A Consultant's Secret: Optimize Entrepreneurs, Not Organizations

When I graduated from business school, I was prepared to optimize organizations. I was ready to analyze spreadsheets, evaluate market forces, and build great business plans on paper.

But since my passion is consulting entrepreneurs, I quickly learned that I had to throw away the clinical approach I learned in school. When working with entrepreneurs, I first need to optimize the entrepreneur, and the organization will follow.  

The opportunity for success in an entrepreneurial organization is directly related to the entrepreneur’s personality, management style, and risk tolerance. 

Once I learned this critical insight, I adapted my business consulting style to specifically address each of my clients’ unique entrepreneurial strengths, and set out to maximize those strengths before addressing the rest of the business. 

Of course, I still start every consulting engagement with a full financial review, which gives me a foundational understanding of where the business stands. I also interview employees and customers to determine the health of professional relationships in the business.

But what I'm really looking for are clues about the entrepreneur himself. I'm watching for hints about how the entrepreneur is doing as a leader and a manager. For example, is he disconnected from his financials? Obsessed with cutting insignificant costs while failing to see growth opportunities?

Does he consistently blame his employees and customers for being difficult or "not very smart?" Does he have high customer turnover and low quality scores? Or does he have great customer relationships and feels like his employees are "like family," but he isn't making a profit? 

An entrepreneur's behavior and beliefs surrounding his financials, employees and customers gives me insight into the deepest challenges and opportunities facing the organization. Because an entrepreneurship is directly tied to the ability of the entrepreneur to guide the ship. An overwhelmed entrepreneur will run an out-of-control business, while an optimized entrepreneur will run an optimized business.

We can fix all entrepreneurial business problems by focusing in on the entrepreneur's strengths and optimizing around them. Rather than focusing on what doesn't work in the business, we focus on the entrepreneur's strengths. Once we optimize the entrepreneur, we gain a whole new momentum for the business.

The more I learn about each entrepreneur’s psychology and behaviors, the more accurately I can structure strategic business plans that maximize each business opportunity. If I take the business school approach and create a strategy based on the standard elements like market conditions, product, customers and other external factors, I miss the boat entirely. I’ve seen it happen time and time again.

When I don't try to change an entrepreneur, but instead optimize him and the organizational structure based on his strengths, we are able to transform the business. 

Entrepreneurial optimization is the only way I have successfully impacted my clients’ businesses. By seeing them for who they really are, and building structures to support them, I am able to help them achieve much greater success in their organizations.

Powerful Brands Have Powerful Editors (Content Managers)

Most entrepreneurs and small business owners have cobbled together a few disparate people who write and develop marketing content for their brand.

Powerful brands have powerful editors. Assign one, highly-qualified person to oversee all of your marketing content (and there should be a lot) to make sure you have a consistent and authentic brand voice.

 

Your Content Manager should oversee all of the following aspects of content marketing: 

• You Website
• Your Blog
• Articles & White Papers
• Infographics
• Videos
• Social Media - Twitter, Facebook, Pinterest, YouTube, Instagram, etc.
• Public Relations - Press Releases & Media Outreach

This Content Manager should act as the strategic planner and the editor of all marketing content for your brand. He or she should be highly qualified as an excellent writer, editor, and manager. 

3 Reasons Why You Absolutely Need a Partner

Americans are pretty obsessed with independence. Almost all of our famous entrepreneurs are presented as individuals, with a few exceptions. But this book, Powers of Two by Joshua Wolf Shenk, says that actually some of the most powerful and world-changing creativity came from pairs of two people.

He points to famous pairs John Lennon and Paul McCartney,  Marie and Pierre Curie, and Steve Jobs and Steve Wozniak who were more powerful together than they were apart.

The classic entrepreneurial personality is naturally independent. Aside from anything else, your brain is moving at light speed, and it can be hard for others to keep up most of the time. But could you benefit from a partner?

Consider these three reasons for having a partner:

1. Challenge: You have to have a strong sense of self and belief in your ideas to become an entrepreneurs. It can also be really tempting to only surround yourself who reflect the best parts of yourself, and who support your ideas without much challenge. But you will never be awesome if you don't have some one who will kick your butt sometimes. Someone who will expose your weaknesses and force you to face the brutal facts that can weight down even the best businesses. A feisty partner will challenge you to look deeper and the results will be 10x stronger as a result.

2. Follow-Through: Entrepreneurs run fast. Like cheetahs, they tent to sprint while chasing down an idea, and then have periods of rest, during which they don't do much at all. A strategic partner will follow you while you're sprinting, making sure that the millions of ideas and initiatives that you start during the sprint are captured. Then they will pick up the ball and take the lead when you are resting, making sure that those ideas and initiatives are actually realized.

3. Confidence: Even the most brash, outgoing entrepreneur has moments of nagging doubt. Did you make the right decision? Did you consider all of the outcomes? What impact will your choices have on your future success? A partner can help you flesh out your ideas and put more meat on the bone, so that when you pull the trigger you have confidence in your decisions. They will never work out exactly as planned, but you will know that you took the time to think them through.

There are many reasons to find a good partner as you build your business. But just remember that I'm not speaking here of a traditional business partner who shares a part of your business. In fact, business partnerships need to be carefully managed as they frequently fail. Consider alternative methods of partnership, including mentors, coaches, consultants, and peers.

Stop Doing Everything Yourself: A 5-Step Recovery Program

Everyone has to start somewhere, and most entrepreneurs start out by doing everything themselves. From buying supplies to sweeping floors to paying bills, there's a good chance that you can do everything in your business. But continuing to do everything yourself is like treading water instead of swimming - it won't get you anywhere.

At least 80% of your time should be spent moving your business forward. This includes motivating your people to do great things, hiring awesome new people, and dreaming up new ideas.

The other 20% of your time will likely always be spent doing less important things that you really can't delegate to others. This is the equivalent of "Treading Water" or just keeping things afloat.

"Doing stuff" is a personality trait common among successful entrepreneurs. While many people have great ideas, only a few actually have the drive to get things done and build a viable business. Eventually, you capacity for "doing stuff" turns from an asset to a liability, and it's an addiction you have to break.

Here is an Entrepreneur's 5-Step Recovery Program to stop doing everything yourself:

1.  Assess your value:
What are you actually good at? What is your primary value to the business? Think about the part of you that you really can't hire someone else to do for you. Your greatest value is probably your creativity, and your ability to inspire others to believe in your vision. I promise that you can find other people to keep the lights on and the floors clean, but you can't replace your core value to the company.

2. Assess your time:
Where are you currently spending your time? You don't have to go all crazy with this, but take a hard look at where you are spending your time over the course of a week. For example, you might spend 34% of your time on bookkeeping functions, 36% of your time on office management functions, 15% of your time managing employees, and 15% of your time working with customers. Most likely, you are spending most of your time treading water, and very little time moving your business forward.

3. Hire someone:
Figure out the area that is taking up most of your time that can be handled by someone else, and invest in finding someone to take it over for you. For example, if you spend a lot of your time bookkeeping, then hire a freelancer, consultant, or full-time employee to help. I know it will be hard to find just the right person, but you have to bite the bullet and make the commitment to trust someone else to do the work for you.

4. Reassign your time: 
Sure, it will take you a few weeks to hire someone, and then a few weeks to get them on board, but as soon as that happens, go back to your time assessment. Remember the 34% that you were spending on bookkeping? Well, now you may need to save 10% of that to manage the bookkeping process for a while, but you should have at least 24% of your time now free to work on value-driven projects to move your company forward. Resist the urge to fill that 24% with more water-treading. Make the commitment now to use your extra time moving the company forward.

5. Repeat
I know that this process will be hard. It will take more time, and make you feel overwhelmed and frustrated. But now you have to push yourself to do it again. What is the next major chunk of your time that is wasted? Hire someone and reassign your time. If you go through this on a constant basis, you will eventually get to the point at which you working at your maximum value level 70-90% of the time.

It is only when you are investing your maximum value in your business regularly that your business will get out of the treading water stage and move forward fluidly into growth and expansion. Dive in!

  

Secrets From a Productivity Rockstar

Entrepreneurs: How to Be a Productivity Rockstar

"I have way too much time on my hands!" said absolutely no businessperson anywhere.

All entrepreneurs must struggle with time constraints, and the global marketplace continues to squeeze every last drop out of us every single day. Whether you are in the startup stages or are running a mature company, I'm guessing that you need help improving your productivity.

Here are five secrets from an entrepreneur I spoke with who can be best described as a "Productivity Rockstar." She is juggling an established small business, a brand new startup, and three children under the age of five. Somehow she manages to do all that while also fitting in exercise and sleep. Seems crazy, but it's possible!

Plan It Out: The most simple way to accomplish more is to have a plan for doing so. Each week, entrepreneurs should roughly plan out their critical tasks. Then, because "stuff" always comes up, they need to revisit their plan every morning and at the end of each day. If you are juggling multiple companies and/or family obligations, include them in this planning process. Entrepreneurs never just work on one thing at once, and you don't have to do that as long as you are keeping the big picture in mind.

Ruthlessly Prioritize: Because something will always be competing for your attention, you must ruthlessly prioritize based on the plan you created. Of course you need to be flexible, but you simply can't be so flexible that critical actions don't get done. It's all to easy to drop a true priority, like developing a sales strategy for a new product, for a "fire" that demands attention right now. You have to ruthlessly evaluate each fire that comes your way, and be careful not to spend all of your time being a firefighter, which results in absolutely nothing getting done.

Delegate: Entrepreneurs are naturally wired to want to do everything themselves, but you can't scale yourself, so you have to figure out how to delegate tasks to others. The more you can get great people around you who you trust, the better your chances of success in business and in life.

Let It Go: One of the reasons the Disney movie "Frozen" hit it so big is because of its catchy theme song, "Let It Go." All of us can relate to the idea that we are held back by our personalities, gifts and circumstances. And all of us fantasize about letting go of those restrictions to find freedom. An entrepreneur, more than anyone else, must learn to "Let It Go" - let go of perfectionism, fear, failure, money, and everything else that is holding you back from achieving your dreams.

Move + Sleep: So many entrepreneurs fill their days to the brim with work. But when the future of the company rests on your shoulders, there is nothing more important than taking care of yourself. Make time to move your body every day and sleep at least 7 hours. Sure, there is a strong fantasy of the entrepreneur getting by on less than 3 hours of sleep per night, but that's really only sustainable for a short period of time, and is typically associated with severe mental illness and/or breakdowns. Don't be an idiot: take care of your body and it will work hard for you for the long-term.

Check out my Slideshare presentation on productivity if you want to learn more:

4 Critical Hiring Mistakes

Picking Just The Right Fit For Your Company Can Be Hard!

Hiring employees is quite possibly the single most important activity for any entrepreneur. Despite this fact, most business owners don't have a strategy in place to guide their hiring practices. They typically wait too long to begin the hiring process, approach it haphazardly, and then hire too quickly, often selecting the wrong person. To top it all off, many small business owners skip a training program that would save even the worst hiring strategy from failure.

1. Waiting Too Long to Start
Most entrepreneurs wait until the last minute to start the hiring process. This is based on a number of factors, including the fact that entrepreneurs tend to be "just-in-time" personality types, not wanting to spend too much time planning; preferring to dive in opportunistically at just the right time. While this can work in your favor in many cases, when it comes to hiring, you have to consider that the hiring process can take time, and is best approached thoughtfully.

If you foresee a hole in your production line two months down the line, then now is the time to start! Even better are the entrepreneurs who can see several months ahead and have a constant recruiting process ongoing.

2. Haphazard Approach
There are a number of critical elements involved in the hiring process, many of which are easy to skip but can result in serious hiring mistakes. First, clearly define the role you are trying to fill. Talk to your other employees as you work on this - what do they think you need? Sure - they could be wrong, but it's still worth asking them to get their opinion from the "front line." Check online resources to find out what title you should assign and how to define the role. Think through what sort of background and training you want your new employee to have and include that in the job description.

Once you post the job opening and begin receiving applications, have a process in place for sorting resumes and evaluating candidates. You can utilize technology to support your hiring process. For example, set up a form on Google Docs to gather information from your candidates. For more detailed candidate quizzes and tests, try ProProfs' quiz-making tool.

When you get to the interview stage, try to have a standard set of questions to ask all candidates so that you can try to control for the many variables that cause us to make bad hires. You can find a lot of advice about interviewing online, since it's a surprisingly difficult task.

3. Hiring Too Quickly
Whether you waited too long to start or followed the rules and started early, you still might fall into the trap of getting tired of the hiring process and hiring too quickly. The fact is that hiring people is time-intensive, exhausting, and just plain boring at times. It can start to feel as if you will never find the right person, and you might start to doubt the market, or your own judgement. 

Hang in there and have patience! Remember that in a small or emerging business, every single individual counts towards your potential for success and growth. One employee can either improve or ruin your chances for business success.

When you jump the gun, you tend to hire for the wrong reasons. Take your time and ensure you are picking the best person for the job.

4. Failing to Train
No matter how careful you have been in the hiring process, you can't ignore this critical step. Don't just think that hiring the right person means you can throw them into your business and expect them to do great things. Each employee is an investment in your company. Set up a training program so that your employees know what is expected of them. Build out a brief but comprehensive training program in which the expectations you laid out in the hiring process are reinforced. Then make sure you check in with new employees: daily for the first week; weekly for the two months following that; monthly for the following four months; and quarterly from then on. 

The People Problem in Business

Source: http://dupress.com/periodical/trends/global-human-capital-trends-2014

Getting an MBA prepared me for the "sexy" side of business: namely finance and marketing. But it didn't prepare me for what I think is the hardest part of running a business as an entrepreneur: the People Problem.

If you are struggling with a disengaged workforce, are struggling to hire and retain great employees, and are generally frustrated with your people, you are not alone.

Gallup research shows that only 13% of employees around the world are actively engaged at work, and more than twice that number are so disengaged they are likely to spread negativity to others.

So, not only do you have lackluster employees, more than 26% of them are actively disengaged, spewing their frustration with you and your management style through the entirety of your organization and beyond.

One negative employee spreads yuckiness  like a virus.

These "actively disengaged" employees are like a virus: they spread their distrust and evil thoughts to everyone else.

I really wish that the People Problem was a big business problem, but it spreads through small businesses and entrepreneurships, too.

So if you are going to work every day feeling like your people aren't as peppy as they used to be ... that they don't seem to care as much ... that deadlines are getting missed and customers are being let down, you are probably right. You are probably encountering the dreaded "People Problem."

I promise that I will offer solutions in future blog posts, but for now, here are the top four warning signs of a disengaged workforce:

1. Frequent push-back and fighting in meetings
2. Doodling, napping and otherwise ignoring others during meetings
3. Angry outbursts, including yelling, crying and running away
4. Snarky, rude and unfriendly emails

If this is happening to you, I'm so sorry. But please know that you are not alone, and you don't have to deal with this alone. But also don't minimize the problem. A disengaged workforce destroys entrepreneurial companies and is the most common reason I see for flat-lining and dead businesses.

Hang in there ... more to come ...

4 Crazy Tips for Awesome Brainstorms

As an entrepreneur, you most likely began your business based primiarily on your own thoughts and ideas. Even if you asked others for their opinions, most entrepreneurs are pretty committed to their own vision.

As you grow your business, you will most likely make the shift from being the entrepreneur as the sole creative contributor to developing a team of creative thinkers who can help propel your business forward.

Taking in different perspectives through regular brainstorming allows small business owners to:

1. Increase growth rates
2. Increase in-house creativity
3. Recognize new opportunities
4. Capitalize on untapped skills
5. Engage team members 

Brainstorming has great value to the entrepreneurial business, but conducting great brainstorms requires trying different ways of tapping into your team's creativity. Here are some non-traditional ways to improve your brainstorming sessions:

1. Go for a Walk - when you are literally facing the same direction together, focusing your body on something external, you tend to get a better flow. Some of the most creative entrepreneurs regularly take their meetings outdoors while walking. Team members quickly learn to wear comfortable shoes, and a lot of work gets done while circling the office or street block.

2. Get Out of the Office - often when we meet consistently in the same room or location, we get stuck on the same ideas. Many business owners conduct all brainstorming sessions in the same conference room in which they meet clients, discuss employee reviews, and meet with their lawyers. The conference room itself becomes associated with "doing business," but what you actually want is for the people with whom you're brainstorming to think in a totally different way. Rent someone else's conference room, go to a park, or meet in a clients' conference room to stimulate new ideas.

3. Bring in an Outsider - it's impossible to avoid the groupthink that develops within any organization. Bringing in an outsider ensures different ideas. Entrepreneurs, with their strong personalities, are at high risk of engendering groupthink in their organizations. The employees decide they can turn off original thought because the entrepreneur has so many of her own. To tap into your employees' creativity, bring in an outsider who will challenge them (and you!) to think in fresh, new ways.

4. Welcome Discomfort - the really good ideas feel really uncomfortable. They often elicit feelings like "we can't possibly do that!" Those are the ideas that we really need to sit with to see if we are rejecting them simply because they are uncomfortable vs. genuinely impossible. Next time you hold a brainstorm, assign someone to pay attention to every time the group shuts down an unconventional idea. Take special note of the "sacred cows" that team members vociferously assert should absolutely not be changed. There is usually gold (not always the obvious kind) in there.

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

5 Reasons Not To Take VC Money (Even When They Are Tracking You Down)

I had an interesting conversation with a brilliant, hugely entrepreneurial guy who owns a technology company that is so hot right now that, with absolutely zero PR or fundraising activity, he is getting pursued by Venture Capitalists who want to invest.

Major VC firms are calling him; clamoring to invest in and/or acquire his business. They are desperate to get a piece of what he's building.

But he's not interested.

He wants to build something big - huge. And he wants to own all of it. Here is what I learned about his strategy:

1. You should only take on investment if your growth is constrained by funding
2. You should only grow as fast as you are able to learn 
3. You should only grow as fast as you can build the infrastructure to support growth
4. It takes time to build a great company
5. You gain more in the long term by maintaining full ownership

I have so much respect for this thinking. In a time when it seems like every technology start-up out there is trying to figure out how to attract venture capital, this guy just goes out and builds a company that is so solid that he can ignore the VC community. His business is completely self-funded, and it's not because he's some kind of millionaire, he built it strong and slow. And he intends to keep doing that.

Of course, there is nothing wrong with taking on investment capital from venture capitalists or angel investors, but I do think it's worth considering the alternative if you have the means to do so.

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

Failure: Dark Path or Bright Future?

Ten years ago I had my first up-close experience with business failure. I was consulting with a small business owner who had been in business for 25 years. Unfortunately, by the time he called me in to help, 25 years of small failures had built up inside of him with no place to vent or dissipate, and he was emotionally "over" the business. And it showed ... his profitability was in the toilet.

I tried everything I knew to revitalize the business: sales programs, financial reorganization, marketing programs, and employee programs. But in the end, there was no changing my client's broken spirit - it trickled down to the 30 employees and hundreds of customers, derailing every program we implemented.

He made the difficult choice to sell the business for a fire-sale price and walked away with very little.

I felt devastated by his loss. Interestingly, when the dust died down, he felt free. Facing failure head-on and conceding defeat allowed him to finally move on with his life. 

My client was done. He was no longer engaged in his business. He just wanted out, and after selling the business he was happier than I had ever seen him before. Shortly thereafter, he began again, building another small business that was a better fit for his interests and has flourished ever since.

By facing failure head-on, he was able to lose his baggage and start something fresh, new, and infinitely more rewarding than what he had before.

Next time you feel afraid of failure, consider whether failure could equal freedom and new opportunity. Is there something that can only be achieved via the dark path of failure? What bright future is waiting for you?

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

Getting Stuff Done - for Super-Creative Entrepreneurs

Entrepreneurs are, by nature, full of ideas.

They think big, they act big, and they do big things.

But sometimes (OK, lots of times), building a business is about getting things done - not dreaming of new things to accomplish. This is a constant point of friction for my clients: how to balance the thrill of developing new ideas with the "get-it-done" attitude needed to bring great ideas to fruition.

Here is my solution: 

The most important thing for entrepreneurs to do is to keep both an 'Action List' and an 'Idea List.' The fact is that entrepreneurs are driven to come up with new ideas - sometimes several a day.

To be productive while keeping their creative edge, I ask them to create a weekly "Action List' based on some form of a strategic plan. These are items that they have prioritized for the week.

On a separate "Idea List," I tell them to write down every single great idea they have during the week. This is where they can put ideas that come to them in the middle of the night, while they're out running, in the shower, or while procrastinating on the items to be done on the "Action List?" ... come on, we all do it!

Together we review the "Idea List" at the end of each week and decide if any of the ideas need to go on the next "Action List," of if they should be filed for later (i.e. monthly, quarterly or annual) review.

This system accomplishes two things:

1. It keeps entrepreneurs accountable to specific actions that must take place to build on their vision.

2. It allows entrepreneurs free range to create and grow mentally, knowing that there is a specific place to hold their ideas until they are ready to build on them.

What do you think? Would this help you get more done?

Give it a shot, and let me know what you think!

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

How to Scale Your Business: Get Out of the Way

I was fortunate enough to meet with David Van Andel, Chairman and CEO of the Van Andel Institute, a medical and scientific institute in Grand Rapids, Michigan that was founded in 1996 by philanthropists Jay and Betty Van Andel with an estimated endowment of $1B. We discussed the state of medicine, healthcare and business, and I told him about the state of small business and entrepreneurship as I see it today.

David is the son of Jay Van Andel, great American entrepreneur who co-founded Amway, one of the world's largest direct selling businesses. After 55 years, the business continues to grow and expand throughout the world, employing more than 15,000 people.

The key in building an organization like Amway, David told me, was in recognizing that while the business could be based on personal values and individual industry, if the founders didn't expand their circle and trust others to do the work, they would have a much smaller impact. This is something that David integrates into his leadership of the Van Andel Institute.

In his book, An Enterprising Life, Jay Van Andel says that from the very beginning he and his partner, Richard DeVos, hired people to do things they couldn't do themselves, and they quickly recognized that this was an asset compared to their competition.

"(We learned) to stay out of the shop and let other people do what they do best," wrote Jay Van Andel. "Delegating responsibility is essential - even for some of the most important work."

What I observe in many entrepreneurs is that they are somewhat stuck in the small business mindset that "if I don't do it, it won't be done right." This perspective makes meaningful growth virtually impossible, because the company can only scale so far around a single human being.

An entrepreneur who wants to build something large needs to be able to scale his business across multiple people, and to put leadership, authority and opportunity in employees' hands.

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

What Strategic Planning Looks Like for Entrepreneurs

At some point in the entrepreneurial growth trajectory, the founder notices that while the seat-of-the-pants approach has worked thus far, some strategic planning will support further growth. But strategic planning looks different for each entrepreneur - when and how you do it depends on your personality, your employees, and your market.

Here are some case studies of when and how some entrepreneurs have integrated strategic planning into their enterprises: 

10-year Old Consumer Product Company: I was called in when the owners started feeling as if their business is a fast-moving car, and they were barely jogging alongside.

After four months in the strategic planning process, we had broken the business into 4 reasonable sections that require strategic planning. We now have four weekly meetings each month; each one focuses on a different aspect of the business (finance, product, business development, marketing). In doing this, we have created structure for the strategic planning process and are beginning to facilitate better decision-making.

The client has recently encountered several strategic partnership opportunities since we created this structure, and we can already see a big difference in terms of the ease with which they can pursue opportunities and make critical decisions.

3-year Old Internet Start-Up: I have worked with this company since its first consumer launch 3 years ago, when they needed to figure out how to acquire customers. In the process of developing our customer acquisition strategy, we adjusted the product strategy and conducted a complete relaunch at the end of the first year.

Now in our third year, the product model we developed is proving itself out, and our customer acquisition strategy is humming along. The company is approaching cash-flow positive status and is raising another round of financing to expand its product line and achieve profitability. 

Because this is a start-up, our strategic planning is focused on specific objectives rather than company-wide initiatives. We are constantly reviewing and adjusting our customer acquisition strategy while also building out strategic plans for new products and our fundraising process. Our strategic planning process is still very nimble as we ramp up company operations.

30-year Old Software Company: This company is led by a CEO engineer/programmer who recognized he needed more strategic planning on the "business" side of his business. While the software was doing very well among people who know about it, there were almost no new sales leads entering the company.

He hired a COO and engaged me to support her in building out a sales and marketing strategic plan. The COO and I have worked together over the past 3 years to create a strategic sales and marketing plan that has led us to gradually add a PR firm and sales lead team and hire a new sales manager. We are currently in the process of hiring a digital marketing firm. These additions have made a significant difference in the company's sales presentations and has significantly increased the number of new sales leads coming in.

Our strategic planning process involves creating an annual sales and marketing plan. While we adjust the details throughout the year, the major initiatives listed above have all been planned and budgeted in advance. 

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

New Products: How to Evaluate Ideas

Every entrepreneur starts with a great idea, and, chance are, successful entrepreneurs don't stop having more and more ideas over time.

The challenge for a true entrepreneur is not actually coming up with new ideas, but managing the stream that assails her on an everyday basis. How does she decide which ideas to pursue, and which to ditch?

When working on a strategic planning process with an entrepreneur, I'm always seeking ways for us to quickly churn through their ideas to identify the promising opportunities from the interesting dead weight. Here are some ways to evaluate new product ideas:

Basic Research: Once you have an idea, do some basic online research to determine how people are currently meeting the need you want to fill. Get a feel for how much other solutions cost, and see if you can find out who their customers are. You also want to understand some of the costs involved in developing the product. To get a broader field of vision, enroll some freelancers to dig around for you. You can find people who will spend 1-3 hours doing web research for you on Fiverr for just $5 a pop.

Interviews: If you can identify that there is a need to be filled and feel confident you can fill it, start asking around. You want to speak with potential customers, employees and competitors to find out what's really going on. Use resources like Elance to speak with people who have worked in your field. Also look for people you could hire to help you build your product. Pay them for an hour to interview them to learn everything you can about the marketplace, costs, problems, sticking points, etc.

Financial Model: At this point, you should be able to create a rough financial model. You need to include your pricing, your customer acquisition model and number of customers you can reasonably convert, and major expenses. Don't get stuck on the details here - you just want to get a feel for what will make this model work (if anything). Play with the model and determine how much wiggle room there is for increasing your margins.

Evaluate: Once you have all of your data, take a step back and consider the following 3 questions:

1. Can you find and connect with customers for this product?
2. Can you reasonably build a competitive product based on your access to talent, the competitors and costs? 
3. Can you make a healthy margin on this product?

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

How to Raise a Bunch of Money For Your Business

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist Hardcoverby Brad Feld and Jason Mendelson 

What They Say: This book covers many aspects of raising capital for an entrepreneurial venture. While their focus is on venture capital, they provide excellent advice for entrepreneurs seeking angel capital, also. Here is a recap of some key fundraising rules:

• Know who you're talking to: do your research and know as much as possible about the venture firm, angel group, and individuals who are evaluating your business. (NOTE: they have a pretty high perceived self-worth, and a little knowledge about their accomplishments will go a long way)

• Develop the basics: You need series of explanations of your business:
• Elevator pitch - 1 sentence
• Short pitch - between 1-3 paragraphs 
• Executive summary - 1-3 page document 
• PowerPoint presentation - 10-20 page overview

• Know the details: All of the items listed above should touch on the following key elements:
  
• The Problem
• How big of a problem it is
• Why it should be solved
• The Product
• Why your product is awesome
• Why it's better than what currently exists
• The Team 
• Why your team is the right team for the job
• The Business Model
• How you will make money
• What you need money for

What This Means for Entrepreneurs: Luckily, unless you are seeking a bank loan or SBA loan, you will not have to build out a massive business plan, but sometimes bigger is easier. Creating simple, to-the-point explanations is key to fundraising. Your potential investors don't have time, and they simply are not interested in, a long discussion. They just want to know what you're going to do and feel relatively good about the potential outcome.

Good luck! 

Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.

The One Thing You Can't Skip When Planning a Business

Most entrepreneurs enjoy the process of building out a great idea, and can tell me how they will make and market their idea, but few of them have created the financial model detailing the revenue streams and expenses. The modeling process illuminates whether the business will be scalable and sustainable. Therefore, it is the single most important aspect of business planning.

Here are some questions that I use to get the financial modeling process started:

Marketing

• How will you reach new customer prospects? (i.e. advertising, PR, social media, etc.)
• How many prospects can you reasonably expect to reach on a monthly basis?
• What will it cost to get prospects? (i.e. advertising, PR, etc.)

Sales

• What is the process of converting prospects to paying customers? (i.e. salespeople, reps, affiliates, etc.)
• How many customers can you reasonably expect to convert on a monthly basis?
• What will it cost to convert customers? (i.e. sales commission, affiliate fees, etc.)

Revenue

• What are your revenue streams? (i.e. subscriptions, advertising, product sales)
• What is your pricing structure for each revenue stream? (i.e. what will the consumer price be?)
• What is a reasonable conversion rate for each product? For example, if we're talking about online product sales, what percentage of site visitors will purchase? You need to estimate a conversion rate for each revenue stream.

Costs

• Startup Costs - what are the costs involved in launching the company? (i.e. brand identity, website development, content development, etc.

• Variable Costs- what are the costs involved in producing each product you sell?  

• Fixed Costs - what are your monthly fixed costs (i.e. office space, web hosting, salaries, etc.)

Are you thinking about starting a business? Start by building out your financial model - get help if you need it! Any investment you make in this one aspect of business planning is well worth it in the long term. 

Failure is ABSOLUTELY an option

It makes me really uncomfortable when people say things like "failure is NOT an option."

That's just a lie; failure is always an option. Even more true is that you will fail at many things in your life. Everybody does.

In business, and for every entrepreneur, failure has been a critical part of their path to success (whether they remember it or not). Failing gracefully and learning from failure is much more important than saying that it simply can't happen.

Some pretty great people know that failure is always an option, and not something of which to be ashamed:

When I was young, I observed that nine out of ten things I did were failures. 

So I did ten times more work.

 George Bernard Shaw

Do not fear mistakes. You will know failure. Continue to reach out.
Benjamin Franklin

So next time you feel like a failure, or stop yourself from doing something because you might fail, don't blow it off by repeating mantras like "failure is not an option." Instead, honor your failures, learn from them, and remember that if you aren't failing at anything, then you aren't trying anything.

Evaluating Business Opportunities

You have a lot of opportunity to grow your business, but evaluating opportunity is challenging – how do you know if you have made the right choice?

Entrepreneurs and small business owners need to conduct a regular "Opportunity Analysis" to sort the good ideas from the bad ones.

You can waste tons of time evaluating and chasing down bad opportunities. Worse, if you choose the wrong opportunities, you can compromise your company’s future.

Opportunity evaluation should be a faceted process that takes into account multiple aspects of the decision-making process.

Opportunity Analysis Process

 Check out more here.

When Organizations Are Unstable, They Can't Grow

Maslow's hierarchy of needs is a theory in psychology proposed by Abraham Maslow in his 1943 paper "A Theory of Human Motivation." It has become a foundational theory in psychology in terms of optimizing the human experience.

To recap the theory, human beings must work their way up the pyramid of needs.

If they are not getting their physiological and safety needs met, they are not exerting energy towards finding love and belonging. But once they are fed and safe, they begin seeking human connection. Next comes esteem, confidence and respect. Finally, the human being can seek Self-Actualization in which he becomes more creative, spontaneous and better able to ponder and solve complex problems. 

Organizations exhibit similar stages of actualization. Many small businesses struggle in the early levels of the pyramid. They constantly strive to generate enough revenue to make payroll and provide safety for their organization, their owners and employees.

Many small business owners are stuck in a constant cycle of anxiety and tension and have very little opportunity to pursue growth.

If an entrepreneur can overcome the lower levels of sustenance, she can jump into growth, pursuing a healthy company culture, high esteem in the business community and, finally, actualization of the organization in which it becomes highly creative, driving additional growth and success.

Are you struggling with the day-to-day anxiety and tension of the lower levels of this pyramid? If so, evaluate the business you are in and determine what it will take (and if it is possible) to get to the next level of development in your organization.

A Valentine's Day Ode To Your Business

Do you heart your business? 

My guess is that it's a bit of a mixed bag: most of the time you like it; sometimes you love it; sometimes you hate it.

Don't worry - this is totally normal! Just like a human relationship, your relationship with your business is multi-faceted; it's not supposed to be perfect.

In fact, seeking a perfect relationship with your business (in which neither of you ever makes a mistake) is a recipe for failure. 

Today, focus on the positive parts of your relationship with your business ... fall in love with it all over again. We are in relationship with our business, and that relationship is a living, breathing entity  that has a past, present and future.

Take a minute to consider the following:

 Yesterday
Remember when you first saw your business (in your mind)? That first rush of excitement and the feeling of overwhelming opportunity? Remember the first days, months and years of your business? Remember how energized you were? Remember how you would wake up each morning with a spring in your step, anxious to dive in again?

Today
What is your business giving you today? In which aspects of your life is it excelling? Is it a great provider financially, emotionally? When you walk in the door, do you feel satisfied with the work you have done together so far? Are you eager to see what happens next? Are you perhaps overly comfortable with your business, or is it still challenging you daily to be a better partner?

Tomorrow
What do you want from your business tomorrow? Where do you want to go with it? Are you happy settling down in your current neighborhood, supporting each other through old age? Or do you foresee relocation, expansions, travel together? Do you want to grow your life together through more employees, customers and partners?

 Virginia Ginsburg is founder and chief consultant at Swell Strategies. She is passionate about supporting small business owners and entrepreneurs in starting and running successful enterprises. An avid reader, in this blog she reviews books and articles and relates specific learning points back to entrepreneurial businesses.