Posted by Vicki Donlan on Sat, Aug 21, 2010 @ 06:43 AM
These economic times are giving birth to multitudes of entrepreneurs. Historically, more small businesses are created in down economies than in thriving economies. Why? Because when people lose their jobs to tighening budgets inside the corporation those same people realize their situation is optimal for launching a small business providing the same or similar service back to their one time employer and others. Yes, a smart entrepreneur shakes off the disappointment of getting laid off and begins using a severance (not always provided) and some of their new found unemployment to start a niche business.
This blog is directed to YOU - the new entrepreneur creating a niche business. The first thing you must do is resist the overwhelming feeling of expanding the products and or services of your new niche business just because you want to attract a larger customer base. This is your first BIG mistake. A niche business is exactly that - a business that specifically provides a solution to a very particular problem or need. Your first job as a new entrepreneur in this space is to be the best at "scratching the itch that creates this niche". You want to be seen as the expert to all those businesses that need help in this niche arena. The moment you stray from your sole mission of your new small business is the moment you become just one small business in a sea of small businesses without focus.
Second, you must believe that every niche business has a niche market. Your goal is to attract and service 100% of that niche market. By expanding your services you dilute your focus market and dilute your brand.
Yes, you will be tempted.....very tempted to stray as promises of money and business will come your way, and as you sniff the cash your entrepreneurial counter ego will tell you to forget this advice of sticking to your niche and take the money. BUT BEWARE! The moment your business becomes just like everybody else's business is the moment you no longer have an opportunity to shine as a niche business.
Be the best at what you do. Brand your business as niche and you'll succeed at securing the majority of the market that needs your service.
Creating a niche business takes character, guts and determination but it is worth it.
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Posted by Vicki Donlan on Sun, Aug 15, 2010 @ 04:25 AM
Every entrepreneur proves just by starting a business that (s)he has the guts to risk failure. Believing that you have what it takes to beat the odds --- less than 40% of all new businesses make it to the third year --- means you are willing to bet on your business idea and yourself to succeed in business. A business can be started on a shoestring budget, but most likely you have reached deep into your own pocket to fund your startup. And more difficult than that, you more than likely have begged and borrowed money from your family and friends just to open the doors. Making the decision to start your own business also means you have decided NOT to depend on someone else's business acumen in creating a place for you to go to work each day. Every entrepreneur has the realization that once (s)he crosses the line over to small business ownership there is rarely a bridge back.
Therefore my premise is that the shear fact that you are an entrepreneur means that you understand the need to challenge yourself. So why aren't you doing it?
You have risked a lot just to get to where you are now in your business. So what happened to that gutsy person who started the business? What is it about the future that scares you? What is it about new challenges that keeps your head in the sand?
You are up for the task of the economic business cycles that happen in every business -- but you must not allow yourself to become complacent or fearful. This is exactly why 60% of all businesses fail in the first three years.
Write down the challenges you face. Take one at a time and create scenarios for ways you will meet them head on. Challenges do not go away just because you don't face them. They grow into obstacles and then into problems too big to conquer. Meet them now while they are still small enough to master.
The world of business has winners and losers and the difference is found in how each is willing to challenge themselves. Just getting out of bed in the morning is a challenge for some, but then there is no reward without taking a risk.
Challenge yourself today to take on just one new aspect of your business. The adventure itself will give you one more reason to believe in yourself.
Posted by Vicki Donlan on Sun, Aug 08, 2010 @ 05:59 AM
No one can deny that the economy is in tough shape and small business owners know this more than anyone..HOWEVER..as an entrepreneur you have a responsibility to raise morale for your employees, your customers and yourself. Happiness is something we give ourselves. We cannot count on others or material things to create our happiness. The Golden Rule applies here...give unto others as you would have them give unto you. A savvy entrepreneur spends her/his time focusing on others and sharing goodwill and time to make the world a better place to live. Optimism is an attitude that is contagious. Successful entrepreneurs are optimistic and believe in themselves as well as their business. If we expect to do well and be happy we will be.
The small business owner who demonstrates an 'attitude of gratitude' for her/his employees, customers, and vendors will discover that the greatest gift of all is to let others know how much you value them. Ask yourself two questions:
"What role does happiness play in my success?"
"How does my happiness relate to money and wealth?"
The honest answers to these questions will enlighten you to your ability to find happiness in your business. Happiness and success are not necessarily interchangeable. We all know wealthy people who are not at all happy and happy people who know how to share the true riches in life - their time, energy, friendship, love humor and dedication.
So start today to be happy. Envision yourself as a winner. I truly believe that our happiness and success are based mostly on our expectations. If we expect to do well and be happy we will be ...it has always worked for me.
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Posted by Vicki Donlan on Tue, Aug 03, 2010 @ 09:12 AM
What are buyer's of businesses looking for? Recurring revenues. Do you have them? Probably not. Can you create a plan to institute them as part of your business? YES. So why aren't you thinking creatively and doing it? It will benefit you in the short term and in the long term it WILL assist you in selling your business.
Let's take a look at a business model that doesn't have recurring revenues and demonstrate what can be done to create them. The small business consultant. Most consultants work on a project basis, meaning they price the service by the project. Most also, if savvy enough, require payment at least in thirds. A third when the contract for the project is agreed to and signed, a third at the middle of the project and a third at the end of the project. This keep revenues coming in and minimizes the chance of doing work and not getting paid for it. However, depending on the type of consulting, and if some of the work is being outsourced, this scenario of a payment schedule may still require some creative bookkeeping to keep the business flush with cash. I recommend that you require monthly payments, and that those payments begin at time of signing. This means you, the small business consultant, are being paid before your render the work each month. I also suggest that every contract require a 60 day cancellation notice. In this way, if your client decides for any reason not to continue working with you you will have 30 days pay in the bank and will only need to bill for the remaining 30 day payment. Unfortunately, it is a fact of life that with or without a contract clients do cancel before a project is completed. However by planning how you receive income you will have recurring revenues from all your clients When your financials are reviewed they will show that your business strategy rewards how your business is valued as your income is more likely to show stability.
Every entrepreneur should be thinking about how to institute recurring revenues into their busness. No matter what you sell - product or service - think about how to provide a maintenance/service agreement or annual consultation for a price determined in advanced and able to be placed on your books. Now you know why so many businesses today are selling you maintenance contracts and agreements. It's the frosting on the cake in their business and you can find a way to do it too. Buyers will stand in line to purchase businesses with recurring revenues. Make it part of your exit strategy today.
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Posted by Vicki Donlan on Fri, Jul 30, 2010 @ 12:00 PM
Leadership programs are being offered everywhere: colleges, organization and chamber meetings, and Fortune 100 to 1000 companies. There are leadership coaches for entrepreneurs, small business owners, senior and middle management executives and for college graduates. You, reading this blog, most likely consider yourself to be a leader because it is part of your marketing literature and pitch to get new business. The question I ask you, seriously is "What is a leader?"
The words to describe leadership that I hear in answer to this question are as follows: listener, compassionate, organized, resource, honest, integrity, dependable, loyal, character, values, good natured, approachable, visionary, adventurer, well-connected, connector, self-confident, self assured, self reliant, self starter.
The statements I hear are: someone others want to follow, someone who behaves the same in front of you as well as behind you, someone who walks the talk.
Take a moment and ask yourself what the definition of being a leader is to you. How many of the above words and statements describe you?
Generations ago leaders were almost exclusively male with characteristics of strength, toughness, dominance and inflexibility as those most respected. Today, as the list of words above substantiates, leadership qualities have taken on a feminine component also. Men who reject this aspect of their personality do so at the peril of not being seen as leaders. Think about it. Male or female, today's leaders must be able to communicate a message and bring people together to be successful at leading. As an entrepreneur, you must show compassion and understanding to those who choose to follow you. Bullying people is not leadership.
The entrepreneur who walks the talk and demonstrates through his/her actions that (s)he is true to her/himself and therefore will always do the right thing whether others are watching or not will be seen as an exemplary leader. And, at the end of the day, week, month or year, the type of leader you are WILL be more important to you and your businessthan how much money you put in your pocket.
Posted by Vicki Donlan on Fri, Jul 23, 2010 @ 10:14 AM
As an entrepreneur and small business owner you have strengths and weaknesses. Too often you focus on your weakness believing that by conquering it your business will grow. However while doing this you forget that your business growth has come when you utilize your strength. You must ask yourself three simple questions:
(1) Who are my best clients?
(2) Why do they do business with me and my company?
(3) What do they have in common?
Paying attention to where your success has come from allows you to expand those areas of your expertise or market and continue to build from it. For example, if you sell investment services and you realize that your clients are all small business people you clearly speak their language and you should continue to focus on this niche. Trying to build a new clientele in an area that has not been successful for you before - for example, doctors - just because you believe they are in need of your services will most likely be counterproductive as you will be spending your time and energy on a niche that has not, at least in the past, been attracted to you and your business.
The one commodity all small business people and entrepreneurs have in common is their time. There are only 24 hours in each day and 7 days in each week. When you spend your time on reaching out and building your business with the niche market that has already proven to be attracted to you - you will be the most successful.
Posted by Vicki Donlan on Sun, Jul 18, 2010 @ 12:49 PM
Every entrepreneur I meet believes that their business is unique beyond belief. Somehow each assumes (s)he has found the "secret sauce" that sets the business ahead of any competitor and has a formula that can't be copied or bettered. The truth is it takes more than a "secret sauce" to keep the competition from wooing your customers away from you. Loyalty to one business is very rare in today's economy. Although you may have customers that have been with you since the beginning unless you are regularly proving to them that you and your company are staying on the cutting edge of your industry you are in jeopardy of losing them to the competition.
Entrepreneur story #1: Sue, President of XYZ Printers, has had a contract with ABC Bank, a Fortune 100 financial services company for the ten years she has been in business. As a WBE (women-business enterprise) she was able to contract with the bank's diversity procurement officer in 2000 for a yearly $1M printing contract. Over the past ten years the contract has remained the same and Sue counts the $1M as working capital in her budget each year. She attends the bank's yearly diversity procurement breakfast to make sure that she is visible to the procurement team and to others on the senior management team. However, she has never discussed how she and her business could provide the bank with better service or a better product even though the technology has changed. Her thoughts were, "don't try and fix what isn't broken and I don't want them to review the contract as it might give them the opportunity to cancel it." Unfortunately for Sue the competition was making a pitch every year for a larger printing contract.The competition was demonstrating that it could offer better quality and more value with its up-to-date technology. It didn't take long for the word to get around that Sue's company wasn't delivering the best for its $1M contract. Before the end of the year's contract, Sue got a letter from the bank informing her that they would not be contracting with her going forward. Sue realized that her silence as a vendor lost her the business. In this case, her "secret sauce" was the bank's meeting their minority purchasing requirements. In the end, it didn't matter because the competition was busy finding the vulnerability in the relationship and finally was able to win a chance to prove themselves.
The moral of the story is that every entrepreneur and every business must be active every day in proving themselves, not only to their current clients but to those they are pitching. Today's "secret sauce" for one business is tomorrow's "what can I do for you that your current vendor isn't doing?"
If you hear yourself talk about how unique your business is to the industry and for your customers, please catch yourself immediately and remind yourself that while you are sitting on your pedestal your competitor is learning how to win over your clients. Don't ever underestimate your competition!
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Posted by Vicki Donlan on Thu, Jul 15, 2010 @ 05:55 AM
Every small business owner and/or entrepreneur must be thinking in the terms of an exit plan when making business decisions. Every decision you make in your business will affect how you may eventually exit the business. Remember, the majority of business owners DO NOT exit their businesses by plan. Too often an exit is forced on the owner, heirs and the business. Why is this true? Very simply because business owners/entrepreneurs believe that they are invincible. They do not plan for having a major disability or, more seriously, their own death. Does that scare you? It should. Founding or buying a business means taking responsibility for its success and failure. I can't stress strongly enough the importance of separating yourself from the business. As the CEO of the business, it is your task to make sure that the chief executive officer (YOU) are in condition for the job at all times and if not have a alternate plan ready to go. Yes, business owners do get sick. They can become disabled. And, business owners, like all other human beings, can and will die. The successful entrepreneur has a plan in place for each of these situations and every decision made for the business takes these serious potential scenarios into consideration. For example, when an entrepreneur decides that the timing for an acquisition is appropriate for the business, (s)he must also be sure that the timing is appropriate for the CEO (the entrepreneur) and have a backup plan ready to roll if the timing for either entity should change. The story of the entrepreneur who waited for the right recruitment firm to come along so she could acquire it and expand the geographic reach of her firm is an example of how timing for the business is right yet timing for the CEO wasn't. Once the acquisition was complete the CEO had a sudden death in the family and was temporarily taken away from the business. With no alternate plan for a temporary CEO to guide the transition, the newly merged businesses did not mesh during the critical first stage and the business lost strategic employees to a competitor. Within six months after the acquisition it became clear the two businesses were not compatible and the deal actually hurt rather than helped a potential exit strategy for the future. This story is just one of many that demonstrates the importance of planning for every potential scenario for your business. As the bumper sticker says S __ __ __ Happens! As CEO it is your job to plan for it.
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Posted by Vicki Donlan on Mon, Jul 12, 2010 @ 05:30 AM
Listen up America! Women in business want to be heard. Women in business want to be taken seriously. Women in business want their time respected and their questions answered. Women in business are responsible for most of the changes that have occurred in the business world in the past two or three decades. Yet, too many businesses and/or business people still haven't gotten the message. Women in business not only have money to spend with vendors, they are the decision makers for the spending in most of the companies they don't own.
Let's look at the power and influence of women in business in America today. First, women own close to 47% of all the small businesses in this country. When you add in the businesses they own with a spouse that number jumps to 50%. Owning half of the small businesses is important as it translates into the responsibility of hiring the majority of the workforce. Yes, women's businesses aren't Fortune 500 companies, but they employ more people than the Fortune 500 combined. And, in this economic condition, women's businesses are more likely to hire people than the Fortune 500. Small businesses are also more responsible for the buying patterns needed for business needs. They tend to buy from each other and become loyal to those who buy from them. Women understand how difficult it is to win an account and grow and they will work to spread the word on companies that support their growth. Yes, women in business are responsible for as much as 85% of all consumer purchasing. And, that includes B2B as well as B2C. If you win her business and respect her loyalty you will be the beneficiary of her spreading the word to friends and associates.
Finally, women in business are known for asking a lot of questions. It is part of our nature to want to know as much as we can about a product or service before we buy. If you want to sell to a woman in business be prepared to explain carefully the what, when, how and why of your product or service. It matters.
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Posted by Vicki Donlan on Mon, Jul 05, 2010 @ 06:27 AM
Every entrepreneur knows that (s)he needs a brand and, as has previously been disgusted in Branding Part I, that brand can be the business itself, the product or service or the entrepreneur. So how to get started? Since branding is all about consistency in the message, both visual and verbal - the first step is to ask yourself - is what the public sees of your brand equal to what is heard? Take a look at the new brand for Comcast just hitting the market - Xfinity. The Xfinity brand is meant to be seen as the new and improved technologically advanced products and services available by the business - Comcast. Hopefully, you have noted that the company is also spending millions of dollars clarifying that the business name and brand has not changed and that the brand Comcast continues to stand for a reliable communications company. This distinction is critical to the success of the branding process for the company. Believe it or not the small business entrepreneur must be just as careful with his/her branding as a mega company such as Comcast. The brand is everything and must be messaged percisely to truely be effective.
Explore how another popular brand Dunkin Donuts continues to expand on its brand to counter the ever increasing competition. Once again, you may think it is all about the amount of money being spent that creates this type of successful campaign but in truth it is mostly the consistency of the message that builds the brand for one individual at a time and that is what a successful brand is --- developing an awareness of the brand with one person at a time until the target market is completely reached and converted.
As an entrepreneur take an interest in other brands as often as possible and get educated as to what works and what doesn't work particularly in your own space. You can learn how to finesse your message the way the experts do. But remember all branding begins internally before it is shared externally. The biggest mistake most entrepreneurs make with branding is to spend money with a message outside the company before those inside understand the big picture. Everyone in the business MUST have the same message if any brand is to stick. Your motto is "consistency of message inside and outside the company both visually and verbally." Go get 'em.
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