Tag Archive for 'small business success'

Sustained small business success requires two kinds of passion

Over the years, as I’ve talked with many a budding entrepreneur about to start their business, it continues to amaze me how many haven’t conducted anywhere close to a prudent amount of research or due diligence on their baby. Indeed, they often act as if they must get their business going … right … now … or … they … will … just … POP!
This kind of impatience is dangerous.
Doing my best to talk them down off the ledge, I walk the fine line of tough love, between slowing them down to the speed of reason and smacking their entrepreneurial passion into a wall.
When would-be small business owners get that far away look in their eyes at this impetuous stage, they have plenty of passion for what the business does. They can’t wait to sell suits, manufacture plastic parts, bake bagels, or (your baby here). And passion for what they want to do is not only a good thing, it’s essential.
But without a healthy interest in - if not an attraction for - business fundamentals, passion has only slightly more value than a dream. In truth, if the balance between your baby and operating fundamentals gets out of whack, that’s when your dream becomes your nightmare. Trust me. I’ve had to make payments on one or two of my nightmares, after the thrill was gone.
This will be on the test: Success as a small business owner requires two kinds of passion:
  1. The love of what you want to do - your baby. If you haven’t been a mother, this is akin to how a mother loves her newborn, and it’s the easy kind. Spoiler alert!  It’s too easy.
  2. This kind of small business passion is less adorable, but in no way less important. This is passion for becoming an operating professional. It makes you dedicated to learning and practicing management fundamentals. If done right, you’ll actually acquire a peaceful acceptance of a return-on-investment timeline that pushes the deferred gratification envelope beyond what you ever thought possible, let alone acceptable.
See, I told you it was less adorable. The closest kin to this kind of passion is that which is required for parents to love their teenagers - during those times when you don’t like them very much, but you still love them … anyway.
It’s critical for a starry-eyed startup to distinguish between, and be dedicated to both passions, because passion for what you sell won’t be enough when:
  • Payables exceed receivables
  • You’re making payroll and there isn’t enough cash because you didn’t manage the cash (”Is it Friday already?!”)
  • When customers are the most difficult
  • When an employee becomes part of the problem
  • When your bank loan request must have current financial statements, including a 12-month cash flow projection showing how the bank will be repaid
  • Your operating derailment here
Brace yourself! This list is like a “What’s inside!” teaser on the cover of a very thick catalog of abiding small business operating challenges. Fending them off will require you to deliver on the management fundamentals you became good at because you had that second kind of passion: you became a high-performing, professional business owner, not just someone who dreamed of being one. You were passionate about what you do, and just as passionate about how you do it.
Write this on a rock … Sustained business success - year after year - requires passion for what you do, AND for how you do it.

Diaper Changing Stuff (DCS): Five critical questions for startups and veterans

Small business owners have to deal with two universes every day: the Marketplace, and what I call, the Diaper Changing Stuff (DCS).

The Marketplace is the fun place, where you buy and sell stuff. Playing in the backyard of this universe is why you became a business owner in the first place. And the good news is, most entrepreneurs are pretty good at the rules and expectations of this universe before they start their business.

The DCS represents mostly backroom, operating tasks (read: not much fun) that have to be done in order to present the business and its products to the Marketplace – accounting, cash management, banking, capital allocation, payroll, regulations – you get the picture. Just as no one has a baby because they like changing diapers, no one ever went into business because they’re passionate about inventory management or accounts payable. And yet, those tasks are as critical as the fun ones.

If you’re thinking of starting a business, don’t do it until you’ve compared my quick DCS checklist to your abilities. If you’re a business veteran, road test your DCS skills against this list to see where you might need improvement.

1. Cash and accounting

Do you know the difference between cash and accounting? Gain this understanding before you hock the house to start your business, because it’s the most imperative financial dynamic you’ll face every day. In fact, it’s the number one business issue that will wake you up at 2am. Remember, you can’t make payroll with a debit or a credit.

2. Capital allocation

Do you know how to properly allocate operating and non-operating capital? Don’t use operating cash to buy long-term assets, or borrow money to operate on. Create a capital source and allocation strategy before you crank up your corporation.

3. Banking

Do you know how to talk banker? If you need a loan, can you explain what you’re going to accomplish with the money, AND how you’re going to pay the bank back? If you make a loan request without this information, you’ll just burn a banking bridge. Bankers are easily frightened, and no one ever got a loan from a scared banker.

4. A/R Days – A/P Days

Do you understand the relationship between Accounts Receivable Days and Accounts Payable Days? If you extend credit to customers, you have to fund those accounts until they’re received, which is usually later than when you have to pay vendors. If you’re not tracking this relationship, you could literally succeed yourself out of business. And the first indication you’re in jeopardy will be a call from your banker telling you to make a deposit, or a vendor putting you on C.O.D. Sometimes these calls come in at the same time.

5. Quality Process

Do you know the difference between Quality Service (QS) and Quality Process (QP)? QS is always making the customer happy, no matter how many times it takes to get it right. QP means getting it right the first time. QS is an expense you have to pay for over and over. Having a QP is an investment in excellence that stops the bleeding and moves customers from complaining to placing new orders and referring you to their friends.

Bonus question: Can you operate the business you had the entrepreneurial vision to create? Not everyone can. Don’t start your business unless you’re ready to change the diapers on your baby.

Write this on a rock … Blasingame’s Fourth Law of Small Business: “Successful small business owners have the spirit of an entrepreneur and the heart of an operator.”

RESULTS: What is the greatest challenge to your business success?

The Question:

Which of these is the greatest challenge to your business’ success over the next 3-5 years?

23% - National and/or local economy
43% - National/state/local politics/policies, like taxes, regs, dysfunction
21% - Organizational deficiencies, like capital, talent, size, technology
5% - Big competitors and globalization
8%-  Internet competition

Jim’s Comments:

As you can see, when it comes to future challenges, only one-fifth of small business owners think their own internal issues might be holding them back. All the rest believe their greatest challenges lie outside their four walls

Two concerns representing two-thirds of our respondents, the economy and the government, are outside of the control of a small business, with the exception of their political involvement and their marketplace efforts. But the other three, including internal issues, are within the realm of a small business owner’s influence.

  • You can improve their own capital, systems and people;
  • You can realize the Big Boxes are more of a problem between your ears than on Main Street; and
  • You can accept the fact that the Internet isn’t going away and add that component to your traditional strategies.

I’m going to have more to say about this in an upcoming Feature Article. So stay tuned.


Believe in yourself first, success will follow

Photo by Melody Campbell via Flickr.com

Photo by Melody Campbell via Flickr.com

As we continue the holiday season and move into the New Year, I encourage you to contemplate your capacity to have faith, and how faith manifests in your life.  Not just religious faith, which is important to many of us, but faith in yourself and faith in others.

August Wilhelm Von Schlegel said, “In actual life, every great enterprise begins with and takes its first forward step in faith.”  How many things have you accomplished in your life where, regardless of your research and experience, the first forward step was taken in faith?

Awareness of faith can be very exciting. William Newton Clark wrote, “Faith is the daring of the soul to go farther than it can see.”

Exercising faith can be very powerful. Sherwood Eddy once observed, “Faith is reason grown courageous.”

Faith can transcend mere facts, and can actually be a lever for reason. Blaise Pascal believed that, “Faith is a sounder guide than reason.  Reason can go only so far, but faith has no limits.”

Have faith and take that first step. Have faith and dare to go farther.  Have faith and be courageous.  Have faith and leverage reason.

Have faith in yourself, and when you do, anything is possible.  Because, after all, you’re a small business owner.


RESULTS: Which of the following is the most pressing challenge your business has right now?

The Question:
Which of the following is the most pressing challenge your business has right now?

16% — Negative cash flow
0% – Getting a business loan
54% — Need more customers
5% — Impact of Obamacare
25% — Taxes and/or regulations

Jim’s Comments:

VIDEO: Acquire and create intangible assets for your small business IP Strategy

I recommend every business have an IP strategy, but how do you acquire those intangible assets for yours? You can think of both kinds of assets — tangible and intangible — as a new way to succeed and draw in customers. After all, it is the Age of the Customer.

Click on the link below or on the image to start playing the video.

Acquire and create intangible assets for your IP Strategy from Jim Blasingame on Vimeo.




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