Sunday, March 27, 2011

Try part-time ventures to test your idea.

"Natural abilities are like natural plants; they need pruning by study." ~Francis Bacon

When starting a new business, there is no question in my mind that the best method is to start small and grow it little by little.

I recommend that entrepreneurs keep their existing jobs and work on their new business part time. This approach allows potential business owners to test the waters before diving in.

Many people who start their own business find out that it is not for them. Owning a small business is most definitely not for everyone. Not everybody is cut out for it, and many lack the requisite skills and financial assets to be successful.

One of the best ways to find out if you have what it takes is to test your entrepreneurial skills on a part-time basis. This approach is much better than quitting your job and going all in with nothing to fall back on.

Frequently, I see small businesses fail not because the owners lack the skills and capital, but because their business concept was not viable. In cases where these entrepreneurs started part time, they were able to greatly reduce their capital loss and preserve their full-time jobs.

For all its benefits, starting a small business part time is by no means easy. It will be tough on you and your family. Starting your business while keeping your existing job is going to take much more time than your full-time job ever did, and your family will see much less of you because getting a new business up and running will require constant attention.

There are several ways to balance the needs of your new business and that of your family. One is to designate some time every day to spend with your family. The key to this is ensuring your daily family time — however long or short — is quality time. You must make sure you are not preoccupied.

Consider having an agreement with your family that you'll work on this business venture for a finite period of time. Once the designated period expires, you will either quit pursuing the venture or you'll take your new business full time by giving up your regular job.

Whichever method you choose, it's critical that your family understands the effort this venture will require, and that you commit to making absolutely sure your family does not feel abandoned.

Now go out and consider whether becoming an entrepreneur is for you. If you think it is, consider starting your own business part time. Not only does this approach reduce your risk, but it also provides a real-world opportunity to test the viability of your business concept.

You can do this!

Sunday, March 20, 2011

Great Managers are Great Listeners.

"No one is as deaf as the man who will not listen." ~Yiddish Proverb

Whether it is with an employee, customer, vendor, spouse or child, listening is such an important asset. For a manager, I do not think there is a more vital skill.

I gave seminars on becoming a great manager to the staff of a business we were helping. Listening with empathy was among the key points I covered. Following the seminar, I received several e-mails from participants telling me how bad a listener the entrepreneur was. This one attribute significantly effected how they felt about the company.

When I asked the entrepreneur about the problem, he vehemently denied it, claiming that he was a great listener. However, in the process of talking to him about this, he interrupted me six times.

There have been countless studies about what it takes to be a great communicator, and every one of them agrees that it should be 75 percent listening and 25 percent talking. Listening is absolutely critical. Unfortunately, it is not an easy skill to master.
I was a counselor at 211 Big Bend, our local crisis hotline, for six years. They spent more than 150 hours training us how to be great listeners. I can still remember one exercise where we sat back-to-back with a fellow trainee. One person talked for two minutes about a topic of their choice while the other person listened without saying a word. The hardest part of this exercise was not being able to interrupt to ask a question or clarify a point.

This exercise and so many others were teaching us active listening — paying close attention to what the other person is saying without interrupting or trying to fix the problem.

To this day, I can still remember all of the calls that I took from mothers with an out-of-control teenager. Obviously, I could not fix the problem, but what I could do was listen in a non-judgmental fashion. After 30 minutes, many of these callers said how much better they felt, and all I had done was listen.

A favorite saying of mine is, "What do you learn when you are talking?" Obviously, you only learn when you listen, so you must be a great listener.

The best way to improve your listening skills is to bring in someone you trust from outside your organization and have him or her observe your interactions. After a day or two, the person will then evaluate how effective a listener you are. This can be a very humbling experience, but it is a great way to start the process of becoming a better listener.

Now go out and become the best listener you can be.

You can do this!

Sunday, March 13, 2011

Know Your Limits On Investing In Your Business

"If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time." ~Chinese Proverb

Good investment decisions take into account how much you can afford to lose. I have seen friends continue to gamble after losing all their money in the hope that they will recover their past losses. Instead, they just end up further in the hole. The same analogy can and should be applied to investing in your business.

Lately, at the Jim Moran Institute, we have run across many entrepreneurs who keep sinking money into their failing businesses in the hope they will somehow recover their investments. In one case, a retail store with a 20-year history of success had been devastated by economic conditions. In the past three years, their sales had plummeted and cash flow was nonexistent.

The owners had already sunk every cent they had into the business, including all of their retirement. Now they were looking for a family member to co-sign a very large bank loan. They thought that if they kept feeding the business, it would eventually turn itself around.

After lengthy discussions with the clients, I quickly realized there was very little hope that the business would survive. In fact, it really should have closed down years ago. Instead, the owners kept on throwing good money at the business in a desperate attempt to save it.

Had the owners limited their exposure, or the dollars they committed to the failing business, they could have preserved their retirement and some of the assets. Instead, they lost everything and had no choice but to go through the tough process of bankruptcy.

When investing in the stock market, a stop loss order can help limit an investor’s exposure to loss. If a stock starts to fall in price, it will automatically be sold when it hits the value specified on the order. Stop loss orders take all emotion out of the sell decision.

The concept of a stop loss order can be applied to business decisions. When acquiring any asset, you must determine how much loss you are willing to take before you liquidate the investment. By setting limits on how much you are willing to lose, you can protect the remainder of your assets.

Another entrepreneur we assisted set a cap on the amount of personal funds she invested in her web application venture. She agreed that once she had put in $100,000, she would stop, no matter what happened. She was supposed to break even at a $50,000 investment. Once she had set these limits, she felt much more confident because she knew her losses would be capped.

Now go out and make sure that you take emotion out of the equation and reduce your risk of exposure by assigning a limit to all your new investments.

You can do this!

Sunday, March 6, 2011

Building Staff Morale Can Be A Simple Process

"Really great people make you feel that you, too, can become great." ~Mark Twain

In order for your staff to be motivated, they need to have a relationship with their leader. It is easy to forget just how important this detail is, but your staff needs to see you occasionally if they are going to feel good about working at your company.

Capelouto Pest Control is one of the best managed firms in Tallahassee, and I have written many columns about their excellent approach to business. About three weeks ago, I had breakfast with the firm’s co-owner, Grant Capelouto, and his brother, Raymond. While we were eating and discussing the business, Grant mentioned Honeybun Monday. I did a double take because I had no clue what he was talking about.

After explaining that on Honeybun Monday the owners serve honeybuns, juice and energy bars to all the service technicians as they are leaving to start their rounds, Grant asked me if I would like to come see how it worked. I jumped at the opportunity even though I had to be there at 7 a.m. We agreed that the next Monday I would come and experience Honeybun Monday.

When I arrived at Capelouto Pest Control the next Monday morning, both Grant and Raymond were out setting up the food table. As the technicians left the yard in their trucks, either Grant or Raymond walked up to each vehicle and asked the driver what they would like. As they walked back to the table, they engaged each technician in small talk about their family or some other non-business topic.

It was clear to see how much the technicians enjoyed being served by the owners of the business. They all left with a giant smile on their faces.

It takes Grant and Raymond Capelouto less than 20 minutes to commit to Honeybun Monday every week, and it costs less than $25 to implement. The benefits they receive in terms of morale and motivation far outweigh these costs.

When I was doing a lot of traveling for work, I made it a point to call and speak with each of my direct reports at least once a week. I just knew they needed to hear from me.

It is vital that entrepreneurs and managers get out of their offices and interact with their staff on a regular basis. Being too busy is not a valid excuse. Taking a few minutes to talk and joke with your staff is important because it reinforces why they are working for you.

Now go out and make sure you have a plan in place to stay connected with your staff.

You can do this!

Building Staff Morale Can Be A Simple Process

"Really great people make you feel that you, too, can become great." ~Mark Twain

In order for your staff to be motivated, they need to have a relationship with their leader. It is easy to forget just how important this detail is, but your staff needs to see you occasionally if they are going to feel good about working at your company.

Capelouto Pest Control is one of the best managed firms in Tallahassee, and I have written many columns about their excellent approach to business. About three weeks ago, I had breakfast with the firm’s co-owner, Grant Capelouto, and his brother, Raymond. While we were eating and discussing the business, Grant mentioned Honeybun Monday. I did a double take because I had no clue what he was talking about.

After explaining that on Honeybun Monday the owners serve honeybuns, juice and energy bars to all the service technicians as they are leaving to start their rounds, Grant asked me if I would like to come see how it worked. I jumped at the opportunity even though I had to be there at 7 a.m. We agreed that the next Monday I would come and experience Honeybun Monday.

When I arrived at Capelouto Pest Control the next Monday morning, both Grant and Raymond were out setting up the food table. As the technicians left the yard in their trucks, either Grant or Raymond walked up to each vehicle and asked the driver what they would like. As they walked back to the table, they engaged each technician in small talk about their family or some other non-business topic.

It was clear to see how much the technicians enjoyed being served by the owners of the business. They all left with a giant smile on their faces.

It takes Grant and Raymond Capelouto less than 20 minutes to commit to Honeybun Monday every week, and it costs less than $25 to implement. The benefits they receive in terms of morale and motivation far outweigh these costs.

When I was doing a lot of traveling for work, I made it a point to call and speak with each of my direct reports at least once a week. I just knew they needed to hear from me.

It is vital that entrepreneurs and managers get out of their offices and interact with their staff on a regular basis. Being too busy is not a valid excuse. Taking a few minutes to talk and joke with your staff is important because it reinforces why they are working for you.

Now go out and make sure you have a plan in place to stay connected with your staff.

You can do this!