We, Not Me

I received quite the lashing after yesterday's post. In short, I made the argument that the brutal statistics about how most businesses fail have less to do with the risk of owning a business and more to do with the business owner’s competency in running a business. We can be the most gifted person in the world at our craft, but if we don't know how to run a business, we're toast. One of the primary responses I received was that it's not easy for business owners to know how to do everything.

That's my point! Yes, thank you! Running a business is extremely difficult. However, instead of throwing our arms in the air and playing victim, we need to take accountability, show humility, and have a heart to grow. It's not about "just be better," but instead growing in the areas we need to grow.

There is another thing, though. Business owners often act as though they are on an island, and everything rides on their ability to individually figure it out. Business ownership can be lonely, but luckily, it doesn't have to be. While I've been hungry to grow in my skills as a business owner, I've also had the mindset that I need to bring people around me to fill in my gaps (of which I have many!).

So, today, I want to give you a little glimpse into my world and the people I've intentionally (and sometimes unintentionally) surrounded myself with to succeed (and hopefully thrive) in business:

• Paige and Alyssa, my former and current assistants, who have helped me create structure in my days and have joyfully taken on many tasks that I'm frankly terrible at. These two changed my life!

• Jordan, who has been my right-hand at all things graphic design for many years.

• Tom, for being a trusted business mentor, willing to answer all my stupid questions in my early years.

• Carlos, who taught me about pricing methodologies and helped me create a suitable work environment that's free from my most detrimental distractions.

• Michael and Ashley, who helped me learn bookkeeping and standard business accounting practices.

• Travis, who intensively taught and fueled my new passion for unit economics.

• Cole, who brings his passion for audio and video to bring the Meaning Over Money Podcast to life. He's also the person who believed in me more than anyone.

• TJ, who taught me the art and science of unreasonable hospitality.

• Rebekah, who pushed (shoved!) me to be more professional in my marketing practices and relationship-building.

• My corporate clients, who repeatedly push me out of my comfort zone and force me to view business concepts through different lenses.

• Doug, who helps me understand and navigate the U.S. tax system in ways I never even imagined. This one changed my entire world.

• Parker, who has excellently and creatively recorded dozens of hours of my professional speaking events.

It would have been lonely doing it alone, but luckily, I didn't have to. If you're like me, you have lots of gaps (the code word for things we suck at!). Yes, learn, develop, and grow. But while you're at it, don't be afraid to bring people into the fold that can help you bring your dream to life. Besides, road trips are more fun with someone in the other seat!

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More To the Story

Statistics show that 20% of businesses fail within the first year, 50% fail within the first five years, and (depending on the source) 65%-80% fail within the first ten years. You've probably heard some iteration of these numbers. The broad consensus upon seeing this data is to conclude that business ownership is simply an uber-risky endeavor. That theory makes sense, and the numbers would seem to point in that direction, but I don't think that tells the full story.

Many years ago, I remember watching someone close to me. This person was brilliant at their craft. "Gifted" is a word I would use to describe them. However, I also witnessed something else. When this person decided to start businesses, they would fail over and over and over and over. I couldn't wrap my head around it. How could this person be so good at what they do, but fail so miserably in business? Ah, I know what it is! Businesses are just really, really risky. As the years passed, I gained a different understanding of the truth. This person, while extraordinarily gifted at their craft, was terrible at the various business disciplines necessary to succeed in the marketplace.

Over time, I've developed a new theory. While businesses are far from risk-free, I believe the data on business failures has more to do with the competency of business owners' running-a-business skills than anything. Gifted at their craft, yes, but somewhere between bad and terrible at running a business is the norm.

If I look back on my own experience as a business owner, I can think of a half-dozen times when I almost lost my businesses. These situations weren't because running a business is risky, but rather, because I made poor decisions that almost caught up with me. It was ME, I was the problem.

Northern Vessel is a great example. Before I got involved, TJ failed multiple times, including the complete shutdown of the company. It wasn't because running a coffee company is inherently risky, but because TJ lacked the knowledge and experience to make wise business decisions. While Northern Vessel has grown into something far more prominent and successful than we ever could have imagined, we almost lost the company a few times in the past three years. We made a series of poor decisions that nearly wrecked the ship. That wasn't because running a coffee company is risky, but because we screwed up and it almost caught up with us.

We don't know what we don't know, and that's okay. However, it doesn't give us an excuse to throw our hands up in frustration and proclaim, "Running a business is just too risky." We need accountability, ownership, humility, and a willingness to learn. Being a master of our craft isn't enough. Without developing a better understanding of how to run a business, we'll inevitably waste our giftedness and drive our sanity into the ground.

To be continued.....

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Thanks For the Pain!

Some days I have to find my writing inspiration, and some days my writing inspiration finds me. Today is an example of the latter. As I was casually scrolling my social media feeds yesterday, I stumbled upon a post by my friend Teresa. She owns a successful business and continues to grow more excellent each day. Here's an excerpt from her post:

"I'd like to once again take a second to thank my previous employer for laying me off. Every knockdown is just an opportunity to come back even stronger."

Her story is wild, and similar to many epic stories of success, it involves profound pain. It would be so easy for her to wish away all the junk that's happened to her, but at the same time, that same junk is what set the table for what has become a beautiful story.

Had she not experienced the pain, uncertainty, and stress of a layoff (with a baby at home, mind you), I'm not sure she would have developed the vision and courage to launch the business she's now blessed with. Comfort might have lulled her into complacency. "Good enough" could have been the motto of her prime years. She might have conceded that mild misery is an acceptable way to traverse this thing called life.

Instead, though, pain met her head-on! The pain knocked her down, forcing her to take a hard look in the mirror; a glimpse in the mirror she might have avoided if things were merely "good enough."

I can relate to Teresa's experience so much, and I have a feeling many of you can, too. One of the worst experiences of my life was being 3.5 years into my dream career and learning that my company was being shut down. I had also been engaged to my wife for just three days (yeah, that was fun). I had my comfortable life all planned out when I woke up that morning, but by the time I went to bed, I was hurt and scared.

Fast forward 17 years, and I can now confidently say that the most profoundly painful experience in my life was the beginning of the most beautiful journey. NONE of what I have today would be without me having gone through the pain, suffering, and uncertainties brought on by that debacle.

Thanks for the pain! Cheers, Teresa! From one hurt friend to another, I'm so glad you're a living, breathing example of what it looks like to use one's pain for good. People are watching. People are noticing. People will continue to be impacted by your example. Keep pursuing excellence!

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Live By the Sword, Die By the Sword

A massive scandal broke out in my city yesterday. Then, in mere minutes, it became a national scandal. Protests were quickly organized, and idealizations of riots were discussed on social media. Then, the inevitable happened. Local companies began drawing lines in the sand and making bold proclamations on their business social media accounts. Not the owners' pages, not the employees' pages, but the actual business pages.

One of my close friends sent me a sharp, but concise assessment that sums up his perspective (and mine): "Live by the sword, die by the sword."

This is a topic I've written about at length. Whenever a company decides to embody human values and shove them down the throats of its customers, two things will inevitably happen:

1. Current and prospective customers who share said values will be immediately attracted to the business. They will throw "support" at the business by posting about it on social media, buying something from the business, and/or giving a good review of the business on Google or another review website. I call this living by the sword.

2. Current and prospective customers who disagree with said values will be immediately revolted by the business.They will likely never engage with this business again, drag the business through the mud with whatever influence they have, and/or give a terrible review. I call this dying by the sword.

Here's the problem about living by the sword and dying by the sword. It's not a zero-sum game. When businesses lose a customer due to these practices, the customers are gone forever (possibly taking others with them). However, when a business gains a customer due to these practices, the customer likely won't remain a customer.

Why? Any "support" someone shows a business as a result of a company projecting certain values is fleeting. It's not builton trust, competency, or tangible value. Relationships not built on excellence are temporary or false relationships. It likely doesn't have legs.

I've watched so many of my friends torch their businesses to the ground by living by the sword and dying by the sword. It doesn't take much to move the needle in a negative direction. At first, it doesn't feel like it's hurting all that much. "I don't need their business anyway." Slowly but surely, though, the business feels the impact. A little this month. A little next month. It's not the end of the world, though! Then, before they know it, it's getting harder and harder to connect the financial dots. I've seen it so many times, and unfortunately, I'll continue to see more of it.

Here's the alternative: pursue excellence. Serve people well. Add value to their lives. Make a positive impact on their day. All the people! The people you love AND the people you might hate (if that's something you're feeling). Just be excellent.....period. Excellence always wins. If we do that, the rest will take care of itself. However, if we decide to live by the sword, we'll eventually die by the sword.

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It’s Just Money

Some of my business partners and I were engaging in an intense conversation. We have some huge decisions ahead of us, and there's a lot on the line. There are so many considerations: risk, upside, impact, mission, and potential pitfalls. In the midst of this debate, I made a controversial suggestion that involved me shifting a large portion of the risk from the company to my personal financial shoulders.

One of my partners expressed concern for my personal finances and the potential negative implications of implementing such an idea.

"It's just money," I responded.

No, I don't want to be irresponsible with what I've been blessed with; that's poor stewardship. However, at the same time, my top priority in life is NOT to accumulate more money, stuff, and status. Ultimately, my mission is to further the mission. And in the case of this particular debate, if it requires me to risk my own personal finances to ensure the long-term success of the mission, then so be it.

This type of attitude is the product of two things:

• The realization that money will not and cannot make us happy. Money can do a lot of things, but our happiness, satisfaction, and fulfillment cannot be driven or defined by how much money we accrue in our bank accounts.

• There's nothing more powerful than a mission that matters. When we believe in something and the impact it can have on people, that's the pinnacle of living.

It's just money.

That phrase can save us from a lot of heartbreak. It's so easy to let financial mistakes and failures beat us down. We think about it and say to ourselves, "I wish I wouldn't have done that!" Ultimately, though, what did it really cost you? Yeah, a few hundred dollars is a few hundred dollars. Yeah, a few thousand dollars is a few thousand dollars. It's not nothing. It might have some heft to it. However, life is about so much more than money.

Please don't let money be the driving force behind your perspective. Don't let money make you sad.....and don't let money make you happy. Don't let money define you as a failure......and don't let money define you as a winner. Don't let money guide you into decisions you otherwise wouldn't feel proud making. Don't let money distract you from your mission.

Yes, let's be good stewards. Yes, let's try to make wise choices. And YES, always stay true to the mission. It's just money.

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Normalize Winning

One of my favorite parts of my work is walking alongside small businesses, helping them unlock new gears they never knew existed. For example, this week I'm meeting with a business coaching client who has far surpassed every goal he ever set for his business. Whether it's revenue, client roster, gross margins, impact, or net income, he has exceeded every benchmark that he previously used to define "winning."

It's not that he originally doubted himself, but rather, he never thought to dream this big. He never actually gave himself permission to win like this. His original plan was to simply provide enough income to support his family and save for the future. It never dawned on him that he could create something this impressive. It never occurred to him that he possessed the ability to build something so cool.

But here we are! Every time we walk through his numbers, his eyes get big and his smile even bigger. He's dumbfounded by where this is going, but he's embracing it every step of the way. The biggest shift that allowed this to happen is that he normalized winning. He stopped being bashful and feeling guilty about his newfound success, and is instead focused on practicing excellence and serving people well. The rest takes care of itself.

Another consequence of shifting our perspective and dreaming bigger is the decision-making shift it requires of us. If our goals are small, we’ll make decisions that will unlock these small goals. However, when our goals are large, it requires a different set of decisions to unlock it. Will we achieve these wild goals? Maybe or maybe not. However, there’s a high likelihood that even if we fail to meet the goal, we’ll end up in a far better spot than had we set expectations lower.

While this may seem like a "duh" idea, I sincerely believe it's one of the key drivers for people who are trying to build something (whether a business, career, or ministry). Normalize winning, whatever that looks like for you. Whatever you think the ceiling is, double it.....triple it.....quadruple it. It's okay to shoot high and work toward a yet-to-be-defined target.

More than anything, though, be sure to approach it with meaning, purpose, and a desire to make an impact. When you do, it makes the journey all that much more fulfilling. If you find meaning in the day-to-day process, regardless of the outcome, you've already won.

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Every Game Is the Super Bowl

I recently received a text from a friend who had just visited Northern Vessel for the first time. She said she was greeted excitedly by the team as she walked in, intentionally walked her through the menu with a smile, and made a killer drink for her. What she didn't know was that we had actually closed a few minutes before she walked in the door. The barista eventually shared that we were closing, but she was free to hang out and enjoy her drink if she desired.

She was blown away. Not only did she receive what she called "the best service of my life," but it was willfully and excitedly delivered even as the shop was closing. This is exactly what we try to accomplish! We're 100% open until five minutes after closing. No cleaning, no sweeping, no trash.....nothing. You won't see any closing-related tasks happening around you, as those are subtle visual triggers that you're no longer welcome. That's anti-hospitality. Using a sports analogy, every game is the Super Bowl. This customer may only ever come in one time, and if that's true, we want to make sure she has a world-class experience. Every customer is the most important customer....period. No, we don't always nail it, but man, we try!

I remember 5-6 years ago when TJ would pop up at grad parties, weddings, and city streets with his little coffee cart, slinging drinks to whoever would give this stranger a shot. He was bootstrapping his dream, desperately trying to eke out a meager living. Something caught my eye when I first met him, though. He treated every interaction like it was the Super Bowl. Every customer who walked up to his cart might as well have been the most important person in the world. That commitment slowly but surely earned him the right to serve more and more people.

Thinking back to those humble (and difficult) days makes what he's built over the last few years all the more special. Just yesterday, we were privileged with the opportunity to serve more than 500 drinks at our shop. That's 80 drinks per hour, or one drink every 45 seconds, for a fun-packed six-hour stretch. As I watched our team work, it provided me with so much joy to see how each team member treated every customer like they were the most important person in the room. Did we nail it 100%? Probably not, but man, we tried! I received countless comments and texts from friends who were thoroughly impressed with the hospitality of our staff. I couldn't be prouder or more grateful!

While I suspect most people reading this probably don't own or run a service-based company, this principle transcends all boundaries. When we approach life, work, and relationships like every game is the Super Bowl, it unlocks something far grander than we could have ever imagined. Give it a try!

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I Don’t Support Him At All

Out of the blue, I received a DM from one of the most successful business owners I know. She wanted to know if I could connect her with the marketing agency we use at Northern Vessel for our photography. She loves our content and desires a similar vibe for one of her businesses. I told her I'd be honored to connect her, but we don't use an agency. It's just one young man named Noah; he's awesome, and I'd love to make an introduction.

I told this story to a few friends, and one of them responded, "I'm so glad you're supporting a small business like that. I'm sure Noah loves your support."

If you're a regular blog reader, you probably already know where this is going.

"Oh, I don't support him at all!"

"Wait, I thought you and Noah are friends....."

"We are friends, but Noah doesn't need my 'support.' He does awesome work, and that's all that matters. I’m just connecting one excellent business to another excellent business that might be able to serve the other well.”

"But people like him need support from us. It's the only way they can make it."

"That's ridiculous....and demeaning. He doesn't need people's support. He just needs to be excellent at his craft. His excellence is what makes it for him, and his excellence is the only reason I referred him to a friend. He earned that."

We can pursue support, or we can pursue excellence. Noah never asked for my support; he's too busy trying to be excellent. Noah is just a young man with a lot of talent and a crapload of passion. He's so hungry to do good work! If he wasn't excellent, my business owner friend would never have asked me for a referral, and if he wasn't excellent, I would never have given it. Noah earned that, and to assume anything else is an insult to his good work.

We all have the opportunity to be Noah today. The fruit of our actions will speak for itself. The conversations we foster, the art we create, the work we produce, and the results that materialize. Nothing good that happens to me today will be the product of someone's "support," and neither will yours. Therefore, I encourage you to abolish the word "support" and simply embrace the word "excellence."

Oh yeah, and if you're stopping by the Northern Vessel shop or our booth at the Des Moines Farmers' Market today and see a young man snapping photos, say hello! Noah would love to meet you.

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Whole Isn’t Whole

I often receive a handful of related comments whenever I talk about the need to be excellent:

• Everyone makes mistakes.

• Where's the room for grace?

• Nobody's perfect.

• S*** happens.

All good points, but today, I want to debunk this argument.

How would you feel? You're dining at a well-respected restaurant with your family. One of your small children orders chicken. However, when the dish arrives, you cut into it and realize the chicken is completely raw. The server apologizes and says they will send out a new one. The new one eventually arrives, fully cooked, and the rest of the meal is largely uneventful. Other than (eventually) replacing the raw chicken dish with a cooked one, no other concessions are made. How would you feel?

How would you feel? A landscaping company is at your house doing some work. For whatever reason, a mistake is made, and they nick your irrigation line. The business owner apologizes and says they will have a professional repair it at no cost to you. How would you feel?

How would you feel to be on the receiving end of these two situations? Well, these are both real-life scenarios that played out last week, and in each, the customer was livid. The restaurant customer is a close friend, and the landscaping company business owner is also a friend. Why would both of these situations end poorly? After all, both customers were made whole.

Whole is not whole, that's why. When a mistake is made, whole isn't enough. Excellence doesn't mean perfection. Excellence doesn't mean we won't make mistakes. Excellence means being better and doing better in all things, including on the heels of mistakes. You WILL screw up. You WILL fail. You WILL botch it. The mistake isn't what defines you; it's how you respond after the mistake that separates excellence from bleh.

In both situations, the business owner should have made the customer whole......PLUS another step.

For my buddy that received raw chicken, maybe the restaurant comps that dish and throws in a dessert. Maybe they comp the entire meal. Maybe they give them a gift card on the way out the door. Whole is not whole, and they blew an opportunity to send my friend away with an amazing story of excellence (plus many return visits).

For my buddy who made a mistake on the landscaping job, he, too, had options. Maybe he could have offered a discount on the job. Or perhaps hand the homeowner a handwritten card with a restaurant gift card in it. Or offered a complimentary follow-up service. Whole is not whole, and he missed an opportunity to create a lifelong customer. He’s a young business owner, and I think he’s going to nail this one next time!

This isn't a blog about IF you make a mistake. It's only a matter of WHEN you do. It's coming. You might even screw up today......I'm sure I will! Excellence isn't defined by how little we mess up. Rather, it's about how we respond when we do. Whole is not whole. Take one more step!

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Destroy the Bar

My friend was beyond frustrated. He had just fired an employee, but right before that, another stopped showing up. My buddy owns a successful landscaping company. "Travis, if you know anyone who wants to work, let me know. We pay good money."

"You bet," I responded. "What particular skills are you looking for?"

"Someone who will show up and show up on time. That's it. We can teach the rest."

The bar has never been lower. In a field that requires certain skills, my business owner friend simply needs people who will show up. I asked if he cares about people being hard workers. "Well, that's preferred, but the most important part is that they are present. I'll take that!" Again, the bar has never been lower.

Sarah and I spent the last two days in a lake town at a waterfront hotel. The boys are at Grandma and Grandpa's house, so we have a few rare days of alone time. We've had a blast catching rest, sun, and relaxation. We've also hit a bunch of the local restaurants, bars, and coffee shops. Let's just say the results have been wildly mixed. Translation: The bar has never been lower!

Between the service, food quality, hospitality, cleanliness, and timeliness, it's been a wild experience. Very few places are doing things well. Yet, despite that, many appear to be succeeding. I found myself wondering what would happen if someone set up shop with an explicit goal of being excellent. They would take over this little world! Why? Because the bar has never been lower.

I'm not picking on this particular town. I see it every day in every city, including my own. "Good enough" seems to be the motto of our day, creating a sleepwalking culture where businesses look to the left and look to the right, trying to determine how little effort must be exerted to stay on par with their peers. If the bar is low, expectations can remain muted and still eke out a victory they call survival.

I'll share an example of someone who doesn't give two rips about the bar. Sarah and I walked into a little deli. It was bright and vibrant, with a ton of energy.....you could feel it. The front of the store was stocked with a unique mix of products. The back half, though, was where the magic happened. There was a deli counter on the left, with two women ripping out gorgeous sandwiches and slinging little tubs of homemade salads. As I approached the counter, one of the women greeted me like I was her long-lost nephew. She was patient while she excitedly helped me navigate my choices.

The second woman was eager to scoop me up a few salads to pair with our sandwiches. She, too, couldn't have been more cheery. Lastly, with sides in hand, we turned to the right, where we were greeted with a counter full of handmade desserts. Another woman was there to joyfully ring us up and close out our experience. Even before we tasted the food, we were served an experience. By the way, the food was ridiculously good! This place is striving for excellence, and I suspect they are finding success. They see how low the bar is, then crush it.

That's our mission today. Recognize how low the bar is, then destroy it.

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Knowing Your Worth

I witnessed something atrocious yesterday.

As I was waiting to get a haircut, the other barber in the shop had a peculiar interaction with a customer. This customer asked the barber for a jar of hair product, and the barber quickly obliged by grabbing it off the shelf and handing it to him. "How 'bout I give you $11 for this?" The barber looked stunned; stunned enough that she froze and looked uncomfortable. The shelf price is $24, by the way (it's the same product I use). A few more interactions happened, but I didn't hear. She eventually responded, "$11 is fine." But then, I heard him ask, "Well, what does it cost you?"

While cutting another man's hair, my barber jumps in, "It costs her $12." The man, being ever so thoughtful and generous (tongue in cheek), said, "I don't want you to lose money. I'll give you $12." I can't put in writing the things I wanted to do to that jerk. He couldn't have been more demeaning in his approach. In short, he treated her like a single penny of markup on the product from her cost would have been unfair to him. Again, I wanted to do things that would have landed me in jail.

Whether you're an entrepreneur or work in a traditional job, I cannot stress enough the importance of knowing your worth. Sure, some people think they are worth far more than they are (you know who I'm talking about!). However, most of us far undervalue ourselves....especially small business owners. Yesterday, that barber grossly undervalued herself. Selling product is a meaningful part of her business's revenue stream, and some jerk weaseled his way in and undercut her.

I have a rule in my coaching/consulting services. If I quote a package for a prospective client and they ask for a discount, I won't let them hire me....not even at full price. Their request means they don't value what I'm bringing to the table, at least not to the level of what I'm charging.....and that's okay. My services aren't for everyone. Some people don't want my services at all. Some people want my services, but at a much lower price. Neither of them should hire me. It means I'm not the right person for them. I'm not mad at them for it, and I certainly don't take it personally. But that's not the right client for me.

It reminds me of a moment I had early in my coaching career. One of my friends suggested that I immediately double my rates. Hesitant, I told him I would tentatively give it a shot later in the day, as I had two consultations. I quoted both prospects the same price, roughly double as my friend suggested. The first prospect said it was the biggest discount in the world and asked if we could start immediately. The second prospect said it was a massive ripoff and people would be stupid to hire me.

Whatever you do, it's not for everyone. Your hourly wage. Your annual salary. Your sales commission. Your fee. Some people will laugh at you, calling you a ripoff. Others, though, will see what you really bring to the table and will eagerly pay you to serve them well. Know your worth, and don't let a couple jerks knock you off your path.

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The Three Invisible Legs

Warning: Non-traditional post….and a bit longer than normal. I felt conflicted, but ultimately decided I needed to take this tangent today.

Shockwaves were recently sent through my community when a popular restaurant unexpectedly closed. It's a newer restaurant that's known to be quite busy. Social media was abuzz, with many commenters dumbfounded by how a business as busy as this can't make it financially.

There were, of course, the obligatory comments about tariffs, evil landlords, how there are already too many restaurants, and people not "supporting" small businesses (which is ironic considering the place was constantly packed).

Several people sent me news articles about the closure, asking for my perspective. As a society, we judge how good a business is doing by how much traffic it has. After all, it's tangible. More people equals more revenue, and more revenue equals more profit.

Today, I want to discuss what I refer to as the three invisible legs of business. Like a real three-legged stool, a business needs all three of these legs to stand firm. If one or more is missing (often the case), the business is at risk of faltering. With that setup, here are the three legs:

First, capital structure. This refers to how the business is funded. Some businesses require little capital to launch, creating little to no capital structure tension. However, if a business owner relies heavily on debt, the financial burden of this capital structure can feel heavy. Consumers can't see how this dynamic silently and brutally plays out behind the scenes. The moment a business owner creates the capital structure is the moment a certain level of risk/pressure is introduced (or not).

Second, overhead. One of the other hallmark moments that defines a business's financial fate is when its overhead is established. Think about these as fixed costs. Rent, utilities, insurance, software, labor (for non-service businesses), etc. These expenses must be paid whether or not a single penny of revenue is generated. And depending on how the business owner approached this, it can feel anywhere from light as a feather to an anvil tied around your ankle.

Third, gross margins. This is one of the least understood nuances of business.....even among business owners. The gross margin is how much profit each good or service generates when sold. For example, if a retailer buys a t-shirt for $10 and sells it for $15, it generates a 33% gross margin ($5 profit divided by $15 sale price). However, the underbelly of gross margins in most people's businesses is that they don't account for the full cost. Let's use the same t-shirt example. Not only do we need to include the cost of the shirt, but also the card processing fees, tags, bags, and any other nuances. Let's say these costs account for an additional $3. Instead of a $5 profit, it's actually only $2.....which is a 13% gross margin. Margins matter so much! If a business doesn't have satisfactory margins, they won't even be profitable if they sell a billion dollars worth of goods!

This is where all three invisible legs get slotted together. There needs to be enough sales at a high enough gross margin to overcome the capital structure and overhead.....plus enough to provide a sustainable profit. All three legs matter so much, and this is where many businesses are whiffing. It's a simple concept, but difficult to execute.

I’ll close with an example:

Business A generates $45,000 of monthly revenue at a 35% gross margin. That’s $15,750 of gross profit. After subtracting $11,000 of overhead and $4,000 of debt payments, it has $750 of profit remaining.

Business B generates the same $45,000 of revenue, but at a 50% gross margin. That’s $22,500 of gross profit. After subtracting $7,000 of overhead and $1,000 of debt payments, it has $14,500 of profit remaining.

It looks the same from the outside, but behind the curtain, Business B is making nearly 20x as much profit on the same amount of sales. These dynamics can be staggering!

Consumers, hopefully you find this interesting and make you see things differently next time you go into a business. Business owners, please focus on these three legs; your survival and success depend on it.

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Never As Good As We Believe

May was an epic month for us at Northern Vessel. We experienced unprecedented growth and achieved things we never thought possible. We sold 1,100 gallons of our signature oat milk cold brew latte alone. Unreal developments, and I'm so grateful for all of it.

At the same time, however, we encountered and discovered gut-wrenching problems that knocked us down a peg or two on the ego scale. This is a universal principle I firmly believe in: No matter how good we might think we're doing, we're never as good as we believe. Danger lurks behind every corner, and our successes often mask the warts.

I'm not trying to go all Debbie Downer on you today. In fact, I think this is the most encouraging message of all. There's ALWAYS room for improvement. That's why some of my favorite coaching clients are the ones who are already doing well in their finances, businesses, and careers. No matter how good they might think they are doing, we WILL unearth some warts when we pull back the layers. Translation: There's no cap on their potential!

One of my clients is in the process of paying off more than $80,000 of student loan debt, $2,000/month, month after month. Not too shabby, and they hope to be done in less than 40 months. Common sense would suggest they are doing pretty awesome, but ultimately, they aren't doing as well as they believe. My job was to help them dig deeper and find their warts. After a few small but meaningful tweaks, their 40-month payoff plan has been reduced to 17 months. That's the power of realizing we're never as good as we believe. I'm excited for them!

Whatever area of your life this piece makes you think about, just know that you have far more in you. The only thing it requires of you is the humility to look deeper and genuinely desire to see the warts under the surface. Once you find them and address them head-on, you'll be able to hit a new, unprecedented trajectory.

As for us at Northern Vessel, we have our work cut out for us to correct some of these flaws. We owe our customers excellence. No matter how good people tell us we are, we can't quit striving for an even higher standard, in every aspect of the business. We owe that to our customers......and ourselves. You do, too, in whatever discipline you happen to find yourself in. Today's a great day to push forward.

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Excellence, On Display

I spent yesterday morning observing my town's farmer'’ market, wearing a few different hats. First, I'm on the board of directors for the organization that hosts the market. Second, I have multiple clients that operate booths at the market. I spent the day watching, chatting, and taking notes.

First, my town's farmer's market is Thriving, with a capital "T." It's amazing to watch how it's evolved over the years, blossoming into a destination. That's a difficult task, considering it's only a 20-minute drive away from one of the top three markets in the country. For years, my town's farmers’ market was a consumer's consolation prize for not driving to the Downtown Des Moines Farmers' Market. Now, however, it's THE go-to for many people.

That sort of transformation doesn't happen by accident. Rather, it's a byproduct of excellence. That's not a simple endeavor, though, as each company operates independently. Each experience is different. Every booth, every product offering, every pricing strategy. All it takes is a handful of bad vendors to spoil the reputation of the market. On the flip side, it takes multiple examples of excellence to establish a winning reputation for the market.

What I witnessed yesterday was widespread excellence. There are no coincidences. When businesses are excellent, people flock. When they aren't, they don't. I've written about this before, but an entire segment of our population preaches "support small business." They shout it from the rooftops, casting a shadow of guilt, manipulation, and obligation upon the broader audience. What they have to sell may or may not be any good, but we should "support" them because they are small (and local).

The irony of this phenomenon is that almost everyone is small and local. As I witnessed the behavior of the market-goers yesterday, they flocked to the excellent businesses and largely avoided the "support small business" businesses (which often correlate with a lack of excellence).

People don't care about supporting you; they care that you're excellent. If you're excellent, they will come. If you aren't, they won't. This is always painfully obvious in a farmer's market setting. Sure, you can talk down to everyone (on social media or in person), telling them they need to support you, but the cream always rises to the top. If you lack excellence, you'll suffer, and it has nothing to do with you being a small business.

Farmer's markets are the great equalizer. Everyone is on the same playing field. Most vendors have the same booth size, the same hours, and the same foot traffic. What they do with that opportunity, however, is what really matters. Those who are excellent will thrive. Those who aren't will either learn to become excellent, or fizzle out.

Next time you're at your local farmer's market, keep your eyes open for these dynamics. It's a fun way to walk through the market! Oh yeah, and while you're there, find some excellent businesses and allow them to serve you well!

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Happy Anniversary, Wall!

Yesterday was a huge day for us at Northern Vessel. No, it wasn't the anniversary of our opening. No, we didn't hit any particular milestones. No, we didn't launch any new products. In fact, practically nobody even knew it was a significant day. As of right now, the only ones in the know are me, the other two owners, our team, and now, you.

Yesterday was the first and only one-year anniversary of not having a car crash through our shop's walls. We've been open for nearly three years, and until yesterday, we've never gone 12 months without having our space devastated by a speeding vehicle.

It's easy to laugh about this today, but the truth is, we've always laughed about it. No, we never found it particularly funny having our business and the safety of our guests/staff put at risk by the misdeeds of reckless people. The truth is, though, we only had two choices: laugh about it or cry about it. We chose laughter.

Regardless of what industry, discipline, career, or role we're in, we WILL be faced with brutal challenges. Obstacles, tragedies, misfortunes, and many other similar words that reek of misery. These types of things are inevitable, but our reaction to them isn't. The onus is on each of us to respond well.

Sure, we could have played the victim card. Our beautiful shop was devastated by a car in August 2023, bringing all our good momentum to a halt. We had everything going for us, then BOOM! (literally), all that good work turned into wreckage. We closed for a few days before reopening with our beautiful glass windows replaced with ugly plywood.

You can probably imagine how euphoric it felt to finally have a fully operational shop in March 2024 when the construction was complete. We were so happy to be back to normal! We spent the next several weeks re-building momentum, preparing for what was sure to be an amazing summer.

Then, in the worst form of deja vu, terror struck again in May 2024 when a second car crushed us again. Devastating! However, we again chose to laugh. A poor attitude wasn't going to fix anything. Instead, we endeavored forward, committed to the vision of providing world-class hospitality despite the new eyesore and hindered operation.

Yesterday, though, we celebrated one year of being car crash-free. We rejoice in the fact our shop is beautiful, our team is thriving, and our guests are joyful.

Nothing will go the way we plan (or hope), so we must continue forward, one step at a time. While I'm talking about a coffee shop, I'm not really talking about a coffee shop. This is our lives. This is our finances. This is our businesses. This is our careers. This is our relationships. We can laugh or we can cry. We can give up, or we can carry on. We can be a victim, or we can push forward. There are a million things that can bring your dreams to a halt. Don't let them. Laugh, persevere, and keep up the good work.

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A Terrible Daughter

I spent yesterday meeting with approximately 50 leaders from all over Colombia, discussing the importance of organizational standards. Standards in transparency, communication, governance, and financial responsibility, to name a few. It was a wonderful day, and I learned so much from the various leaders (each with his/her own perspective and discipline).

At one point in the meeting, my friend Gary asked our guests to stand and share their opinions on why these standards matter. One particular woman, a middle-aged attorney, said something that struck me. I wrote it down, as it was something I wanted to sear into my brain. As with most of my meetings here, my involvement is facilitated through translators, and we're blessed to have three amazing translators with us. (Side note: I'm constantly in awe of how these three women navigate this craft so well!). Here's what this guest said that knocked me off my feet:

"Disorder is the daughter of improvisation. Without standards comes chaos, and eventually failure."

Standards mean everything! I regularly write about the importance of being excellent. Whether you're trying to thrive in your career or successfully run your business, the key is excellence. Excellence, excellence, excellence. However, excellence is born from standards.

Or, as I visually represented to our Colombian team later in the day, you can't have excellence without standards, and you can't have growth without excellence. Standards > Excellence > Growth. Therefore, everything begins with standards. If we try to be excellent without having standards, we've failed before we even start. If we try to grow without being excellent, it's like a house built on sand.....it will eventually collapse.

What are your standards? This is a question we must each ask ourselves. Whether it's in the operation of our family's finances, our careers, our parenting, our marriages, or our businesses, it all begins with standards. My friend TJ says it best: "We don't rise to the level of our aspirations. We fall to the level of our standards." If you tell me what your standards are, I'll tell you what your ceiling is.

My clients who set rock-solid standards will inevitably thrive. Yes, they will be met with stress, tension, turmoil, and unwanted surprises; that's life! However, when standards are established, and then met, success (as dictated by their standards) is nearly inevitable.

My encouragement today is to think about your standards. What standards have you set in the way you approach the various aspects of your life? I can tell you my life is thriving in the areas where I set high standards.....and struggling in the areas where I failed to set standards. I need only look in the mirror to reflect the harsh reality of this principle. Standards mean everything.

I'm so grateful for all my Colombian friends and the memories we made yesterday in Medellín. There are days we will take the to grave with us….yesterday was one of those days for me. After 14 straight hours of meetings, mission, and memories, we ended the night with a little impulsive decision to jump into the rooftop hot tub at our hotel (in the rain, nonetheless). This is the view that concluded our day.

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Getting to the Excellence Part

I recently discovered that an old friend runs a business. I had no idea he even had a business, which perhaps should have been my first red flag. In any event, I discovered his business upon seeing a social media post from said business, venting about how people need to do a better job "supporting" small businesses. In short, his business was struggling, and unless something changes soon, they may have to shut their doors.

Curious, I did a deep dive into his last 12 months of social media posts. Here's what I found: 50% of the posts were about supporting small business, 40% of the posts were them taking stands on various political topics, and 10% of the postswere related to the business.

I reached out to my friend, offering to help. "Dude, I can't even tell what your business does from looking at your social media." Clearly annoyed, he responded, "People should already know what I do."

He asked if I had any ideas, seemingly open to outside ideas/perspectives. As a matter of fact, I had many......but one stands out above all others. He needs to get to the excellence part.....period. Just be excellent. Serve people well. Add value to his customers. Treat people with hospitality. Do amazing work. At every step of the conversation, he wanted to return to the idea that people need to "do a better job at supporting small businesses."

The same day, I talked to another friend who is struggling at work. He believes he deserves to be promoted, but gets continually overlooked. "Have you been excellent?" I asked. He just stared at me for a few seconds. "Well, I show up to work if that's what you're asking." After some prodding, here's what I discovered:

• He shows up to the office right on time.....never early.

• He NEVER stays past 5PM. If there's a project hanging in the balance, it can wait until tomorrow. "I don't work for free."

• He doesn't respond to messages outside of business hours.

• He admittedly does just enough to get by.

There's nothing excellent about that. I'm not advocating for his firing, but at the same time, I'm not sure why anyone would want to promote someone who doesn't exude excellence.

When all else fails, be more excellent. Are there people out to get us? Maybe. Is life fair? Not at all. Are crappy things going to happen to us? Without a doubt. But through all that noise, excellence stands out. Excellence is the linchpin to everything. There are a million things we cannot control, but our level of excellence is one we can.

So, today, whether you're an employee or a business owner, let's get to the excellence part. Excellence always wins.

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Must Be Nice

"Must be nice." Ah, gotta love that phrase. "Must be nice" is a politer way to say "You got lucky" or "I'm jealous." It's also a phrase that signals the beginning of the end. The mere utterance of these words signals that your inputs are detached from your outputs. Using this phrase means outcomes are not correlated with executon. Mentioning this phrase means you've lost before you've even had a chance to play the game.

These words were said to me on Saturday afternoon on the heels of the Downtown Des Moines Farmers' Market. My friend saw our huge line as he passed through the market and had some "feedback" for me afterward. He gave me permission to write about it, so that took away some of the sting. In short, though, he attributed our long lines to good fortune. Right place, right time.

He's not alone in this sentiment, and this doesn't just apply to Northern Vessel. If you've built something that matters (whether it be a business or career), there are countless people in your life who are sopping with jealousy. Or, in the words of one of my business owner clients, "Travis, you're the only person in our lives we can even talk to about this stuff. You're the only one who will genuinely celebrate with us." He, too, gets lots of "It must be nice" comments. Jealousy is everywhere.

The truth is, it does feel nice. It feels wonderful to create something that matters. However, ahead of that niceness is a ton of blood, sweat, tears, pain, suffering, failure, and growth.

In this conversation, my friend asked what I attributed our success to. I think there are a lot of reasons for it, and they all revolve around inputs, not outputs. While most people believe in obsessing about the outputs, we believe in obsessing over the inputs and merely measuring the outputs.

Here are some of our inputs:

• We're obsessed with finding the right people. It's extremely difficult to get hired at NV. TJ's standards and expectations are brutally high.

• Financially, we believe in paying our team ridiculously well. TJ hasn't given me permission to share specifics (yet!), but we created a compensation structure for the farmer's market that boggles the mind. Interests are aligned, and our team is incentivized to crush it.

• In turn, the work is a grind! It's like going to battle. Our team goes into market days knowing they will be wreckedby the time we're done. My hope is they look back on that experience and say, wow, that was awesome!

• Unreasonable hospitality. It's not good enough to quickly serve a coffee. Anyone can serve a coffee. But can you make people feel a certain way while doing it? The experience is everything.

• Constant obsession with getting better and more efficient. "Good enough" isn't good enough. Every team member has the green light to propose ideas for "better."

I pray you get rid of the phrase "It must be nice" from your life, and keep all the "It must be nice" people at arm's length. Whatever you're into, obsess about the inputs and measure the outputs. Keep going! "Nice" is coming.

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5.2

Yesterday marked a hallmark day in my year: The first day of farmer's market season! This is the third year Northern Vessel has set up shop at the Des Moines Farmers' Market (regularly voted one of the top five markets in the country). 

Our operation is simple, but difficult. The simple part is that we only sell one product: our signature oat milk cold brew latte. The difficult part is scaling it to levels that challenge common sense and any form of reasonableness.

The market is open from 7am-12pm on Saturday mornings, May through October. Five hours, once per week, for six months. 26 bites at the apple. You get one shot to make the most of that precious time. Heading into our first year, we had no idea what we were doing. We essentially winged it, figured out what didn't work, tweaked, tested, and repeated. Eventually, we plateaued at a point where we could sell 2.8 drinks per minute. It was a massive success! We were proud of our achievements and thoroughly enjoyed the process.

Heading into our second year, we knew our peak was around 2.8 drinks per minute, but we aspired to do it better. A better experience, more fun, more hospitality, a better overall vibe. We wanted that three-minute experience to be the highlight of someone's day. 

By the third week of our second season, we realized our minds were far too small. After testing (and failing) new ideas, our constant tweaking yielded results we never even imagined. In the heart of that season, we capped out at 5.2 drinks per minute.....it was bonkers.

In this last offseason, heading into the third year, we looked at it differently. No matter how close we think we are to our peak, we realize we still haven't even scratched the surface of what's possible. This mere notion led our team down a rabbit hole of obsession. For the past few months, we've tested new ideas and debated countless tweaks. What if this person stands here? What if those cups are positioned there? What if we used this other piece of equipment to fill cups instead of the normal one? What if a different person fills that role?

As this season approached, that 5.2 drinks per minute number lingered in our minds. This time, though, we didn't look at it as a ceiling, but rather a floor. In our minds (or perhaps imaginations), we believed we could blow by a previous record that never seemed possible to begin with. Our new goal: 7.0 drinks per minute for five hours. Yesterday was our first test. In yesterday’s market season opener, with unseasonally low temps, we landed at 5.2 drinks per minute.....tying our previous peak-season record. Now, we tweak.

I love this team!

I have much more to say about this, but I'm quickly running out of real estate. I'll pick that up soon. In the meantime, here's my takeaway. Whatever you think is possible....is. Whatever you think isn't possible.....isn't. And whenever you think you've reached your peak, you haven't even scratched the surface. Keep tweaking!

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Back Against the Wall

There's an interesting theme I've noticed over the years. I think about this often, and it was brought up to me by a friend yesterday. When successful business owners or entrepreneurs are interviewed about their origin stories, they don't usually say, "Yeah, life was pretty good, and I was really content where I was, but I threw it all in the trash so I could start over and significantly increase the stress and risk in my life."

Rather, it's usually something more along the lines of, "I lost my job, my girlfriend broke up with me, and I was living in a dump, so I figured, 'why not give it a shot?'" I might have exaggerated that a bit, but there's usually an inflection point of pain that precipitated the career move.

Why is that? Why is it that people who built something amazing didn't start until life punched them in the face? That's a rhetorical question, as I have my own theory: OK is the worst place to be. When we're OK, we're just good enough not to want to rock the boat of life. OK means we're probably not overly miserable, overly impoverished, or overly hungry for better.

I'd argue that OK robs us of a thirst for meaning. OK allows us to say, "It could be worse," and then take steps to prevent "worse" from happening. Sure, I might not be happy, but at least I'm not miserable! Thus, we hold on to "not miserable" like our life depends on it.

On the flip side, I'm watching person after person who experienced profound pain, loss, suffering, and uncertainty pursue a much different path. A scary path. An unknown path. A non-linear path. It's the hardest thing they've ever done, yet at the same time, they report it's the most meaningful they've ever lived.

It's also funny how this group of people wouldn't wish away their painful inflection points, as that would mean wiping their eventual decision to pivot in life. Looking back, the worst thing they ever experienced led to the best.

And all it took was for their backs to be put against the wall. I don't feel bad for people who were put in absolutely terrible gut-wrenching back-against-the-wall positions. I feel bad for the people who have experienced a lot of OK without the pain. Perhaps it's time some of us put our own backs against the wall and use it as an opportunity to live the life we're meant to live. I’m not saying everyone should turn their lives upside down and abandon their jobs, but for those of you silently suffering in the discontent of OK (you know who you are), I’m talking to you!

Whether you're OK, living in deep meaning, or have your back against the wall as we speak, keep fighting for it! It's worth it. I hope you have an amazing day!

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