All three are valuable. But only one of them holds the keys to thriving in tough economies.

If you let the other two dominate, be prepared to struggle.

The visionary Entrepreneur asks, “How can we make/do this better? What is the market demanding?”

The pragmatic Manager asks, “How can we systemize this? How can we control the chaos?”

The hard-working Technician asks, “How can I get the Entrepreneur and the Manager to leave me alone so I can just do it how I want to?”

During recessions, cash isn’t king; innovation is king. The companies who adapt and shift resources the quickest crush slower but more capitalized companies.

“But trying new and different things is risky.”

Not nearly as risky as maintaining the status quo, crossing your fingers, and hoping that the economy will turn around.

“Think of risky undertakings as ‘experiments.’ Regardless of whether your experiment succeeds or fails, you’re going to learn something useful.” -Roy H. Williams

Change is Your Friend

The Entrepreneur faces reality and acts boldly. He’s never content with stagnation or mediocrity. He thrives on growth and creation.

But growth requires change, and Managers and Technicians detest change.

You’ve heard it before: “If you do what you’ve always done, you’ll get what you’ve always gotten.”

Are you content with your current results? If so, stop reading this and get back to work.

If not, what are you going to do about it? Are you going to wait for the stars to align? Are you going to let external circumstances dictate your results?

Or will you take charge and keep innovating until you figure out what works? What other option do you have?

“To improve is to change; to be perfect is to change often.” -Winston Churchill

What Do You Have to Lose?

If your business is declining or simply maintaining, then what you’re doing isn’t working

So what do you have to lose? Money? You’re losing money already–and you’re only going to lose more the longer you wait.

This doesn’t mean you blindly throw stuff up against the wall and hope something sticks; innovation need not be reckless.

It means you set your box aside and brainstorm long and free to think in ways you’ve never thought before. It means you dig deep and analyze market trends. It means you execute, watch your data, then shift your strategies based on what the data tells you.

The Manager and Bean Counter in your head will warn, “Now, let’s not be hasty. Those new ideas don’t have a track record. We don’t know if they will actually work.”

Never let your skeptical Manager make strategic decisions when decline is imminent and change is required.

Put your Entrepreneur in charge. You may get a few scrapes and bruises along the way, but he won’t quit. He’ll pull you out of the wreckage of temporary failure time and time again. And eventually, you’ll succeed. It’s inevitable.

“The Entrepreneur is the visionary in us. The dreamer. The energy behind every human activity. The imagination that sparks the fire of the future. The catalyst for change. The Entrepreneur lives in the future, never in the past, rarely in the present. He’s happiest when left free to construct images of ‘what-if’ and ‘if-when.’” -Michael Gerber

The “Box” is Your Enemy

We were recently in brainstorming mode while consulting with a company.

We threw out idea after idea after idea, only to be immediately shot down on each of them by one of the owners. She was in Manager mode, so she only saw all the reasons why we couldn’t do them.

Whether or not the ideas are feasible isn’t the main problem in this scenario. The problem is the endemic skepticism. The immediate discarding of any idea that’s even remotely outside the box.

Our question for the owners was, “Okay, if not all the ideas we’ve presented, then what? How will you grow? What are you willing to do differently than anything else you’ve ever tried? Because everything you’ve tried in the past isn’t working.”

What will make or break your business during recessions is how you make decisions.

Is your Manager making your decisions, or is your Entrepreneur?

By definition, Managers don’t use the thinking processes that instigate rapid, fundamental, and drastic change. Managers and Number Crunchers are highly creative when it comes to proving why ideas won’t work, yet astoundingly deficient when it comes to generating the ideas themselves.

This isn’t a criticism–it’s simply not their job to innovate. But when innovation is critical, you must learn to defer to your inner Entrepreneur.

“The best way to have a good idea is to have a lot of ideas.” -Dr. Linus Pauling

Crush the Box

When the economy is great, you have the luxury of being comfortable. You no longer have that luxury.

If you’re not dedicating people, time, imagination, money, energy, and other resources to a growth strategy, either accept the reality that your results won’t change or start putting resources to innovation.

Managers and Technicians have their place, but to innovate and grow you need to put the Entrepreneur in charge.

“The Entrepreneur is our creative personality–always at its best dealing with the unknown, prodding the future, creating probabilities out of possibilities, engineering chaos into harmony.” -Michael Gerber

Ready to rock the new year? Buckle your Manager in the backseat. Put your Entrepreneur at the wheel. Slam on the gas pedal of innovation.

It’s going to be a wild ride.

Stephen Palmer is a marketing consultant and writer with KGaps Consulting. His firm uses their methodology Hub Mentality to help small businesses generate more leads, sales, and referrals while making their marketing budget more efficient.

Stephen is the co-author of as Hub Mentality: Shifting from Business Transactions to Community Interactions as well as the co-author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

What do you say? “Oh, everything is fine, thanks.”

Your customers are doing the same to you — they’re not telling you what they don’t like about you to your face.

But with the rise of social media, they’re going home and sharing their negative (and positive) experiences with their online connections.

What if you could overhear what your customers were saying about you?

How could that improve your business? What would it highlight that you’re overlooking? How much power would that give you?

Yes, this is possible. It’s called social media monitoring.

Simply put, social media monitoring is using technology tools to identify what people are saying about your company online.

Social Media Monitoring Tools & Resources

Here are a few free and simple ways to do this:

1. Twitter Search

Click here and enter keywords relevant to your business, particularly your company name.

2. Google Alerts

Click here and enter your relevant keywords. Google will email you any time in encounters those keywords online, based on your preferences. (You need a Google account to set this up.)

3. RSS Feeds

Set up a Google Reader (or other RSS reader), then set up RSS feeds from social media sites as generated by searches.

For example, when I search for “KGaps” on Twitter, you’ll notice the RSS icon on the top right. A specific RSS feed is generated for every search.

4. Facebook Page

Set up a Facebook Page for your business, then simply check the wall daily for comments.

Read this introduction to Facebook for business.

5. Free Monitoring Platforms

There are a number of free social media monitoring platforms to take advantage of, such as Addictomatic, Socialmention, and Tweetdeck.

There are also tons of companies who offer social media monitoring services, such as Spiral16, Radian6, and Trackur, but I wouldn’t recommend these for most small businesses; it’s simply unnecessary.

This social media monitoring solutions wiki lists every available tool.

Here are a few more great articles on the subject:

• How to Monitor Your Social Media Presence in 10 Minutes a Day
• 10 Steps for Successful Social Media Monitoring
• The Problem(s) With Social Media Monitoring Technologies

Your Customers are in Charge

Knowing what your customers say about you is vital. It tells you what you’re doing wrong and right and how to improve.

As my business partner and I write in our book, Hub Mentality:

“Not only has power itself changed, but also who controls it has shifted. In the past, it was business that wielded power to achieve its ends. Now, the power lies with customers.

“It is customers who dictate the creation and disposition of information. It is customers who determine not only what things get produced, but also how they get produced (note the rise in social-oriented and environmentally-friendly businesses).

“Customers are firmly planted on the new throne; businesses are their servants. Those that understand and adapt will survive and thrive. Those who don’t will disappear, leaving only a memory.”

Stephen Palmer is a marketing consultant and writer with KGaps Consulting. His firm uses their methodology Hub Mentality to help small businesses generate more leads, sales, and referrals while making their marketing budget more efficient.

Stephen is the co-author of as Hub Mentality: Shifting from Business Transactions to Community Interactions as well as the co-author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

The problem is, you can’t see these limiting factors.

You’re stuck in the “box” of your business. You see all the wonderful reasons why customers should buy from you.

Unless you can get out of the box, you’ll never pinpoint your limiting factor. And you can’t overcome your limiting factor(s) until you identify it/them.

Consider these examples of limiting factors:

• Competition. Are your competitors good? Do you have a lot of them? Perhaps you need to radically differentiate.
• Population. Perhaps you’ve simply gained all the business you can in your current location. Time to expand to a new location?
• Poor systems. Maybe your systems are too slow and outdated. Time to improve?
• Answering the wrong questions. Advertising fails when you answer questions nobody’s asking. Find out what your customer’s actually care about and speak to their felt needs.
• Hidden, un-leveraged assets. Many businesses conceal gems, the power of which they’re not even aware of. Revolutionary messages that aren’t being shared in a powerful way. Time for a M.E.S.S. analysis?
• Niche markets. Perhaps your offering simply isn’t mass-marketable and you need to either 1) find better ways to reach your target market, and/or 2) expand your offering to appeal to a broader customer base.

My friend Garrett Gunderson tells the story of driving with his friend on the freeway. He started to merge into the right lane and his friend shouted, “Watch out!” There was a car that he didn’t see in his blind spot.

Perhaps you need someone in the passenger seat shouting “Watch out!” in your business?

Stephen Palmer is a marketing consultant and writer with KGaps Consulting. His firm uses their methodology Hub Mentality to help small businesses generate more leads, sales, and referrals while making their marketing budget more efficient.

Stephen is the co-author of as Hub Mentality: Shifting from Business Transactions to Community Interactions as well as the co-author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Systems must be in place to ensure perfect delivery. If you don’t execute and keep your promises, these customers will tell everyone about it, and they have the web to spread their bad experience.

We call this “front stage” versus “back stage.” It doesn’t matter how pretty and flashy your front stage is if your back stage doesn’t deliver.

Front stage is your high-profile executives and spokespersons, events, website, materials, and media.

Back stage is your people and systems—the inner workings of your company that customers don’t see, but the results of which they experience.

I once purchased a training course from a company with an excellent front stage. The speakers were persuasive. The events were flawless. The results seemed inevitable.

However, after engaging with them for about a month, it quickly became apparent that their back stage was a mess.

They wouldn’t return phone calls. They never delivered on their promises. What looked like a golden opportunity was quickly exposed as fool’s gold.

I wasn’t the only one with a bad experience. The company went out of business a couple years after opening.

Carl once had a conversation of the leader of the execution team for a major self-help author.

The author had written many books and had phenomenal success. He had the ability to speak magically to the hearts of the audiences to whom he regularly spoke.

He put on his own events where he offered and sold a number of in-depth solutions for personal growth and financial success.

Unfortunately, he had the bad habit of biting off more than he could chew. In other words, he over-promised on stage and his staff had no other option than under-delivering.

They couldn’t create nearly as fast as he promised. In the end, customers felt slighted. His staff felt the pressure and ended up leaving.

My marketing firm is unique in that most marketing and advertising firms focus solely on your “front stage” messaging.

Using our proprietary M.E.S.S. Method, we help you build your “back stage” so that it supports and synchronizes with your front stage.

Stephen Palmer is a marketing consultant and writer with KGaps Consulting. His firm uses their methodology Hub Mentality to help small businesses generate more leads, sales, and referrals while making their marketing budget more efficient.

Stephen is the co-author of as Hub Mentality: Shifting from Business Transactions to Community Interactions as well as the co-author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Most people confuse branding simply with the external imagery of their business.  Their logo.  Their website.  Their tagline.  Their company name.  All these things are important but they are all, or at least should be, extensions of what is going on inside the business.

The mistake comes from branding your company from the outside-in vs. from the inside-out.

What do I mean by that?

When a company gets started and they want to get their name out.  What are some of the first things they think about? They start worrying about business cards, pamphlets, one sheets, etc.  Then they realize they need a logo to go on all these things and make them look professional.

They may get all of this information in place and then they realize they need a website because they went to a book publishing workshop with my friend Michael Drew and he told them that if they don’t have a website they don’t have a business.  So now they panic and rush out and find their brother in law who studied web development at a community college for two years.  Website?  Check.

During this whole process, not once did the business owner really take the time to consider the following as it pertains to their brand:

Mission, Vision and Values:  I don’t care what business you are in.  You have to articulate where you are going, why you exist and what you care about.  These terms were bastardized in the mid-to-late nineties but when done right these are powerful tools.

Your audience:  Before you create visuals for your company take some time to consider who is going to care about what you do and then craft visuals around the people that you want to do business with.

The client experience:  How are people going to interact with you and your company? Will there be many levels?  Online or offline?  Are your relationships going to be quick and shallow or slow and deep?  You need to spend some time to create the client experience process around your business.  Nothing kills a companies’ credibility faster than getting people excited about your business and then failing to deliver on your customer’s expectations.

Your team:  What type of people are you going to have on your team?  What skills do they need to have?  Put together a team that’s going to deliver on your mission and values.  Don’t skimp on this area.

In the end your brand is promise of what people can expect when they do business with you.  To be able to effectively deliver you must have clarity, high performing team as well as well thought out systems and processes.  You don’t want to sell people a car that has the body of a Ferrari with a Pinto engine.  That’s bad for your brand.

How have you experienced this either in your business or with someone else’s?

Incision means to cut into something, excision means to cut out something, and decision means to cut off something.

If you want your business to grow, you must decide which customers to keep and which to cut off.

In other words, you must choose one business model. There are only four.

This choice may seem painful. But just as pruning trees makes them grow bigger and healthier, so will making this choice increase your revenues and market share and decrease your stress.

In their groundbreaking book The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, consultants Michael Treacy and Fred Wiersema detail three of these four:

1. Operational Excellence
2. Product Leadership
3. Customer Intimacy

Operational Excellence

Operationally excellent companies provide standard products at the best price with the least inconvenience. They’re defined by low prices and hassle-free service.

Henry Ford epitomized this model when, after being asked what color of Model T’s could be ordered, he quipped “Any color you want as long as it’s black.”

Ford’s assembly line was regimented, proceduralized, rule-driven. The system was such that virtually any person could replace another at any point on the line.

Wal-Mart, Dell, Southwest Airlines, Costco, 800-Flowers, and FedEx are also examples of operationally excellent companies.

This operating model is based on four distinct features:

• Processes that are optimized and streamlined to minimize cost and hassle.
• Operations that are standardized, simplified, tightly controlled, and centrally planned, leaving few decisions to the discretion of rank-and-file employees.
• Management systems that focus on integrated, reliable, high-speed transactions and compliance to norms.
• A culture that abhors waste and rewards efficiency.

Such companies produce no-frills products for the middle of the market where demand is huge and customers are more interested in cost than in choice.

Product Leadership

Product leaders are bleeding-edge innovators, always pushing past the realms of the known, the expected. Their value proposition is the best product, period.

Think Apple, Google, Nike — always coming out with new, better, and surprising products that raise the bar. When they release a new product, they’re already plotting how to make it obsolete with their next product.

The main features of product leaders are the following:

• A focus on the core processes of invention, product development, and market exploitation.
• A business structure that is loosely knit, ad hoc, and ever-changing to adjust to the entrepreneurial initiatives and redirections that characterize working in unexplored territory.
• Result-driven management systems that measure and reward new product success and that don’t punish the experimentation needed to get there.
• A culture that encourages individual imagination, accomplishment, out-of-the-box thinking, and a mind-set driven by the desire to create the future.

Customer Intimacy

Customer-intimate companies are highly flexible and in tune with the needs of specific companies. Everything they offer is customized to each customer.

Their value proposition is “We take care of you and all your needs,” or “We get you the best total solution.” Such companies don’t pursue transactions; they cultivate relationships.

Examples of customer-intimate companies include Home Depot, JetBlue, and the Ritz-Carlton hotel chain.

At Ritz-Carlton, every employee has automatic authority to spend up to $2,000 resolving issues for any one guest — without having to obtain permission from anyone. While other businesses are afraid to justify such expenses, customer-intimate companies consider the customer’s lifetime value, not just the profit and loss on a few transactions.

The features of this model include:

• An obsession with the core processes of solution development (i.e., helping the customer understand exactly what’s needed), results management (i.e., ensuring the solution gets implemented properly), and relationship management.
• A business structure that delegates decision-making to employees who are close to the customer.
• Management systems that are geared toward creating results for carefully selected and nurtured clients.
• A culture that embraces specific rather than general solutions and thrives on deep and lasting client relationships.

The Fourth Model

Roy H. Williams adds a fourth model to this list: distribution dominance. In this model, companies thrive by dominating distribution channels in their category.

For example, suppose you’re driving 300 miles in the middle of nowhere and you need gas. A gas station appears in the horizon with no competitors for miles around. Guess where you’re going to buy gas?

Other examples would include airport restaurants and gift shops. These companies don’t have to provide exceptional service or products — they just have to be in the right place at the right time.

Make the Choice

Don’t make the mistake of thinking you can lead in all or multiple categories. You can only be a market leader in one.

According to Treacy and Wiersema:

“…no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market…

“…if you decide to play an average game, to dabble in all areas, don’t expect to become a market leader. Thus, choosing a discipline is the choice of winners.

“Not choosing means ending up in a muddle. It means hybrid operating models that are neither here nor there, and that consequently cause confusion, tension, and loss of energy.”

Pick one operating model — just one. Improve on that model obsessively. Maintain threshold standards in the others.

Dominate your market.

Stephen Palmer is a marketing consultant and writer with KGaps Consulting. His firm uses their methodology Hub Mentality to help small businesses generate more leads, sales, and referrals while making their marketing budget more efficient.

Stephen is the co-author of as Hub Mentality: Shifting from Business Transactions to Community Interactions as well as the co-author of the New York Times bestseller Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity.

Business owners can’t help but be a rugged individualist, especially in the area of accounting.  We do the books ourselves because we think we are saving ourselves money.  Doing the books yourself is one of the top 10 don’ts when it comes to small business bookkeeping. We don’t do them right and it ends up killing our business.

The reason is that as a business owner we have plenty to worry about and doing the books is always an afterthought.  A good bookkeeping system has some of the following elements:

• Actually hire a bookkeeper.  There is a time when doing your own books makes sense and I will talk about that later this week.  For now, assume that you won’t do your books forever.
• Up-to-date books that can be accessed at any time.  You should be looking at your books at least once a week if not more depending on your industry.  If your books aren’t current this makes that difficult.
• Have a communication system for receiving the different reports you need from a bookkeeping standpoint.  Make sure that when you set up a standard of communication for you and your bookkeeper.  Let them know how often you want reports and what reports you need.
• Keep an eye on the most important numbers for your business.  Make sure you understand what you are looking at and how things are trending.  If you don’t know what the numbers mean then find out.
• Share the important numbers with your team.  Too many small businesses don’t share their results with their team.  This is a mistake.  There is also an art to this but that topic is for another time.

Ultimately, just make sure that you have a solid bookkeeping in system in place that allows for timely reporting and analysis on behalf of the owner.  Knowing the score financially is the difference between succeeding and failing in business.  Take a look at your system and ask yourself how you can do it better for your business.

Let’s face it.  You are probably not a detail oriented type person.  That’s OK.  As a business owner your primary role is as the visionary and finding the team to help you fill in the details.  Many business owners embrace the role of visionary and totally forget the role of team builder.

Bookkeeping is one of those areas that can make or break your business in the long run.  A bookkeeping makes you look good in the following areas:

• Tax time: When your books are up-to-date your tax preparation goes smoothly and efficiently and ensures that you haven’t made an costly mistakes of miscategorizing or not taking certain deductions that you should be taking.
• Time to do what you do best: When tax time rolls around have you ever spent a couple of unproductive days sifting through the labyrinth that is trying to identify all of your expenses.  What did I write that check for again?  Exactly.  I wasted some valuable time being a knucklehead.  Channel your inner Nancy Reagan and just say no.  In the meantime, you are saying yes to productivity.
• Manage your business like a pro: When you have the critical financial information in front of you, you can make better decisions about marketing, hiring, planning etc.  It’s easy to play when you know the score.

Take the time to get your books in order.  Your business will look good.  You will look good.  Ultimately you will be giving your business a better chance at long term success.  What has kept you from hiring a professional bookkeeper in the past?

Almost 68% of the survey respondents said that business is growing or growing substantially compared to this time a year ago. Preliminary results for the first quarter of 2011 indicate that roughly 58% of businesses plan on hiring over the next few months.  Both of these findings indicate that small businesses are finally growing again. What the survey doesn’t explain is why those businesses are growing.

Based on my personal interviews with business people around the world, I may be able to shed some light on how businesses are building their companies during these trying times and also provide insight into how you can grow your business:

• It all starts with attitude. A product sales company in the U.K. was about to execute layoffs in order to meet payroll. When it announced this to employees, one of its sales reps wrote on the whiteboard: “We absolutely refuse to participate in the recession.” Everyone in that branch office signed below the statement on the whiteboard. They all then met to strategize about ways to seriously generate more business. As a result, they ended up with their best month all year and no one was laid off from that office!
• Innovation during adversity is a key factor. I know a commercial real estate broker in Southern California who had his best year ever in 2010 (and he’s been in business for 26 years). He cited the dozens and dozens of one-to-one meetings he had during the year to find ways to work together with other businesses. His opening approach was to help these other businesses. At the same time, however, he built his business in the process. This, he told me, is counterintuitive to what most commercial real estate people do.
• Look for new or emerging opportunities.  I met a residential real estate agent on the East Coast of the U.S. who told me he had his best year ever last year. He said he went to investors he’s worked with in the past and told them that “real estate is on sale!” He said to them, “don’t be one of those people who come to me in a few years and say, ‘I was crazy not to look at these opportunities.  I should have bought property back in 2010 when it was cheap!’”  He told me this strategy has helped him sell more real estate than any time during all his years in business.
• Be creative with your offers. I recently met a business coach in the U.S. Midwest who created a guarantee for his coaching.  He said, “If you follow my weekly coaching program and you don’t raise your income to at least six figures, I’ll continue to coach you for free until you do.” This has dramatically increased his sales, he told me, and he hasn’t yet had to provide free coaching to any clients.

The BNI Business Index survey looked at retail, service, and manufacturing businesses. All three areas had very similar results across the board with service and retail being incrementally stronger than manufacturing. In addition, business appears to be looking up consistently around the globe, with solid growth in all parts of the world.   Australia/New Zealand and Asia showed the strongest results with 74% and 79% respectively stating that business was growing or growing substantially.

Although the trends looks good, there are some areas where businesspeople still seem to still be struggling.  One respondent to the current survey says that while “Business is growing, the comfort zone for retaining clients is nonexistent.”  He went on to state that there is a “continuous feel of uncertainty for what is going to happen in the next quarter.”

Another respondent said, “There are many opportunities, but there are still not enough cash reserves or financing from the banks to take advantage of these opportunities.”

Despite the lingering concerns, the numbers seem to indicate that things are changing and changing for the better.  One respondent summed it up best when he said: “I’ve changed my target market to one that has both a greater need and a willingness to do something different.” These kinds of changes along with having the right attitude, being innovative, looking for emerging opportunities, and being creative are the ways businesses around the world are pulling out of this long and difficult recession.

Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author.  He is the Founder and Chairman of BNI, the world’s largest business networking organization and the Sr. Partner for the Referral Institute.  His newest book, Networking Like a Pro, can be viewed at www.IvanMisner.com

What does this have to do with gaining an advantage over 23 million other business owners?  I have been talking recently about the different types of entities that you can set up for your business as you start out.  There are distinct pros and cons to each type of entity.  Per the IRS there are over 23 million people that are filing taxes as a sole proprietorship.  23 million!

Not only is there a high number of people filing as a sole proprietor, the receipts that were reported from these businesses were over $1.3 trillion in 2007.  That’s a lot of money.

Here’s where you can gain the advantage.

There is no way that every one of those 23 million business owners could not benefit from a different structure for their business.  This is where the risky business owner comes in.  Risky business owners take the path of least resistance and hope for the best.  Prepared business owners do their homework up front, assess their long term vision and structure their business accordingly.

Of the $1.3 trillion in receipts from these business owners, how much more money went to the government that probably didn’t need to?  How much of your money are you willing to donate to the government?

Setting up your entity correctly gives you a distinct advantage over other business owners who haven’t taken the time to do their homework.  In the first 2-3 years of your business, cash is king.  You need to put your business in a position to keep as much of that cash as possible so that your business can grow.  Don’t be a risky business owner, be a smart business owner.  Your success depends on it.