Business and Wealth have Rules and their Serious – part 2

31 01 2009

kid-and-toy-planeBusiness rules are not the rigid things that tie you up and rob life of excitement and fun.  May it never be…  No, what business rules are or do is define the treacherous path of business so you don’t kill yourself and therefore take you completely out of business.  You must pay attention to the rules in business or you will die a slow and sometimes agonizing death. 

These rules are as basic as gravity or inertia or entropy.  If, like the laws of physics, you pay attention to them, you will not fall to your death and you may even learn to use those laws to fly.  You will be able to make it over the tough times that WILL come and you will keep going for the long haul or until YOU decide that it’s time to stop.  So, okay, enough with the metaphors or similes or what ever they are, here is my shot at the basic rules as we’ve experienced them and seen them work in our client’s lives everyday.

In business you must:

  • Find your motivation for the business- It’s your fuel
  • Have a plan even if it changes later (and it will)
  • You must write that plan down, You MUST
  • You must clearly answer the big marketing questions
  • You must keep the marketing chain throughout your entire company
  • Learn to Manage finances… You don’t have to do them, but someone does
  • You must eventually make more than you spend
  • Until then you must have a plan for cash flow
  • Working and making money is not enough, you must have cash flow
  • Pay yourself first
  • You must set measurable goals
  • You must regularly check whether you made your goals and adjust
  • Systematize where ever possible
  • Get good help because you can’t do it all forever
  • Use consultants.  Good counsel is much cheaper than hard knocks… and faster.
  • Do what you’re good at and delegate what you aren’t
  • Innovate
  • Schedule innovation

 

These are the main ones I can think of.  I may have missed a few and some of these rules imply a lot.  What I never really found early on in business was anyone that explained what these rules were in a clear concise way and helped me understand the relevance of them.  I needed to know why they mattered and how they would help me do what I wanted faster and better.  I needed to believe that the time it took to learn them was worth it.  Some people told me it would be faster to do certain things but they couldn’t really tell me how.

 

I hope I can help you understand what is needed to do, why it’s important and illustrate the significance enough that you will take the time and change your behavior to follow these rules.

 

I promise you, if you stick with the rules your success will be greater and more frequent and your failures will be fewer and less painful.  How can that be a bad idea.

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Business and Wealth have Rules and their serious – Intro

31 01 2009

boy-and-looking-at-chessboardWhen I was young I hated rules and in a funny way I loved rules.  I hated them because they were limiting and I was creative and “innovative” as a child.  Not a characteristic every parent longs for in their offspring.  I eventually realized that I loved rules and structure because they allowed me to understand the boundaries of where I could go and be successful.  Just like in any game I couldn’t win unless I knew the rules.  Once I learned the rules I then was free to create my own path.  One of the Keys to business and wealth, and I don’t mean being rich as much as I mean having more than you need, starts with knowing that there are actually rules that can help you be successful. They are there to point out the order of things not the limitations.

 One of the keys to business and wealth is discovering the rules and then following them.  If you do, you can grow into being successful and if you master them then you will thrive at business and thrive financially.  If you strive to master the rules of business and finance you will also avoid a lot of pain in life.  But let’s back up a minute.  You might be asking, “do the rules really help me and not slow me down?”  Well if you’re like me you want to know how.

The rules we will talk about can help you get to where you’re going faster, safer and more efficiently.  One way our business would have grown much faster is if we had actually invested money in marketing and sales for ourselves.  We always thought that we didn’t have the time or couldn’t spare the money.  The truth was that if we had taken the time to plan, execute and invest the money we could have cut the time it took to get profitable by at least half, if not more.  We also would have saved tens of thousands of dollars.  Think about it like priming a water pump.  It takes a minimum amount of water in a given period of time to prime the pump and get a vacuum that brings all the water you need out of the well.  If you don’t put enough water in or you don’t commit enough water in time then the water is wasted and you can’t prime the pump.  So in your business and mine the water is the money.  Here is how that played out for us. 

Kathryn and I were always afraid of more debt and wasting money so we would just bleed enough money into the business to survive instead of thrive.  We didn’t fully realize that if we had spent the money up front instead of over a year or two then we would have increased our customers and our profit and gotten above critical mass faster.  We didn’t know the rules about priming the pump.  Needless to say there was a lot of stress and pain that didn’t have to be and all because of fear and lack of knowledge.  We didn’t have anyone telling us what the rules were and we didn’t know how to find them.  Yeah, we knew a lot of rules from life but we didn’t know all the rules of business.  We didn’t even always know what we didn’t know.  We didn’t know the difference between a good investment in council and education and a bad one, so fear took us buy the throat and we just did the best we could.  If we had a rule book and a Mentor/Coach then we would have been able to go a lot further, a lot sooner but we didn’t know how to find that either. Needless to say, knowing the rules and having a mentor are invaluable to all of us no matter what our sex, age or skill level.

So if I have your attention then stay tuned. Coming up… some really great rules.





All Business is Marketing… and numbers

29 01 2009

dice-on-black-istock_000007557830xsmallProbably the number one thing most companies do not understand is that marketing is not a department or an activity but is what every part of a business is about.  We call it the Marketing Chain and it is what connects every part of the business to a single focus, creating a customer.  Isn’t that what we are all in business for?  Don’t we all need customers to stay in business?  Peter Drucker, the father of management and most other things to do with business said that a business’s main purpose was only two things, innovation and creating customers. 

When a company focuses every aspect from R & D to manufacturing to customer service on the client then what takes place is a company that creates, operates, speaks and interacts with outsiders in one voice.  This one act alone can so change a company that the results are nothing short of amazing.  What begins to happen is that a type of energy pervades the company because customers become the focus and reward the company with sales and profits.  They genuinely believe that the company cares about them by talking to them, listening to them and responding by giving them what they want or need.  Let’s face it what people want is to get their needs met by people they like and respect them.

Now don’t get me wrong, even though i wrote that in five sentences I don’t pretend to think it is easy.  In fact it’s hard work to focus a company that much and to keep it focused.  Part of what we are talking about is a culture shift in the company and in the minds of the leadership.  The focus must be spelled out in clear language that serves three purposes, the facts, the behaviors and the new attitudes.  1) I must clearly communicate what the focus is the all need to know and what it takes.  2) I must clearly tell the company what behaviors make up this new focus.  In some companies this will be a foreign concept because they have been locked away from customers.  In other cases people start a business to do their thing and they just want customers to support their hobby or they just look at customers as a necessary evil. 3) I must clearly tell the company what our new attitude needs to be.  These will be the crux of good training and the beginning of a culture shift. 

To sum it up everything is about marketing and marketing is about defining our target market, fulfilling one of their needs and making sure they now about it and then adjusting to the new relationship.  If we do that then we will continue to grow as a company. 

Oh, and the numbers… well that is how we quantify everything that we do.  If we don’t keep a firm grip on those then we are sure to loose.  Remember, if you focus your company on marketing and the numbers you can’t go wrong.





Weigh the cost before you start

28 01 2009

red-flag-istock_smallThis blog entry is not encouraging and it is not uplifting so beware.  If on the other hand you want to go forward with your eyes wide open then read on.  Kathryn and I believe that having your own business is a great thing but it is also one of the hardest things we have ever done.  We believe with all our heart that if you are not compelled to pursue a dream to have your own business or to create something significant in the world then work for someone else.  You will save you and your loved ones a lot of heartache and a lot of money.  This is part of the shpeal that we give people thinking they are going to start a business and it starts with the advice, “Weigh the cost.”

Everyday thousands of people have, what Michael Gerber has called, an Entrepreneurial Seizure.  They think that it is their God given American right and maybe their duty to start a business.  They figure that if they can make something or perform a service that they can and should go out and work for themselves.  So that’s exactly what they do.  They quit their job and walk away from all since of security and start a company but what they didn’t do was count the cost.

While 100% of them actually believe they will make it 90% of them will not still be in business in five years.  Out of the remaining 10% it is said that 90% of them will not make it to ten years.  That leaves 1% of the original 100%.  So if only one out of a hundred actually make it for the long haul then why would you take the risk?  It will cost more money, more time and more determination than you think.  You will work long hours, be exhausted most of the time and wonder when you will you ever make a profit.  If you think that this will be over soon well think again.

Most companies don’t really make a profit the first couple of years and the ones that fail over 90% in the first five years; well they never made a consistent profit.  That’s why they failed.  And when those 90% of people’s dreams came to an end what did they have to show for three, four or five years of blood sweat and tears?  The answer is nothing except a bunch of memories and what some would call a character building experience.  So if you can run away from this entrepreneurial seizure then run.  If the seizure is so strong that you can’t run then just relax and don’t make any decisions until it is over and then get up and run.

But, if you can’t stop thinking about it and long after the first seizure hits you still are driven to do start your own business then do yourself a HUGE favor, learn what it takes and weigh the cost. We help companies succeed everyday and we can help you.  The people who succeeded are not lucky but they learned what the rules of business were and worked hard to apply them.  The one thing you have that many of us didn’t is a guide through the narrow path.  Read it and pay attention and you could be one of us business owners that love our work and can pay the mortgage.





Do what we say, not what we did…

27 01 2009

do-not-enter-sign-small1I like to tell the story about the plumber who has bad pipes at home or the cobbler whose children all need new shoes.  I like to tell these stories because for a very long time my wife, who is my business partner, and I have had bad pipes at home. 

What I mean by this is that for most of our formative years in business we didn’t pay much attention to our own marketing and we didn’t execute our own business affairs in the same way we advise our clients.  I don’t completely understand why but part of the problem seems to be that it is hard to hold your own feet to the fire.  You also get so busy working for your clients that you neglect doing the right things for yourself.   So the following is a brief confession of our trangressions in business and the lessons we learned the hard way. 

When we started our business we had lots of experience at everything but running a business.  Especially the parts of the business that are required in a startup.  Oh, don’t get me wrong, I had started many businesses and all of them, well… let’s just say they no longer take in revenue… and in the beginning this business wasn’t much different.  I was doing the best I could but that was not good enough.  When we started this business we had no clear plan.  We lumbered along the entrepreneurial path hitting every pot hole in the road.  Occasionally we had some success but it didn’t usually last and there were several times we had the painful discussion of whether we should give up or not.  Fortunately we are still alive and have made it to this point.  Here is a list of just a few things that almost sank us.

  • We didn’t have a business plan
  • We didn’t fully know what our business was about
  • We didn’t really know who our ideal client or target market was
  • We never spent enough money on marketing so we never primed the pump
  • We didn’t have a mentor for a long time
  • We didn’t have any experience running our type of business
  • We spent too much on the wrong things at times and not enough on the right things
  • We were confused about what we did for way too long
  • We didn’t understand financial reports
  • We didn’t know how to evaluate our industry ratios

This is just a short list and I’m sure that if you sat my wife down she could give you several more.  These mistakes cost us time, money, peace of mind, some dignity and almost cost us our business.  Since I am writing this it is probably obvious that we survived but at no small cost.  Business is hard enough and there are good reasons that some 90% of all new businesses fail in the first 5 years. 

So I am writing this blog for three reasons.  The first is to try and save you some pain and the second is to get you to your goal of success (and I do mean profitability) as quickly as possible.  The day you say, “We’re profitable” is a good day.  The third is to encourage those who are barely profitable but every month it is a struggle.  You can have a thriving business.  But now that I think about it there is maybe a fourth reason.  That reason is a selfish one.  Every time my wife and I help a company be more succesful and avoid the blatent mistakes we sleep better, we laugh more and we find that life and our vocation is that much sweeter.  So please, do as we say and not as we did, we’re professionals… I think…





13 potential chapters or The key parts to making the business work

26 01 2009

copy-of-number-13-istock_000004647867xsmall3I’ve been thinking recently about the main points my clients all need to know.  This last week I had one client contact me and tell me that they are shutting their entrprenurial venture down because it will cost them to much.  They are two Moms that had an idea and didn’t realize the cost.  They invented a cool thing for parents and their kids and even spent several thousands of dollars having it developed in China but didn’t realize what it would take to go to market. 

 I had another client drop by the office and ask how we could help them in these tough times.  They are a national company and this client is the VP of Marketing and Sales who has lots of sales experiance and not much Marketing experiance.  They need to increase sales but are shooting from the hip.  I told them they need a plan, a strategy.  He comes from the school that says, ‘When I have time to plan I will.”  After a long conversation I told him that he doesn’t have time not to plan. 

In Both of these cases key steps where missed in the business process that would have saved time and money.  Over the next few weeks or months I want to write on some of these topics.  Who knows, maybe this is the outline or chapters of the book I have been looking to write.

 

The Thirteen chapters are:

  1. Don’t do what we did
  2. Weigh the costs before you start
  3. All business is Marketing and Numbers
  4. Business and Wealth have Rules.  Obey the rule and you might survive, master the rules and you might thrive
  5. The Message Document-  Preparing the ground before the foundation
  6. The Map- Business Plans are the foundation but you need a Sherpa.
  7. Benefits vs. Features – Don’t get them backwards
  8. Find and Expert – You need help so get good help and remember you get what you pay for.
  9. 10,000 hours or maybe 1500
  10. The Marketing Light House Effect
  11. The Relationship Map
  12. SEO – Knowledge is more precious than gold
  13. Anyone can Succeed

There may be more but I think I’ll start with this.  See you soon.