How To Master Decision-Making
HOW TO MASTER DECISION-MAKING
How can entrepreneurs tell when to persevere or step back in business?
Here's the thought that came to mind: when you reach the point where it feels like you're forcing something, that's when it's time to pull back.That's the moment when I've realized something isn't right for me.
Most of the time, if you put in the hard work, things will be challenging, but that's just part of the process. However, when you feel like you're forcing things to happen despite clear signs that it shouldn't be, that's different. This is where experience or discernment comes into play because you start to see certain signs.
Facing difficulty doesn't necessarily mean you're forcing it. It could just mean you need to learn a new skill set or find a different approach to the problem. That's the key—understanding when it's just a hard challenge you need to push through versus when everything around you is signaling to stop, and you're ignoring those signs.
What should entrepreneurs understand about neuroplasticity and decision-making?
I think about the difference between reality—what's actually real in the world—and the reality we create in our minds. Just because something happens once doesn't mean it will happen every time. That's where patterns come into play. I've done my own studies on this, and I've talked about it on the show before. It's like a muscle: every time I lift weights, I build strength. It's the same with your mind. When you think a thought for the first time or experience something new, a new neural connection forms in your brain. The more you revisit that thought, the stronger that connection becomes, increasing its diameter because it stays active.
However, if you don't think about it again or don't accept that one event defines everything, that neural connection remains weak and eventually breaks down. This is particularly challenging when you experience several traumatic events within a short time. Those experiences are very real and have a strong mental and neurological impact, making them harder to break down later.
The key is understanding that one event does not dictate everything. It can be tough when people don't see the truth, even when it's right in front of them. Often, it's because of these reinforced mental patterns. We need to have compassion for these situations, especially for people who have gone through intense experiences. At the same time, it's important to recognize there is a choice to either reinforce those patterns or not.
How can entrepreneurs continuously build relationships with their children?
The answer is always the same: proximity. Even when my twins were born, if I needed to go buy something like deodorant from the local Walgreens or CVS, I would take one of them with me, even if they were just two months old. Some might think it doesn't matter because they're too young to notice, but I believe the opposite.
By doing this, I was setting up a pattern—a good habit for myself and for them. Now, with three kids, if I mention I need to go get something, they ask, "Hey, Dad, can I come with you?" They just want to hang out, for no other reason. Some of the best conversations I've had with my kids have happened during those short car rides.
What financial principles are crucial for business owners aiming to scale and sustain profits?
I talk about one of my key principles: the rule of thirds, especially for service-based businesses. In finances, there are different categories to understand. There's the top-line revenue, and then there's the cost of goods sold (COGS), or cost of sales—these terms mean the same thing. COGS is the money spent to deliver your services. This can include materials, SaaS products, or the direct labor needed to provide the service. For example, a technician or carpenter's wages would be considered COGS because they are essential to delivering the service.
It's surprising how many business owners don't understand basic financials, but it's not hard when broken down. I learned this early when I was 17, working at Radio Shack. They taught me how to read profit and loss statements (P&Ls) and showed me that my bonus depended on net operating income. They gave me control over most of the P&L, from ordering stock to managing labor costs, which made me understand the importance of controlling expenses.
The rule of thirds is simple. After accounting for COGS, if it takes up one-third of your top-line revenue, you're left with your gross margin. From that, you subtract another third for overhead expenses, also known as SG&A (Sales, General, and Administrative expenses). Overhead includes rent, utilities, office expenses, and non-essential staff like bookkeepers. The goal is to have a net income that is about one-third of your revenue.
A healthy business should aim for a 33% net income margin. If you can include your salary in overhead or COGS and still maintain this margin, you're in a good spot. I suggest reinvesting half of that net income back into the business. It benefits taxes and allows for growth by investing in new assets, services, or staff that directly increase top-line revenue. You can't do that with a 10% net operating income, but with a rule of thirds, you have the flexibility to reinvest and drive growth.
What advice would you give to aspiring entrepreneurs?
Don't wait. I waited a long time until it became a "non-choice," as I call it. I'm glad I made the right decision in that moment, but I wanted to start something on my own years before I actually did. Much of the delay was due to comfort, and while that time was a learning period, I don't want to say I wasted six years because I gained valuable experience and met great people. For example, I was the first Geek Squad agent in Chicago, which became part of my story—from being a Geek Squad guy to running a public company in cybersecurity.
Looking back, I always had the desire to do something entrepreneurial. I wish I hadn’t waited. That might sound harsh, but I can reflect on the lessons learned.
What strategies do you use to make decisions in business?
There are now three things I believe in whenever I face any situation: stay calm, be confident, and never hesitate. This has become a code I live by. Time kills all deals, and opportunities can be missed. People often say, "If it's meant for you, it will come back around." The reality is that sometimes it doesn’t. You can look for the next opportunity, but it will never be the same. That's why I believe in being calm, confident, and never hesitating.
*This interview has been edited and condensed for clarity.*
