My Capsule Wardrobe and the Amazing After Action Review

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Welcome back to my blog and my take on how a Capsule Wardrobe is similar to a Capsule Business! As we discussed in my first post on the Capsule Wardrobe, when you come to the last two weeks of wearing your Capsule Wardrobe during a season, you should review what you have, purchase or incorporate what you need, and discard what you don’t for the upcoming season. I consider those two weeks to be clarifying weeks, when I carefully evaluate what I have, what I want, and what I need.

This is SO similar to two critical, intentional times of reflection in business:

  1. The After Action Review which occurs after any meeting, consultation, proposal presentation, or staff/customer interaction.
  2. Scheduled times on a regular basis when, from a big picture stance, you intentionally evaluate your customers, products/services, and market.

First, the After Action Review, or AAR, has been used by the US Army for several decades, and has been promoted for business use by value pricing guru, Ron Baker. (Here’s where he describes why the AAR is the most awesome learning tool ever.)

I believe by practicing the art of the AAR, you can skyrocket your business success! In an AAR, you should ask:

  • What was supposed to happen?
  • What actually happened?
  • What are the positive and negative factors here?
  • What we learned and what should we do better next time?

In my business, AARs are fast becoming the standard right after any client or prospect-facing meeting and even after many staff meetings. Each person who participated inherently knows ways to improve the next time around, and capturing this knowledge is critical for growing and improving. Ron Baker said:

Your firm’s intellectual capital is the most important source of its long-term wealth creating capacity… Capturing the tacit knowledge that exists in the heads of your human capital and making it part of your organization’s structural capital will insure that your firm knows what it knows, and can deploy it quicker and at a greater value than the competition.

I would encourage you to try implementing AARs into your business, whether you are a business owner or an employee! The insights you will gain will propel your business on its way toward more focused operations.

Second, regarding times for broader reflection on the overall direction of the business, these will not be as frequent as AARs. (I recommend quarterly for the frequency.) These are times you set aside from working in the weeds to discover and prune clients, services, products or markets that do not bring you the ROI you thought they would. During these reflecting times, you may find that your services or products don’t bring the joy they once did or that you may want to seize some opportunities you have set to the side. It’s a healthy thing to intentionally create times of focus, planning and pruning in our lives, whether quickly after key interactions or less frequently for deep thought.

As business owners, we can get so buried in the day-to-day operations of our businesses that we find them drifting whatever direction the wind blows with no real mapped plan. We must remove ourselves for a time of review, renewal and refocus so that we can effectively steer the ship we are sailing.

Back to the capsule: if you’re interested in creating your own Capsule Wardrobe, I would encourage you to read the following posts for inspiration and clarity:

What reviews are you doing that are helping your business grow? I would love to hear about them below! Happy Capsuling, Niching, Focusing and Reviewing in Your Business!

My Capsule Wardrobe and Capsule Business Focus

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In previous posts, I introduced the Capsule Wardrobe concept and explained how the Capsule Wardrobe is similar to choosing your business niche.

Today I want to discuss focus and how the Capsule Wardrobe’s seasonal focus relates to business focus.

A Capsule Wardrobe requires you to stay focused on wearing only the clothes you selected for three months. Fashion trends can change in the blink of an eye, but a Capsule Wardrobe gives you a focus on set pieces of clothing for three months so that you aren’t tempted to buy every new outfit you see. Embracing a Capsule Wardrobe forces your shopping to become intentional and focused. You now shop with a purpose – to fill specific voids in your Capsule with items that bring you joy – rather than simply shopping to kill time, spend money, or bring a bit of happiness.

It’s important to trust that the pieces I originally picked for my Capsule are the right pieces for this season. I can dive into the selections in my wardrobe and really get creative with putting outfits together. It’s been said that scarcity fosters creativity.

Capsule Wardrobe FocusThat creativity can be found when we stay within our focus area. Similarly, I have found that once a business carefully niches, it then needs to focus on its niche. Just like fashion trends or sale items, business opportunities will come your way. If the opportunity fits within your niche you should jump on it quickly. However, if it is a distraction that will take you away from your chosen niche, you may need to place that opportunity on a shelf while you focus on your business niche for a set time. Focusing on your business niche will ensure you are providing the value your customers need instead of chasing after distractions.

I have a personal tendency to be sidetracked by “Ooooh shiny” distractions and find that it’s critical to quickly identify whether it does or does not fit within my area of focus and whether it’s actually an opportunity or a distraction. Of course, it would be silly to be completely blind to business opportunities, so we have to practice discernment.

My husband and I recently took a weekend getaway trip, and while eating at a restaurant I noticed some cute t-shirts in the gift shop. In the past, I would have snatched up two or three and been on my way with my fun purchase, only to later realize that they weren’t the cut or fabric I prefer to wear. That would result in me wearing each shirt only once or twice and then donating it at Goodwill. This time when presented with these shirts, I knew it wasn’t time to shop for my Capsule, so I was able to pass them by, knowing that they didn’t fit within my Capsule focus for the season.

In a similar sense, various people, businesses, connections and events frequently come my way as a business owner. It’s critical that I focus on what I set out to do in my niche and believe that what I choose when I created my niche is still the right choice. When it is the right time to think about other directions, the right opportunities will come along.

Here’s to staying focused on your business niche and running a successfully focused business!

Tidying Up My Finances

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In last week’s blog post, I introduced Marie Kondo’s book The Life Changing Magic of Tidying Up and explained how I began my tidying journey.  After I purged my home of junk and clutter, I had an overwhelming desire to declutter everything in my life.  The thought echoing in my mind was:

Everything must be tidy.

How much joy could I experience by having my entire life tidied?

Tidying Up My FinancesCredit Cards

The need to simplify went hand in hand with the Profit First philosophy. As I walked through the Profit First method of accounting and banking in my company, I realized tidying up my finances needed to come next.

For years, I had accumulated credit cards. Any time a store offered a deal, discount, free shipping, or friends and family pricing for card holders, I signed up immediately. After all, I rationalized, it’s a bargain. I would be a bad steward if I didn’t take the card. I realized, however, that in order to receive free shipping on an order and redeem my $10 discount, I needed to spend $50. That just caused me to spend money on things I didn’t need and that did not bring me joy. Managing the “discount” credit cards actually cost me a large amount of energy and money, brought distraction, and cluttered up my wallet and finances. I no longer wanted to use my energy and brainpower to manage the many credit cards in my wallet. I begin to cancel them and cut them up one by one, and therefore, tidying up my finances. 

Tidying Up My Finances with MikeMy Profit Assessment Meeting with Mike

When I first started implementing the Profit First methodology in my own company, I had a strong desire to become a Certified Profit First Professional, so I applied to do so with Profit First. The first step in my journey to become certified was analyzing a Profit Assessment on my very own business with Mike Michalowicz, the author of Profit First!  We scheduled a conference call and went over the details of my Profit Assessment. During that phone call, two main points of focus came to mind:

  1. Our business was going in too many different directions. We needed to tidy up and rid ourselves of the services that were not profitable. As Mike taught in Profit First, The niches are in the riches. One specific area of low profitability immediately came to mind, it was something we had maneuvered around for years. Mike guided me to the reality that this particular service needed to be let go in some fashion. We needed to create a laser focus.
  2. My company could no longer use a credit card. Even though it was the kind that was paid off from month to month, for me to be a purist and embrace Profit First system fully, spending on a credit card just wouldn’t work. The money needed to be spent in cash via a debit card.

I needed confirmation that the right thing to do was cut up my company credit card. My initial plan was to take a month. As recurring bills hit the credit card, I would change the billing to a debit card. But I’m not much on an ease-into-things-kind-of-girl. When I make a decision, I like to start right away. I realized almost instantly, that we had to get rid of the Amex. I pulled everyone’s credit card and started paying for all our bills with a debit card.

That month was painful! I was paying for everything twice- the credit card bill with the charges in arrears and the current monthly expenses as they occurred. However, the joy I felt the next month when I didn’t get an Amex bill, made the pain worthwhile. I no longer dread the 17th of each month when I would receive a bill that was somewhat of a surprise. (I don’t like surprises. As a company, we focus on no surprise bills for our customers. This new method of tidying up my finances and paying for things up front fell right in line with that philosophy.)  

Now, I know how much money I have available all the time and I’m truly living the Profit First focus. Stay tuned for next week’s blog post – Grasping Opportunities