Realizations of New Business Owners

The US and, probably, the world are filled with millions of people who dream of owning their own business.  However, when it comes to finally taking the plunge and doing it, a much smaller group of people actually make the move.  This is not a judgement on those who don’t.  It’s not for everyone.  Personally, it took me a long time (over 25 years) and the loss of a job to get me off the sidelines.  Inertia was my roadblock; that and the fact that I didn’t really know what I wanted to do.  For many, they have the same issue.  For others it is the lack of financing or the realization that their dream or idea is not capable of being scaled to the point of providing a living for them.  Still others just decide it is not worth the risk.  All of those are OK.  For those of you that are about ready to take that leap, here are some thoughts that may push you one way or the other.  These come from the experiences of first year business owners.

Talent and Determination Only Take You So Far

In many cases, having a particular talent like repairing cars, building houses, making cupcakes or fitness training drive us into our own business.  Then, we put our heart and soul (i.e., time) into making it grow and become profitable.  However, none of us can do everything in the business.  Where to turn?  The answers are closer than you think.  We all know people.  They all know other people.  Somewhere in that network are resources that you can tap into for help with areas that are not your strength.  First, identify those weaknesses (yes, I said it) and then ask for help.  The second was my toughest step.  As it turned out, a lot of people were mentors to me, but they didn’t really know it.  I got little tips from a lot of places instead of leaning on one person.

You Will Need to Adapt to The Market

If you were wise, you wrote a business plan before you started your business.  It’s been written that nobody plans to fail; they just fail to plan.  That said, business plans cannot be something you write once and toss in a drawer never to be seen again.  They must be reviewed and adjusted based on the market place; primarily feedback you receive from your customers.  Should you do everything they recommend/request?  Heck no.  The customer is always right…..except when they are not.  You should, however, take ever suggestion into consideration.  Examine the cost and ROI of each idea.  In the end some will make good business sense.  Some will not.  That is up to you to decide.  No business stays the same over time.  The longer you are in business, the more you will need to adjust.  Change products.  Change marketing methods.  Change personnel.   Improvise, adapt and overcome.  That is the secret to longevity for your business.

Do NOT Sell Yourself Short

This might be the biggest single mistake that entrepreneurs make.  They don’t charge enough for their products and services.  When I bought my business, part of my business plan was to compete on service and quality.  That, necessarily, precluded me from competing on price.  We let hundreds of jobs go due to pricing over the years.  That was a strategic choice and we stood by it day in and day out.  Charge a fair price for what you do; fair to you and fair to your clients.  We weren’t the most expensive and we weren’t the cheapest.  Find your price point where you aren’t working at full tilt just to break even.  Know your market value.  Know your costs.  Price accordingly.  It’s equal parts science and art.  You will need to adapt from time to time based on the market (do your best not to go downward).

You Will Never Work So Hard in Your Life and Love It

I’ve had a few people tell me, “It must be great to own your own business.  You can take time off whenever you want!”  All I can do is laugh and tell them the truth:  I’ve never worked so many hours in my life.  To which they just stare at me with their jaws wide open.  The other part of that statement is that I never had any trouble getting up and going to work.  It was a labor of love.  Every entrepreneur that I have known or worked for felt the same way.  In many ways the business defined them.  Vacations will be few and far between for a while.  If you and your significant other can handle that, dive in.  If not, it may be best to continue being an employee for someone else.  Either way is OK.  Just know what you are signing up for.

Work Life Balance Can Be Hard to Find

As I mentioned above, your business can be a labor of love.  The risk in that is that other parts of your life may suffer.  Are you married?  Do you have kids that are busy with activities year around?  Can they handle your not being present (physically or mentally)? Often times, this is the tipping point between hanging up your own shingle or holding off.  When is your family ready?  Even when you all collectively decide you are ready, there has to be balance.  Just like you wrote a business plan, I suggest writing a “Work/Life Balance Plan.”  Commit to certain vacations and other events that are inviolable.  Maybe you like to volunteer at your church or other organization.  Find a way to NOT give that up.  These things complete you and refresh your mind.  For me, the time was not right until our children were grown and out of the house.  My wife was busy with here career, too.  We agreed that vacation was not an option, it was a requirement.  Our church and our relationship had to be on equal footing with the business (in fact, they came slightly ahead of the business in reality).  Find your balance.  Find your success.

Be Persistent

To be direct, there will be struggles.  How you handle them will determine your level of success and longevity.  Stick-to-it-iv-ness has helped many a business owner when talent wasn’t enough.  Let me repeat:  there will be struggles.  You may even fail and have to start over.  If you want it it badly enough and believe in what you are doing, keep pressing forward.  When you hit the bumps, be willing to work/suffer through them.  Lead your people, if you have any, and show them you are confident that the business will get through the issues.  Make the changes that are needed.  Persistence can overcome a lot.

Marketing Today

I have been in business for a long time.  Over the years, marketing has changed quite a bit.  From TV and radio ads to Yellow Page ads, direct mail, variable data direct mail and now the various forms of internet and social media marketing, it has been difficult to stay on top of what works best.

Having spent over 20 years in the printing industry (and not being in the industry any more), I can tell you that print ads just don’t produce like they used to.  Personalized variable data mailings provided a huge leap in response %.  However, they are so common now that most of us just throw them away too, don’t we?  To be honest, I would not recommend spending much, if any, on print marketing other than business cards (apologies to my friends still in the industry).

Where to spend your ad budgets?  It’s all about the web, my friends.  SEO (search engine optimization) is important but don’t blow your entire budget on that.  There are a lot of simple free, or nearly-free, things that you can do for that.  The key is to make sure, if you own a small business, that you are on the 1st search page when a smart phone searches you nearby.  Don’t worry if you aren’t on the 1st page of a search in LA for your Wisconsin business.  They won’t be a customer anytime soon.

Where you really want to focus is on Facebook.  70% of Facebook users log in every day.  Couple that with all the demographic data that Facebook collects (themselves or via business partners) and you can target your marketing very specifically at reasonable prices.  I have just begun to learn about this and the potential is amazing (if a not a bit scary with respect to the data Facebook has on each of us).  I paid for a service to help me do it the right way.  It was under $500 to learn how to do it.  There are email marketing subscriptions that I will need to purchase, but they are not terribly expensive, either.  Time will tell just how effective this will be, but it seems to make good sense to me to skip paying for ink-on-paper and target my “ideal customers” using all that demographic data.  I expect it to minimize my cost per new client.   Once I work out the kinks on my more established business, I will set out to work on my newer business.  It’s going to be interesting.

What Does Your Business Stand For

Most business owners/executives are rightly concerned about the customers’ perception of their business.  They work very hard at trying to manage that perception through their marketing program.  The really successful ones have a very clear vision of what their business is about and what it stands for.  From there, they make sure that all communication and customer interaction reflects that vision.  Now, being human, mistakes are made in this endeavor.  The key is to get back on track immediately.

In order to do this in your business, answer this one question:  “What do you stand for?”  Sounds simple, doesn’t it?  It really takes a lot of self examination, especially for a leader of a small business like me.  This is because every step you take has a direct reflection on you.  Plus, if you actually stand for something, there may be potential customers that aren’t comfortable with that and decide not to patronize your business.  It’s tough self-love and can be risky, but critical to identifying what your business stands for.

When I purchased my auto repair business two years ago, I thought long and hard about the experience I wanted to provide for our clients with respect to what I wanted our image to be; what I personally stood for.  Believing firmly that God put me in this place at this time, I believed that the business was my opportunity to do His work through this business.  I made that clear by putting the Christian Fish symbol on our company’s sign and a reference to my faith on our business cards.

Clearly, there will be people that don’t come to our shop because they don’t believe what I believe.  So be it.  That’s their right.  I can look in the mirror and know that we stand for something good and right AND our clients know that.  That gives us a baseline from which to operate and makes it clear What We Stand For.

Let’s Be Clear

If you are a business leader, how well are your team members aligned with your vision?

Are you sure?  When was the last time you asked them about their overall reason for being employed there?  If you are like most, it’s been a while.  When was the last time you actually stood in front of your team and specifically and succinctly explained to them why they are there with you?  Probably as long, if not longer.

This is a very common problem in the businesses that I’ve work in and been associated with from the outside.  Oddly, it’s one of the easiest things to correct.   Get your team together for 15 minutes next week and tell them what your vision is.  You should know that like the back of your hand; after all, it’s your vision.  Then talk about it every chance you get.  Leave no doubt as to what the company is trying to accomplish.  You and only you can do this.  Don’t leave it to your direct reports (you probably haven’t been clear with them either).  Don’t leave it to the line managers.  They are usually trying to get today’s orders out the door.  You must own this one.  It cannot be delegated.

Once you’ve done it, don’t turn around and change it.  You will confuse everyone and make the business more complex than it needs to be.  Anything you add to the business needs to fit under your big picture vision.  That’s how you keep it clear and avoid constant changes.

Keep your team moving in the same direction with a consistent, clear message.   And do it now.

Let’s Talk About The Economy

Well, I just can’t resist putting my 2 cents worth into this area.  I probably don’t know a lot but, it seems, neither does anyone else (particularly the Obama administration).  Stimulus packages don’t stimulate anyting but the budget deficit…but I’ll save that for another day.

With respect to your business, unless you are in one of a very few niches, the economy has been an  equal opportunity troublemaker.  Your demand is likely down 15-40% and your sales team can’t do a darned thing about it (or so they think).  Now is the time to be setting the table for the recovery.  While, here in the Midwest, the economy doesn’t appear to have reached it’s bottom, the coasts seem to have bottomed-out.  Now, in my personal opinion, we will stay at the bottom for a period time followed by a long, steady climb.  It will be at least a couple years until we get really rolling as a world economy, again.  I don’t think, however, that employment will follow quickly (part of the reason for the long, slow recovery).

Back to setting the table…You absolutely have to continue to market your business.  If you want to conserve cash, then do frequent, smaller marketing campaigns.  Go for TV to radio.  Go from mass mailings to targeted, integrated marketing.  Whatever you do, don’t stop telling people you are still in business and ready to serve.  Studies have repeatedly shown that companies who market through a recession, come out early and grow faster when the recovery arrives.

Make sure your products/services are what your customers really want.  Now is the time to get your research hat on and go visit customers.  What they used to buy from you may not be what they will buy tomorrow.  Get rid of trailing products/services and develop new ones based on what your research tells you.  This is a the most effective way to reduce costs without cutting muscle.

Take a good look at your team.  Do you have the right people in the right seats?  Get rid of the one-trick ponies and keep strong, multi-talented people.  They may cost a bit more on paper, but will benefit you way more than the narrowly focused ones.

For those in manufacturing industries, don’t stop maintaining your equipment.  You can’t afford to not be ready when the turnaround begins.  If you can’t deliver, there will be dozens of competitors who will gladly fill the void.  Make sure your operations team can keep the promises that sales makes.  It will never be more about the customer than now and into the future.  If your entire organization doesn’t get that, you’re in trouble.

Fix what is broken now and the future will be yours.

Jeff