Personal Wealth Management » Entrepreneurship

Be a Kick-Butt Entrepreneur

Jordan Wilson — Fri, 20 Jan 2012 16:41:40 +0000

Many readers aspire to become successful entrepreneurs.

Most never take the chance.

“I do not have a great business idea.” “I am not a high-tech person like Steve Jobs and those are the only areas for young entrepreneurs.” “I do not have the money to launch a new venture.”"I have too much on my plate to find time to start a new business.”"I have no experience running a small business.”

There are tons of reasons why would-be entrepreneurs never actually become small business owners. So it is always good to read examples of how people in the same shoes as you (or worse off), managed to succeed.

Inspirational Entrepreneurs

CNNMoney.com provides some good role models in Be a Kick-Butt Entrepreneur. If you need inspiration to start a small business, these people should provide a boost.

Note that the small business cited do not require degrees in rocket science or more investment capital than possessed by Bill Gates.

The keys to success are ….

Well, how about we let the entrepreneurs tell us themselves.

Keys to Entrepreneurial Success

Halfaker & Associate

Army Captain Dawn Halfaker lost an arm while serving in Iraq. She “worked her butt off” to build a consulting firm for defence contractors. Today it has more than 100 employees.

“Have a vision. Follow your passion. The money will come,” she said.

Elohim Cleaning Contractors

Single mother Sirena Elohim gave birth to twins while still in high school. Starting with $200 in seed money and working from home she began a cleaning service for construction sites. Today the business has 60 employees and sales of $2 million.

“Have a dream, but write it down. Then find a mentor* to help you make your plan a reality.”

*Note to nephews everywhere – uncles make terrible mentors.

Delicious Bite

Susan Cabrera had a business idea but could not attract capital. She finally funded her venture through family and began a company making Latin meals. Today, Delicious Bites are in more than 700 stores and sales will reach $1 million for the year.

“The storms may be strong, but there’s always an umbrella” and tenacity, she said, “No matter how many rocks you encounter on the road…just jump over them and keep your goal in sight.”

Native American Intellectual Property Enterprise Council

At “rock bottom”, David Petite found himself living in his car. But with “a personal commitment to better his life” and an “angel investor”, Mr. Petite set-up a small technology company. Today, he has received “50 patents worldwide” for his business.

“I learned to see failures as great lessons,” he said. ”Look in the mirror and say ‘I am going to make a difference for the people around me’ and you will be rewarded,”

Hacienda Mexican Foods

Lydia Gutierrez and her husband intended to create a national business selling Mexican foods. That is, until her husband died unexpectedly. On her own, Ms. Gutierrez continued to build and expand the company. Today, Hacienda Mexican Foods has annual sales of $10 million.

Lydia believes respecting her employees is the key to her success. “Those that walk with others never walk alone,” she said. She added that hopeful entrepreneurs should seek out a mentor. “Everybody needs their own angel,” she said.

ViSalus

Ryan Blair began his odyssey in a “L.A. crack house”. Investing “his last few dollars” to buy back a failed company, Mr. Blair started anew and retooled the business model. Today ViSalus earns $20 million annually.

“I couldn’t ever accept failure as an option,” said Blair. “Give your idea a shot. You have nothing to lose and everything to gain.”

Lessons For Aspiring Entrepreneurs

1. All the cited entrepreneurs had significant obstacles in the way of their success.

War injury, teenage pregnancy, lack of capital, living in a car, husband dying, crack user. All these small business owners had problems equal to, or likely greater, than almost everyone reading this post.

I might exclude my niece and nephew from this group as both have major hurdles to surmount. My niece is actually a very bright girl. But having had to endure such a brother these last 20 years must have done some permanent damage. And my nephew, well let’s just say that he was snowmobiling at the lake the day God was handing out skill sets.

2. The business ideas were not earthshaking.

Consulting in your area of knowledge, cleaning service, food preparation, weight loss.

With the exception of Mr. Petite, the entrepreneurial ideas were quite simple and did not require advanced technical expertise.

3. The businesses were not overly capital intensive.

There is no clear information in the article on most of the start-up costs. But when you look at the business models, they are all scalable operations.

Start small (single person consultant, $200 working out of a bedroom, etc.) and build the business over time.

Initially, it appears no public offerings, no huge bank debt, etc., were required. To the extent capital was needed, family and/or angels were the answer.

You may have to give up a bit of ownership and/or control to a third party financier, but it can accelerate your growth. Just go into any arrangements with your eyes wide open. This is the business of the venture capitalist and he will have the edge in negotiations. Do not sign a bad contract and then wake up one day to find that you have been ousted from your own company.

4. Clear vision, solid planning, hard work, and learning from mistakes are the keys to success.

You may have the best idea in the world.

But if you lack any of the above, you have a high probability of failure.

And you may not require the most unique or high-tech business idea.

But if you have a vision, plan, and proper work ethic, you have a better chance of success.

Business Product and Process Names

Jordan Wilson — Wed, 11 Jan 2012 18:36:59 +0000

Care must be used when choosing a business name.

Entrepreneurs and small business owners must create strong names that enhance the firm’s business prospects. The names must also be legal.

The same rules apply to product names and business processes.

There have been a multitude of poorly named products throughout history. From the greenest entrepreneur up to the largest of companies. No one is immune.

Language or Cultural Differences

Often the problem relates to language or cultural differences.

Not something that can normally be guessed at by small companies. If you operate primarily in the U.S., who knows what will offend people in Kazakhstan or Iceland.

But if you ever intend to sell your product in a culturally different environment, you need to take the time (and money) to ensure that there are no problems.

My favourite example is from the car brand, Chevrolet. They had a very popular car, the Chevy Nova. Always a good idea to leverage off an existing, strong-selling, brand name when expanding to new markets. Well, unless that brand is the Chevy Nova and the new markets are Spanish in nature. For those not chuckling because they do not speak Spanish, “no va” means “no go” in Spanish. Not a great slogan for a new car.

Yes, I know that some claim this story is overblown and make excuses for General Motors. Technically the justifications are correct. But do you think that if someone was designing a car from scratch, they would name it akin to “no go”? Not likely. Plus, it is a funny anecdote.

You can google other examples of well-chosen names such as Pee Cola or Only Puke chips.

Lawyers, Lawyers, and More Lawyers

Way back when I was in university, one of my business law professors said that there were more law graduates in the U.S. driving taxis than actually practising law.

Lawyers are in the business of selling their services and making money. Nothing wrong with that. However, you do get a lot of what I will call predatory practising. Where lawyers and their clients will try to use every loophole to win a case, no matter how dodgy the issue.

McDonalds’ coffee too hot? Let’s sue!

Woman driving while impaired and crashing her car? Let’s sue! She is suing the bar for selling alcohol to her as she was underage. Okay, maybe an argument to be made (although was she at no fault herself for trying to buy liquor while underage???). Not content with that, she is also suing “the Department of Transportation and the town of Bluffton and Beaufort County claiming they had failed to properly maintain the road where she crashed.”

I expect that if she had killed anyone in the crash, she would have sued their estate too. Probably for damage they caused to her car on impact and the emotional stress of seeing someone die.

Yes, yes, yes. Lawyers play a valuable role in society protecting people from evil companies. And I have no issue with lawyers protecting people in legitimate instances. But too often things go beyond common-sense and proper proportion.

When you are running a small business, you will see the impact this has on your bottom line. It may be in the extra costs incurred to ensure no one could possibly get hurt from your product. Regardless of how hard they try. Or the extra insurance needed to protect your business. Or the time and money needed to deal with frivolous suits.

So spend the time before to safeguard your products and processes to minimize the possibility of problems.

Predatory lawyering can extend to the names you choose for your products and processes. Like with your business name, take some time to ensure that there are no problems with names given to products or processes.

Otherwise, you may just be writing letters like this one as a way to stay sane.

More on Business Names

Jordan Wilson — Tue, 10 Jan 2012 04:24:01 +0000

In Naming Your Business, we reviewed eight rules for creating an effective name for your small business.

Excellent advice for aspiring small business owners and entrepreneurs.

Today I want to briefly discuss another important part in naming your business.

You can choose a simple, straightforward name for your small business. Or you can be very creative. If you follow the eight rules, you should be able to design an effective name.

Avoid Prohibited Names

But if you are not eligible to use the name, you may be wasting time and money.

Different jurisdictions have different laws relating to choosing a business name. Make sure you know what laws are applicable in your location.

Many of the prohibitions are common-sense.

Restrictions on business names often include no: obscenities or offensive words; existing names where confusion may result; misstating your legal entity; pretending to have a connection to government or royalty; using certain industry names.

For example, if I was in the computer industry, setting up Apple Computers might not work. However, Apple Accounting might be fine as it is in a different industry and there should be no confusion to customers (just do not imply that you are part of the Apple empire).

If you run a sole proprietorship, you cannot call yourself Apple Accounting Inc. (or Ltd. or LLP). The Apple “Queen Elizabeth’s Personal” Accounting will not fly. Or if you try and name your business The Bank of Matthew and you are not a registered bank, you will be offside.

There a variety of prohibited names and they may differ between jurisdictions. Check out your local laws prior to naming your business.

Avoid Names Already in Use

Watch out for using the same business name as another firm.

Legally, you may not be eligible to use the same name as an established entity. But there are exceptions.

Often if you are not in direct (or even indirect) competition, business names can be duplicated.

For example, I am sure there are other Wilson Wealth Management firms out there. If someone started a business with the same name in Australia, no problem. If someone tried that in Western Canada, problems.

Geography is a key factor in competition.

If someone started Wilson Plumbing in Saskatchewan, not typically a problem. It is completely different industry. We are not in competition.

Again, you need to check your local laws and business registry regulations.

Even if you can use another’s name, you might not want to for marketing purposes. If something goes wrong with the other firm, it may taint your own reputation.

Do you want to call your business, Enron Energy? Bernie Madoff Wealth Management? Bre-X Resources? Even if you could, you would not.

Do your homework in naming your business. Make sure it is legal and appropriate for your needs.

A Funny Tale

It is not always new entrepreneurs that make mistakes in this area.

Consider this old story.

Once upon a time there were two large banks. We will call one, Swiss Bank Corporation. The other, Union Bank of Switzerland.

Good business names. Unique, described the business, and conveyed to potential clients the high quality service associated with Swiss banking.

One day these two banks decided to merge. What to call the new entity? It was still great marketing to let potential customers know you were a Swiss bank. So let’s keep that in the name.

Now what should we call the uniting of the two largest Swiss banks. How about the United Bank of Switzerland? Excellent name. Hit all eight rules perfectly.

Fast forward a few months. Logo, letterhead, colours, etc., have all been created. The merger is complete and the United Bank of Switzerland is set to launch.

The launch is a great success! Wait, hold on. What’s that?

There already is a United Bank of Switzerland? Oops. And this tiny little bank will not sell the name to the big boys. Double oops.

Logo, letterhead, acronym, et alii, are all designed and paid for. What to do?

How about we scrap the name, United Bank of Switzerland, and just use the acronym, UBS?

Does not mean anything, but we will use it anyway.

That occurred in the late 1990s. When I worked in the Cayman Islands and The Bahamas, we would often get phone calls from people who thought we were UPS. Yes, we deliver, but financial services and not packages.

A second nightmare involved dealing with potential clients. The inevitable question they would ask as to what UBS meant. To spend the initial part of the discussion on this issue took away from dealing with the client’s needs and objectives. Not the best way to do business (not too mention that the actual story did not make UBS look great).

Finally, using UBS (that means nothing) is still a source of confusion for many. For example, UBS advertises on CNN (Cable News Network – see the 8 rules apply again). Even now in stories about UBS, I occasionally hear their announcers call it Union Bank of Switzerland. You would think CNN could get the name of their client correct. But not all the time.

Even the big companies can make mistakes naming their businesses. In the case of UBS, they went from a strong name that linked the bank with Swiss banking excellence to people having no idea what the name means.

And anything that takes away from your business message hurts revenues and image.

If you want to succeed in your business, do not make the same error.

Naming Your Business

Jordan Wilson — Sun, 08 Jan 2012 21:11:25 +0000

Many people want to become entrepreneurs and start a small business.

One key issue is choosing a business name.

There are a variety of options in designing a name.

Keep It Straightforward

As you can imagine, I tend to keep it simple.

My wealth management company has the extremely creative business name, Wilson Wealth Management. And this personal wealth management blog has an equally creative title.

But in my business and blogging I want to keep things straightforward. The names do not make the client or visitor guess at what I am doing.

Or Be Extremely Creative

I enjoy fellow Saskatchewan blogger Kate McMillan’s Small Dead Animals. But if you did not know it was a Canadian political/social blog, you might think it related to pet funerals, road kill recipes, or things you will see while driving Saskatchewan highways.

If you have the critical mass, you can get away with a name that has little to no literal relevance to your product or service. Small Dead Animals, Drudge Report (a manual labor blog? Well one that had over 10 billion page visits in 2011), Apple (what does fresh fruit have to do with computers?), etc.

If you are one of a million in a specific industry, maybe you want to really differentiate yourself from the competition. Not a bad idea to separate yourself from the herd. An unusual business name might help make people remember your company.

The challenge is finding that fine line between standing out from the crowd and in not having customers be able to find your business. Or if they can find your company, want to buy your offering.

In my industry, an extreme name might not convey seriousness to my client base. You might be happy considering the professional services of Wilson Wealth Management. But would you be so quick to hire Small Dead Investors or Watermelon as a wealth manager? Probably not.

It is difficult enough finding new customers and selling them your products or services. Why make this process tougher by choosing a poor business name?

If you are starting out you may want to keep it relatively straightforward and direct. But being straightforward does not preclude you from being creative in designing a business name.

Eight Rules For Naming a Business

Entrepreneur.com offers a good article, A Quick Guide to Naming Your Business.

The authors outline eight simple rules for naming your business. All make sense and should be incorporated into a name.

1. Your name should have a positive ring. Avoid anything negative. Your name should make people enthusiastic and optimistic about working with you.

2. Avoid difficult names. If people have trouble pronouncing it or spelling it, they won’t remember it. (Embarrassing exceptions: “Haagen-Dazs” and “Guerrilla.”)

3. Make your name unique. You don’t want people confusing you with a business that already exists, especially if it’s one with a poor reputation.

4. Don’t use a name that will limit you down the road. Acme Sleep Shop will limit you to selling sleep products. Acme Interiors is more open to expansion.

5. Use a descriptive name, such as Jiffy Lube. Note that this name also conveys a benefit.

6. Don’t get caught up in trends or fads. While it may be profitable in the short run, you can’t ride a fad for the long haul, and focus on the long haul.

7. Your name should reflect your identity: dignity, largeness, local identification, quality and other descriptive elements.

8. Pick a name that looks and sounds attractive on the phone, on the radio, on your letterhead, and on your website.

While neither Wilson Wealth Management nor Personal Wealth Management are exciting names, I think they both hit all the points made above.

But you do not need to be as straightforward as this to adhere to these eight rules.

A Little More Creative

Lest you think I have no creative juices in my body, I can occasionally be a little imaginative.

When I co-founded a junior oil and gas company in the early 1990s, I developed a creative name. There were many small, medium, and large oil companies in existence and we wanted something with a little oomph. Something that would keep us in the minds of investors.

Although I had never heard of the eight rules above, I thought about many of these points while determining a good name for our company.

What We Wanted

Obviously we wanted the world to know we were in the oil industry. Specifically on the exploration side.

We wanted to convey that we were solid, hard-working, and reliable. That we would protect investor capital and expand the business. At the same time, we wanted investors to realize that we would be aggressive in our efforts to succeed.

A company with a warrior’s mentality.

What We Came Up With

The next step was pulling out dictionaries in various languages for ideas. My focus was on old languages like Greek and Latin. Ultimately I came across the word “bellator”, which means “warrior” in Latin.

Thus launched Bellator Exploration Inc., a publicly traded oil and gas company.

Hitting All Eight Rules

A simple name to pronounce and remember, with no negative connotation. Not trendy, but historic and solid. And this was long before the existence of Bellator Fighting Championships, so we had very unique name.

It accurately described our business and did not limit future opportunities in the industry.

We used a Roman Centurion in full regalia in our letterhead. That linked the Latin name, which many did not readily recognize, with the desired imagery of our identity. The multi-coloured logo and letterhead stood out and was memorable.

Without actually knowing the rules, we managed to hit all the key points.

And in so doing, produced an imaginative business name that was well received by the public.

Follow these rules and you can find a powerful name that helps develop your company.

And operating within these eight parameters, you do not need to keep it simple.

You can still design a highly creative business name.

EU Innovation Conference 2011

Jordan Wilson — Thu, 05 Jan 2012 04:38:27 +0000

Michael O’Leary gave an interesting talk at the 2011 European Union (EU) Innovation Conference in Brussels, Belgium.

Michael O’Leary is Chief Executive Officer of Ryanair, a discount airline based in Ireland.

Neither O’Leary nor Ryanair are overly popular with Eurocrats. The talk given by Mr. O’Leary explains why neither are appreciated with the elite of Europe. As well as why Mr. O’Leary is no fan of Brussels.

Some of the key points made include:

1. His Ronald Reagan quote that “the economic policy of government and bureaucrats is always: if it moves tax it; if it keeps moving, regulate it; and if it stops moving, subsidize it.”

Very true.

2. Ryanair is far and away Europe’s most popular carrier. The reason for Ryanair’s popularity is due to providing customers with “3 things they really want: a cheap flight, an on-time flight; and a promise not to lose their bags in between.”

And those 3 things have led to 27 years of continuous growth for the company.

3. When coming out to the conference, the organizers offered to pay for Mr. O’Leary’s flight, provide a limo to/from the airport, and hotel. He sends them his itinerary. Then gets an email back saying sorry, the organizers cannot reimburse for travel on a discount carrier, only a full fare airline. The same email said that the organizers could not send a taxi to the airport, as he was landing at a small (i.e. low cost) airport and not the main Brussels one. So the EU organizers would happily pay for airfare on a more expensive full fare carrier and send a taxi to the main airport, but would not pay for a cheaper trip option.

That story pretty much sums up the EU and why they are in their dire financial state.

4. A key to Ryanair’s success is having staff with no prior experience with airlines. So there were no ingrained bad habits that staff brought to the business. While experience is usually good, often taking a new look at a business generates innovation and freshness.

In certain business contexts, this is considered taking a “green fields approach”.

5. Mr. O’Leary gives some good examples on how to improve profitability by enhancing revenues and/or reducing costs. He also shows how you can use competitors to improve your own results.

All in all, a good way to spend 17 minutes of your life.

http://www.youtube.com/watch?v=p4HYSsrlcq8

Success Tips for Entrepreneurs

Jordan Wilson — Wed, 21 Dec 2011 18:00:01 +0000

Many people think about becoming entrepreneurs.

A potentially rewarding life, but running a small business is hard work.

Entrepreneurs must be focussed and plan thoroughly if they wish to succeed.

Young entrepreneurs should also try to emulate successful small business owners and innovators. What works for them and the lessons they have learned.

Today we discuss specific tips for entrepreneurial success.

These come courtesy of Ink from Chase’s, 10 Tips From a Successful Small Business Owner.

It is well worth a read.

A few thoughts from my side on the article follow.

Systems and Staff

The article recommends creating “systems that can run without you.” Also, to “hire great employees, then get out of their way.”

Good advice and the two points go hand in hand.

If you want to stay small and work 100 hour weeks, keep everything to yourself.

If you want to grow and (eventually) enjoy life a little, you need to delegate to some extent.

That means introducing strong systems and hiring staff to whom you can offload responsibility.

Link Employees to the Business

With excellent employees, consider giving them a piece of the pie. An ownership interest, profit sharing, phantom stock options, real stock options, are a few of the common ways to let employees become part of the company.

Without a personal interest in the business, excellent employees may become less excellent over time. Those who work hard and contribute to the profitability of small companies may begin to feel that their efforts only make you, the owner, richer. After a period, disillusioned employees look elsewhere for work. You may end up losing a key cog in your machine.

However, staff with a vested interest in how the business does will likely work hard to make it a success. And success means more dollars in your pockets and possibly more time for an outside life.

That said, you need to be extremely careful about who shares the wealth. Mission critical employees, possibly. But there must be value for you to do so. It makes little sense to dilute your ownership and control without a specific purpose and result.

Also, you need to pre-determine what happens when an employee with an equity interest or profit-sharing arrangement departs. Spend some money on a first-rate lawyer and make sure all employee contracts are tight.

Always have contingency procedures in place. For everything you do.

If you fail to plan, you plan to fail.

Focus, Focus, Focus

Keep your eye on the ball at all times.

The article refers to this in three separate points.

“Set specific goals, then take time to review them.”

“Don’t waste time on tasks that you can outsource.”

“Stick to your core business.”

Stay focussed on your core business and area of expertise.

Know where you want to go and thoroughly understand how you want to get there. The world is a fluid place. Conditions change constantly. Do not lock yourself into a course of action, but be prepared to adapt as circumstances shift.

Always have contingency plans. Know what you will do when, not if, a situation does not go as anticipated.

Effectively and efficiently utilize external resources to achieve the best return for your time and money.

For example, maybe you lack the funds to hire a bookkeeper. In that case, you may need to inefficiently perform the tasks yourself. Perhaps you need to spend 20% of your time on bookkeeping. Could (should?) that time be better spent generating new revenues for your business?

And what about if your lack of accounting knowledge creates errors on your financial statements and tax returns. This ineffectiveness may cost you real money.

Always consider both efficiency and effectiveness in any analysis.

Performing work outside your core business or expertise may save you money in the short-run. But the opportunity costs may be expensive over time.

Plan, review, adjust. Repeat as necessary. But do not lose focus on the key issues.

Partner Up

I could include this with outsourcing parts of your work, but I want to highlight this point.

Why?

Because I think this is a huge problem for many new entrepreneurs.

Most people are good at one or two things. Maybe you have a great idea for a business. But do you possess the business development, financial, legal, accounting, tax, marketing, etc., skills necessary to turn the idea into a profitable venture? Probably not.

Some skills can be outsourced to external parties. But depending on your business idea and personal expertise, it may be useful to partner with somebody who fills in any large gaps.

What you outsource and what you partner up depends on many factors. Keys include: how critical the expertise is to your core business; cost of outsourcing versus insourcing; availability of external expertise; short and long-term business objectives; your own skill set.

For example, at one time I was involved in a start-up junior oil company. My experience was finance, both in general and oil specific. Probably not enough to run an oil company myself. Far from it.

My initial partner was a tax expert with strong experience in oil and gas. This was valuable as we intended to acquire assets using tax effective strategies. Sure I could have outsourced this skill set (or he could have outsourced my finance expertise!), but the scope of work involved made it cost effective to conduct in-house. It is one thing to outsource my personal tax return to a tax accountant. It is another thing to outsource a focal point of the business itself.

So we had a finance guy and a tax guy, both with some knowledge of the oil patch. But recognizing a skill gap, we brought in an oil landman as the third partner. Further, we filled out our Board of Directors with senior oil professionals, so that we had competent internal advice. Again, we could have hired consultants on an as needed basis. But a landman and oil patch executives were critical for immediate success.

Initially we concentrated on tax-effective deals. Periodic consultants in other oil related areas served our needs. But as we grew, it became more efficient and cost effective to bring in additional expertise. So we partnered full-time with a geologist and engineer.

As a result, we built an efficient and effective team over time. Each person with complementary skill sets to offset our initial gaps.

Key Takeaways

I think the underlying keys from the article and my commentary are as follow:

Plan, plan, and plan some more.

Know what you want to accomplish in your business venture and how you intend to get there.

Plans cannot be rigid. They must be adaptable to changing conditions. Conduct periodic reviews and refine as needed.

Never be surprised by any unexpected events. Have contingency plans in place to deal with unforeseen issues that (always) arise.

You fail to plan, you plan to fail.

Focus, focus, and focus some more.

Keep your eyes on the prize.

Focus on your core business.

Everything you do in your business should be to achieve your goals.

All else is probably noise. Do not get distracted by the small things.

Get the most from your time, energy, and money.

Always consider the effectiveness and efficiency of what you do. And do not forget about opportunity costs in your analysis.

Resources

Outsource functions that are inefficient or ineffective to conduct in-house.

Add new talent internally when the benefits outweigh the costs.

Hire strong employees and tie them to the company’s success.

Work to continually strengthen and broaden your own skills.

Implement efficient systems to better assist in reaching your goals.

Create a work environment that promotes success.

Want to Become an Entrepreneur?

Jordan Wilson — Wed, 21 Dec 2011 02:45:37 +0000

Many individuals want to become entrepreneurs and/or run their own small business.

The idea of not having to (figuratively) punch a clock each day and put up with an idiot boss is an attractive concept.

Plus with tough economic conditions in much of the world, jobs are scarce. Owning a business may be one of the few options you have to generate income.

But running a small business is not the easiest endeavour.

Entrepreneurship Is Not Easy

Entrepreneurship is not a nine to five life.

Managing your own small business takes a lot of hard work with a high amount of financial risk and stress. There is initially low to negative cash flow, so you may need to finance the business and your personal expenses from savings for a period. The success rate for entrepreneurs tends to be low. And usually more than a modicum of luck is required to prosper.

While being an entrepreneur can have many rewards, make certain you understand what needs to be done before embarking on the path.

Fail to Plan, Plan to Fail

Regardless of what you do in life – education, career, personal life, etc. – you always need to develop a game plan.

One that is well thought out and addresses all aspects of your endeavour from cradle to grave. One with contingencies built in for the unforeseen situations that always seem to arise.

The more experience you gain in life, the easier it is to plan.

But what do you do if you lack experience? Perhaps you are just starting out.

Model the Behaviour of Successful Entrepreneurs

Model the behaviour of those that do have the experience. Those that have been successful in the area in which you wish to enter.

The people you choose do not have to be Warren Buffet, Bill Gates, Richard Branson, Robin Li, or Azim Premji. Although they are not bad figures to model.

You can pattern yourself after the person down the street who runs a well-managed, profitable restaurant/engineering firm/plumbing company/etc. A relative (preferably not an uncle or friend’s uncle though) who runs a his or her small business.

Or look at a combination of people. Any tips as to how they became successful are worth learning and possibly copying.

Read books and articles about the individuals you want to emulate.

Listen to webcasts or online interviews. Attend their public meetings or appearances.

Some investors buy single shares in Berkshire Hathaway. Just for the opportunity to attend the company’s Annual General Meeting and listen to Warren Buffet in person.

Talk to Successful Entrepreneurs

If possible, speak with successful business people.

In my experience, successful people are happy to speak with young entrepreneurs.

Make sure you are respectful and do not monopolize their time. And above all, be prepared.

If you ask well-thought questions and show that you are serious, successful business people will be more willing to take time for you. But if you cannot even take the time to do your own research, why should someone else waste precious minutes on you?

Do not just learn from successful business people. You can also learn a fair bit from those who have made mistakes or done badly. In fact, some of the best lessons in life can be learned from your own mistakes and in watching the problems (and resolutions) of others.

Study a Variety of Guides to Success

Hopefully this blog provides insights into how to become better in different areas.

And in today’s electronic world, information on any topic is only a click away.

Be a human sponge. This is your career path. Every additional piece of knowledge you accrue might be the difference between success and failure. So do not shortchange yourself.

Some information is good, some less so, and some poor. As you develop more experience, you will better be able to sort the wheat from the chaff.

Or, if you are like my nephew, over time you will develop a taste for chaff.

Next up, 10 specific tips for entrepreneurial success.

An Interesting Business Model

Jordan Wilson — Wed, 14 Dec 2011 04:06:05 +0000

Well, “interesting” as in “how not to succeed in business”.

In my personal life and professional career, I have dealt with numerous financial institutions. Some good, some less so.

But one bank I currently deal with has an “interesting” business model.

Smart Businesses Want Satisfied Customers

Most business attempt to deliver a satisfying customer experience. One that makes the client think fondly, or at least tolerably, of the company.

Happy customers keep buying the company’s products and services. They tell their friends (albeit at a much lower rate than dissatisfied customers complain to friends) and that generates new revenue streams.

Less Smart Businesses Annoy Customers

Now this particular bank seems to think that annoying customers is the path to prosperity.

Let us call this bank, The Bank of Nova Scotia. The bank’s core services are adequate and meet my needs in certain areas. The staff that I deal with are competent and courteous. No complaints on my part.

For the most part, I am a relatively satisfied client. A customer with a smilie face.

But that is not good enough for The Bank of Nova Scotia.

Some genius at corporate headquarters came up with a fantastic idea.

“How about we distribute client contact details to a few of our subsidiaries or affiliates?” Service providers that I have never expressed an interest in. Smilie face waning.

The genius is now on a roll. His or her next idea is even better.

“Now how about we get these service providers to call existing bank customers at home and on their cellular during the day and in the evening?” Usually while they are having dinner or relaxing with friends or family. Smilie face gone, replaced with a frown.

After continuous, periodic calls over the last few months and ignoring requests not to call, my smilie face has turned into a nasty snarl. And like Pavlov’s dog, with each new 1-800 call from these folks, I immediately get extremely annoyed with The Bank of Nova Scotia’s entire organization.

Now we have reached the point where I am no longer directing any business to that bank. Bank staff are still fine. Products and services that I utilize are still adequate. But some genius at head office has cost the bank my business. And the steady revenue stream that I provide.

Checking the internet on this repeated, cold calling strategy by Scotia, I am not alone in my unhappiness. Many existing clients have commented about taking their business elsewhere.

Not a winning strategy from Scotia, in my opinion.

Entrepreneurial Moral of the Story

When running a business, work as hard as possible to meet the needs of clients.

If you believe that you can add value to the client experience, do so. In fact, improving the customer experience should be a priority.

But there is a fine line between adding to the customer experience and annoying the client with unwanted solicitations and not respecting client wishes.

If you stay on the right side of the line, you will have happy clients that bring revenues and profitability to your business.

Fall on the wrong side, you will have angry ex-customers buying from your competitors.

Improving Your Networking Skills

Jordan Wilson — Wed, 16 Nov 2011 18:55:30 +0000

Networking is a great way to develop business contacts. Something that is good for business development, finding competent suppliers and support, as well as helping to find a new job.

So the ability to properly network is definitely a skill worth strengthening.

What are the keys to good networking?

A FINS article from The Wall Street Journal provides eight rules for networking. The advice given is well worth a read.

I do not have much to add, but I will make a few minor observations.

Always Be Prepared

If you seriously want to improve your networking, always be ready for an unexpected encounter.

Sure you will meet people at professional conferences, Chamber of Commerce functions, and other organized events. You fully expect to be networking at these times.

But you will also meet people just when you are out and about. At sporting events, on the golf course, while at dinner with friends. It is amazing how often you will meet a friend of a friend while in a social setting. And these people can be excellent contacts for future dealings.

While you do not need to be “on” at these times, just be aware that you do have the opportunity to make contacts in social settings. Then be prepared to use some of the tools described in the article.

Time is Money

One of the most valuable commodities a person has is time.

Do not waste the time of others.

I do not mind speaking to most people and discussing business or employment opportunities. Helping someone costs me little and can set them off on the right path. But when someone takes up too much of my attention then that begins to add up. If I spend 30 to 60 minutes answering your questions in my office, that is 30 to 60 less minutes that I can conduct my own business. Which means either a loss of revenue for me or the need to work an extra hour that night.

So when talking to someone new, pretend that they are off to a birthday party or nice dinner and that you are keeping them from that. Hopefully, that thought will keep you focused and not monopolize the person’s time. Or, if in the office, invite them out for lunch one day where you can talk at a more leisurely pace.

Always let the person know indirectly that you realize his or her time is valuable and that you will not take advantage of it. It will go far in developing a business relationship.

Always Be Prepared

In a different sense from above.

If you want to network with me, know what you are talking about. Do your homework before we meet.

If you want to learn more about becoming a professional accountant, financial analyst, or financial planner, I am happy to discuss the topics. But show me that you have done some research and can contribute to the conversation. If you cannot take the time to do some work for yourself, why should I waste my own time on you.

The Elevator Pitch

The article states that you should not confuse people.

Know what you want to say about yourself. Keep it brief, positive in tone, and hopefully memorable. Better to have people wanting to learn more about you than be looking for the exit.

Keeping it brief and focused is often called the elevator pitch. It is well worth creating one and knowing it cold.

Close the Deal

In this case, the deal is creating a positive impression that will be remembered by the person you have met.

Business Cards

Invest a little money in business cards. And I mean only a little.

Keep them very simple with your name and contact details. Make sure you use proper bond paper for the cards so that they have some substance. Otherwise they will rip apart and be lost quickly.

The person you give one to will simply throw it in a drawer unless you make a spectacular impression. But that is not a problem. If you develop the contact over time, they can easily retrieve the data from the drawer.

Pen and Paper (or Electronic Equivalent)

If you can get your contact’s business card, great. But often at social settings, people will not have cards with them (of course you will always be prepared and have your cards on hand). So it is nice to have your own pen and paper to jot down any contact details.

Also, after leaving the contact, take a moment to note any pertinent additional information that came out in your discussion. The business card will contain name, position, address, telephone, email, etc. It will not tell you the name of her husband, the fact she has been at the company for 6 years, or that she prefers playing tennis to golf. But this knowledge is extremely important for you to remember for subsequent conversations.

Follow Up

I am not sure 24 hours is the right number, but send them an email in the next couple of days. Long enough that you are not seemingly stalking them (“hey, I saw you just arrived at your desk and thought I would email.”) but short enough that you will not completely escaped their consciousness (Jonathan Ferraro? Was he one of the three tenors and why is he emailing me?).

Keep the email brief and professional. No one has the time or desire to read a 3 page email from someone they met for 10 minutes at a function.

Maybe I am getting old, but I would not text a new contact. It seems a little unprofessional for an initial contact. Especially if you are prone to using such measures as “C U 2nite. GR8!”, followed by a ☺.

Also, conveying professional thoughts in very few characters is tricky.

If you met at a specific event or were referred/ introduced by a mutual acquaintance, mention that in the subject line or opening sentence. An effective way to trigger the recipient’s memory.

Feel free to ask for a follow up meeting. Ask directly for the meeting, but allow them to choose the timing. Explain that you realize they are busy with work and personal life, so you will work to their schedule. I would suggest that you offer to keep the initial meeting short in duration. Perhaps over lunch or 30 minutes in their office (never make them come to you as it is you that wants the meeting).

Best of luck.

Things Top Entrepreneurs Do Differently

Jordan Wilson — Fri, 29 Jul 2011 02:05:06 +0000

Courtesy of an Ernst & Young business survey, Ten Things Top Entrepreneurs Do Differently.

As someone who has been an entrepreneur and started new businesses, much of the list makes sense. But I would add a few additional comments.

Made, Not Born

True for the most part.

If you plan on becoming an entrepreneur, always watch how others operate in business. Then include the good points in your own venture and avoid the negative points.

What does your company do well? More importantly, what does it do poorly? What are the positive and negatives from the restaurant, retail store, or service company that you have recently used?

In my case, working in a public accounting firm was invaluable. I saw many companies up close and learned much about how to do things both correctly and incorrectly.

Seeing how good and bad enterprises operate will help you when starting out.

But Being a Born Entrepreneur Helps

It is true that entrepreneurs are made, not born.

But I do think that one’s personality plays a part.

Those who are risk intolerant will prefer the safety of a steady job. They will not want to risk their capital on a new venture. Others may lack the creativity and personal drive that is usually necessary to start and develop a brand new business.

So if it is not part of your makeup to be an entrepreneur, do not feel that you need to change who you are and become one.

No “I” in Team

When in charge of a company, unit, project, etc., always try and surround yourself with the best possible people.

Be confident in your own abilities. Avoid yes-men and weak employees who, while perhaps making you look better and stroking your ego, bring little other value to the team and your overall success.

In assembling a team, always look for complementary skill sets. No one is good at everything. Ensure your team has some members that address any limitations that you may have in your skill set. And that the team as a whole has diverse skills that will best meet your objectives.

As an entrepreneur who runs a lean company, look to outside parties to support your limitations. Accountants, financial experts, lawyers, engineers, technical experts – they can all be brought in on an as needed basis to provide support.

Entrepreneurs as Architect of own Vision

There may be no “I” in team, but someone has to lead it.

That someone is you, the entrepreneur (or boss, project leader, etc.).

On strong teams there will be many disagreements on the proper course of action. If you are the boss, ultimately all decisions come down to you. If you are not prepared to be the leader, you will have a difficult time experiencing success in your venture.

To ensure that the team works well together and that all oars are paddling the same direction, it is crucial that members share the same vision.

When putting a team together, many entrepreneurs focus more on the technical skills and experience of potential employees. But do not forget to assess their commitment to achieving your objectives. If some members are not on the same page as you wish them to be, it is a recipe for problems.

And yes, as the survey indicates, getting external parties to buy into the vision definitely assists in success. Again, this is an area that many entrepreneurs ignore (at their peril).

Simply Seek to be Better

I have written about this before, here and here.

You do not need to invent some previously unknown technological wonder to be successful. Many entrepreneurs find profits simply by improving on an existing product or service.

This can be done in a variety of ways. Improving the actual product or service. Finding a way to improve efficiency so as to produce the good or service at a lower cost to consumers. Developing a product or service that leverages off an existing item. Consider all the products and services that have sprung up to support Apple’s iPod.

So there you go, a few more tips on becoming an entrepreneur. And in these current tough economic conditions, entrepreneurship might be the best career option for many individuals.

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