Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

May 22, 2013

At What Age Should You Start a Business?

Filed under: Entrepreneurship — Tags: , , — Mike Van Horn @ 11:50 am

From a question asked on MosaicHub by Barbara Ciosek.

I’ve been advising small business owners for 25 years, and I see that people start businesses at all ages. Here are a few common categories:

20s. New professionals. People who get professional training, then go out on their own, so they never really work for anybody else (except their customers). Pretty quickly they see they must make their professional practice work as a business.

30s – 40s. Experienced professionals. People who start out working for a large company, get fed up with it, and strike out on their own, perhaps taking a few customers with them. Most of my clients fall into this category.

50s – 60s. Corporate escapees or castoffs get laid off–or retire–then either start their business or buy a business. I have a client who took his golden parachute from investment banking and started a yoga studio.

60s – 70s. Recycled Boomers. People who retire often get bored and decide to launch another venture. I have a client who sold his cable programming company at 67, and has started a training program for other retirees.

What about energy levels? I think it’s a myth that you have to work 24/7 when you start a business. Many do, of course, but I think that’s often due to poor planning–or choosing an inadequate business model.

The young often see older people as decrepit and slowing down. But when you get to be 70,  you might say, “Hey, I still love my work, and I still have plenty of energy and gumption. And what else would I do for the next 20 years or so?”

I, at 71, am about to launch a new offshoot from my company, training coaches and consultants to do what I do.

 

PS. This ignores the whole category of people who take over a family business, which can happen at any age, but most commonly in the 30s or 40s, after working in the business for a long while.

 

December 11, 2012

Planning for Small Business Growth

Filed under: Planning — Tags: , , — Mike Van Horn @ 10:38 am

5 Tips for Getting Your 2013 Plan Done

Business owners have a love/hate relationship with planning. We know that regular planning Small business success workshopboosts our chances of success. But it’s hard to carve out time to get it done. Here are five tips for getting it done without making a big deal of it.

Tip #1. JUST DO IT! Get it down in writing. “I’ve got my plan right here in my head” just doesn’t cut it.
Too many business owners let planning slide. Do it every year, or more often if need be.

Tip #2. Be concise. I tell people in our plan workshops that if you can’t write it on a page, you can’t get it done in a year anyway.

Tip #3. Be practical. Write a plan for yourself, that you can follow and achieve. Don’t write a plan to look good for others. Don’t set blue-sky goals just to “push yourself.” Set no goal without doable action items that will get you there.

Tip #4. Tackle your biggest dilemmas, choice points, uncertainties–not just the positive stuff. Any plan that neglects how you will handle these challenges is bound to fail.

Tip #5. Follow up. Build in a plan to review your progress periodically. And it’s best to involve others in this, so you can’t fool yourself. My clients present their action plans to each other and get feedback. This forces them to think things through and clarify their assumptions, so they can defend their goals. Thus, they achieve their goals!

And one bonus tip:

Tip #6. Stick to your plan–until it’s time to change it. Things change during the year, and you need to shift your targets and strategies to accommodate. Balance steadfastness and flexibility in your planning.

Get Your Plan Done in one day at our annual planning workshop. Get 2013 started off right! First session is coming up–Monday, December 17, in San Rafael. More sessions in January–including a virtual session available to people anywhere.

Save 50%! If you’ve taken the workshop before, you get a 50% discount.

Recruit a colleague and both you and they get 25% off. Please forward this to your friends.

November 5, 2012

Do you have what it takes to be an entrepreneur?

Filed under: Entrepreneurship — Tags: , , , — Mike Van Horn @ 3:35 pm

From LinkedIn question by Ayoola Stephen Efunkoya: “Do we all have what it takes to be entrepreneurs?”

It doesn’t matter if everyone has what it takes to be entrepreneurial. Enough do. Let them create jobs for the rest.

Do YOU have what it takes? That’s all that matters to you. Sounds like you already have several qualities needed by entrepreneurs. Here are the basic qualities. How would you rate yourself?

Profit drive. Do you have a strong drive to make a profit from your entrepreneurial efforts, in addition to serving others and getting satisfaction and pleasure?entrepreneurial vision

Market sense. Secondly, do you have a good sense of what you could sell that people would pay for–and pay enough so that you can make a profit and provide yourself with a good living?

Organizer. Third, are you good at organizing resources–ideas, capital, people, equipment, vendors–needed to build and manage an efficient and productive endeavor?

Visionary. Fourth, do you have a vision of how all this could unfold, and where you could take it? It’s okay to start out with a fuzzy vision–most of us do.

Risk taker. Fifth, are you willing to take a big risk, and go for it even when it’s all very uncertain?

Planner. Finally, can you pull all this together in a plan that you can follow and that others can understand?

If you can do these things, you can be an entrepreneur. You don’t have to be at 100% with all these; we all start out small and inadequate. But we go ahead anyway–because we WANT it.

Or maybe because we are forced into it, and have no option. Necessity is the mother of entrepreneurship!

One other thing. Not all entrepreneurs go into business. You can be entrepreneurial in a non-profit, in an educational or scientific or artistic organization, in an NGO. You can even be entrepreneurial working in a large corporation, if you pick your place carefully.

 

 

May 29, 2012

Is Entrepreneurship for Everyone?

Filed under: Entrepreneurship — Tags: , , , , — Mike Van Horn @ 8:44 am

Updated “new and improved” version of this post is here.

Discussion started by Rieva Lesonsky on LinkedIn “Small Biz Nation” group. Here’s my response

I advise small business owners, from solopreneurs to 50 or more employees. Let me mention a few of them:

  • Two art majors started making hand-printed greeting cards for friends. Now they own a print shop with 10 employees. They’ve printed my books.
  • A woman was making pear condiments in her kitchen. Now she sells pallets of her specialty foods to Costco from her warehouse. I have a photo of her driving her forklift.
  • A woman in IT had gluten intolerance, started baking things for herself. She now has a bakery, several retail outlets including in the San Francisco Ferry Building, sells online, and has 30+ employees. She still doesn’t understand her P&L.
  • A Japanese immigrant worked as a busser in a restaurant, and saved his money. The restaurant went bust, he bought it for $1. Twenty years later, he has one of the best restaurants in the Bay Area, and has had a Michelin star.
  • A Hispanic guy got hurt on his construction job, and went on disability. While he was waiting for some job retraining, he started doing gardening for neighbors. He was chastised by the state for accepting money while on state aid. He now has three trucks and two gardening crews working for him.
  • A woman took over her husband’s bookstore when he died of a heart attack. She doesn’t really enjoy the business, but she’s trained somebody else to run it for her, and she has actually hired two more people.
  • A banker took his early-retirement buyout and started a yoga studio, and he just loves doing that.
  • A woman got fired from her sewing job, took a couple of favorite customers and did sewing for them. She now has a sewing workroom with ten employees, and recently bought out her former boss.
  • When my wife, the least entrepreneurial person I know, left her job because her boss was a total ******, she scanned the want ads for a new job for about six months, until she had so many HR consulting clients she had no time for that. Ten years later she keeps her schedule full without any marketing, just by referrals.

None of these people would have scored high on anybody’s entrepreneur test beforehand. I think it’s so dangerous making assumptions about who can or cannot be entrepreneurial. It may be true that not everyone is cut out to be an entrepreneur, but I challenge you to point ’em out ahead of time. I have worked with so many “accidental entrepreneurs” like these folks. “One day I just noticed that I was in business. It was so hard to make a go of it. I had no idea what I was doing. I didn’t know how to run a business, how to hire or manage an employee, how to watch the finances.”

The guy in the article who says entrepreneurship can’t solve the unemployment problem is oblivious to the fact that every one of these people I mentioned created 5 or 10 or 50 other jobs. And that some of those employees will in turn go out on their own—either voluntarily to pursue their passion or kicking and screaming. And that each of these little businesses help support other businesses around them.

My job is to teach these people enough about running a business so that it doesn’t drive them crazy.

Regarding that stat that most small businesses go belly up due to lack of money, I think it’s a myth, and I called this a myth in another post.

 

April 27, 2010

How entrepreneurs get started

Filed under: Not yet categorized — Tags: , , , , — Mike Van Horn @ 12:15 am

From a question on LinkedIn by Robert Saric: “Do you agree — first build the product everyone wants, then raise enough money to build the business?”

I agree, Robert. If you don’t have a workable product, then you cannot demonstrate that everybody wants it. Without this evidence, nobody will invest in you.

Creativity and innovation are hard; building a business around these is much easier (though still difficult). Creativity and innovation are rare, business skills are much more common, investment capital is plentiful. But investors want strong evidence that you can give them a 5x return.

Thus most businesses are initially self-funded, or rely on “3F funding”: family, friends, and fools. You go into hock to build your prototype and see if you can generate some market buzz. Then you go after angel or VC backers. You get some seed capital, do more marketing, produce more results, then go after 2nd round financing.

You build stepwise in this manner. You hire only those who are essential to get your product to the next level.

Pre-dot-bomb and pre-“great recession” rules were much different, but this is 2010, and investors hold their cash with an iron fist.

*   *   *   *

If you’re in this situation, and don’t see where the capital is going to come from, let me know. I’ll be glad to talk you through it.

November 25, 2009

Why Did You Go Into Business?

Filed under: Entrepreneurship — Tags: , , , — Mike Van Horn @ 2:08 pm

from a LinkedIn question asked by my friend Christopher Richards. I think this is a good question for all of us to ask ourselves. In “Success in 2010,” our annual plan workshop, the first question is, “Why are you in business?” It completely stumps some people! But once you answer that, it really helps you to organize your business to give you what you want.

Here’s my answer:

I went into business by accident. I was at a party. I overheard these two engineers talking about a project they’d gotten to produce a big conference for Jet Propulsion Labs. They were puzzled how they were going to handle the group interaction, which wasn’t their strength.

I butted in and said, “I could do that for you.” I ended up as #3 guy on the project, which went really well, and we were offered follow-on conferences. The two engineers said, “This really isn’t our thing; we’re turning this over to you.” So there I was, sole owner of a technical conference production company, with up to ten employees.

Since that time, I’ve only had one “real job” (i.e., one with paid vacation), when I made the mistake of going to work for my best client. That lasted two years. Since then I’ve owned an export management company (which lasted till Japan’s economy went in the tank), and my current company, The Business Group.

I’m in business because I like to create and organize big things. Yes, I like the money, and yes, I like contributing to others, but those aren’t the main drivers.

At heart I’m a teacher and  communicator and organizer, and my businesses have all been designed as venues for me to exercise these strengths in various ways.

And to schedule time off when I want it.

Oh yes, then there’s the fact that I’m such a hard-headed, autonomous sumbeech that no employer could long put up with me!

July 28, 2009

Solopreneurs and Marketing Budgets

Filed under: Marketing — Tags: , , , , , , , , — Mike Van Horn @ 3:32 pm

Q: I’m curious if anyone has a rule of thumb on what should be spent annually by solopreneurs on marketing. Would anyone care to share their own marketing expenses? Or percent of revenue?
Maria

A: Maria
I’ll bet that not 1 out of 20 of us knows how much we spend on marketing. Three reasons:

1. Our biggest marketing cost is the value of our own time we spend on marketing, and we don’t track that, let alone assign an hourly value, or check the results for the hours we spend.

2. We don’t collect all our marketing expenses under one account called “Marketing.” Instead, we have line items for Professional Services (web design, podcasts, etc.), Advertising (display ads, google ad words), Memberships, Business Meetings, Travel, etc.

3. We don’t create marketing budgets, then track how much money and time we spend, compare budget to actual, and compare effectiveness of different marketing activities (“bang for your buck”).

“A yacht is a hole in the water you throw money into,” we’ve heard people say. I think this is the way most entrepreneurs treat marketing. “If I’ve got some money, spend it on marketing. A free evening? Go to another networking meeting.”

So I’ll be very interested to see if anyone can give a meaningful answer to your question. I hope you can prove me wrong!

February 5, 2009

Economic stimulus for small business?

Filed under: Political rants for entrepreneurs — Tags: , , , — Mike Van Horn @ 5:15 pm

Three rules for Washington economy rescuers to live by:

“First, do no harm.”   (Hippocratic oath for fiscal policy makers)
“It’s got to work, stupid.” (From Clinton’s “keep it simple, stupid”)
“Targeted, timely, and temporary.” (From Obama’s economic policy advisors)

I want to hear from you.

What specific items in the economic stimulus package wending its way through Washington would benefit small businesses and independent professionals? Why? How?

What elements of the package would not be helpful–or could hurt you?

No conservative or liberal rants, please. Be specific. Relate it to your situation.

Below are ideas and responses on this topic–starting with my answers to my own question.

December 15, 2008

Kill the golden goose with taxes?

Filed under: Entrepreneurship — Tags: , , , — Mike Van Horn @ 4:50 pm

Convincing blog post on the “Doing Business” blog on the importance of entrepreneurship for innovation and economic well-being. We all knew that!

Business Owners Toolbox

Business Owners Toolbox

Read the full post at http://www.typepad.com/t/trackback/462659/35963502

But small businesses also bear the brunt of taxes! And the more we pay in taxes, the less we can afford to invest in our businesses. So our government is damaging our ability to create jobs and innovation, the very things they say are essential to boost the economic well-being of all of us.

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