Over the past week or so, how often would you say you’ve felt overwhelmed, exhausted and/or stressed?
If you’re like most of the business owners and entrepreneurs I know the answer is one of the following,
- “A lot”
- “Most of the time,” or,
- “More times than I care to admit.”
Being overwhelmed, exhausted and stressed out seem to be part of the natural outgrowth of making a decision to be an entrepreneurial leader (i.e. one that can’t be avoided). However, is that true? Does it have to be this way?
Back in my old pastoral days, my former denomination used to have a saying back in the late 1800’s, “Where stands it written?” In our case, where stands it written that being a business owner and/or entrepreneur has to be an overwhelmed, exhausted, stressed out kind of existence?
Could it be that we’re our own worst enemy here? Could it be that because of the choices we make (like running everything to the edge or not making a decision) that we’re responsible for a lot of the stress in our own lives? Chances are, yes.
Now, while there are a number of different strategies and techniques you or I could use to reduce stress, right near the top of the list is one of my favorites, margin.
Margin is simply defined as “an amount allowed or available beyond what is actually necessary.” Or to put it another way, margin is that extra space between what you have and what you need/require.
When that space is small (e.g. you need to make payroll and you only have $10 more than payroll in your cash account), stress is high. When that space is large (e.g. you have a year’s worth of expenses in your cash account), your stress level is low.
In other words, margin isn’t your foe, margin is your friend. And to help you add more margin to your life, here are five key areas for you to think about adding more margin to.
Why? Because if you do, you’ll reduce your stress, increase your sense of well-being and, at the same time, accelerate the growth of your business. Sounds like a pretty good deal, doesn’t it? Absolutely!
So, without further ado, here are five key areas for you to think about.
I. Cash Margin
I’m constantly amazed at how few business owners and entrepreneurs focus on creating more margin in their cash accounts. Back when I was at the University of Wisconsin-Madison, it was probably day one of Accounting 101 when my professor said, “Cash is king,” (right after, “Debits are on the window side, credits on the door side”).
Yet, whenever I talk with most small business owners, their cash margin is virtually nil. They tend to run everything to the edge, maxing out their lines of credit and credit cards, managing A/P deciding who to pay when and how far out before they get in trouble, etc. This is an exhausting stress-filled way to live. Whenever you or I have to land an account this week or collect a receivable this week to pay the bills, that’s exhausting.
The solution is so obvious (“add more cash”) that it shouldn’t need to be mentioned. However, whenever I suggest or ask a business owner if they’ve budgeted to increase their cash reserves, they answer is almost always the same, “No.” Hello!!!!!
If your business anticipates revenues of $3.6M and then you budget expenses of $3.6M (or above), what can you expect? Exactly, stress. Cash never comes in exactly on plan. So, don’t live that way.
I’m constantly amazed that we tell individuals (and I hope you’re doing this) that they ought to save at least 10% of their income and they ought to set aside at least three to six months of living expenses in a liquid savings account before investing long-term because you never know when a disaster might strike—but then we don’t carry that idea over to how we run our businesses.
Imagine how much less stress you’d have if you had at least three to six months of expenses in your cash account (in the example above, that would be between $900K-$1.8M). Wouldn’t that feel great?
Note: USA Today recently reported that Twitter’s stock may have been down recently, but they have enough cash to run for 412 years before running out of cash (now that’s margin).
So, how do you create more cash margin? By budgeting for it (and/or increasing revenues without increasing expenses). Pick a percentage to put into cash and put it there before you use it for anything else. Some businesses have to start small with 3% or 5%. If you can use 10% that would be great. Remember, 10% on $3.6M is only $360,000 (just a little over one month’s cash flow), which means it would take almost three years to build up a between three and four month’s worth of expenses in your cash account, assuming you’re starting at zero.
But is it worth it? Absolutely! Growth sucks cash. But cash reduces stress. If you have to choose one over the other, I’d choose cash. Life’s too short to be stressed by payroll and A/P every week.
II. Schedule Margin
When you look at your calendar, how much margin do you have? Are you running from morning to evening with very little time for yourself? Probably yes, So, how’s that working for you?
Interestingly, not only does not having schedule margin take an emotional hit on us, it greatly hinders our ability to lead well. Why? Because working on your business (vs. in it) requires time and space to think—which you can’t do effectually while running.
Ideation. Innovation. Strategy. Competitive Advantage. Etc. All require time for you, as the leader of your business, to think about.
Which means that if you’re spending your entire day fighting fires, going to meetings, answering emails, making phone calls, closing deals, preparing for meetings, coaching leaders, reviewing other people’s work product, etc. you have no schedule margin—and it’s killing you.
The good news is that the key to creating schedule margin is pretty simple, block it in. Block in strategy thinking time. Don’t run meetings one right after the other right after another. In other words, don’t let other’s dictate your schedule. You dictate it. And block in margin.
For example, instead of holding 60 minute meetings,you might want to try holding 45 minute meetings. Everyone will be more focused. And you’ll block in 15 minutes per hour between back to back meetings where you can answer emails or take a walk or follow-up on a project or take a ten minute snooze.
None of us earns badges by blocking out every minute of every day.
So, break the addiction cycle. Take back control of your schedule and intentionally block in some margin.
Note: this also means adding some time to the amount of time you think something will take you. For example, if you think it’ll take you ten minutes to get to a meeting, leave fifteen minutes early. Just because you were able to make it to that restaurant one time in ten minutes doesn’t mean you can get there in ten minutes every time :-). Or, if it normally takes you an hour to prepare for a board meeting, make sure you have a flexible half hour afterwards just in case it takes more time this month. Remember, margin reduces stress.
III. Emotional Margin
It would be nice if none of us required any rest, if we just go 24/7, but we can’t. We just don’t have the emotional strength for it. We need rest and activities that restore us emotionally so we have enough margin to handle the emotional drain that comes from being a business leader.
I can remember, back in the early 2000’s, being emotionally exhausted and someone suggesting that I find a hobby so that I could turn off my brain and just relax. I decided to take up painting—and it saved me. Now, we’re all wired differently, but for me, when I picked up painting, it did several things for me.
One, I love learning so I was learning something new (which was restorative). Two, it diverted my attention away from what I thought about 24/7. And three, when I was painting, my brain became totally focused on the art. I lost track of time and became absorbed in how to combine perspective and color, dimension and emotion, space and negative space, shading and light etc. into an image that meant something. The result was that it created emotional margin to handle the inevitable drain that would happen the rest of the week.
So, how about you? What do you do that creates emotional margin for you? I’ve talked with a lot of business owners and entrepreneurs and rarely do that have something that restores them emotionally. But if you can find something, whatever it is, schedule it. Make space for you to just restore you. Everyone in your business will be better for it.
Note: if a hobby isn’t restorative don’t use it for this purpose. For example, for some people, playing golf and being out on a course with friends is restorative—regardless of whether they hit 72, 82 or 92. Excellent. However, most of the people I know who golf come home feeling stressed and frustrated with their game. If that’s you, don’t count golf as part of your emotional restoration plan (sorry).
Also, a lot of emotional stress happens because of decisions that are avoided. For example, not firing an underperforming employee, not confronting someone on your executive team because of how this person normally reacts to critique, not engaging in a crucial conversation with someone who said something that negatively affected you, etc. So, as you think about creating more emotional margin for yourself, realize that it isn’t just about adding more margin, it’s also about eliminating some of the items that are draining you as well.
IV. To Do Margin
Without looking at your to do list, how many items do you think are on it right now? Note: feel free to round to the nearest hundred.
Most of us simply have way too much on our to do lists—and this usually happens because we’re terrible at the art of delegation. We hold on to things we should have delegated a long time ago.
In fact, in my Delegation Mastery Course, one of the assignments I have people complete is to take their to do list and then break it down into four categories.
- What can I and only I do?
- What should I delegate?
- What can I delegate?
- Who will I delegate which item(s) to?
Think about that. Your current to do list operates like everything fits in the first column—but that’s not true. There are plenty of items that fit in the should and/or can delegate columns.
So, if you want to create more margin in your life, master delegation. Every week, look at your list and ask, “Is there anything on my to do list for this week that someone else could or should be doing?” Then use the right techniques for delegating, not dumping, and you’ll be on your way.
Remember, the more you delegate, the more margin you’ll be creating for you—and life will get better!
V. Direct Report Margin
How many people directly report to you? If you’re like most leaders, it’s probably more than should. I usually recommend 3-5 as healthy. One is a bad number (you can never fully trust one person to tell you the truth. Three to five means you’ll have a better chance of getting the truth. And trust me on this, I’ve been burned by one. Avoid it at all costs).
However, chances are your number is greater than five (especially if you have a Board of Directors or Advisors). And the way it happened was pretty organic. Over time, you simply kept adding new people. But now that you’re at seven or nine or more, it’s overwhelming. Trying to lead and manage nine people, plus do all your other work is just too much.
So, what should you do? Create more margin by reducing that number to between 3-5 direct reports. But how? By reorganizing your org structure. But won’t people be ticked off? Possibly, but guess what, they’ll get over it. Within a month or so, the new norm will become just the norm and life will go on. However, you won’t be trying to lead and manage nine people every week any more, you’ll be managing four people—and with a whole lot more margin than before.
I’ve helped lots of people make this transition and I haven’t discovered one who regretted it 🙂
There’s only one you and you only have so much to give. In order to have margin, you have to be vigilant to create it and direct report margin is one of the key ways to create it.
So, there you go. Five different ways you can create more margin for you and your business.
- Cash Margin
- Schedule Margin
- Emotional Margin
- To Do Margin
- Direct Report Margin