Why Being an Entrepreneur is Worth It!

I admit - one reason I’m writing this post is to remind myself. I’m involved in several entrepreneurial ventures, and it’s tough at times! Being an entrepreneur is difficult by definition. You’re charting new paths, starting something new with small odds of success, trying things the average person isn’t willing to try. Plus, once you get past the startup phase and start seeing “success,” you have to handle the growth without flaming out.


What’s not to love?

There’s a lot to love, actually. The trick is remembering the good things during the hard times.

Here are 3 reasons I believe being an entrepreneur is worth it:

1. Entrepreneurship can be less risky than other sources of income

Most people associate entrepreneurship with risk, and I won’t argue with that. New businesses have low survival rates. Founders often invest their own money and pledge their personal assets to guarantee loans and leases.

However, I don’t think being an entrepreneur is any more risky than other sources of income.

Most employees are completely dependent on one employer. No matter how stable the business or non-profit or government department is, a number of factors unrelated to performance can lead to job loss.

There are at least reasons entrepreneurship can less be less risky than a job.

First, a well-developed business isn’t dependent on one customer. If it loses some customers, it still has other customers to keep the business going. An employee only has one customer.

Businesses usually decline over time, giving the managers a chance to adjust. A job can be lost in a day.

Second, the best entrepreneurs are actually risk averse. They plan their finances with the expectation of unsteady income. They build up large emergency funds during the good times, knowing they will probably need it to get through the hard times. They are careful about how they spend business funds, knowing that it ultimately comes out of their pocket.

In contrast, many employees live as if their paycheck will arrive every two weeks and grow steadily over time. They don’t think they need an emergency fund, and they maximize their debt payment to income ratio. A gap in employment while living on the edge can be devastating.

2. Entrepreneurship provides freedom

Entrepreneurs don’t have complete freedom. Ultimately, they must spend their time on what customers are willing to pay them for.

However, within that broad guideline they have a lot of freedom. They can spend time on the activities they love the most and do the best.

They can design their lifestyle. Customers aren’t watching to see if they clock in at 9 am and stay later than 5 pm because everyone else is there. As long as they get results, they don’t care where or when the work gets done.

They can choose who they work with. This is a big deal. Managers in big companies may have some control over who they hire, but they probably don’t have much say in who their peers are.

Of course, the average entrepreneur probably spends more time working than the average employee. But they generally get to choose when they work, where they work, what they work on, and who they work with.

3. Entrepreneurs do work that matters

Finding meaning in work leads to a more fulfilling life. Studies have shown that once basic needs are met, people are more motivated by finding meaning than making more money.

Of course, entrepreneurs are not the only ones who find meaning in their work. However, many employees feel like a small cog in a large wheel, dependent on their steady paycheck. There is more to life!

Entrepreneurs choose to solve problems they are most passionate about and bring the most fulfillment to their lives.

Call to Action

For you entrepreneurs out there who are struggling with extreme challenges: don’t give up! It’s hard, I know. But you have the freedom to do work that matters in a way that can be less risky than being an employee.

For you employees with an entrepreneurial bug: don’t ignore it! Don’t be afraid! Get started!  If you’re not sure, read my post about knowing if it’s time to start your own business.

Being an entrepreneur right now is not for everyone. But entrepreneurship is a great way to make both a living and a difference in the world.

Question: Why else is being an entrepreneur worth it?

Why I Haven't Been Sick For 3 Years

This is a "knock on wood" post. I really shouldn't put this out into the universe, but I will anyway because it’s had such a positive impact on my life. I haven't been sick for almost three years. I haven't even had a minor cold. Going back a little further, I've only been sick twice in about five years.



Before that, I probably caught a minor cold (or worse) at least every three to six months, especially in the winter. I thought getting sick a few times per year was part of life.

It’s been awesome not being forced to periodically slow down (or stop) my normal activities.

I obviously don’t know all the factors, and maybe I’ll get sick right after submitting this post. It would serve me right!

However, I did make a major lifestyle change almost 5 years ago, and I have to believe at least one of these changes have prevented me from getting sick.

In hopes of helping others improve their quality of life, here are the changes I made:

1. Eat nutrient dense foods

I’ve written before about my experience losing 30 lbs about 4 years ago. I believe the biggest factor was a change in my diet.

My typical day used to include cold cereal for breakfast (Life and Lucky Charms were my favorite), sandwich and chocolate bar for lunch, and heavy starches like pasta or potatoes for dinner (with dessert after, of course).

4 years ago I starting making 2 liters of green smoothie every morning, which would last through breakfast and lunch, and then I would usually eat a huge salad loaded with vegetables (with white wine vinegar as dressing) for dinner (with no dessert).

I haven’t been as strict since I lost the weight, but I still make sure I eat primarily nutrient dense foods (i.e. mostly vegetables and fruits). I drink at least a liter of green smoothie per day, and I regularly have a huge salad as a meal. I haven’t eaten much cold cereal over the last 4 years!

2. Limit refined sugar

I began limiting refined sugar at the same time I started focusing on nutrient dense foods. In fact, I don’t think I had any sweets while I was losing weight.

As I mentioned, I thought dessert had to be part of every meal. And snacks between meals. And bedtime snacks. I was definitely addicted to sugar. I blame it on my Grandpa Smith, who kept his work desk stocked with chocolate bars, and his mother, who we called “Candy Grandma” and was famous for her chocolates.

Limiting sugar has given me numerous benefits, and one of those benefits could be an improved immune system.

I haven’t been as strict since I lost the weight, and once in a while my addictive tendencies return. However, I make a conscious effort to eat far less sugar than I used to.

3. Exercise consistently 

I’ve always been fairly active, but about 5 years ago I started exercising almost every. I started lifting weights, and then I trained for and ran a half marathon. I continue the habit of lifting weights 2 times per week and running 3-4 times per week.

It’s good to have regular formal exercise sessions, but even moving more helps. I use a standing desk, which forces me to move more during the day. I also use my iPhone to track my steps, and I shoot for 10,000 steps every day. I try to go for a walk at the end of the day if I’m not quite there.

4. Get adequate sleep

This hasn’t been a major change because I’ve always made sure I get plenty of sleep. But I believe it’s important enough to add to the list.

I have trouble functioning on less than 7 hours, and I usually get at least 8. I would love to add an extra 2-3 hours to my day by getting less sleep, but I don’t think the trade-off is worth it.  I’d rather have a focused and productive 16 hours than a sluggish 18-20 hours.

Besides, if you don’t get enough sleep, your body may force you to rest by getting sick.

I have intentionally been light on science and details. It’s partly because I simply don’t know much, and it’s also because everyone is different.

I can’t guarantee that you’ll go 3 years without getting sick if you follow this list. I can’t guarantee I won’t get sick tomorrow and return to my pattern of getting sick several times per year.

All I know is these changes have worked for me so far!

Now it’s up to you to research and experiment to figure out how to improve your health. Improved health comes with many benefits, including less down time from being sick.

Question: What practices have improved your health? 

5 Essential Software Tools for Your Personal Life

I love using software to boost my productivity and effectiveness. Innovative developers have created software solutions for almost any problem you can think of. Any time I have to do a repetitive task, I search for software to make it easier. coding-699318

In my last post I wrote about software for your business life. In this post I’ll describe 5 essential tools for your personal life.

1. News and educational content (read) 

All of us face information overload. How do we consume as much content as possible without getting overwhelming and spending too much time?

I use Flipboard to stay on top of the latest news and blog articles. It allows you to combine your Facebook, Twitter, LinkedIn, Google+ and other social media accounts into one feed. The interface looks like a magazine and allows you to quickly flip through a lot of updates and read more in depth anything that catches your eye.

I also use the Kindle app for reading books.

2. News and educational content (listen)

I enjoy sitting down to read, but I consume more content by listening while I do other things. I can educate myself while driving, running, or cleaning out the garage.

I use the Downcast app to listen to podcasts and the Audible app to listen to books.

3. Social media

It’s good to consume content, but it’s also good to be a content creator. As you create and curate content, you serve those around you and build your reputation for expertise.

I use the Buffer app to post to social media. You can set a schedule for posting to each account and then send content to Buffer. Buffer will take care of the posting so you can create the content in batches but spread out the posts for your followers.

For example, when I find interest articles while flipping through Flipboard, I forward them to Buffer for posting on my social media accounts. This allows me to be a content curator without spending any extra time.

4. Personal finance

Budgeting and tracking your spending is important, but it’s not fun (unless you’re a nerd like me). Even though I enjoy it, I don’t want to spend a lot of time on it. Software allows you to automate managing your personal finances.

I use Mint.com to track all of my financial accounts, transactions, and budgets. It connects to all my accounts and automatically download transactions. I spend some time at the beginning of the year setting up my budgets, and then it only takes a few minutes every few days to categorize the latest transactions.

I monitor my actual spending vs budget every week or so, and I take a little longer at the end of each month to review how I did that month.

5. Fitness

Software can be used to improve your fitness in a variety of ways, such as tracking steps, recording runs or bike rides, watching what you eat, and watching your weight.

I recently started using my phone to keep track of my steps every day, and it has motivated me be more active. If I don’t have my 10,000 steps near the end of a day, I’ll go for a walk. I consciously do things throughout the day to make myself walk more, such as parking further away from the store or taking the stairs instead of the elevator.

On an iPhone, the Health app tracks steps, but I don’t like the interface. Several apps use the Health data to display steps in a more useful format. I use the Withing app to both track steps and record my weight (using the Withings wireless scale).

I use the Nike Running app to record runs, and myfitnesspal for tracking calories.

Question: What software do you find essential for your personal life? 

What is the Difference Between Creating and Capturing Value?

I recently heard an entrepreneur speak about the founding and growth of his company. It was a fascinating and instructive story overall, but he mentioned one concept that I’ve been mulling over since. He talked about the difference between creating value and capturing value. 547915_55603419

This topic came up when asked how he decided when to take outside capital and how much. He described how he, as a founder, is focused on building value in his company. As he was looking for capital, he found that most potential investors, including venture capitalists, were more focused on capturing value. He found this to be a problem because he believed that capturing value too early would inhibit their ability to create value.

I’ve been thinking about how VC’s and other investors can help entrepreneurs both create and capture value.

First, what does it mean to create value?

The activities that make up the economy are not a zero-sum game. Gains in one area do not have to come at the expense of losses in other areas. The economy grows, and value is created, when entrepreneurs create outputs more valuable than the sum of the inputs.

The process of creating value can include focus on the following:

Creating a network effect. Some products become exponentially more valuable with more users. The classic example is the telephone. One telephone in the world is worthless, but that one phone becomes more valuable as more phones are placed into service. More recent examples include Facebook, Twitter, and other social media sites. Some of these companies created billions of dollars of value even before turning a profit because of the number of users they have been able to attract.

Building brand strength. The stronger the brand, the more a customer is willing to pay for a product. A brand is built over time through marketing and a reputation for high quality and good service. Apple is a good example of value created through brand strength. Consumers are willing to pay more for Apple products than comparable products because they trust the brand.

Developing efficient operations. Manufacturers create value by selling a product for more than the cost of the materials, labor, and equipment needed to produce the product. The more efficient the operations, the lower the cost of production. The lower the cost of production, the more value is created. Value can be considered both the profit to the manufacturer and utility for the customer relative to price.

Second, what does it mean to capture value?

Agriculture easily illustrate the difference between creating value and capturing value. Farmers create value by planting and growing crops. However, creating a valuable crop doesn’t do any good unless the crop is harvested and sold.

Value-capturing activities include:

Monetizing users. Social media companies often struggle with capturing value. Twitter created enormous value by rapidly building a large user base, but they have struggled to capture the value through monetization. Facebook’s stock has been surging because they have found effective ways to monetize through advertising.

Pricing effectively. The value of a strong brand and efficient operations can’t be captured if the product isn’t priced appropriately. Again, Apple is a great example. They earn high margins because of their brand strength and quality product, and they protect these margins by controlling their high pricing carefully across all distribution channels. It is difficult to find lower than usual price on Apple products.

Providing liquidity to shareholders. A company can capture value by monetizing users and pricing appropriately, and then they can pass on that value to shareholders by providing the ability to sell the more valuable shares. This can be done in many ways. Profits can be distributed through dividends. Private companies often raise money at higher valuations and allow new investors to buy out existing investors. The goal of public companies is to allow investors to capture value by increasing their stock price.

Real Value Must Be Created Before Being Captured

Both creating and capturing value are necessary, but it’s important to recognize where to place your focus at a given stage in your company’s growth.

In general more focus should be placed in the early stages on creating value, and as sustainable value is created, some attention can be turned to capturing that value. Even while capturing value, management should stay continually focused on creating value, or the ability to capture value will be short-lived.

Beware of artificial value, such as that created by financial engineering. Failure to recognize this distinction is one of the causes of the housing bubble and subsequent economic collapse. Low interest rates and creative financial products led to a flood of capital into the housing market. This caused housing prices to artificially inflate, creating the illusion of value creation.

Banks allowed homeowners to capture that “value" by borrowing against the inflated value of their homes. The illusion was eventually exposed, leaving behind severely underwater mortgages and general economic disaster.

Entrepreneurs and investors should work together to recognize the distinction between activities that create and capture value and prioritize their resources effectively. As they do so, they will be able to maximize both the value created and the value captured.

Question: What are other value creating and value capturing activities?  

What to do When Your Startup Can’t Pay The Bills

Business schools teach all kinds of cash flow principles. Find the optimal mix of debt vs equity financing. Minimize the operating cycle, or the time between purchasing inventory and collecting cash. Take early payment discounts. Use credit lines. And so on. These principles are all important, but I didn’t learn in business school what to do when a startup doesn’t have enough cash to pay all of its bills. The reality is that many businesses wouldn’t even be started if they had to fit nicely into the theoretical box of optimal cash flow practices.



It always takes much longer and much more money than expected for a startup to become profitable, if it gets there at all. Even profitability may not be enough to cash flow the business when working capital and capital expenditures grow with sales.

Most startups struggle to pay all the bills before the business cash flows itself. It’s important to have a plan for getting through these tough times. Cash flow struggles do not need to equal failure (even though it may feel that way when you’re in the middle of it).

Here are some things to do when you can’t pay all the bills:

 1. Communicate

It’s hard to communicate with those we owe money to when we don’t have good news. We may hope they don’t notice we’re behind. If they start reaching out to us, it’s tempting to avoid them until we’re able to pay.

We tend to fear the worst reactions, but it's surprising how patient most vendors will be if you communicate well. Most won’t yell at you or insult your mother. Most will be willing to give you extra time or put you on a payment plan without too much fuss.

2. Prioritize 

Not being able to pay all the bills is tough for honest people. We want to pay everyone in full and on time, if not early.

However, sometimes this is simply not possible. We have to prioritize carefully, or we’ll end up killing our business by giving our precious cash to those who can wait (i.e. vendors with mean collections people) and not having any left for those who can’t (i.e. employees).

Payroll can’t wait. People are everything, and if you can’t pay the people critical to running your business, they will leave. When times get better, your reputation will prevent you from hiring good people.

Notice I said “critical” people. You need to pay everyone on payroll, but you don’t need to keep everyone on payroll. Tight times give you a good reason to identify team members who are coasting or holding the team back. Cutting back your payroll not only frees up cash for other bills but also refines your team.

Payments with severely punitive default terms can’t wait. For example, some bank or hard money loans may require late fees and a drastically increased interest rate if payments are late.

Most other bills can wait. Every business is different, but think carefully about priorities.

3. Be creative 

There many options for raising money when you are struggling with cash flow. Don’t be afraid to look beyond the traditional friends and family, bank loans, credit cards, etc.

Loyal customers can be a source of financing. If you're running a great business, you should be important to your customers’ success. They don’t want to see you fail.

I know someone who sourced the product he sells from several different manufacturers. He provided great service to his customers, and they loved him. However, in some cases the manufacturers wouldn’t deliver on their promises, which made it difficult to meet his customers’ needs.

He had the opportunity to set up his own manufacturing facility but needed funding for the equipment. His loyal customers knew this would provide them with much better service. Several of them prepaid for large orders at a discount, giving him the time and capital to set up the plant.


It goes without saying that we should do our best to pay all of our bills, on time. However, when building a business sometimes it simply isn’t possible, at least in the short term. When this happens, it’s important to have a plan for getting through the tough times with the least damage possible.

Question: What tips do you have for startups struggling with cash flow? 

3 Strategies for Dealing with Uncertainty

All of us face uncertainty in our lives. Working with startup companies, as I have done for several years, can be particularly uncertain. The last few months have been especially uncertain for the companies I work with, which has led me to think a lot about how to deal with uncertainty. Morning_Manna_Logo


The following 4 strategies have helped my sanity in the face of uncertainty.

1. Don’t suffer from things that haven’t happened

It is important to anticipate and plan for the future, but sometimes this causes us to suffer from things that haven’t even happened yet. I like Mark Twain’s quote, "I've lived through some terrible things in my life, some of which actually happened.”

We live today, not in the future.

D. Todd Christofferson addresses this topic well in an address he gave called, "Give Us This Day Our Daily Bread.” He relates the experience of the Children of Israel in the wilderness. They were able to survive because the Lord gave them manna daily. They weren’t able to gather extra for the future. They had to live for today and trust that more manna would appear tomorrow.

He tells the story from the book and movie, Lone Surviver, and quotes a senior officer speaking during the intense Navy SEAL training.

“First of all,” he said, “I do not want you to give in to the pressure of the moment. Whenever you’re hurting bad, just hang in there. Finish the day. Then, if you’re still feeling bad, think about it long and hard before you decide to quit. Second, take it one day at a time. One [phase] at a time.

“Don’t let your thoughts run away with you, don’t start planning to bail out because you’re worried about the future and how much you can take. Don’t look ahead to the pain. Just get through the day, and there’s a wonderful career ahead of you.”

Likewise, sometimes we need to recognize that we’ve done all we can to prepare for the future. All we need to worry about is getting through today.

2. Consider the worst case scenario

During uncertain times it helps to imagine the worst case scenario. This isn’t being pessimistic. Rather, it shows that even the worst case scenario is manageable.

During the financial crisis, the US Treasury Department officials needed to identify which banks needed capital and how much. They came up with the idea of a stress test, but they were afraid the tests would reveal a hopeless situation, creating financial panic and meltdown. They realized that the worst case scenario would only confirm what the public already believed, and better results would create confidence.

They were correct; the banks weren’t as bad off as everyone feared, and information gained from the tests allowed them to take the first informed steps toward recovery.

3. Don’t think too much

There are times to think about the future, and there are times to focus on the task at hand. I find myself too often neglecting what I need to do today because I’m thinking about the future. This thinking is not always productive planning. Often it’s imagining various scenarios about how my life could turn out and worrying that it won’t turn out like I want it to.

Sometimes I have to force myself to stop thinking and get working. It helps me to set aside specific times to think about the future. It doesn’t always work, but I try to focus on the tasks at hand during the week and save my future thinking for Sunday morning. During this time I review my goals and my progress towards them.

4. Don’t expect perfection

I’ve heard the saying, "perfectionism is the enemy of progress.” I have a tendency toward perfectionism, and this can make it hard for me to deal with uncertainty. I find myself hesitant to start or continue down an uncertain path because I’m afraid it won’t work out perfectly.

I have been a Dave Ramsey fan since I discovered his radio show via podcast in 2005. In 2009, some friends encouraged me to start Dave Ramsey’s Financial Peace University in the community I was living in. It is a course (previously 13-week, now 9-week) that covers personal finance topics by Dave Ramsey on DVD and through group discussion led by a volunteer facilitator.

I didn’t want to start because I was afraid we wouldn’t have much interest, that I wouldn’t do a good job as a facilitator, and that it would take time away from my family or other areas of my life. I didn’t want to start something that might not be perfect.

It took some prodding from my friends, but finally I got started. Our first group was very small and consisted mainly of my parents, my in-laws, and a few close friends. We held it in a county maintenance garage. It wasn’t perfect, but it was successful.

Over the next 3 years I facilitated 3 more groups that included over 100 people. Many of them changed their lives for the better after learning important financial principles. None of this would have happened if I let perfectionism stand in the way of starting.

In conclusion, uncertainty is a part of life. The better we are able to deal with uncertainly, the more happy and successful we’ll be.

Question: How do you deal with uncertainty?

Why I Started a Blog

I have wanted to start a blog for a couple of years, but until now I haven't made it a priority over other demands on my time. A few factors have contributed to the nagging desire to start, and one factor in particular pushed me over the edge this year. 1428653_34995249

Two reasons I have been thinking about starting a blog:  

1. Producer vs. Consumer.  I have always been a prodigious consumer of content. I love reading and learning. I use Flipboard to flip through hundreds of articles and social media posts every day. I am usually in the middle of reading several books at a time so I have always have something I'm in the mood for, whether it be business, self-improvement, fiction, spiritual, etc.

I like audio so I can listen at double speed and consume content while I'm driving, exercising, or working around the house. I subscribe to Audible.com so I can listen to at least two books per month, and I subscribe to many podcasts on Downcast.

However, reading Atlas Shrugged by Ayn Rand got me thinking about the difference between a producer and consumer. I realized that all of my life I have been a consumer of content (much of it free) while never giving back by producing content for others to consume. I wonder if I can produce content others will want to consume, but I feel I need to try.

2. Build a platform. I have been following Michael Hyatt's blog and podcast since he left the CEO post at Thomas Nelson Publishers to start his own writing and speaking business. He talks extensively about how and why to build your own platform. I recommend his book, Platform: Get Noticed in a Noisy World.

The reason that got me started:  

Communication. I am an introverted nerd at heart. I love technical and analytics things like numbers and computers. I am more comfortable in front of a computer screen than I am interacting with other people. However, I know if I want to have any kind of positive influence in the world and achieve my personal and professional goals, I need to be able to effectively communicate with others. It's not that I can't communicate with others, but it's an area that I need to work on.

As part of my new year's resolutions, I have designated 2014 as my year of improving communication with two main goals:

1. Join a local Toastmasters chapter and earn the Competent Communicator certificate. I have had a great experience so far with the Parkway Pontificators in South Jordan.

2. Start and actively contribute to a blog. I want to improve my written communication skills, but my main goal this year is to improve my verbal communication. What does a blog have to do with verbal communication? I recently had an epiphany. One of the reasons I struggle to speak clearly is that I struggle to think clearly. In my busy CFO schedule I spend too much time doing and reacting and not enough time thinking.  I believe that writing content someone else might read will force me to organize my thoughts more clearly, which will in turn help me to think more clearly.

I look forward to improving my communication in 2014!


If you have a blog, why did you start?

How have you improved your communication skills?