Advice to New Business Owners: Part 2

Here are some more tips and comments from OED500 applicants when asked to share advice to people starting a business. In the OED spirit of "entrepreneurs supporting entrepreneurs," we'll be passing along some of the best feedback received. Read on and pass along to those you know who are making a go of it!

MG(ret)Roger Blunt
Retired Military Officers Association (RMOA)
Join or form systems of information sharing and cooperation with other small businesses in like situations; rethink the old paradigms that have characterized your operating systems or methods and don't be afraid to change or challenge them; look for cooperative efforts with others outside your standard arenas; be available to joint venture, team, or form other marketing alliances to increase your market share; work harder AND "smarter".

======================================
Tom McCormick
http://www.tom-mccormick.com/
Pay yourself first! Do not expect to profit from revenue coming in alone. Determine that for each dollar coming in, you are going to take out X cents for profit. If you can't get the work done (at the proper quality level) with what's left over then you are losing money before you even agree to take on the revenue.

So true, Tom! How many business owners scramble to pay other without taking a salary? A too common problem in this economy and a hard business "habit" to break once started!

=====================================
Don Ritzman

Absolute Identification, Inc.

Try to create relationships with partners that do not require major outlays of cash. Cash is the precious item that all start-ups need to preserve in every way possible in order to sustain and then be in a position to grow. Cashless transactions with key partners can help make this easier.

Great, creative way to stretch that ever-so-precious cash on hand!

Watch for more great small business quick tips, search for expert advice, and explore opportunity postings at http://www.oedmembers.org/!

Advice to New Business Owners: Part 1

Each OED500 applicant is asked for advice to people starting a business. In the OED spirit of "entrepreneurs supporting entrepreneurs," we'll be passing along some of the best feedback received. Some will be a healthy reminder to us all, and some may make you smile. In all cases, they are words to live by for people starting out. Read on and pass along to those you know who are making a go of it!


Jennifer A. Garcia
Logicreative Design (on twitter @ LogicCreative)
1- clarify your target audience not only who needs your products/services, but who can afford them
2- be very clear on your own business goals
3- utilize social media

Check out Eyal Bino's post on small business Social Media to get started on #3
-----------------------------------------------------------------


Adele Ann Taylor: Adele's Literacy Library  (on twitter @ ALLforbooks) 
Plan accordingly and project your expenditures as far out as you can. Know that your dreams take a lot of hard work, dedication and sacrifice.

Well said, Adele!
-----------------------------------------------------------------


Kendra Von Achen

DB Pros Consulting  (on twitter @ dbpros_crm ) Make sure you're committed to it before diving in. It is hard work running your business, and as they say, not very profitable for the first 3-5 years. I have virtually no overhead, but I'm not making what I made in corporate America.... Stick with it through the ups and downs and try not to get in your own way through negative thoughts, etc.

Thanks for the candid feedback, and the realistic expectation-setting reminder, Kendra. It's very easy for people passionate about a new business to get swept up in the energy. Grounded expectations are key to their businesses as they launch.

Is "fear" holding back small business owners' from taking steps to improve their business?

John Walters taps into the pulse of the small business community, and seeks your feedback to assess the current environment.

In speaking with small business owners, it occurs to me that they are feeling more than a little battered and bruised: the markets are down; 401K’s where they exist are in decline, and significant equity in their homes has been wiped out.


Employment statistics are not encouraging, consumer confidence is low, and at the same time owners are reading about how the government is helping small businesses, but they are not realizing the benefits.

Fearful that returns may not materialize, and with siege mentality, business owners are reluctant to invest money, even when the returns look to be attractive. In essence, they appear to be paralyzed from taking actions to improve their business.
“Cash is King” and owners are keen to hold on to what they have.

Does any of this sound familiar?

Please share your thoughts on the above.
 
Reprinted with permission from 1-2-1 Business Consulting, LLC

CONGRATULATIONS GWYN EDWARDS!

DC-Based Caterer Recognized for Perseverance

The Organization for Entrepreneurial Development is pleased to announce that the third quarter winner of the OED 500 is Gwyn Edwards, founder of Sweety’s Last Minute Catering of Washington DC. The OED 500 is a quarterly small business contest started as a way to recognize the flexibility, resourcefulness, and at times extreme measures displayed by American small businesses during our country’s recession. Hit hard by the recession like many small business owners, Ms. Edwards has preserved through the creativity and determination that is the hallmark of entrepreneurship.

“Gwyn has been in business over ten years, demonstrating tenacity to pull through the last prior downturn and this most recent economic turmoil,” stated Brian Marshall, an OED Trustee. “Like so many businesses, her business is a service-based business that many will see as a non-justifiable expense in recessions. By retooling how she presents her services, she has sought to maintain revenues. Changes in suppliers have assisted in cost containment as rising food costs were further chipping into her bottom line.”

Ms. Edwards formed Sweety’s Last Minute Catering in 1999, when an attractive opportunity presented itself. Spurred into entrepreneurship, she says she believes in, “starting out with a firm, well planned and well thought out footing.” Ms. Edwards explained, “I began my business in response to an opportunity and did not begin reviewing growth opportunities or making growth and expansion plans until I realized the initial opportunity could shrink as well as it could grow.  I would counsel others to actually perform 3,6,12, month and 2 year analyses and put plans into place to usher their small businesses thru growth or shrinkage periods and thru tough or not so tough times.”

“They are the drivers of the United State’s economy. The entrepreneurial spirit is vital to our country’s history and to our economy. “Small businesses account for 80% of all jobs in the United States,” said Mr. Marshall. “It is widely regarded that this nation’s economy can not recover without small business recovery. We support the entrepreneurs who have struggled, who have struggled through credit crunches and down sales. They are working though and pushing through to survive, stabilize, and then thrive. In OED’s mind, that needs to be recognized. Business owners like Gwyn need to be recognized for the dedication needed to overcome these challenges.”

The next round of applicants will be accepted beginning October 15, 2010. Awards are open to all types of small businesses ready to share their story of creative cost reductions or sales adjustments that have helped them weather this economy. Submission deadline is November 30, 2010 with announcement to be made December 15, 2010. To be placed on invite list for application, please sign on to  http://www.oedmembers.org

Social Media for Small Businesses: Engage, Convince, Become!

OED Certified Advisor Eyal Bino shares Social Media tips with small businesses enagegd in B2B marketing.

According to BizReport.com, 86% of B2B firms are using social media, compared to 82% of B2C firms. However, only 32% of B2B firms engage consumers daily via social media channels, while 52% of B2C firms do.

B2B firms are eager to jump on the social media train before it takes off (has it already?), but they're forgetting what it means to have a social media strategy. While many are successfully engaging consumers, it's clear that most of them could take some clues from B2C firms' strategies.

B2B firms probably have a more daunting task than B2C firms when it comes to social media: B2C firms have to engage and convince; B2B firms have to engage, convince, and establish themselves as thought leaders. B2B firms aren't entering relationships with consumers; they're exploring partnerships with other businesses and have much more than reputation at stake.

The rewards of dedicating time to a focused B2B social media strategy are plenty. Here are some tips to leverage your B2B firm's online presence.

Twitter & Facebook
Share content that is valuable to your followers & fans. That is, your current and potential customers. Here is your chance to share interesting articles, links, websites, and news that are relevant to them. Ask them questions and invite them to engage with you, and each other! You can engage them by crowdsourcing for suggestions, or polling them on their opinions.

Linkedin
Many firms are using Linkedin as a vital piece of their social media strategy. Discussion boards are the meat of the tactics here, providing ample space for exchanging ideas and giving tips & suggestions. What's best is that you're engaging a network of professionals, who are likely to refer you once you've established yourself as a thought leader.

Blog & Website
The final piece of the puzzle. All of your social media efforts have been driving traffic to your website, and it is here that they shall be convinced! Clear, efficient, and to-the-point copy is a requisite; avoid wordy descriptions. A slick, simple, and intuitive website will make for easy navigation.

Ultimately, your blog should serve as a platform for current and potential customers to exchange information, and more importantly, to receive valuable information from you.

Tip: if your B2B firm is a one-man or one-woman show, make sure your profile is personal, so your customers know they are communicating with a human being. It makes the whole "online world" less devoid of personality, and ultimately more engaging.

Make sure to join our mailing list at http://www.born-global.net/ for more tips and suggestions on becoming a successful entrepreneur!

For more small business promotion strategies, visit OED's online community.

Improve the way things are done, and the savings rack up

OED Certifed Advisor Dana Komar shares insight into some of the most effective cost containment measures a small busines can take.
Improve constantly and forever every process for planning, production and service. Improve quality and productivity, and thus constantly decrease costs. ~William Edwards Deming


In a contracting economy, good business owners realize the need to quickly get costs in line with declining revenues in order to preserve their operating margins. Typically, their first reaction is to eliminate obvious unnecessary spending on supplies and ancillary items and to reduce payroll. However, after these steps have been taken, many realize that they just are not enough. But, how can they pull more cost out of their operation without destroying the quality of their product? The answer is to focus on improving processes and increasing efficiency which will ultimately result in increased margins, production capacity, and product quality. This approach will also help owners surgically reduce resources spent in certain areas rather than blindly eliminating spending without truly understanding the impact it will have on the operation.

So, how do you do this?

By using a systematic approach to analyzing current processes, you will find opportunities to reduce the amount of time and money that goes in to producing your product.

First, assemble a team to perform this exercise. It’s important to have outside perspectives as well as insight from those directly involved in the processes. Therefore, including people from different functions and levels in the organization is beneficial.

Next, have the team map out the individual processes employees go through to produce the product, step-by-step. Are there steps that are taking longer than they should? Are they wasting time waiting, searching, or walking? Are supplies being wasted? Are they performing steps that really don’t need to be done at all? Are steps being repeated?

Now, list out the reasons why time and efforts are being wasted or why things are taking longer than they should. What is really causing these things to occur? Don’t assume that the most obvious explanation is the answer – keep asking why to uncover the true root cause of the issue.

Next, determine how to fix the root cause of the issues so that they don’t happen again in the future. Don’t just come up with a way to band-aid the problem “for now” – that’s not good enough.

Then, prioritize all of your fixes, starting with the ones that will give you the biggest bang for the time and effort it will take to make the changes.

Finally, get to work! Develop and execute action plans to implement the changes that are needed. Make sure each plan has an owner and a deadline to ensure accountability and completion.

After the initial exercise is over, encourage all employees to adopt this type of thinking and process analysis into their daily work. That way you will continuously build on previous improvements, thus continuously enhancing your operation and reducing costs.

For more small business saving strategies, visit OED's online community.

A Question for the Small Business Owner

If you decided to walk away from your business, could you sell it or are you “the business?”

This vexing question is posed by John Walters, OED Certified Advisor, and founder of 1-2-1 Business Consulting LLC. His insight below is eye opening for many a business owner!

Recently I visited two small businesses where the owners informed me that it was their intention to operate the businesses for another four to five years, sell off the businesses and retire on the proceeds.


However, upon further examination, it became apparent that the businesses could not operate for more than a few days without their owners; the businesses did not have the required processes in place to make them self sustaining. Without the owners, there will only be assets to sell when the owners come to retire.

Both businesses were probably worth between $150-200,000. Since the owners were thinking more in terms of $2million each, based on a multiple of 4, they are facing a huge gap and a bit of a wake up call.

When we began to discuss this issue further, it became apparent that the owners were spending significant time in the business. As such, they thought it only natural that they should make all the decisions.

This behavior in reality intensifies the problem – employees realize that there is little point in second-guessing what the owner may be thinking – they stop thinking for themselves and rely entirely on the owner. The opportunity for delegation is lost.

While it may be difficult to delegate tasks within a small business for any number of reasons, including cost, this must be done if the business is to become sustainable without the owner.

As a Business Owner ask yourself the following:

1. Do I really need to make every decision?

2. What can I delegate now?

3. What could I delegate if I give a little training to my employees?

4. What procedures can I put in place so that I do not lose control?

5. What are the vital few things that I must do personally?

6. At what stage should I bring in a manger to take over my responsibilities so that I may sell the business as a going-concern?

7. Do I really need to take every decision?

How you address these issues will ultimately decide if you have a business to sell as a going concern or simply a few assets to sell off. The value creation / destruction potential can be substantial. Think back to the two businesses that I referred to earlier that at looking at $150-200,000 vs. $2 million.


Please give careful consideration to investing in your future by making sure that you have sound Operational Planning, Succession Planning and Exit Strategies in place. The risk of not doing so is too great.

And, please remember that “121″ is there for you should you need any help.