Tuesday, January 31, 2012

Recipe for Success: Make a Plan

Many small business models start with a great idea. Entrepreneurs typically get great ideas from one of two places. First, they have a light bulb go off in their heads one day, the classic “Ah Ha!” moment of inspiration. “Why didn’t I think of this before?” You know the moment; you’ve probably had them yourself. These kinds of moments gnaw at an entrepreneurs gut until they have to do something about it. It’s part of the crazy DNA of an entrepreneur. Second and most common, they work with a less than desirable situation for a long time wishing it could be better until one day they decide they will make it better themselves. You work away over the years in someone else’s company thinking “If this was my business, we’d do this differently.” Eventually, the pressure builds up inside until you have to start your own business or explode. For entrepreneurs, those seem like the only real options.

So you have a great idea, now what?

Start by making a plan. Put down on paper a description of your product or service and start defining your business model. In other words, identify your customers, your competitors, the size of your market, suppliers and partners, and your distribution methods. You’ll need to research the market in which you’ll operate to understand how business is typically done and what trends are driving the future. And it’s not that you can’t do things differently in your business. You can and should consider how to make doing business with your company easier than doing business with your competitors. However, if you’re going to reinvent the wheel, you need to understand how the market (i.e. your customers) will react to a different model. Just because your new way is better, doesn’t mean it will be accepted. People can get in a comfort zone and resist change. All these questions point to one activity that is critical for new businesses: research.

There’s just no way around doing your research. I write about doing research frequently. In the next post I’ll give a list of helpful research tools available for hopeful entrepreneurs.

For those who want to do it right, get my book Business Start-up 101: From Great Idea to Profit…Quick! It’s a how-to guide for entrepreneurs to take you from great idea, to getting yourself ready, proving your plan, and finally writing a business plan and getting funded. You can get it at my website www.BluePointStrategies.com or Amazon.

Friday, January 27, 2012

Start carrying the small stones

A Chinese Proverb says:

The man who removes a mountain begins by carrying away small stones.

Do you feel like doing your business planning and writing your business plan is like moving a mountain? Does the sheer size of the task cause you to shrink from the task? If so, you're not alone. I coach hopeful entrepreneurs in this situation frequently. They see the job as too big, so they just don't start. 

The answer is not to postpone the task yet again, but to start carrying away small stones. Start with a plan template. Of course, I recommend mine. You can get my new book, Business Plan Template, at Amazon or my website www.BusinessStartup101.com in either paperback or Kindle format. Use mine or get your own, but layout the project in terms of your template. For people who have trouble getting started, I recommend starting with the organization description section, because you'll know much of this information up-front without having to do any research. A large portion of this section can be completed quickly and you'll feel a sense of accomplishment and hopefully a new confidence that you really can create a business plan. 

Once the description part is completed, you have to start doing your research. There's no way around that, but at least you've made a dent in the mountain. For many, this getting started is all the push they really needed.

If you need help with your business plan, we can help. Contact me to see if we're right for you. 

Tuesday, January 24, 2012

Schrodinger’s Cat and the Entrepreneur

Austrian physicist Erwin Schrodinger proposed a thought experiment in 1935 to discuss the paradox of the Copenhagen interpretation of quantum mechanics. Any non-physicist fans of the TV sitcom The Big Bang Theory, is likely also familiar with the paradox known as Schrodinger’s Cat. Schrodinger’s theoretical experiment places a living cat in a steel box with a radioactive trigger and a vial of poison. If the radioactive substance decays, the trigger will break the vial of poison killing the cat. If the radioactive substance does not decay, the cat remains alive. The paradox comes in the not knowing. Since there is a 50-50 chance of the trigger decaying, without opening the box, one will not know if the cat is dead or alive. Since we don’t know, and in fact cannot know the state of the cat without opening the box, the cat is said to be both alive and dead. In quantum mechanics, this state is called a superposition.

On the TV show, Sheldon suggests that Leonard and Penny’s proposed date is like Schrodinger’s Cat. Only by looking in the box, or in their case actually going on the date, will they know how the date will turn out and what affect if will have on their friendship.

Living in a space town like Huntsville, Alabama, with all its rocket scientists (both Redneck and not), us mere mortals often feel like Penny; it’s all just a bunch of jibber jabber. I think that’s why I like the show so much. I know lots of real life Sheldon’s and Leonard’s. I’m trying to get them to think about target markets and business models and they can’t quit talking about delta Vs and burn rates. So what do Schrodinger and Sheldon have to do with small business?

After all the planning is done, and the models made, and analysis documented, someone has to open the box. That is, at some point you just have to launch the business and see if it lives or dies. You can poke and prod and analyze a business model to death, but that doesn’t get it started. Many hopeful entrepreneurs struggle with the decision of when is the right time to open the box. By not opening the box, your business can live and thrive gloriously in theoretical bliss. You can’t fail if you don’t open the box. On the other hand, you also can’t succeed. A paradox some would-be entrepreneurs find just too daunting.

In Schrodinger’s subatomic world of quantum mechanics, single particles have been observed in two different states at the same time. That is, his cat is both alive and dead. That fact poses some difficult questions in the observable world of dates with Penny and start-up businesses. The only way to know is to open the box.

Friday, January 20, 2012

Recipe for Success: Get Creative

Many small businesses are struggling to survive in this difficult economy. Restaurants have been particularly hard hit by rising raw material costs. Prices for staples like butter have increased significantly over the past year. And most small restaurants can't really buy in bulk due to lack of adequate storage space or food spoilage issues. So how do they survive without passing on higher menu prices, which many owners fear will drive away customers in a fragile market environment? They get creative.

Sourcing food products from local sources allows owners to buy just what they need. While the price may be slightly higher on a per unit basis, you only buy what you need. Buying from the large restaurant supply firms means you buy most products by the case, even if you can only use half that much. For example, a raw material is available from the national vendor at $2.00/lb. but must be bought in 8 pound cases. A local provider will sell any amount of the same raw material, but at a price of $2.25/lb. The unit price for the national seller is 12.5% less.  However, the restaurant can only use 5 pounds before the product goes bad. The total cost of the raw material from the national seller is $16.00, versus only $11.25 for the same usable quantity from the local provider, an almost 30% reduction in actual cost.

What ways have you found in your business to save money? If you have some interesting tips for other small businesses, please share them here. 

For a more complete discussion, view my white paper: Weathering the Economic Storm.

Tuesday, January 17, 2012

Business Cards for All

Do all of your employees have company business cards? If not, why?

Especially in a professional environment, your employees can be some of your best salespeople. They all have family and friends with whom they'll be thrilled to share their new cards. They all go places around the community and have lots of opportunities to share a business card. They all do networking, at least casually, and have opportunities to share their card with new friends and business acquaintances. A business card to you is just a business card; something you expect as part of your job. But to a staff or admin employee, a business card is a sign of respect and importance. They will hand theirs out as a sign that you value them as employees, especially if they are encouraged to do so. 

If you don't have a formal training program of sales and networking in your professional firm, you should. Professional firms, especially attorneys, don't have a formal sales force. But they do have an informal sales force; their employees. The problem is, most firms just don't prepare these employees to be ambassadors for the firm. More likely the bigger problem is these firms don't have a marketing plan, so they aren't prepared to take advantage of all the promotional tactics appropriate for their customer base.

If you have no idea what I'm talking about, then you probably fall into this category. If you need to learn about marketing plans, networking, or just want to learn how to promote your business to increase your sales, give me a call.

Friday, January 13, 2012

Reference Librarians: An Entrepreneurs Best Friend

Conducting research for a new venture or product line, developing a marketing plan, or a  general business expansion is so important to the ventures success. Yet so few people actually take the time to do it. Why is that?  Do they not know how? Do they not know where to look for information?

I tell hopeful entrepreneurs frequently to go to the public library or university library in the reference section and speak to a reference librarian. Many of these entrepreneurs look at me like I had two heads. A polite request for help will generally get you way more information and assistance than you bargained for. Reference librarians, by nature, are helping people. Most thrive on providing assistance to their patrons and members. 

I had another wonderful experience yesterday with a reference librarian at the main branch of the Huntsville/Madison County Public Library. I walked up to the reference desk and asked for some help finding resources to research a particular issue. Not only did the gentleman answer my question, but he also invited me around to sit at his computer to show me how to access two on-line databases that are available to library members. He showed me how to log on and gave me a quick tutorial on using the services. Try to get service like that from you local cable company!

Tuesday, January 10, 2012

Networking at Kindergarden

I saw this quote the other day in a book on connections by Jeffrey Gitomer, Little Black Book of Connections:
"Your mother taught you everything you need to know about connecting before you were 10 years old:
Make friends, play nice, tell the truth, take a bath, do your homework." ~Jeffrey Gitomer
I really liked this quote. And it's so true. The first rile of networking is make friends. Try to make a personal connection with people before trying to sell them. If you start selling right off the bat, people are going to turn you off and categorize you as either a pest or an amateur. In either case, they aren't going to be interested in having a professional relationship with you. 

Play nice is the equivalent of bring them value. Do something to help the other person realize value out of the relationship. By doing this, you make yourself valuable to the other person. Hopefully, they'll want to bring you value as well. 

Tell the truth, even if it hurts. How wants a relationship with someone who can't be relied upon to be truthful. The even if it hurts part means, even if you've done something stupid and have to fess up. It takes a strong person to admit that they've screwed up and take ownership and more importantly, find a way to fix the problem so it doesn't happen again. Learning from your mistakes is one of the most valuable parts of making them. 

Take a bath. Enough said!

Do your homework before you waste someone's time. If you invite someone to have coffee or a meal with you, make sure you do a little research beforehand. Not only does it show respect on your part, it also makes the meeting more productive. If you know a little about the other person, you can ask valuable questions and not waste their time nor yours.

It's just basic networking. 

Friday, January 6, 2012

PowerPoint, Not Just For Presentations Anymore

One of the fun parts of being a start-up coach and consultant is I get to review lots of business plans. As you would imagine, some are good and others not so much. There has been what I consider an alarming trend over the past few months though. Entrepreneurs are using PowerPoint to create a "business plan." 

Now clearly, you can't write a business plan in PP unless maybe it's for a lemonade stand. Most people are clueless how to use PP to support a presentation, much less use it for a business plan. Don't get me started on the insane presentations people make using PP. Who in their right mind would try to write a business plan using presentation software? I know, it's nuts, but so-called entrepreneurs are doing it every day. 

If you need help writing a real business plan or developing a real presentation, drop me a line. I'm happy to help with either, but we won't be mixing them together.


Wednesday, January 4, 2012

Rules for Success

Many years ago, a friend/mentor gave me a sheet of paper with his 5 rules for success. I've kept that paper over the years and was inspired to create my own rules for success several years ago. It has changed over the years in small ways. The words have been shifted, but the overall meaning has remained the same. Each year I get the document out, dust it off and make an attempt to mentally refocus on it. Here it is:

Chris’ Rules for Success

  1. Never gamble with things you can’t afford to lose.
  2. Decide what’s really most important to you and never lose sight of it.
  3. Define the end result. Make a plan, prioritize and take action.
  4. Focus on accomplishing your goals and moving your plan forward, not completing tasks.
  5. How you think is everything.  Always be positive, think success, beware of negative environments.
  6. Don’t do business with dishonest or unpleasant people.
  7. Surround yourself with the best people and professionals.
  8. Create value for others in every relationship.
  9. Never quit learning.
  10. Be honest and dependable, remember The Golden Rule.

What are your rules for success? If you don't have a list, maybe you should consider writing it down. I'm sure most of you have a mental list, but just haven't taken the time to write it down. Send me an email with your list. I'd love to know your thoughts.