Entrepreneurial Lessons

Many seasoned business owners lived through what is commonly known as “start-up screw-ups,” or common mistakes made in early business ownership. However, business owners of all maturity levels fall victim to several common business problems. The one common issue the IEC sees through business owners is a desire for easy solutions to business troubles. Unfortunately, easy solutions are often a dream. If owning and running a business were easy, more people would leap into ownership. In an effort to take charge of your business, Guy Kawasaki suggests the following five tips:

1.       Focus on cash flow. Cash is what keeps the doors open and pays the bills, so knowing how cash works along with your profitability is critical. You need to get your costs under control, understand how much it takes to break even and how much you need financially to keep the business alive.

2.       Make a little progress every day. Don’t believe in the big-bang theory of marketing: a fantastic launch that created such inertia that you flew to “infinity and beyond.” No more. Instead, focus on making a little bit of progress every day – whether that’s making your product slightly better, increasing your skill in one small way, or closing one more business deal. The reason the press writes about “overnight successes” is that they seldom happen -not because that’s how all businesses work.

3.       Try stuff. If you are relying on luck alone, you better re-evaluate that mindset. While luck is a big part of many successes, don’t get too upset when you see less qualified businesses succeed. Secondly, luck favors the people who try new things and take analyzed risks. Be patient, talk with customers and try different products or solutions.

4.       Ignore schmexperts. According to Guy Kawasaki, “Schmexperts are the bad combination of schmucks who are experts – or experts who are schmucks. When you first launch a product or service, they’ll tell you it isn’t necessary, can’t really work, or faces too much competition. If you succeed, then they’ll say they knew you would succeed.” If you believe in your products or services, try it.

5.       Never ask anyone to do something that you wouldn’t do. This goes for customers (“fill out these twenty-five fields of personal information to get an account for our website”) to employees (“fly coach to Mumbai, meet all day the day you arrive, and fly back that night”). If you follow this principle, you’ll almost always have a good customer service reputation and happy employees.

African American Business Owners

According to the US Census Bureau, there are 1 million Black owned businesses in the United States. Black businesses account for over $100 billion in annual sales, and African Americans have over $800 billion in expendable income each year. Minority business enterprises (MBEs) are a rapidly growing and increasingly important segment of the U.S. and global economy.

From 1997-2002, the total number of U.S. companies increased by 2 million. According to the Minority Business Development Agency (MBDA), over 50% of this increase was accounted for by minority-owned firms. MBDA notes that minority-owned businesses are diverse, and participate in a wide variety of industries like financial services, health care, construction, transportation, and other services.

However, despite the impressive growth in the number of U.S. minority firms, MBEs must increase their size, scale, and the economic viability of their firms if they are to compete effectively in the global economy. In this day of the global economy, minority businesses must be assertive and innovative competitors who will not fear or retreat from globalization.

In the MBDA report, “Minority Business Enterprises Mastering the Supply Chain: A Perspective,” research suggests that businesses who understand the supply chain concept will be more equipped to bring their businesses to the next economic level. The report, available at www.mbda.gov, demonstrates how minority businesses are able to grow their companies by coping with the challenges of local, national and international competition.

If minority businesses learn about and master the three levels of supply chain management, new opportunities await their businesses. Supply chain management is defined as the “planning and management of all activities involved in sourcing, procurement, conversion and logistics management activities. It also includes the coordination and collaboration with channel partners, which can be supplies, intermediaries, third-party service providers, and customers.”

The three levels of supply chain discipline according to the MBDA include:

• Managing the fundamentals of supply chain, which includes identifying the risks that exist within the supply chain. Once the risk is identified, the business owner may take steps to mitigate those risks.
• Selling the value of a shorter and more reliable supply chain. By reviewing the supply chain, the business owner can see where efficiencies are needed and where partnerships may be formed to decrease costs yet increase turn-around deliverables.
• Transcending today’s supply chain. By acquiring the skills to get ahead of today’s supply chain trends, moving toward higher value positions and markets and staying ahead of the competition, the business owner will see greater results.

The three levels of supply chain discipline lead to business owners to a path of continues study and learning. Staying abreast of the market and trends happening within the market and with technology will lead to business decisions that are relevant. Minority businesses have great opportunities with their businesses, and taking charge of the business is the first step to success.

E-Myth Revisited

Several business owners and entrepreneurs in the Fort Smith region have been reading the book The E-Myth Revisited. Watching several entrepreneurs transform their approach to their businesses has been priceless to the IEC. The great thing about Michael Gerber’s book is that almost any business owner can read through its wisdom and apply at least one idea to help their business.

One such idea is considering one’s business as a reflection of oneself. Gerber notes “If your thinking is sloppy, your business will be sloppy.” This idea drills down to every aspect of one’s business. If you don’t have a plan, then your business won’t have a direction. If you don’t research your market or talk with customers, your business will reflect limitations because of that. If you don’t keep up with your market or industry by continuously learning, your business will get left behind. If you are greedy, your employees will reflect your values of greed. If you are unorganized, no one else in your business is going to be more organized than you.

If you don’t understand what it takes to run a business, your business will reflect that. However, there is hope, and you can change. The key is the business owner needs to be willing to change and make needed improvements to the business. Whether it is cleaning an office and getting organized or documenting and instilling policies or procedures for the organization, business owners need to be willing to take a sober and unbiased look at their businesses. If your business has cash-flow problems, will a line of credit or bank loan fix the problem or is there something else that needs to be reviewed? While complaining about business problems is easy, one needs to stop pointing the finger at others and take responsibility for what you see in your own business.

FYI – if you are interested in excellent buisness information, visit http://www.e-myth.com/blog/. This is an excellent blog to help you with your business.

Scientific Advertising

Knowing advertising is a discipline of marketing just like sales, did you know that advertising and sales are the same? The difference between the two is the delivery method. However, many businesses approach advertising like they are playing Black Jack.

The art of advertising has been in use since Egyptians began using papyrus to share messages. Today, individuals are bombarded with thousands of advertising messages a day. The challenge in advertising is reaching the exact person who needs your product or service, interest them enough to absorb your message then you need to take action.

Given the countless ways of reaching consumers today, the more you know about your ideal customer, the easier it will be to devise plans to sharing your message with that person (note – get out from behind your desk). Whether you place an ad in the paper, send direct mail, put ads on the internet or blog your message, there are fundamentals to follow in advertising.

Claude C. Hopkins wrote “Scientific Advertising” in 1923, in which he shares advertising fundamentals that continue to hold true even with the advent of new media marketing outlets. Mr. Hopkins’ conclusions were based on experience and testing that he had done throughout his career. His conclusions were not based off trends or opinions, which makes his information necessary for any business.

You can download his free short book “Scientific Advertising” at http://www.backchannelmedia.com/documents/ScientificAdvertising-ClaudeHopkins-1923.pdf .