As the recession continues to loom and as unemployment rises, we have seen an increased interest in executives wanting to start their own businesses. They want to transition from executive to entrepreneur.
You may be interested in becoming an entrepreneur because you lost your job, or because you have a great idea, or because you cannot find a job you are interested in.
Regardless of the reason, however, you will find there is more information available today concerning starting a business than the average human being can consume in a lifetime. Standard advice includes:
o Prepare a solid business plan
o Have cash for at least six months
o Work with a good accountant and attorney
o Understand your market
o Know your competition
o Have a marketable product or service
This is good advice indeed. But in our experience, business startup success or failure involves more than adhering to these maxims. Here are the things you need to pay attention to in order to avoid sabotaging your business success.
10 Mistakes That Will Hurt Your Chances of Becoming a Successful Entrepreneur
Entrepreneur Mistake #1: Letting fear immobilize you. We believe the number 1 issue that affects the success of a new business is fear of failure, fear of success, fear of criticism, fear of feeling unappreciated and fear of thinking no one will like your product, your service or you. Understand that fear can immobilize you. Learn to recognize it and deal with it.
Entrepreneur Mistake #2: Failure to develop real relationships. Nothing happens until a relationship is formed. No meeting, no sales opportunity, no business. Take the time to build a relationship, and then you are ready to sell.
Entrepreneur Mistake #3: Failure to respond quickly. The quicker you respond, the more responsive you appear. E-mails not returned in days, voice messages ignored, and proposals or sales agreements delayed show that you don’t care about your prospect’s business. Forget the absurd advice that a quick response makes you look eager or desperate for the business. It makes you look – responsive.
Entrepreneur Mistake #4: Becoming a pusher. Nobody likes a pusher. So when your buyer says “yes” – stop selling. And don’t up-sell, which is getting the buyer to buy more than they need. It’s great for short-term profits and terrible for a long-term relationship.
Entrepreneur Mistake #5: Quitting at no. Nobody likes rejection, but sometimes we see it when it’s not there. No is often an initial response to someone the buyer doesn’t know, not a conclusion. Or, it can come from a gatekeeper whose job it is to say no.
Entrepreneur Mistake #6: Getting stuck in perfection. There is no such thing as the perfect proposal, the perfect letter and the perfect response. Good is often good enough unless you are dealing with life and death situations, which most of us are not. The extra 20 percent you put into your product, service, response is neither recognized nor appreciated by the recipient. But the fact that it took you too long to respond is recognized and not in a good way.
Entrepreneur Mistake #7: Wearing your personal beliefs on your sleeve. No one cares about your opinions when you are in a sales situation. Your political, social, sports beliefs should stay with you.
Entrepreneur Mistake #8: Lack of focus. When you are not focused on your employees, clients and prospects it looks like you are not interested or that you are overwhelmed. When there is a lack of focus in your organization, it looks like a version of the fad of the month which quickly blows morale as staff struggles to juggle changing priorities and new initiatives.
Entrepreneur Mistake #9: No executive presence. Executive presence is not about just looking the part. Executive presence is about being the part. It’s about managing your image thoughtfully and not artificially. Like it or not, tired, overweight, out of shape and sloppy people who aren’t aware of current events and haven’t read a book since high school or college present a very different image than people who take care of themselves and are intellectually curious.
Entrepreneur Mistake #10: Not showing gratitude. Becoming a success in your business never happens by yourself. Along the way there are people who share their advice, help you through the tough times, perhaps give you an introduction. Don’t forget them when you become successful. Gratitude has a return.
These are very difficult economic times. Starting a new business can be exhilarating and very rewarding – personally and professionally. Yes you need a solid business plan, financing and a marketable product or service with a strong and compelling value proposition. But you need more. And, you need to start eliminating sabotaging behaviors that will kill your transition from executive to entrepreneur right now.
About the Author:
Management Consultants and Business Performance Improvement Specialists Tony Kubica and Sara Laforest have 50+ years of combined experience in helping budding entrepreneurs accelerate their business growth in record times. Now, they unveil the common, subtle and self-destructive actions that will hurt your business performance. Get their free special report: “Self-Sabotage in Business” now: http://www.kubicalaforestconsulting.com/resources.php
Month: December 2009
It happens at some point in the life of every business: cash has been coming in, things are going well, and then all of a sudden, things take a turn for the worse. Whether it’s a bad time of year for the business’ particular product, or a rough patch in the economy, weathering slow cash flow can be tough. But how the business comes out of the slump depends on how the business owner handles it.
Research by Jane Out of the Box, an authority on women entrepreneurs, has revealed there are five distinct types of women in business. Each of these five types has unique approach to running a business—and as a consequence, each of them has a unique combination of characteristics and factors. This article profiles three of the Jane “types” and the different ways they may handle cash flow issues.
Go Jane Go is a successful business owner with plenty of clients—but she’s struggling to keep up with demand. She may be a classic overachiever, taking on volunteer opportunities as well, because she’s eager to make an impact on the world and may really struggle saying “no”. Because she wants to “say yes” to so many people, she may even be in denial about how many hours she actually works during the course of a week. As a result, she may be running herself ragged or sometimes feel guilty about the list of goals not yet achieved.
Although Go Jane Go feels totally competent when it comes to running her business, a slowdown in cash flow can occur when Go Jane Go is not paying enough attention to money. She may be behind in sending bills because getting the work done seems more important. Or she may be reluctant to raise the money issue with clients who are late in paying, because she doesn’t want them to be embarrassed or to create conflict in the relationship.
Here are some things Go Jane Go should consider when faced with cash flow challenges:
* Clients want to pay. Your clients value and respect you and they want to pay you well for the work you’ve done. In fact, as a Go Jane Go, you may have even had clients offer to pay you MORE than you asked, because they can see how much you go above and beyond. Relationships are a two-way street, and your clients want to help you succeed. So, give them the outlet by billing them in a timely manner so they can uphold their half of the bargain.
* Falling behind on billing or reminders also can cause relationship problems. You not sending invoices in a timely manner or not following up on overdue payments may cause an internal problem for your customers, too. If they are corporate types, they may get in a tangle with their accounting departments if they submit bills from you too late. And, if they are smaller businesses or consumers, a forgotten invoice can cause cash flow problems on their end, as they scramble to find the money to pay you. Take good care of them by keeping your financial house in order and helping them do the same.
* You don’t have to do this alone. One of the easiest jobs to outsource is bookkeeping. And those experts are probably better at the task than you are. If your books are a mess, bite the bullet and admit it. And even if your books are in great shape – get help. You have a unique gift to share with the world and you maximize your ability to do so when you delegate other tasks. Best yet, your bookkeeper can follow up on late invoices too – just give him or her a system for how to do it so it is in keeping with your (probably gentle) values.
Merry Jane. This entrepreneur is usually building a part-time or “flexible time” business that gives her a creative outlet (whether she’s an ad agency consultant or she makes beautiful artwork) that she can manage within specific constraints around her schedule. She may have a day-job, or need to be fully present for family or other pursuits. She realizes she could make more money by working longer hours, but she’s happy with the tradeoff she has made because her business gives her tremendous freedom to work how and when she wants, around her other commitments.
Merry Jane usually has an income other than that her business provides, so business cash flow challenges may not be as difficult of an issue, per se. However, many Merry Janes do wish their businesses made more money. In order for that to happen, money has to become a focal point for Merry Jane, rather than simply waiting and watching how business growth evolves. Even as cash flow becomes a priority, however, it’s imperative for Merry Jane’s happiness that more money does not mean more work – her life balance is too important.
A few things Merry Jane should consider if she sees her cash flow slow down:
* A little attention could go a long way. Think about WHY cash flow is slow. Has there been a downturn in sales in the business? Have you invested in materials, equipment, or software that will help make money in the long run but are chewing up available cash in the short-term? Until you know whether the problem is slow revenue or high costs, you won’t know the strategy to fix it.
* If revenue is slow, leverage your connections, both on and offline. Finding new clients is often the toughest aspect of business for Merry Jane. Reach out to your existing customers with a plan that gives them more of what they want while also helping you grow your base. Think about the upcoming holidays – can you make an attractive offer that gets them to buy gifts from you? Or, maybe your business lends itself naturally to referral. If so, what “Thank You” gift can you give them when they find you another customer?
* If costs are high, it’s time to plan. Stop spending temporarily and map out how many sales you need to cover the costs of the equipment, materials, or software you bought and make it all worth it. Turn this into a game; play with the numbers. And as you calculate how many sales you need to make your costs pay off, keep in mind that you can also raise your rates! It’s fun to watch the number of sales go down as your price per sale goes up. Balance it all – the fair price for your product or service, the number of sales you need, and the amount of money you wish to have flowing in each month to arrive at a plan that works for your business and your lifestyle.
Accidental Jane is a successful, confident business owner who never actually set out to start a business, but may have ended up with one due to frustration with her job or a layoff and decided to use her business and personal contacts to strike out on her own. Or, she may have started making something that served her own unmet needs and found other customers with the same need, giving birth to a business. Although Accidental Jane may sometimes struggle with prioritizing what she needs to do next in her business, she enjoys what she does and is making good money. About 18% of all women business owners fit the Accidental Jane profile.
Although Accidental Jane didn’t necessarily set out to start a business, she now finds herself full-swing into entrepreneurship and everything that goes with it. So she may feel unprepared to face cash flow issues.
Because Accidental Jane is successful, and overall has just the amount of work she desires, cash flow issues are most likely to result from marketing peaks and valleys caused by Accidental Jane herself. A typical pattern for Accidental Jane is to network her way to a sufficient amount of work. Then, when she’s happily working, she’ll stop actively marketing her business, only to realize as the work draws to a close, that she needs to start marketing again.
Therefore, Accidental Jane’s key to avoiding cash flow issues is to find ways to keep her marketing efforts running at a continual, low level. This will iron out the peaks and valleys so the work flow is steadier. Accidental Jane can get creative with this, making it a game to develop creative marketing approaches in her business that require little time on her part. This might include developing an effective referral system, launching a weekly “tips” email to keep awareness of her business high, running periodic “specials” during the off-season, etc. Best of all, with simple, systematized campaigns, Accidental Jane can recruit part-time help to make sure the marketing is happening even while she’s enjoying the work she loves to do.
Every business owner can learn from Go Jane Go, Merry Jane and Accidental Jane when it comes to cash flow problems. A variety of techniques exist for dealing with slowing cash flow, and each one provides some help for entrepreneurs who want to keep their businesses in the black.
About the Author:
Michele DeKinder-Smith is the founder of Jane out of the Box, an online resource dedicated to the women entrepreneur community. Discover more incredibly useful information for running a small business by taking the FREE Jane Types Assessment at Jane out of the Box. Offering networking and marketing opportunities, key resources and mentorship from successful women in business, Jane Out of the Box is online at www.janeoutofthebox.com
When you look at your Facebook friends, or your LinkedIn network, or your Twitter follower list, do you see only people you know? Or, like me, do you have a mix of people you know well, some you don’t know that well (yet), and maybe even a few people who reached out to you, and you’ve never met or talked with them?
As easy as it ease to connect on the social networks (usually just a click and a quick message of Hello!), more and more people are wondering how open they should be with their social network acceptances. Some people are locking down, and only accepting people online that they know in real life. Others are accepting everyone who meets a certain standard of engagement or professionalism. And still others are accepting everyone who asks.
With the site-wide roll out of new privacy settings on Facebook, the questions of how open to be on your social networks is becoming more and more relevant.
While I certainly don’t have all the answers, let me give you a few areas to consider.
How open you should be on your social networks is based on what you’re using your social networks for.
For example, if you are using your Facebook account primarily to stay in touch with friends, family, and neighbors, you can set the most stringent privacy settings- the ones where only friends can see your details. This is also a smart move, perhaps, if you share a lot of details about your life, and want to retain some amount of control over how this information is distributed. Of course, remember that anything that goes online is never really private, or undiscoverable, so keep that in mind when you share.
If you are using Facebook or Twitter or LinkedIn to build your professional network, I would suggest being a little more open about who you accept. My rule of thumb, generally, is to accept most people who approach me, after I’ve checked out their profiles, and recent updates, and satisfied myself that I’m comfortable with being associated with them. I call this approach the “giving people the benefit of the doubt” stance- I will connect on the social networks unless or until you give me a reason not to do so.
The third way to approach your social networks is to accept everyone indiscriminately- just to boost your follower ratio, or just because you’re lazy. I definitely do not recommend this, for several reasons. First, it can damage your reputation or standing. Let’s say, for example, that you accept a bunch of people who are porn spammers on Twitter- wouldn’t that negatively impact your brand? (Of course, right, unless you’re a porn spammer yourself, in which case you’re probably not reading this anyway…). The second reason not to accept just everyone is because now that the content of Twitter and Facebook updates are now searchable, you don’t want any ill considered tweets or updates to show up in your stream or on your Wall and be associated with you. Not saying this is exactly how it will work, but better safe than sorry, especially with new technology, right?
If you do any directed promotion online, such as a teleseminar or webinar, be sure you are careful about how you manage your social network additions in the days and weeks after. I have had people who were in my classes or trainings approach me to connect, and you want to encourage this as much as possible in order to build your positioning online. If I were too stringent and denied everyone who wanted to connect with me that I didn’t yet know, I would have pissed some people off, and kind of cut off new potential business relationships before they really began. This is why, for business, I recommend the “give people the benefit of the doubt” approach as a general rule.
Part of the value of social networks is that you can engage with and connect with more people than you might otherwise be able to reach. The value of this is diminished if you are too stringent in your networking, or, conversely, too open with it.
Like the fairy tale of Goldilocks, the goal with social networking is to not be too stringent, nor too open, but instead, just right.
Dr. Rachna Jain is Chief Social Marketer at The Mindshare Corporation. Rachna works with speakers, consultants, authors, and small business owners to develop and execute effective social media marketing strategies. Her proprietary persuasive social media process (sm) focuses on building influence, credibility and visibility online. This translates into greater recognition, increased website traffic, faster lead generation, a shorter sales cycle, and more opportunity for her expert clientele. She blogs regularly at The Mindshare Blog
Most entrepreneurs have new ideas springing up like popcorn. Problem is, they don’t know how to systematically transform those ideas into income, leaving them overwhelmed, disillusioned or with a scattered brand that’s the same as no brand at all.
The solution is both simple and profitable: turn one idea into multiple streams of income. This concept is especially easy if you’re a creative type because of your natural ability to see many possibilities. You just need to know how to harness your creativity so it’s working for you, instead of against you.
The beauty of this strategy is it channels your creativity into a direction that has high payoff value, thus opening the door to creating the six and high-six figure business you want.
That’s what I just coached my private intensive client, Bria Simpson to do. The result is a business model and plan that will easily turn her frustrating five-figure business into high six figures in less than one year. All Bria needs to do is implement according to the detailed marketing calendar we mapped out. (Watch a video at the end of this article, of Bria and I sharing the business model we designed together for her.)
So, here are 3 easy tips on how you can turn one idea into multiple streams of income. Remember that this simple shift in your business model will make a huge shift in your income!
Tip #1 Use The “Rinse And Repeat” Strategy
Every time I teach a client how to turn one idea into multiple streams of income, they always protest, saying, “But Kendall, I can’t offer the same information more than once…can I?” The short answer is yes, you can. In fact, that’s where the power of this strategy comes from: offering the same information in a variety of formats. This is how you build a powerful brand, simplify your life and quickly create multiple streams of income.
So rather than burn yourself out trying to create tons of new content, focus instead on repeating your core information in different learning modalities, such as teleseminars, articles, workshops, private 1-day intensives, etc. The more intimately clients get to work with you, the more personalized and advanced you can customize your information.
Tip #2 Listen To Your Clients For Your Next Big Idea
When I created my best-selling home study course, it was an instant hit. Why? Because I listened to my clients, who kept asking me for help with “how to charge what they were worth.” Bingo! That became the title of a best-selling info product that became the foundation for my 7-figure business.
Moral of the story is, don’t waste time trying to get your clients to buy what you think they should have. Instead, listen to what they tell you they want, then create it for them.
Tip #3 Don’t Get Distracted With Multiple Ideas
Rather than creating different titles and topics to offer your clients, direct your creativity to designing different offers on the same topic. Afraid you’ll get bored? Trust me, you won’t. Once you see the money flowing in you’ll be thrilled you channeled your creativity in this exciting way.
Repeat After Me: “What Streamlines Your Business Increases Your Income”
Creating a six, high-six or even seven figure business isn’t more work. It’s doing the right things right. By following my “turn one idea into multiple streams of income” model, you too can transform your current business into one that simplifies your life while putting a lot more money in your purse!
About the Author:
Kendall SummerHawk, the Million Dollar Marketing Coach, is an expert at helping women entrepreneurs at all levels design a business they love and charge what they’re worth and get it. Kendall delivers simple ways entrepreneurs can design and price their services to quickly move away from ‘dollars-for-hours work’ and create more money, time, and freedom in their businesses. For free articles, free resources and to sign up for a free subscription to Kendall’s Money, Marketing and Soul weekly articles, visit www.kendallsummerhawk.com.
Article Contributed by Jim DeLapa
Among the very first decisions you, as a future business owner must make is whether to write your own business plan, or turn that over to someone else. By taking ownership of this first, most important step in building your business, you will gain far more than a crisp document to be read by others. You’ll develop a deep understanding of what it will take for your business to succeed. For this reason, it is essential that the business owner be the primary thought leader or sole author of the business plan. Outside help should be reserved for fine tuning, validation and in some cases to prepare financial projections.
Let it be YOUR plan.
As the founder and business owner you will be charting the course for the business. It will be important that the business plan be an extension of your personal vision for the company. For most entrepreneurs, the opportunity to call the shots and lead the way was an important part of why they wanted to get into business. Now is the time to start being a leader. Leaders develop their own plans and call the plays along the way. When it’s not your plan, you relegate yourself to performing as an operator. You will find yourself going back to the business plan someone else wrote to occasionally re-read the directions, or ignoring it altogether. Either way, the value of having a plan has been greatly diminished.
The Value is in the Process.
The act of writing a business plan is one of forced discipline, problem solving and reconciling the results. When approached and completed in this manner the end product and the process itself will increase your self-confidence and assuredness about where your business is headed.
Starting with a simple business plan template, and there are lots of them available, force yourself to think through all the critical aspects of the business. This will be an iterative process that you repeat, fine tune and re-write. As you develop each section of your business plan, your thoughts about the other sections will evolve—even those that you’ve already written. You go back, edit and in the end, you make it all work together. That’s the idea. You are developing an understanding of the relationships between every aspect of your business.
To underscore the importance of writing your own business plan, take this little exercise. Read the paragraph below as fast as you possibly can. Then stop, take a breath and move on to the next one.
Who will my customers be? What problem will I solve for them? How much are they willing to pay to have this problem solved? What are my costs associated with each sale? Why will customers choose to buy from my business? How will I find customers? Who will sell, produce, and deliver? Which markets will I go after first? Why? How much will it cost to operate the business each month? What will my breakeven point be? How fast can I get there? How much startup capital will I need? How will I succeed?
Okay, slow down now and consider this: The most important question isn’t listed. The most important question is, “How are these factors interrelated?”
Imagine that today someone handed you the answers to all of the questions from our fast-read drill above. It would certainly save you a lot of time. Better still, these wouldn’t be just any answers, but they would be the right answers from a solid business plan for a business that had already been proven to be successful, a business just like the one you’re planning to start. You could read and re-read the answers many times over, practically memorizing them. You would know that they were the right answers. Yet, doing so will not help you develop an understanding of how the answers are interconnected.
If you change the way you plan to find customers, how will that impact your monthly operating costs? If customers are only willing to pay 80% of your planned price, what will that do to your breakeven point? How will the answers to these two questions impact how much capital you need to start the business? This example looks at just two questions. Realistically, the answer to each question is highly dependent on the answers to several of the other questions. In the end they must all work together and you must understand how they all work together.
If you develop your own business plan, section by section, thinking through all of the answers to the critical questions, you will also develop an intuitive sense of how they work together. It will require a lot of thinking and rethinking of your ideas and it will take time. It’s not a fast drill. In the end, it will be the difference between ‘memorizing the lines’ and actually ‘being the character.’ Small business ownership is not the place to be reciting someone else’s lines. You are the character. Write your own lines. Be the leader.
When to Bend the Guidelines
There are some times to reach outside for help. For example, perhaps you would say, “I’m not a numbers person; I don’t think I can do the financial projections.”
First, plan to become more of a numbers person because business ownership is about numbers. Sales, expenses and profits are the three that are most important. Even so, many business operators who have a good feel for the numbers need assistance with spreadsheets and financial statements. It is okay to get outside help preparing your financials, just be sure that you understand them when they are complete. If you are going to pay someone to prepare them, be sure that they also save time to go over them with you from top to bottom. Ultimately they are your numbers.
Others might say, “I have great ideas, but I’m not a great writer.” It’s understood that there can be a lot riding on someone else reading the final product of your business plan—such as a loan or an investment decision. For that reason, if you are not a strong writer you should start by going through the process of organizing, writing and rewriting your own business plan as best you can. Force yourself to go through all of the steps of writing, rethinking and rewriting as your ideas evolve. Then, have someone else take your finished draft and craft the final polished document. What is important is that the final document must accurately reflect your concepts, ideas and thought process, not the editors.
What if I Just Can’t Do It?
Finally, some would say, “I want to start my own business. I am a strong operator, but honestly, I don’t think I could write a business plan myself. What do you suggest?” Simple: Buy a franchise! They are perfect for people who are strong operators where someone else provides the strategic plan, the systems and some guidance. This might be the best ownership model for you. That’s a topic for another day.
About the Author
Jim DeLapa is the founder of GreatBusinessPlans.com, a leading provider of small business plan assistance for current and future small business owners. DeLapa has launched and invested in numerous successful startups and played an active role in nurturing two of those from inception through being acquired by publicly traded firms.