Archive for the 'Entrepreneurship' Category

Six questions and answers on being a successful business owner

As many of you know, for almost 19 years I’ve conducted over 1,000 live interviews annually on my radio program, The Small Business Advocate Show. I get to ask four really smart people a lot of questions. But occasionally the tables are turned are turned on me, like when Alignable.com podcaster, Alan Belniak, asked me several questions about small business on his show. I thought you’d be interested in that interchange.

Belniak: What’s the biggest problem small business owners don’t know they have?

Blasingame: Too many business owners don’t realize that their customers’ expectations are changing faster than ever before. If you want to find out what your business should be doing tomorrow or next year, that information is inside the heads of your prospects and customers. Ask them.

Belniak: What advice do you have for small business owners in order to make a successful new hire?

Blasingame: Focus on the 3Ps: Be more patient, professional and proactive. Don’t make a hiring mistake by rushing to fill a slot. Use professional methods and practices to increase your chances of making a successful hire. Be more proactive by grooming employees to step up to a key assignment, so that you’re hiring for the lower position.

Belniak: What advice can you give to those who are seeking funding?

Blasingame: Strategy and forecasting. Create a capitalization strategy that includes multiple capital sources and terms. Don’t use operating cash for long-term capital expenses. Don’t finance something you can lease. Don’t use investors when you should get a bank loan. Use an electronic spreadsheet to create a 12-month cash flow projection so you can forecast beginning and ending cash. This will make you smarter and your banker happier.

Belniak: What is one way that operating a business today is the same as 15 years ago, and one way it’s different?

Blasingame: It’s Old School fundamentals and New School tech. Old School: The fundamentals never change: you still have to buy low, sell high and keep good records; cash is still King; people still want to be treated well. New School is the digital elements, and most is good news: Small businesses have handy cool and affordable tools available, but it’s not good news if you’re not keeping up. You don’t have to win the digital race, but you do have to participate.

Belniak: What are some of the character traits common among successful entrepreneurs?

Blasingame: You have to have a high tolerance for risk. If you don’t, clock in tomorrow. You have to believe in yourself. Many days all other elements of your business will let you down. If you can’t believe in yourself, there will be days when you won’t come back. You have to love working. You’ll never work harder than when you own a business. If you don’t love working, clock in tomorrow.

Belniak: What’s one thing you see small business owners failing to do?

Blasingame: They fail to set aside time at least every week to stop being a manager and assume the role of the CEO. Fire yourself from jobs you no longer have to do and promote yourself to jobs that a growing company needs someone to perform, but that only you can do.

Write this on a rock … Being successful in small business isn’t complicated, but the degree of difficulty is hard to explain.

Admiring two kinds of American heroes

Every four years, you can watch special people participate in a noble cause – the Olympics.
These heroes commit countless hours over many years to achieve a level of excellence that might somehow qualify them to represent their country in the Olympic Games.

Notice no mention of winning, medals or glory. Most Olympians find neither. And yet they train and compete.

Watching an event, we’re at once self-conscious and grateful as the camera’s lens permits us to invade that private moment just prior to competition. Self-conscious because of the intrusion, but grateful to share the moment and benefit vicariously from the Herculean effort and sacrifice.

The TV camera moves in closer. We can actually see the color of their eyes — even imagine their thoughts.

The swimmer: “Twelve years of training and it all comes down to the next few seconds – must remember the fundamentals.”

The gymnast: “Today I will perform my personal best.”

Then the long lens captures the mouth. There’s a lick to fight the cottonmouth that only those who risk failure have tasted. The lips move ever so slightly, as if to offer a short prayer or claim an affirmation.

Every day, you can watch another group of special people participate in a noble cause – small business.
Small business owners are a lot like Olympic athletes. They commit countless hours over many years, pushing mind and body to achieve a level of excellence that might somehow allow them to merely … make a living.

Notice no mention of winning, medals or glory. Most small business owners find neither. And yet they show up, year after year, to work, compete, and contribute.

Like an Olympic race, sometimes the future of a small business’ success rides on how well the owner performs over a very short period of time. If the camera could take you in close, you might see an owner thinking: “All these years of work and risk could come down to how well I deliver this proposal in the next few minutes - must remember the fundamentals.”

The long lens would also capture the lick to lessen the cottonmouth that only those who risk failure have tasted. Then the lips move ever so slightly, as if to offer a prayer or claim an affirmation.

Olympians and small business owners are dedicated to what they love. Both work hard, in search of excellence, take great risks against all odds, and usually at their own expense.

I’ll gladly spend my admiration on that kind of spirit.

Write this on a rock … Because of Olympians and small business owners, the world is a better place.

Three important people you want to be close to you

Why do birds suddenly appear
Every time you are near?
Just like me, they long to be
Close to you.

In 1970, the brother/sister act, The Carpenters, took these lyrics and the rest of the song, “Close To You” to the top of the charts. Velvet-voiced Karen sang lead, with brother Richard contributing lyrics and sweet harmony.

Out here on Main Street, small businesses should hum that tune every day to remind themselves about the three most important stakeholders they want to be close to.

Customers
Every business, large and small, longs to be close to its customers. But getting customers to return the favor is the challenge. Time was, when a business was a critical link to certain products and services for customers. Longing to be close to us, customers – and their loyalty – weren’t so illusive. Today, almost everything needed by customers can be purchased within a few miles of your business from competitors that didn’t exist when the Carpenters topped the charts. Throw in the Internet and e-commerce and what isn’t a commodity today?

The good news for Main Street is that small and nimble increasingly trumps big and strong. With few exceptions, we can’t compete with the big guys on price, selection, or brand intimidation. But we can make customers want to be close to us is by scratching an itch the big boxes can’t always reach: customization.

If you want customers to suddenly appear, find out what keeps them up at night. And don’t expect the answer to be a burning need for your product or service. If you deliver a customized solution, customers will long for your business because you added unique value they can use. And here’s the silver bullet of customer longing: Help your customers help their customers.

The other good news is that customization justifies higher margins than off-the-shelf offerings. If it’s truly focused on the customer’s solution, they’ll pay for it and come back for more.

Vendors
Once-upon-a-time, a vendor was a company from which you purchased inventory, raw materials, and operating supplies. Today, if a vendor isn’t longing to be your partner, you’ve got the wrong vendor.

Of course, we’re at once a customer to vendors and a vendor to customers. Consequently, we have to find vendor-partners as well as be one. In these roles, it’s important to understand a concept that has become part of the romance between 21st century vendors and customers: seamless.

In a world of outsourcing as a management strategy, the goal is not merely to reduce in-house staff. If outsourcing is to work, products and services MUST be delivered so seamlessly to us by our vendors, and by us to our customers, that operating efficiencies actually improve.

Small businesses have a greater opportunity today to accomplish the hand-in-glove level of closeness required for seamless delivery. And we can’t deliver seamlessly to customers unless vendors long to be seamlessly close to us.

Employees
Back when the Carpenters were belting out hits, the employer/employee relationship was based largely on the Dominator Management Model, which is to say, not much closeness. Employees longed for the perceived job security and benefits of a paternalistic employer. But in the 21st century, employees are drawn closer to leaders.

Today, employers must be able to show employees that we long for them. The best way to demonstrate our longing is to close the gap between what the company needs and what employees want. This means finding and keeping employees who become stakeholders.

If you want employees to long for you, you have to suddenly appear as a partner longing to support their professional and personal fulfillment. And no one can do this better than small business.

Write this on a rock … Find and keep customers, vendors, and employees who long to be close to you.

Celebrating American independence and entrepreneurship

Seven score and 13 years ago, Abraham Lincoln’s inspired speech at the Gettysburg Cemetery dedication included these words: “…our fathers brought forth on this continent, a new nation, conceived in liberty and dedicated to the proposition that all men are created equal.”

Four score and seven years earlier, one of those fathers, Thomas Jefferson, penned what is arguably the most important secular document in history, the Declaration of Independence, which included this passionate passage:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights that, among these are Life, Liberty, and the pursuit of Happiness.”

Having the spirit, courage, and vision to declare independence at a time when monarchy was the globally accepted model of government was unprecedented. To fight for those principles then, and defending them from within and without in the two centuries since, is impressive.

To be sure, America has had lapses in the delivery of some of these tenets. Indeed, while Lincoln was trying to save his beloved country, he made this judgment: “We made the experiment; and the fruit is before us.”

Even today, America is a work-in-progress. We’re on a journey of understanding that has many stations where new things are learned and past wrongs can be righted. But in terms of contribution to the world, Ronald Reagan’s “shining city upon a hill” has an incomparable record. Warts and all, the United States of America is still a benefactor nation like no other in history, with millions, if not billions of beneficiaries.

Freedom to dream is found in other lands, as is freedom to pursue dreams. But no entrepreneurial soil is more fertile than in America, and it’s because of those who had the conviction to create our founding documents, the will to deliver them, and the courage to defend them.

Life, liberty, and the pursuit of happiness have been essential to millions of American small businesses. If you ask anyone anywhere on the planet where to go to start a business and have the greatest chance to succeed and accrue the fruits of that labor, the answer would be America. Like the Founders, generation after generation of American small business owners have demonstrated courage as they claimed and perpetuated the American dream.

As we celebrate the blessings of another Independence Day in America, let’s hold fast to Lincoln’s closing prayer so beautifully conveyed in his 1st Inaugural Address. That the relationships we have with each other will be “touched by the better angels of our nature.”

Write this on a rock … Happy Independence Day, America.

10 reasons to never be too cool for Old School

You may think you’re too cool for “Old School,” but there’s one thing it produced that you can’t be successful without: the fundamentals. Here are ten essential operating fundamentals that are timelessly, beautifully, definitively, non-negotiably, Old School.

Financial statements: Become an expert at understanding your financial statements. Spend more time with the numbers below the sales line on your operating statement. Non-negotiable.

Budgets: Yuck, right? But operations work best with a track to run on. Creating budgets isn’t hard – sticking to them is. Grow some discipline and get on track.

Cash management: Whether sales are up or down, you must be intimately familiar with your cash picture today, tomorrow, and six months from now. Do not delegate this.

Inventory: This is a euphemism for cash. Inventory that isn’t turning is declining in value and must be converted into cash – ASAP. And if you aren’t practicing Just-In-Time inventory management, do it now.

Vendors: Their success depends on yours. Talk to them about managing inventory, improving margins, lowering freight costs, and new ways to serve customers. Get rid of any vendor that only wants to sell you stuff.

Systems: These are the structured components in your operation which may be outdated and unproductive. Scrutinize employee schedules, delivery routes, opening hours, (your idea here). Nothing is sacred! Nothing.

Customers: Categorize them from the most profitable As, to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs, and let the Ds learn the meaning of self-service. You might even have to fire a few.

Products: Same song, different verse: A-B-C-D. Stock the fast-turning As, keep some of the Bs handy, and only a couple of the Cs. But never let a D spend the night under your roof unless a customer has paid for it.

Add Value: Find out what customers want instead of trying to get them to take what you need to sell. If you don’t add value to your customers’ operations, like your unhelpful vendors, expect to be fired.

Employees: Let them help you find efficiencies and opportunities. Encourage creativity and entrepreneurial thinking. Invest in training. Share your plan and let them help you accomplish it. Empower producers and cut the dead wood.

Bankers: Don’t be a stranger. Good news or bad, an informed banker can help you. But an uninformed banker is a scared banker, and no one ever got any help from a scared banker!
Focus on these Old School fundamentals and success will come and play in the New School backyard.

Write this on a rock … Even if you’re too cool for Old School, you still have to focus on the fundamentals.

Organizational special sauce: an intangible force

“Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.”

You may know this line as the commercial jingle describing the Big Mac that McDonald’s created to compete with the Hardee’s Husky, which came with essentially the same condiments, including Hardee’s own special sauce.

Over the years, the term “special sauce” has been re-deployed beyond the burger wars, from condiment to handy metaphor. Management and organizational commentators, like me, have co-opted the term to identify a level of organizational performance beyond extra effort. Here’s how I’ve observed organizational special sauce in the marketplace.

Organizational special sauce isn’t a strategy or campaign, nor can it be achieved with a slogan or mission statement. No special sauce was ever the child of an algorithm, big data, or other amalgamation of ones and zeros. To the chagrin of Wall Street quants, organizational special sauce is an incalculable, unprojectable, and intangible force. It’s 100% performance leverage produced by a single active ingredient: human beings loving to work together toward something they all believe in.

This leverage kicks in like a turbo after quantifiable, tangible leverage reaches its RPM red line. Every business would like to have organizational special sauce but few ever do, because the elements that foster it are not easy to achieve, including, but not limited to:

  • Hiring the best people, who are then respected and valued.
  • Excellence as a non-negotiable performance standard assumed by all stakeholders.
  • Leaders demonstrate all the aspects that define the word: courage, integrity, morals, ethics, commitment, decisiveness, humanity.
  • People are not interchangeable parts, as if they were modules.
  • Corporate values flow to the organization’s last mile as a minimum expectation.
  • Delegation includes responsibility AND authority.
  • Corrective action first presumes shortfalls result from best efforts, and the first management step is redemption.

Here’s how organizational special sauce manifests:

  • Peerless products and services.
  • Industry-leading employee retention.
  • Prospective employees line up to join the organization.
  • Employees and partners are proud of and claim the organization’s excellent reputation.
  • Ethical actions and integrity manifest as devotion to the unenforceable.
  • Customers become the organization’s best salespeople.
  • Teams work harder than they ever did, while having more fun than they ever had.
  • And the classic marker: quantum leap performance.

You can’t demand, buy, or acquire the intangible leverage of special sauce, you can only foster an environment that gives rise to it. It’s an engagement sweet spot that produces results beyond expectations and projections – quantum leap performance.

Organizational special sauce is possible, but rare in public corporations, because it doesn’t conform to the analytical expectations of the Wall Street 90-day conference call. Our here on Main Street it’s more prevalent, where small business leaders know special sauce comes from the intangible resolve of their valued and respected employees.

Write this on a rock … Contributing to organizational special sauce is one of the hardest and most beautiful things you’ll ever do at work.




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