We have been recently reducing some of our excess inventory and office equipment online using Craigs List. It has been suprising how much of our necessary stuff finds value for other people. We could go through eBay and perhaps net a few extra bucks, but whatever the gain would likely be taken in Paypal and eBay fees, not to mention the hastle of shipping some of the items. Craig’s list has been great, cash for our old stuff, and they pick it up in person. Not a bad way to go. This also made me think it may be a good place to grab some office equipment in the future.
It is great to find sources of inspiration, and realize what works well for you. For me it is reading the biographies of other successful businessmen. And while your best selling businessmen are always great places to learn, it is sometimes better to look into the lives of other ordinary people who have been a part of a successful company, such as the various bios on Apple, Pixar or Disney. And invariably, they all started out in one field and ended up very successful in quite another. With Disney’s recent success in the iPod series, not quire a PC (but almost), Pixar which started with 3D Imaging computing for medical field, now producing 3D animated movies, and Disney which started with movies, and now is a media enterprise complete with 11 theme parks.
It can be an excellent source of encouragement to see them overcome their troubles, and press forward towards success. Take a moment and swing by your local bookstore and pickup a copy today.
During the beginning startup phase of a business, it is essential to manage startup costs. Many entrepreneurs want to go with the corporate image, complete with the business cards, and fansy business furniture. This is based on two important things: (1) the corporate image is important to may industries; (2) the owners pride.
The first point is very valid, there is a need to present a professional image to receive the confidence from prospective customers. The second point is important to note simply from a self-realization standpoint. You need to understand that some decisions are less about rationality, and more about personal feelings.
One area which has seen a significant boon is the virtual office space. This enables your small business to have a physical presence, even though you really don’t need to be in a real office space. This fits for business where you work out of your home, or perhaps out of your car. Take the mobile bookkeeper, or event mobile carpet cleaning service. How about an application developer or consultant who works from their home office. Yet, some of the benefits of a real office space come in handy, such as the professional receptionist to answer and forward your calls, available office or conference room space, package delivery and even hourly administrative assistants to help you.
These services are becoming more popular and their rates have remained very affordable. From around $99 to $300 you can have these services to provide your company an excellent, professional image – and also removes your home address from many business forms and paperwork.
I highly recommend you look into a virtual office space for your next startup.
One of the best ways to grab the attention of prospective clients is to paint them a mental picture of the end results. They don’t need to know the how, that is your job, they want to know what your product or services means to them. At the end of the day, what is the benefit to them. The process is something which can be discussed later. First off, can they see the end results benefitting their company.
You need to paint a mental picture — say that you’re a janitorial service, you could perhaps paint the picture that your company is distinctive in that due to your services, the restrooms will look and smell as comfortable as home. That is a mental picture that will stick with you. Perhaps the opposite picture will stick clearer in your head. The descsision maker doesn’t need to know about the five organic cleaning materials and rare earth minnerals you use to keep the place smelling just right — they want to know about the end results. There may be time for technical questions, such as “how do you accomplish that”, and you had better know the answer – but first sell them on what it will look like.
The biggest place you can go wrong in the legal world is to take action based on “the principle”. That reason alone is not sufficient, and will not really move you towards a successful resolution. A business partner of ours recently was “wronged” by an investment firm; there was a series of failures by several employees of the firm resulting in “potential” loss of tens-of-thousands of dollars. He wanted to take action, and he wasn’t particularly interested in a monetary resolution. He wanted to get them, effectively, “in trouble” — because of the “principle” of them matter.
The reality of the issue, if you’ve ever been on the other end of this situation, is what the person wants isn’t defined, nor is there any clear path to resolution. And until you can bring this person to a quantifiable expectation or demand, further action is almost useless. Certainly you want to provide excellent customer service and deescalate the situation. But after that, when it comes down to actually fixing the problem – you need to know what they expect to be done. Otherwise, to take action will only result in your chasing your own tail.
What most customers want is for whatever happened to never happen again. They want to be the whistle-blower and get the problem to end, to sacrificially prevent other people from being harmed. However, experience has shown two things: (1) You cannot prevent it from happening again; you can hold meetings, implement safeguards, but you cannot prevent it; (2) the actions of #1 will not make them feel better, they’ll still be unhappy — so the problem customer really hasn’t been satisfied. Which has taught me that they really aren’t just the sacrificial lamb they think they are. We all would love to be the hero, thought of sacrificing ourselves for other — but more often then not, it’s simply good sounding rhetoric.
So how to we resolve this situation. First we help walk them through discovering what would satisfy them – to react without knowing this will waist time. Help them narrow down to specific actionable items: you can provide a discount, refund money, perform services for free, have employee reviews or even employee disciplinary action. You also need to know what you cannot do: make sure this doesn’t happen again.
When parties cannot resolve a situation outside of the courtroom, the winning party has already been declared — the attorneys. With all respect to their professions, both parties ultimately end up loosing in court. Yes, one of them will walk out of a courtroom as the prevailing party, however even they loose. Their cost of time and money, distraction and emotional input cannot be recovered.
Beyond your own personal loss, there is also the possibility of public and customer prospective. Regardless of who wins, the fact that your company is involved in a case may cause your customers to become uneasy. If you’re bringing action against a client, it will cause your other clients to be weary, likewise if your going after a former employee. Alternately, if you are the target of an action, then they may hear more about the false claims or acquisitions, well before they hear the outcome of the litigation.
The best way to resolve all situations is outside of the courtroom. If that takes place informally, or perhaps through a formal mediation service. Finally, there is always the opportunity for a last ditch effort on the day of court.
Finally, be fully aware of what you are willing to accept – and what areas are open to compromise. Be realistic about your expectations. Obviously they already know your demands, so you will not likely have all of your needs met, so decide was you’d be willing to flex on.
One of my mentors early on in business tough me this very important question: “do you know, or do you think you know”. The answer to that is key in many areas of business. It is something that you need to constantly be asking of yourself. But today, I’ll brush back on my discussions about building a team of advisers. You need to surround yourself with people who know that they know what they’re doing. How often do we get caught in “not knowing what we didn’t know”. We cannot afford that of our advisers who we are paying (or should be paying) good money for. (On an side, you should be paying your advisers at least twice as much as you are charging our clients!)
Now the big quandary is that you are paying them to know what you don’t, so how do you determine that they know more about something that you don’t know about? Double-talk, sounds like it. So how can you really know this. I was watching a program on PBS the other day about wealth management, it just happened to be on. Some of what they guy had to say made a lot of sense, other parts didn’t. But what I took away was how he addressed this very problem – how do you know your adviser knows his stuff.
The answer is simple, ask plenty of open ended questions and judge how he responds. The content is less valuable then how… For example, what is the most recent law change, that they know of, which affects their role. For example, the case of us choosing an HR attorney (back in 2006), what law has recently changed that affects employer/employee relations. They should be able to name something specific, that they can explain in layman’s terms and note that it was recently (say the last 3 months or so). When I spoke with our attorney recently, I brought up that I noticed that the Court of Appeals of California ruled that employers are not required ensure employees take their breaks, but rather that they are only required to ensure that the break is available and cannot prevent or dissuade them from taking their breaks. This was a landfall ruling for employers. When I brought this up, my attorney mention, that yes, it was a big victory for employers, but it really doesn’t mean a whole lot until it is turned into law, which is what it is in the course of doing right now. You need to have people on your team that are more informed about the current issues than you are.
Another couple of questions to as are:
- How to you keep yourself up-to-date in your trade?
- What is the last conference/seminar you attended?
- When was your last certification/credential/etc?
- When was the last time you worked with a client with a similar situation as mine? (This would be a great one to ask your medical doctor next time!)
- What was the last time you turned away a client because their need did not match up with your ability?
Those are challenging questions to ask your advisers — or candidates. They are also challenging questions we need to honestly ask ourselves for our own business.
There is a lot of people who “practice” in their area of employment — do you really want to be “practiced” upon? There is no perfect advisor out there for you, but there are a lot of bad choices. A lot of people who “think” they know what they’re doing. We call those interns, or journeyman, or whatever. There is a place for them, and they may be a part of your team in some areas. But you also need your fair share of experienced people on your team, someone to pickup the slack. A good example may be this…Dancing…
In dancing, there is a leader and a follower — they are typically separated out by gender roles, but not always. My wife and I have very little experience dancing and can fumble through a lot of things, more on my end then hers. We trying a free private ballroom dancing session. It was amazing, when either of us danced with the pro, we did fine. But when we danced with each other it seems to go far worse. We did get through it, but they key was when we were with the pro, one of us knew what was going on. When neither of us had a clue, it fell apart. The same goes for your team. If at least one of you is a pro, they can acknowledge the deficiencies of a team member and help bring them up to speed. But when your team is full of amateurs, you can get into trouble quick. Yes you can fumble through it, but the mistakes may be costly.
Make sure you have more pro’s then amateurs on your team. If you are an amateur at business, then you need to hire a few pros. If you’re a pro, then perhaps an amateur or two may be an acceptable liability for you. But in the beginning, don’t skimp on experience!
A great post over at Young Entrepreneur discusses that fact that in most small businesses the owner is the key sales person at the company. And while most of us are more interested in the product that we’ve developed, or the service we provide – we are the de-facto sales person. And as the business grows it is very easy to become overwhelmed with the business end of the company and neglect sales. However a continued focus on sales in the key to sustainable growth — or even to stave off attrition.
Evan Carmichael, quoting Sales guru Jeffrey Gitomer, outlined 7 reasons why the principle is the best sales person. It is worth looking at. And yet we still try to expand out business by hiring a sales person to hand this duty off to. We have and have failed twice at it! The key to this is what Jeffrey calls his 7.5th point — even with a sales person, the principle still needs to champion and lead-by-example the sales portion of the business. In a entrepreneurship video I watched a few years ago, it showed an interview with the founder of Netscape, back when they were a viable company — and people actually purchased Internet browsing software. In there, the principle spoke about how he monitored and personally trained his first sales person. And that he took an interactive and proactive approach to training and leading his first sales person – a process he repeated until he had a very size-able sales team.
So, how have you handled selling your company lately?
I just completed reading I like big moats and I cannot lie over at Fool.comand was really impressed with the idea. This is a concept I have understood and practices without every putting a term to it. I have been a part of networking groups which discuss this concept, and barely scratch the surface. In this article Rich Greifner quotes Warren Buffet regarding a term Buffet himself coined: the economic moat.
In other words, what distinguishes you from your competition. What sets you apart? If you cannot describe why you’re business, product, idea, etc., is different from the next hot-shot product, idea, business, service – then you’re just another face. What makes businesses successful is that they can provide something significantly different. Not just another marketing hype of better, faster, cheaper – or perhaps smaller, intimate, personal attention. Those are nothing new. I have a great deal of friends who have their own bookkeeping business. They do a great job at distinguishing themselves apart from larger firms, yet they really have nothing compelling between other small 1 or 2 person firms. They play the, small, agile, personal, flexible card — typically of small start-ups. Yet they really bring nothing new to the table. If they have good references, resume and experience, then I would choose on price alone — and that is a very bad place to be. Small businesses cannot afford to be in the commodity business.
Back to Buffet, he says that when he is evaluating a business to invest in, the key is a large sustainable moat. They key is sustainable. Is what sets you appart something that will fade? Can it be trumpped by a competitor? What are you doing about it? I may be selling a high rise appartment complex and if my speil is that it is the highet, with 360 degree views around Silicon Valley. That is a nice selling point, however it is not sustainable. It will eventually be trumped by a larger building or something that obstructs the view.
As you evaluate your small business – there needs to be something unique about your business that sets you appart from both your competitors, and your peers — as well as a sustainable plan to ensure that remains the case. A drug company can release the next miracle drug and then be off-the-market when the generic form is released, or you can be the next Merck which is constantly investing more in R&D and has one of the largest portfolios of patents. That would show sustainability in innovations.
What is your sustainable moat?
Probably the largest signficance,for a very small business owner, between a Corporation and a sole-properitorship, is the liability protection afforded by the corporation. However, in order to keep this liability protection solid, the most important piece to maintain is proper paperwork. Without maintaining the proper corporate stucture, backed-up my minutes, annual meetingss, etc., Failure to do this may permit a entity to “pierce the corporate viel” and go after you personally. Attemtpting to play catch up with your required paperwork is not only illegal, but very diificult after the fact. It is first, and foremost important to setup a structure to ensure your compliance going forward – mark it on your calendar, use an Outlook reminder, whatever it takes to ensure that you are providing a minimum of Director and Shareholder meetings at least annually. Also be sure to keep your finances in line and major descisions should be placed in the minutes. Paperwork is the number one killer of the “corporate veil”… You can try to run the best business, by the book, however you will either invariabily not know something and screw up, or you’ll have someone else attempt to sue you over something frivelous, yet still that protection will be required. You cannot control other people, so you need to ensure you are taking the correct actions to protect yourself and the corporation from libaility at all times.
