no matter what adversity comes, you are more than capable of overcoming it. I have asked many of my clients this question: If you don’t believe in yourself and what you have to offer, how can you possibly expect anyone else to? The simple answer is you CAN’T.

DISTANCE YOURSELF

As I’ve already mentioned an unwavering belief in yourself is vital to your success, but at times it will feel like a daily grind to maintain confidence and move forward. You will be vulnerable to ANY negative influence in your life and the cold hard truth is that we all have people in our lives who are really good at being the wet blanket on the fire. This doesn’t make them bad people, but it does make them incompatible with where you are at and where you are going.

Does this mean you should tell these people to take the train and get out of your life for good? I can’t answer that question with absolution because every situation is different, but I can tell you from my own personal experience that building a successful business is HARD and the last thing any of us needs in that situation is someone who will drag us down and make it harder so you would be wise to distance yourself from those negative influences.

FAKE IT UNTIL YOU MAKE IT

Most have heard the phrase “fake it until you make it” and people often misinterpret this as lying or being deceptive, but I believe there’s a far more pragmatic view of the “fake it until you make it” approach. Anyone who has ever started a business knows that until you make your 1st sale you are in a pre-revenue position, and you don’t have SALES (plural) until you’ve made your 2nd sale, then your 3rd sale (and so on and so on). In other words, we’ve all been there.

So when you talk about your product or service, you might talk about your client(s) and share more than one way you helped them. You talk about meeting a certain need, or solving specific problems they had been dealing with. This allows others to learn about your level of experience and the different services you offer or the various problems your product solves.

In my first year or two in business, I shared a number of TRUE stories about the experiences I had with my first 5-10 clients including the problems I solved, the ways I was able to benefit them, and how happy they were to be working with me. I am quite confident this established my credibility, a proven track record, and the confidence prospective clients could have in my experience and the services I had to offer them.

Over time you will grow your business and your customer base, and then others will be singing your praises and referring business your way. Until then, you must represent your business with supreme confidence and never stop believing in yourself.

MAKE SALES

I get it… this seems like a no-brainer. Guess what? It is… but it can be easier said than done.

There is simply no substitute for making sales, generating revenue, and growing your business. Not only did I gain more confidence with every single sale when I was first starting out, BUT I realized that my experience was growing rapidly as well. Being exposed to different businesses, understanding the various challenges they were facing, and realizing I could actually help them only served to multiply my confidence exponentially.

It wasn’t long before my email inbox was filled by people asking questions that I knew the answers too and my phone was ringing with requests for my help in solving problems that had business owners stuck. When you get that very first phone call from someone who says, “I have a problem and [NAME] told me you are the guy who can solve it for me,” I can promise you that your confidence will soar. As an entrepreneur, there’s no better feeling.

If you are struggling to build CONFIDENCE and would like some help, I’d love to speak with you. You can reach me at kent@kentgustafson.com.

May 17

Managing Stress

Uncategorized

Over the past 15 years, I’ve had the opportunity to work with thousands of business owners to start, grow, and sustain successful businesses. With all of that experience I’ve learned a thing or two when it comes to managing workflow and controlling my stress level. Believe it or not, I’m often asked about that aspect of business ownership by other entrepreneurs who are struggling to find a balance.

While controlling workflow and managing stress isn’t an exact science, I can state with great confidence that there are a few “tricks of the trade” that I will share with you. Being informed in this area is the first step. Implementing these tips I’m about to share with you is step two. So without further ado, here they are:

PRIORITIZE

When the laundry list of things to do is long, it’s easy to feel overwhelmed and defeated. We all have to accept the fact that we are 1 person and there are only 24 hours in a day. Translation: You can only do so much.

The problem with many entrepreneurs is that we like to think we have superhuman abilities and are capable of leaping tall buildings. The reality is that we don’t and never will. Therefore, it is foolish to put unrealistic expectations on ourselves.

Rank every task in order of importance and focus on those tasks that have the highest priority first. Accomplish what you can accomplish in a reasonable workday (8-10 hours), and leave the rest for another day. Trust me, the work will still be there tomorrow.

SET REASONABLE DEADLINES

We all want to do well and offer our clients the highest level of customer service. What we often forget is that those whom we serve are usually rational and can differentiate between a reasonable timeline and one that is unrealistic. Yet we want to be great, so we tend to make promises that may stretch us too thin. Eventually, this approach will come back to haunt us.

As entrepreneurs, we spend so much time hustling to make sales and grow topline revenue that we fail to establish clear boundaries. Our clients ask us to do something, and we say YES. They ask if we can complete the task by a certain date, and we say YES, even though we have already said YES to more things that we can possibly respond to within the designated timeframe.

I get it, I was there once myself, but the reality is that this approach is a recipe for disaster. You will either fail your clients or burnout from stress (or worse). Trust me, you aren’t doing anyone any favors and you will end up being miserable.

When you make the decision to set reasonable goals and deadlines, you will feel completely liberated.  Your clients will still love you (and still want your product or service), your customer service will actually improve, and I guarantee your stress level will drop. Trust me, those whom you serve will respect you when you establish boundaries and live by them.

DELEGATE

This is another one that can be tricky for a lot of entrepreneurs. When you build your business from the ground up, you wear every hat and know your business inside and out. You’ve always done it your way and it’s hard to let go. How can you release that responsibility to others and trust them to do it the way you did it?

Guess what? You simply cannot afford not to. Find the right people, train them well, and trust them to do their job. They may not do it exactly the way you did it, but they might do it just as well or maybe even better. Either way, when you let go and learn to rely on others you gain so much peace and will definitely feel less stressed.

TAKE A DEEP BREATH

This may sound somewhat rudimentary, but I promise it makes a difference. When we get overwhelmed with everything, it impacts us mentally and physically. If we don’t do something about it, there will be negative consequences.

For me, taking a deep breath allows me to press the pause button. It helps to remind me that I don’t have superhuman powers and there are limitations on what I can accomplish in any given period of time. It also helps me to re-focus my efforts as I move forward and complete each task efficiently, and effectively.

There is much more we can do to manage our stress, but this is a really good place to start. If you’d like to talk this through, or could use some assistance in implementing these practices into your business, I’d love to help. You can reach me at kent@kentgustafson.com.

May 17

Meet The Man – How I Became A Business Consultant (Part 2)

Uncategorized

In my previous blog post, I shared with you the circuitous path I took to becoming a business consultant and the feedback I have received has been quite positive. In fact, I’ve had a number of requests to hear more about my family and how their influence has shaped me, and how that has helped me shape others.

I grew up in a middle-class home where both of my parents worked. We certainly weren’t poor, but we were by no means wealthy either. We never went without and had everything we needed, as well as some of the things we wanted. I didn’t always appreciate what I had growing up, but all these years later I realize how lucky I was and am grateful for the way I was raised.

My dad grew up on a farm and farming was all he ever wanted to do, but he simply didn’t have the necessary resources to farm at a level that would support a family of 5. So he worked a job he didn’t enjoy at the local print shop and farming was how he spent his free time. Personally, I wish he would have spent his free time doing other things because I didn’t enjoy the farm life at all and vowed my kids would never grow up picking rock, baling hay, or cleaning the barn.

But what I learned from my father all those years ago was the value of hard work. I realized that there was honor in working hard and it was a necessary component of supporting a family and living a life with purpose. I was grateful that my dad set his dream aside in order to provide a stable home for our family. I believe I owe a lot to the sacrifices my parents made and the work ethic they instilled in me. It is that work ethic that has allowed me to build my business over the past 15 years.

While I grew up in a working-class family, I was also blessed to witness entrepreneurship on a regular basis. My grandfather on my mother’s side, having nothing more than an 8th -grade education, started a trucking company in 1935 and built it up with his own 2 hands. I loved the days I got to spend with him picking up cattle or freight, seeing a man who was beholden to no one, doing things his way and earning a living. As early as 8 years old, a part of me knew that I would have my own business someday and follow in my grandpa’s footsteps.

As a kid, I knew I didn’t want to be a farmer or own a trucking company, but it’s amazing how much I was shaped by my experiences on my dad’s farm and traveling on those country roads with my grandfather. I was raised by parents and grandparents with strong work ethics, strong faith in God, and a love of family. I know I would not have the faith, the family, or the business I have today without that foundation.

All these years later, I am grateful for my amazing life. My wife, Heidi, and I have been together for 25 years and married for nearly 24. Our daughter Finley just graduated from high school and Karli is a sophomore. So much of what we have instilled in our daughters comes from how we were raised. We are grounded in our faith, our love of family, and content to live the a simple life.

I look back on my upbringing and my career over the past 28 years, and I realize that I am living my dream. I have the family I always wanted plus a front-row seat to see so many others pursue their dream of entrepreneurship. I can think of nothing greater than to pursue what you want with the support of a loving family.

When I started my business, my goal was to build something to support my family and allow me the freedom to be present with them as my kids grew up. It wasn’t easy in those early years and my kids would tell you that I spent a lot of time working, but it was worth it to be able to be present for the school concerts, plays, and ball games. If one of my kids was sick, or needed to be at an appointment I had the flexibility to work from home or adjust my schedule accordingly.

The entrepreneurial path has afforded me so many blessings. The greatest of these is the gift of time and the ability to live life on my own clock. If you’ve ever dreamed of starting a business and are ready to pursue your dream, I hope you find my story inspiring and feel empowered to take that next step. If you’d like to talk it through with an experienced consultant, I’d love to discuss it with you and see if I can help. You can reach me at kent@kentgustafson.com.

May 17

Meet The Man – How I Became A Business Consultant

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Most of us had dreams or aspirations as a kid. Some want to be a Doctor when they grow up, while others hope to become a fire fighter, police officer, teacher, or serve in the military. All of these and many other occupations are certainly noble professions and important roles in our society. But how many of us actually grow up to become what we dreamt of as kids?

I had many dreams as a kid. Like many boys growing up in the 70’s and 80’s I wanted to have a long and successful career as a professional athlete, motorcycle patrolman, musician, or sports broadcaster. In fact, the answer to the question “what do you want to be when you grow up?” might change weekly.

In the end, I graduated high school and headed off to college to major in broadcasting and my career path was set… until it wasn’t.

Like many 18-year-old kids, I realized I simply wasn’t ready to make a firm decision on how to spend the next 40 years of my life and halfway through college I knew that broadcasting was NOT the career path I wanted to pursue.

While admittedly feeling a bit lost at that point, I decided to shift my focus to what I was good at and leveraging my strengths.

Since I had God-given leadership skills, was extremely detail oriented, and possessed a strong aptitude for business it made sense for me to pursue a career in business management. Over the next 14 years, I held several management positions that afforded me invaluable experience in administration, employee management, operations, and sales. As I embarked on that path,  little did I know it was preparing me for something so much bigger… so much better.

After nearly 14 years in the corporate world, I made the decision to walk away from it and pursue my own path. I knew it would not be an easy transition because I was approaching my 35th birthday at the time, had a family to support, and had absolutely zero experience starting and running a business.

For some this would have been a difficult decision to make, but for me it was just the opposite. After years of experience in the business world, I knew I had compiled a wealth of knowledge and experience that I could use to help other people be successful and though the path I had taken to become a business consultant was a bit circuitous, it was necessary.

So what were the founding principles of my consulting business?

While this is different for everyone, there were really 3 core tenants for me:

  • I wanted to help people. More specifically, I wanted to help entrepreneurs and small business owners pursue their dreams and achieve success.
  • I wanted to start something from nothing. There is absolutely nothing wrong with buying an existing business, but I wanted to start at square one and build a successful business from the ground up.
  • I wanted to be in complete control of my time and live life by my own clock. I wasn’t afraid of hard work or long hours because both should be expected when starting and running a business, but I wanted to have the freedom to control my schedule and be able to be present with my family when I needed to be. My faith, my family, and living a life with balance and purpose are important to me and those factors had to be central in my consulting business.

These were my founding principles when I started out nearly 15 years ago, and I have not strayed from them. In that time I have served hundreds and hundreds of business owners and learned many valuable lessons that have blessed me on my journey. I will share just a few:

  • When you love what you do, going to work every day doesn’t feel like work.
  • There is no substitute for hard work. I value it and so do the people I work with.
  • If you do really good work, your clients will sing your praises and referrals will come.
  • When you operate your business with honesty and integrity, you can sleep well at night.
  • If you invest in relationships built on trust you will enjoy repeat business from a very loyal client base who appreciate your character, provide you with opportunities for repeat business, and refer you to their friends and family.

If you are thinking of starting your own entrepreneurial journey or searching for your purpose, I hope this window into my life and the path I’ve followed will inspire you to take action. If you’d like to talk it through with an experienced consultant, I’d love to talk with you and see if I can help. You can reach me at kent@kentgustafson.com.

May 17

Do You Set Goals?

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One of the questions I’m asked most often is, “What does it take to be successful?” In true teacher fashion, I love to turn the question around and ask the individual what they think it takes. I want you to stop right now and think about that question. Now, write down your responses.

I’m guessing you said something that included hard work, hustle, making good decisions, a bit of luck, etc. These are the typical answer I hear when I do this exercise. Sure, all of those responses are true, but there is one significant thing missing from the list—goal setting.

When it comes to absolutes, it’s been said that the only things you can count on in life are death and taxes. In my opinion, another absolute is that successful people set goals.

In my previous blog,  I discussed success and the process of defining it. Once you’ve taken the time to determine what success means for you, you want to do everything in your power to achieve it, right? Well then, the next step is to set goals.

Why is goal setting so important?

When you set goals, you are putting in place long-term vision and objectives and short-term motivation. Setting goals can help you find focus in your business and make it easier to organize your time, effort, and resources for maximum productivity. https://www.mindtools.com/page6.html#:~:text=Setting%20goals%20gives%20you%20long,the%20most%20of%20your%20life

How to accomplish business goals?

Once you come up with goals, you’re going to want to work towards those goals. There are some easy tips and tricks that will help you keep your goals top-of-mind, so you actually accomplish them.

In addition to setting your goals, you should be writing your goals down. Studies have shown that you are nearly 45% more likely to achieve a goal if you write it down. When you write down goals, it creates accountability. Yet only about 25% of us take the time to write our goals down. This is a huge mistake and one I would encourage you not to make.

Another way to make it easier for you to hit your goals is by creating a visual cue. The more we see something, the more it sticks in our brain. After you’ve written out your goals, put them in a place you’ll see daily.

Your goals don’t need to be lengthy or dramatic. In fact, if your goals are simple and concise, it will be easier for your brain to program them to memory.

What is a SMART goal?

Have you ever heard about SMART goals? Specific, Measurable, Achievable, Realistic, and Timely. In your business, you’ll want to make sure your goals are SMART goals.

Goals should be actionable and attainable. It does me no good to write down an unattainable goal. For instance, I have zero chance of ever playing in the NFL, so it’s completely unrealistic to make it a goal. But increasing my 2021 revenue by 10% over 2020 is a SMART goal and is something that I have some control over.

You’ll also want to focus on realistic goals. Focus on goals that lead you closer to your target. Remember that Success = Desired Outcome. If you haven’t defined success yet, you’ll want to start there first to understand what your desired outcome truly is.

Finally, you’ll want to focus on measurable goals. I could have easily said I want to increase my 2021 revenue, but at the end of the year, how will I measure that? Will it be successful if I make $1 more than last year? This is why measurable goals are essential and why a goal of increasing 2021 revenue by 10% over 2020 is a better goal.

It can take practice to set the right goals for your company. I would love to help you through the process or help you talk it out. Reach out to me at kent@kentgustafson.com and let me help you create specific, measurable, achievable, realistic, and timely goals.

May 17

How to Prioritize Revenue-Generating Tasks?

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If you have been following me, you have most likely heard me mention revenue-generating tasks. These tasks are vital to the success of your business but can be challenging to prioritize. Today, I’m going to give you some tips on how you can prioritize your revenue-generating tasks.

The first thing you need to understand is the difference between revenue-generating tasks and non-revenue generating tasks.

Non-revenue generating tasks consist of actions vital to your business’s operation and must be completed but do not directly drive revenue. Think about when you pay invoices, review financial statements, check inventory, improve customer service measures, manage employee matters, develop operational procedures, etc. These are all necessary and essential actions, but they do not drive revenue.

Some examples of revenue-generating tasks include sales (selling your product or service), generating sales proposals, product/service delivery, marketing development, customer lead generation, and follow-up with interested prospects, etc. All of these actions can help your business earn revenue.

Now that we have separated the revenue-generating tasks from the non-revenue generating tasks let’s go back to the question: how do we prioritize them?

I’m a big believer in simplifying things whenever possible. Obviously, it’s essential to generate revenue for your business to succeed, but that needs to be balanced with fostering a pipeline for future sales. Here are some of my recommendations on how you can do that.

  • Focus on low-hanging fruit first. If you have customers ready to buy, concentrate on meeting their needs and fulfilling their order requirements. Make the sale right in front of you, and then deliver the product or service the customer paid for (and do it well).
  • Generate sales proposals and send them out to the prospects quickly. When a prospect expresses interest in your product or service, provide them with the information they need to make an informed decision as quickly as possible. In this day and age, people expect a quick response, and making them wait could result in lost sales and negative PR.
  • Work on marketing development and lead generation so that you continue to build your brand and add prospects to your sales pipeline consistently.
  • Equally important is to focus your attention on promoting your most profitable products or services. Revenue generation is essential, but it won’t have the desired impact on your bottom line without maximizing your profitability.

If you don’t know your most profitable product or service, you need to figure it out fast. Businesses need to track and understand where their profits are coming from. As a business owner myself, I know exactly what my most profitable service offering is, and I build everything else I do around that. This is also something I help my clients do.

There’s definitely a lot more to revenue-generating tasks, but this is a good starting point. I’ve worked with thousands of businesses to help them put a system in place so they can prioritize their revenue-generating tasks. If you are still struggling with this and would like some help or just want to talk, I’d love to help. You can email me at kent@kentgustafson.com.

May 17

Achieving Your Goals

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Setting goals is important, but what comes next?

Setting goals and writing them down is an important step for every business owner, but in many cases, this is where the story ends. You see, it’s one thing to establish goals, but taking the necessary steps to achieve them requires a high level of commitment and effort.

As you may know, one of the services I offer to my clients and followers is full transparency. I willingly share my stories of success and more importantly, my failures, because I believe wholeheartedly that others can benefit from my mistakes and hopefully avoid making those same errors themselves.

When I started my entrepreneurial journey 14+ years ago I had no issue with identifying my goals, but the action plan for achieving them eluded me and I felt stuck. I had to learn the hard lesson, that goals without a clearly defined plan for achievement were worth nothing at all.

So what is the first step?

In my previous blog, I shared the importance of SMART goals.

When you establish goals that are Specific, Measurable, Achievable, Realistic, and Timely you put yourself in an excellent position to succeed, but it’s also very important when creating goals that you start by prioritizing your actions. This step may be the hardest one to take, but once you do, everything else flows from there and the puzzle pieces seem to fall into place.

As I worked to prioritize my actions, it became rather apparent that generating revenue had to hold the highest priority, so finalizing my marketing blueprint and developing my sales pipeline required a sense of urgency. While growing the company, expanding to include employees, and adding new service offerings were important goals, I knew they were secondary. With a family to support and bills to pay, my priorities had to be focused on revenue-generating activities.

So every single day I spent the bulk of my time working on revenue generation. I made phone calls, sent emails, scheduled appointments, and created marketing content. Administrative tasks, no matter how important, had to be done in the evenings or on weekends. I knew that the only way to realize my revenue goals was to focus my work efforts on revenue-generating events and make those my priority.

As I scaled my business, I had to alter my priorities to achieve the larger objectives and reach the long-term goals I had established. This meant setting aside specific blocks of time to complete work projects, create infrastructure for growth, and implement operational measures geared toward efficiency and productivity.

If you are just getting started and considering your goals, I encourage you to focus your efforts on revenue generation and customer satisfaction. Make the intentional decision to spend 80% of your time completing revenue-generating tasks and ensuring that your product/service delivery includes the highest level of customer service that will ensure client retention.

If you’d like some help with goal setting and prioritizing your actions, I would love to help. Reach out to me at kent@kentgustafson.com if you need some help or even if you’d just like to talk it through.

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