Lessons in Organic Bootstrapping – Growing Your Business

Have you heard that 50% of small businesses fail in the first year and 95% fail in the first five years? Let me tell you why.

Most small businesses fail becuase they can’t handle debt, get buried by rent, or get pushed into risky decisions by impatient investors.

I’ve seen a lot of business fail taking the “Big Bang” approach to small business start up. They put together a fancy business plan and they execute it perfectly. They take out a bunch of SBA loans, have trendy digs, hire talented people with a proven record, maybe even build a building or two. Sometimes this approach works, with dramatic success, but more often than not, it fails.

The problems are:

  1. They never tested the market, so when the sales don’t materialize immediately, they are under capitalized, and go bankrupt in a few years.
  2. They spent too much on fluff. In the quest to look professional or hip, they overspend.
  3. Instead of adding employees once demand is established, they add them before the first dollar is earned, banking on potential sales to pay the wages, and burn through too much capital too quickly.

Making mistakes is the secret to learning. You learn what you need to know about business through your pain and failures. Organic bootstrapping allows you to learn as you go without going broke, the “big bang” approach does not.

Christine and I are pushing hard this summer to grow Christine’s Books. We’re moving her store out of our house.

It needs to move because:

It’s taking over the kids play areas

And is creeping into every other area of the house

To expand, we need employees, and our house wouldn’t be a good place for others to work.

In 2003 when she first started selling books on the internet, she invested $500.00 in inventory, and kept it on a 6 ft table. By 2004 we had run out of space in our house, and bought a new house that was triple the size. That gave us five more years. Now we plan to lease a showroom and warehouse space that is as big as our entire house. We are hoping that will last 3-5 years and allow us to quadruple sales and add several jobs to the local economy.

While looking for the right location, I’ve had the chance to meet a few entrepreneurs who have grown the same way we have, by organic bootstrapping. Roger at Business Systems International sells refurbished phones. He started in his garage and now owns multiple commercial properties, and has branched out into the software business. Opportunity begets opportunity and success begets success. Roger said, “Every time I moved to a larger location my revenues doubled.”

I talked with Brian at Sunlite Windows and Doors and he had a similar story. He started in his garage, then built a bigger garage with the profits, then leased a shop and warehouse. He said, “When we rented our first shop, I said, we’ll never use all this space. Three years later it was time to move. Now I have triple the space and we own 50% of the window market in this area.”

If you are interested in how small businesses start and grow organically, you’ll be interested in the coming series of posts.

Next post: we’ll talk about finding the right location at the right price.

Is Living Dangerously and Risk Taking Critical to Your Hapiness and Success?

A friend and blogger ApplePieMom brought an idea to my attention yesterday in her post Living Dangerously.

The idea that living dangerously enhances life is a conundrum that rolls around in my head frequently.

I understand AppliePieMom’s point that simply taking a few economic risks isn’t the same fighting in a war zone. No doubt. The difference is one of degree. Are you risking your life, your job, your money, your marriage, your freedom, your health, or your reputation? We clearly put different values on each of these things.

But that doesn’t get at the fundamental question…

Is Living Dangerously and Risk Taking Critical to Your Happiness and Success?

It is to me, but it is nuanced and complex.

Almost everything worth doing is risky.

I was driving down the freeway and my son yelled, “Dad the speed limit is 70 and you’re going 78. The policeman is going to take you to jail.”

I thought about it a minute and I said this to my son…

“First, no one is going to take me to jail. If I get caught I’ll have to pay fine. Second do you notice how everyone else is going even faster? If I drive slower we will be in more danger than if I keep up with the flow of traffic.

One of the most important things to learn about life isn’t to obey all the rules. It’s to learn the rules, know when you’re breaking them, and what the consequences are if you get caught.”

Risk taking and danger doesn’t always involve breaking the rules, but more often than not it does.

The need for risk and challenge can manifest itself  in harmless ways…

When a golfer first plays a clean round of golf, they can find it isn’t what they thought it’d be. They thought it’d be exhilarating but instead it was boring. Why? It is more interesting to get yourself into a mess and get yourself out than it is to execute near perfection.

manifest itself in incredibly destructive ways…

Claude Steiner writes about this in The Games Alcoholics Play. He states alcoholics and addicts don’t find “normal” life interesting. They are caught in an destructive obsessive form of risk taking, consistently digging themselves into a hole and recovering. This is why they are more likely to relapse when life is going well than when they are having problems. They crave not only alcohol but the risk that goes with it.

Some people climb mountains, others jump from airplanes, and some put their life savings down on a startup. These activities make them feel alive.

What do you think? Is living dangerously critical to your hapiness and success?

For me it is. Too much safety and comfort bore me and lead to apathy. But there are a couple of caveats…

  • The risk must be calculated and intelligent, not a blind gamble or reckless endangerment.
  • The likely result of my risk taking should be constructive and positive.

ApplePieMom shares her experience as the mother of a 26 year old soldier on the ground in Afghanistan.

Another Unoffical Lesson Taught in School

The lessons kids learn in school that aren’t part of the official curriculum are the most powerful lessons taught in these institutions. John Taylor Gatto wrote about the unofficial lessons he taught in school.

Today I have one to add to his list.

Respect can be achieved through the purchase and acquisition of status symbols.

Let me explain.

I work with a guy who has two teenage boys in a large suburban public high school. Parking in the school lot is by permit only and costs $180.00 per year.

However, students can park in the lot across street for free but few do.


Student culture has labeled the free lot the “loser” lot.

I would think that the intelligent kids, the entrepreneurial kids, and the healthy kids, would park in the free lot. It’s good exercise to walk a hundred yards more to school and you’ll save almost $200 a year. Why would you throw your money away?

Simple, kids believe having a parking permit makes them a ‘winner.’ Why? They, or more importantly, their parents, can afford to throw money away on a piece of paper. Only ‘losers’ can’t or won’t spend money on a piece of paper that gives them membership in a herd. The parking permit isn’t a parking permit at all, it is a social status symbol and a subtle symbol of conformity.

Can You Live on 50% of Your Income?

Let’s talk about money. Someone will probably call me insensitive or naive for posting this, but I don’t care. It’s important. Please keep in mind, I’m talking about people with normal to above average incomes, not senior citizens on SSI or single moms on state assistance. I understand there are hard cases.

I heard a 60+ year old man say this today…

When I was 18 I made a decision. I decided I never wanted to be under financial stress. I have lived that decision my entire adult life and have never experienced financial stress. How did I do it? I saved 50% of my take home income without exception. I’ve had months I’ve made $100, and other months I’ve made $100,000. But regardless, I still saved 50% of my income. My income has fluctuated but my saving percentage hasn’t. This has enabled me to purchase several business and a large ranch without incurring debt. I hear people say ‘I couldn’t possibly live on 50% of my income.’ Oh! baloney, you choose not to. Sure it’s harder once you have a 400K mortgage and kids in private colleges, but you decided to live that way. You don’t need to live that way. And if you had decided when you were younger to live differently, you could have your 400K home and private college today without a dollar of debt.

I’m not trying to preach. I don’t save 50%. But I know everything this man said is true. I could have saved more, and if I had, I’d be much better off today.

I’m aiming the following list at the 18-25 audience. Why? Most older people are already working like slaves to pay off debt and can’t imagine living on 50% of take home. A huge percentage of people are living paycheck to paycheck by 30 with college loans, cars, credit cards, and mortgages. Once you’ve accumulated your debt, living on 50% will become impossible due to the choices you made earlier and your financial stress may never subside. Creating financial freedom starts young, requires disciple, and must become a habit.

Here are some ideas you could use to help you save 50% when you are just starting out in life:

(Keep in mind that these lifestyle sacrifices would be temporary – delayed gratification)

  1. Live in a small apartment with roommates
  2. Avoid buying a car. Cars are money pits. If you must purchase one, buy a cheap used car with cash. Never buy a car on credit
  3. Don’t indulge fashion trends. Instead wear practical durable inexpensive clothing. If your friends say you look like a dork, find new friends
  4. Avoid high-maintenance boyfriends/girlfriends
  5. Avoid expensive vacations. Instead make them local and cheap. Maybe go camping or biking.
  6. Don’t eat out
  7. Warning – this one is blasphemy – Avoid student loans. Pay cash (Community College) or learn free on the internet
  8. Don’t upgrade your home, your car, your education, or your clothes until you can pay cash

You may not want to live this way, but you certainly could live this way, if you chose to.

Most people say they can’t live on 50% of their take home. When in reality, they mean they won’t live on 50% of their income because they aren’t willing to make the trade offs. Or maybe they don’t think the trade offs are worth it.

I genuinely want to discuss this with you. Is saving 50% reasonable? I don’t know if it is. That depends on who you are, right? But for many people it is possible. What would happen if your income was cut 50% right now? Would you go bankrupt? Would you die? Would it destroy your marriage? Or could you survive for years?

Today’s post was inspired by Episode 63 of The Focus Society of Overachievers podcast.

Are You An Extraordinary Person?

Before you attempt to answer the question “Are You an Extraordinary Person?” read this story.

After my mother-in-law watched our interview with Jonathan Fields on Career Renegades she mentioned to Christine, “I wish Steve wouldn’t talk like he was this regular ordinary guy. Why does he do that? We know that he isn’t ordinary at all.”

Let me explain why I describe my past that way.

For the first 30 years of my life I viewed myself this way:

I grew up in an ordinary family, in an ordinary middle-American city. My dad had an ordinary job. Just like every other boy I knew, I did shitty in school and I hated it. I was told by authorities that I’d never amount to anything, that I’d be lucky to get a job that could pay the bills, and that my generation was the first generation who would have it worse than their parents. I worked jobs I hated so I could come home, sit on the couch, drink beer, smoke cigarettes, and watch TV. I wasted my weekends watching televised sports. I was in debt and I couldn’t see myself getting out.

I was told that without a higher education I would never amount to anything. I saw myself as working class. I accepted the social sorting our schools and institutions had applied to me. I became what I believed I was. I felt like I was an ordinary working class guy and that’s all I would ever be.

I felt guilty when I wanted more. I should be happy, right? At least I had a job. I had a cracker box to live in. I had a wife who loved me unconditionally. I had so much food I was getting fat. When I’d dream for more, I’d hear a demon in my head shouting “What do you want more for? You ungrateful little bastard, you’ve got everything you need. Quit feeling sorry for yourself.”

Was I ordinary? Yes, I was ordinary because I thought I was ordinary. Who am I to presume I am extraordinary?

If you listen to the news and the lessons taught in our schools you’ll hear the same message again and again. Ordinary people are helpless victims.

Do you want to know the truth?

It’s a lie. There are no ordinary people. You are all extraordinary. You are all gifted creators. Everyone of you has amazing things to offer.

I’m a slow learner. It took me almost 30 years to learn this.

It is my story and I am compelled to share it with you in the hope that it won’t take you 30 years to figure this out.

I was what I thought I was. And now I am what I think I am. And that’s what you are too.

Christine and Steve Olson on Career Renegade TV

Jonathan Fields was kind enough to interview us on Career Renegade TV. We loved doing this interview. Jonathan is a great guy and makes you feel at ease. We planned to do audio only but at the last minute we decided to go for the video. Let us know what you think.

We talk mostly about Christine’s home based business, Christine’s Books and we also talk about entrepreneurship, family life, social media, and the current economy.

We’re grateful for the opportunity to talk with Jonathan, a published author who has interviewed web superstars like Gary Vaynerchuk.

Here’s the interview:

The Great Fargo-Moorhead Flood of 2009 – Amazing Pictures

Off-topic post…

As some of you know, I grew up in the Red River Valley where the flood of the century is happening. Three of my brothers are still there.

My brother, Paul is a photographer and hasn’t had time to document as much of this historic event as he would like. He has been sandbagging for days on end.

He posted some pictures of the area where he was volunteering today:

The family who owns this house is winning the battle for now. What you can’t see in this picture is the makeshift sandbag dikes which run for miles and miles on each side of the river. What these folks have done is absolutely amazing. I was told that if the average citizen hadn’t volunteered to save this city, 80% of the city would be underwater right now.

They have 18 inches of snow on the ground and are praying for cold weather so it doesn’t melt. Another blizzard is on the way early next week and that’s better than rain.

What you aren’t hearing in the media As Bob Collins is reporting at MPR, these makeshift dikes leak and need to be manned 24/7 with pumps. As the water leaks in they pump it back out.

To win this battle they are going to have to keep this up for another week.

The city has built contingency dikes outside the the dikes pictured above.

The National Guard patrols the streets, but looting and anarchy aren’t a problem. These people have come together as a community to fight for their property and their lives. You can’t imagine how miserable these conditions are, how hopeless the national weather service told them it was, and they refuse to quit. There’s no whining and no complaining, only smiles and a little gallows humor. No one knows if they will win, history will be written after the snow melts and the floodwaters subside. And still, able bodied men and women are going door to door offering their help to anyone who needs it. The biggest problem is – too many volunteers.

If you’d like to see more photos from Paul E Olson’s coverage of the Fargo Moorhead flood of 2009, visit his website.

He’s taking a walk downtown this evening to capture more scenes, and if they have a story to tell, you’ll see them here.

The Secret to Creative Growth

This afternoon, as I was lying down reading On the Road by Jack Kerouac I had a thought I wanted to share with you.

I saw this news clip earlier today, and the impact of it didn’t hit until now…

You can’t get ahead by hanging on. Clinging to where you are or what you had will never lead to growth, it leads to a slow painful death.

If you want to grow, you need to have faith, you have to let go and trust the bottom won’t kill you, that maybe, if you’re lucky, you’ll bounce when you hit.

It’s the same reason drunks have the uncanny knack for surviving car accidents… they are relaxed at impact while sober people tighten up trying to avoid the inevitable and their own desire to survive helps kill them.

It’s like the football team playing the prevent. They aren’t playing to win, they are playing not to lose. The greatest comebacks in history were made against teams that had given up on playing to win and decided to try not to lose.

Clinging to what you have is an act of desperation. It isn’t creative, it isn’t helpful, and you won’t like the results.

The secret to creative growth is the opposite of clinging, it is the act of letting go.

The First Step Toward Ending Procrastination

In this post I am going to:

  • Illustrate a root cause of procrastination
  • Show a simple way to improve your emotional state
  • Stress the importance of action, regardless of inspiration

This post doesn’t address all the complexities involved in procrastination, but it does get to the root of one major cause.

Tell me if this story sounds familiar to you:

You need to work on a project. It could be any project, for school, for a customer, for an employer, for your spouse, or for yourself. Maybe it’s new software, a blog post, negotiating a lease, developing a brand, or getting in shape.

Your logical mind knows the project is within your abilities, that working on the project will be interesting and rewarding, and that you’ll find satisfaction upon completing your project.

But knowing the above doesn’t matter—you procrastinate anyway.

Why do you procrastinate even when you know taking action will be rewarding?

You have an emotional hang-up. It feels like a tightness in your chest—like a cross between fear and guilt. It’s an emotional dam in your creative stream. You want to bust that dam and get the stream flowing before you act.

So you tell yourself, “I don’t feel like doing this right now.” You aren’t lying to yourself—you feel sick about it, so you blow it off until you feel better. You find a distraction that gives you immediate relief, a video game, a night out, food, television, surfing nonsense on the internet, or even drugs and alcohol.

You’re hoped “a little fun” will make you feel better so you can get motivated. But now you’ve taken a night off, and when you face your project, that same ugly feeling returns, only more intense this time, and you escape into another distraction.

But you remember working on projects in the past, and it wasn’t bad. In reality, working on the project made you feel great. So why don’t you do it?

It comes from years of mental programming. As a child you started saying “I don’t feel like it” to your parents, other kids, and your teachers.

You’ve made it a habit to avoid things you don’t feel like doing.

You came to believe you had to feel a certain way in order to take action. Somehow your learning process was interrupted. You began to look for stuff “you felt like doing” and did only that.

But you got it wrong. You judged the worthiness of an activity based on the feelings you had before you acted. Emotional health is developed by acting and thinking in a way that is likely to result in a positive emotional state despite your feelings at the moment.

How you feel right now doesn’t matter. If you want to feel happy and free…

All that matters is the likely result of the next action you take.

I am not asking, “Is it likely to make you feel good for the next five minutes?”

I am asking, “Is the next action you take likely to result in confidence, pride, esteem, and happiness in the long term?”

Live in the now. It is the only place you can live. But use your thoughts and actions to build a better tomorrow. You were born to create tomorrow. Don’t leave it to chance.

One more time…

If you feel unmotivated and uninspired, act anyway. Get moving and motivation and inspiration will follow.

Seven Simple Steps to Realizing Your Dreams

This formula is time tested and proven by some of the most successful people who ever lived. It isn’t original, in fact, it is ancient. It’s been published in various forms hundreds, maybe thousands of times over the last 4000 years. If you already know it, read it again – repetition is key to personal growth. You can read volumes of productivity and self-help books if you wish, but these seven simple steps are the foundation of all personal change and all personal achievement.

1. Decide exactly what you want. Make it a goal.

Did you know most people never do this? If you ask the average person what they want from life, they can’t tell you anything specific. You can’t have everything, so you need to make a decision. If you don’t, others will make the decision for you. Don’t hunker down and wait for life to come to you.

Engage life and decide what you want to do with it!

Be specific. Don’t say…

  • I want to be “happy and rich”

It’s too vague. “Happy and rich” isn’t a destination or a goal. It’s too abstract and subjective. Instead say…

  • I want to lose 40 lbs and save $100,000 in cash

But it doesn’t have to be about health or money. Your goal could be anything specific. It could be…

Now that’s specific!

Be realistic. What does realistic mean? It means something different to each one of us. For me, becoming an NHL All-Star isn’t realistic. I don’t have the natural talent and I’m too old. But for you it could be realistic. Only you know for sure. The best way to know if your goal is realistic is to ask yourself “Do I really believe this is possible for me?” If you can honestly say yes, then it is realistic. I’m not talking about delusional thinking here. I’m talking about BELIEVING NOT WISHING you can accomplish your goal. Don’t lie to yourself.

2. Decide what you are willing to give to reach your goal.

Deciding on a specific goal is only the first step. Next, you need to give value in return. You can’t get something for nothing, even stealing requires some effort.


  • If you want to lose 40lbs, you might need to spend more time in the gym and spend more money on healthy foods.
  • If you want to save $100,000, you may need to give more attention to the people you serve in business, your customers or your employer. You may need to spend time acquiring specialized knowledge so you can give more value to your customers.
  • If you want to build a 300 HP, 225 MPH, V-8, P-51 replica kit plane, you may need to volunteer your time and services to help someone else build a kit plane first, that way you can learn the specialized skills required.

Often it isn’t only what you need to give, it is also what you need to give up.


  • If you want to lose 40lbs, you may need to give up soda pop, sweets, and lazy evenings on the couch.
  • If you want to save $100,000, you may need to give up expensive vacations, a big house, or a new car.
  • If you want to build a 300 HP, 225 MPH, V-8, P-51 replica kit plane, you
    may need to give up watching football and NASCAR on the weekend.

Once you know what you need to give (and give up), be willing to make the sacrifice. Everything has an opportunity cost.

3. Develop a plan.

Planning is essential to reaching your goal. Goal setting without planning is like trying to reach a destination without directions – you’ll end up someplace you didn’t intend to be. Your plan doesn’t need to be perfect, it doesn’t need to be the most efficient (although it helps), but it does need to layout specific actions and steps toward your destination. Your plan also needs to be flexible. You will meet unexpected obstacles along your journey, you will find flaws in your plan, so you will need to alter your plan.

4. Set a date you plan to reach your goal.

Someone once said goals are dreams with a deadline. That’s partially true. But I don’t like the word ‘deadline’, I like ‘target date’ instead. It’s flexible. A target date makes your goal and plan real. Leaving your goals open ended leaves no sense of urgency for action. Open ended goals are rarely achieved.

You need a target date, but things do change. I’ve worked in software for over 10 years and I’ve rarely hit a target perfectly. Sometimes they move in but more often they move out. Expecting to hit your date every time is like expecting to put every golf shot in the hole. You need to aim for the hole, but you’ll rarely hit it, so when you miss, you asses the distance to the hole – the obstacles and hazards, shoot again, and repeat until you sink the shot. Do not quit simply because you didn’t meet your first date, reorganize, set a new date, and keep going.

5. Put steps 1 – 4 in writing.

It is essential to write everything down. Writing them down shows commitment. Don’t use a computer. I prefer to write my goals by hand with a pen and paper and carry them everywhere I go. It has more psychological power when you see your goals in your own handwriting. Hand written goals have an almost magical property. When I reflect back I realize the 90% of the goals I have written down I have achieved.

6. Read your written statement aloud at least twice a day.

People have a hard time with this one. I did too. As a kid, I watched Al Franken as Stuart Smalley stand in front of the mirror and say, “I’m Good Enough, I’m Smart Enough, and Doggone It, People Like Me!” To me reading goals aloud always felt a little… well… weird.

When you make a mistake, have you ever blurted out, “I’m so stupid” or when frustrated, “this is never going to work?” That’s called negative self-talk, and most of us do it habitually. And unlike positive self-talk, negative self-talk is socially acceptable. For some of us, negative self-talk is all we say about ourselves out loud.

If you have the same hang ups I had, you need to get over it. You need to learn to talk about your goals and your dreams aloud, both when other people are present and when you are alone. If you still can’t talk about your goals with yourself, get a personal coach, have regular meetings, and go over your goals aloud.

Why is this important?

Reading your goals aloud several times daily will program your subconscious mind to act on your goals and plans. When you make a habit of reading your goals aloud daily it becomes nearly impossible to procrastinate. Your subconscious mind will begin handing you new ideas and fine details and it will nag you when you’re lazy, if you you follow this step habitually.

7. Take action toward your goals every day.

Persistent action is critical. Every day make a habit of taking action. Dreams are not realized sitting around imagining the future, dreams are realized by taking planned calculated action. Massive action yields massive results, tiny action yields tiny results, no action yields no results.

Remember you don’t have to get it right, you just need to get going!