Tag Archive for 'Entrepreneurship'

5 year-end steps to take while you’re closing out this year

Fourteen hundred and forty - the number of minutes in a day.

Since we can make more money, arguably the greatest challenge of any small business owner is balancing the demands of the forces that compete for those minutes.

“What is the best use of my time right now?” is the constant management question on Main Street. And in no other part of the year are we more time-management challenged than in December, when we’re faced with allocating time to two very powerful management imperatives: The tactical focus on closing out the sales year as strongly as possible, while simultaneously taking strategic steps to set the business up for a fast and clean start on January 1.

In his book, Blue Highways, William “Least Heat Moon” Trogden said his Osage Indian grandfather once told him, “Some things don’t have to be remembered, they remember themselves.” It’s a natural law that the year-end sales push doesn’t have to be remembered, it remembers itself. But as we come to the two-minute drill in the last quarter of the marketplace game our business plays all year, committing precious time and energy to preparing for the future requires the discipline to remember it ourselves.

There are many areas to focus on this month to help you start the New Year clean and fast.  Here are five to get you started.

1. Throw stuff away

Even if you’re not a pack rat like me, you’ve accumulated stuff you don’t use anymore.  For example, one of the markers of a 21st century office is the digital graveyard. Unused or broken computers, monitors, etc., may have some value, so call a tech recycler and convert it into cash. If you can’t sell it, give it away or throw it away, because it’s in your way.

2. Empower producers - cut the dead wood

Year-end is also a great time to take stock of employees who’ve demonstrated leadership and engagement. Recognizing the performance of those individuals will motivate them to a fast start in the New Year.

The only thing worse than firing someone is letting an unproductive employee hold your team’s performance hostage for another year. A byproduct of identifying those who perform is it also shines a light on those who don’t. You owe productive people the most effective organization possible, which means you have to let the unproductive pursue their careers elsewhere.

3. Classify customers

Classify customers by gross profit into four groups, from the most profitable As to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs and teach the Ds about self-service. When the cost of a customer’s expectations encroaches on your profit margin too much, allow them to join your unproductive employees - elsewhere.

4. Purge inventory

As with customers, take a new look at your products and inventory by identifying the most profitable As to the least profitable Ds. Stock all the As, a few of the Bs and maybe a couple of Cs. But never let a D spend one night under your roof unless it’s paid for. Remember, profitable inventory management means just-in-time, not just-in-case. And write off obsolete and damaged inventory. Take the hit now.

5. A/R reality

Take another hit by writing off uncollectable accounts receivables now, so you can start January with a clean list. A/R write-offs are tax deductions this year, and if you wind up collecting them next year, it’s gravy. The only thing more troubling to a banker than uncollected A/R is a customer who doesn’t have the discipline to deliver a clean balance sheet.

Each New Year deserves to have the maximum opportunity to be successful, so don’t saddle it with obsolescence, waste and bad decisions. By taking these steps - and others from your own list - you’ll prove to yourself, your team you’re your banker that you have the discipline to make the critical decisions for which successful managers are known.

Write this on a rock … Have the discipline to set up your New Year for a clean and fast start.

Be thankful

Americans punctuate each year with the Thanksgiving holiday as a way of perpetuating a 390-year-old tradition begun by a rag-tag group of our forebears. That first time, in 1621, thanksgiving day wasn’t the proper noun it became. It was just a day set aside by a few dozen humans who risked everything, actually lost most of it, were hard-by to any number of dangers that could cost them the rest, but still felt compelled to be thankful for what they had.

Regardless of where you live on planet Earth, let me leave you with a list of things to think about. This is not my list. When we’ve published it before in this space with attribution to Anonymous, some of my readers have attributed it to Mother (Saint) Theresa, which suits me just fine. I’m thankful I found it and have the ability to pass it along.

Be thankful for the clothes that fit a little too snug, because it means you have enough to eat.

Be thankful for the mess you clean up after a party, because it means you have been surrounded by friends.

Be thankful for the taxes you pay, because it means you’re employed.

Be thankful that your lawn needs mowing and your windows need fixing, because it means you have a home.

Be thankful for your heating bill, because it means you are warm.

Be thankful for the laundry, because it means you have clothes to wear.

Be thankful for the space you find at the far end of the parking lot, because it means you can walk.

Be thankful for the lady who sings off key behind you in church, because it means you can hear.

Be thankful for the alarm that goes off in the early morning, because it means you are alive.

And finally, here is mine: I’m thankful for small business owners — the most courageous and most important modern-day pilgrims I know.

The wonderful world of small business niches

One of the things Sears Roebuck is famous for is their Craftsmen tools, especially their mechanical socket wrenches. Once, while buying one of these, I was confronted with the options of “Good,” “Better,” and “Best,” a strategy for which Sears is also famous. Asking about the difference, I was told that the Best model had more notches, or teeth, inside the mechanism, allowing for finer adjustments when tightening a bolt or nut.

For the past 30 years, the marketplace has increasingly become like that “Best” socket wrench: every year, it acquires more notches, except in the marketplace, notches are called niches (I prefer “nitch,” but some say “neesh” – tomato, tomahto). And just as more notches in a mechanical wrench allow for finer adjustments, niches create finer and more elegant ways to serve customers, which they like – a lot.

Webster (and Wikipedia) defines a niche as, “a place or position perfectly suited for the person or thing in it.” If ever a concept was perfectly suited for something, it is the niche and small business. Indeed, as one small business owner creates a new niche, another is creating a niche within a niche. It’s a beautiful thing.

Rebecca Boenigk is the president of Neutral Posture, Inc., a Texas company she and her mother founded in 1989. This small business manufactures REALLY comfortable and ergonomically correct office chairs. As a guest on my radio program, she told me they attribute their success to filling a niche: Their chairs aren’t for everyone, just those who are willing to pay a little more for a chair that promotes the best posture at work. Many small business fortunes have been made with the Neutral Posture model of being the best-in-niche, rather than trying to conquer the world.

The mother of niches is what Adam Smith called “the division of labor,” which today often manifests as outsourcing. Outsourcing is when individuals and businesses spend more time focusing on their core competencies and contract for the other stuff. For example, there are more professional lawn businesses today because folks are increasingly realizing they can earn more by sticking to their professional knitting, than it costs to hire their grass cut.

And across the marketplace, it’s become an article of faith that the best way to stay on track is by outsourcing non-core tasks to a contractor – often operating in a niche – whose core competency is that task. I’ve long said that the best thing that ever happened to small business – after the personal computer – is outsourcing, because it manufactures niches, which are pretty much the domain of small business.

As niches have increased in number, so have entrepreneurial opportunities, resulting in the most dramatic expansion of the small business sector in history. It’s difficult to say which one is the egg and which is the chicken: Have entrepreneurs taken advantage of niche opportunities presented to them, or have they carved out niches while pushing the envelope of an industry? The answer is not either/or, it’s both/and.

In the future, there won’t be more mass marketing, mass media or mass distribution, but there will be more niches – lots of new niches. Even niches of niches. And that’s good news, because more niches means a healthier small business sector, which I happen to believe is good for the world.

Write this on a rock … Most small businesses will find more success by creating and serving niches.

Identifying the elusive entrepreneur

If you venture into the marketplace jungle, you may be able to observe that rare wild creature, the entrepreneur, in his or her natural environment (darting is not necessary, entrepreneurs are very gentle - just rub their stomachs). As you study them, you will find levels of vision, curiosity, courage, tenacity, and faith. Here’s what to look for in order to identify this elusive critter:

Vision: Entrepreneurs see things and consider the possibilities before they exist, even as the world is telling them, “It won’t work.” When entrepreneurs are deep into their vision they go into what their families call a “zone,” which is when it’s easiest to slip up on them.

Curiosity: Entrepreneurs ask questions other humans don’t. They can’t help it. If someone asks you a question and you have no idea what they are talking about, you are probably having a close encounter with an entrepreneur. Don’t be irreverent; you might be at ground-zero of the 21st century equivalent of Velcro or the microchip.

Courage: Entrepreneurs attempt things that other human species won’t. As you peer through the triple canopy at your subject, look for death-defying acts in the face of conventional wisdom. Entrepreneurs eat conventional wisdom for breakfast.

Tenacity: Entrepreneurs keep trying when other humans give up. They have a high pain threshold, which when combined with a visceral desire that can only be compared to the maternal instinct, delivers a primal display of tenacity which often is frightening to other humans. If the entrepreneur you are observing is crouching, lie down quickly. You probably aren’t in danger, but fainting is a possibility.

Faith: Entrepreneurs believe in themselves and their vision. The great writer and even greater curmudgeon, H.L. Mencken, once said, “Faith may be defined briefly as an illogical belief in the occurrence of the illogical.” That’s our entrepreneur! If you see someone demonstrating an inordinate commitment to an “illogical belief,” congratulations. You’ve found your entrepreneur.

Catch and release, please.

Small business owners – still crazy after all these years

“Still crazy after all these years” is the title of a contemplative, 1975 song by the legendary singer-songwriter and multiple Halls of Fame member, Paul Simon. Listening to it on the radio the other day for the zillionth time, the song’s title/refrain made me to think about what makes small business owners different.

They’re different in the way they look at the world. How they think about challenges, imagine outcomes, appraise risk, project potential, and measure all of that against their resources and themselves is different from everyone else. And when they decide to go, like the poker player pushing all his chips to the middle of the table, small business owners are all in. Against all odds. No one else in the marketplace does that.

Still crazy after all these years.

Mountains of evidence should dissuade them from starting a business. The SBA reports over half of all small businesses fail in the first four years, and that’s a 20% increase in mortality over the past 20 years. Every new technology that lowers the barrier to entry for a small business simultaneously disrupts a traditional business model while producing a hundred new competitors. And yet thousands of new ventures are created every year.

Still crazy after all these years.

Many voices ask good questions: “No one’s ever done that before – what makes you think you can?” “How’re you going to create something from nothing?” “How can you compete with the Big Boxes?” “How did you talk the bank into a loan?” To which small business owners have one simple, but classic response: “I didn’t know I wasn’t supposed to.”

Still crazy after all these years.

Small business owners are constantly compared to other, more popularly trodden professional paths that could have been taken. “Why don’t you get a real job?” “Your brother’s job has retirement and healthcare.” “If you worked for a corporation you’d get bonuses and overtime.” “If you worked for the government you’d get paid leave, sick days and job security.” But to someone who took the entrepreneurial path less traveled, those “others” sound like receiving a sentence.

Still crazy after all these years.

In the face of all this, with no fanfare and little recognition, small business owners create over half of the U.S.’s $18 billion economy, 55% of innovations, are 93% of exporters, and sign the front of paychecks for over 70 million Americans, while simultaneously anchoring every Main Street in America.

What’s crazy to others sounds about right to a small business owner. Thank God.

Write this on a rock … Still crazy after all these years. You’re welcome.

Making fear a motivator, not an immobilizer

Anyone who has contemplated forsaking the perceived, if not real, security of employment to start a small business has come face-to-face with the fear of failure.

Indeed, countless would-be entrepreneurs have discontinued their self-employment pursuits for fear of losing too much—the risk being just too great.

But if you pushed through these concerns and actually became a business owner, you know that this isn’t the last time you’ll experience fear. And time will teach you that fear can actually be a good thing.

Not paralyzing fear — like when you’re ignorant of how to prevent or recover from danger. But rather the kind of fear that motivates you to take the steps to be aware, knowledgeable, capable, prepared, decisive and effective. You know – so you can seek excellence.

Remember these two things about fear: It’s a shape-shifter capable of appearing in many forms. And successful entrepreneurs learn how to recognize and deal with fear it in all of its shapes. Let’s take a look at some of the manifestations of fear, followed by what each one might sound like.

First on the list is the mother of all fear — unremitting, cold sweat, cotton mouth fear in its default entrepreneurial shape: “What if I can’t cut it as an owner?” Meet the others:

Terror: “What if I’m buying the wrong business?”

Fright: “What if I order all of this stuff and no one buys it?”

Panic: “What if my pricing for this bid is too high—or worse—too low?”

Dread: “I hate it when I have to fire an employee.”

Trepidation:  “I need a business loan; what if the bank turns me down?”

Anxiety: “How will I ever be able to compete with the Big Box competitors?”

Shock: “What do you mean our best customer signed a contract with a competitor?”

The best way to minimize—if not eliminate—these fears is through performance. But performance only happens when you use the fear-fighting tools: awareness, knowledge, experience, training, planning, preparedness, decisiveness and execution.

Armed with the fear-fighting tools, fear can become manageable and a productive stimulus that can actually create opportunity. But if you don’t use these tools, the fear you feel is probably well founded and giving you good advice.

The only way to make sure your fear is a motivator and not an immobilizer is through performance. And small business performance only happens when you’re armed with the fear-fighting tools.

Write this on a rock —

Fear-fighting tools help you replace fear with its archenemies: confidence and excellence.

Jim Blasingame is author of the award-winning book, The Age of the Customer: Prepare for the Moment of Relevance.




Warning: fsockopen() [function.fsockopen]: php_network_getaddresses: getaddrinfo failed: Temporary failure in name resolution in /var/www/wordpress/wp-includes/class-snoopy.php on line 1142

Warning: fsockopen() [function.fsockopen]: unable to connect to twitter.com:80 (Unknown error) in /var/www/wordpress/wp-includes/class-snoopy.php on line 1142