Tuesday, March 30, 2010

Is Your Business Heading In The Right Direction? Answer This Question

I had an interesting conversation the other day about the words entrepreneur and small-business owner? What do they mean? Are they both different creatures?

I think they are one in the same, but I seem to be in the minority on that point. Even if they are a bit different, there isn't much of a difference. Either way, let's not get caught up in semantics. If you really want to categorize business owners, there's only one question to ask:

If you (the business owner, entrepreneur or whatever you call yourself) are hit by a bus tomorrow and (God forbid) are no longer with us, is your company still going to be open for business Monday morning?

If you answered yes, congratulations. You are building a business. (You actually read the E-Myth and got it.)

If you answered no, you have a job, not a business.

Now, there is nothing wrong with owning a job. In fact, there are many advantages (pay, time, flexibility). And, it is not easy by any stretch of the imagination (sometimes more difficult than being CEO of a larger company). However, you're not building anything for the future. You haven't developed a concept that can stand on its own. You haven't created such raving fans that, even without you, still need what you provide.

Entrepreneur or small-business owner? Tomato or tomato!

Will your business survive without you? That's the real question.

--Ron Ameln, SBM

Are You Playing The Prevent Defense With Your Company

There is a certain defensive strategy in football and it is called the "Prevent Defense." What is it? Well, if your team is up by a touchdown or more late in the game, your coach might call for the prevent defense. Basically, it is a less aggressive defense that allows the other team to drive down the field but hopefully keeps them from having any big plays. Former coach and television analyst John Madden isn't a big fan. He's always believed using this strategy "prevents your team from winning."
I thought of the prevent defense yesterday when I read a stat that said 80% of small firms are waiting out the economy before hiring or expanding. That sounds a lot like the prevent defense.
My question is, why? In talking over the years to the area's top entrepreneurs, I'm convinced that a company should always be in growth mode, looking for new opportunities and constantly striving for more profits. Wait and these opportunities will pass you by.
Take Tom Schlafly, for example. Schlafly began Schlafly Beer in the back yard of the world's largest brewer. During his path in building the company, he never looked back, never stopped because of the economy, never diverted from his growth plan. He knew his opportunities would come from his own aggressiveness.
Today Schlafly's business is thriving. And guess what, he hasn't stopped striving for more success.
John Madden might be correct, the prevent defense might prevent you from succeeding.
--Ron Ameln, SBM

Thursday, March 25, 2010

Patience Is A Virtue When It Comes To Building A Business

A few years ago when we hosted a speaking event for sales guru Jeffrey Gitomer, one of his most important points came at the end of his presentation: "It takes time," he told the audience. "Sales takes time."
What? Takes Time? Are you kidding? We want it now, yesterday, last week...
David Siteman Garland of Rise To The Top said it best when we interviewed him about one of his challenges growing his enterprise: "Patience," he said. "I lack it."
He's not alone. Most entrepreneurs could say the same. Over the years, however, as I've met and interviewed some of the area's top business owners, patience was one of the most striking characteristics they all shared.
It all goes back to the corridor theory. Imagine, as an entrepreneur, that you are walking down the hall of your grammar school. There are doors every 10 yards or so and each contains opportunities that may help you. You peek your head in one door and check it out. If you like what you see, you stick your whole body in and maybe even stay awhile. If not, you head back down the hall to see what other opportunities are available.
The point is simple: If you are not patient enough to really find out about the opportunities in each room and if they can benefit you, all you are doing is aimlessly walking down the hall.
--Ron Ameln, SBM

Wednesday, March 24, 2010

Raising Your Prices. Where to Start

The economy is still stuck in neutral and you've cut every expense you can possibly consider (goodbye two-ply toilet paper). Now, it's time to generate some revenue.
One option many owners never consider is raising prices. I know, I know...the economy, blah, blah, blah.
Dale Furtwengler, author of the book, "Pricing for Profit: How to Command Higher Prices for Your Products and Services," says now is the ideal time to create long-term profits and finally get paid what you are worth.
So, let's say you want to raise your prices tomorrow. Where to start?
"You start by ascertaining which of your product or service offerings generate the highest margins," Furtwengler said. "Then, identify which of your customers in that group are providing the highest margins. Next, you determine why they're willing to pay this premium--is it image, innovation or time-savings? Calculate the value in real numbers that these customers get that make them willing to pay the premium. Set your sales script to communicate that real number value, and then revamp your marketing to attract those customers."
--Ron Ameln, SBM

Monday, March 22, 2010

My Favorite Quote

"Life (personal, business) is a circus. If you fail to get a kick out of all three rings' worth of entertainment and can't accept the fact that NOTHING ever goes according to plan, you're in trouble. It's not that every cloud has a silver lining (lots don't); it's that every success is built on your taking advantage of the unexpected detours, setbacks and embarrassments that life routinely serves up. If you can reap joy from the mess that surrounds you, you've gone a long way toward stardom and happiness."

(Tom Peters)

--Ron Ameln, SBM

Tuesday, March 9, 2010

Asking The Best Interview Questions

Finding "A Players" is one of the most difficult challenges for entrepreneurs. One bad hire can damage company morale and curtail profits. Here's one important interview question and what to look for in a response. A special thanks to Susan Martin of AAIM Employers' Association for offering up the question and response.
The Question:
What did you like best about your last job?
What To Listen For:
Be alert to a "profit" mind-set. As the interviewee describes the attributes of his previous workplace, try to determine whether he appreciates the fact that most companies are in business to make money. How often does the interviewee mention efficiency or revenue-generating measures that helped the company's bottom line?
--Ron Ameln, SBM

Sunday, March 7, 2010

Women Succeeding In Male-Dominated Industries

The last decade has been a great time for women entrepreneurs. Nationally, women-owned firms generated $3 trillion in annual revenues in 2009, and one in five businesses in the U.S. with revenues over $1 million are woman-owned firms.
More and more of these entrepreneurs are succeeding in male-dominated industries. Take, for example, Ann Kastendieck, owner of V.L. Clark Chemical Company. When the former accountant purchased the business in 1991, sales were $20,000. In 2009, V.L. Clark had revenue of $7 million.
This growth is partly driven by Kastendieck's desire to persevere as a woman in the chemical industry.
"There were always those people out there who wouldn't do business with me because I'm a woman," she said. "But those are the people who ended up helping me because they make me even more determined to find suppliers who will work with me and build relationships with my customers."
--Ron Ameln, SBM

Thursday, March 4, 2010

A Small Firm's Secret Weapon

We recently made the decision to revamp the look of our magazine. The updated look and content was much needed and has certainly given a boost to our company and bottom line. A friend asked me last month is the design process took 10-12 months. I laughed.
I think it took about a month from start to finish. One month to transform our product, which makes up 70% of our yearly revenues.
Could that have happened at a large, corporate magazine? No way. It would have taken them a month to plan the first meeting. While we usually can't match our larger competitors with pricey technology and the latest gizmos, we can beat them with our flexibility. And so can every other small firm in business today.
Small firms have always been compared to gazelles, the fastest animal on the planet. Gazelles move at a lightning pace and have the agility to switch directions the instant they spot a new opportunity.
As a small business, this agility is our secret weapon. Look for opportunities and trends where you can use that agility to grow your business and keep competitors at a distance.
--Ron Ameln, SBM

Tuesday, March 2, 2010

Perseverance: The Key To Entrepreneurial Success

Do you want to succeed as a business owner? Can you persevere in difficult times?
Hopefully you answered yes because that's what it takes.
Take, for example, Jennifer Raeker. When her father Bob Raeker, also the founder of Bob Raeker Plumbing, died unexpectedly on a Saturday night, Jennifer had to step up to the plate. Despite being just 27, she was now in charge. "I had no idea how to run the business," says Raeker. "I never got into the finances. I had no idea what was in our savings, if $5,000 or $50,000 was a lot to have, or how to pay the bills."
To make matters worse, when suppliers found out what happened, they assumed the business would close and demanded payment in full, putting even more of a burden on the company.
Unlike many things in life, you can't teach perseverance. It's an innate, instinctive trait that is usually passed along from generations. If you have the ability to persevere (find silver linings when others only see gloom and doom), you'll succeed in any business and industry.
Raeker certainly has the ability to overcome challenges. She's built the 54-year-old company into a multimillion dollar firm.
--Ron Ameln, SBM