Back to reality… How to Actually Do it!
Metaphors aside, a company must identify large changes in the market to be in position to play a key role in the development of the wave as well as profit from it. The only way small businesses and entrepreneurs achieve growth through market fluctuations is through proper management and prevailing contingency planning.
A good entrepreneur is a manager who is a master of their field and someone who knows how to build a team, but equally important an entrepreneur needs to know how to fail. Knowing how to fail is distinguishing stoppage from lagging, and recognizing when to pivot versus when to bail.
Experience doesn’t necessarily mean expertise but so many companies are started by entrepreneurs who either love their sector or feel they are experts because they have been an employee in their sector for a number of years. Love is blind, but more precisely love makes you blind. Loving your business can make you blind to certain indicators such as product or system failure. Failing to see why a product (whether its service based or goods based) needs improvements or flat out isn’t working is a common mistake entrepreneurs make.
Although you learn more about your sector from your business, your business is not an opportunity to learn your sector.
Love and/or employment of an industry DO NOT equal expertise. Let me be perfectly clear here; I am not saying an employee or lover of an industry should not become an entrepreneur. I am saying in order to become an entrepreneur you must become an expert.
Being an expert means knowing the industry inside and out, it means knowing the network of partners and competitors and it means knowing the tools of entrepreneurial market-forecasting.
Managers Tool Belt
First the Intangibles; these are tools which exist to the Entrepreneur as part of their experience, knowledge and connectivity.
Control credit and pay back loans while operating a business. Yes, this is a tool because part of positioning a business in front the wave is to be financially prepared to accommodate the wave.
Know the interest rates on loans so cashflow can be forecasted accordingly. As a small business it’s common to be in a perpetual state of repayment; a business owner needs to be aware of their interest rates to be able to access future funds and fulfill big orders.
Financial responsibility leads to flexibility through Factoring. If a business is properly managing credit they can rely on factoring rather than direct loans or investments. In short if a small business secures a large order from a company like Macy’s but can’t fulfill it due to funds shortage; they can sell the invoice to a Capital or Financing Company then use the funds to fulfill the order. The Financing Company collects the money from Macys and the profit is split.
Respect the powers that be - Factors Affecting Economic Development and Growth
Overall Economic Health of the country affects consumer confidence. In recession not only do consumers cut back and sales of luxury items decrease but production companies cut back on manufacturing due to lulls. A business must know the climate and their customer and be able to analyze where their product fits in to the trend. .
Government Intervention can create waves. With the mandate of massive overhauls such as Early College High Schools, there will be dozens if not hundreds of small business which crop up as a new sector with consulting firms, advocacy groups, career firms and alike.
Environmental Impact impacts economic growth as a result of shortage or surplus of resources. A strong example is crop shortages or the sudden unpopularity of fur in the 90’s leaving many distributors with truckloads of dead animal fur coats.
Observing Driving forces
Engage in forecasting professional development by studying predictions of predecessors and experts. Business owners and companies should be active in professional groups and community organizations so to keep one proverbial ear to the ground for changes popularities and movement.
Owners should attend market fairs and conventions to stay close to customers and suppliers. There is no better way to keep the finger on the pulse than to attend massive networking events.
Business owners must look at tech solutions on the horizon. In a single day a new innovation can create greater avenues for disintermediation, generate virtual solutions or reduce costs.
Business deals in massive amounts of information, sales data and customer records. Without the right system tools Small business will be able to position themselves: here is a list of valuable Tangible and as well tangible tools including web based software and mobile tools.
- Tangibles Tools
- Cash flow and financial management
i. Intuit QuickBooks is the industry standard accounting software which allows Small Business Owners to operate tools for bookkeeping, Billing, Invoicing and Bill Pay.
ii. GoPayment is a Merchant Services for accepting payments created by the same company which created QuickBooks
- Research and Planning
i. Google Trends: small business owners can use Google trends to see what consumers are looking for. Is an idea being search by consumers? Is a topic trending?
ii. PlanGuru is budgeting and forecasting software designed to help businesses and nonprofits make better decisions. Whether it’s a high level forecast for the bank or a detailed multi-departmental operating budget, PlanGuru can enable you (or your team) to produce a more accurate analysis in less time.
iii. Tracmore is only $19 per month for the lite plan, and is the commercial open source solution that makes it easy to centralize and track your assets online. From its simple web-based interface to its intuitive workflow, Tracmor will help you drive down costs while maintaining an accurate record of your assets.
- Sales and Consumer
i. Zohos Sales Force Automation (SFA) solution drives sales force performance and profitability by giving you everything you need to sell smarter. By automating your processes, it frees your people to concentrate on creating leads, closing deals and growing your customer relationships. Zoho SFA makes it simple to perform Lead Generation & Qualification, Pipeline Analysis, Sales Stage & Probability Analysis
ii. Sales Force - Sales Cloud. The Sales Cloud includes a real-time sales collaborative tool called Chatter, provides sales representatives with a customer profile and account history, allows the user to manage marketing campaign spending and performance across a variety of channels from a single application, tracks opportunity-related data including milestones, decision makers, customer communications, and other information unique to the company's sales process. Automatic email reminders can be scheduled to keep teams up to date.
- Mobile tools
- Geckoboard allows you to see your web analytics, your social streams and other key performance indicators no matter where they reside—on your network or on your mobile device. Pricing starts at $9 per month and also has a 30-day free trial.
- Ducksboard is one in an emerging class of analytics programs that aggregate all of your different reports or data streams into one unified location. That location might be your iPhone or an HD television hanging in your lobby. Pricing is $29 per month for unlimited widgets and dashboards. You can also test it in a 30-day free trial.
- WatchDox is an enterprise-focused solution to the growing need for secure document sharing and mobile collaboration. Users can view all documents shared via the WatchDox
- PocketCloud provides secure remote access to a Mac or Windows desktop from your iPhone or iPad. Through PocketCloud, you can access your files, photos, and applications like PowerPoint and Photoshop.
- To-Do This is a task-management app that makes the old To-Do list look like something developed by precocious chimpanzees. With Wunderlist you start getting organized simply by creating lists of tasks that you need to get done.
- Quickoffice gives mobile workers on-the-go access to Word, Excel and PowerPoint. Mobile editors provide a mobile-optimized way to create, edit and share various documents. Features recently added include connections to cloud storage providers, a PDF annotation tool, spell check (English, French, Italian, German and Spanish) and external keyboard shortcuts for tablets.
- Concur is a travel and expense management app intended to help you simplify business travel. The mobile app allows employees to book travel, manage itineraries and track and file expenses.
- Expensify helps you track work expenses as you travel. The app lets you use your phone’s camera to scan in receipts, and it’s smart enough to capture the date and amount charged for each receipt you upload.
- Officedrop turns your smartphone into a portable scanner. While any file type can be uploaded into OfficeDrop’s cloud filing cabinet, anything scanned by your phone is immediately converted into text-searchable PDFs.
- Webalo is a remote access app that allows you to connect your iPhone to most enterprise apps. To help companies deal with BYOD initiatives, Webalo lets administrators configure mobile access to individual enterprise applications or combine functionality and information from multiple applications. IT can then consolidate everything in a simple set of menus on mobile users’ devices to provide each employee with an individualized connection to the enterprise.
- Quickbooks MOBILE If you already use Quickbooks for your small business accounting, Quickbooks Mobile will help you streamline your bookkeeping by adding a mobile client to the mix. The mobile app lets you track sales, send out invoices, and see recent payments from your handset.
- Herematch - This location-based service is designed to help you make new business connections in real time. The app can be linked to your LinkedIn, Twitter and Facebook accounts, so that when you check into a place or event, your status will be automatically updated on social networks.
- FileMaker Go allows productivity workers to remotely access custom business apps that have been created using FileMaker Pro 12 database software. The app allows team members to view, edit, search, and share information with each other while on the go.
- Developer: FileMaker, an Apple subsidiary Cost: Free, but you need a desktop version of FileMaker to connect to, which starts at $299 for up to 10 users."
- Meeting Mapper is an intuitive and elegant application for iPads that makes it easy to gather up and “map” (thus the name) the information you need for truly successful meetings. This application tracks the role and the stance (opinion) of every participant in a meeting, and makes it easy to create action items or next steps and automatically schedule the actions for follow up. Meeting Mapper costs $6.99 and is available from the iTunes store. A related application, Meeting Mapper Fierce, is integrated with SalesForce and is optimized to serve as a strategic weapon for closing new sales. Meeting Mapper Fierce is available from the SalesForce AppExchange, here.
- Tappestry A newcomer in the social field, Tappestry is a bit different than the social tools such as Yammer or Salesforce Chatter. Tappestry was built for sharing knowledge and to learn new information. It integrates with many of the traditional technologies human resources and learning departments use.
- StratPad "Use the most powerful business tools ever. Unleash the full potential of your remarkable company.
- StratPad is designed specifically for owners and executives of small- and medium-sized companies. It’s a complete, all-in-one management tool: learn strategy secrets, create your strategic plan, share it with your management and staff, and monitor everyone’s progress. Get focused, get aligned, get going"
- Speaktoit is the top-rated â€¨virtual assistant for Android or iOS/Windows, but will be targetingâ€¨ productivity for business users in 2013. Speaktoit was a top 10 NY Times App of the Year in 2012, but is adding specific features for workers in early 2013.
An Enterprise needs a Crew
A good entrepreneur is a manager who knows how to build a team. A Leader will always be better served to build a team around them when starting a business. An entrepreneur can be blind to failures or reasons for failures, be too close to the business or be uneducated to a sector.
Entrepreneurs need to make decisions on information they are not familiar with, this is when good leaders lean on their team. There is no one person who understands all aspects of a business or a market for which it exists. A support team will not only provide powerful insight into strategies but also information on competitors, market trends or changes.
How to Fail
In the end an Entrepreneur must know how to fail. This is not about failing gracefully. It’s about knowing how to plan strategically during a failing situation t to create future ventures.
As Jimmy Durante said “It’s all in the exit.”
First of all, before any venture begins an entrepreneur should sit down with family and mentors or a spouse and set and end game. As depressing as it may be the owner must set a goal and decide on a number which will be the line they will not cross of the goal is not met. The number can be monetary or time sensitive but it must resolute and nonnegotiable once set. It may be hundred thousand dollars or 20 years but when the number is up, the business is done. This prevents the pitiable “I just need 1 more year” syndrome.
Secondly, Never, Ever, Ever sign a personal guarantee. One of the most common mistakes business owners, officers, managers and employees make is that of signing a personal guaranty. It seems innocuous, but it isn't.
The personal guaranty is part of a very common scenario. A small business is trying to set up terms with a vendor for product or materials, the time comes for payment and the company is short. They sign a personal guarantee with their own assets in the company’s name and the risk is set.
Unless you are willing to risk your personal lively hood along with your employees and family, don’t do it.
Lastly, in reference to the failing with an exit strategy, Know when to pivot! Viagra didn’t succeed as an blood pressure reduction agent but found another way to succeed. That move didn’t happen through pure serendipity; it happened because the right mangers were in place to stage the pivot. A lesser command would have only seen failure or worse persisted with the idea of creating blood pressure medication.
MySpace failed to pivot (at the time) but the owner knew when to take his exit to receive his big payoff.
I started a lead generation and resume blasting business which failed to grab hold because job seekers don’t have money to spend. Instead of persisting I shifted my focus and ideas to colleges and career service departments. In doing so I have found a customer who will buy my product and my company and I have stumbled into a new market with software. It is the author’s mantra “Good Business Don’t Fail, They Pivot”
Find out about how to Pivot to avoid failure in Part 3