Hey EV readers 👋 

I hope you've had an amazing week so far! I've got something special for you - a delightful mix of insights that will quench your thirst for knowledge and help you power through another week of hustle and bustle. Enjoy!

Can you build a successful business without overtime?

Overtime is when an employee works beyond the normal working hours. Most businesses encourage their employees to work overtime by paying mouth-watering rates.

So if an employee earned 20 dollars an hour during business hours, they could earn as much as 30 dollars for each hour outside the usual business hour. This is a tempting offer but is it the best way to motivate your employees? NO

The first reason is that this will likely create a hustle culture. Employees will be willing to work longer hours not because they value their work but because they stand to make more money.

This has a long-term impact on their mental health, social life, and even their personal life. After putting in the extra work at their job, your employees are less likely to hang out with friends or family, eat healthy, or exercise due to exhaustion.

The effect of these compounds over time, and soon affects their performance on the job. You start to notice a drop in their productivity. They can barely focus to get things done on time and have to stay longer to catch up with the work they would ordinarily have completed.

Soon you start to notice a drop in the business output as more and more employees struggle to keep up with their daily tasks. The business is already losing profit but there is more. As the rate of overworked employees increases, there will be a high chance of employee turnover.

This is bad for the business, as you will soon see, your employees are among the factors that can increase the Goodwill value of your business. High employee turnover is a sign of an unhealthy workplace culture.

To build a successful business, you need a healthy workforce who are motivated to work not because you bait them but because they value their job and truly believe in the vision of the company.

The hiring process is tedious and expensive, see how Startups can improve employee retention and reduce employee turnover.

The Goodwill advantage and why you need one

Goodwill is the difference between the actual value of the company and its perceived market value. The actual value of a company is calculated using tangible assets like land, buildings, equipment, etc.. Whereas Goodwill is calculated by putting a value on the company’s intangible assets.

Intangible assets are company assets that don’t have a physical form. So it can neither be seen nor touched. Hence the name intangible. Examples of intangible assets are company brand, customer base, patent, intellectual property, etc.

Most startups build Goodwill using their intellectual property. If there is a potential market for their product, then the founders have a Goodwill advantage and can bargain for a higher investment amount or payment during exit.

If your business has no intellectual property, no need to worry. You can still build Goodwill by focusing on your brand and customers. A loyal customer base is a valuable asset, just like a positive brand image, a good reputation, and an exceptional team.

Having a Goodwill is a no-brainer, the alternative means the company is unattractive to investors which can spell doom.

Here is a simple formula to calculate the Goodwill of your company;

Goodwill = Purchase - (Value of Assets - Value of Liabilities)

Of course, there are other ways of calculating Goodwill that are more accurate and complex than the equation above. However, the equation above helps you understand the foundation of the concept of Goodwill.

An uncanny advice from a billionaire

Billionaire and serial entrepreneur Mark Cuban has been trending recently because of an opinion that goes against the norm. It is common advice to chase your passion especially if you have an entrepreneurial mindset and are thinking of what business to start.

Passion, they say, is the driving force behind most successful businesses. But The billionaire has a different opinion. According to him, you should not follow your passions, instead, you should follow the money and your target should be to build wealth.

You can hardly argue with a man who is worth billions of dollars and I am inclined to agree with him on this. Passion is a great source of motivation, unfortunately, passion alone is not enough if it doesn’t generate income.

The idea here is to make money, this may sound capitalistic, but that’s the world we live in. So when next you are stuck between following your passion or chasing the bag, ask yourself this question;

Can I turn my passion into a profitable business?

Read the full article here

That’s all for now folks.

Until next time, stay inspired and keep chasing your dreams!

Cheers,

Alex