The Essence of Entrepreneurship

What makes a successful entrepreneur? 

The question is often asked and there are many different, but acceptable, answers. To add my perception, I think there are certain personal character traits mixed with particular skills, knowledge and experience that add up to the "essence of entrepreneurship" that leads to success.

Here is my list of what I think adds up to be the Essence of  Entrepreneurship:

1. Burning desire to turn an idea into a successful business.
2. Determination and persistence to achieve results.
3. Treating every obstacle as just another challenge to be met.
4. Recognizing the challenge to provide both strategic leadership and operational management.
5. Consistently communicating vision, mission, values.
6. Willingness to change the plan but not the goals or ideals.
7. Strong social awareness and empathy for people.
8. Motivated by more than the money. 
9. Good marketing and sales instincts - knowing what appeals to the target market. 
10. Understanding the industry measures of performance for the business.  
11. Continuously aware of business results relative to planned performance. 
12. Does not waste time - the most precious non-renewable resource. 
13. Knows to decide when it's time to decide, not waiting for all the information to be sure it's right.
14. Mix of strong industry knowledge or technical/professional skills with good instincts
15.  Acceptance that success is a very imprecise objective and that never being satisfied is the way to continue being better and doing better.  

Not a short list and not all essential.  But also probably not yet the complete answer to what it takes to be a successful entrepreneur.

Let's keep working on it.

Richard Branson's Five Secrets to Success.

Multi-business billionaire Richard Branson has always been one of my favourite examples of a model entrepreneur (and the most successful practitioner of guerilla marketing.) 

He recently described his short answer to the frequently asked question, "What is the secret of your success?"

Here is the summary and a link to his article. 


After reflecting across 40 years and thinking about what characterises so many of Virgin’s successful ventures, I have come up with five "secrets" to business success.


1 - Enjoy What You Are Doing.

2 - Create Something That Stands Out.

3 - Create Something That Everybody Who Works for You is Really Proud of.

4 - Be a Good Leader.

5 - Be Visible.


Go over to Entrepreneur.com to read his five business tips in full.

Listen to Richard. 
He's about as thoughtful, creative and successful as any entrepreneur on the planet.

Back to School means Back to Business too?

Yes, it's time to get back to business.

End of August means summer holidays are nearly done, kids returning to school, and it's time to re-think your business too.  

Seize this opportunity to assess your current performance and come up with an action plan to improve results and enhance the value of your business.

Here are some ideas to inspire you to get back to business and do better than ever.

Check your numbers against the top performers.

You probably already know the key variables to manage profitability in your business - gross margin, sales per square foot, or sales per employee, for example – but have you compared your numbers to the top performers in your industry lately?

How has the current economy affected their growth rates or performance ratios compared to yours? You will have to do some homework to get the answers. Be sure to find the most comparable companies by industry size or type of business and then try to select the top performers. You may get useful comparisons from available data on public companies, from trade journals or from industry data bases. Your banker likely has access to RMA (Risk Management Association) data that is used by the banks to assess your credit worthiness. It is worth knowing what they are looking at and how they assess your performance.

Ask for key stakeholder opinions on your performance.

In addition to the bank’s assessment you should also regularly solicit feedback from your other key stakeholders. Those would be your employees, your customers and your suppliers.

The key questions to ask are:

• How would you describe our company relative to our competitors?

• What do you think we do best?

• Where do you think we need to improve?

• What opportunities do you think we are missing?

Listen and learn from the feedback.

Often business owners are surprised to find that the perceptions of their employees, customers and suppliers are quite consistent, but very different from their own.

You may think your business is best known for low prices and fast service, but others see you as having expertise that is valuable and worth paying the perceived higher price and accepting relatively poor service. Oops!

Now you have something to work on. First, try to ensure that your perceived strategic position in the market is the one that you want; then work on delivering what is expected. And finally, assess the feedback on perceived opportunities that you are missing. You have already established a receptive audience to new initiatives, so follow-up quickly.

Verify your corporate fitness for growth

In order to pursue new opportunities and grow your business it is also timely to verify that you have a solid foundation for growth. The foundation needs to be resilient, flexible, and expandable in all the dimensions related to organisation, facilities, financing, and IT infrastructure.

A fitness test on all these areas is a necessary first step before launching new initiatives.

Focus on maximizing long-term value.

In these processes of performance review there will be some obvious and easy “quick fixes” to generate revenue or cut costs. But as Einstein apparently once said, “For every serious and complex problem, there is an easy and obvious answer, that is wrong.”

For businesses the error is usually to focus on short-term profitability, rather than long-term value. In fact, the accumulation of short-term decisions to control costs or push revenue may actually diminish the long-term value that arises from sustainable and profitable growth. Typical examples are under-qualified staffing, limited capacity software applications, cutbacks in marketing and promotion, chasing big customers with low prices or accepting questionable credit risks.

Identify and select the priority opportunities.

After completing the review and assessing the opportunities, the list of potential action items may be long. A selection of priorities to address in the immediate future is required. And more than three priorities means you have not yet made a selection, only a ranking. Try harder.

Make a new plan.

With a short list of priorities, you can make a realistic and achievable plan to improve performance. Simply list the steps required with names and dates assigned to each step.

Then make it happen.

Take this “back to school” opportunity to rethink your business and make something happen. Remember if nothing changes, nothing happens.

Be better. Do better.

LISTEN TO MOM

As my mother once said "Don't do anything you wouldn't do if I was there." Ouch! Now that was a great way to keep me on the straight and narrow, instead of looking for trouble as a teenager.

I've often thought about that advice since then and generously offer it by thought and gesture to others. Especially those dangerous drivers flying by on the highway - "Does your mother know you drive like an idiot!?"

Mothers are an important influence to guide our ethical conduct in business too. That was apparently understand by the jeweler in Cranbrook BC who had a conspicuous sign posted next to the cash register stating "We give instant credit to all our customers. If they are over 90 and accompanied by their mother." Good credit guideline!

Most entrepreneurs and executives probably don't often think of their mothers on the job, unless she's the boss – like Ma Boyle at Columbia Sportswear. Maybe they should. We would probably have fewer issues of corporate misconduct if their mothers knew what was going on. Perhaps instead of all those current management courses on ethics and corporate responsibility, we only need to remind decision-makers to ask themselves "Would my mother be proud of me if she knew what I was doing?"

My Uncle Ralph persona is partly inspired by my father and his unique character and style of dispensing wise advice, punctuated with easily remembered one-liners (“Always do good work and charge like Hell!”).

But my mother also had a strong influence on my personality and management style, although it was more subtle and less frequently stated than demonstrated. Quiet, hard working, good humoured, responsible and respectful of others; those are the characteristics that immediately come to mind. Things we all learned from her example, simply by being around her. Of course, she was also good at reminding us when we forgot those important principles or our behaviour was not up to her standards. And it's still a pleasure to make her proud.

That's why I recommend you use the test "What would Mom think?" before your actions and decisions in business too.

Thanks Mom. And Happy Mother's Day every day.

On the other hand, “I am not your mother.”

Now I am suggesting that we might have better decision-making if managers asked themselves what their mother would think of their actions. But what about those employees that expect you to act like their mother?

What is the right level of caring and compassion before it becomes more personal than a working relationship should be? Is there a reasonable limit? Is it appropriate to get involved with issues that are strictly personal? Do employees become part of your extended family with all the additional obligations that implies?

Some recent exposure to business owners dealing with their employees' personal issues has caused me to be more cautious about getting involved. Once the managers start lending a sympathetic ear and then a shoulder to cry on, it soon becomes more time consuming on and off the job and creates a relationship that is difficult to steer back to business only. It also becomes a distraction for other employees and creates new concerns about employee favouritism.

My guideline for these situations would be to decide whether you would do what's being requested for every employee in the same situation. Personal advice? Time off? Cash advances? If not, then say no to the first request. Don't start a precedent that you're not prepared to write into the policy manual.

And don't be afraid to clarify the relationship, "I'm your boss, not your mother".

Those are my thoughts on Mom's influence on your business.  Do you agree?  Any comments?

Teaching kids entrepreneurship

Check out this video and tell me if you agree that it actually promotes the most negative stereotype of entrepreneurs as greedy and manipulative - in it for the money and part of the problem in our consumption based economy.
"Let's Raise Kids to be Entrepreneurs ..." http://on.ted.com/8Qs5

The video at the end of this TED presentation is a more positive and inspiring view of entrepreneurship but most of the commentary seems to be focused on his own version.

Thought provoking, but not convincing that this is what we should be teaching kids in school.

Learning Entrepreneurship at School?

I am starting to see more articles and commentary about the "need" to teach entrepreneurship at school. Is that a good idea? I have taught Entrepreneurship courses at Concordia in the Continuing Education program, mostly to young adults seeking relevant knowledge to advance their careers or to manage their own business.

Should Entrepreneurship be taught sooner?  Probably not in elementary school, but high school or college?  I tend to agree with Rick Spence (Financial Post, June 28, 2010), that the emphasis should be on entrepreneurial qualities such as creativity and innovation, problem solving, critical thinking, collaboration, persistence and leadership. I would add curiosity, self-confidence and independence.

Entrepreneurship packaged as a course is more appropriate at levels where students are considering career options. But it would help to have some early education on basic economics from savings and investment to financial and economic systems. I fear the bias of many teachers is that big business is evil and that entrepreneurs and the capitalist system create more social problems than solutions.

It would be an improvement to have some balance added to that point of view.  I'm not optimistic.  The media focuses most high profile stories on the disasters and the criminals among us.  It's hard to find the heroes to emulate.  After Donald Trump or Richard Branson (whom not everybody loves), who do we have doing good PR for business and entrepreneurship as a means of having fun and doing good?    

Do you Tweet?

Nope, useless waste of time. 
Wrong!        

Follow me on Twitter

Like the old days when you first built a Web site, the only reason you are now looking at Twitter is because ... "it's cool,
my kids tell me I have to,

customers are asking for it". 

Let me give you some other reasons.  

My Thoughts on
How to Use Twitter for Your Business 

First let's review what it is.  Aside from all the "New Media" hype and the old media fascination, Twitter is essentially a simplified version of the bulk email newsletter or a short form (140 character) Blog entry.  So if you use either if those, you need to check out Twitter.com

It also has elements of the social media sites, like Facebook or LinkedIn, but is simpler, more spontaneous, easy and fun. Not looking for fun?  Then consider that it is also interesting, informative and occasionally entertaining to be a Twitter follower.  You get new personal insights as well as some good tips, tricks, and tactics from the people you already know and respect - from Harvey Mackey or Tom Peters to Bill Cosby or Tony Robbins.  You choose for yourself if you want to follow the gurus or to be a celebrity groupie.

I use Twitter to maintain contact with friends and associates, think out loud, play with words, create new content, add to my Web presence and build a new audience.  Any of those may be important to you and your business.  It's easy and fast to set up and use or you can just visit and browse the content. Try it. 

Or visit my Twitter account and follow me if you're interested.
Follow me on Twitter
See you there.

Every Business is Global

You may think your little local business is too small or unimportant to be affected by the global economy, but unfortunately there is nowhere that is sheltered from the fallout - good or bad. 

It doesn't matter whether it's an oil leak in Louisiana, or a torpedo off Korea, or civil service perks in Greece, the consequences for the global economy will get passed on down to you and your business, wherever you are.  It may be interest rates, tax increases, program cuts, exchange rates or simply changes to your operating costs and demand for your products and services, but you will see a connection.

So what?  Well, obviously you don't have much control over events or any more ability than the plethora of erroneous experts to predict the event.  All you can do is BE PREPARED.  That means plan and manage with a large margin for error.  We live in volatile times and can only expect the unexpected; on top of the potential for the worst case scenarios.  

I don't mean to be too pessimistic, it is also possible that things could turn out much better than expected.  Be prepared for that too. 

Nobody said it was getting easier.  

FREE Business Plan Guide to Join "Entrepreneurs Only"

I am now offering a FREE copy of "The 10-Minute Guide to Business Plans" when you join the "Entrepreneurs Only" mailing list.

The subscribers receive regular updates, tips, ideas and information to help entrepreneurs be better and do better.

The 10-Minute Guide is a quick summary of all the basics to prepare an effective business plan and includes the recommended financial projections and a sample of a successful plan from a client.

Check it out yourself at: http://www.diybusinessplan.com/FREE10-minuteBusinessPlanGuide.htm

I will be pleased to have you join us with entrepreneurs from around the world.  
  

Do-It-Yourself Business Plans

It's done.

I finally expanded the quick 10-Minute summary into a Complete Do-It-Yourself Guide to Business Plans.


Including:

• A clear concise 50-page Guide that describes all the requirements for a great Business Plan .


• Valuable ideas and information on the personal and strategic business decisions required before you start


• Recommended Templates for your Financial Projections


• A quick summary 10-Minute Guide to Business Plan basics


• An actual sample Business Plan that delivered results

Check it out at: http://www.diybusinessplan.com/DIYcompleteGUIDE.htm


Why Do-It-Yourself?


As a management consultant, I have often been hired to help with Business plans. (As an entrepreneur, I've also written a few of my own.) But if you hire someone, it still needs to be "your" plan. Nobody can go away and write it for you.


It needs to reflect the entrepreneur's passion, competence, knowledge and commitment to the business. A consultant can help with the planning process, words, numbers, and presentation, but investors, lenders and strategic partners need to know the entrepreneur behind the plan, not the consultant.


Learn how. And do it yourself.

Breaking even is hard to do

Checking my portfolio after reading the Canadian market was up 60% since March last year, I was disappointed to see that I was just barely above the original investment values before the crash.

That didn't seem fair as the crash of 2008-2009 was widely reported as knocking values down by only 40%. I was expecting to be up by more than that.

Unfortunately, it's a lesson in the inconvenient truth of basic arithmetic. If your original investment is down by 40%, then it has to come back by 67% to return to break even. Do the math.

I agree it doesn't seem fair, but that's how it works. Breaking even is hard to do.

Being concise

Finally we're writing the all important Executive Summary to the Business Plan. And, of course, it has to be concise.

(Most advice also says to write it last, but I think it's a good starting point as an outline of all the points you will cover in more detail - so I recommend that you do a draft Executive Summary first.)

But the final objective is prepare a brief (1 - 3 page) summary of the key points in your Business Plan, which might be a 20-page document or more, plus all the supporting data in appendices.

An excellent guide to the Executive Summary is available at Garage Technology Ventures (Garage.com). They emphasize that aside from being concise and still answering all the important questions the Executive Summary is primarily a selling tool for your Business Plan. It allows potential lenders, investors or strategic partners to quickly decide if they are interested in participating in your plan.

And even more important than the executive summary is that one sentence or paragraph in your cover letter or e-mail (or elevator pitch) that convinces them you may be onto something that could be a viable business.

Golden Glow of Winter Olympics 2010

This week it feels especially good to be Canadian. Sorry (which we apparently say too much), but I just cannot help myself.

Being Canadian is sufficient to feel proud and strong after being such successful hosts of the Winter Olympic Games and winning an all-time record 14 gold medals. I know I didn't do much more than watch and cheer, and clap with my red souvenir mitts, but I still feel part of the team that hosted the games and did so well in almost every event.

Proud to get to know so many new Canadian heroes.

So many who worked so long and hard for their few seconds, or their long ordeal over ice and snow, to prove they could be the best in the world. Such an inspiration to us all to persevere in pursuit of our own goals - however humble they may be.

Go Canada! There is more for us to accomplish and more of us to expose to the world.

Olympic lessons for entrepreneurs

Enjoy the Winter Olympics in Vancouver, but don't miss the opportunity to learn some lessons to help your business go for gold!

You can help your business to perform like an Olympic champion if you take these ideas from the Olympics as your inspiration:

• Have a four-year plan to achieve Olympic records



• Decide: Go for gold, or Quit.



• Learn from your losses



• Push your limits



• It's not for the money



• Don't cheat



• It's never too late

To see the full article visit: "Olympic Lessons for Entrepreneurs."

Be inspired to take your performance to Olympic heights.

Customer banned for life?

Occasionally it's necessary to refuse business and fire customers, but banned for life?

A complaining Tim Horton's customer in St. Andrews New Brunswick has received legal notice that he is no longer allowed on the premises of either location in town. Ouch! The former customer is now brewing his own decaf at home instead of using Tim Horton's drive through.

Now maybe the franchise owner had good reason for banning the customer - disruptive behaviour is not good for business and needs to be stopped in the best interest of both employees and customers. But managing the fallout can be a bigger challenge. The customer has become an international celebrity and champion for better customer service as the story gets played out by the media. The owner seems an unfriendly tyrant defending bad product and poor service. He certainly hasn't done a good job of the PR.

Maybe a more tactful, diplomatic resolution would have been less provocative and provided less fodder for the consumer to go public.

Recycle your Business Plan

I'm re-thinking my approach to Business Plans as I give another course on the subject at Concordia's Centre for Continuing Education. To consider alternative approaches, I recently reviewed other widely available resources on the Web.

All very un-inspiring. Not convincing in presenting the reasons to document a good Business Plan and entirely discouraging in describing the process for preparing one. Not likely to persuade any busy, results-oriented, documentation-challenged entrepreneur that it's a good idea and that they can do it for themselves.

So I have come to describe my own approach as "Recycling your Business Plan". That best describes the process I recommend of starting simple, then continuously reviewing, revising and expanding the plan to deal with more issues and answer more questions.

I'm reminded of the "million dollar napkin" that one entrepreneur boasts he used to start and guide his business simply by responding to the challenge to put it all on a restaurant napkin.Or the thousands of successful businesses that were launched "on the back of an envelope". It's a good start to your Business Plan.

Here are the steps I recommend to "recycle" your Business plan.

Remember the objective is to arrive at that communications document that confirms the business opportunity, describes your strategy and operating plans, and presents the financials to prove it will be a profitable and successful business.

Each step is a version of the Business plan that becomes more solid and detailed at each "recycling":

1. Describe the concept, business strategy, marketing slogan and target market on one page (or napkin, or envelope).


2. Confirm that your personal objectives, skills, personality, experience, contacts and knowledge are consistent with your business objectives.


3. Collect the market data on customers and competitors that confirms both the business opportunity and your ability to meet customer needs against competitive alternatives.


4. Do business feasibility test at your estimated sales volumes, pricing and operating costs to determine profitability. Calculate break-even sales and compare to your forecast.


5. Adjust sales forecasts and cost estimates to assure profitability.


6. Expand the financial analysis to include start-up costs, working capital required and the cash flow consequences to arrive at the financing required. How much, when, and how will it be recovered?


7. Document in more detail your business concept and strategy and all the operating plans for facilities, organisation, operations, marketing and sales. Add a section on the risks considered and your response to anything that may not go according to plan.


8. Complete the document and full set of financial projections against a checklist of the Business Plan requirements of your intended audience - management team, lenders, investors, strategic partners.


9. The next recycling step is to capture your Business Plan in a 2 - 3 page Executive Summary, in a 1-minute elevator pitch, and in a 10-slide PowerPoint for alternative presentation situations.


10. The final recycling process is to continuously refer to your Business Plan against operating results for each period. After review, check whether the plan and objectives are still valid, then revise plans or performance to achieve the business objectives.

That's it. A few simple steps that take you from a good idea to a well developed and fully documented Business Plan that will serve as a guide to management and will persuade others to invest in your plan.
Recycling is good.