March 15th, 2010
Success of Failure is Up to You!
Recently I was talking to a friend who had spent several years in Madagascar, a third world economy. Much of the time he spent there was in rural areas working with the local people. He shared an experience on how many of these people eke out a meager living by working the land.
One such story is about a man I will call Johan. Johan had a family of six and worked from dawn to dusk to provide for his family. He decided that instead of working for others he would venture into the entrepreneurial world. He purchased 100 ducks with the plan to raise and sell them to sell in a year. He scraped together everything he had to purchase his duck flock.
Being a duck rancher turned out to be a lot more challenging than he anticipated. He lost some of his ducks to the cold weather, others were eaten by wild animals and his neighbor poisoned some of them when they repeatedly got into his field and ate his crops. At the end of the year Johan had only 20 ducks left which he sold for a net loss.
I assumed that this was the end of Johan’s entrepreneurial venture. What happened next surprised me (but it shouldn’t have). When asked what he was going to do next, he replied, “I am going to raise pigs because they are stronger.” He purchased two pigs with the proceeds from the sale of his ducks built a pig pen and moved on.
What amazed me from this story is the resilience of the human spirit in one of the more challenging environments in the world. Failure was not a part of Johan’s emotional make up.
I’ve worked with entrepreneurs most of my business career and his perspective of failure and success have repeatedly emerged. Failure is not viewed, by most entrepreneurs, as the end of the road but simply as bumps along the road to eventual success.
How do you handle setbacks and failure? As bumps in the road or the end of the road?
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January 22nd, 2010
Shot Gun or Rifle – Which is the better gun?
Recently, I received an email from an entrepreneur regarding a service that monitors government opportunities soliciting my thoughts on the subscribing to this service. I responded as follows:
Shot Gun or Rifle – Which is the better gun?
Too often entrepreneurs go hunting with the wrong type of gun, especially when their business is in a startup mode. The primary mission for a business in startup mode is profitability in the shortest time horizon possible. This means walking by some opportunities while devoting a lot of resources to others. This does not mean that the opportunities that are walked by are not good ones but that the time, effort and resources necessary to secure meaningful business is not as great as other opportunities.
Every hour of every day and a portion of every dollar that leaves your checking account should be focused on business acquisition and making sure new customers are satisfied. Without this laser-like focus time and money may run thin, if profitability does not arrive soon.
One area some entrepreneurs focus on is business from large companies or the government because they believe that the amount of potential business is so huge. Generally, this type of business is not a sweet spot because it takes a lot of time and effort to work through the various bureaucracies in large companies and government agencies.
This type of business may be a significant part of many businesses at some point but the time and expertise needed is not a good fit or the best use of resources in the early phases of a business. This is a shot gun approach. Entrepreneurs should put away their shot gun and go hunting with a rifle.
They should know who the customers are, where they are and how many of them there are and that there is not a lot of brush or other obstacles in the way so they can get a clear shot. When this type of information is available the probability of a successful hunt is greatly increased. In other words, to generate cash flow as quickly as possible hunt rabbits verses elk.
One elks feeds a lot of people but rabbits feed the hunter. Elk hunting will come.
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January 15th, 2010
One of the key components in achieving profitability in a new business is about focusing on the right things. Success in any entrepreneurial venture is rooted in understanding how to organize events and people to create a desired result.This will not happened unless there is a laser-like focus on the critical elements of your business.
To orchestrate success in your business three things need to happen.
- Your ladder needs to be leaning against the right wall. Or in other words, you need to understand the crucial elements of success such as which vertical markets that are the most profitable in your business, the cost elements of business and the cost of acquiring a new customer. Every business will have different crucial elements. The key is figuring out what they are and the focusing on them.
- What are the events/tasks need to be executed on to ensure that you are climbing up the latter.
- How can you make sure that you get to the top of the ladder in a timely fashion when it seems that there are so many distractions that cause you to stop climbing or even take steps back down the rungs on the ladder?
No matter how hard you work or how fast you climb the ladder, if you ladder is up against the wrong wall (you are not focusing on the right things) it is hard to be successful in business.
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Marvin L. Storm
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January 12th, 2010
Years ago in my college business course work the conventional wisdom was to develop a 3-5 year business plan.
I have written detailed and lengthy 3-5 year business plans over the years that have included exhaustive financial, market and operational analysis. These plans have served as a tool to force market research, understanding of the financial metrics and a thoughtful analysis of operational strategies.
This type of business planning is certainly useful but today’s economic environment is so different that a business plan developed today often migrates from a useful tool to being dated in less than a year because the world we live in changes so rapidly.
Does this mean that business planning and all of the attendant homework is irrelevant? Absolutely not! What it does mean is that this planning tool needs to be a living document vs. simply a tool to secure financing, hire people and provide the initial strategy and tactics for the business. It needs to be updated quarterly, if not monthly.
Today’s business plans should serve as a compass that is reference frequently to see if the business is on course. Sadly, this rarely happens. Too often the static in an entrepreneur’s daily life is so great that the compass is never check because entrepreneurs often are so busy putting out fires they rarely check their compass.
If you are going to succeed as an entrepreneur 2010, commit using the business plan you have developed and make is a living document, use it and check it often to keep you on course.
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December 22nd, 2009
A millionaire entrepreneur when asked what he attributed his success he replied, “There are a lot of things that resulted in my success; hard work, hiring the right people and a bit of luck but none of this would have been possible if I had not taken 15 minutes each day (without fail) to reflect and plan my day.’
This bit of wisdom has been repeated many times over in the lives of successful people. It seems that a few minutes to thought, reflection and planning is not only therapeutic but crucial to create an environment for success.
As you reflect about the things that you did right in the last twelve months, the things you would do differently and what you are going to do better in the next twelve months, perhaps making a commitment to allow the magic 15 minutes make a difference in your life and business in the future.
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