Archive for Entrepreneurial Lessons

What Is A StartUp Business?

how to start a start up

I had an interesting conversation over the weekend with a startup founder. She reached out because she thought she might be interested in our services.

She stated that she is a creative type, not really a business person, so she’s looking for some business guidance.

I made an assumption that, like most creatives, she didn’t have the funds to hire us, so I asked her if she had funding. She stated that she thought that’s what a start-up was: a beginning company with no funding.

 

I explained that most successful entrepreneurs start their venture with at least a few dollars. Many work at a job until they’ve saved enough funds to invest in starting their business.

This founder, I'll call her Jane for easy reference, is also looking for investors. I explained that most investors, unless they are relatives, want the founder to have invested at least something into their own business so that the investor knows the founder has some “skin in the game.”

Jane then asked: “How much ‘skin' is usually expected?”

In our experience, it depends on at least 2 things: how much funding a founder is looking for, and how well the investor feels they know the founder.

More specifically: if you are only looking for a few thousand dollars, an investor probably wants you to have at least that much invested in your own business as well.

However, if you are looking for millions, an investor, unless they know you very well, probably wants you to have a few hundred thousand invested.

Jane also wants to hire others to help her find investors so that she can be left to create. I explained that most investors will want to meet with the founder, not just her team. It is not unsual for the startup team to dissolve, or morph, for any number of reasons; but the constant will be the founder, so she must remain involved.

Start Ups, if they last, Grow into Small Businesses (I’ll leave this for another post)

If you would like help with your start-up, or small business, please start at www.FreeMarketingConsultation.com Once you’ve invested about 5 minutes into the assessment, you should receive an email with a link to schedule time in our calendar for a free 30 minute strategy session.

We look forward to thinking for you, working for you, and figuring it all out for you!

Your Mid-Year Business Review

We just did a “second set of eyes” check up for a small business in our area. This made me think that, since we are at the half way mark of the year, this would be a good time to discuss our mid-year business review process.
Cheshire Cat's Mid-Year Business Review
Just like we used to get in school, let’s give our marketing tactics, employees, financial agencies, systems and ourselves a letter grade.

Marketing tactics:   This is a great time to write them down.  You may be surprised that you are doing more things than you think to market your business.  I have added our wheel chart on this blog for you to see (if you opt in here or below, we will send you a blank one to fill in for yourself).  Take the time to fill in all of your current marketing tactics (you may not need all the blanks this time, but over the years, you may find that you do need them all).  Every place you put ads.  Every place you volunteer.  All the different on line and off line tactics you use to market your business.

Our Mid-Year Business Review templateThe next step is to grade them using the traditional A through F (do you ever wonder what happened to E?).  This grade is completely subjective: Do you generate great relationships but few dollars?  I make no value judgement. Does it generate a lot of  referrals? How much time does it take from your month? Do you compare each with the number of dollars?

Do you know what your greatest source of new revenue is?

How often do you meet with each Employee?  What kind of feedback loop is in place? How do you let them know the results of their feedback? How do you reward them when you put their ideas into action? How do you course-correct with them?

For your staff in general, are there some you lean on for support or ask to do to much? Or too little?

Are your Financial people responsive? How responsive? Do they bring up possible challenges and solutions?Or are they purely reacting to what you ask them?

Don't Leave Your Mid-Year Business Review to chanceOne of the hardest things to do is change accountants, bookkeepers and financial planners. It takes a lot of time to train a new group, so quite often we will just let things slide. Sharyn and I know this one from personal experience.

The sad part of this is that though it is the hardest part of the company to make changes in, it is also one of the most very important ones.

We suggest that from time to time, you take a meeting with others in this field to see what they know and get recommendations.

Your Mid-Year Business Review should include your processesBy Systems, I mean all the ways you get things done:

  • When a client or prospect calls, how is the call routed and how soon is it answered?
  • How do you schedule work? We had one client who did the jobs that brought him the most profit first and was losing a lot of smaller clients that on a percentage basis had a larger profit.
  • How quickly do you send out invoices?
  • How do you collect and deposit money? An incredibly successful friend, Rickey Gelb, makes sure that money is deposited every day, no matter how large or little the amount is (yup, we do this, too).
  • How do you follow up? Do you use an electronic process? Are you using “rubber band marketing?”  Are you using a physical filing system? White board? SendOutCards greeting cards?
  • How do you schedule times to work with clients? We have a certain amount of time we speak to clients then we have to do some work, for example, design ads or social media pages.
  • What expenses take the most cash flow?
  • How does your company brainstorm and solve problems?
  • Once you brainstorm, what are you doing to make sure the majority of your time and effort go toward it?

WOW! That was a lot to cover, right?  The best way to remember to fix your systems are to remember a pneumonic device I learned a long time ago for the word SYSTEM. It stands for: Save Yourself Some Time, Effort and Money.

It all makes more sense now, right?

Lastly, let’s take a look at Ourselves.  This might be a hard one because we are working so many hours every month and we are the point people for so much of that gets done and does not get done.
Discussing Our Mid-Year Business Review on The Pulse
Here are a few questions:

  • Is your To Do list too long? Perhaps you need a NOW list and a TOTAL THINGS To Do list.
  • Check out things that never get done. Perhaps you need to delegate or outsource them?
  • Compare the amount of time you spend each week with non-income vs. income generating tasks. Be mindful of things like “I can design this ad for the Chamber of Commerce because I generate dollars other ways within The Chamber.”
  • Are you working with the kind of ideal clients you want to work with? The first thing we do with new clients who work with us is go through that decision making process.
  • What tasks get you unfocused? Or, you know, make you want to take a nap instead of doing the work?
  • Same thing with clients. Are there some to whom you should say good bye?
  • How are you being held accountable?

And finally…  Are there things that waste your time yet still garner your attention?

This exercise is difficult.  The good news is that as you go through it again and again, it will be easier. And think how incredible it will be to get rid of the weaknesses and inconsistent behaviors which can slow us all down.
We'll Help with Your Mid-Year Business Review
We would love to help you through the process.   If you go to www.BoxFullOfMarketing.com and take the short assessment, you will be placed in to our calendar for a decisive 30 minute phone call where we can begin to get you on the correct path.

For clients, we schedule regular check ups on the health of their business, and you can get started just by being willing to change habits and some ways of operating, and thinking.

Best of luck to you always!

How Knowing Your Target Market Saves You Time

Do you like saving time?

Do you know your target market?

Would you like to know how knowing your target market will save you time?

If only I had recorded what Angie (of Angie's House) said at lunch yesterday!

Since I didn't, let me set the stage for you before I share the story she shared:

Angie Lozano saves time knowing her target marketIn 2000, Angie opened the first homeless  shelter in the Verde Valley. She now also owns and operates 9 transitional homes for those recovering from various addictions.

On Monday evening, Angie had 3 places to be at the same time. As you might imagine, she stressed out over how she was going to be in 3 places at once.

When she told us the story, she couldn't even remember one of the places (clearly it wasn't that important).

The most important place she had to be was leading a support group.

The other option was speaking with inmates that may need a place to live when they are released.

While they could be potential residents, they aren't the ones who decide where they are going to live.

Once Angie realized that the inmates weren't actually her ideal target market, it was easy for her to realize she only had to focus on her support group. Angie didn't need to spend the time with the inmates.

Of course, if Angie had been invited to speak to parole officers, those that actually do make those decisions, then she may have made a different decision.

If you need help niching your ideal market, we invite you to invest 4 minutes on our free Marketing Assessment at www.BoxFullOfMarketing.com which will grant you access to our calendar for a free 30 minute review of your assessment.

BTW, we did get this video testimonial from Angie when we first started working with her and her husband, Pedro, about a year ago:

How to be Affordable not Cheap…You’re Not the Value Meal!

At our networking group , as we went around the room talking about what we did, I heard the same things:
“I’m the best locksmith and we have cheap prices.”
“We work fast and cheap,” said the painter.
“And I am cheaper than the prevailing rates in Sedona,” said the massage therapist.

I cringed each time I heard it. The word CHEAP. We must all learn that our services are affordable not cheap.
I hate it when people devalue their product or service. When I think of all the training, effort, and time they have put into sharpen their skill sets, it saddens me to hear people compare themselves to the Value Menu at McDonalds.
be affordable NOT cheap
This goes back a long way for me. I had a transmission shop client who used to tell me that he didn’t care if there was just enough ink in the pen to write the check to him, he wanted CHEAP pens.

I also remember doing the same thing TO myself. When I began in the promotional product world, if someone asked for a polo shirt, I started by showing them the bottom of the barrel shirts, thinking that I was going to solve their problem (they needed a shirt with a collar) in the least expensive (cheapest) way possible.

It took me awhile to learn that when it came to the clothes people put on their staff and themselves, a certain level of quality, and therefore a higher price, was necessary. That was a huge hurdle for me.

I learned that when it comes to great logo'd clothing, it is far better to be affordable not cheap.

Later, when it came to charging for marketing services, the same challenge confronted me.

The first pricing structure we offered was very low. The idea was that an inexpensive add on to our promotional product offerings would add an injection of cash to our profit level. But there was a mistake in this thinking. As you can see from the chart below, if you are a Coach/Advisor/Oracle, this is where you should be charging if you want to feel valued and, even more importantly, are GIVING incredible value for your services.
This chart came from Smart Meetings Magazine:
5 levels of fee affordable not cheap

In other words, if you ARE an expert, charge like an expert. The services we offer are commensurate for the value we add to our client’s businesses and that makes what we do AFFORDABLE not CHEAP.

Do not turn yourself into the lowest price alternative. You can NOT “make it up on volume.” You are NOT the McDonald’s Value meal for what you do.

When you need assistance in deciding what to charge for your services, give us a phone call at (800)705-4265. Even better, head to our Marketing Assessment page at www.BoxFullOfMarketing.com

As long as I am at it, when I hear people use the phrase “Give me your best price” it shows me that they do not respect the skill and the benefits they get from working with the person they have just insulted. I had one person recently ask me for a referral for one of my “team members,” and said that they “Of course, I'd like it to look professional without the professional price tag. Lol!” I connected them with my team member and added 20% to his rate. He’s worth it. And so are you!

Lessons We Learn From The Entrepreneurs Around Us

As part of the business community, I think it is our responsibility to pass on the lessons we learn from entrepreneurs around us.  I think those lessons become even more solid when we teach them to others.

Lessons We Learn From Entrepreneurs Around Us lead to Honorary Awards

Honorary Lifetime Membership Award

The other night, I received a Lifetime Membership award from the Encino Chamber of Commerce and thought that I would share some of the lessons I have learned from members, who have become lifetime friends.  It is a place I constantly learn, teach and learn some more.

A few months ago, after driving all the way through Los Angeles to Encino, passing 10 million people, I stopped at our mailbox drop.  As I got out of the car, the very first person I saw was Leon Woods.  Leon is my banker.  Has been for years.  As we stood there and shared stories of our parents and our lives, I realized that as a business organization, the Chamber has created a small town inside a very large one.  All of us in large or small towns, can create this atmosphere, and we should.

Several years ago, local insurance expert Paul Davis and I had our first conversation. We both noticed that each of us had a similar method to dominating our categories in networking groups. We were able to share some of our best practices because we sold different products to some of the same target audiences. Cooperation between entrepreneurs is an important lesson.

Lessons We Learn From The Entrepreneurs Around Us, including Melody LeBlanc

Melody LeBlanc and Hank Yuloff

At the Chamber installation dinner where I was honored, Melody Leblanc ran the silent auction, like she has for years.  Do you know how many hours that takes?  To gather items, to remind others to gather items, to package them into easily salable gifts, to get them all to the venue, to arrange them, to make sure the items are selling and adjust the prices, to make sure it ends on time, to collect the money and get a report to the board… .and probably a dozen more steps I don’t know.  Yet, when you go up to Melody to congratulate her on a job well done, the first thing she does is commend the team around her.  She pats them on the back instead of taking the credit. Leadership. That is what we learn from Melody and it’s one of the most important lessons I learned in 25 years of being a member of that chamber.

Most of us have no idea what Vahid and Hammed Khorsand do.  These brothers have received zero business from the Chamber – their clients are large investment companies.  But they learned from their grandparents and parents that when we have a business in a town, we owe it to that town to give back.  Getting involved is what business people do.  This blends perfectly with the message that Sharyn and I teach each client that hires us as their virtual Chief Marketing Officer:  Find a cause – we prefer non-profits – and get involved.  We owe it to society to leave it better than we found it.

When we are on the road, talking about and teaching marketing to a lot of very different sized groups, we share the story of Stan Goldenberg and WestVal Pharmacy.  They are a little independent business that competes monthly, daily, hourly, against much larger chain stores, but they have learned to adapt and thrive.

Another one of the lessons we learn from the entrepreneurs around us came to me when I asked Rickey Gelb why he did not charge for parking at the buildings he owned.  It seemed like a definite revenue source.  His answer was, typical for Rickey, very simple and direct: “My tenants are busy making money doing what they do.  Why not make it just a little easier for them by giving them one less thing to think about when one of their customers walks through the door?”  He also noted that he was certain that he had more loyal tenants because of it.  The lesson: A win-win may not increase your bottom line directly, but there are other places it will show up.

And finally, one of the people I met a long time ago, Gloria Pollack, came to mind.   It turns out that I was the very first person she met when she came to the city who didn't work at the company for whom she worked. We both attended the same Chamber event and she says that I was the first person to walk up and make her feel welcomed.  I remember that day – and I was following my own rule: If they are new, you need to meet them.  Gloria is one of those people who always knows the right person and I am so glad that she considers me one of them.  Lesson:  Stick out your hand and say hello. We are all in business, let’s make it easier for each other.

Those are a few of the lessons I have learned from being involved in the Encino Chamber of Commerce.  I strongly suggest you get involved in your local Chamber because even if you don’t receive direct dollars from someone hiring you, there is within the membership a wealth of knowledge, connections, friendships and the intangibles we all need to be successful.  You just have to say “hello.”

If you want some help getting involved, or figuring out what to do once you have joined, give us a call at (800)705-4265 and let’s talk about it.  There are also other blogs and chapters in The Marketing Checklist which talk about networking in more depth.