In many businesses, the end of December and first week in January can be a slow time of year. It’s a great time to slow down a bit and recharge your creative energy but if you are like many entrepreneurs, your mind will still be buzzing with business ideas.
When I was in the home furnishings business, I spent the last two weeks of December in Hawaii with my husband and son. The holiday season was a quiet time in that industry, but because I am an idea generator, I couldn’t tune business out all together. If you are a creative entrepreneur, chances are your mind works the same way.
Rather than stress over the lack of revenue this time of year, there are some things you can do now, even if you are on vacation, to make sure 2013 is your most prosperous year yet.
1. Do a review of 2012.
First, Congratulate yourself on what you did right. What was your most profitable product or service? What project was the most fun? Ask yourself how you can expand on those areas of your business that brought in the most revenue and brought you joy. What products or services can you add related to those successful ones? Are there things you can do that compliment them that would appeal to the same customer? For example, you make canine themed jewelry for humans? Would the same customers who buy your breed specific charms buy custom jewelry (tags and charms) for their dogs? (If you need ideas on that one, I am full of them.) Or, you write a blog on nutrition for vegan expectant mothers. Could you also add a product that those mother’s will purchase after their babies are born? ex: a booklet or e-course titled “How to make sure your vegan toddler gets enough protein.”? And maybe sell someone else’s hand-made, leather-free (vegan) apparel?
Now look at what mistakes you may have made or where you see holes in your business. Remember, only do this after you’ve spent time on your successes. What areas of your business took more work or cost than they were worth? Is there a way you can make them profitable and enjoyable? If not, are you willing to let go of the parts of your business that don’t have a sufficient monetary return? Can you outsource the aspects that lack a joy factor? Will changing the process or materials you use make the product or service more profitable or more fun? (yes, “joy” and “fun” must be part of the year-end review. After all, isn’t that why you are in business for yourself?) If there are areas in your personal life that you’ve neglected while launching your business this past year, make sure and list those in this section. What do you need to do to take care of “the boss”?
2. Outline solutions and goals.
Now that you have identified the specific areas of your business that work and those that are in need of attention, make a list of what steps you will need to take to attain those goals over the next 12 months. I find it’s most helpful to break these down into monthly projects and then break those into weekly tasks. You can even start each week by making a list of daily baby-steps.
Include any personal care in this section. (If you’ve been seriously neglecting yourself, I would avoid things like “lose 20 lbs” or “run a triathlon” and instead set goals like “eat a nutritious meal 5 nights a week” or “walk 3 times a week at lunch time”.) You can then break these down into baby steps if you need to.
3. Line up your support network for the year. Do you have a mentor or coach who will help you find solutions and hurdle the speed bumps? Will you be part of a mastermind? Particularly if the first two steps felt overwhelming or you know you will get distracted and off track, it’s time to invest in yourself and your business by hiring a guide and joining an accountability group.
You can find info here on how to find a mentor and where to find your entrepreneurial tribe. http://ht.ly/go9K6
September has always been a time of new beginnings for me. Yes, most people think of January as a time for fresh starts and of course spring is time of re-birth. Maybe it’s my Jewish upbringing because the Jewish New Year begins in the fall, or just left-over school days excitement about moving up to the next grade. Possibly it’s the years I spent in retail when Labor Day signaled the end of tourist season and the time to place orders for the holidays. Whatever the reason, I get fired up to do new things in September.
Nine years ago on the first of September my father passed away. Flying back east for to bury himl, I couldn’t help but wonder at his timing. Had he waited until Labor Day so that I wouldn’t have to leave my business during tourist season? As you know if you are a regular reader, my dad was the greatest influence in my life as entrepreneur. My cheerleader and confidante, he encouraged me to start up businesses, even those he didn’t really understand. Having spent his career selling competitively priced goods, he was baffled by my confidence in selling to a more upscale crowd. He thought in volume while I wanted to know the person responsible for creating each product. One thing we had in common, though, was that we both loved designing new business models and couldn’t imagine not being self employed.
Do you also find yourself thinking this is the time to start up something new or make changes? Does the fall get you motivated to step up to your dreams and make those ideas take shape? Are you ready to finally do what it takes to make your business more meaningful and more profitable? The best ROI you’ll ever realize is when you invest in yourself and in your dreams.
Because I want to see you finally dive in and get your business rolling, I am extending my summer Idea Generator Package through September or until slots fill.
That means 3 Session Package for $378. (That’s a SAVINGS of $189. on a $567. Value for three sessions purchased separately. In other words, you are getting one session F*R*E*E*) Find out more HERE
Fledgling and aspiring entrepreneurs frequently confide in me that they want to start or grow their business. They start out with great enthusiasm but lose momentum and fall into paralysis mode at the thought of marketing. They use words like “sleazy” and “underhanded” to define internet marketers. I keep hearing, “ I really want to start a business but I hate the marketing part.”
As a new entrepreneur, it makes sense that you hit a wall when everything you read tells you that the only way to build your business is to create free mega tele-summits where you give a few bites of valuable content and then spend the last fifteen minutes of each call plugging a high priced program. It works. but YOU DON’T HAVE TO DO THAT to succeed. I don’t and some of my entrepreneurial friends don’t either. We write on our blogs, share with our friends on Facebook and Twitter and charge reasonable fees for our valuable services. We don’t hold free calls and then offer pricey programs. We promote paid tele-classes where we offer valuable information.
I’m not making a judgement on that type of internet marketing. It just doesn’t feel right for me. But I’ll let you in on a little secret. I love marketing. I love good marketing so much that on the rare occasions I watch television, there are a few commercials that I actually look forward to viewing again and again. I giggle every time I see a certain home insurance commercial featuring an exceptionally domestic canine. I’ve never thought of buying a Subaru but their recent ad campaign featuring a father and daughter makes me want to hug the ad team.
As a small business, you might not do a lot of paid advertising. As a solo entrepreneur, you are better off developing ongoing relationships with people who have like interests and will become long term fans. That’s marketing-the art of connecting with those want or need what you have and letting them know about your products and services. You don’t have to use the popular formula if it feels “bait and switch” to you. If you offer something of value in an authentic, straight forward style, there is nothing “sleazy” about it.
Aspiring entrepreneurs are under the impression they need large lines of credit, and when they hit obstacles, they frequently keep pouring more money towards the same mistakes rather than having to find creative solutions. It’s my firm belief that this keeps them from ever developing their problem solving muscles.
As a successful serial entrepreneur, I know first hand that starting on a shoestring and having no back-up capital is the best way to grow a profitable business.
The first business I started at 23 happened almost on a dare. I had no idea what I was doing until I did it I had planned to start a creative arts program for pre-schoolers and was working to save start-up money. My father had a furniture and appliance business and needed help with advertising. When I realized how much commission an ad agency takes, I walked into my dad’s office and said, “If we start an in-house agency, we can save (a figure equal to 15%) a year”. Coincidently, the figure was more than double my salary. He looked at me and without blinking said, “so do it.” I knew that translated to “YOU figure out how to do it on your own.” He didn’t offer to loan me money and I didn’t ask . I’m convinced that’s why I’ve been successful. He gave me the gift of faith in my ability to be a creative problem solver.
So often new entrepreneurs get caught up in lawyers, accountants and business plans. Yes, you will need them eventually but rather than spend on high paid professionals right off the bat, start out simply as a sole proprietor and once you see you are making money, you can hire someone to count and tax-shelter it. You won’t need a formal business plan if you aren’t going to apply for a loan.
When my husband and I decided to open our own furniture business, we didn’t have the money to set up a brick and mortar store so we sold our house, took the tiny bit of equity ($12,000) to buy a container of furniture, rented a hotel banquet room and started a business that we eventually grew to 17 retail stores grossing 25 million-without ever borrowing a dime. At first, we were literally living out of hotel rooms and a van with a toddler. It was a huge risk so we had no choice but to succeed. Having made the decision not to borrow money, we had to be creative because there was nothing to fall back on. We made some mistakes in the beginning and if we’d had a lot of capital, we may have blown it before we learned some valuable lessons. Instead, we became resourceful and innovative problem solvers.
In 2000, I fell in love with a small seaside tourist town. I knew it was time to get back to art and this seemed like a perfect location for an art gallery. Having no idea how I was going to do it, I signed a lease on a retail space in October with a commitment to open Thanksgiving weekend. Then my son and I headed to the lumber yard for plywood to build display pedestals. My only experience with the art business was selling my work at craft fairs when I was very young, so I spend the next few weeks going to Open Studios, chatting with artists and trying to figure out what sells. Because I don’t believe in putting a lot of money into start-ups, I talked about 50 artists and craftsmen into working on a consignment basis. I ran the gallery alone 7 days a week for the first several months until the business could afford the first employee. Some of the merchandise I started with turned out to be wrong for the clientele but because it was on consignment, I didn’t lose money. I simply returned it to the artists, grateful I hadn’t invested start-up capital and considered the lesson a blessing. Once there was good cash flow, I began attending trade shows and purchasing contemporary crafts wholesale but I never bought more merchandise than I knew I could pay for within 30 days.
Within the first couple of years, the business had outgrown the first location, I had a great team of loyal employees, an enviable income and a strong following with locals and tourists.
When it was time to move on, I sold the business for a very nice six figure profit.
If you’re ready to start a business and the only thing stopping you is start-up funds, hold that big vision but look for creative ways to start small and grow.
You know that feeling you get when you work with a client who truly appreciates the value you add to their life or business? How you feel all energized? But sometimes you have a client who drains you and you feel worse after working with them. If you are in a service or consulting business, your income depends on attracting and retaining clients but not all clients are right for you. Here are some hints it’s time to fire a client:
-She wants 90% of the work for 50% of the money.
We’ve all worked with someone like this. You work up a proposal that involves several segments for a package price. You spend time presenting it to the client and explain how each piece will benefit her business. She’s excited about it and says, “Yes, let’s go for it.” She calls you later and says, “I’ve been thinking about this and I want you to do the part first and then we’ll do the other part later.” She expects you to charge her half as much because she’s only asking for half of the project. What she doesn’t realize is that she is asking you to do the most time consuming work for half the money. It’s time to fire that client.
-She thinks you are available to her round the clock.
If you do any kind of coaching or consulting, you’ve probably dealt with this high maintenance client. You set up a series of phone or in-person appointments and at the end of each meeting, you give the client homework. Between meetings, she emails this work to you so that you can be prepared and don’t have to “waste time” on your next scheduled call. What she’s saying is, “I want you to work on this during time that I am not paying for.” Time to fire her.
-He thinks taking you to lunch to talk about his business doesn’t count as billed time.
After I sold my last business, I consulted with other retailers to help them increase revenue and profits. I charged a modest fee and my clients saw results. An existing client called and asked if we could meet for lunch and discuss my helping him market his business for sale. We didn’t have a decent business broker in town so I did all the marketing on the sale of my business myself. Several other shopkeepers had called to ask how I brought in three offers when their businesses sat on the market without a bite, so I added this to my consulting practice. I met the above mentioned client for lunch and outlined the exact steps I would take to get his business sold. They included setting up a separate web site for the sale of his business, writing copy, preparing a prospectus, setting up social media sites and writing posts for him. After quoting him a fee, he said, “Oh, I didn’t realize that was part of your business. I can do that myself now that I know what needs to be done.” He paid the check, gave me a hug and said, “Thanks so much for taking the time to talk to me about this.” When a client assumes your intellectual property can be bought for the price of a tuna fish sandwich, it’s time to fire him.
If you’ve clearly defined your services and fees and a client is trying to get something for nothing, let them go. If you don’t feel great working with someone, be honest with them. Tell them the relationship isn’t working. Don’t let them rent space in your brain for free. You’ll be surprised how letting go of one bad one will open space for three ideal clients.
Have you been considering purchasing an existing business but not sure you should spend the money when you could start your own? It’s important to weigh many factors before you decide if it makes sense to buy or start from scratch.
For years I’ve bucked the adage “don’t re-invent the wheel” because I believe some of the most creative and inspired ideas and businesses are a result of doing it differently, putting your own spin on an existing concept. If you find an existing business that you love and that has a sound track record of profit, ask yourself the following questions:
- How could I take this idea and make it even better?
- Is this business missing a demographic that I could target with a similar model if I tweak it or add something to it?
- Do I like the service or product they offer but not the location?
- Would this concept or model work with a different product?
Here’s an example:
Last week, I spotted a unique business in the parking lot of the community swimming pool. A young man was making crepes on the back of a cool little teardrop-shaped trailer. Of course, I had to interrogate him as I always do when I discover a business I haven’t seen before. I learned that he sets up every Thursday in the summer at this location and at a different location every day of the week. He takes his portable creperie to local soccer games and other community events.
As I continued my walk, I thought of other items this concept could be applied to and taken to various locations where the ideal customers gather. The list of products someone could peddle this way is endless: candy, ice cream and even non-food products. OR, what if you loved the idea of starting a crepes business but not moving a trailer to a different location every day? Could you set up on a college campus permanently?
If you spotted this business on vacation and loved the idea, you might consider duplicating in your own community. Do you know enough or could you research and learn about it to start up on your own or would it make sense to approach the entrepreneur who’s already doing this about hiring him as a consultant to help you start your own traveling crepe cart? Or purchase recipes from him?
While I generally encourage people to start their own business, there are times when it makes sense to purchase an existing business.
Years ago, my partner and I sold our home furnishings business to our controller. Since he had all the inside information about vendors, advertising, employees and the systems of the business, he probably could have started from scratch, particularly since that business was not dependent on repeat customers. He chose instead to purchase the existing business because we had ideal locations and all the suppliers, vendors and personnel in place, saving him a lot of time which meant he could immediately begin earning.
If you’re considering starting a personal service business, it might be best to start from scratch. When I decided to discontinue bodywork, it would have been foolish for another therapist to purchase the practice because I WAS the business. My clients liked my style and may have been unhappy with the work of another therapist. The same would hold true for some other very personal services like hairstylist or aesthetician. It is possible to profit from your knowledge, however, when you are ready to close a business that isn’t really salable and I’ll address that in a future post.
So, when does it make sense to buy rather than start up on your own?
The couple who purchased my contemporary craft gallery made a wise choice to buy rather than start from scratch because I had a favorable lease on a building in an ideal location which was a valuable asset in that community. I had also established strong relationships and exclusive agreements with artist and vendors. I’d already figured out what works and doesn’t so they benefited from my early mistakes which saved them a lot of money. The gallery had a loyal following with locals and was a destination for tourists. All of those factors made it a wise choice for this couple to purchase rather than start a business on their own.
If you’re not sure whether to purchase an existing business or start your own, ask yourself these questions about any business you are considering.
- Does it have an established loyal following or clientele?
- Is the location ideal or would you be able to start-up in a better spot?
- Are there a number of years left on the existing lease and is it transferable to a new owner?
- Does the seller have exclusive agreements with vendors or sources?
- How much time would it take before you would be able to generate income if you started up on your own?
- Does the existing business have a strong reputation in the community?
- Does the market warrant another like business?
What if you spot a business you love but want to open your own in a different location? I’ll address that in a future post.
In the previous post, we talked about why bigger isn’t always better. Here I want to address a related issue that keeps cropping up in conversations with new and aspiring entrepreneurs.
There seems to be a lot of buzz these days about starting your business with your “escape” in mind and I think it scares many would-be entrepreneurs because they think they have to create this machine that can function without them.
For some people, this is a great idea, but to me, it gives the same message as Tim Ferris’s “4 Hour Workweek”-that work is not fun and is something to just get over with as quickly as possible so that we can get on with the business of life. Well, that seems counter-intuitive to the flavor of creating work you love. If the purpose of starting a business is to set yourself up to stop working, then, yes, it makes sense to create a business that can run itself without you. But what about those of us who don’t even consider retirement and want to share our special gift with the world or those who want to create income out of interests and enjoy our work?
Whether you’re employed at a job that’s a poor fit or you are out of work, you are likely considering some kind of a career change. That can either mean looking for another job or starting or purchasing a business. Unless you’re just putting in time until you can retire, you probably want to do something that has meaning to you and in this economic climate, finding that perfect job is even more difficult.
Not everyone who wants to start a business aspires to be a mega tycoon. Many people just want to escape a job that’s unsatisfying and find a livelihood that pays well and is enjoyable. If you fall into the second category, it’s best to tune out a lot of the chatter about starting a business not a job for yourself because your dream job would likely be one where you work where you want, with whom you want and do the kind of work you love. Well, if it’s your business, you get to choose where you work and who you work with and what kind of work you do because you have a great boss-YOU. You choose your benefits package and the type of retirement investing you want to do and you can design an exit plan that keeps paying you if you at some point decide to stop working.
Not only is there nothing wrong with creating a job for yourself, or in some cases “buying yourself a job”, it’s a damn good solution.
In future posts, we’ll address when buying yourself a job makes sense and how you can continue to earn should you ever decide to slow down.
We’ve all heard the advise “Work on your business, not in your business. Leveraging is the key to growing your business. Get your business to the point where it can work without you.” In some cases that is good advise but often it’s not.
Yes, leveraging can mean you have some passive income or that you can produce more revenue than you could on your own but bigger does not always mean more money, more free time or more satisfaction.
Some aspiring entrepreneurs have a goal of growing a large business and hanging out on a tropical island while employees run it, but chances are you are going to spend a lot of your time in an office planning, directing and delegating. Is that what you ultimately want your life to look like?
Let’s say you are a custom cabinet maker. If you started your business because you love doing that kind of work with your hands and get satisfaction out of taking the project from design to completion, are you going to be happy doing the work to drum up clients, hiring other cabinet makers, ordering materials, keeping track of payables and receivables and handling payroll? Probably not.
In some circumstances keeping it small is a smart choice. Maybe you don’t want to deal with the administrative side of overseeing a large business. Perhaps you thrive on the actual service you perform or customer interaction. Sometimes growing large can be so costly with payroll taxes, worker’s compensation insurance, remote office rental, etc, that your net profit isn’t much greater than staying small and keeping your costs and quality of service under control.
Years ago after finishing massage school, I intended to open my own body-work center and hire other therapists to work for me for a percentage of the revenue. I’d had other businesses and knew the administrative load involved. To get practical experience in the spa industry, I subcontracted to a few resorts and what I discovered was that while I was comfortable with and good at the work involved in marketing and running a business, what I really loved was the hands on healing work with the client. I didn’t want to give that up in the interest of building a large business.
In the home furnishings business, however, I found I enjoyed the marketing and administrative side more than customer interaction so running a larger business made sense. However, there was a point at which rapid expansion proved less profitable because we grew faster than we could manage.
When I opened a contemporary craft gallery, I loved the face-to-face client contact and knew that I needed to out there with customers to learn their preference. I also needed to do the buying and attend trade shows to keep up on trends. I didn’t want to be behind a desk doing paperwork so I delegated the book-keeping. Even though I loved working in the business, I also wanted and needed some free time for other activities I love like walking on the boardwalk, in the redwoods and traveling. Some small business owners will just close up shop a day or two to have time off but I wanted to be open seven days a week so I opted to hire additional exployees to work the gallery and have money coming in even if I was away. For me, that was the perfect mix of hands-on and delegating. When I was encouraged to expand and add other locations, I knew that wouldn’t fit the lifestyle I was looking for at the time.
Before making the decision to expand your business, ask yourself what aspects of the business truly excite you and which tasks you prefer to avoid. If being out doing the actual service is most satisfying to you, it probably isn’t going to make you happy to have other employees or contractors doing the work and sitting back directing. You may be happier for the long run doing the work yourself and having an administrative person handling the appointment scheduling, phone calls and paperwork. Every entrepreneur has to find her own comfortable balance so don’t assume bigger is always best.
Are you ready to leave your job but not necessarily walk away from the field entirely? Maybe there are factors about your particular position or employer that make you restless and wanting to escape but you are interested in doing something on your own related to your current industry. Are there things you’ve learned on the job that will be invaluable to you in launching your own business?
Perhaps you like the industry you’re in but your current job is unsatisfying. Maybe it’s personal dynamics or a long commute that you are unhappy with, not the field itself.
I just read a former brand manager at Proctor and Gamble and an account manager at Welch’s who left his lucrative position to launch his own beverage company. Steve Hatch was senior VP of sales for TradeWinds, maker of ready-to-drink iced teas, when he identified an unmet need. From his experience in the beverage industry, he knew that coffee is a $50 billion business and that convenience is an important factor for consumers. No one was making a ready-mixed flavored coffee with milk and sugar in its own microwaveable container. It was a niche waiting to be exploited.
Hatch’s knowledge of the industry enabled him to set up a canning plant in Wisconsin and collaborate with Campbell Soup Co. to make the container.
Identifying a need and manufacturing the product are all terrific but what really makes a launch successful is knowing how to bring it to market. This is where Steve’s previous industry experience proved priceless. From his work with other beverage companies, he had relationships with key contacts at the major retail chains and managed to get his product on the shelves at 1800 Walmart stores.
What have you learned in your career as an employee that you can carry with you to your own new venture? Are there unmet needs that you recognize or an unserved market sector? What’s lacking in your industry that you can create a solution for? Who do you know from your work experience that can help you make it happen.
What contacts have you made that will be helpful in getting your own product to market. Have you developed relationships with suppliers, brokers or buyers? Would you know how to source products for your new business, where to buy raw materials, how to manufacture and distribute?
If you’re even considering leaving your job to start your own business, begin keeping a list of all the contacts, sources and industry knowledge that you can take with you. Industry relationships and intellectual resources may prove to be your most valuable start-up assets.
Do you feel like you spend so much time trying to grow your client list but you aren’t bringing in the revenue to show for all your efforts? You may be wasting a lot of energy courting the wrong customer.
Many fledgling entrepreneurs make the mistake of trying to make everyone their customer. Motivated to grow their business quickly, they fear turning any business away so are too general and don’t take the time to define and target their ideal customer.
I see this in every kind of business from coaching to retail to service. In fact, I just heard a story this morning about a young woman who in an attempt to build a Mary Kay business, held a party for all her friends, college students who are mostly on financial aid. No one at the first party purchased except the host who received a huge discount. But the representative wanted to build her customer list so she asked each of the girls attending to host a party. The idea is for each of them to bring in other friends who will purchase and bring their friends who will refer their friends and become repeat customers. But, if none of them purchased at the first party and they each have a party to get the free hostess gifts she is going to waste more time and effort doing several more presentations to the same girls who will do nothing to grow her business. She’s wasting energy wooing the wrong client.
I saw this in my own businesses as well. Years ago I studied massage and wanted to grow a practice quickly so gave discount coupons to everyone I knew in hopes that some would become regular clients. Thinking I should practice all the different bodywork I had learned, I would do whatever type of massage the client wanted. What I saw very quickly was that many of them enjoyed the massage but couldn’t afford weekly or even monthly bodywork. Then I sat down and wrote out criteria for my ideal client. I decided to specialize in one modality and only target clients who could benefit from upper body, neck and shoulder work and who could afford to pay for the work regularly. Then I made a list of people I knew who either fit that profile or who were in a position to refer my target client. Rather than offer discount coupons, I gave this targeted group gift certificates for a free session. Instead of attracting clients who were only taking advantage of a free or discounted service, these were chiropractors, physicians and people with the means to pay and refer. By putting my time and effort into targeting a very specific profile rather than courting everyone, I very quickly built up a thriving practice.
When I opened a gallery of contemporary american craft in a tourist town, I realized that the majority of people walking down the street patronized the shops that sold souvenirs and imported nicknacks. I quickly learned that only a small percentage of the visitors either valued or would pay for handmade items. I knew in order to make it, I would have to adjust my inventory to appeal to at least twenty percent of the foot traffic. I could have started carrying chinese knock-offs and thus brought in more customers but I had made a commitment to support American crafts people. Also, if I carried the same old trinkets everyone else did, I would appeal to a larger population but what would differentiate me from the other shops in town? So, I made the decision to stay focused on a specific client and added in some more affordable pieces that were still handmade and continued to target the customer who would refer and return. Yes, I missed eighty percent of the foot traffic but the twenty percent who I did reach were my ideal client and became loyal, long-term customers.
If you’re you working too hard to be everything to everyone and finding it frustrating and unprofitable, ask yourself the following questions about your client list:
Can most of them afford to pay you fairly for your product or service?
Do they come in regular contact, either in person or virtually, with others who are your ideal client?
Are they people you enjoy working with who will tell their friends or clients about you?
Will they become long-term repeat clients?
Are they likely to purchase other products or services you offer in the future?
If you answered no to any of the above questions, you are courting the wrong client. Stop and make a list of the qualities your ideal client possesses and then figure out how you can reach those people. If you stop trying to reach the eighty percent who won’t become long-term paying clients, you’ll find the twenty percent you do target will bring in the majority of your income.