Archive for May, 2012
I started running late in life when two of the guys at worked challenged me to run a mile with them. I worked at a large hospital at the time and worked and often socialized with two guys. One managed patient accounts and the other was a consultant from Andersen Consulting (now Accenture). At the time, I was overweight and wanted to lose some weight. The challenge we made with one another stipulated that whoever quits has to buy whoever keeps running dinner. Guess what? I am the guy who did not quit and I went on to become fanatical about my running. The other guys treated me to a free dinner.
Good entrepreneurs are like runners because they do not quit. I used to tell myself, “one foot in front of the other.” Entrepreneurs should tell themselves something similar like take it a step at a time, but whatever you do, do not quit. Similarly, an entrepreneur should take an active interest in the business he creates. The entrepreneur should also give himself small rewards along the way like the free dinner I received from my work associates.
Okay, so after this first episode I continued to run. I started running about three miles about three times a week through my neighborhood, but then the fall came. Another friend of mine wanted to join a new health club so we could play racquetball. I went to the club and signed up with him to play racquetball, but we started our routine doing a workout. I noticed the club had an indoor running track and next time I brought my running gear so I could run a little first before playing racquetball.
Next time we visited the club, I started running first before our game. I met some nice people on the track who encouraged me to run the Chicago Marathon with them. My racquetball friend did not like running and our racquetball games quickly stopped, but running with my new friends continued.
Starting a business is like running because you develop and nurture new relationships. After our runs we would go upstairs to the bar and have a few beers and have a good time. We forged a strong relationship with each other. We talked about our plans for the marathon. Starting a business is similar to planning to run a marathon because a business founder plans his business and develops strong relationships in forming those plans. A business founder does not exist on an island, but collaborates with those he trusts. A good business depends on good relationships.
As the date of the marathon approached, we trained together encouraging one another. We trained inside and out depending on the weather. We continued encouraging one another on our runs and discussed different strategies to take to complete the marathon and run a good time. A few of my friends fell to injuries, but most of us went on to the marathon.
A new business is similar because some relationships will stop and others will continue depending on who is the fittest. The camaraderie continues as the goal comes into sight. The new business founder has to keep his goals in front of him just like a person wanting to complete the marathon. The new business founder continues to forge relationships with the fittest of his relationships.
The day of the marathon finally arrived and the weather was perfect. I started out slow to pace myself. I learned from running with my friends I am an endurance runner, but not too fast. However, my friends pushed me to improve my time. Running a new business is similar to the marathon because business associates push you to do better and recognize your abilities.
During the marathon I built speed as the race progressed and I loved the cheering crowd’s encouragement. As the I approached the twenty mile mark, runners started to hit the wall and drop from the race, but I continued to press on. Running a new business is like running a marathon because some people hit the wall, while others press on to the finish. Customer encouragement helps the new business put the final goal in sight. A new business needs customer feedback to stay on course and complete the race.
As I approached the finish I saw many struggling to continue. Some stopped or walked as they headed to the finish. I felt good as my training paid off and I decided to pass as many people as I could. I surged to the finish picking off as many competitors as possible and I could finally see the time clock at the finish. I knew I had beat my goal and a good feeling it was.
Starting a new business is like running a marathon because training pays off and allows an entrepreneur to surpass the competition. The goal of the entrepreneur becomes clearer as the founder approaches the finish line and it feels good to beat the goal.
As I crossed the finish, a few of my faster friends greeted me and I waited with them to see the others of us who finished. One by one I greeted the rest of my friends as they completed their journey. Running a business is like running a marathon because the encouragement continues throughout the journey. The camaraderie continues as those who make it have cause to celebrate.
Are you ready to run the marathon and start your own business? Learn more.
One of the characteristics I enjoy most about entrepreneurship is that an entrepreneur does have to keep doing the same tasks repeatedly. In fact, my experience is just the opposite. An entrepreneur is constantly trying to perfect new tasks. The entrepreneur is in constant contact with people and those who need a product or service. Because entrepreneurs want to perfect a product or service, they must continually take the pulse of the people they serve.
I have to confess my undergraduate and part of my graduate education trained me to perfect procedures in which the steps are repetitive. My background and experience as a certified public accountant highlights the repetitiveness of what a good accountant does. I found working as an accountant interesting at first, but quickly became boring because I wanted to move on to learn new things. I have heard people say that accountants and lawyers often make the worst entrepreneurs because of the repetitive nature of their work.
In retrospect, I can see how professionals like lawyers and accountants make terrible entrepreneurs because most of the time they involve themselves in fixed routines in which they have extensive training. Corporate planners in specific vocations are much the same way, but entrepreneurs enjoy constant relations and communication with the people and the consumers he they aim to serve. Few engagements involve using the identical procedures and the entrepreneur is more like a detective always trying to seek the truth to perfect a product or service. Steve Jobs highlighted this role as an entrepreneur in developing his products.
I believe I have always had the curiosity to enjoy learning new tasks because I learned from my father who worked as a private investigator. I believe, because I helped him on many occasions, it put the thirst for entrepreneurship in my blood. I enjoyed discovering new things about people and this role stayed with me to this day.
A good entrepreneur in my experience likes to work with people from diverse backgrounds. The corporate planner, the accountant, and lawyer attune themselves to a more convergent group of people with similar skills. Entrepreneurs like to learn from others about talents and skills they may not already have. Entrepreneurs like to stay in touch with people with diverse talents because it allows them to improve products and services to satisfy an emerging need.
Corporate planners immerse themselves in routine and become detached from people. These people become more bureaucratic and enjoy placing layers between themselves and the people they ultimately serve. Bureaucracy in my view is a dirty word because it adds costs and, although in the beginning is more efficient, it eventually reduces efficiency in the long haul. Corporate planners already have a model producing enough cash flows, but entrepreneurs have to craft a model to make it efficient enough to produce enough cash flows. Corporate planners manage existing models and repetition makes their models tired, but entrepreneurs create new efficient models through their communications with people and consumers to discover what they want now.
I believe an entrepreneur is more an adventurer and enjoys dealing with the unknown. Professional planners concern themselves more with avoiding the unknown and dealing with issues with which they already have skills. Both professional planners and entrepreneurs work to minimize risk, but risk is routine and a person can avoid risk through insurance or risk transfer. The unknown is much more adventurous because no one knows what it may bring.
What do you enjoy? Do you enjoy learning and discovering new tasks or do you enjoy the routine of a professional planner? What is in your DNA? I would love to hear your answer.
If you have the DNA of an entrepreneur and want help to use your talent as an entrepreneur please visit us to learn more about how we can help.
Once I took a position as the chief financial officer of an organization with a history of over 100 years. The institution in its early years thrived because of its location bordering a city nearly the size of Chicago with a booming coal mining industry. The location bordered on the one of the Great Lakes cutting off half the circumference of the target market.
Eventually, the coal mining industry declined and the city bordering the organization dwindled in population because of lack of other industry in the area. Recreation supplied the next biggest industry in the area because of ideal conditions for snowmobiling, cross-country skiing, and other winter sports. In the summer, the area provided ideal conditions for hunting and fishing. These industries failed to provide enough jobs and opportunities to keep the city alive.
The organization I worked for had its numbers drop by nearly 70% because the organization depended on people within a hundred mile radius of it. When I arrived I found the finances in a shambles and an accumulated deficit resulting in a negative net worth. At first, this condition alarmed me, but I knew I had a calling to turn this ship around.
A turnaround of this magnitude is like starting a new business because it needs a radical transformation. Fortunately, the executive team committed to a radical transformation of finding a new model for the organization that would turn around the organization and create positive cash flows. Weekly we explored new ideas and acted on cutting drains on the organization’s cash flows. In this way, the turnaround is more difficult than starting a new business because a new business does not have to deal with getting rid of existing programs causing a drain on cash flows.
The result of these efforts balanced the organization’s budget and identified new programs capable of producing positive cash flows. When I did my doctoral research I discovered that many companies that go public have accumulated deficits of the same magnitude and about 70% of them eventually fail. This revelation surprised me and I thought about how many companies can use the same help a turnaround expert provides. Big and small companies have similar failure rates. ‘
Although the cause is different, the need to identify a working model is the same. Without transforming an organization by finding a working model that produces positive results any organization will subject itself to failure. This revelation also caused me to think about the benefits of going public versus remaining private. Often, companies go public far before they rightfully should and prematurely remove the founder whose role it is to find a working model.
Public companies start to create more bureaucratic settings, while the organization needs to stay nimble enough to allow the working model to develop and meet consumer needs. Bureaucratization adds costs and reduces flexibility to adapt to make the model work. I believe many companies act too fast to go public because they believe it provides a safety net for raising capital. I believe a slower more deliberate growth may benefit many companies and allow the founders to keep their company and learn how to manage it instead of getting shown the door. Founders work hard and if they are serious should hold on to their creation and learn how to improve it.
I believe other consultants place too much emphasis on getting big too fast. Companies might do well to slow down and grow organically than fall prey to seeking the safety net of a public company. Slowing down allows the founder to start to see the forest from the trees and build a sustainable model without risking the founder’s position.
My company works to build organic growth by building on gaining the experience and education needed to grow organically. I believe a serious entrepreneur has an attachment to his or her creation and needs a different focus to preserve an identity with the company the founder creates.
What is your goal in founding a company? Would you prefer to stay involved in the company you create or do you want to exit and put the company in someone else’s hands? Please leave a comment to let me know your view.
If you are serious about preserving your identity with the company you want to create I urge you to try the services of my company by signing on now.
I often see bankers trying to lure small business owners into letting them help manage their cash flows. Although managing cash flows is critical for the small business owner, I question the value of going to a banker for help. In my experience, many bankers only have banking experience and little other tangible business experience. Banks concern themselves with cash flows mainly to ensure customers produce enough funds to pay the bank back. Is this approach enough to create enough cash to run your business?
Banks do not provide services without some form of compensation and may charge fees for managing cash flows. Banks often have no understanding of your business and what it takes to increase cash because all they understand is that you must sell more without understanding the tactics it takes to make more sales. Many times banks simply focus on cutting costs without considering new ways to raise revenues. Is this the approach you need?
My advice to the small business owner is to look at your own cash flows daily. Looking at your own cash flows will help understand where to increase revenues and where to cut costs. The business owner is the person who needs to decide how to increase cash and how to cut it not some outside party with little experience in your business. A business owner can look at the environment in which the company works and do some scanning to see what best fits the company’s model.
A company that does need help should employ a coach or an analyst to help design a procedure for the owner to make his own daily evaluation of cash flows. A coach or an analyst can also help the small business owner asked the right questions about what to add to improve revenues and what to cut to decrease costs. Experience and education are key ingredients in deciding what revenues to improve and what costs to cut. A good consultant is worth his or her weight in gold in helping the small business understand how to produce enough cash flows to keep a profitable business.
In my view, a good coach or consultant is there to guide you and help you develop the experience you need to make intelligent cash flow decisions. Yes a good coach or consultant comes with a cost, but the cost pays for itself because the small business owner benefits from learning how to manage his or her own cash flow. Do you want to learn more? Do you think you can get the same service from your banker?