By Michael Walsh
Have you ever seen a very accomplished person start “dropping the ball” on basics within their job? Ever wonder, “What happened to them?”
Quite often, these people are in a state called “Capacity Overload”. They are past the edges of their personal capacity levels. This can be particularly costly to the entrepreneur, on whose talents the business relies. Many businesses have been lost to capacity overload, and others have gone through severe setbacks. This gets extremely expensive when an entrepreneur is going after Large Scale Growth.
This phenomenon occurs quite frequently when entrepreneurs do not manage their environment, also too common when they are entering a new zone in their business – a game on a much larger scale. People do well when times are good, but do they have the capacity to handle things when times are stormy? How do you manage your affairs to minimize the disruptions that diminish your capacity? How do you “risk manage” your capacity, while attempting Large Scale Growth?
Foundation
In business, it is essential to handle and maintain your "foundation" issues and items. Foundational items are those things in our lives that are invisible as long as they are working, but take an inordinate amount of effort to deal with when things go wrong.
One example of this is your computer system. Anyone who has had their computer crash without the hard drive backed up is painfully aware of the cost of this event, both in time and in heart-ache. Computer crashes do occur, but the drain in energy of the "crashee" is inversely proportional to how recently the back-up occurred (if at all!). Losing your work, such as important customer files or company product and financial information, may have a dramatic, negative effect on your business. Proper system maintenance, however, may reduce the incidence of crashes, and timely back-ups will certainly reduce the consequences.
Other examples include cars and babysitting. Have you ever had a mechanical breakdown on the freeway? Have you ever had a babysitter not show up or call in sick? These are but a few of the many things we routinely take for granted. They are invisible when they are working, but they take what feels like far too much energy to set right when they don’t go as planned.
What are your foundation items? Identify them and maintain them while they still work. They will be tested as you grow. And be sure to build in a "Plan B" (and C and D if need be) just in case something does go wrong.
Personal Space
Another cause of diminished capacity is a lack of personal space. Similar to taking insufficient time off, entrepreneurs are notorious for spreading themselves too thin while helping, supporting, and providing for others.
Newsflash: Your first commitment to your customers, your suppliers, your staff, and your family (yes even your family!) is to stay sane enough to meet all those other commitments in life. Your capacity to handle commitments as you move out of your comfort zone is directly proportional to your physical and mental state.
For some people, personal space means going for a workout. For others it could mean eating ice cream while walking in the park on a sunny afternoon. The important thing is not what you do, so much as whether or not your "rejuvenation time" actually rejuvenates you.
New moms seem to lose their personal space with the birth of a child. New business owners often lose this space as well. Entrepreneurs are paid for results, not for their inputs. The fresher you are, the faster you will see results. Mistakes caused by fatigue cost lots of time. How much more effective might you be if you carved out a little more time for yourself?
What do you do to ensure that you give yourself adequate personal space? Is it enough for you? If your answer includes some element of "It’s all that is available to me," then you probably need to increase the time available to rejuvenate you. We often have more control than we give ourselves credit for. If you can’t take care of yourself, how are you going to grow your business as big as you want, to meet your goals and commitments in life? It just makes no sense.
Personal Money
It seems that very little drains capacity levels more than stress over money. People spend a great deal of time and energy worrying about their money. Furthermore, shortcuts are often taken when funds are tight — shortcuts that often create problems down the road.
Taking the wrong customers is a good example of this. If your car is on the end of the repossessor’s hook and you are eating Wheaties for dinner with water (because you just can’t quite afford the milk) then you are far more likely to take a new customer that you know will later cause you anguish and grief (a PITA, which is a technical term for "Pain in the Assets"). This will strain your capacity levels in the future, not to mention the constant distraction of financial concerns in the meantime.
As an alternative, what if you had "TBM"? TBM is another technical term. It stands for "Talking Back Money". Would you take on a PITA if your bills were all paid and you had a bunch of extra money in the bank? Might there be a little more freedom available? "Yes, that’s nice, but how do you build these types and levels of reserves?" The time to sort this one out is now. Not when you have more money, or when you get that next "big deal", but now. Many financial planners have talked about setting aside 10% of your income to build a buffer or a reserve. Others will argue that it is better to pay down debt (at a higher interest rate) than saving money. However, there is a problem with the "debt repayment at all costs" logic. It ignores our humanity. Please allow me to explain.
Some people pour all of their efforts into paying down debt, sometimes over a long period of time (many months to many years). After all this effort to pay off debt, they feel they deserve a reward (and they do! It is hard to maintain the discipline to pay off large debt loads). So what you they do? They celebrate and treat themselves, going into debt again. And the cycle continues…
What if you got into the habit of saving some money, even as you chipped away at the debt? It may take you longer to pay down the debt, but after you are done, you have money stored up, and a solid habit as well. If you wanted to treat yourself at this point, you would not need to go into debt to do so.
As an aside, here is how to become a cash millionaire:
– Start by putting $50,000 in the bank (cash money, not borrowed).
– The first step to putting $50,000 in the bank is to put $10,000 in the bank.
– The first step to putting $10,000 in the bank is to put $1,000 in the bank. This breaks down to $83.33 per month.
– If $83.33 per month is too much, then how about $10 per month?
If $10 per month is too much, stop worrying about how to become a millionaire and get to work on your business. For the rest of us, why not start today? Developing the habit is the first and most important step. By handling our personal money, we are freed up to use our creativity to deal more effectively with the business, leaving fewer potential problems to challenge our capacity levels.