Summer's almost here...Is your Business READY?

Summer is always a time when the world is in full throttle to do anything but work!  Nature is alive and green, the beaches are warm, the sun is inviting - and your customers and employees are not thinking about your business....so what do you do to bring their minds back to your company?

Here's a few ideas that I have implemented in my clients' businesses to bring back their top customers and remind their work force how truly important their company is in their lives:

Everyone falls down; it's how quickly YOU get up that MATTERS

When I think of a truly successful businessperson, I think of Jeff Bezos, the founder of Amazon.com.  Jeff didn't become successful and a multi-millionaire on his first try.  He fell once (A9), and fell twice (Auctions), and thrived on the third run (Amazon.com). 

Want to make money?? DIVERSIFY!!

I was reading the Urban Dictionary the other day, and looked up the definition of Insanity.  According to that dictionary, it stated that Insanity is doing the same thing over and over and expecting a different result.  The Urban Dictionary gave this example:  Working a job and expecting to get rich is insanity. Now doesn't that tell most of the populous a truth?

If you're in business and have been running a company for a while, the economy has certainly not been very cooperative in providing decent revenues.  While you may be an expert in a certain field and in the past saw decent business profits, if you really want stability and want to jump start  2013 revenues then you have to diversify.  By this I mean, do something not related to your field but within one of your personal strengths to foster growth and sales.  

Get out of your element!  Especially if you've seen slow growth, delayed profits, or non payment by your customers!  If you're good at selling - get a completely different product to sell.  If you are a creative person, consider painting, web design, writing - anything that brings you into a different field than what you're currently doing. 

If you have a certain expertise and find a fellow entreprenuer that requires what you do (and vice versa) - consider forming a limited liability company to unite both services.  You do not have to share your personal companies to accomplish this.  You can each keep your personal and primary companies separate.  You don't even have to form an LLC, you can form a partnership by writing up an agreement between both parties.  It's that simple!

As a business consultant for over 15 years, I can tell you that the companies that are weathering this economic storm have diversified and therefore grown. For instance Nabisco, recognized maker of cookies in the United States.  Nabisco doesn't just make one type of cookie. It is the maker of Chips Ahoy, Fig Newtons, Mallomars, Oreos, Ritz Crackers, Teddy Grahams, Triscuit,  Wheat Thins, Social Tea, Nutter Butter,  Peak Freans, Chicken in a Biskit all used for the United States, United Kingdom, Mexico and Venezuela as well as other parts of South America. Nabisco merged with Post Cereals because both companies had certain strengths they could provide each other to foster growth.

Another example, albeit when it started it was on a small business level, is City Fuel of New Hampshire's acquisition of Dave's Septic (also in New Hampshire). It doesn't take much imagination to understand that Dave's Septic is all about septic tank cleaning and portable toilets white City Fuel provided fuel via 10 trucks and 10 service vans to neighboring New Hampshire towns. 

Both businesses were completely different, but flourished because of their differences!

The businesses are managed by George Winslow.  In the Summer, Dave's Septic is extremely busy providing septic tank cleaning and portable toilets at weddings, construction sites, outdoor events, etc.  In the winter, City Fuel keeps employees busy providing fuel to homes and businesses to keep warmth on the premises.  

It's this type of merger/acquisition that benefits entreprenuers.  Even if you are successful, by diversifying in a completely different direction, you are ensuring that your business will continue to profit in good and bad economic times!

Top State for Business: Virginia

Top State for Business: Virginia

What makes a company GREAT?

Great companies come from great leadership.  A great company's leadership NEVER forgets what it's like to be an employee.  After all, in the circle of life, whether we're Company Presidents, CEO's, Owners, Secretaries, Managers, Clerks, etc (you get the picture)...we all WORK to please someone else. 

A President/CEO of a company - big or small - works to gain the business of another.  That could be as vast as providing a service for another business or consumer, obtaining funding from an investor or lender, or striving to attain or keep key employees to make the company function.  All employees of a company work to keep the company viable, and feed their families and/or maintain their lifestyle. 

The difference in a GREAT company is that its leadership is more altruistic and benevolent. I read an article in the Daily News on Russell Simmon's new book, "Super Rich: A Guide to Having it All"* Russell Simmons states: "The true self already knows it is a servant. Look inside for results and not out. Look inside for inspiration and not outside. Accept that happiness is up to you and every choice that you make has to come from inside you. You have to be comfortable with it. Don't let your teachers tell you what to do. Note for yourself. If you sit still, you — as one individual — have the power to change your world. Take stock in the self. Operate from abundance, the number of people's lives you inspire by being a good giver." Unfortunately for Russell - NONE of his companies made the "TOP 100 Companies to Work for" list.  Russell should get back to the drawing board and spread some of his love and giving virtues to his employees.

Enterprenuers should emmulate the businesses from the 100 Best Companies to Work For -2010.  The top 5 are:

1. SAS.  One of the Best Companies for over 13 years, has a laundry list of benefits:  high quality child care at $410 a month, 90% coverage of the health insurance premium, unlimited sick days, a ), a free 66,000 square foot fitness center and natatorium, a lending library, and a summer camp for children, medical center staffed by four physicians and 10 nurse practitioners (at no cost to employees
   
   Jim Goodnight, SAS's Co-founder founded a culture based on "trust between our employees and the company"  is the only CEO that SAS has had in its 34-year history. Although SAS gave away loads of perks, SAS is highly profitable and ranks as the world’s largest privately owned software company. Turnover is the industry’s lowest at 2%.
2. Edward Jones.The investment adviser weathered the recession without closing one of its 12,615 offices or laying off a single employee (the British division was sold in October). Salaries were frozen, but profit sharing continued.
   Employee Perks: Telecommuting, 90% health coverage, Job Sharing program, Compressed work week, On site fitness center, subsidized gym membership, On site childcare, Paid Sabbaticals
3. Wegmans Food Markets.  Rated one of the best groceries in the nation, and a former No.  on the list, Wegmans has never had a layoff in its 94 year history.  More than 4,000 employees, 11% of the workforce has been here for more than 15 years.
   Employee Perks:  Job Sharing Program, Compressed work week, Telecommuting
4. Google.  The search engine king plans to add thousands of employees to its payroll in 2010. Though a few perks have been cut in recent years, Google last year increased 401(k) matching and added a stock-option exchange program to help employees with underwater options.  Engineers still get to devote 20% of their time to projects of their choosing.
   Employee Perks:  On site Childcare, Job Sharing Program, Telecommuting, On site Gym
5. Nugget Market.  The tough economy prompted the supermarket chain to help associates by giving them cards good for 10% discounts on $500 of groceries every month.  At one employee-appreciation event, the executive team surprised everyone by washing the cars of all associates.
   Employee Perks:  100% health care coverage

Being an Entrepreneur myself, I certainly plan to have my company encompass all the best traits of these companies - and even better surpass them!

*(http://www.nydailynews.com/lifestyle/2011/01/01/2011-01-01_russell_simmons_def_jam_records_cofounder_discusses_super_rich_a_guide_to_having.html)

The urgent need for Telecommuting

Since this past week we've seen massive flooding caused by rains in California, which then turned into Winter Blizzards across the United States.  Most of the New York City region has been paralized due to the blizzard that pulmeted the region with approximately 30 inches of snow, and winds gushing to 55 mph.  Public Transit haulted, roads have been impassable, and airlines and railways closed.  Everything came to dead stop.  Everything but companies who are ahead of their peers and telecommute!

Why is it in times of evolution, the majority of companies INSIST that they see their employees faces in person every morning at 9:00 AM?  Simply put, management is egotistical.  There is NO REASON why most office workers (unless they deal face to face with the public from  their desk) need to be commuting into work.

Most Management is aware of and utilizing contact management software that not only organizes an employee's contact database but also generates reports on the efficiency level of managing those contacts.  Case in point is SalesForce.  It's highly adaptable to a company's needs.  It can integrate with a sales dialer, keep an individual employee's contact database, generate leads, templates, call reports which can be broken down into time spent on each call, breaks the employee took, etc. 

Computer tracking software is currently being utilized by many companies. The software can review every website that is visited, and see what is done while on the website. It can capture and review all instant messages delivered by both sides. It can track every email sent and received, including web-based emails.  It can capture every single keystroke typed, including usernames and passwords.  It can get the exact time and date everything is typed. It will also see everything an employee does on MySpace and Facebook and see every picture posted, every file downloaded, and will quickly find what they are searching for on google, yahoo, aol, etc.

These different type of software provide the necessary flexibility for companies to not need as many managers for employees, while continuiing to have a tighter grasp on an employee's productivity and time management.  Most employees are completely unaware of how much "Big Brother" is watching. 

Despite these recent software advances that most companies have set in motion, few if any allow telecomuting. Most company management believe that if they are not visually seeing their employees work, employees will not value their employment or position. I equate it to the start-up funding scenario. Employers want to know how much "skin"  an employee have "in the game".  In other words, "as an employee, if you value my company, you'll come into my headquarters and spend your money commuting to me, and giving up 8 hours daily of your life to me, because I am worth that much.  I have the beautiful corner office, you work on the floor with all the other busy beavers." Ego.

JetBlue is an United States airline company that continuously posts profits for it's investors.  JetBlue is a low cost airline that offers its passengers nice amenities like DirectTV movies, and Satellite radio.  One of JetBlue's cost cutting overhead features lies in its Customer Service department.  JetBlue's Customer Services department is entirely telecommuted.  Every Customer Service rep works from the comfort of their own home. This greatly reduces JetBlue's overhead costs.  In this day and age when so many airlines are showing losses on their balance sheets, JetBlue is again producing profits! This example shows how innovative corporate minds work to produce more profits for their investors and why telecommuting works.

Telecommuting offers companies the ability to significantly lower their overhead costs, increase employee productivity, and raise profits.  It is a complete win-win opportunity.  It is not for every business. There are some retail establishments, personal care businesses, and some government operations must be handled in person. But the majority of businesses worldwide can take advantage of software capabilities that would enhance their bottom line. 

How most businesses should start to avoid failure

The art of entrepenuership requires real creativity.  This is not just in whatever business venture you choose to start, but in every aspect, including how to live your life while you grow your business.  In my last blog I spoke about using creative self funding solutions.  This entails a few different methods.  All these methods require that you at a minimum gather between $10,000.00 and $20,000.00 on your own.  There's really no way around it, in this day and age, you can't sell a dream and expect everyone to jump on to your bandwagon.  You have to gather funds. We're going to refer to this as the "initial deposit on your future business" or IDFB. There are costs that you need to foot - no one else.  We'll go into depth on this in another blog topic, but you must be prepared to pay for business related costs. 

These factors have to be adhered to:

1. The best way to gather your initial capital is to work for someone else - in other words - have that dreaded job.  It's important.  You need to self sustain your living costs while saving money for your business venture. 
2. Important:  You need to lower your cost of living expenses to save for your business.  Think logically:  Given current economic conditions - whose job is secure?? Primarily the President/CEO/Business Owner of the company you're working for - not yours. 
3. Never give up your dream of owning your own business.  Keep your eye on the ball.  Whatever difficulties you are living in at the moment, remind yourself that they are short-term. Your goal is to make your business venture happen.  Don't let nay-sayers dissuade you.

Let's work on getting your IDFB.  There are various methods to raise your capital. 

• You can work and with your earnings save the money.
• You can gather friends and/or family and make them your partners/investors. (show good faith by depositing their money in a bank account, and give them the bank and account number information)
• Take the money from your 401K.
• If you're eligible to get a refund on your tax return, take that refund and add it to your IDFB. 

There's one thing that I will always advise NOT doing, and that's getting into debt initially to start your business.  Saving is essential to proper entrepeneurial ethics. It looks great on your Business Plan.  We'll address the need for a Business Plan in another topic.  If you need to get more capital to fund your business - NO ONE, I repeat, NO ONE will give you money if they haven't seen that you've sacrificed your own money for your business. 

Why is $10,000 to $20,000 the magic number you need to have?  Because you have to save 10% of what you will need in total to start your business. Most small businesses need $100K to $200K to start.  If you're business plan calls for more than that, you need to gather 10% to start.

Once you've attained your IDFB, then we can talk about how you can effectively make that money grow to self-fund your business.  There are very reputible businesses in the United States that will allow you to invest in their growth and get excellent returns.  We're going to explore in more detail, each one of those business opportunities you can profit from.  Keep tuned for our next blog.

Creative Opportunities to self fund your business AND not lose your shirt

We've all heard the old adage:  It takes money to make money.  Then there's the average rule of thumb that states that a business needs to be functioning for at least 3 years to fully support itself and grow.  In the meantime, an entrepeneur needs to be able to either:
a) Have enough funds available to support the business for the first 3 years until the business starts producing
b) Get enough financing to get the business through the first 3 years before it produces

What if your business doesn't produce in the first 3 years? What if you need more years to produce? What if your estimates were wrong and you need more money than you originally thought?  What if you lose all the money you've put into it?  Worse yet - what if you obtained a loan to finance your business venture?

Going the traditional route to start a business doesn't suit every entrepeneur.  The traditional route involves saving money, applying for a loan, and hoping that all of creation will be on your side as you grow your business.  On the upside, if you have previous business experience, you are more likely to prevail.  Newbie entrepeneurs have to tread very carefully to not mis-spend the loan funds.  You must have extremely good credit, and cash reserves to hold you over for the first two to three years of business to help ensure your success.

This scenario does not apply to the majority of entrepeneurs these days.  Creative procedures need to prevail here.  As a budding entrepenuer, it is imperative that other routes of raising capital be found.  Here's where thinking "outside the box" comes into place.

Music Concerts have always been a great form of entertainment.  However, the larger concert producers have hit a snag in this economy.  Bigger isn't always better.  Live Nation is a huge conglomerate in the music business.  With big arenas no longer filling up to a satisfactory capacity, LiveNation's profits have dropped for the 3rd quarter of 2010 (http://www.variety.com/article/VR1118026955).  AEG Live owns and operates all of their facilities and swallows up contractually their artists.  The average human being believes they cannot invest to profit from music concerts - or can they?

There are investment opportunities with smaller music concerts.  There are legitimate smaller concert promoters that organize and promote musical acts and smaller venues.  It is possible to invest with these promoters in their concert acts.  The amount can be as small as $10K to 100K, depending on several factors which include the cost of the act, and the venue.  The value is the short time you need to invest and the return on investment.  You can invest for as short a time as 3 months to 6 months and get excellent returns.

Oil and Gas has ALWAYS been a lucrative investment.  To get the most return on your investment you need to invest early on in the company - before the stock splits, and before they go public.  Getting in on the ground floor is key.  There are legitimate Oil and Gas ventures that during their nascent phase will offer what is referred to in the industry as "mailbox money" returns.  This means that for your initial investment, which can be as low as $16K (depending on the company), you will receive monthly checks as long as the oil and gas wells produce - that could virtually be as long as 50 years. 

Short term/high yield unconventional investing can work.  Just as long term investment in a market that is sure to be around for decades. Doing your homework and knowing who the leaders are is an absolute must. Using these investments while you are raising the money to start your business operations can save you from having loads of financial headaches down the line. These are a few of the great ways you can self-fund your business venture and NOT lose your shirt. 

Tune in next week while we further explore business start-up self funding.