Category Archives: Back to Fundamentals

You Build Dreams, not Just Follow Them

Back to Fundamentals, Entrepreneurship, Starting a Business

There was a scene in one of those old black-and-white movies in which the fabulously rich guy is asked the secret of success and he answers: "Choose rich parents."

For the rest of us, it has to do with work. As in another old saying I like: "The harder I work, the luckier I get."

Which brings me to one of the basic fundamentals of building a new business, or running an existing business: it's a lot of work.

Be your own boss? Well, maybe, but the toughest bosses are their own bosses.

This comes up because of a great post yesterday from Pam Slim, of Escape from Cubicle Nation: Who says following your dreams shouldn't be hard? She says:

I have come to the realization that we cause ourselves a lot of stress by believing that if we just choose the right business, or quit our loathsome job, or find the perfect Internet marketing system, or get that book deal that things will become easy.

She goes on to point out that most of what we get in life, most of the good things, are also hard. There are lots of clichés on that point. Pam suggests that there is good hard — such as "Meeting unexpected life challenges with both pragmatism and optimism" — and bad hard — like "Spending twelve hours on an administrative task that is complex, boring and not your strength when someone smart could do it in 30 minutes for fifty bucks."

Somewhere embedded in all this is that you work on what you love, because to be successful you're going to work on it a whole lot, so you'd better love it.

And, also, that the opposite of hard is boring.

Which brings me to my title above. Following dreams isn't enough. You have to build dreams.

Back to the Fundamentals

Back to Fundamentals

Global Entrepreneurship Week

In order to participate in Global Entrepreneurship Week (November 17-21) I’m teaming up with Palo Alto Software to offer a free webinar on business planning, starting at 9 a.m. Pacific Time, Monday, November 17, 2008. Capacity is limited, so please register now to assure your place.

Also known as: Plan-As-You-Go Planning; Going, not gone.

Whether it is recession, depression, or just a dip in the road, one of the best things you can do for your new business, existing business, or growing business is to strengthen your fundamentals. Dig into your planning process to make sure you’re managing cash flow, costs and expenses, but without losing focus on fundamentals. Keep your sights on the horizon — the long-term goals, your ultimate success — without losing basics like following up, accountability, and prioritizing.

Now is the time to make sure your fundamentals are sound.

Please click here to register now for the webinar. Capacity is limited.

4 or 5 Truths About the Sky Falling

Back to Fundamentals, Current Affairs

I’ve been working on other posts, but then I saw today’s paper, and the stock market drop. You want good reading? How about 60% of Americans say depression likely (A CNN poll). Or the much more reassuring Then and Now. I recognize that my place in blogging is something like baby-boomer ex-hippy MBA entrepreneur, which doesn’t include this post.  But I can’t help it. 

In case you’re wondering, my list of 7 points here is titled as "4 or 5 truths" because some of these points are only half true.

  1. Business will go on. Your business will do just fine if you continue to offer customers goods or services they want to buy, and they have money to spend. But there’s no denying some spots are better than others. Real estate’s going to suffer. Banking’s going to suffer. 
  2. It’s surprising how well the high end holds up in tough times. Gourmet foods, expensive coffee, and other so-called "affordable luxuries" tend to do well. Apple stores were crowded yesterday. 
  3. Price-driven strategies do well. Old Navy was crowded yesterday. 
  4. There’s a morality play (sorry, I was an English major once) embedded here. As a nation, a society, we played all grasshopper, not ant, for a generation. We consume, we don’t save. When it was time to tighten belts, we didn’t; our politicians wanted to be popular, not right. We built guns and butter both, not — as the classic economics texts suggested — one or the other. We attracted savings from the societies that save (Asia, Europe) to substitute for savings in our own country. 
  5. Flash back to the 1980 presidential campaign. Jimmy Carter ran against Ronald Reagan. Carter preached common sense and restraint, with a touch of sacrifice, because we were consuming so much more than we were producing. We’d had two energy shortages just before that, and we were in the middle of a credit crunch. Reagan parried Carter’s statesmanlike warnings with his reassurance. We can have it all. We are, after all, us. Reagan won. 
  6. If you wonder why neither presidential candidate spoke of the belt tightening and tough times and sacrifice that are obviously coming, during the debate last Tuesday, see point 5 above. 
  7. Why exactly right now? All this is happening during the last few weeks of a lame-duck administration; one that has the lowest approval ratings on record. Confidence is so important right now. But we have the election uncertainty to compound it. Would this have played out the same way in late January? I think not. I’m sure it wouldn’t have been as bad. The people in power next January will presumably be able to speak truth, and wield credibility, without worrying about an election in weeks. Could sounding the alarm bell have waited until January? I don’t know. Do you?

Was it FDR who said "all we have to fear is fear itself?" I think so. Today, it’s not all we have to fear, but fear itself is driving this thing the wrong way. We need to settle down. Suspend disbelief. As MommyCEO said on her blog yesterday:

We need to keep focused, keep our eye on the ball, and churn out the sales that will keep us growing and healthy. As if our lives depended on it. Because they do.

A Thousand Answers to The Big Question

Back to Fundamentals, Business Planning

The question was:

What measures should small businesses take to weather this economic downturn?

It was asked 13 days ago on LinkedIn by Chad Moutray, chief economist of the SBA.

As of this morning, there were more than 1,000 answers. You can Click here to browse those answers on LinkedIn.

Would you like a summary? Well, yes, me too … but it’s more than 1,000 answers. I spent some time there browsing. With 36 pages of answers, the recession might be over — or become a depression — by the time you or I read them all.  I’m not claiming to have read more than the first few pages of them, but here’s an digest version (quote or paraphrase, with my comments in brackets):

  • Cash flow, cut costs, sell better, depends on type of business, engage customers, cash flow, cut costs, sell better, engage customers, depends on the type of business cash flow … [lots of repetition.] 
  • Comprehensive business plan, sales forecast, pessimistic scenarios … review, revise the plan. If you don’t have a plan, get one, and, more important, planning.
  • More and more on cash flow, liquidity, expenses, customers, better sales … [on and on forever — not that they aren’t all right, but I’m amazed at how many answers seem to repeat previous answers.]
  • Global markets. Lots of global markets. [fat chance. I’ve spent a good percentage of my career consulting in international business, particularly high-tech channel partners. Sure, there are always exceptions (Jerry Lewis), but in general, if you can’t make it in your home country, you don’t make it abroad.]
  • There’s a stream in there of would-be plain-talking contrarians with variations on the "stop listening to all the crap" theme. Some are amusing, some annoying.
  • Lots of self-serving "go to my website" stuff
  • Move to the East Coast. Of India. I hear Bangalore is booming. [Ha!]
  • Vote Democrat and pray.

And so it goes.

The “Slogging it Out” Theory of Business Value

Back to Fundamentals, Business Stories, Entrepreneurship, Starting a Business

Sometimes we overemphasize the theory, analysis, strategy, management, and implementation in small business. I see it all over the place. A business run reasonably well that lasts a while begins to accumulate a certain value over time, an economic power beyond the straight numbers.

I noticed this a few years ago with my wife’s sister and her hardware store in Mexico City. She didn’t develop strategy, she didn’t analyze the business, she found an available retail space for rent, she rented it, she bought a bunch of screws and nails and wire and small tools — financed from savings — and she spent a lot of time in the store watching things and talking to customers. She smiled, she gave change, she honed the inventory, she kept business hours, and she made money. After a year or so she hired a person or two to help her keep it open enough hours. And a couple of years after that she was able to spend a couple months in the United States, while the money kept coming in.Hardware Story

Of course this isn’t the glamorous business startup we dream about, or write about in blogs like mine. Business schools don’t talk about it or study it, it’s like the dull side of business. Still, she had a machine going and it had enough flywheel power to keep going, and generate a decent income, even when she left it for a while.

I had a friend who used to say "90% of success is just showing up." This is a lot like that. Buy the stuff, put it on the shelves, price it fairly, and stay open on a reliable schedule. Give people value.

Obviously there’s a limit to that leaving idea, that is to say, leaving the business alone for a while. You have to know and trust the employees, but that relationship is one you can earn over time. The small business owner works hard and is, for the most part, a slave to the business; but then there is that accumulated value, accumulated income power, of the established local business with a place in the market and customers who make it part of their regular lives.

That is what I call "the slogging it out theory of business value."

— Tim