So Many New Things, So Little Time

Welcome to another Thursday Update!

This week I want to give an update on some personal goals of mine for 2015.

Goals Update

Those astute readers might have noticed there was no Monday post on the blog. My goal for 2015 was to get a post a week up, every Monday. Now after a few months of keeping on track I’ve missed a week, so what happened?

Well, for starters, I had been writing on the weekends and editing on Monday as I post the blogs. Three weeks ago Kelly and I finally closed on 10 acres of land so I have been spending my weekends working at our new property instead of sitting at home writing. This means that my regular schedule shifted to Monday nights after work.

This Monday, after a busy day at the shop, Kelly and I had the opportunity to spend time with some close friends that we have been missing for a while, so I decided I could post the blog on Tuesday instead and spend some overdue time with close friends.

Tuesday I got invited to a Toastmasters group by a friend. One of my goals for 2015 is to do some regular public speaking and this included the strategy of joining a Toastmasters group here in Charlotte to improve on my speaking skills, but which of the 60 groups should I join?

So, when I was invited to one of the better groups in the area, I skipped the blog on Tuesday to attend an event and it was awesome! I will be returning next week and will likely join this group and make it a regular meeting helping me to further my public speaking ambitions and to learn/improve some new skills.

Wednesdays are usually packed for me and my mother came back from her trip to Canada so we had diner together and caught up, so I skipped the blog on Wednesday too.

So why didn’t I get a blog uploaded? I disrupted my writing routine by getting busy on the weekends and adding some more projects/commitments to my schedule. This meant that my usually quick edit/post session on Monday was not possible so I ended up sacrificing my writing opportunity this week.

When starting new habits, sticking to the routine is very important. I may have to re-evaluate my schedule and see what I can work in now that we will be unavailable most weekends.

Now with all that said, I am not completely bummed about the missed blog because I have been directing a lot of my energy toward another goal for 2015, public speaking. This is obviously a better excuse than say, sleeping in all week long.

In other, related news, I’m happy to say my first speaking opportunity will be next Wednesday at 2:00 for the South Park chapter of the newly formed Business Klub here in Charlotte. I will be writing and presenting a speech about online reviews and reputation to a group of business owners and entrepreneurs. If it is useful it will become a regular talk that I will be able to give to 7 or 8 other meetings around Charlotte and it will be a great opportunity for practice and improvement.

Currently I am on track for my first group of 90 day personal goals in 2015 although it is possible I may have to alter my writing schedule over the next few weeks in order to put as much effort as I can into my public speaking. As I get a little more comfortable with that, the time required will be much less and I will be able to pour more of myself back into writing.

At the very least I will continue the Thursday Updates for those who want to keep up. My biggest challenge to success is going to be and has always been stretching myself thin and not getting enough progress on all my projects.

It’s looking like I also may be putting my racing hobby on hold for 2015 in order to get through some of these goals and work on our property and finish renovating our motor coach. All this while running and growing our existing business and exploring two new business opportunities mean there is a lot on my plate and I’m going to be keeping an eye on what I’m doing to make sure I’m not taking on more than I can handle, which could be exactly what is going on.

 

Advertising for our “Brick and Mortar” business (part 2)

Today I want to share two examples from our advertising portfolio.

The first I want to talk about is Angie’s List. Businesses can create free profiles and members can to fill out reviews on these companies. This does not cost the company any money and it is possible to gain some clients just by great service and word of mouth. Companies can also choose to advertise with AL for some premium services that will put their brand at the top of the list.

When a member searches for your service they get a list of companies. Premium companies will show up at the top of the list and have the ability to create offers or coupons that the free listings don’t. Premium companies cannot alter their reviews in any way and must maintain a B rating or better to advertise with AL so the integrity of the process is maintained.

We started advertising with AL in the middle of 2012 and didn’t see major results for about 6 months when our reviews started to come in. Once we had 3 or 4 good reviews we started to see a lot of traffic. Even better was the types of people coming in the door. Our AL customers on average spent 20% more than our average customer in 2013 and 80% more in 2014. I attribute this partly because people with larger upcoming repairs are more likely to seek out a highly rated repair facility than someone coming in for regular service so these were customers with lots of repairs coming up soon.

  • As of right now AL members make up about 10% of our total business.
  • In 2013 our total cost of advertising was around $6500 and total revenue generated was $47,698.62 for the year.
  • In 2014 our total cost of advertising was around $7800 and total revenue generated was $41,118.19 for the year.

In our industry the gross profit is around 50% (before rent, utilities, insurance, advertising, training, uniforms, etc) so we need to make sure our advertising cost is less than 1/2 the total revenue generated. As long as the advertising cost is lower than the gross profit we are able to put money in the bank to pay for all our other expenses and we come out ahead.

As you can see, the cost to advertise is a lot lower than the revenue generated which is why we continue to use AL. It was surprising to us how well it has worked years later. Now we have 58 reviews with an A rating and we are Super Service Award winners for 2012, 2013, and 2014.

The key to making Angie’s List work is to find out who is a member and treat them like superstars! Obviously as a business owner you try to treat all your customers like they are the most important person in the world but some times we have bad days and we just don’t have the energy, but EVERY member gets 4 emails and phone calls to fill out reviews on your company after they look you up so there is an extremely high chance that person is going to fill out a review that hundreds of potential future customers will see one day.

Treat them like Superstars no matter what!

 

The second company I want to highlight is our local Town Calendar.

This is an advertising program run by a local person who we have known since we first opened 5 years ago. She is pretty awesome and one of the nicest ladies you will ever meet. Every year she puts out a local calendar that is sent to every home in our town with important dates and coupons for local business on the bottom. She sells these coupon sections for a couple hundred bucks each to cover the cost of printing and make some profit.

We have tried a few different coupons and had very mixed results.

2012 – Cost: ~$1100 for four coupons in March, June, Sept, Dec for $9.95 oil changes

Results: 118 total visits, $8,338.51 spent for an average of $70.67 per person

2013 – Cost: ~$500 for two coupons offering $10 off any service over $100 or $5 off any oil change.

Results: 2 total visits, $106.74 spent for an average of $53.37 per person

2014 – Cost: $350 for two coupons offering 10% off any service

Results: Depends. What we found out is that the people using the 10% coupons were already customers of ours. That means they were getting discounts on work they already were probably going to pay for any way. If you look at new customers in 2014 there were only 5 and they spent $428.81.

If you look at the total spent in 2014 and assume they only came in because they had the coupon it could be as high as $4,456.13 but that really isn’t a good indication the program worked because those were all people who came to us in 2013 and were already customers. More than likely the 10% coupon cost us $500 in discounts we probably wouldn’t have given otherwise.

We found the only way this advertising worked was to offer a stupid cheap oil change for $9.95 and have 118 people come in. Of those we got several lifetime customers that have spent $25,007.27 over the last three years. The problem with that figure is the amount of time it takes to get those customers and what they spend. We had to do 118 oil changes that lost money to gain customers that spend 42% of what our average customer spends.

That was fine in 2012 when we had lots of free time but now we’re a busy shop and that is time we could spend with our loyal and regular customers! We would need to put off customers who spend a lot more money to service 100 coupon shoppers to try to get 10 return customers that spend less than half as much over their life.

In 2015 we did not repeat our coupon offers.

 

Hopefully those two examples shed some light in how we make advertising choices. It’s not just about attracting customers or generating positive cash flow. Targeting your ideal client is important too!

What ever you do, make sure you have a system to track every client so you can go back on a regular basis and see what works and what doesn’t.

Hidden Inspiration from Super Bowl XLIX

Super Bowl XLIX has come and gone, and regardless of which team you were rooting for I think everyone can agree that it was a game with a lot of ups and downs.

With all those high and low moments sprinkled between a mix of funny and depressing commercials, a half time show that made you think someone slipped LSD into your drink, and a final two minutes that seemed more ADHD than a teenager watching YouTube, it is understandable that you may have missed a few awesome lessons sprinkled throughout the broadcast.

So just in case I wanted to point out a few lessons from the Super Bowl that we can start to apply right away.

Lesson 1: Why Did They Throw The Ball?!

The biggest questions fans are asking themselves is why Seattle threw a pass that ultimately got intercepted costing the Seahawks the game. With three chances to run the ball three yards for the win and the best running back in the NFL, for some reason they chose to call a pass instead.

Sometimes in business and in life we can become our own worst enemies. Have you ever overthought a situation and created a big mess?

What was called for in this situation was good ‘ol fashion football. Drill down, grab a yard or two, and advance the ball to victory.

Sometimes in business what is called for is not a fancy advertising campaign, a new hot product, or headhunting a hotshot manager. Instead what is called for is good ‘ol fashion business fundamentals.

Developing great phone skills = Run the ball

Remembering your client’s name = Run the ball

Investing in your team = Run the ball

Don’t overthink your situation. That trick play can make you look like a hero but it can also blow up in your face. Running the ball may not be as sexy as the trick plays but little gains here and there can add up to big victories!

If nothing else, take solace in the fact that professionals screw up all the time too. Allow yourself the freedom to make mistakes and learn from them.

Lesson 2: How a 7th Round Draft Pick Turned Into a Play Maker!

When Julian Edelman was picked by The Patriots in 2009, 231 other players were picked before him. So how did this “Picked Last for Kickball” player turn into a star 5 years later?

Not surprisingly the answer is lots of hard work!

According to teammates, Edelman is up as early as 5AM every morning, routinely beats the coaches to training sessions, and spends most of his extra time getting in workouts, watching training films, and catching balls.

All this while keeping a positive attitude and encouraging his teammates!

I personally don’t believe there is any such thing as an “overnight success” and I believe that people are never stuck in their current situation.

Julian is a great example of how hard work and consistency can add up to great success.

How would your career look if you put in the extra hours for 5 years? For that matter what would your marriage look like? How about your health and fitness?

Obviously you can’t put in all this hard work on everything in your life, so pick the few things that are really important to you and start to focus on those.

If you need help picking your top goals you can always use the Warren Buffet strategy. His key is to pick the few that matter and ignore everything else.

Lesson 3: Chris Matthews: Footlocker to Super Bowl but Almost Blew It!

A year ago Chris Matthews was working at Footlocker and as a security guard when he got a call from the Seahawks asking him if he wanted to try out. Obviously we know how things turned out but did you know he almost blew them off?

When an NFL team calls you to try out, you drop everything and book the next flight.

His response:

                “I don’t get off of work until 9 p.m. I don’t know if I’ll make it.”

Luckily his agent called him a minute later and slapped some sense into him and he caught his flight.

But why would anyone almost miss that opportunity? Maybe it’s because Chris didn’t recognize how big of an opportunity it was, or maybe he was starting to give up on playing football all together.

By this point he had gone undrafted out of college. He was signed by the Browns only to be cut after training camp. He went on the play Arena Football and then the Canadian Football League where he was finally having some success only for an injury to cause him to be cut the following year.

Now he finds himself working two jobs wondering what his future would hold. Imagine all the hard work through high school, college, and three different football leagues only to end up at Footlocker selling sneakers.

It’s not hard to see how you might want to stop trying at some point and accept your life the way it is.

Lucky Chris gave it another shot and a year later we all get to hear his story! If you want to see great things happen in your life, you must be willing to get rejected over and over again and keep trying until you succeed.

Who knows where Chris would be today if he was afraid of being rejected one more time.

 


 

Don’t stop trying to accomplish the things that are most important to you!

Be willing to put in the extra work on for the things that are truly important!

Don’t over-think things, stick to the basics!

Those are my takeaways from Super Bowl XLIX! Are there any that you found I missed? Let me know in the comments bellow.

 

 

 

Thanks to Eric Twiggs for inspiring this post and James Clear for being the first blogger to turn me onto Warren Buffets Pilot Story.

Sources:

http://liveyourlegend.net/warren-buffetts-5-step-process-for-prioritizing-true-success-and-why-most-people-never-do-it/

http://nesn.com/2014/10/julian-edelmans-routine-arrive-early-lead-patriots-by-example/

http://en.wikipedia.org/wiki/Julian_Edelman

http://www.si.com/nfl/2015/01/19/nfl-playoffs-nfc-championship-chris-matthews-garry-gilliam-seattle-seahawks

 

Advertising for our “Brick and Mortar” business (part 1)

Today I want to share a little about the advertising layout for our garage. This is a complex topic so I’ll split it up into two parts. This week I’ll talk about our overall advertising costs per month and what works for us and what doesn’t. Next week I’ll go into specific details about what we spend on each one and what results we see.

This has been a steep learning curve for me over the past 5 years. Hopefully I can save some of you from making the same mistakes I have.

So let’s start by talking about what our current marketing budget looks like…

As of Jan 2015 we gross about $40,000 per month on average. Our core advertising budget is $1,824 per month and that consists of our Google Adwords campaign, Angie’s List, our Yahoo! listing, our website hosting, our customer retention programs and our BBB listing.

In addition to our core advertising we usually rotate different programs on a trial basis or seasonal basis and track the returns on the advertising dollars we spend. Overall we try to keep our advertising budget around 4-6% of our gross income, meaning we usually play with another $200-500 per month on alternate advertising for a total budget ranging from $2000-2300. Where this number should fall will differ depending on your industry but I have heard a good average is between 4-7% of your gross income.

I put all advertising into two categories, Branding and Direct.

Branding is anything that does not result in a relatable sale but puts your company out in front of people, usually when they are not looking to purchase your service. Examples of Branding would be billboards, naming stadiums, radio and TV commercials, etc. My experience tells me that small companies should avoid branding advertising like the plague because of the high costs and low returns. You’ll see nearly all of my overwhelming misses are branding related.

Direct marketing is anything that focuses your message toward people ready and willing to buy your service. Google AdWords is a great example because you are getting your message in front of people that are currently looking for your service usually in your area. This is hyper targeted marketing and if you put your message in front of people actively looking for your product you will close many more of those impressions and the average cost per sale ends up being much lower!

When you are a small business with limited funds, focus all your efforts on direct and traceable marketing only. You also need some way to trace every person you make a sale to so you can figure out how they found your business.

Every person that walks into our door for the first time is asked “How did you hear about us” and that source is entered into the computer. We now can track the original ad that brought them in and their total spending behavior over their life. I can take that data to find out what marketing is effective and what sources not only drive traffic, but provide great customers.

So what has worked for us and what hasn’t?

  • Angie’s List – WORKS GREAT! (for us)
    • This was a surprise to us a little bit. While you don’t have to pay anything to be on Angie’s List and you can’t affect your reviews, they do offer a service that will put your business at the top of search results when a member looks for your service. This means someone in our area looks up “Auto Repair” and we are on the top of the list with about 5 other businesses. They can see our ratings and any coupons we have before the “free” businesses listings.
    • This is direct marketing. People are looking for a mechanic when our ad comes up
    • This works for us because it aligns the customers perfectly with our business. Our company is designed to foster trust between the business and the customer, and Angie’s List members are using reviews to find people they can trust. They are more worried about finding quality businesses that offer a great experience and this aligns very well with our demographic.
    • Almost 10% of our business now comes from Angie’s List and they are typically some of our best customers!
    • This will be an expensive and horrible failure if you are not the most amazing business in the world. A few bad reviews and you will not get any customers at all from this. You must treat Angie’s Listers like they are VIP’S because EVERYONE will get multiple requests from Angie’s List to fill out a review on your company. I have got up to 4 and 5 emails when I use businesses from the site. Users are hounded with multiple emails and even called up to give reviews on your company so treat them AWESOME or you will find yourself paying for the rest of your 12 month contract and getting no business.
  • Google AdWords – WORKS
    • Direct marketing puts our name in targeted ads. People search for auto repair or any number of targeted searches and we show up on the side of the page.
    • This works great for new businesses because your website will nor rank organically for a while
    • This is hard to judge. Our service has a unique phone number and we match our calls with our customers so we know who comes in each month from the Adwords campaign.
    • This campaign basically breaks even each month in driving new business but as customers come back regularly we end up positive for the year.
    • If you work with a company to manage your AdWords campaign make sure they provide a trackable phone number so you know how many calls you get from your campaign. A good company will also tweak your campaign every few months so make sure they are working for you and not just taking your money each month.
  • Yelp! – DIDN’T WORK
    • I have heard businesses getting great results on the west coast through Yelp! so we wanted to try. Our results were not noticeable and it was expensive each month. We ran a 6 month program and saw some traffic but not enough to break even.
    • Part of the reason is that the traffic we saw from Yelp! was not really our target demographic. This may just be a matter of the wrong fit for Yelp! users and our business.
    • Extra negative marks for the really pushing high pressure ad sales people. If I wasn’t so keen to try Yelp! I would have never dealt with the guy. I’m very glad I didn’t get stuck in a 12 month contract.
    • I’ll continue to track our Yelp! customers and see how they are for the next year. I may find that they are super loyal and it may make sense to start advertising again if that’s the case.
    • As it stands right now we have some super awesome people that are now customers because of Yelp! but it just wasn’t nearly enough to justify the cost involved.
    • I think this would work great if I ran a different business like a restaurant for example.
    • Worth a try!
  • New Movers Coupons – DIDN’T WORK
    • There are various programs but basically it’s a coupon packet that gets sent to every new house each month. The theory is that families who just moved into town are looking for local restaurants, doctors, mechanics, etc. You give them a FREE oil change, they come in, love you and they are customers for life.
    • In reality people come in for a FREE oil change and never see you again. Most seem to be expecting a bait and switch and there’s ZERO way to control who gets these coupons. Most of the people were not our target customers and after a year of the program and close to a thousand bucks we had almost nothing to show for it.
    • These programs typically work much better for restaurants.
  • Local Newsletters – DIDN’T WORK
    • We have done several local publications. Everything from senior mags to local papers to coffee newsletters. None gained us more than a customer or two and all were a few hundred $$ to try out.
    • People reading these are not looking for your business. Brand marketing requires TONS of exposures and the payoff is either non-existent or so far in the future you’ll be long broke before they can try your services.
    • It’s hard to tell the sweet old guy no to the $65 ad for the local high school paper
  • Groceries store receipts / bags – DIDN’T WORK
    • There are companies that sell ads on groceries store carts, receipts, and pharmacy bags.
    • When was the last time you EVER used a business because there name was one any of these things?
    • No one else does either.
  • Online Reviews – WORKS GREAT
    • Nearly free – You will sometimes have to cave into customer demands to keep them happy even if you were in the right so it’s not totally free.
    • You must maintain your online reputation and respond to any negative reviews in a professional manner.
    • People come in all the time and tell us our reviews set us apart from the competition.
    • Partner with sites that allow you to respond to reviews. You want a dialog on the internet. You’re best to not even create profiles on sites that won’t allow you to respond to reviews in your industry.
  • Phone Book – DIDN’T WORK
    • We stopped our phone book ad after two years.
    • This may be needed if your target customer is much older but most of our 60-70 year old customers are internet savvy now anyway.
    • Why pull out the phone book when you can type in the computer in half the time?
    • Phone books will soon be in the same category as dinosaurs, pagers and the telegraph.
  • Christian Phone Book – WORKED GREAT!
    • There was a publication called the Shepard’s Guide. It was a local phone book that featured Christian Businesses and they would sell ad space in the book and then distribute 100,000 of them in all the local churches and businesses.
    • It was around $600 for the year to advertise in the guide and it brought in 20 or 30 customers a year for us. Sadly they had trouble making the jump to digital and they were not able to keep going and closed down.
    • This worked great because it was laser targeted to our exact customer. People looking for businesses they could trust!
    • If you can find something that’s literally a perfect fit, give it a try!
  • Radio – DIDN’T WORK
    • We tried some ads on our local Christian Radio station but didn’t get much from it. Mainly it was super expensive and we tried too early into our business when we just couldn’t afford to keep it up each month.
    • This is branding at its core and you probably need to be on the radio for 8-12 months to see any results. We couldn’t afford it so we had to stop before seeing any benefits.
    • This may be worth looking into if you are the big fish and can afford the cost but as is typical with branding you never know how much of your advertising dollars are coming back into your pocket.
    • At the end of the day I think I was more interesting in the prestige of being on the radio but I couldn’t afford it and neither could my business.

 

So there are a few things that worked and didn’t. I honestly thought this would be a quick post but I only covered about 10% of what I was going to talk about. I didn’t realize how many things I’ve tried over the last 5 years. Bottom line, nail down your ideal customer with laser clarity! Focus your efforts on getting in front of the perfect customer at the perfect time! Only after you have maximized that should you move onto other forms of advertising. You must also track every purchase source so you know what works and what doesn’t.

Next week I will post hard numbers for the last 12 months on some of our advertising. What I spent over 12 months and how much business each brought in. I’ll show what I pulled the plug on a few programs and how some new ones are performing.

5 Hidden Keys to Success in Kung Fu Panda!

Forget Wall Street or Glengarry Glenn Ross, this is the movie that should be at the top of your inspirational collection!

So why do I think so highly of this well disguised children’s movie? Let’s take a look at 5 lessons buried within that you may have missed!

Lesson 1: There is no secret ingredient!

 

After getting the Dragon Scroll that is supposed to possess the deepest secrets of Kung Fu, Po finds it blank. Thinking the secret to success has eluded him, Po runs away from the upcoming fight only for this important lesson to be revealed by his adoptive father.

During that conversation, Po’s father reveals that the secret ingredient to his famous “Secret Ingredient Noodle Soup” is actually NOTHING! As his father says,

“For something to be special you only need to believe it’s special”.

Po applies this message to his training and realizes there is nothing special about the Dragon Warrior other than hard work and the belief you can succeed.

What do we learn from this? Great people are made, not born. Michael Jordan spent thousands of hours training to become the most successful basketball player in history. Mark Cuban worked 7 years with no vacation on his first real company MicroSolutions where he credits his success to putting it far more time and effort to study manuals and out learn his competitors.

Many people think that you have to be born with a “gift” to be great at something but I believe that if you really look at successful people you’ll find more often than not, they were born with a passion toward something and they leveraged their interest as motivation to put in massive amounts of hard work!

There is no shortage of passionate people who never achieve success. The ones that do are the ones that aren’t looking for some secret ingredient or special situation; they are the ones that go out and work hard to create their own fortune!

Lesson 2: Learn from those around you, but be yourself!

 

Po gets a lot of guidance from his Masters and fellow warriors and draws a lot of strength from their advice. Ultimately he finds that he is unable to duplicate what they are able to do so he finds his own unique way to practice Kung Fu.

What can we learn from this? Having mentors or people to look up to is very helpful and will quicken your ability to grow, but don’t spend your time trying to copy their style or methods. If you want to be a public speaker, don’t try to be just like Tony Robbins. The world already has one of those and he’s probably better at it than you are anyway!

Instead, study their techniques and see what common threads they all share but find your own voice. Take inspiration from their journeys toward success but find your own path.

Po learned from everyone around him but when it came time for the big fight it was his own unique style that saved the day! Find your voice because that is what your success will be based on in the end!

Lesson 3: The most productive process is often the most painful!

 

If you’re trying something truly great, it will probably have a steep and painful learning curve. This is especially true if you want to go through any big changes in your life. When Po first started his new training he was horrible at it.

“I probably sucked more today than anyone in the history of Kung Fu, in the history of China, in the history of sucking.”

Again, this comes back to the importance of perseverance and hard work. Every day you practice a new skill you get one step closer and it gets a little easier. Go forward with the expectation that it’s going to be tough and you’re not going to be good at it right away. Allow yourself the freedom to struggle through the process as you learn new skills. I have found the more I struggle through things the deeper their impact ends up being on my life.

Lesson 4: Our limitations can be our greatest strengths!

 

When the movie starts out Po is at a clear disadvantage. Being a Panda he is heavy, slow, not graceful, and lacks the natural weapons of the Furious Five. These limitations lead Po to believe that he does not have the qualities needed to become a Kung Fu warrior, regardless of how bad he wants it.

By the end of the movie we find these very limitations are his greatest strengths. Po’s size makes him immune to most of Tai Lung’s attacks and his inability to learn the other fighting styles leads him to create his own method of Kung Fu that is far more effective in the end.

Many people miss that this is the very thing that made Master Oogway so amazing at Kung Fu. Being a turtle he lacked speed so he turned his limitation into the mastery of focus that allowed him to unravel the secrets of Kung Fu in the first place.

What can we take away from this?

In my first business I had very limited funds to start out with. I couldn’t afford to outfit the shop with lots of equipment and spend a ton of money on advertising to get new customers. Instead I had to focus on what we really needed and we spent a lot of time fostering close relationships with our customers so they would send their friends and family as well. Five years later almost 80% of our business is repeat and referral customers!

Embracing our limitations often leads to creative solutions to problems. This can lead to a unique perspective and an advantage over our competition.

The bottom line is that we all have a list of reasons why we shouldn’t be successful. Actor Jim Carey and singer Jewel were both homeless before becoming successful, Oprah Winfrey was molested by several family members as a child, and Richard Branson is dyslexic and got poor grades in school. While I can’t say that all these things made them stronger people, they all could have been excuses to give up trying.

Instead of focusing on how your limitations hold you back, spend your energy on how to get around them and succeed!

Lesson 5: You never really arrive!

 

All the characters throughout the movie continue to work hard to polish their craft. Master Oogway is usually deep in meditation, Master Shifu is constantly trying to master inner peace and the Furious Five are training on a daily basis to become better each day, even though they are legends to all those around them.

The wildly successful people we all hear about and look to for inspiration were once just average successful people. Michael Jordan was once a decent basketball player. Bill Gates was once just a good business owner. Dean Koontz was once a moderately successful author. The key with all of them was they didn’t coast once they got a little traction. They all kept working hard, becoming better each day until they were at the top of their game.

Just because you’re starting to see success doesn’t mean you can start to relax. Bring your best every day and try to get better each day and learn something new. You must embrace a mentality of constant improvement because what got you here will no


So there you go! Kung Fu Panda may be the best movie you can watch to learn principles of success. If you haven’t seen it yet I promise it’s much more entertaining than most of the business movies I’ve seen and more family friendly. Watch with your kids and teach them how they can develop characteristics to become more successful in their lives.

 

 

 

 

Sources:

http://blogmaverick.com/2011/04/07/shark-tank-success-motivation/

Thursday Update!

Welcome to the first Thursday Update!

When I started writing articles on this site a little over two months ago I did it because I wanted to learn some new skills and habits. I wanted to get better at writing and I wanted to get consistent at writing. I also wanted a place to put down some of the things I’ve learned in my journey starting and running a business with the hope that it would be helpful to me and others.

Since starting this site I have published 9 articles relating to business that I thought would be helpful or interesting to people, mainly because they were helpful or interesting to me. I’m now in the habit of making notes in my iPhone whenever I think of a fun topic so that I can write about it later, and I’m proud to say I’ve kept up with my goals so far of getting one article published a week (every Monday) since starting. My goal for 2015 is to publish 52 articles, one every Monday, whatever it takes.

So why am I writing and posting something up on a Thursday? Well, I’ve become obsessed with finding ways to create things that are genuinely helpful and valuable to people. That’s a big reason for this site, not only can I learn new skills but I can hopefully share things with you that are beneficial as well. As I reflect on the 9 articles I’ve written so far and looked at the data, I am starting to see signs that people are engaging with the content and seem to at least be reading it.

But, I’ve also noticed something else as I read through these articles. There’s a lot of motivational and inspirational content (at least to me) and I’ve sprinkled some interesting concepts and encouragement to start your own business, but I don’t think there’s enough actual hard data from running my business as I originally intended. So, as I continue experimenting and writing, I’m going to try and run two separate style blogs and see how that works.

Mondays I will continue to try and keep a similar format to what I’ve been currently doing. These will hopefully be interesting, inspirational, creative, blah blah blah.

Thursdays, I am going to try to be a little more raw and conversational. I want to write shorter articles (because I spend on average 6+ hours on each Monday article) and I want to include more data from my own current business. I also want to occasionally update you on how things are going with this site and any other projects I might be working on. So, on Thursdays look for shorter posts about our shop and running a business for the last 5 years and updates on how this project is turning out.

I want this site to be useful and interesting to people so I am going to try out several different things and try to gauge what is most impactful for you and what you like. Feel free to comment on these posts if you enjoy them, hate them, etc. This is now your site so tell me what you want more of!

 


 

So, with all that said, let’s start Thursday off with what I’ve learned so far after just over two months of writing consistently and starting “SmallBusinessRob”.

  • Learning new skills is still crazy hard! I’ve never run a WordPress site or used any of the plugins that I am running right now before. I want the site to be simple and have very little clutter so I found the best generic template I could but my lack of experience means it takes me hours to make even simple changes. More often than not I seem to be unable to get things the way I want. That gets very frustrating some times.
  • Mail Chimp may be the single greatest and worst thing to happen to me. Mail Chimp includes all kinds of awesome metrics and has some great plugins to allow people to sign up for the mail list but again, my learning curve is very steep! If I give the format on the website a C+ I give the format on my newsletter a D-. As I practice more I hope to make these better looking and more user friendly, and I hope people will continue to sign up for our newsletter because it helps me track what is useful and what isn’t to you!
  • 1/3 of my traffic comes from Russia! If you’ve never run a site like this you probably don’t know that in Google Analytics there are companies that bomb your sites so that you will follow the source links and end up at their website where they do anything from sell you stuff to scam/hack you. It’s actually an advertising strategy!
  • Hard work is contagious! I thought starting this might distract me from my business but it’s turned out to be to opposite. I’ve found that as I have more to do and I have to start scheduling my time each day, I’m actually getting more work done at the shop. It’s also forcing me to be more aware of how I spend my time and on what activities so I try to spend less of my day doing things my employees were hired to do. We will see how this turns out in a few more months.
  • After 5 weeks of promoting the site on basically just Facebook, 118 (non-Russian) users have come to the site in the last 30 days. Of those, we have 21 regulars (return visitors) who spend an average of 10 minutes on the site. This is about what I expected and I figure it will take about a year to get any momentum and the point is really to share information and learn new skills anyway.

So that’s it for this week! Next Thursday I plan to talk about advertising dollars at our shop including our biggest wastes of money and our biggest surprises.

You’re Losing Because of HOW You Ask the Question

Give a monkey an apple and you’ve got a happy monkey! Give a monkey two apples, and it’s even happier. Not twice as happy as the first monkey but two is still better than one even in monkey mathematics! Where things get interesting is what happens to the monkey with two apples when you take one away…

If you ran this test with two monkeys at the same time, give one an apple and give the other two but then take one away, both monkeys end up with one apple at the end. Logically we would expect they should both be at a similar level of happiness since they both now have an apple each to enjoy and neither had an apple at the start of this test.

When scientists actually run this experiment however, it shows that the monkey we took one apple away from is far less happy than the monkey that only received one apple to start with. We basically end up with a brooding monkey pining over the two apples that could have been!

This is known as Loss Aversion Bias and it’s a powerful tool in understanding how we behave and react to certain situations.

Loss Aversion is how psychologists describe our mental preference to rate losses as more important than identical gains. In other words, we feel more pain when we lose than we feel joy when we gain.

So why does Loss Aversion matter and who cares about monkey apple math anyway?

There is a wonderful Veritasium video experiment out right now that shows this exact concept and how it applies in everyday life. Complete strangers are asked on the street to wager $10 on the flip of a coin. If they win, they get $10. If they lose, they have to give $10 of their own money. All turn down the interviewer and with the odds being 50/50 who can blame them. What’s interesting is when he starts to up the ante. What about your $10 to my $12? How about $10 to my $100? All of them turn down the wager even when the odds are stacked in their favor because they can’t stand the thought of losing their $10! Loss Aversion in action! They rate the pain of their possible loss as higher than the joy of what they might gain.

Most eventually take the bet in the end but only when the potential gains are WAY higher than what they could be losing.

Now we can argue that people make poor choices because they don’t understanding odds or risk but Laurie Santos, who studies primate psychology and is the Director at the Yale Cognition Laboratory, has some research that suggest this may be a deeper issue. She has a fascinating TED talk you can watch here where her team taught primates to use currency to see if they would make the same bad financial decisions that stock brokers seem to make over and over again. In her talk she does a great job of summing up Loss Aversion with this example:

Imagine I give you $1000 in cash. Ten crisp $100 bills you can now put in your pocket and spend how you want. Now I give you a choice to get even more money.

                Choice 1: I flip a coin – HEADS you get another $1000 – TAILS you get nothing

                Choice 2: I hand you another $500

Most people when presented with this choice will choose the guaranteed $500 extra in Choice 2. In Choice 1 they might get $2000 but they may only get their original $1000. Choice 2 they are guaranteed $1500.

Now let’s ask the question in a different way. Imagine I give you $2000 in cash, and you now have to choose how to lose money.

                Choice 1: I flip a coin – HEADS you lose $1000 – TAILS you lose nothing

                Choice 2: I take $500 away from you

Now what do you think people choose? As soon as you frame the question around losing money, people get a lot more risky. In the first example, most people take the safe bet of an extra $500. In the second example, most people take the riskier choice of gambling with the hope of keeping the whole $2000. When you frame the decision around Loss, choices change.

So we see that people avoid taking risk that favors them and miss out on favorable opportunities due to Loss Aversion. We see people make risky choices trying to prevent loss due to Loss Aversion. How can one concept cause us to both avoid good risk and increase bad risk?

Well, there’s a second item at work here called Framing. Framing and Loss Aversion go hand in hand in many studies because how you frame a possible loss can influence what choices people make.

Framing teaches us that we can change people’s choices just by changing how we ask the questions!

Loss Aversion shows us that we are wired to feel loss as more painful than gains. Framing around loss affects the choices people (and monkeys) make. Now think about how you can use Loss Aversion and framing to alter your life and your results. Start to look at how you ask questions, make sales pitches, or any other area in your life where you are asking people to make choices.

“This trick helps you keep customers” is not as powerful as “You’re losing customers without this trick”

“Are you tired of losing money?” is better than “We help you save your money”

Are you making a big change in your life or organization? Talk at least as much about what is staying the same (avoiding losses) as you do about what’s changing. Remember, people feel loss more strongly than gains so the “same” message probably will have to be communicated a lot more than the “differences” message.

Think about the last time you saw a company re-brand and heard the message “The only thing different is the name!” I love that tag lines because I instantly get the image of a massive amount of consistency and very little that I need to give up from what makes me comfortable. That’s a message framed around Loss Aversion that reminds us that we can keep nearly everything we want to as customers.

So how can Loss Aversion and Framing change the way you interact with people? What ways can you re-frame your situation to either focus on or minimize the loss?

I want to hear about other examples you can find of companies using Loss Aversion to their advantage. Comment bellow and if you find these articles interesting or helpful, please share them with people you know. You can link them on Facebook, Twitter or Google+ by clicking the links bellow and don’t forget to sign up for our free news letter so you never miss an article.

What’s Holding You Back and How to Push Forward!

I was standing outside the dealership where I worked when I got the call. When I saw the phone number I jumped into the closest new Honda sitting on the lot, closed the door, and answered the phone. It was the real estate broker that represented the building we were trying to lease, the building we needed to open our garage.

The day I took that call I was convinced I was already “all-in” when it came to starting my business. I was working 70 hours a week at the dealership and spending another 2-3 hours a night working on business plans. I had been doing this for the last three years!

When I went to parties at friends’ houses everyone would watch movies and hang out, I would sit in a corner on my laptop and play with Excel spreadsheets. Everyone basically knew I was starting a business, and in my mind it wasn’t a matter of “if” but “when”. I was convinced I was “all-in”.

So there I sat, after three years of research, writing business plans, pricing equipment, and meeting with vendors, answering the phone and hearing the real estate broker on the other end. I don’t remember what I was expecting him to say, but the first thing he did say was that our offer had been accepted. We were getting our building.

This was great news! It should have been the last piece of the puzzle falling into place but what that phone call turned out to be was me crossing what I now call The Scary Point!

Up to that point I thought I was “all-in” but despite all the work and effort I really just had an idea. Sure I had well researched spreadsheets and designs and logos and marketing outlines and three years of work, but the truth was I could have walked away at any moment, told everyone I couldn’t make the numbers work and gone back to my normal life. No one would have thought less of me.

When I was offered that lease, I now had to cross The Scary Point! I was about to quit my job, sink my life savings into a new business and expose myself to the world. Now I was about to have something to lose and my failures would be laid bare for all to see. I was both overcome with excitement to be attempting such a big endeavor and scared to death of falling on my face at the same time.

I wish I could tell you I was a seasoned professional and that I was so confident in my own abilities that success was assured. I wish I could tell you I handled myself well when I took that phone call, but I didn’t. Instead, I hung up the phone and started to cry.

When I say cry, I mean tears running down the face, unable to speak, legit emotional outburst, and I’m not a very emotional person. My wife has probably seen me cry a half dozen times in the 7 years we’ve known each other, but the excitement and fear and the shear “bigness” of what I was about to do was so overwhelming that all the emotions just came pouring out.

So I sat in that Honda crying, hoping none of my coworkers walked by, and about 5 minutes later I composed myself and called my then fiance to tell her the news. I got about three words out before I started to cry again. This was how I discovered The Scary Point.

Lots of people experience moments like this, not just new business owners. If you’ve ever intentionally done anything significant in your life you’ve probably crossed this point even if you didn’t realize it. This is the line we cross that takes us from the planning and the research stage to the first real step forward. The Scary Point is where we are locked in, and we are going to see it through however it turns out. Before this point there are many possible outcomes but once we cross over we’ve made the choice and now we have to live with it!

Getting married? Moving your family? Changing careers? Having children? Eventually you have to cross The Scary Point and you’ll own that decision.

For a lot of people this is a hard thing to overcome because what ever the results end up being, you’re the one that caused them! If we don’t make a decision than what happens really isn’t our fault, right?

If you don’t change jobs and get fired a year later that’s just the universe doing it’s thing, but if you switched companies and they fired you shortly after, you made a stupid choice and it’s all your fault! For a lot of people it’s “safer” to just never cross that line.

This doesn’t just apply for big life changing decisions; it can happen with more mundane things also. Recently I got my first tattoo and the scary point was between telling the guy what I wanted and him laying the design on my arm. I had wanted a tattoo for years, but that was when I realized it was about to happen. I wasn’t worried about the pain; I was worried how I would feel at age 80! That’s when the butterflies started and I had a moment where I really thought about backing out. No tattoo meant no possible regret even if I really wanted it up to that point!

There are lots of points in our lives when the planning and the dreaming meet the commitment and the doing and we need to learn how to push through if we want to achieve anything really big!

The reason I feel this is such an important concept is because there are a lot of people that get stuck at the scary point and never get past it. This is probably the biggest thing that holds people back from attempting great things and if more people push through this world could be transformed! So how do we overcome and get past The Scary Point?

The first thing we need to do is expect it in the first place. Just by being aware it exists and will show up can prepare us to deal with it. If you’re not blindsided by the fear you’re more likely to be able to deal with it. When you feel those butterflies or that twinge of fear, recognize it for what it really is.

The second thing I do to push through these resistance points is to remind myself of the prior planning and research I’ve done up to that point. With my business I already knew it could work from writing the business plan and studying already successful companies. If they could do it, so could I!

I was able to tell myself the fear was not something that was protecting me, but it was trying to hold me back instead. When I got my first tattoo I was nervous so I reminded myself that it was something I wanted for years and tomorrow morning when I woke up there was a good chance I’d still want it. (I still love it by the way!)

Another way to push through is to setup unavoidable encounters. This is something I unintentionally did when starting my business by signing the lease offer. Psychologically it’s harder to break a specific commitment so when I signed the lease offer, there was something in place pulling me forward to help counter the fear holding me back. I would have had to back out of that signed commitment if I wanted to call the whole thing off.

Now this is something I intentionally do! When I started this blog I set myself a target of getting a new article out every Monday. This is an unavoidable encounter that forces me to push forward and write even when I may be scared of how it will be received.

Since this is a self regulated encounter, the key is to set specific goals with a specific time frame. In our lease we had a specific agreement set to activate on a specific date. For this blog the goal is 1 article on Monday of every week. Saying you’re going to “start a blog” isn’t going to cut it nor would “several articles a month” work either, they have to be measurable and there needs to be specific times associated with them.

If we can also enlist people to hold us accountable we have an even better chance of success. Tell a friend “I’m going to get to the gym Monday, Wednesday and Friday of every week, kick my butt if I don’t” would be a good example. Telling a friend “I’m going to start working out” is not.

In October when I decided I wanted to start writing this blog I told someone who said “Great! I’ll call you after Thanksgiving and I expect you’ll have a blog up and running and you’ll already be writing articles.” This wasn’t anyone that I even really knew all that well, a mutual acquaintance that I was seeking some advice from, but knowing he was going to call me in 6 weeks pushed me to get moving.

He helped me set up an unavoidable encounter and now I had someone holding me accountable to a specific goal. I have no doubt it would have been harder to get started without those things pushing be forward. I wasn’t about to tell him I hadn’t done anything when he was taking time out of his life to help me out.

The good news about crossing The Scary Point is that the more often you cross it, the easier it’ll get. You will get better at developing strategies to push through it and it is a skill you can learn. Sooner or later the fear gives way to excitement and it’s much easier to step up and attempt bigger things!

Remind yourself of all your prior planning to help you convince yourself you’re making a good choice. Set up unavoidable encounters to help pull you forward when The Scary Point is pushing you back. Set specific goals and have people hold you accountable to keep you from getting bogged down in the fear.

Eventually everyone will get to The Scary Point, but your success will always be limited unless you can find ways to get through it!

Why Making More Money Shouldn’t be Your Goal in 2015

Since we’re coming off the New Year I thought this would be a great time to talk about setting goals, and specifically why your goals shouldn’t revolve around making money. A lot of people spend their lives either chasing money or at least wishing they had more of it. As an entrepreneur, many of my goals often involved earning a certain amount of money and I think it’s safe to say we all believe some or all of our problems could be solved if we just made more of it. Of course, if we are driven and work hard enough, it’s possible to figure out the game and start to make a lot of money, and that’s where we all start living really great lives right?

Do you think our family friend would give up the millions he’s worth if he could get his deceased 12 year old son back? How many well-adjusted, genuinely happy Hollywood celebrities can you name off the top of your head? When we take time to really think about it, most of us would agree that money isn’t the cure-all for the problems in our lives, so why do we spend so much time trying to get more of it? I think the problem comes when we place money in the wrong category as we structure our lives.

I consider the things around me in one of three categories. First are our NEEDS. These are the things we require to survive. Our needs consist of things like breathing, eating, shelter, basic companionship, and personal health. NEEDS are the things that without, we start to wither and die. If we can achieve these on the basic level, we can assure our survival.

The second category is our WANTS or GOALS. These are the things we want over and above our needs. These can include traveling or going on adventures, personal recognition or achievements, helping others, luxury needs such as eating great food or having a nice house instead of basic shelter, having deeper relationships, etc. These are the things that enrich our lives and give us a sense of accomplishment and purpose.

The final category is our RESOURCES. These are all the things we use to achieve our NEEDS and our WANTS. Resources include oxygen, food, our home, our creativity, our personality, our relationships, our knowledge, personal skills, etc. We use air to provide for our need to breath. We use our house to provide for our need of shelter. We use our relationships to provide for our need of companionship, etc. This is the category money falls into because if we think about things in this way, the only thing we use money for is to provide for our NEEDS or our WANTS. Money is nothing more than a tool that we can use the same way we can use a screwdriver.

You may try to put money in the NEED category but homesteaders can live without money. Tribes in the Amazon live without money. If we majorly restructured the way we lived, we too could survive without using money so it doesn’t belong in the NEED category since there are people on this earth that can survive without it.

The more common mistake so many people make, including myself, is viewing money as a GOAL when we are really using it as a RESOURCE. We spend our lives working to get as rich as we can when really we’re chasing the wrong thing. Some are treating money as the GOAL when what they really want is to spend more time taking their family on vacations. Time with their family is the real GOAL, the money is just the RESOURCE they want to use to achieve it. Some people are chasing money, unaware that they are really looking for recognition and they are just using money as the score card.

When thinking about all the items in our RESOURCE category, we need to understand the only reason we acquire them to meet our NEEDS and GOALS. Once we are able to achieve those, we really don’t need any more of the resources do we? Spending all of your efforts to get as much money as possible is like gathering as much air as you can find just so you can breath more, it doesn’t make sense! If we spend too much of our precious time acquiring RESOURCES we lose the time to do anything with them. Think about the parent that spent all their life working and never had the chance to raise their kids, they spent all their time achieving the wrong thing!

So let’s get money out of our GOALS and put it in the RESOURCES category where it belongs. While having more money can indeed provide for a lot of our NEEDS and help us achieve our GOALS, it’s still just a tool for our use and by itself it’s not actually getting us closer to the things we want our lives to really be about.

Most of our needs and wants can be satisfied with different RESOURCES. We can use money to buy a big house but we could also use our skills to build the house ourselves for half the price! Whatever that GOAL is for you, if you think about it I’d bet you can come up with another way to achieve it. Do you really want to spend more time with your family? You can downsize your expenses and work a lot less hours. Want to travel the world? There are dozens of books that teach you how to do it for a fraction of what you think it will cost.

RESOURCES can also be traded for one another. We trade our RESOURCES of knowledge and skills for money when we go to work. We trade our RESOURCE of money for food, shelter, more education, etc. We can capitalize on our RESOURCES of relationships and personalities to increase our opportunities in business and life. All of these things fall into our RESOURCE category and they can all be traded back and forth with each other, and unlike money, knowledge and skills can be traded over and over again.

So when you are considering your GOALS for the New Year, don’t make the mistake of chasing money. Set your GOALS on the things that are actually important, then set about coming up with the strategy to achieve them. That strategy may very well include earning a certain about of money, but it could just as easy include trading some RESOURCES for others. If you’re always chasing money and think it’s the only way to accomplish your GOALS you may be missing out on a better solution. If your biggest desire is to spend more time with your children, working longer hours may get in the way of what you actually want to achieve. Do you really want to spend your life traveling the world? Maybe it’s time to trade that huge house for a smaller one.

Make sure you’re working toward your GOALS in 2015 and not your RESOURCES!

Why you Should Give Up More Often

When I was in college I had a friend named Tim that had been dating his girlfriend Lauren for 6 years. Tim and Lauren were always fighting so I was shocked when they announced their engagement later that year. The next time I saw Tim I asked him why they were getting married and what he told me was unbelievable. “I’ve been with her for over 6 years.” he said “I’ve invested too much time to not marry her.”

Take a moment to really think about that answer.

Tim wasn’t saying “I love her”. He wasn’t saying “She makes me happy” or even “Her parents are rich and I’m doing it for the money.” What Tim was saying was “I don’t want to admit the last 6 years of my life were a bad decision.” So Tim and Lauren got married, and a few years later their relationship collapsed and ended in divorce.

So why did he make such a bad decision? Why on earth would someone go against common sense? To me it was obvious that getting married to the wrong person wouldn’t make the last 6 years of his life any better, but at the time he thought it was the best possible choice.

Tim had fallen victim to the Sunk Cost Fallacy. The 6 years he put into the relationship were already gone and no decision would have made those years come back, yet he allowed that “cost” to influence his decision about the future because he wants to feel justified about the time he had already to put in.

We all fall victim to the Sunk Cost Fallacy at some point in our lives. Have you ever sat through a movie you hated because you already purchased the ticket? Have you ever fought to finish a book that you didn’t enjoy because you had already read the first 150 pages? What about dragging an old friendship along that should have ended years ago? Are you working a job you hate because “it’s too late to change now” or “it’s what I went to school for”?

We all may need to learn to give up a little more often.

The Sunk Cost Fallacy is an example of a larger concept known as our Loss Aversion Bias. Loss aversion states that people are hardwired to avoid loss more than seek gains. Something deep in our brains hates losing, even if it means getting something better in return. It’s what causes people to make poor financial decisions, stay in bad relationships, or prevents us from chasing our dreams.

I’ll expand on Loss Aversion in another article, but for now let’s stay focused on the Sunk Cost Fallacy and how to avoid it.

Years ago I worked for a small business owner named Brad who manufactured performance parts for specific vehicles. As he grew, he got stretched too thin and the business slipped into cash flow problems and insolvency. He was about $120,000 in debt and losing money every month. He served a very limited market and there were only so many people who would buy his product. By that point he had already sold most of them so his customer base was drying up and he wasn’t able to move into new markets quickly enough. Brad took out more loans and floated the business for another year, jumping from project to project trying to save the business until he ran out of all options and had to close. He owed close to $300,000 and spent the next 10 years paying it back. One of the reasons he dug himself a deeper hole at the end was because he didn’t want the years of his time and money to be wasted. He was obsessed with “saving” his business.

Contrast my experience with Brad to a couple of brothers I know who spent years building their stone company from the ground up. They invested most of their lives for 5 years, creating unique products that lasted twice as long as their competitors for half the price. They made hundreds of thousands of dollars and invested it all back into the company as they continued to expand and grow, taking almost no salary for those years in order to see the company grow and flourish. Things were going wonderfully for them until the housing market started to collapse. Orders started to dry up and they realized the business was no longer sustainable. Instead of going into massive debt and dragging the death of their business along, they realized they were backing a losing horse and shut the business down. They sold off their inventory, wound the company down, and walked away debt free.

So what was the difference? The brothers didn’t let the last 5 years of their lives influence their decision for the future. They realized the only thing they needed to consider was their best options going forward, ignoring all past mistakes or investments of time and money, and the best choice didn’t involve their stone company.

The key to overcoming the sunk cost fallacy is to completely remove sunk costs from the decision process. The money and time you’ve already spent isn’t relevant. We place a higher value on avoiding loss which leads us to make poor choices. Instead, we need to look at the future costs of a decision and the future opportunity it will provide. We may find that changing gears is the best opportunity we have before us.

When you catch yourself justifying a decision with words like “But I already spent…” Stop and realize you’re falling into the sunk cost trap. Forget what you “already spent” and consider what it will cost going forward. Finishing that awful book might stop you from calling a dear friend. Staying in that failing relationship might delay your future happiness. Seeing that project through might keep you from investing in a much better one. Not changing your major now may cause you to spend 10 years in a job you hate.

If you can master awareness of the Sunk Cost Fallacy you will find yourself making those hard choices sooner, and it will be easier to cut your losses and move on to a brighter future!

Source: “The Framing of Decisions and the Psychology of Choice” ; Amos Tversky & Daniel Kahneman