Financial management is a key ingredient of any successful business.  For years I have used a simple system that has played a critical role in my ability to create and advance momentum in business through good financial management.  I wanted to share that system with you today.  In essence, the answer to the question of where to invest your money has four parts:

Proven People – Early on in my business career I realized a couple important principles about success in business.  First is that long-term success comes from building long-term relationships.  Over the years I have found that the most critical aspect of building long-term relationships was the “Relationship Selection” phase of the process.  In essence, if I started with the right person, then my chance of building a long-term relationship was so much greater.  Equally, if I started with the wrong person then my odds of building a long-term successful relationship were compromised and failure was relatively high.  Below are the three questions that I ask every time I examine relationships, especially in the relationship selection process.

1. Can they do the job (the “needs” question)?
2. Will they do the job (the “commitment” question)?
3. Are they a fit (the “compatibility” question)?

Proven Systems (including products and services) – All businesses at their core are a collection of systems.  That means your chance of success improves if you create or utilize proven systems.  Remember, the greatest failure in business occurs in innovation.  Much of innovation involves building sales (prospecting and conversion) and support (relationship building and retention) systems.  In addition, innovation is where you build products and services with a goal of moving into the marketing of those products and services, and ultimately driving profits in your business.  If you are fortunate enough to align yourself with a business culture or opportunity where they have proven systems, products, or services, then your focus should be about learning them.  The quicker you learn them, the faster you can reach the marketing stage of business which is what drives the sales process. 

Innovation – The only constant in business is change.  I have learned that consistently advancing momentum requires the ability to embrace two things – change and problem solving.  Change can be embraced in two ways.  First, you can focus on what you need to fix that is slowing down growth.  Second, you can focus on what you need to improve upon (make something better).  When it comes to problems, remember that business is often nothing more than the pursuit of a better quality problem.  Innovation is often the path needed to accomplish that goal.  For example, let’s say your problem is getting 2 new customers a day.  Imagine how much different that problem is than trying to figure out how to manage the process of dealing with 10 new customers today.  In the end, problems are your friend if you remember the goal is the pursuit of a better quality problem.  Finally, remember that nothing is forever.  Change is inevitable which is why innovation has to always be a part of any successful business.

Personal Development/Education – There is a simple formula I have followed for years when it comes to creating wealth.  That formula is  Wealth = Value + Leverage.  Value is about what you can do in the marketplace.  That is the “You” component of personal development.  Leverage is about learning to utilize “Others” as a way to increase your value.  When you understand leverage, then you understand how to get paid over your value.  The “You” component only allows you to get paid by the hour.  The “Others” component allows you to get paid for the value you bring to an hour (a combination of your efforts and the efforts of others).

Finally, when it comes to personal development, remember the process is Awareness + Integration.  Information only has power if you do something with it.  Examine the information above and see what you need to learn to create more value, have more fun, contribute at a higher level, or do a better job in relationships.  Also keep in mind that one of the most important parts of personal development is taking quiet time to think.  Discipline yourself to set aside time everyday to learn, grow and examine your life.  I can tell you as a personal testimonial that building “Self Communication Time” into my DMO (time management routine) played a critical role in my ability to sustain long-term success.

One of the biggest failure points in business is the process between making a sale and earning a relationship.  For too many business owners, the sale is an event instead of part of a process designed to earn a relationship and subsequently multiple paydays from the relationship.  Remember, for most businesses one of the most significant costs is the acquisition of the customer.  That is why it is so critical to turn that customer into a relationship.  Often when sales become a bigger priority than a relationship, the business will struggle to survive long-term. 

One of the key principles in business is that long-term success requires long-term relationships.  In this blog I want to discuss the first part of this process.  In reality, every sale is made for a reason.  However, a sale is just a promise or an expectation.  To earn a relationship, you must fulfill the promise, not just make it.  Below are the three critical questions that you should be asking with every sale so that you can earn your way to a relationship and stability in business.

1. Why did this person make this decision?  In other words, why did they take my product or utilize my services?  In reality, they made the decision because the customer felt it would meet some expectation or need in their life.  It is critical that you understand that need and expectation because it is your job to insure it is fulfilled if you desire to earn a relationship with your customer.

2. How does this person know if the need or expectation is fulfilled?  All needs and expectations have a way of being measured.  If you do not understand how a need or expectation is measured, then you might fail to properly do the job.  For example, suppose you market a nutritional product and the expectation of your customer is to lose weight.  That is an easy expectation to understand but the measurement of that expectation can be a wide spectrum.  For one customer that might mean a pound a day.  For another it might be a pound a month.  That is why understanding how your customer measures the fulfillment of their need or expectation is as critical as understanding the need itself.

3. What does the customer expect from you?  Customers will enter into a relationship with two expectations.  First, they want to know that you have their best interest at heart.  In other words, that you are willing to work to fulfill their needs.  If you are so focused on your own needs being fulfilled without even considering if your customers’ needs are being fulfilled in the process, then you have ventured onto a path often resulting in failed relationships and a bad reputation.  Second, you (and your product and service) have to be able to fulfill the need of the customer.  In other words, you can’t earn a relationship if you can’t do the job.

In the end, the most successful businesses are the ones that build on “relationship income”.  When you make earning relationships the focus of your business, I can assure you the benefits will be greater than you ever imagined possible.

As I noted in my last blog, effective time management is one of the biggest challenges for people in society today. I explained that time management evolves around two words – plan and control. In short, you need a plan in order to meet your needs in all areas of your life and you have to remain in control of your time as much as possible. However, awareness is only the first step in the process. You can build a better plan and even figure out how to gain more control, however without integration change will be minimal at best.

One of the best integration systems is your DMO. This is the routine or discipline that drives the process. While a DMO is different for everyone, I have found 5 critical tenants of any successful DMO that MUST be in place if you want to maximize the value of your DMO. Those tenants are as follows:

1. Productive Tasks – Productive tasks are those activities that drive the growth of your needs. In other words, in every area you manage in life (career, business, family, etc.), there are activities you can do every day that will (1) insure your needs are meet in these areas, and (2) will actually increase the fulfillment of your needs in these areas. One of the basic rules of time management is to focus as much time as possible in “productive”. I would note that much of “productive” is driven by consistent tasks or disciplines. However, there are times when productive is about new tasks and different activities. In the end, remember that one of the key components of success is UNWAIVERING PIGHEADED DISCIPLINE. Your goal with productivity is to have that phase define your DMO.

2. Scheduled Communication – The #1 place I see people struggle with control is in the area of communication. Too much of their communication is (1) controlled by others, or (2) compromised by poor management of their own systems of communication. The key is to schedule all forms of communication (phone calls, texts, emails, etc.). It often requires someone to change their thinking in order to improve in this area. For example, stop picking up your phone every time it rings. Instead, schedule your calls. Stop going to the email every second one comes in and instead schedule a time to review and respond to email. Also, remember to tell people your rules on scheduling communication. If not, you might find that their inability to reach you on their terms can be taken the wrong way (i.e. they may surmise that you are too busy for them). In the end, the more you schedule your communication, the more you will have control of your time.

3. Collection of Information – Every day our world fills us with new information. I find that when people do not collect and schedule information, they often lose control of time. Not everything that comes in through various forms of communication has to be acted on the minute you get it. The key is setting aside information you gather from the day and processing it all at one time. I like to do this at night as I wrap up my day. In other words, I go to whatever information I have collected that day and either (1) schedule it, or (2) put it in an organized system where I collect all data so I can schedule it later.

4. Proactive Time Planning – You should begin every day with a plan. I have found the best time to set up a plan is the prior night. That way I start every day with a plan on how to best utilize my time. I pay a great deal of attention to days that have deviated from my plan. Those are opportunities to study (1) whether I planned ineffectively, or (2) how I lost control of my day. Remember the rule of good time management – either you control time or time controls you. To control time you have to be “proactive” vs. “reactive” in the management of your day. Also, one useful strategy with productive time management is to have “purpose days”. For example, every Sunday is my “Planning Day”. This is when I organize the coming week and update my long-term planning strategies. Another example would be “Focus Days”. This is a day where I focus as much of my day as possible on driving one area of my life. A good example is that about 3-4 days a week I stay focused on the activities that drive my business growth. I find the four critical “purpose days” are (1) focus days, (2) admin days, (3) planning days, and (4) thinking days. There are also many strategies that can be used with proactive time management that allow you to use your time more EFFECTIVELY.

5. Self Communication Time – I never realized the value of quiet time until I incorporated it into my day. It has probably had the greatest impact on my ability to advance momentum than any change I have made in my life. Many years ago I realized an important distinction – people that stay in a state of momentum take quiet time to think. During this time they process things like planning, problem solving, analysis of where momentum isn’t moving forward, relationship gaps and personal development plans. For many it is about journaling, which is a great starting point for establishing a quiet time regimen. Although so much of self communication time is used for analysis, I believe part of the process has to be integration. Ultimately, if you can process the world around you and integrate for change, your chance of staying in momentum is great.

In closing, a good DMO might be the most useful and simple system that anyone can use to improve time management. If you build in the five tenants of a DMO that I outlined above, I am confident that this strategy will make a profound difference in your life.

If any of you have your own personal strategies about how you successfully manage your DMO, or just comments in general about what you have read… feel free to share them with all of us by commenting on this blog.  Just click on the “read more” button below and scroll down to the reply box.  Thank you!