MBA2327 Are You Optimizing For The Wrong Things in Your Business? + Free Ride Friday

0:09Heyo! Welcome to the$100 MBA show. No fluff, just the good stuff. Delivering practical business lessons to help you grow your business. I'm your host, your coach, your teacher, Omar Zinhome. I'm also the co-founder of Webinar Ninja, an independent software company I started back in 2014. And today's episode is Free Ride Friday. On Free Ride Fridays, we give away a lifetime membership to our$100 MBA program, giving you the practical fundamentals to improve as an entrepreneur, 100 % guaranteed. If you want to win a free ride to the$100 MBA, just leave us an Apple Podcast rating and review, and you enter our weekly random draw we call Free Ride Friday.

0:45Listen in on Friday, just like today, to see if you won. It's that simple. We announce this week's winner a little bit later in the episode. In today's episode, you will learn, are you optimizing for the wrong things in your business? This is a lesson I wish I learned way earlier in my entrepreneurial career. Whether we intend to do it or not, we are always optimizing for something in our business. Another way to look at this is, what are we focusing on? What are we trying to do in our business? Some businesses optimize for growth at all costs. Some for profit, making sure they're as profitable as possible.

1:21Some people optimize for happiness or fulfillment, making sure that their business and the work they do in their business is something they look forward to. Some people optimize for free time. How much free time can I get while having a sustainable business? You're always optimizing for something in your business, but you've got to be intentional about it because sometimes you'll find yourself optimizing for the wrong things. It doesn't match what you actually want out of your business. And another chestnut is that you can only optimize for one thing at a time. We're going to get into all of the nitty gritty details, how to choose what to optimize for, how to actually focus on optimizing for that thing, how to stay on track and a whole lot more.

1:59Let's get into it. Let's get down to business. It's really healthy to look at your business like a book. The lifespan of your business is like a book with chapters. And just like a great book, each chapter will go deep in a topic, in an idea. Or even if it's a fictional story, each chapter will focus on a certain arc in the character's story. The problem with a lot of entrepreneurs is that they don't do this. They don't see their business as a story of chapters. They want to do everything at one time. They want to grow profits. They want to grow their business. They want to grow their employees.

2:34They want to have more free time. They want to do it all. But a lot of these focuses or a lot of these things that they're optimizing for are counterintuitive. A good example is if you're trying to optimize for growth, meaning you're trying to grow at all costs, something like a fast growing startup like Facebook in the early days. In order for you to grow at all costs, you can't worry about profit. You really can't worry about being as profitable as possible because you want to spend all the money that you're making or that you have to grow. That's what optimizing means. So you can't have your cake and eat it too.

3:05But if you see your business like a book with chapters, you can have the chapter of growth and then the chapter of profit where you shift gears and have a moment in time, have a period where you focus on one optimization. Now, in my opinion, one year is a good period of time to focus. at least. You can focus on optimizing for growth for two years, but the minimum, in my opinion, in order for you to get traction and actually see results is one year. And this applies to any optimization, whether you're optimizing for growth or profit or free time or whatever it might be. So how do you know what you're optimizing for?

3:44And by the way, you don't have to change what you optimize for all the time. It all depends on what you want. And that's how we find out what to optimize for. Ask yourself, what are you doing this all for? Some people start a business because they want to build something great. That's what drives them. They want to build something incredible. Now, we all want to build something great, but what is the number one driver for you starting this business in the first place? Why are you an entrepreneur? For some people, they just want to build the next big thing. They want that significance. They want to be able to point at it and say, hey, I made this amazing thing.

4:17That's what drives them. Some people start businesses or become entrepreneurs because they want freedom. They want to do their own thing, be their own boss, and take time off as much as possible. Be with their family. Some people do it so that they can become really wealthy. And in this case, you've got to optimize for profit because profit is what you keep. Now, some might argue that you can become really wealthy by optimizing for growth and building a successful company that has small margins, but one day you'll sell it for a very profitable amount. Now, that is one strategy, but every strategy has risks.

4:49And the risk of doing that is you might not be able to make it to the point where you could sell the company. You may not be able to survive a tough economic crisis because your margins are so thin. You may not last the competition, whatever it might be. So the point here I'm making is you need to really figure out why are you doing what you're doing? You got to really reflect. And this is stepping away from the computer, stepping away from devices. I like to go out in nature, go for a walk, maybe journal, sit on a park bench and spend some good time alone in my thoughts. I'm not talking about 10 or 20 minutes.

5:23I'm talking about an hour or two, three hours. Go grab a coffee and come back and do another hour. The point here is that you want to allow yourself to really reflect. And this is kind of the planning or the sharpening of the saw before you start cutting the tree. You want to make sure you know what you're doing and you're spending your time on the right things because you might find yourself doing things that are not in your best interest. You might be writing down in your journal as you're reflecting, hey, I want to be able to have more free time. I want to build a business that's financially viable, that gives me a certain level of comfort in my life, but I only want to work 15 hours a week.

6:01The rest, I want to do hobbies and exercise and be with my family. If you write that down and then you ask yourself, am I doing things that are optimizing for that in my business right now. A lot of us will say, no, I'm not doing that. I'm doing other things because I have conflicting ambitions. And this is true. Many of us want many things. We want to have a business that's highly profitable. That's a growth monster that I only spend 10 hours a day. The thing is that it's really hard to achieve that. And it's much easier to achieve a goal that's just optimized for one thing. You only want to make it easy for yourself.

6:37You want to make sure you can achieve this goal. So the point of the brainstorm, of the reflection, of the sitting on the park bench is for you to really make sure you know what you want. What is the top priority? You may want a lot of things, but rank them. What's number one? And then ask yourself, are you optimizing your business for that? Are you doing the things in your business to make sure you have free time? Or are you complicating the business? Are you doing things that are requiring your time? Are you putting things in your calendar for the sake of growth or for the sake of hiring more team members?

7:08Because some people feel significant when they have a lot of team members. And are you shooting yourself in the foot? So I want to give you some examples. What are some of the things you should do in your business if you're optimizing for X? Let's say you're optimizing for growth. You want your company to grow as fast as possible and become the market leader. This means your business should be spending a lot of time and money and investment and focus on marketing and sales. You need to be known in the market. You want to attract new customers. You want to get customers from other platforms to move to your platform or from other products to your product or from other services to your service.

7:43If you ever look at any company that you kind of see grow very fast, you'll notice they are really marketing heavily. They are really aggressively trying to get new customers. There's a project management tool called monday.com that has so many ads everywhere. And if you look at their growth trajectory in the last few years, it's been crazy. It's because of the marketing. But let's say you're optimizing for profit. You want as much profit as possible. You want to have a war chest of money for yourself, your family, or your business so that you can withstand any rainy days. If that's the case, then you're going to try to look at your biggest expenses in your business and see how can I minimize these expenses while keeping my business going, while keeping my business staying efficient as well as providing the service or the product that I'm promising to my customers.

8:31This might mean changing your team or changing how you operate or the tools you use or even the business model itself. It might mean cutting costs. It might mean increasing your prices so that you make more profit per sale. These are the actions you have to do to increase profits and optimize for it. Let's say you're trying to build a business that optimizes for free time. So you have free time. Well, it doesn't make sense that you're building a business that doesn't scale, that requires your time. Maybe you need to change your offering. Maybe you're a service-based business and you deliver the service.

9:02Maybe you need to hire somebody to do that for you or productize your business. Sell products instead of services. The point is, is whatever you input into your business, you're going to get an output. So input the things that are going to get you the output you want, that you want to optimize for in your business. And remember, you can optimize for more than one thing if you focus on it for a period of time. So let's say you want profit and you want free time. So maybe this is the year of profit. and you focus on that, you build the systems, you build out your business and the model that works for profit.

9:33And then once that's moving like a well-dolled machine, then next year you're focused on optimizing for free time. But understand whatever you optimize for will get you an X result and make sure that result is what you actually want out of your business. Listen, I'm gonna say something that not a lot of people will say in business. Entrepreneurship is a means to an end. Yes, you will love the journey, you will improve and it's fun and exciting and challenging and it makes you an incredible person, but you gotta see business as a means to an end. What are you trying to get the business to do for you?

10:06You have to be in charge. You have to tell the business what to do so that you can get the results you want. Don't let the business push you around. Thanks so much for listening to the$100 MBA show, but today's episode's not over. It's free ride Friday. Let's see who won this week's free ride. And the winner is Regina Tikanova. Regina says, valuable insights for entrepreneurs, five stars. Thank you for your podcast. I love the episode on the cost of stress in your business. I love your approach to stress and using stress to your advantage and taking the best out of it and using that energy. Thanks, Regina, for that great review.

10:39Your mission is to email me over at omar at 100mba.net so I can make sure to hook you up with a lifetime membership to the$100 MBA program, helping you become a better entrepreneur, 100 % guaranteed over at 100mba.net. If you want to win a free ride, just like Regina just did, Just leave us an Apple podcast rating and review and you enter our weekly random draw. And don't forget to hit subscribe on your favorite podcast app so you get our next episode automatically. Before I go, I want to leave you with this. Sometimes we get busy building. We just get busy working on our business. We get busy just trying to make ends mean and make everybody happy in our team and just managing.

11:14And we forget why we did this in the first place. Like, why did we start this business? Why did we become an entrepreneur? Sometimes it's good to refocus and say, okay, I'm not moving in the direction I want to. I'm not doing the things that are gonna optimize my business for the results I'm looking for. It's okay to change things up so that you can realign yourself with the values and the outcomes you want. Schedule something like this to reevaluate every six months because it's easy to get a fall into the old habits. I've done that plenty of times in my own career. Thanks so much for listening and I'll check you in Monday's episode.

11:48I'll see you then. Take care.