Archive for November, 2007

Nov302007

Capital Constraints - Good and Bad

I was just at the REIA of Macomb last night, Michigan’s Premier Real Estate Investment Association, and heard national business credit expert, Tom Kish, speak about unsecured lines of business credit and how they can be used to fund your business.

I found Tom’s message to be compelling, and it got me thinking about the subject of financing for entrepreneurs. Money is always a big question mark for anybody that is looking at starting or expanding their business.

There are a lot of different theories on business financing out there. The fact of the matter remains that most entrepreneurs are continually operating under capital constraints; seeming to be forever in bootstrap mode. I know that for me, personally, bootstrap mode means continually evaluating the viability of projects. Questions like: “does this initiative deserve more money than another one?” are always circling around in my brain. I know the textbooks say that this is how you are supposed to operate, that you are supposed to have to make these ‘rationing’ choices all the time. This might be o.k. for large companies to swallow, but for entrepreneurs we are often talking about survival, or growth necessary to get to a more sustainable level.


As an entrepreneur, I think one of the hardest things to reconcile my self to is the fact that I can’t implement all of my ideas. You see, I just see problems that come up in my life and in the world that I want to solve. Solving problems effectively, for large numbers of people = money made. Not being able to address these problems is hard, but if I am honest with myself I understand that I can’t always do everything.

The bottom line is that only the best ideas and initiatives will get funded. Whether you are trying to get your business off of the ground with angel funding or working with your personal savings to get started, or you are raising institutional funding, only the best ideas get the money necessary to get off the ground. The same rule applies to your own internal business funding; only the most promising marketing initiatives will get funded.

All of this might seem like a hindrance to growth, but it is a necessary aspect of business development. Our job as entrepreneurs is to make sure that we are continually coming up with new ideas for improving and starting companies and continually pushing the growth envelope. As they old saying goes: “the cream always rises to the top.”

Published
by
Adam Davis
on November 30, 2007
in Finance and Investing
. 0 Comments
Nov272007

Tuesday Top 5: 5 Marketing Trends More Entrepreneurs Are Taking Advantage of and Making Money With Right Now

The Tuesday Top 5 for this week highlight the Top 5 marketing trends entrepreneurs are taking advantage of to increase their brands and boost their bottom line.

Online Collaboration

Software tools like Go To Meeting, WebEx and others have been at the forefront of a revolution in how business owners are able to work with their clients. From solving problems and providing service and support to making more concentrated efforts at inside sales, collaboration software is helping small companies gain ground on their larger competitors.

Webinars

A webinar is simply a seminar or presentation held online. Entrepreneurs are using webinars for everything from training employees in different locations (helping drive costs down) to presenting products and services to clients across the globe.

Savvy entrepreneurs have been using webinars to get more productivity out of their workforce and have a bigger reach to a much wider audience than before. For example, service providers such as accounting firms are hosting short online sessions to benefit their clients. One key is that webinars can be set up ‘on demand’ – thus adding value to clients and customers while ensuring maximum convenience and superior delivery.

Media

Media content, in the form of video, audio, animation and interactive applications are revolutionizing the way companies interact with their customers.

You Tube has helped lead the explosion of online video for the masses. My Grandmother is now talking about funny clips she saw on You Tube! Smart entrepreneurs are using You Tube to highlight features of their products and services, drive traffic to their websites and put themselves and their brand in front of their customers in an engaging and inviting way.

Podcasts are already a valued part of the marketing arsenal for hungry business owners. Audio content libraries of podcasts, MP3 files and streaming audio can become valuable assets for business owners. Flash animation is a widely recognized medium for delivering content

Product Placement

Product placement has long been the realm of the biggest multi-national billion dollar companies. Companies such as Coke, BMW and IBM have long been paying to have their products featured in movies, television shows and other areas (think Vera Wang dresses on celebrities at the Academy Awards).

Now, cutting edge entrepreneurs are utilizing cost effective mediums such as: You-Tube, MySpace, Facebook and other social media sites to display their products and services in action. The internet and social networking have made the celebrity barrier easier to cross. Think of Amanda Congdon on Rocketboom (she had over 100,000 daily viewer when she was on the daily vlog), Lonely Girl 15 on You-Tube (a video series of short clips) or Tia Tequila (entertainer) on MySpace as examples of how people are able to rocket to superstar celebrity status without being in major motion pictures or television shows.

Product placement in these mediums strikes very targeted niches and loyal audiences, something that equates to bigger bottom lines for advertisers.

White Papers

White papers are simply an expose on yours or your company’s expertise on a subject matter. Like product placement, white papers have long fallen into the realm of exclusivity for larger companies. However, with an explosion of new markets and new issues and problem facing businesses, the monopoly of expertise on subject matter has been broken. Small entrepreneurs are quickly becoming known as experts in fields like internet marketing, direct marketing, information technology management and many others. Individual entrepreneurs are publishing industry studies and white papers as marketing tools to great effect.

The best thing about these trends is that they are extremely cost effective and easy to implement. Business owners can be more proactive with their marketing approaches now, getting information in front of customers in unique and creative ways. Take advantage of these trends to your benefit; ignore them to your detriment.

I love to keep re-iterating the fact that it is great to be in business today. Never before in history has their been so much money to be made and so many ways to make it!

Published
by
Adam Davis
on November 27, 2007
in marketing and starting a business
. 0 Comments
Nov192007

Tuesday Top 5: 5 Reasons To Be In Business For Yourself Right Now

This week I want to cover what I think are the Top 5 reasons that anyone should be in business for themselves, in some capacity, right now.1. Technology
10 years ago the technology wasn’t there to conduct 50% of the business that we do today. Broadband internet, Google, and email on your cell phone were not around 10 years ago. Love or hate the rapid advances in technology (and the subsequent hit to your pocketbook for upgrading), we can now be more productive than any generation of business owners before.


2. Shift in employee/contractor status
There is a tectonic shift taking place in the nature of the workforce. In 10-15 years, there will be a great many people, who used to be working as employees of one company, that will be forced to become independent contractors; moving around from project to project, within and between companies. Working from anywhere in the world will become the norm, as software, the web and collaboration tools become commonplace and easily integrated. Check out the August 2007 in Business Week (Click Here)
article on the future of work that elaborates on this. The great benefits of this shift in the workforce, for those that will take advantage of them, are:

A. There will be a great deal of talented people available to work – as a business owner this is a GOOD thing, as you can now procure the people you need much easier than ever before
B. The cost of payroll compliance will likely decrease


3. Tax advantages
It has been said many different times and many different ways by countless experts and gurus, but the tax advantages of being in business for yourself are better than those of an employee. Simply put, many of the things you pay for with after tax dollars as an employee are able to be fully or partially deducted as pre-tax business expenses. Legitimate travel for sales calls, business lunches and countless other costs (which the business owner can enjoy the benefit of) are tax deductible expenses.


4. Globalization
Globalization is a big fancy word that tries to capture the economic changes that are happening as countries such as India, China and Brazil play increasingly more significant roles in the economies of their trading and non-trading partners alike across the world.

Globalization has opened up many more doors than it has closed for aspiring and existing business owners alike. For example, if you want a software program designed or a machine tool set up, the speed and cost with which you can bring them to market are faster and cheaper than ever before. You have the ability to easily serve other markets with your products and services and make more money FASTER than even 1 year ago, and it’s only going to get better.

Take a glance at Thomas L. Friedman’s book The World is Flat, for an in depth look at all things 21st century globalization.


5. PROFIT Opportunities Galore
Plain and simple, making money is a pretty important aspect of being in business. As the world continues to spin faster, their will be a constant stream of new problems to solve and needs to fill-which is what being in business is all about. The bigger the problem you can solve for the largest number of people will determine how much money you will make.

Think of the healthcare or education systems here in the U.S. These are HUGE problems that are just waiting for a savvy entrepreneur to step up to the plate and provide a solution that solves even 5% of it.


Give this week’s Top 5 some thought over your Thanksgiving dinner. I hope that you see the same opportunities that I do and make the choice to take advantage of them.

Published
by
Adam Davis
on November 19, 2007
in Entrepreneurship and starting a business
. 0 Comments
Nov182007

Get Rid of the ‘If” Factor

“We will either find a way, or make one!”
-Hannibal, 218 B.C.

All too often in conversations I have with people that are either interested in starting their own business or looking to expand their existing business, what I call the “dreaded ‘if’ factor” rears its ugly head.

The ‘if factor’ usually goes something like this:

“If I get that pay raise, I’ll be able to start buying some income producing real estate.”

“If we have a big holiday season, we’ll look at putting more money into marketing.”

“I don’t know if I can take the risk of starting a business now…maybe if I was 10 years younger I would think about doing something like that.”

It is at this point during the conversation that I wish I had a time machine. Besides the fact that it would be really fun to travel through time, I would really want to see what would happen when their ‘if’ conditional is fulfilled. Would this person really go forward with buying an investment property when they got a raise? Would the holiday season really be the deciding factor in whether or not this business owner spends more to grow their company?

Many people live their lives by a conditional function: if this, then that. The problem is that life throws a lot of unexpected events at you. You put yourself into reaction mode versus proactive mode when you rest your future actions on events or situations that are often beyond your reach of control or don’t even directly tie into your goals and dreams.

The most successful people that I have encountered have a strong sense of purpose and conviction and they rarely put conditionals on their goals and dreams. I have heard successful people say things such as:

“I will buy 10 investment houses next year, no matter what.”

“We are going to plow money into marketing, based on a strong plan, so that we can double our business next year.”

“I am going to start a company now, because there is a great opportunity.”

Whatever you do, don’t put conditionals on the level of success you want to achieve. Keep moving forward and, if there isn’t a way – MAKE ONE!

Published
by
Adam Davis
on November 18, 2007
in Motivation and quitting your job
. 0 Comments
Nov142007

Analysis Paralysis

We have all suffered from it at one time or another: analysis paralysis. The symptoms are quite common: constant number crunching, re-hashing the same information and facts over and over again, lying awake at night, constant distraction and gross inability to make a decision and take a clear direction forward. Analysis paralysis is found to occur most frequently in the face important decisions, decisions that impact your bottom line.

Analysis paralysis is one of the leading killers of business deals. It is often easier to do nothing at all than to make tough decisions.

The prognosis for analysis paralysis can vary among those afflicted. Some suffer indefinitely, never being able to make timely decisions and move ahead in their businesses. For others, it is a temporary condition that provides a stepping stone toward bigger and better things.

The good news is that analysis paralysis can be cured relatively easily. The next time you feel the onset of analysis paralysis, try the following cures:

-Get a fresh perspective
Talk to somebody outside of your daily grind. Have a trusted advisor, mentor or colleague that you can call that will give you an outsiders’ look at your situation. Quite often, you are so close to the problem, that you can’t see the forest through the trees.

-Reconcile the deal with your business goals and objectives
It’s easy to get caught up in the moment. Dollar signs can do funny things to your thinking. If you are hesitating to do the deal, it may not be the right fit for the direction you want to go.

-Set Deadlines
Deadlines keep you accountable. If you impose a deadline on yourself, you open the door to indecision, because you can more easily justify delay and further consideration.

-Trust Your Gut
Trusting your instincts would seem to be a no-brainer. However, many people think that business decisions must all be counter-intuitive. If you get a bad feeling from someone you are considering doing business with, there is usually a reason. Some business owners go about endlessly justifying and rationalizing different options when they could have simply gone with their gut instinct from the beginning and saved themselves a lot of time and hassle.

I think the best way to avoid or overcome analysis paralysis is to take some words of wisdom from Theodore Roosevelt: “Do what you can, with what you have, where you are.”

Published
by
Adam Davis
on November 14, 2007
in Management
. 0 Comments
Nov132007

Tuesday Top 5: 5 Reasons Businesses Don’t Get Off the Ground

It’s time for the inaugural Top 5 Tuesday. Each Tuesday, I will break down a ‘David Letterman’-like list of things that are pertinent to my viewing audience.

Below, you fill find the main reasons I have discovered why people either never get started in business or can’t get their business off the ground after they start:

1. Fear
Plain and simple, fear holds most people back from achieving what they want in life, whether it is in business or elsewhere. It could be fear of failure, fear of success (yes, there is such a thing) fear of the unknown, or some other fear that opens the door to doubt and indecision.
When I was working in Corporate America, I would routinely have lunch with some friends and during these lunches we would occasionally talk about our aspirations outside of the cubicle walls. Now, these guys were all ambitious and very smart-much smarter than me. We all talked about how much more money we could be making if ‘we went out on our own’. Than, when I would bring up the idea that I wanted to start my own company (and soon), I got a lot of horrified looks. “Why would you want to leave a steady paycheck for the unknown?” “What if you fail?” These were the first questions out of their mouths. The questions people ask invariably highlight what they are thinking and feeling. Fear can cripple even the brightest minds.

2. Lack of Support
When you launch a business, it takes a great deal of time, effort, dedication and sacrifice. Support from your family, friends and colleagues can be either a tremendous help, or a huge hindrance in making your business a success. If you are an aspiring business owner and you don’t have the full support of your spouse, or significant other in launching your venture, than your journey to the top is going to be harder. You can’t always expect your friends or colleagues to be behind you 100%. They may be jealous of your courage and ambition. Be careful who you confide in, but make sure you have somebody in your corner that you can lean on.

3. Improper Focus
I am often surprised at the number of people that start business ventures in areas of which they either; a: have no experience or, b: have no particular talent or affinity. This is not to say that you can’t learn or acquire a taste for something in which you have neither experience nor talent, but why stack the deck against yourself when there are easy fixes?
Experience can be gained. For example, if you want to invest in real estate and flip houses, you can join a local real estate investment group and meet and talk to some experienced investors. You could apprentice with an experienced investor and learn the ropes (free and competent labor can be enticing). Or, if you wanted to start a hamburger franchise, you might think about taking a part time job at McDonald’s to learn the business (it might be a hit to your pride, but not doing so could cost you lots of money).

4. No Momentum
Momentum is very critical in business. It can often mean the difference between a breakthrough quarter or months of red ink. A lot of new business owners that I talk to, whether they have recently left a job or have been on their own for a year or two underestimate the power of momentum. When you are wearing all the hats that a business owner has to wear (sales, accounting, customer service, etc.) it is hard to keep
When you are on a roll in a particular area of your business, whichever area it is in, you need to keep rolling. For example, if you are allocating 4 hours out of your day, say from 10am to 2 pm, for selling and you find yourself making some sales (which is a GOOD thing), than keep selling! You are experiencing what athletes refer to as “the zone.” Often, for the sake of perceived crises in another area, or rigid adherence to a time management program, the new entrepreneur will forsake “the zone.” When you forsake “the zone”, you will lose momentum, and if you lose momentum, you will forsake the big chunks of progress and leaps forward that you need to drive bigger success.

5. Absence of Persistence
This would seem to be pretty obvious, but I can’t count the number of people who give up too soon. When I hear about someone quitting on a project or not wanted to make that extra sales call, I think of the story of the miner on Colorado.
A miner was digging for gold in Colorado. He had dug for three years without striking anything of significance. The miner expressed his frustration to another businessman in the area, who offered to buy the miner’s claim for a paltry sum. The miner agreed, happy to move on to bigger and better things. The businessman quickly commissioned some experts to inspect the claim, and promptly began mining. After only three feet of digging, the largest gold vein in Colorado history was struck. The businessman became wealthy beyond measure. The miner, who had since moved on to farming, would live a life of regret. He would often lament that he was “just three feet short” of a fortune.

Too many people fall “just three feet short” in pursuit of their business goals. Persistence is paramount to success.

Published
by
Adam Davis
on November 13, 2007
in Entrepreneurship and starting a business
. 0 Comments
Nov92007

Corporate Stink Think

When I was working for a large multi-national company, I used to daydream often about the businesses that I was going to start and the money I was going to make once I mustered up the courage to fire my boss. Having several friends that were entrepreneurs, I had gained valuable insights into the problems they were encountering and how I could solve these and other problems on a larger scale and make a viable business model out of it.

After I gave my boss the boot and launched out onto my own, I quickly came to the realization that the education and experience that I had gained in Corporate America had grossly ill prepared me for the rigors of business on my own. I had developed a ‘corporate think’ mindset (Those of you that work for big companies will know what I am talking about more so than others).

I couldn’t understand why my customers did not appreciate my ‘value proposition’. They didn’t care about the nice spreadsheets and power point presentations that I put together to show how becoming a ‘strategic partner’ with me was going to give them a ‘scalable business.’ Sitting in front of my computer and endlessly tweaking my website or spending 15 minutes trying to articulate the most eloquent email was not correlating to increased zeros in my bank account. How was I supposed to make decisions in only 2 minutes instead of calling a meeting and having a 10 person sounding board?

The small business owners that I was targeting only cared about one thing: MAKING MONEY. After several dozen sales calls, I felt like I had been chewed up and spit out. After being regurgitated by a few veteran entrepreneurs that I was pitching, I came to realization that, while my corporate and career IQ were reasonably high, my street smarts were far below passing grade.

The bottom line is that nothing; no books, no seminars, no courses, no websites nor college classes could have prepared me for the butt kicking that I took (and still routinely take) in the business trenches. Nothing can prepare you for being a business owner other than becoming a business owner. You learn to walk by falling down. You learn to ride a bike by falling off and getting back on again. At the end of the day, the only school with a degree that matters, when you are in business, is given by the school of ‘Hard Knocks.’ Corporate ‘stink think’ WILL SINK you when you are in business for yourself.

Published
by
Adam Davis
on November 9, 2007
in Management and quitting your job
. 0 Comments
Nov82007

Does Anybody Want to Do Business?

I am routinely astounded at the number of business that keep telling me ‘times are tough’ and ‘business is slow.’ The frequency with which I hear this has been increasing in recent months. For me, the issue arises when people complain about something yet don’t do anything about it. The beauty of America is that, if you don’t like your current situation – YOU CAN CHANGE IT. To put it as frankly as I can, many business owners and service professionals simply don’t want to ‘hustle’ – they want to hang out a shingle and watch the customers just roll right in. Let me clarify, by hustle, I mean getting up everyday with a laser focus on making customers happy (A happy customer is one who receives and perceives great value and service) and doing everything you can do to drive business. The days of simply hanging out a shingle and running an ad in the Yellow Pages are long over.I want to share a recent experience to illustrate my point:

Recently, I found a home I wanted to purchase. I decided that I would go with a mortgage broker versus a bank for my financing, and thus began searching for a reputable mortgage broker that could take care of my needs. After two weeks of looking, these were my results:

-2 out of 10 called me back after I left them a message
-1 out of 4 called me back after they said they would
-0 out of 6 emailed me back after inquiries to their website
-1 out of 5 gave me an actual quote in terms of interest rate, closing costs and the like

Needless to say, I got a bit discouraged. Especially in light of the fact that I was bringing a 20% down payment, my wife and I have good credit and stable income and we were purchasing a home in a good area that we could comfortably afford. Could I be crazy? Were these people doing so well and did they have so much business at the time that they could just blow off a lucrative new customer?

What killed me about this experience was the total lack of respect and professionalism. Each of the mortgage “professionals” that blew me off probably kissed about a $1,000 (minimum) payday goodbye. Not to mention, they lost repeat business from me when I refinance my home in 18 months and when I look for somebody to work with me on financing investment properties. And, MOST IMPORTANTLY they lost any possible referral business from me.

If you are a business owner, service professional or real estate investor (if you are a real estate investor, your tenants and motivated sellers are your ‘customers’), and you think ‘times are tough’, ask yourself these questions:

-Do you call your customers back within 4 hours?
-Do you email internet leads/inquiries back within 4 hours (or have auto responders set up)?
-Do you call each person back that you say you will in the time frame you told them you would?
-Do you regularly call your existing customers just for the ‘heck of it’ to see how they are doing and to THANK THEM FOR THEIR BUSINESS?
-Do you send out cards or correspondence to your customers for Christmas, Birthdays and other events (anniversary of a deal)?
-Do you let your customers know you care by showing them tokens of appreciation out of the blue?

If you answered ‘no’ to any one of these questions, then STOP complaining and START taking action.

We live in an ‘on-demand’ world now; people expect fast turnaround times for service and every little thing counts. The devil is in the details. I can guarantee that if business owners, real estate investors and service professionals were able to answer ‘yes’ to the six questions above, they would not lament to me that ‘times are tough.” I would wager that they would barely be able to contain their excitement about how much money they were making.

DO YOU WANT TO DO BUSINESS?

Published
by
Adam Davis
on November 8, 2007
in Leadership and Motivation
. 0 Comments
Nov72007

There is No Time Like the Present

Living in SE Michigan, it is easy to get caught up in all the negative media attention surrounding the state of the economy. Every time I turn around, I see headlines, news clips and grumbling about ‘how bad things are’ here in Michigan.

It seems like all we hear about here in Metro Detroit is the increase in home foreclosures, the ailments of the Big 3 auto companies and the unemployment rate. The bombardment of negative attention is constant and intenstifying. Quite frankly, it is starting to get on my nerves!

This never-ceasing ‘henny-penny, the sky is falling’ mentality reminds me of the story by Jerome K. Jerome from his classic work Three Men in a Boat:

I remember going to the British Museum one day to read up the treatment for some slight ailment of which I had a touch—hay fever, I fancy it was. I got down the book, and read all I came to read; and then, in an unthinking moment, I idly turned the leaves, and began to indolently study diseases, generally. I forget which was the first distemper I plunged into—some fearful, devastating scourge, I know—and, before I had glanced half down the list of “premonitory symptoms,” it was borne in upon me that I had fairly got it.
I sat for awhile, frozen with horror; and then, in the listlessness of despair, I again turned over the pages. I came to typhoid fever—read the symptoms—discovered that I had typhoid fever, must have had it for months without knowing it—wondered what else I had got; turned up St. Vitus’s Dance—found, as I expected, that I had that too,—began to get interested in my case, and determined to sift it to the bottom, and so started alphabetically—read up ague, and learnt that I was sickening for it, and that the acute stage would commence in about another fortnight…

The analogy I see is that it is very easy to get caught up in a swirl of bad things that you perceive to be happening and it spirals more and more. The media fans the flames. Roughly 93% of the employable population in Michigan is still working. We enjoy a higher per capita income here in Michigan than many other states in the U.S. We have the natural resources, infrastructure and collective human capital that many states envy. The question is: what do we do with it NOW?

Yes, we have our share of people here in Michigan that have fallen on hard times. Does anybody remember a little thing called the Great Depression? How about 25% unemployment? (and that was nationwide!) How about families moving all over the country, wandering like nomads, just to find food and shelter?

If I was a doctor and Michigan was a sick patient, and the sick patient came to me asking for a cure, do you know what I would do? I would prescribe the following:

-1 shot of PERSPECTIVE

-2 doses of INITIATIVE

-4 doses of HARD WORK

-10 doses each of PERSISTENCE and DETERMINATION

The bottom line is, for entrepreneurs, THERE IS NO TIME LIKE THE PRESENT to move ahead toward your goals. If you are a real estate investor, good properties abound for pennies on the dollar. If you are thinking of starting a dry cleaning business, the technology available and abundant commercial space make for a perfect recipe for a profitable business. If you are selling cars, the Big 3 are giving away huge incentives and the finance companies still have cheap money available, a perfect recipe for a record year.

If you have any inkling of doubt, like “now might not be the time” or “I’m going to wait it out and see,” take a moment and ponder a great thought by Keith Cunningham, co-founder of Prime Cable and respected Wall Street dealmaker: “Many people will not head down the street until all the lights are green. That is why they don’t go anywhere.”

THERE IS NO TIME LIKE THE PRESENT

Published
by
Adam Davis
on November 7, 2007
in Inspiration, Leadership and Motivation
. 0 Comments