Three Key Challenges Which Confront Successful Entrepreneurs

One faces a multitude of challenges as an entrepreneur. Going to work for someone else is a cake walk compared with becoming an entrepreneur. An entrepreneur gets to wear all the hats that need to be worn, even the hats that fit somewhat uncomfortably. The owner has to make all the decisions and takes the heat when he or she makes a bad call. 

So, let's focus on three specific challenges an entrepreneur must confront in successfully growing a business.

Challenge One: Building the Business Plan and the Marketing Plan

How can a business owner know what the goals are for the company and what the game plan is to realize these goals? He or she cannot know it without crafting a carefully written Business Plan and Marketing Plan. 

This document clearly defines the products and services that are going to be offered, the niche market for those commodities, the competition... and much more. Add to that a projected set of Income Statements for the first three years of operation. Long story short, this document lays out the big picture for the company for three years and presents the best-case three year scenario for the venture. It is the benchmark against which the actual operational data for that period of time is measured.

Can a business owner afford to bypass this task? At his or her own risk. This game plan serves as the road map for the company. As time proceeds, the owner consults the Business Plan to see if the company is on track in its development. The owner uses this document to make mid-course corrections as needed when unanticipated circumstances present themselves. But for the most part the company has a preview of what it anticipates will happen next. 

So what is the challenge here? The challenge is to just dedicate the time to write the Business Plan/Business Plan. Don't put it off until there is "some time in the future" to do it. If one defers completing this important task, the price one will pay is that the company will be flying by the seat of it's pants and the probability that the owner will be blind-sided by some unforeseen events increases exponentially.

Does your company have a Business Plan and a Marketing Plan? Yes or no? If not, get on it ASAP. And after it has been written, use it as a management tool on a regular basis.

Challenge Two: Establishing Procedures and SOP's to Manage Cash Flow.

The idea of managing cash flow is to manage incoming cash deposits so that they coincide with the accounts payable payment schedules. Payroll has to be paid on time. Bills must be paid by specific dates. Whoever is assigned this task must track outflow and factor in seasonal and industry specific issues that can impact cash flow. Among the issues that must be tracked are:  

• What are the scheduled payment due dates for loans and accounts payable billings currently in-house? How much cash is available in the bank to pay these bills as they become due? 
• How much cash is being withdrawn from the company by the owner [in the case of a sole proprietorship or partnership]? Can the company disburse that cash without risking being able to pay liabilities on time? 
• Does the company need to take into consideration the need to increase stock during holiday seasons? Has the cash been held back or the credit lines set up so that the company can purchase the necessary stock? 
• Are there periods during the year when business falls and cash inflows slow down? Has a reserve fund been established to set aside enough cash during busy months, so that there will be sufficient capital for the company to pay bills during the slow months? 
• In the reserve fund, is there also cash held back to cover unexpected expenses that might crop up during the year?

Over time, the owner will need to identify the issues for that particular business and put in place guidelines to carefully manage cash flow. There will be a fearful price to be paid if the owner fails to recognize the need for these cash flow controls: chaos, missed payrolls, late payment penalties, serious damage to the credit rating of the company and damage to the financial credibility of the company. 

Challenge Three: Surviving Burnout and Getting Overwhelmed by it All.

Because the business owner wears too many hats,all too soon the stresses of running the business can become overwhelming. 

First for all, the owner is not going to be skilled at every task that needs to be done. At first, he or she has no choice but to become a master of many areas. But as the company grows, then it is time to build a staff of competent of employees. A business owner dies not have to be able to do everything well. The owner can hire the people needed to make sure that critical tasks get done on time. But he or she does need to develop the skill sets necessary to manage the staff and employees effectively.

Even with the necessary management skills, the owner faces the risk of burnout after a period of time. 

• To forestall burnout, as early as possible in the growth of the company, an owner needs to establish a balanced routine in the daily schedule so that he or she can avoid becoming a workaholic.
• When managing the company begins to become too much to handle, that is a red flag that the owner may need to hire an assistant or delegate some of his/her responsibilities to a staff member. Becoming overwhelmed, the owner should also determine if this stress is occurring because of company growth. In that case, it is time to hire more employees, the budget permitting or to make adjustments to the company's operations that will facilitate that expansion. 
• When nothing seems to help, the business owner can also talk to other business owners or hire a consultant to identify what the problems are and to work out solutions that will resolve those problems.

Every business owner, from time to time, will get overwhelmed. It goes with the territory of the position. When that happens, the best one can do is just stop what one is doing and take a deep breath. Perhaps set the problems aside for a short period of time and start again, focusing on first things first. 

When returning to solve the issues, the secret is to take one step forward, and then the second step in the right direction. And the third step. Figuratively, just put one foot in front of the other and move forward until things start moving ahead at the normal pace. Not rocket science. But it works. Just get back up and take the first step....

Summation: 

In business, challenges come in all shapes and sizes. In this article, we have focused on three specific issues that confront business owners. 

• Building the Business Plan and the Marketing Plan
• Effectively managing cash flow
• Surviving Burnout and Becoming Overwhelmed by it all.

Anyone in business who is savvy knows about these three matters. But most of us need to be reminded that if these issues are not taken care of or managed effectively, the success or survival of the business can be at risk. 

 

Being Invested In Core Business Goals - A Key to Preventing Business Stallouts

There are certain areas near the Equator, in both the Atlantic and the Pacific oceans, called The Doldrums. Sometimes, the trade winds within these areas just stop blowing for weeks at a time and any sailing vessel which ventures into The Doldrums will get caught there, unable to move until the winds resume once again. How many small business owners look at their company these days and feel just like the captain of one of those sailing ships trapped for the duration in The Doldrums? How many of these owners fail to realize that they have the power to "fill their company's sails" and move forward under their own power?

Why is it that even in difficult economic times, some companies continue to prosper and do well? Do these "survivors" know some secret that the rest of us don't know? Not really. In fact, some business owners succeed where others falter because they are still focusing on the same core goals that motivated them to start their businesses in the first place.

A successful company sets out to achieve much more than enjoying a healthy bottom line. In itself, that is certainly a legitimate goal. However,. A great company sets out to make a difference for its clients and customers... to make a real difference in the world. That might translate to helping customers to be healthier, to be more fit, to become better educated, to eradicating a terrible disease, to be able to get to work, for children to enjoy a clean and safe park or to be able to buy food that is safe and okay to eat.  

Every company will define that set of core goals in the mission statement it writes for itself. That statement should constantly remind the company (and not it's customers) what the company wants to a accomplish. The mission statement is the best expression of what the company stands for and defines how the company wants to be perceived by it's customers. The most powerful mission statements challenge the business owner and his/her employees to stand out from the crowd, provide excellent goods and services and to set an outstanding example for others to follow. The wind that fills their sails is generated by an exhilarating sense that, every day when they go to work,  they are  doing something that really matters in the larger scheme of things and that they are changing the world about themselves for the better.

A great example:  Jeff Bezos, founder of Amazon.com, in a conversation with Ernie Manouse last night on PBS, explained one factor that has helped to make his company so successful. A central goal of Amazon.com's mission is to become the "Earth's most customer-centric company." Beyond that, because Amazon.com enjoys such large prominence in the business community, he hopes that his company will serve as a role model for other companies to emulate that value in their business models. Always remembering that has infused his company with a powerful sense of purpose and  has kept his company on track, enabling it to enjoy extraordinary growth, according to Mr. Bezos.

When the business environment gets bumpy, what happens to a company whose owner and employees continue to be fiercely empowered by the clearly defined company goals? At minimum, it survives when other companies will falter or fail. In the best case, it will enjoy even spectacular growth, because everyone in the company continues to fully believe in their mission. In their minds, their individual job descriptions go far beyond that of being a salesman, office worker, truck driver or stocker. For them, failure is not an acceptable option, because they know that what they are doing is important and even critical to the larger success of the  community they serve.

Among the most important responsibilities of a company owner, few rank higher than making certain that every member of a company team understands the core mission of that company. Every member of the team must be made to understand that his or her contributions are critical to the company's success. That means whether one sweeps the floors or one makes executive decisions, every man and woman on the team must be able to clearly identify and explain the most important goals that drive that company to greatness. Being able to do that will enable for them to feel invested in the success of the company for which they work.

The very survival of that company will ultimately be riding on the fact that they can do that... or they can't. In this matter, the buck stops at the owner's desk.

Positioning Your Company So That Your Customers "Get" What You Do

Is your company successful at getting your customers and your clients to understand what you do for them? Is your advertising message capturing the essence of what it is your niche market is demanding and expecting from your company? 


You cannot expect this outcome to magically happen for your company. It requires more than putting a few buzzwords together into a catchy but random phrase. And to create that compelling favorable image of your company, you cannot turn the task over to a trendy PR firm. They do not know the core values and vision of your company half so well as you and your employees do. You will only discover the mantra... the phrase that captures the essence of your mission, in everyday, street language, only after you have invested a considerable amount of time in clearly defining what you want to say. When you can do that, than you par the message down to the minimum number of carefully chosen words. 


Guy Kawasaki gives us some great examples of some major corporations have fielded this problem. Consider the following examples from his book, The Art of the Start.


Impersonal/Ineffective: "Reduce the size of the ozone hole.
Personal/Compelling: "Prevent you from getting melanoma."


Impersonal/Ineffective: "Dozens of airplanes flying in a hub-and-spoke pattern around the United States."
Personal/Compelling: "You are now free to move about the country."


Impersonal/Ineffective: "Increasing the mean test scores for children in your school district."
Personal/Compelling: "Ensuring that Johnny can read."


Why is the second statement, the Personal/Compelling statement so much more effective than the first one in each set? The second statement succeeds because it overcomes the "So what!" attitude on the part of potential customers. The first statement makes a bland, uninteresting explanation of what is being done by the company. The customer may well say, "Okay. So what!" The second statement lays out in unequivocal and 100% understandable terms what a company's products/services will mean to the public or to the consumer of that service or product. 


Now, when I am watching television or reading a magazine, I study these carefully worded phrases that have so effectively enabled major companies to positively position themselves to keep and expand their market share. 


On television, Hyundai runs an ad in which folks who have never driven a Hyundai give one a test drive and are wowed by the cars handling and performance. Their testimonials attest to the wonderful qualities of the car. Hyundai frames all of these positive response to their product under the heading of: "Hyundai: Uncensored." As Joe Friday, from  the early TV show, Dragnet used to say: "Only the facts, sir. Only the facts." If as clients we hear something we can accept as factual, as the truth about a company and it's products, that company has crafted the specific psychological cue that will turn potential clients into actual clients. 


AARP ran a television ad in which a series of over-60's people tell the audience what they are going to do when "they grow up." One wants to start a rock band. A woman wants to take her 1 year old grandchild on his first flight. These are people who clearly feel like they have a lot of living yet to do. Retirement is not even on their radar yet. AARP's carefully crafted phrase is: "Together, we will figure out what comes next." That message will certainly resonate with the over 60 crowd.


The First Lady of the United States, Michelle Obama has worked to create a national campaign to combat childhood obesity by encouraging more physical activity and a better diet, among today's kids. That campaign has been aptly named: the Let's Move national campaign. Two words which cut to the chase, imply fun, get the job done and effectively get across exactly what it is she is trying to do for these kids. (WebMD magazine, Mar-Apr 2010, page 80.)


Why are these position statements successful examples of what works out there in the world? Why do they get the message out for these causes and these companies in a compelling way? 

• They are positive statements. They speak to what is possible. These days, people are desperately looking for such positive statements of encouragement.
• They focus on your customers. They address what your customers have told you what is important to the market niche they occupy.
• They are empowering to your customers. For your customers, the message reinforces the sense that the customer base can accomplish their goals and can be be successful utilizing your product or services..
• They are self-explanatory and very specific. The message is clearly stated and very specifically zeros in on hot-button attitudes and issues of your core market.
• They convincingly speak to what you do best as a company.
• They express a message that has a long shelf-life and will be as relevant fifty years from now as it is today.
• What you are saying is fresh and clearly stands out from all the other positioning statements in the marketplace. 
• It works to firmly establish/solidify your firm's presence within the market niche in which your company has chosen to focus its advertising efforts.

Which people in a company need to understand how that enterprise is positioning itself? Everybody in the company from the CEO or the owner all the way down to the janitor who sweeps the floor. At one point another, every employee of the company will be the "face" of the company to a customer or a supplier and how they conduct business in the name of the company must be consistent with the  way the positioning statement is laid out to the public. 

Positioning a company emerges as a critical endeavor for any commercial enterprise. Those charged with doing this must do so intelligently and craft the message with great care, so that the company's positioning statement they create will serve the company well and bring about increased client loyalty and continued company growth. 

Business NewsBytes - July 19, 2010

>>>Health Insurers pushing plans to limit choices of personal physicians. As the battle to shape the new national health program heats up, major health insurers are repackaging their insurance policies to limit access to physicians outside of the networks of medical providers for that company. They are floating the idea as a way to cut their own costs and to lower premiums, giving them a market edge. Americans were assured this would not happen. But in this case, it is anyone's guess as to what shape the final bill will take as the details are hammered out by all the key players. (Hou Chron, A10, Sunday July 18.)
>>>Volunteering your time/skills a great way to give back to the community. The Hou Chronicle of July 18th, listed some great volunteering opportunities in our area The local food banks could use our help to sort, sack groceries at distribution sites. Another agency could use local graphic artists to make greeting cards for institutional shut-ins in connection with various holidays throughout the year. A health initiative needs Spanish speakers. Contact: Volunteer Houston at 713.965.0031, M-F 9am to 5 pm or go to www.volunteerhouston.org, for more opportunities. 
>>>Kudos to the Blue Willow book store, 14532 Memorial Drive, Hou.Wife of former Houston Mayor, Andrea White picked Blue Willow book store, one of Houston's lesser known treasures, as the best store in town for kids. "Blue Willow, which she calls a community hub, specializes in children's books. 'Last Christmas, I took some friend's kids to get holiday gifts there, and we had a blast." Editors note: A great place for adults as well with a carefully selected offering of fiction and non-fiction. (News courtesy of the Houston Chronincle, The Good Life, page 1, July 18, 2010)
>>>Pearland shaping up to be potential focal point for business ops. Pearland has grown by leaps and bounds. Since 2000, the population has tripled from 37,500 people to 96,000, with another 40,000 living just outside it's borders. Affordable housing, a short commute to Houston, greater medical services, new shopping venues, restaurants. Forbes magazine rated Pearland the 34th fastest growing city in the US. Looking to grow your business? Put Pearland on your radar. (Exerpted from the Hou Chron, Sect. G, p. 1)
>>>Major Banks to raise customer fees to offset declining revenues. The word on the street is that major banks like Bank of America are being pressured by stockholders to shore up declining revenues. One of the options on the table is to institute fee increases for basic banking services, including using the services of  the bank teller behind the counter to conduct business in person. It will be interesting to see how all this plays out. 

A Man Out Walking His Dog... Random Insights Into Business Life

While my Yorkie, Spike, was still alive, it was our habit to take a walk just before going to bed. What I remember most about those walks was that the world was quiet. No noise of traffic or jackhammers breaking up the street. I could hear myself think and in rare moments I could think through some issues with greater clarity than I could when the world was noisy and I was busy. Hence the title for this new feature of The 610 Business Journal. Welcome To AMOWHG (A Man Out Walking His Dog.)


Not Thinking About It


Those of you who have followed this business journal know that I had written at some length about the need to establish a balance in one's life. I have wrestled with what that means. On one level, it means making the choice to do just that and following through. But that begs the question of we have to do to work towards that state of balance, so that our lives are not dominated by our jobs and our work. 


Maybe, the answer is and always has been a very simple idea. Maybe the main thing we have to do is give ourselves the permission not to think about what we do at work or some client we need to take care of by such-and-such a date. Nothing more than that. On the weekends and at the end of the work day, just give ourselves the permission not to think about work and to focus in on our family, our hobbies or our friends. 


I am not going to say that this is going to be an easy thing to do for anyone in business, because I know that for a lot of us that will run against the very grain of who we are at the moment So perhaps the first decision we will have to make is to institute some major changes in our thinking about how we live our lives, figure out what we have to do and then just do it. It isn't an easy thing to do. Ingrained behaviors are never easy to modify. But then again, this whole notion is a no-brainer and this is not a complicated proposition. 


Allow me to be the one to set an example for anyone who wants to do this. Effective immediately, I am making it my goal to put my actions where my mouth is. I am choosing to make this paradigm shift in the way I live. Wish me success. I will keep you up to speed as to how well I am doing. 


Kindest regards, 


Howard Fireman
Editor and Publisher
The 610 Business Journal

Baseball Is More About Losing

Tonight, PBS aired the episode, Sixth Inning of Ken burn;s series, Baseball. For Ken Burns, baseball and the happenings in the sport during the period from 1941 to 1947 are iconic of what was going on in America during those significantly eventful years. One observation about baseball especially stuck in my mind. The narrator said that most people think that baseball is mostly about winning. He continued, they are wrong. Baseball is more about losing.. Batters are able to hit the ball only a third of the time. Major league teams usually lose more games than they win. But just because a batter may strike out, he doesn't quit the team. Just because a team loses a game, the team doesn't withdraw from the league in disgrace. They just try to do better the next time.


Lately, a lot of things which never grabbed my attention very much seem more compelling subjects to think about. Baseball certainly falls into that category, a subject not hugely interesting to me until now. Ken Burn's series on baseball changes how I perceive it now because he has made the people and the events in baseball powerful metaphors for the day-to-day realities we have to eventually face. Especially this notion that baseball is a lot about losing. 


Why is that? Well, the real question confronting us is: Which experience transforms us more, winning or losing? The answer is losing. Playing baseball, living our lives or being in business are mostly about the journey, rather than specific things that happen to us. For better or for worse, we learn how to make our way in the world by trial and error. Sometimes the things we do work and sometimes they don't. If something doesn't work, we figure out what we could have done better and work on what we will do the next time. Over time, if we are focused and committed... if we are serious about putting in the best effort which we are capable of doing, we might even become really great in our field. But in truth, it is not about being great. It is about always getting better at what we do, than we are today. 


When we finally achieve a notable victory in our life or in playing baseball, that moment of success is a milestone in our life. But the real story which needs to be told is about all the times things which did not work out for us leading up to that victory. In business, it is the sales we did not make or the jobs we did not get. It is about the mistakes we made which cost us a deal or caused us to lose a valuable business connection. It is mostly about what we learned from our mistakes as we honed our skills, until the day that we finally got good enough to seize the day. 


Everyone knows that sales is a numbers game. One will get one sale out of "x" number of presentations. So is getting a job. One will have to go through so many interviews before some company will make a job offer. In the case of making sales presentations, we test out our presentation on the first few potential customers. And we refine our presentation and refine our selling skills. We get better at making the presentation and in closing the sale. We make a sale. We have our milestone. To make the next sale takes fewer presentations, because we have become a more effective sales person.


But winning a game or making the sale is not the end of the story. That victory is just one event in the journey. Not only that, a certain truth comes into play. In fact and in the way we will be perceived by others, we are really only as good as we are today. Even if we were doing great things yesterday, we must now focus on doing the best we can do today. Tomorrow, we will face the same challenge all over again, whether or not we succeeded today. 


In reality, we are always living in the moment. As such, our focus and our commitment must be on what we are doing this day, this  hour... this very moment. Whatever we are doing, we should be looking to do our best and to realize our full potential. Hopefully, we will enjoy some level of success in business today and get the sale or the contract. All things being equal, we will complete a project on schedule and the client will pay us in a timely manner. And ideally, we will make some kind of difference in the world. 


But there will never be guarantees that we will win today's battle. Odds are we are likely to lose more times than we win. So in business, it is also mostly about losing the battles, but still holding our own in spite of it. So we can borrow from Ken Burn's analogy of baseball to grow as individuals and to become more competent in business with each passing day. We can use this thought to build our businesses better and stronger. We just have to remember that every time we don't win, we are really just one step closer to getting our next client or making the next sale.

Seminars and Business Mixers for the Week of August 9, 2010

InHouston Events
Click on the dates on the main page for the specific events. You will get a page with a listing of additional events throughout Houston on that day. For event details, go to the link below.
http://inhouston.ning.com/ 
HNN Events
For event details go to the link below
http://www.houstonnetworkingnews.com/
BNI - Katy
7 am to 8:30 am
Crown Plaza Hotel
Hwy 6 at I-10
Cost: $10.00
BNI - Grand Parkway Chapter
7 am to 8:30 am
Vida Loca Mexican Restaurant
21810 Kingsland Blvd
Every Wednesday
For more information: www.gpbni.com
SCORE Houston
Schedule of Events for 2010. For information of events this week, go to the link below. http://www.scorehouston.org/workshops/
UH Small Business Development Center
2302 Fannin, Suite 200 
For Registration to all seminars, go to: www.sbdc.uh.edu.