Archives For entrepreneur
I had the honor of speaking the West VA. F.E.W. conference this past weekend on building profitable businesses…a couple of points worth reviewing:
1. Brand – memorable is the key word here! I see companies depending on best pricing, certifications, status with vendor partners, and just thinking their people are great. The truth is, every company has people and certifications, and while customer service does vary, it’s hard to present your company as “Better” unless another company is failing while you are standing next in line. This does not grow business. Branding must be something unique and memorable. I have written and taught on using positioning questions. Download my free copy of the House & the Cloud (right hand side bar) to learn more about this.
2. Sell, then build. Most do this the other way around. Building an offering, and then looking to fit it into your client’s world is backwards. Identify the needs, selling the client on fixing them, then create the solution. This provides unique value and commands a higher fee.
3. Be the best. Specialize…there is no such thing as high-involvement sales people who sell everything. No one wants to pay big commissions to someone who takes orders. Your value depends on expertise. As a sales person, this expertise should be at the business level – learn your target prospects business, become an expert at solving certain problems that tend to exist in this type of business – using the tools your company provides.
4. Don’t paint yourself into a corner. Specialization is important, but if you’re not careful, you might find yourself in a business that has no where to go. Business expertise tends to provide greater options in the future, where highly specialized technical expertise will eventually commoditize – if you focus on the latter, be sure to watch the trends and grow your career with the market. About every two years you should be looking to grow into a new technology area that seems to be growing.
5. Setting Fees. Sales people who continually discount are on the road to disaster. Work out the right pricing before you propose and make sure your value matches your pricing. When it comes time to negotiate, change the scope when a price change is needed. Honest pricing means you can’t change it without a scope change.
6. Great products die without great marketing…plan and execute marketing plans and messaging. Working hard to sell is a waste of time without it. Sales people should plan out there marketing each quarter – use social media, events, webinars, and email – be sure you have one core message you are representing. Build your brand by continually focusing everything on one central theme – perhaps you are the Retail Automation Expert. Your company may do it all, but you should be known for one thing! Make it memorable.
7. Learn how finances work. Understanding how businesses make money, where they lose, how debt, depreciation, ROI, TCO, op-ex vs. cap-ex, and budgets work will go a long way. Defining the terms is not enough, learn how they work. Read The Wall Street Journal and Google terms you don’t really understand.
© 2011, David Stelzl
Last night I had the privilege of presenting new material on Entrepreneurial Thinking to a group of fathers and young men (mostly college age). I thought it might be helpful to post a few comments to keep the learning process going:
1. Andrew Carnegie (in the early 1900s) wrote: Capitalists need compliant workers…willing to work for less than the value their productivity creates – this is profit….The answer to worker unrest is to build an educational industry designed to teach workers just enough to get them to cooperate. My comment – don’t accept average…don’t give into this kind of thinking. Get out of the box and do something great today.
2. In 1908 Publisher Henry Holt said, “There is too much enterprise, excessive overproduction of brains is the root cause…we must emasculate man’s entrepreneurial energy.” My comment; Don’t let this happen! Let someone else lose their ambition, but don’t you do it.
3. I meet people all the time who are wondering what they want to be when they “Grow Up”. Many of these people are well established in business, in their 50s, yet, and unfulfilled. Why? Don’t just go with the flow, sit down and think, how do I want to spend my life and what is my fulfilling purpose going to be? This is especially true for young people just entering or leaving college. Don’t just go to class, build a resume, and look for a job. Consider what great things are out there to do, then set about doing it.
4. Seth Godin Wrote, in his recent book, Linchpin; “Unskilled people are interchangeable – we’ve been culturally brainwashed.” He’s right you know.
5. We are too risk adverse! Our training has taught us never to try anything that isn’t already proven to succeed. We learned this from our teachers who insisted on us doing things a certain way; their way. The alternative was an “F” – failure. Entrepreneurs don’t think that way. Innovation is key – start being creative simply by creating. Assume most of your ideas will not be good, so set them aside and come up with new ones.
© 2011, David Stelzl
It’s that time of year – time to rob our bee hives! If you’ve seen me speak you know I am in the process of raising entrepreneurs. Avoiding traditional learning programs that tend to produce “worker bees”, while searching out ways to develop my children’s creativity and business acumen. Seth Godin writes about this in his latest book, “Linchpin” – urging us to move beyond the #2 pencil, to develop our problem solving skills and creative abilities.
Yesterday we suited up in our “almost” bee proof uniforms, and headed out to the bee hives. They’ve been working all summer to make enough honey to survive the winter, and hopefully enough to support my apiculture team through the winter as they sell their honey. But, like all business ventures, there are no guarantees.
The bees do most of the work. They begin by building up the hive in the early spring. We start to really see some activity in March as the queen is mating and recreating to build up her team. As the first flowers appear, nectar flows and the bees collect pollen. Comb is then built on frames, first in the lower brood boxes, then in “supers” which are added as the brood chambers are filled with both brood and honey.
But there’s a risk. As the hive builds, the bees know its time to multiply. They’ve been created with an instinct to raise up a new queen, and so some of the brood are targeted for this new role in the hive. Royal jelly is applied to several eggs to raise up this new queen. A queen cell develops from this application, and two-thirds of the hive members prepare to leave with the old queen! That’s right, most of our hive will try to flee the hive, hunting for a new home somewhere out of our reach. If we don’t find a way to stop them, they’re gone. The new queen will then emerge and begin repopulating the hive. All of this is natural, however it completely disrupts the honey production, leaving the bee farmers with only a small amount of honey at the end of the season.
There are other problems as well. Mites may infect the hive, killing it off. There are other pests that may disrupt the hive, weather conditions such as drought or a freeze may disrupt the nectar flow leaving us empty. Or perhaps an animal will get into the hive and completely destroy it as they help themselves to the honey.
It turns out that this was one of those years. After faithfully caring for the hives through the summer, we incurred a few swarms (this is how the bees take off with the new queen), one of our hives died last winter, and for some reason the hives just didn’t produce. In fact, only one hive had enough honey to actually harvest. The rest only made enough for next winter.
Of course the kids were disappointed! But let’s not miss the important lesson here. For the Stelzl family, keeping bees is less about profit and more about learning (at least that’s how I see it). I don’t expect any of my kids to actually support their future families on bee farming, however I do want them to learn about investments, overhead, gross profit, marketing and selling, and the work required to produce their product. This year we’ve learned a lesson on risk – there is no guarantee. They’ve put in a great effort, however the pay plan is pure commission. In fact, they’ve even spent their own money buying bees to replace past failures, purchasing equipment and hive repairs, and purchasing jars to sell the honey in. Who will make up for their loss? No one. There are no bail-outs for this type of failure. Instead they will have to rely on their other business ventures to support their coming year’s expenses. And of course, there’s always next year’s honey if all goes well. But there are no guarantees.
Tomorrow I’ll be presenting the opening Keynote at Ingram Micro’s vertical symposium – health care and finance, in Dallas. As I’ve prepared for this, I’ve recounted numerous conversations over the past year concerning the economy, cloud computing, business struggles, and managed services. What’s working and what isn’t. The majority would say, not much is working…
Creativity might be defined as approaching a task or idea from a different or unique perspective. It’s a simple concept, but often misunderstood at the deepest level. We have creative teams, creative people, creative software, and Adobe’s creative suite…but what’s so creative about these things? Most of the time, nothing. I see thousands of websites, data sheets, and even resumes sporting the same meaningless esoteric language. I love how Goden, author of Lynchpin describes the education system of our country – we learn to use #2 pencils, dress the same, write the same, follow instructions, take notes, take tests, forget the material and move on. Failure is not an option, and so the idea of creating and trying new things is not permitted. Being a home educator I can really see this in the materials offered to us.
Instead, I’ve opted to largely ignore traditional books in place of creative problem solving, team oriented learning, and building entrepreneurial enterprises with my kids. Business is getting harder to conduct, competition is greater, and price pressure is killing us (and of course taxes will finish us off). Going the traditional route is not going to succeed on average. In fact, history shows us, of the thousands of companies that start, only about 4% (according to a recent business conference I attended) make it to ten years, and this says nothing about profitability.
So what are we going to do differently to stay in the game? Creating business has to to be part of it. Understanding how to build effective messaging and move people from prospect to client, is fundamental. Finding more efficient ways to buy and sell, and delivering greater value through discontinuous innovation, is needed. Intellectual capital is important, but those who tend to be risk adverse are destined to fail – the entrepreneurial spirit has been stripped from us.
I’m just coming off of a 4 day planning and strategy sabbatical with lots of ideas and enthusiasm. Hopefully you’ll be in Dallas tomorrow to hear about it. Either way, start thinking outside the box – start practicing creativity.
Meeting today with a group of entrepreneurs – some key points from this discussion group:
1. Most people charge too little…that’s right! Your client gives you the sob story about how they can’t afford it. In fact there’s a value disconnect and a natural tendency to want a discount. Hold your ground, you can’t afford not to.
2. Wrong metrics. People tend to watch the wrong metrics or none at all. What are you watching? If you’re in sales, forget about trying to equate number of calls leading to number of meetings etc. Improve you ability to communicate value, reduce the number of calls, and increase close ratios. The number you really need to watch is GP per deal, profit per project, and close ratios with an eye toward improvement.
3. Not every client is worth having. Some clients suck the life out of you. They will take up tons of time, nickel and dime you, and only buy on their terms. They don’t value your expertise and are wasting your time. Tell your story, look for synergy, and conduct business. If not, move on.
4. Make sure you are working on your mission. Deals outside of your focus waste your time. Move on with a focus on what matters and what contributes to your business long term.
5. Deliver quality. You can’t afford a bad reputation.
© David Stelzl, 2010