Below are a list of articles I found interesting this week. If you’ve found some interesting stuff, please share it in the comments below!

Why Did 17 Million Students Go To College? – An interesting look at the number behind college and the value we’re really getting from our educations. It begs the question, “Is college really worth it?”

How to Hire and Work With a Virtual Assistant – One of the guys in my entrepreneur group shared this with us. The next 12 months will find me looking to use a virtual assistant for certain work in my business. When I do, I will be turning to this article. If you’re swamped, but not sure it’s time to hire a full-time employee, consider a VA first and read this article.

The Persuasive Power of Swearing – “Light swearing at the start or end of a persuasive speech can help influence an audience.” Now, I’m not advocating this methodology for increasing persuasion. In fact, I recommend you don’t swear. However, there’s an interesting nugget that points out that it may not be the swearing that persuades people as much as it is the perceived passion for your content that’s the persuasive element. People resonate with passion. Swearing is just one way of communicating passion – not the only and certainly not the best.

Burnout S.O.S.: Increase Your ‘Worth Ethic’ and Save Your Health – Feeling burned out? This post examines how understanding where we derive our sense of “worth” affects our sense of well-being. Noticeably missing from the piece is how faith fits into the picture. But it’s from the Huffington Post, so that shouldn’t surprise anyone. Still a good read.

Setting Up a Social Media Management Center – A fairly comprehensive post from social media expert Chris Brogan. Some of the tools he recommends are quite expensive and there are inexpensive and free alternatives to a lot of them. But it gives anyone an understanding of what needs to be done to create a strong social media presence and manage it effectively.

How to Setup Your First Blog the Right Way the First Time – Not sure this needs much explanation. I know a lot of my readers are working on setting up a blog or are thinking about it so check this out.

EntreLeadership 1-Day – I went to this yesterday with Justin Davis of Madera Labs and it’s a fantastic event well worth the small investment. I’ve been to both the live 1-Day and the Simulcast. Both are spectacular but go to the live event if you ever get the chance. This is not an affiliate link, by the way. That’s how much I believe in this type of material.

Photo courtesy of celinesphotographer

I’ve had an insanely busy week. As a result, I’ve completely dropped the ball on writing a blog post this week. When I sat down to write, I was reminded of a question I heard recently.

The question?

What would you do in your life if you were absolutely confident that you would succeed?

And then it hit me. This is a great opportunity to try an idea I’ve had for a while – an open discussion. I spend a lot of time on this blog expounding on ideas. That makes sense since it’s my blog.

But what I really love is the dialogue and the conversation with you. So I want us to try an open discussion in the comments around a single question. It could bomb since it’s possible nobody will respond, but who cares? I also don’t know how often we’ll do these. However, this week seems like a great week to try it.

So, in the comment section at the bottom of this page, answer this question: What would you do in your life if you were absolutely confident that you would succeed? It could be anything. Just have at it – no restrictions.

To get the party kicked off, here’s my answer:

I would stop procrastinating on an e-book I’ve been working on and get it finished. I believe it can and will succeed, I’m just in the self-doubt phase of the project where I question everything about it. This is also why I have a team of fellow entrepreneurs I meet with on a weekly basis to hold my feet to the fire. I’ll no doubt hear about this on Monday.

What would you do?

Photo credit: Stuck In Customs

Warning: This post has only been mildly proofread. It’s my “gut reaction” to a few conversations on debt over the last two days. It’s not nearly as polished as many of my others. Don’t say you haven’t been warned.

This post has been rolling around in my head for a while. I didn’t plan on writing it yet – partially because it’s a sensitive topic and partially because it’s difficult to be thorough and brief. Not impossible, just difficult.

On Thursday, I was talking with my oldest friend when the topic of debt came up. I told him that I believe any business could be started and operated without debt. He disagreed and it started a fun and challenging dialogue about “responsible borrowing.”

That same evening, I was talking with my wife Lisa at dinner recounting the conversation when I said, “Debt is a tool of the impatient person.” We talked about that for a while and I stand by my statement. (She agreed with me, in case you’re wondering.)

Today, I tweeted that statement out and heard about “responsible debt” again from a business perspective along with it being an “effective” tool when used responsibly.

Finally, my friend Amber asked what Dave Ramsey would say about Kiva.org – the micro-lending site that allows ordinary people in wealthier nations to help those in third-world countries by loaning them small amounts to start businesses. I told her I didn’t know (which I don’t) – nor am I really concerned about it.

My stance on debt and finances, while certainly informed by Dave Ramsey, is my own. It’s been molded from my own experiences and background and it has evolved a lot over the years. I met him once for 30 seconds. Kiva never came up.

So let me try to tackle these points.

Is Debt Needed to Start a Business?

The short answer: no.

The long answer: no.

“But what about…” Look, I’ve heard a lot of these questions. One of the more common ones I get is about restaurants. Opening a restaurant takes a lot of money. The average is about $125,000. Most are likely financed. I have no statistics on this – it’s a conjecture, but I’d bet I’m right. Anywhere from 60-90% depending on your source will close in the first 5 years.

Here’s the deal: if you take out a loan to start a business, you will have to personally guarantee the loan. Which means, you will be borrowing against your family’s well-being and putting it at risk for a business. If your business goes under, creditors have rights to your personal assets. This is bad. Just ask anyone who’s gone through bankruptcy after borrowing to start their business.

Would You Borrow Money to Invest in the Stock Market?

If I came to you and asked if I would be wise to take a home equity line on my house at a rate of 7% to invest it in the stock market which historically returns 10% or more in the long-term, what would you say?

I hope you would tell me I’m an idiot.

Investing in the stock market is investing in businesses. When you buy shares of a company, you are investing in that business. So it is when you’re starting a business. You must invest capital to start a business. So, should you borrow money and leverage your personal assets to start a business?

I’d argue the answers are the same.

Debt is a Tool of the Impatient

There. I said it again. I still stand by it.

Let’s go back to our restaurant example. The argument makes a faulty assumption that the only way to open a restaurant is to open a restaurant in one step. To go from “I don’t own a business” to “I now own a fully operational restaurant” in 6 months. If you take that view, then you will need $125,000 over the next 6 months (if not more). There are only three ways to get $125,000 (legally):

1. Borrow the funds
2. Get investors
3. Save up the money

While I used to be, I’m no longer a fan of legal partnerships. I’d prefer to maintain 100% control. But how do you save up a $125,000? You bootstrap it.

Here’s an example of bootstrapping a restaurant:

1. Save up $10,000 while keeping your day job. At night, start building up a killer short menu. Test out your recipes on friends and family who will give honest feedback.
2. When you have some money saved up, offer to cater a friend’s wedding who’s looking to save money. Use your previously created menu as the starting point. Use your $10,000 (or whatever the actual number would be) to hire a few servers for the day – or recruit family.
3. If it’s well-received, start connecting with local party planners, party supply rental companies, etc. Tell them about your services and create joint ventures with them to refer business.
4. Save and invest back into the growth of the business but only grow as fast as you can manage without debt.
5. Live on less than you make. (Shocking, I know.) I’ve tried it the other way, it doesn’t work for long.
6. When you have some money saved up (let’s say $75,000-$100,000), try to find a failing restaurant in a good location. Structure a great buyout deal.
7. Invest as little of your money as you can to refurbish the restaurant and get it running. Invite EVERYONE you’ve ever catered for opening night.
8. Rinse and repeat.

Now, I’m not in the restaurant business. I’ve been a waiter before – and a pretty bad one at that. Obviously, there are steps missing in my sample plan. That’s not the point. The point is that is can be done. It just takes patience.

“But I don’t want to open a catering company.” That’s fine. You’re not patient. I get it. Go get a loan. Just don’t tell me it can’t be done.

So, how patient are you?

Bootstrapping is More for “Lifestyle Businesses”

Tell that to Cisco. The company is valued at $131 Billion (with a “B”). And, according to USA Today, the company has never had any debt since the inception of the company. Building a business debt-free is possible – regardless of the type of business.

My Thoughts on Kiva.org

Crap. This is going to tick some people off. Or a lot of people.

If you live your life by a set of principles, then you have to ask if those principles are black-and-white or if they’re guidelines. Things rarely fit neatly into a black-and-white world. After all, the world we live in is broken. But that’s a post for another day.

If you don’t know what Kiva is, it’s a micro-lending company where those in third-world companies are loaned money to get a small business started. The average is about USD $380. Not a lot to us, but a lot to them. You can pitch in as little as $25 toward their fundraising goal and the site a has a repayment rate of nearly 99% – an astounding figure.

Let me start by saying that my thoughts on Kiva are directed by this principle:

“The rich rules over the poor, and the borrower is slave to the lender.” Proverbs 22:7

Our faiths guide our worldview. So, if I look at this statement, what am I to believe? If I loan someone money, am I putting myself in the position of slave master? I’ve answered this for myself in the affirmative. Why? Because I’ve been on the other side and I was a slave to creditors and it nearly ruined me.

Separating the Mission of Kiva from the Method

I love what Kiva is trying to do. I’m a big supporter of their mission to end poverty. However, I have to ask myself if the method of putting people into debt is the right way or the best way to do this.

An interesting statistic that I’ve not been able to find on Kiva’s website is the success rate of businesses that have received money from Kiva loans. There is a difference between repaying a loan and running a successful business. They readily reveal the lending stats, but I’m not sure those are great measurement for success of any business other than their own (and the people loaning money).

The problems of poverty are huge and won’t be solved by this post. There are a lot of great organizations trying to fight it on different fronts. Many people have given money to Kiva. They are not bad people. The people running Kiva are not bad people. The people borrowing money from Kiva are not bad people. I’m merely calling into question the method.

I love the idea of helping people start small businesses in third-world countries. After all, I’m an unapologetic capitalist. But is the problem their lack of funding or is it a lack of education in basic financial principles?

Does the ability to repay a loan makes someone suddenly capable of making sound financial decisions?

Your Turn

Now that I’ve managed to anger a large segment of people, I’m going to stop and turn the blog over to you. The comment section is below. Have at it (or me). I will respond to everyone.

By the way, if you want to win 30 minutes on the phone with me to talk about goal setting or to yell at me for these viewpoints, read my post on How To Set Better Goals. You still have a little bit of time left.

Image credit: iandavid

There are a lot of people who talk about “one day” owning their own business. Yet, very few people actually end up even trying it. Why?

Usually it’s because they’ve chosen to believe one or more lies about starting a business. There are 7 common lies that people are telling themselves right now that will keep them from changing their dream of entrepreneurship into a set of goals they can accomplish.

Lie #1 – It’s Too Risky In Today’s Economy

Without a doubt, our current economic situation sucks. However, that doesn’t mean you shouldn’t start a business. In fact, starting a business during an economic downturn may be one of the best things you can do.

Why?

• Your job is likely not as safe as you think it is. After all, layoffs increase during times of economic uncertainty. Right? Why not put yourself in the driver’s seat rather than depend on someone else for a paycheck?
• It will force you to prioritize your spending. If you can operate a profitable business in an economic downturn, you can do it during times of economic boom.
• Competition decreases during crappy economic times. It’s sad but true. A lot of companies go out of business in a downturn. Regardless of the reason, this creates opportunity for someone who is talented and willing to work hard to take on clients from failing companies.
• It’s cheaper to start a business during a downturn. With so many businesses going under right now, it’s a great time to pick up needed items at an auction or on Craigslist. You can also negotiate better deals with potential vendors right now.

Here’s a fun fact: roughly half of the Dow Jones 30 were started during a recession. Now may be a great time to start that business you’ve been talking about.

Lie #2 – I Don’t Have Enough Time

How was last night’s episode of Gossip Girl? How insane was that Yankees game? OMG…did you see the preview for the next episode of Glee?

• The average American watches nearly 4 hours of TV per day.
• 49% of Americans say they watch too much TV.
• 98% of households in the US have at least 1 TV.
• 34% have 2.

You have the time. You just have to claim it from the other distractions in your life. If TV isn’t the problem, you may be working too many hours for someone else doing something you hate. This was my problem for too many years. I made a lot of money doing work I didn’t enjoy so that I could buy stuff I didn’t need.

Lie #3 – I Can’t Afford To Quit My Job

Who said you have to quit your job to start a business? Most businesses are started during nights and weekends. Feel like you don’t have enough time on nights and weekends? See Lie #2 above.

Oftentimes, it’s not an income problem that people have – it’s a spending problem. Their cost of living has risen to – or more likely above- their income.

So how can you prepare for being able to quit your job? Here are some things you can do to get ready:

• Save up 6 months of living expenses in a money market account.
• Create a budget for both the business and your household. Figure out how much money your business will need to make in order for you to survive.
• Get out of debt and stay out of debt. It’s a lot easier to start a business if you don’t have to worry about creditors knocking down your door.
• Practice living on less before you have to start living on less. It’s a habit you have to learn. There is not magic “live within my means” pill.

Lie #4 – It Takes Too Much Money To Start a Business

There are a lot of businesses that can be started on less than $1,000, $5,000 or even $10,000 dollars. You just have to start thinking differently about how you’re going to do it.

First, start small and then scale up. You don’t need to go lease a storefront just because you want to own “the best hotdog joint in town.” Instead, start by renting a cart and setting up shop on a busy street in the financial district downtown. Try out different recipes while minimizing exposure. Figure out if people even like your hotdogs.

Then, if things are going well, begin planning for expansion into a bigger market. Figure out how much money it will take to purchase your own cart. Start saving to buy one without financing it. Once you own your own cart, begin socking money away to buy another cart (in cash) and hire an employee to run it. Keep up this process until you own enough carts that you’re making enough money to open your storefront without going into debt.

Too many people use borrowed money such as credit cards, home equity, and personal loans to finance the opening and/or growth of their business. This is stupid. Figure out how to start smaller with less exposure and risk. It will keep you making smarter decisions because you won’t be able to buy things you can’t afford.

Lie #5 – I Don’t Know Anything About Running a Business

Neither do a lot of people when they start a business and it shouldn’t stop you from starting one.

Don’t get me wrong – you need to learn about running a business. But there are a lot of free or low-cost resources available to you:

• Ask friends and family who have started a business to act as advisors and mentors.
• Contact SCORE. They offer free small business advice and mentoring in-person and online.
• Visit your local library and become and avid reader of business books.
• Find and read blogs on business development, sales, marketing, freelancing, etc.

If you’re starting small and part-time as I suggest, you’ll have time to learn about running a business as you do it. It will take a lot of the pressure off of having to know it all up-front.

Lie #6 – I’ll Go Out on My Own When …

…my kids are out of the house.
…I retire.
…I blah, blah, blah.

No. You most likely won’t. Excuses like these are generally made out of fear. Starting a business can be a frightening thought. So rather than admit the fear and confront it, people mask it behind “sensible” statements such as these. They tell themselves that it would be unwise to do it right now.

These statements meet two needs:

• We don’t want to admit we’re scared, so we tell ourselves and others that we’re going to do it…just…down the road. It keeps the dream alive – even if only on life support.
• It makes us sound reasonable in our fear. After all, who doesn’t want to sound reasonable? Nobody wants to be seen as rash or foolish. This type of excuse enables us to lie to ourselves and others while maintaining a bit of self-respect.

Lie #7 – I Don’t Know What Kind of Business to Start

I think that most people have an idea of what kind of business they would start, they just don’t want to admit it in any other capacity than as a fantasy.

What do I mean by that?

Have you ever played the game with friends where you answer the question “What would you do if money weren’t an object?” Of course. We’ve all done it. And it’s fun because it’s “safe.” It’s all fantasy because, of course, money is an object. So we talk about our fantasy of starting our own sports memorabilia store, wedding photography business, bakery, PR agency, non-profit, etc.

The problem is that when we relegate our passions to the world of fantasy, we no longer see them as potentially viable businesses. We assume that something we’re passionate about can’t possibly make money. It just seems too good to be true that we could actually do something we love and provide for our families.

If you know how to answer that question in a cocktail party setting, then you know what kind of business to start. Now, granted, the business may take on a different form than in your money-is-no-object fantasy. But that doesn’t mean you shouldn’t take the above steps to make it happen.

Share Your Thoughts

Are any of these lies stopping you from starting a business?

If you’ve already started your business, which lie did you struggle with the most? Should I have added additional lies to the list?

I’d love to hear your experiences in the comments below.

I’ve had the opportunity to talk with a few entrepreneurs lately and something keeps coming up – building a business to sell it. I’ve got nothing against selling a business. I’d love to build something that people want to buy from me for exorbitant amounts of money.

But building a business with the sole purpose of selling it is a great way to ensure that it realistically never happens.

Here’s why: building a business is a long, hard, arduous process that will test your resolve. I was involved in a startup with the goal of selling. I wasn’t in it for passion and it sucked.

So when things got tough (they always get tough), the business fell apart. And it never falls apart pretty – in fact, it’s generally quite ugly.

Small sidebar: the beginning of the end is when one potential investor said, “So basically, what you’re trying to build is a social network for death.” We weren’t, but social networks were still a bit new and a lot of people didn’t get it. What would later become the death knell for our little startup was when friends and family started asking us how “Death.com” was going. There’s a whole different post there on branding for a different day.

The Best Case Scenario?

Let’s say that your business actually succeeds and is doing quite nicely and you want to sell. Remember, you didn’t build a business you were passionate about. So you want to sell. Do you know the statistics of businesses that actually get bought for large payouts? Of course not. Because most businesses don’t. If it succeeds, you’re going to be running a business you’re not passionate about, can’t sell, don’t like, but don’t want to close.

Sound fun? Of course not. Remember that job you hated that paid really well? You know, the one you quit while making a vow to yourself that you would never settle for another job that sucked the life out of you every minute of every day no matter how much you made? Oops. Only this time its much harder to quit.

The Better Path

Want to increase your odds of success? Of course you do.

Then build a business you’re excited about and don’t want to sell. Your life will be much more enjoyable. You’ll still have bad days – lots of them. But you’ll be able to push forward knowing that you’re one of the few people who actually chose to chase your dream rather than settle for someone else’s.

It won’t guarantee wild success. However, neither will building a business to sell. But I can guarantee you’ll have a lot more fun and be more likely to actually see it through to the level of success you want.

Have you ever tried to create a business that you weren’t passionate about? I’d love to hear your “Death.com” experiences below.

In his book The War of Art: Break Through the Blocks and Win Your Inner Creative Battles, Steven Pressfield tackles the constant battle that rages inside of artists. Art, according to Pressfield, is war. So is trying to start a business.

Have you ever considered the similarities between artists and entrepreneurs? Both are trying to create something from nothing. Both dedicate a tremendous amount of effort toward their craft. Both want to earn a living doing something they love. Both face internal battles against self-doubt and fear.

Only one of them tries to get paid prior to having much of anything to show. Guess which one.

Very rarely will you see an undiscovered musician head to a label and ask for a record deal based solely on an idea for a song. Yet an entrepreneur will head to the local angel investor or VC armed only with a business plan and a hockey-stick-shaped revenue projection.

I know because I’ve done it.

Perhaps we need to approach our craft like a musician and not like it’s a get-rich-quick scheme.

• Successful musicians start by writing music first. Entrepreneurs need to start by creating a product or service that makes money.
• Successful musicians practice even when nobody’s looking. Entrepreneurs need to build their companies even when nobody cares.
• Successful musicians care more about their fans than the labels. Entrepreneurs should care about their customers/users/clients more than pleasing potential investors.
• Successful musicians understand it often takes years to be “discovered.” Entrepreneurs need to understand that even Facebook wasn’t built overnight.
• Successful musicians often carry a day job and practice their craft during the down time. Entrepreneurs need to be willing to do the same.
• Successful musicians don’t wake up one day and say, “I’m a musician.” Some people think all they need to do is change their Twitter profile to read “entrepreneur” and they’ll get funding.
• Successful musicians had to live with constant rejection early on – meaning they had to be in love with the art, not the process. Too many entrepreneurs pick projects based on pipe-dream payouts – not how willing they would be to do it for years with no promise of a pot of gold.

We know this intuitively. The success rate of startups is not a mystery. It sucks. Yet we want someone else to bankroll our idea without having done much more than write a business plan.

It’s time we start thinking like a successful musician. It’s time we build businesses. It’s time we dig in for the long haul. It’s time we pick projects that excite us because of the work, not the fantasy payout. I’ve got nothing against investors. They are wonderful people doing great things. I’m just not going to work for them anymore. I’m going to work for me.

I have a gut feeling money follows passion. Not the other way around.

I’d love to hear your thoughts on this. Please share in the comments below.

Do you want to be successful? I’m not talking about money, though that may result. I’m talking about getting from where you are to where you want to be – starting that business, getting that promotion, landing that new client, creating a new product line, etc.

I believe there are only two skills you need that will make up for any of those you may not have:

1. The Ability to Sell What You Believe In
2. The Ability to Deliver What You Sell

Everything is Sales

The economy runs on selling a product or service for money. Even if you’re a programmer or a customer service rep, you’re in sales. Everything is sales:

• Hiring Managers sell the position to potential employees. You want the best applicants? Sell them on why your company is the best place to work.
• Entrepreneurs sell ideas to potential investors. They hear hundreds, if not thousands, of pitches per year. Tell them why they should care about yours.
• Job Applicants sell themselves to a company. If two people with similar resumes apply for the same job, who gets it? The one who can sell themselves over the other person. I’ve even hired people with less experience just because they convinced me they’d work harder.
• Revolutionaries sell people on why the status quo needs to be shaken up. Every person who’s ever led a movement, first had to convince a lot of people to see things as they did. They sold their vision and ideas.

Bottom line? You’re in sales whether you want to believe it or not. Embrace it. Then learn to sell your ideas, yourself, your business and your dreams.

Deliver on What You Sell

The term “salesman” has taken on a negative connotation. Primarily because so many things or ideas we’ve been sold don’t deliver. We don’t trust salespeople. We think they’re lying. I don’t believe that most salespeople intend to be dishonest. However, I believe most people sell something and then don’t deliver. Delivering takes effort. Delivering takes diligence. Delivering is hard, constant work.

If you can learn to sell what you believe in, then deliver on what you sell – be it an idea, your skill set, your company – you will never be lacking for business or a job. Many people can do one or the other. Only the truly successful learn to do both.

Do you possess these two skills? How do you use them in your pursuit of success?