Tuesday, February 28, 2012

Is your elevator pitch taking you to the wrong floor?

So, what do you do?

How many times do you get asked this question at a networking event, from potential service partners or in the grocery store?  It happens all the time, right? Do you have a good answer? 

The answer is known as your elevator pitch. The idea being, you enter the elevator and the person standing next to you asks what you do. You have the length of time it takes to ride to the lobby to tell your story in a way that make the person ask for more details. You have even less time than that to get them interested, or your encounter goes from potential to pleasantry. In reality, you have about 10 seconds to grab the other person’s attention and convince them that you can make their life better. The key rule is crafting an elevator pitch is it’s not about you.

Many people stumble around, looking for the right words to describe what they do. They think about their job title and lead with that. Next they add details to their title to make it sound more important or interesting. Next they add a special award that they won and .  .  .  What’s that you’re saying, I quit listening. Now I’m sorry I even asked you what you do and I’m trying to figure out if I can get out on the 1st floor so I won’t have to deal with you in the lobby.

 That is what you were asked, right? Well, technically. But that’s not how you should answer.  Telling people literally what you do violates the #1 rule of elevator pitches: It’s not about you.

Over the next few posts, we’ll talk about the five rules of elevator pitches and how you can craft a pitch that’s sure to get your riding partner to ask for more.

Do you have a great elevator pitch that you’d like to share? If so, list it in the comments.

Tuesday, February 21, 2012

Are you suppressing your Jeremy Lin’s?

The New York Knicks newly famous point guard Jeremy Lin is all over the news these days. He went from bench warmer to hero in practically a blink of an eye.

Lin went from being unknown with sparse playing time to averaging 24.4 points per game. He also has racked up 9.1 assists and 4.0 rebounds over the past seven games. So what’s up with this performance? How does a guy go from barely playing in a mop-up role to the hero of New York? And apparently, all the Nicks sports paraphernalia with his name and number are sold out for weeks.

Here’s a low level guy in the Knicks organization who got a chance to shine and has made the best of it. Whether he’s playing above his level for a short time period or he has permanently increased his effort and intensity are yet to be seen. The point is, Lin got an opportunity to play in an intense game situation and responded like an all star. It’s not that he was ever a terrible player. You don’t make an NBA team if you suck, especially on a team like the Knicks. Lin never got his chance to play due to the number of high profile players on the team.

Are there Jeremy Lin’s in your organization trying to shine? Do you have employees with creativity and high performance pent up because of because of your style or policies? Are you creating an environment in your organization that allows your employees to perform their best? It’s a difficult balancing act between creating procedures to standardize work and performance and letting everyone manage themselves. No business owner is comfortable near the chaos end of the spectrum. But if you operate completely on the control end, employees, especially professionals will feel that their talents are being wasted and efforts going unappreciated.

You see spectacularly high performing organizations that have put a team of people together and turned them loose to create magic. Companies like Google or the design house IDEO have great results in a loosely managed organization where professionals are treated as such. One of the differences is these organizations manage expected results, not activities. Frankly, part of it is organizational magic; the right combination of environment, people, work, tools, owners, and expectations. It’s difficult to create this magic, so owners have to work really hard to create an environment where employees can take pride in their work. And this applies whether you’re managing a group of rocket scientists or manufacturing widgets.

Do you have a tip for managing people to high performance results?

Friday, February 17, 2012

The Elusive Fortune

I talk frequently to hopeful entrepreneurs and groups about a concept I call the “5 Deadly Sins of Entrepreneurism.” Many times these “sins” get into an entrepreneurs mind and take over their thought process. At that point hopeful business owners go from thinking about how to make their business successful to thinking about being successful. Many times this is a premature state and causes the business to stall or fail.

Sin #2 is Fortune. I saw an Inc. magazine article recently that suggested some rather startling statistics about founder fortunes, at least in terms of founder pay in the technology sector where the survey was conducted. I suspect that these statistics are fairly common across the industry spectrum.

The survey measured how often the founder is the highest paid executive in the firm. Here are the findings:

Highest Paid           17%
Tied                       24%
Not Highest Paid     59%

To get really good people, who are typically employees not entrepreneurs, you have to pay them well. There may not be enough cash flow left over to pay yourself well. In fact, the survey found that in the 283 tech companies surveyed, that the founder was paid less than at least one of their subordinates in almost 60% of the companies. This situation has been experienced by several of my business acquaintances who started businesses and were in some cases the lowest paid employee during the start-up phase.

Now clearly this situation will change over time if the start-up is successful. But it’s a cautionary tale for entrepreneurs to think about their expectations for their start-up. You’ll likely not be super successful over night. Time commitments, cash flow difficulties, and the like take their toll on entrepreneurs who aren’t prepared for the lean start-up times.

This discussion is never meant to scare people off, but to prepare them for the reality of starting a business. If you and your family are prepared for what’s coming, you’ll stand a better chance of surviving and getting to the payoff time later.  

Tuesday, February 14, 2012

It's not what you say...

...it’s what the customer believes.  And nothing else really matters.

I’ve lost count of the hopeful entrepreneurs who get frustrated with me to the point of saying “You just don’t get it!” It almost makes me laugh just thinking back on these conversations. It would make me laugh if it wasn’t so tragic. These folks are operating in the It’s All About Me mode. They don’t understand that their customer just doesn’t care. Customers care only about themselves. How will your product make my life better? How does your service help me run my business more smoothly? How will doing business with you help me make more money?

In many ways it’s a feature vs. benefit type of discussion. Except is not about features. It’s about a business owner or hopeful business owner who thinks that what they want and what they think matters to the market. Many of these people just don’t get that what they think and what they want to happen is irrelevant. The market always does what it wants to do. Customers almost always behave in a way that benefits them. Your hype and internal beliefs relative to the market’s behavior just don’t matter.

You can tell me all day long that your company (that is YOU) believes that the sky is red, but when I see that it’s blue, I’m not going to buy from you. Most times this misguided belief comes from not doing any research or doing the wrong kind of research. Most times the answers are there if you just look hard enough.

I’ve been talking about research a lot lately. It’s just so important to really understand what the market wants and needs before you go throw your money after a bad dream. In fact, one of my goals as a business coach and consultant is to keep people from throwing their life’s savings away on a harebrained idea. Starting a business is really hard. It takes its toll on your personal life, your savings account, your physical and mental well-being. If you have a great idea at the right time and right place with the right business model, you just might make your fortune. If just one of those factors is off, you’re likely to end up in bankruptcy court.

I’m not saying don’t try to start a new business. I hope you will try. All I’m saying is to make sure you understand what the market wants first and don’t try to force your ideas on a market that wants something different.

Friday, February 10, 2012

What’s the pain?

It’s in my knee right around…no, not that kind of pain. What’s your customers’ pain?

One way you can get the upper hand on your competition is to really consider the way your customers do business. What are their issues? How do their buying processes match up with your selling processes? How do the quantities of product they need in an order match with the quantities that you sell in a unit?  Maybe you should ask.

These economic times require you and your team to be better than you were in the past. Most industries are slow or slower than four or five years ago. If you don’t have the kind of business you’d like, maybe you aren’t asking the right kinds of questions.

Have you considered having a conversation with your customers? I know, that’s pretty radical, but if might just work. Sit down with them in their office and ask what you can do to make doing business with your company easier. Is there anything about our ordering and delivery processes that cause you problems? Is there anything we can do better?

You may find that a simple and easy tweak to your process will provide a huge benefit to your customer. Maybe you pack 15 units to a case and your customer uses them in quantities of 8. Can you change your box size to accommodate one more unit so that your customer can get a better utility out of your ordering system? Perhaps it’s something in the way your paperwork doesn’t give them a piece of information that would make their life easier. The point is, you won’t know unless you ask.

We’re talking about making changes to your system to make life better for your customer. Maybe your willingness to consider a small change to your system is just the kind of loyalty that makes them a customer for life. Maybe your system tweak makes them love you enough so that your price is no longer a major factor in the buying decision. Maybe they would be willing to accept an x% higher price if you could make this simple change.

You will not be able to accommodate every whim and desire of your customers. But you never know what little thing about the way you do business that really irks them unless you ask. In these difficult economic times, your company has to be better than their other alternatives. Being assertive and positive in wanting to make the relationship better is a great way to make your customer relationships better.

Tuesday, February 7, 2012

Starting a business? Just fill in the blanks…

If you believe all the advertising hype on the internet about fill in the blank business plans, you’d think that’s really all there was to it. Fill in the blanks business plan, one-page business plan, connect the dots business plan, what’s next, the Crayola business plan? Let your child’s kindergarten class write your business plan with a box of 64 crayons!

Lest anyone misunderstand, let’s be clear: it’s not the business plan document, but the business planning that’s important. The problem is this; these types of documents are targeted at folks who don’t know what they are doing. And whatever preparation is suggested by people or groups perceived as “professionals” will set the maximum bar for preparation. So if you suggest that a startup can create a one-page or fill in the blanks business plan and sell them a template to do so, that’s all the research their writers are going to do. And just enough research to fill in a few blanks is just enough to get them into trouble.

I’m not talking about professional entrepreneurs working for existing or big-time startup companies. They aren’t the target audience for these business plan products in the first place. The target for these so-called business plan templates are inexperienced first-time entrepreneurs who don’t know what they’re doing. To suggest that they can put their business plan in a few blanks is just non-sense. This is a marketing scheme designed to make money on the gullible. Most of these people aren’t ready to be business owners. If they don’t do their research and just start a business, the likelihood of failure is even higher than it is in the first place. And with that rate running in excess of 75%, anyone suggesting that a newbie just fill in a few blanks is helping that person fail. It’s as simple as that.

Again, this isn’t about the business plan document. It’s about understanding your market and the trends that will affect how your market does business in the future. It’s about understanding your competition and how they do business. It’s about understanding your target customer and what they want. It’s about having some understanding of whether your model is even viable in the first place. And for many first-time entrepreneurs looking for the easiest way to get into business, they are going to do just enough research and planning as necessary to write a business plan and no more. Whose fault is that? It’s their fault. BUT, if you’re a professional consultant, incubator group, or author, and you suggest that these people can do it by filling in a few blanks, shame on you.  If you are a first-time entrepreneur, don’t fall for this hype. And if I may sort of paraphrase a famous quote by John Wayne: “Starting a business is hard, and it’s even harder if you’re stupid.”

Don’t be stupid. Do your homework. It’s your life’s savings we’re talking about. Don’t throw it away on a harebrained idea. Don’t throw it away because you didn’t bother to do a few hours’ worth of research. This idea and the associated products is just like everything else in this life that seems too good to be true. It’s not true!

 If you do your research, you can write a one paragraph business plan for all I care. Heck, you can skip writing the document all together, because that’s not what is important. The business plan document is just a way to communicate to others a summary of your plans and research. And seasoned business professionals and entrepreneurs understand all this. They will write a business plan document to support whatever their need; be it funding from investors or recruiting employees at a job fair. And responsible professionals will support this idea. There are plenty of groups helping entrepreneurs write a short and sweet business plan, in some cases a one pager, but it’s backed by research. In fact, it’s a one-page summary of your research and your business model. You know, that sounds an awful lot like an executive summary to me.  

Friday, February 3, 2012

Recipe for Success: Do Your Research

As we begin part two of a who-knows-how-many part series on creating success, we’ll be talking about research. This is one of those areas that many hopeful small business owners would rather skip. You’ve been working in your industry or around your industry or as one most likely unsuccessful restaurant entrepreneur told me once told me when I asked about her industry experience, “I eat at restaurants a lot!” Unless you’ve constantly reading and measuring and following the industry, you’ll need to do some research.

So where do you go to get your information about an industry?

I’m going to give you a list of resources; I don’t have the space in a blog post to tell you how to do it. You can probably figure out that part yourself anyway.

Census Bureauhttp://factfinder.census.gov/ You can also link to the American FactFinder database through my website.

Public Library: I wrote about research librarians in a recent post. Most of you didn’t read it because it sounded boring. Maybe it is, but it also a huge resource.

Virtual Library: Ask your public library about access to special database collections and resources available with a virtual library card.

University Library: The business and research sections of university and community college libraries have great research tools for entrepreneurs. Just ask for help if you don’t know where to start.

Chamber of Commerce: One of the main goals of a chamber of commerce is to support the creation of new businesses.

Trade Associations: Most industries have one or more trade associations to support the membership of the industry. You may have to join to get access to their information, but it’s generally worth it to get that kind of data access.

Small Business Administration: www.SBA.gov/ The SBA has lots of resources for small business owners.

Paid Sources:  There are plenty of paid sources for industry information available to small and big business owners. Big national companies who are in the information providing business are ready, willing and able to help you with your research needs…for a fee.

In addition to these commonly used research sources, there are market testing and focus group activities to tell you specific things about a market. While these activities pay huge dividends in terms of specific preferences, you’ll not typically use them in the beginning phase of research.

Do you have other resources that might be helpful for small business owners? If so, please leave a comment.

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.