Category Archives: Small Business

Is Your Business Extraordinary–or Ho-Hum?

Most micro businesses have a lot of competition… I mean a lot! Just check out businesses in your city or town that are listed in the Yellow Pages—print or virtual—and look at the competition in each category.

Everyone’s question then becomes “How do I get noticed above all the competition? How can I drive customers to my business instead of going to my competitors?”

Maybe the answer is… “Be Extraordinary!

Here’s a short video created by Tom Peters on this subject—take a look:

Email subscribers view video on my blog.

Video from the Tom Peters “Little Big Things Video Series”

Yes, Tom is using an example from big business in his video, but we’re talking about competition here and what industry has more competition than the fast food industry?

So maybe it is time for you to sit back and take a look at your own business.

 

However beautiful the strategy, you should occasionally look at the results  —Winston Churchill

 

When you do this, think of the video where Tom said: “Ho-hum could be worse than awful!”

Let’s look at Tom’s questions to us in his video: “Do you really pop? Do people say ‘wow’… this place really looks like it is up to something interesting? Or is it—heaven help you—ho-hum?”

So, what about your business:

  • Does your business “pop?” Why not?
  • Do your customers say “wow, this place is interesting?” (For an advertising example, click here.)
  • Even if you are doing “nothing wrong” are you still just “ho-hum?”
  • Or, even though you do everything right, is your business just like everyone else—just ordinary?

Also remember that what was extraordinary yesterday will be ho-hum tomorrow. Your competitors may not be leaders in your industry, but they’re all very good followers and they can help make your business look ho-hum quicker than you might think.

What have you done lately to take your business out of “ho-hum” and into “extraordinary?”

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5 Reasons for Business Failure

Business failure is a subject most people never want to discuss, or ever hear about. I even had a Business School administrator once tell me that business failures are so minimal they needn’t even be considered.

Yet, of the 6+ Million new businesses the Kauffman Foundation tells us will be started this year … most of them will fail!

Dream vs. Reality-4.75

 

So, I have to ask the question: “Why do so many businesses fail?”

I think a possible clue lies in the frantic questions I periodically receive from business owners asking for help with their failing business … or from aspiring entrepreneurs who are lost in the morass of trying to start a business.

Interestingly, the cause for these questions—and I believe the underlying cause of most small business problems—can be found in one of the following reasons for business failure.

Let’s take a look:

  1. Lack of Passion. Every entrepreneur believes they have the passion to start a business. Unfortunately, very few of these people understand the meaning of “sustained” passion. That is usually because they have no idea what pitfalls and roadblocks lie ahead of them, and that their passion will be sorely tested. Far too many new business owners lose their passion after a few “reality checks.”
  2. Lack of Knowledge. In almost every case, the questions I’m asked indicate a basic lack of business knowledge. If you cannot understand and analyze financial statements—or create Pro forma statements for your planning—you should not start a business until you can do both. The same holds true for planning, marketing, managing employees, and all the other aspects of running a small business. Find a mentor, read business books, attend small business classes—whatever it takes to get the knowledge you need.
  3. Lack of Planning. “I don’t need no freakin’ Business Plan” is a common response when I ask someone with a business problem, if they have a business plan I can look at. Very few entrepreneurs have any written planning, they just want to get their business started, because they “just know” the business will succeed. If you do not do proper—and constant—planning for your business … you will fail. Period.
  4. Not Understanding the Market. “If you build it, they will come” is the worst possible approach to starting a business. More businesses have failed because of this belief than any other. Study your potential market; test it; survey it; research it—whatever it takes to learn all there is to know about who you are going to sell to, and what it is they need or want. A little extra time spent here can often mean the difference between success and failure.
  5. Lack of Commitment to Hard Work. Rare is the new entrepreneur who has any idea about the amount of hard work required to build a successful business. Most aspiring entrepreneurs envision a life of leisure where they only have to work a few hours a week and let others do all the real work. However, it is you, the business owner, who must create the fruits of your labor before you can start to take it easy and begin to live off those fruits. Most people want quick gratification, without putting too much effort into the process, which is—the formula for failure!

 

You will notice that I did NOT include “lack of capital” in the above list of reasons for small business failure. In my opinion, that is usually a cop-out because the entrepreneur is lacking in one of the 5 reasons listed above.

If a new entrepreneur can overcome the reasons for failure listed above, they will be able to find money for their new business—even if they have to resort to Bootstrapping.

So, if you are a new business owner or aspiring entrepreneur, I highly suggest you review the above topics and make sure you have an understanding of what makes the difference between success and failure of a small business.

What do you think? What is your opinion on why most businesses fail?

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“1 Million Cups of Coffee”–For Entrepreneurs

The single biggest reason for small business failures is a lack of (real) business knowledge on the part of the business owners.

Too many people start a business without knowing about the speed bumps and pitfalls they will encounter along the way. The result of this lack of knowledge is shown in the free pdf report Business Survival Reality.

Classroom education and books can only go so far in training an entrepreneur—the real learning occurs from listening to, and interacting with, others in the business community.

That is why the Kauffman Foundation created the “1 Million Cups of Coffee” program. The concept and format are simple, and were developed by the foundation at their Kansas City headquarters.

This idea has now spread to a couple dozen cities across the U.S. from coast to coast, and is rapidly growing.

For a little more insight into this program, take a look at the recent video of their 1st anniversary celebration held in their Kansas City headquarters:

 

 

Meetings in each city are sponsored by the Kauffman Foundation, with local involvement, and are held every Wednesday morning—with lots of coffee served.

“I Million Cups” brings entrepreneurs (established, just starting, and aspiring), mentors, advisors, and experts all together in the same room to share what they have learned about entrepreneurship.

This program is for all entrepreneurs, including those who are only thinking about starting a business. The opportunity to learn from those who have gone through the trials of entrepreneurship is a matchless learning opportunity.

Every person starting, running, or aspiring to start a small business needs to be involved in some kind of local business network. If you are lucky enough to be in one of the cities holding “1 Million Cups” events, you really should spend some time at them—you will learn things rarely discussed in formal classes.

For more information on the “1 Million Cups” program, go to the 1 Million Cups website.

To find a city near you that holds “1Million Cups” events, go to the website’s events page.

If there is no such event in your city, contact your Chamber of Commerce or business development organization to see if they can’t start one up. It takes community involvement, along with support from the Kauffman Foundation, to get a successful “1 Million Cups” event program established.

I would like to hear from anyone who has attended one of these events—or have experienced the benefits from local networking with other small and micro business people.

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The Future of Micro Businesses

The Industrial Age has long been relegated to the history books, and now the Technology Age is getting pretty long-in-the-tooth and is rapidly winding down.

So, what do we have to look forward to?

Well, the groundswell of information and media attention appears to point towards an Entrepreneurial Age, where a proliferation of Micro Businesses seems to be creating a lot of buzz.

What is a Micro Business?

There is no simple definition for this category of business, because most countries and many agencies within those counties all have different standards and definitions of a micro business. Depending on who you talk to, a micro business can have anywhere from 0 to 19 employees; sales under $2 million; or assets under $2 million.

In fact, there is even no agreement on how to spell the term! It appears that micro business, microbusiness, and micro-business are all the same as micro enterprise, microenterprise, and micro-enterprise.

Take your pick—but I’ll stick with “micro business” just as we all now write “small business.”

In addition, I’ll put forth my own definition of a micro business as: Any business with only a “few” employees—or none at all.

I use this definition because well over 90% of micro businesses have NO employees, while there will be others with one employee that has more revenue than a similar business with 10 employees. So I’ll stick with “Any business with only a “few” employees—or none at all..”

 

Man in Hardhat

Is the Entrepreneurial Age a Good Thing?

There have been micro businesses around for longer than recorded history, but they have always been in the shadow of big business, governments, and big money. Now, the big businesses have left the developed nations and are concentrated in the industrial developing countries.

Big money organizations pretty much invest in each other, and various governments are floundering in disarray. That is why more and more unemployed, underemployed, and unhappily employed people are turning to the creation of micro businesses.

Various media pundits, and business “experts,” gurus, policymakers, and elitists consider all these micro businesses to be a form of self-employment and therefore should be summarily dismissed. Micro businesses are totally misunderstood by these groups.

This attitude is one of the things that so greatly contributes to the large number of failures by these smaller small businesses. They struggle all alone with little or no help from … anyone.

In spite of all the disdain by the business community and the government, one in 7 adults in the U.S. own all or part of a microbusiness. Businesses with no employees, alone contribute over $1 trillion to the GDP.

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The Entrepreneurial Age is here, and the sooner the policy-makers and business “experts” of the land understand this, the sooner we will see more and better support for these small businesses—along with a strong boost to the economy.

What Is Your Opinion?

Am I alone in believing this, or do you share the idea that we are in the early stages of an Entrepreneurial Age? Or, might this just be a temporary condition that will decline as soon as the economy gets back on track?

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Business Survival Rate–The Great Mystery

Does anyone really know what the true statistical probability is for an entrepreneur to have a business failure in the U.S.?

The answer is NO—there is not even a close guess! This is because the people and agencies that attempt to determine these statistics use “selected” data, which ignores some 70% of all U.S. businesses.

Why is this even important? Why should an aspiring entrepreneur, or small business owner, even care what the survival/failure rate is?

Well, there are three groups of people that should care a great deal:

  1. Government policymakers should care. They are the ones who make the laws and regulations that affect our businesses. These people should know the true facts and not rely on half-truths and erroneous data about small business survival when considering new, possibly more damaging, regulation.
  2. Business investors should know what their chances are of making or losing money before they invest in our businesses. They should be looking for reasons given by us as to whether or not they should believe we would overcome the statistics and make our business successful. But first they need to know what the statistics are.
  3. Every aspiring entrepreneur and business owner should care, and understand what they are up against statistically, so they can use that information to better apply themselves when preparing their business for starting up.

As an exercise some night, watch Shark Tank on TV and observe the naïveté and lack of planning the wannabe entrepreneurs bring to the sharks. Then switch over to Restaurant Impossible to see what happens when business owners don’t plan, or they become complacent, or they go into denial.

Maybe just knowing how close all small businesses are every day to becoming a statistic could jolt business owners into doing better planning, rise from their complacency, and make smarter decisions. Maybe even work a little harder.

This brings us back to the question: Just what are the survival and failure rates of businesses in the U.S.?

Don’t’ pay too much attention to the numbers being thrown around by business pundits, academics, and writers—their numbers are based on surveys from a selected group of businesses representing less than 30% of the total business population … often less than 10%.

Worse than that, the promoters of these numbers often quote from each other and the numbers tend to change depending on who is doing the telling.

The fact is, that the actual numbers do not exist. No one really knows what the survival and failure rates of the entire population of American businesses actually are.

Although I have been interested in this area for quite some time, I too have not been able to determine an accurate rate of survival and failures for businesses in the U.S. But I do believe that my research and findings come closer to reality than anything I have seen so far.

In addition, I have put all my research and findings into a report called Business Survival Reality: The Mystery of Business Births and Deaths in the U.S.

You can obtain a Kindle copy of this report by clicking here.

One thing I want to instill in readers minds as they read the report, is that even though the failure rate is high—that is not a bad thing!

All entrepreneurs will have failures throughout their lives, for example:

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life, and that is why I succeed.” — Michael Jordan

Many will have their entire business fail—some multiple times:

“Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure or you can learn from it. So go ahead and make mistakes. Make all you can. Because remember that’s where you’ll find success.” — Thomas J. Watson

So, my advice to aspiring entrepreneurs and small business owners is to properly prepare your business for success. Do everything in your power to succeed. But if you do have a failure—embrace it and learn that it is not just a part of the cost of becoming successful—but a part of life.

Consider this:

“I really don’t think life is about the I-could-have-been. Life is only about the I-tried-to-do. I don’t mind the failure, but I can’t imagine that I’d forgive myself if I didn’t try.” — Nikki Giovanni, Poet and Teacher

Most importantly, regardless of how many failures you may have over time, you should never, never quit—and never lose sight of your dreams.

Have you ever had a business failure? Let us hear about it, and how you overcame it.

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Profitability’s Hidden Menace

Something is happening in the U.S. that is heavily impacting productivity, driving costs ever higher, and lowering profits. This nemesis to small business is something we are all familiar with, but rarely think of in these terms. What I’m talking about here is…allergies! I guess technically it’s called allergic rhinitis (my family calls it hay fever). During the past 15 years the number of people suffering from allergies has doubled, and related medical expenses has increased 338%.

Here are some interesting statistics that may surprise you:

  • In 1995, allergies resulted in 1 million missed workdays.
  • In 2010, allergies will result in 6 million missed workdays—up from 4 million just 5 years ago.
  • In 1995, there were 7 million doctor visits to treat allergies.
  • In 2010, there will be 16 million doctor visits to treat allergies—up from 13.1 million just 5 years ago.
  • In 1995, medical expenses to treat allergies was $4 Billion.
  • In 2010, medical expenses to treat allergies will be $17.5 Billion—up from $6.1 Billion in 2000.

Apparently, a large contributing factor to these trends is that in North America spring arrives 10 to 14 days earlier than it did 20 years ago, resulting in a longer pollen season. Also, as average temperatures rise, they boost the proliferation of pollen-producing trees like oak and hickory. This is particularly true in the Midwest and eastern U.S. Some experts predict that, due to fossil-fuel emissions, pollen production could double by the year 2100.

Just one more thing for small business owners to deal with, and there doesn’t seem to be any clear solution. It looks like increased absenteeism and higher healthcare costs are going to be a considerable cost of doing business in the coming years. More things to make being a business owner in the U.S. even more difficult.

Any suggestions?

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