Archive for the 'Entrepreneurship' Category

Are you looking for answers in the wrong places?

This is a story about three small business owners who had one thing in common: a wise man named Luther. Oh, by the way, Luther is their janitor.

On Mondays, Luther cleans the offices at National Supply Co., Inc. Sometimes he talks with the founder, Mr. Gilbert.

One Monday afternoon Mr. Gilbert said, “Luther, I don’t know how long I can survive.”

“What’s wrong, Mr. G?” Luther asked.

“It’s those big-box competitors,” Mr. Gilbert said. “I’ve looked under every rock for ways to lower our prices and increase advertising, but I just can’t compete with those guys.”

“Maybe you’re looking in the wrong place,” Luther offered.

“What do you mean?” Mr. Gilbert asked.

“Those big competitors will always be with us,” Luther reminded him. “Why don’t you emphasize the value of the human connection and customized service that only a small business like yours can deliver? Those two things alone are worth more than anything the Big Boxes offer.”

On Wednesdays, when Luther cleans the offices at Central Data Corp., he often visits with the owner, Sarah.

“Luther, I always assumed my kids would take over my business, but now it doesn’t look like that’s going to happen,” Sarah lamented one day.

“Why aren’t they interested in the business?” Luther asked.

“I’m stumped, she said. “I’ve shown them the opportunity and how profitable the business can be. What else can I do?”

“Maybe you’re asking them to look in the wrong place,” Luther suggested.

“What do you mean?” Sarah asked.

“Sarah, I’ve noticed how much you love what you do,” said Luther, “even when times were tougher and things weren’t so rosy. From what I’ve seen, being an entrepreneur is as much about nourishing the spirit as growing the bank account. Help them think about that.”

On Fridays, Luther cleans the offices at Westco Dynamics, Inc. Mr. West usually talks with Luther for a few minutes, but he seemed pensive today.

“Luther, my family was so poor that we struggled just to survive,” Mr. West said. “When I left home, I vowed to never be that unhappy again.”

“Mr. West, it sounds like you’ve got something stuck in your craw,” Luther observed.

“Aw, it’s nothing,” Mr. West fibbed. “It’s just that, with all my money and stuff, I still can’t stop looking for ways to make sure I’ll never be poor again.”

“Maybe you’re looking in the wrong place,” said Luther.

“What do you mean?” Mr. West asked.

Then Luther said, “You’ve been motivated by the fear of being poor instead of the joy of creating something from nothing. Try finding happiness in knowing that you provide valuable products and services for your customers, and jobs and income for your employees and their families. Remember, money and stuff only give you options, not happiness.”

Write this on a rock … When you’re looking for answers, make sure you look in the right places.

Four marketplace truths about your customers

Spend time in the marketplace and you’ll have many close encounters of the third kind with the most interesting species in all of nature: the human being. And as we have learned, the nature of humans isn’t much different from other animals: All need to breathe, eat, drink, procreate and survive.

But there is something that clearly sets humans apart from other fauna: sentience. And one of the manifestations of being self-aware is that beyond what humans need, they also want.

Every human who owns an automobile will need to buy new tires. But what they want is to keep the family safe while not spending a Saturday buying tires. So if you’re in the tire business, should you advertise tires, which are commodities that the Big Boxes can sell cheaper than your cost? Or should you develop and market a customer loyalty program that combines peace of mind for your family with pick-up and delivery? How about this tag line:

Let us worry about when you need new tires and get your Saturday back.

Basically the hairless weenies of the family animalia, human beings need shelter, but we want a home. So if you’re a realtor, should you focus on the obligatory list of residential features, or how the physical setting and interior space fit what you’ve learned is your customer’s sense of a home? Try this on:

Mrs. Johnson, countertops can be replaced. What I want to know is how much will you love seeing the sun rising over that ridge as you enjoy your first cup of coffee every morning?

Humans, like thousands of other warm-blooded species, need to eat every day, whether they get to or not. But unlike other animals, only humans want to dine. If you own a fine dining restaurant, do you emphasize the food, or the potential for a lasting memory? Check it out:

Long after you’ve forgotten how wonderful our food is, you’ll still remember that table for two in the corner or the booth next to the fireplace.

Small business success requires understanding these marketplace truths:

1. What customers need are commodities driven by price.

2. The price war is over, and small business lost.

3. What customers want is anywhere from a little bit more to everything.

4. Customers will pay more for what they want – charge them for delivering it.

As a small business success strategy, delivering what customers want or selling commodities they need, is as Mark Twain said, “like the difference between lightning and a lightning bug.”

Write this on a rock … Find out what humans want, deliver it, and charge for it.

What politicians, small business and mice have in common

Almost 20 years ago, Dr. Spencer Johnson wrote a legendary book titled, Who Moved My Cheese? It tells a story about four characters who ate only cheese.

Early in the story all four characters went to the same place in their world – a maze – to get cheese. The first two were not picky about their cheese or where they found it – it was just food. In fact, the current place in the maze where they found and ate cheese was literally just that. So when someone moved their cheese, they immediately started looking for the new place where cheese was being put.
For the second two characters in Johnson’s story, cheese represented more than food; they had allowed themselves to become defined by the specific cheese found in that specific place in the maze. To them, this cheese was more than nourishment, it also represented their esteem, success and happiness. You’ve heard of being hidebound. Well you might say these two were cheesebound (my term, not Johnson’s), which really wasn’t a problem until someone moved their cheese.

Twenty-five years ago, in his book (and film), Paradigms: The Business of Discovering the Future, futurist Joel Barker defined a paradigm as a set of rules that: 1) establishes/defines boundaries; and 2) tells you how to be successful within those boundaries. Barker says paradigms, both written and unwritten, can be useful until there’s a shift, which is what happened to the cheesebound characters in Johnson’s story. When someone moved their cheese, instead of looking for new cheese like their maze-mates, they whined and dithered so long in the old place – now devoid of cheese – that they put their survival in jeopardy.

Johnson’s cautionary tale – and the two sides of Barker’s paradigm coin – apply to all parts of life, especially politics and business.

For generations, the Democrat and Republican Parties each showed up at the same corner of their own political maze where they had always found the same cheese. Like the second characters in Johnson’s story, both parties had been nourished and defined by the cheese they found in that specific spot. But when someone moved their cheese, as the electorate is doing now, the cheesebound members whine and struggle to maintain their identity instead of taking action to find new cheese. In his book Johnson says, “Old beliefs do not lead you to new cheese.”

Meanwhile, Bernie Sanders and Donald Trump are like the first two characters in Johnson’s story. Neither define themselves by the old cheese in the old location. They went looking for and, to the surprise of their party leadership, found new cheese. Johnson says, “Movement in a new direction helps you find the new cheese.”

Small business owners should watch the clinic that the Democrats and Republicans are putting on this year on the wages of being cheesebound. Like the electorate, customers are moving cheese and shifting paradigms all over the marketplace. You cannot afford to become cheesebound.

Write this on a rock … Blasingame’s Law of Business Love: It’s okay to fall in love with what you do, but it’s not okay to fall in love with how you do it.

Do you value your soybeans more than your time?

Ever think about time as a commodity? Commodity: something in common use, readily available and virtually the same wherever you find it.

Time certainly fits that definition, doesn’t it? But so does a soybean.

Time may be the only commodity we haven’t synthesized. Until we do, it will continue to be unique among commodities and, consequently, our most valuable. And yet, as precious as time is, it’s an expensive irony that it’s the commodity we often waste the most, sometimes as if it were worth nothing. Meanwhile, we take extreme measures to protect every soybean.

So, what’s the solution? Organization – it’s the nexus between time and productivity.

We commit resources to acquire all kinds of stuff – information, materials, etc. – with the intention of accomplishing something, like a bid or a marketing project, which typically will need to happen within a predetermined period of time. But whether it happens as planned — including on-time —often depends more on how organized we are than our capability, or the information and resources we’ve acquired.

If someone stole your new $2000 computer, you would have them arrested. But how often has being unorganized cost you more than $2000 in an unsuccessful bid, loss of a contract or other opportunity? In the justice system of the marketplace, that’s the same as being arrested, indicted, tried, convicted and sentenced to some level of failure. So what does your organization “record” look like?

But let’s cut ourselves a little slack. It’s not easy for a small business to be organized when you have one person doing the work of three, or 25 doing the work of 40. Such ratios are one of the markers of a small business – doing more with less – especially these days. Consequently, a large project can be so intimidating that it creates the dread disease that’s worse than anything your soybeans could get: procrastination.

Professional organizers say cure procrastination with one critical practice: Break large projects into an assembly of smaller ones. Instead of thinking about a large project like it’s an elephant you have to eat all at once, split it into an assembly of smaller pieces and take them on one at a time.

How small is small? How about small enough to complete while you’re waiting on hold? Not with the IRS. Much shorter, like with a customer.

Break big projects into bite-size pieces to help you work smarter, not harder; increase your competitive advantage; and use that most precious commodity - time - more efficiently.

Write this on a rock … Value your time like you’d value a load of soybeans.

Are you asking the Outsourcing Power Question?

Biutou Doumbia lives in a tiny village in Mali, in western Africa. She and her family live in poverty, very close to the line between survival and, well, you know.

Oh, one more thing: Biutou is a small business owner. She makes and sells peanut butter.

In Mali, as reported in a Wall Street Journal article, peanut butter is made the same way African women have made other staples for millennia: by grinding the seeds on a rock with a wooden pestle. You might say Biutou’s operation is vertically integrated: She grows the peanuts, then manufactures, sells and distributes her product.

Over two centuries ago, in The Wealth of Nations, Adam Smith explained how markets are made by the division of labor. And free markets created capitalism, which Ayn Rand called, “the only system geared to the life of a rational being.”

Biutou doesn’t know Smith or Rand from a warthog – she’s illiterate. But she is one of Rand’s rational beings. And as such, she recognized the division-of-labor efficiencies offered by a diesel-powered grinder/blender when it became available. Now for 25¢ and a 10-minute wait, the sack of peanuts Biutou carries to the central grinding location turn into better peanut butter than she could make pounding all day with a pestle.

So Biutou now practices outsourcing, a division of labor process which is the employment of contractors to create efficiencies. Outsourcing is a valid business strategy, as is its opposite – you guessed it – insourcing, the process of removing vendor layers, usually to get closer to customers.

These two strategies are as different as chocolate and vanilla; but, like ice cream, choosing one doesn’t mean the other is wrong, just different. When Biutou practiced insourcing she didn’t have a choice. You have many choices; but are you choosing wisely?

One of the things every 21st century small business must do is focus on core competencies: what you do that makes your business valuable to customers. Everything else, theoretically, can be performed by a specialist in your non-core activity.

Take a look at your own operation to see if – like Biutou – you can find efficiencies and recover time through outsourcing. Ask yourself and your staff Blasingame’s Outsourcing Power Question: Must this task be done in-house? The answer will come from these three questions:

• How much control do we lose, and can we live with it?
• What impact will our decision have on customers?
• How much of not using outsourcing is about ego?

Remember, any decision to employ outsourcing – or not – should be driven by the desire to seek efficiencies and improve customer service.

Write this on a rock … Blasingame’s Outsourcing Power Question: Must this task be done in-house?

Small business owners have the right stuff

One of my favorite books is The Words Lincoln Lived By, by our good friend and Brain Trust member, Gene Griessman. That’s where I found this Lincoln quote about tenacity:

“I expect to maintain this contest until successful, or till I die, or am conquered, or my term expires, or Congress or the country forsakes me.”

Sound familiar? If you are a small business owner, I bet it sounds very familiar. It might even give you a little chill when you read those 140-year-old words. you know, hearing the essence of your being translated into the spoken word in a way in which you may never have actually spoken it out loud.

As an Army officer I was taught to be responsible for everything my unit did or failed to do. In small buisness, and you’ve heard me say this before, “You turn the lights on, you turn the lights off. Whatever it takes.”

Tenacity. I sure do like that word, and I admire tenacious people. Are you tenacious? The tenacious have the courage of their convictions. Courage, period. Passion. A strong spirit. Maybe even an indomitable spirit.

If you are a small business owner you know how far down inside of you that you have to reach to rise above all of the challenges, train wrecks and surprises that are thrown at you. Sometimes deeper than you knew you could. Testing your mettle. I don’t care what anybody says, astronauts are heroes, but they don’t own the franchise on “the right stuff.” Small business owners have it, too.

I am so proud of you.




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