Wednesday, September 30, 2020

8 Steps For Moving From A Business Dream To Results

business-dream-to-realityAs a business advisor, I listen to many of you entrepreneurs talking about achieving your dreams, but too few of you have structured that dream, and can express it in a set of specific goals, with a timeline for getting there. You all hope I have some magic formula for success, but the reality is that only you can pick the goals that match your passion, work ethic, and desired outcome.

I believe part of the problem is a fear of failure, or hesitancy to commit, perhaps due to a lack of self-confidence, or a habit of waiting for someone else to tell you what to do. I can’t help you get into the right mindset, but I can offer some proven specific steps for translating a business dream into reality, based on my own years of experience working at all levels in the business world:

  1. Narrow your focus, to identify your major business goal. As Yogi Berra once said, “If you don't know where you're going, you'll end up someplace else.” Without a measurable objective, you will be constantly frustrated by not seeing progress, and you will never feel success satisfaction. Avoid fuzzy goals, like making big money or being a market leader.

  2. Develop an “elevator pitch” as an initial path to your goal. An elevator pitch is a problem-solution summary that anyone can understand in a sixty-second ride up to their office in an elevator. It has to embody enough passion and reality to convince yourself, as well as a rational business person, that you have moved beyond the dream stage.

  3. Create a timeline to success, with quantifiable steps. You can break any reasonable business dream into at least ten smaller milestones, to be completed in one to two years. It’s fair to be optimistic and aggressive, but don’t be afraid to get help from advisors and domain experts to make sure your assumptions are realistic in today’s business world.

  4. Populate each step with actions required for success. You probably already know the key challenges to complete each step, but it helps to write them down, review them with peers, and have a written list to update as you learn more. If necessary, break big steps into smaller ones, since most can only accomplish a big goal as a series of small steps.

  5. Prioritize the activities and execution within each step. Remember the old 80-20 rule, that 80% of the value typically comes from 20% of the actions. Do the most important things first and celebrate each small success. By the way, you now have an viable business plan – which puts you well on your way from a dream to business success.

  6. Stop talking and writing, and start executing the plan. Completing that first step is now a well-defined action, rather than a nebulous step into the unknown. The market changes quickly these days, so the slower you move, the more likely that changes will be required in your plan, and that competitors will pass you by. Celebrate your successes.

  7. Network to find inspiring and needed team members. Building a business is not a solo operation. You must surround yourself with team members and partners with complimentary skills and dreams that mesh with yours. Don’t be too busy to attend industry conferences, mingle with experts, and negotiate partner relationships to fill gaps.

  8. Register what you learn each day, and update the plan. No business plan can win by remaining static, so take advantage of what you learn each day to improve your plan. The result is that tasks become easier and more satisfying. New momentum will be energizing and inspiring, rather than stressful and discouraging. Keep track of every progress step.

In my experience, visualizing a dream is a necessary, but not sufficient step in achieving success in business. In fact, a much different mindset is required for the focus required to plot a set of execution steps, and manage them through to success. As an advisor, I concentrate on the proper outline and measurement of these steps, since activities are common for all businesses.

So don’t give up your dreams. The challenge is to apply the same passion and energy to the next stage of business execution that is required for dreams to come to fruition. There are many resources out there to help you make it happen, including incubators, accelerators, advisors, mentors, and even investors. Now is the perfect time to take that next step.

Marty Zwilling

*** First published on Inc.com on 09/17/2020 ***

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Monday, September 28, 2020

7 Ways To Get Key People Committed To Supporting You

women-team-relationshipInvestors invest in people, not ideas. Customers buy from people, not companies. Employees rally for a great leader, not a brand. As an entrepreneur, you need relationships to succeed. That means relationships with team members, investors, customers, and vendors. One of the best ways to build a good relationship with anyone is to make them feel important.

One of my favorite authors, Brian Tracy, in his classic book “No Excuses!: The Power of Self-Discipline,” outlined seven ways to make other people feel important, which I believe are extremely relevant to entrepreneurs and business:

  1. Accept people the way they are. Because most people are judgmental and critical, to be unconditionally accepted by another person raises that person’s self-esteem, reinforces his or her self-image, and makes that person much more likely to accept you and follow your lead.
  1. Show your appreciation for others. When you appreciate another person for anything that he or she has done or said, they will like themselves and you more as well. The simplest way to express appreciation is to simply say, “Thank you” for an idea, some good feedback, time spent together, or an order.
  1. Be agreeable. The most welcomed people in every situation are those who are generally agreeable and positive with others. Entrepreneurs who like to be argumentative, complaining, or disagreeable, will have a hard time closing a contract, investment, or a customer contract.
  1. Show your admiration. People invest a lot of personal emotion in their possessions, traits, and accomplishments. When you admire something belonging to another person, it makes him feel happy about himself. Everyone has positives, and it’s up to you to find them. In turn, these positives will be reflected back on you.
  1. Pay attention to others. The most powerful way to pay attention to someone is to listen attentively first, even ask questions, before you launch into a monologue answering every question they might never ask. Believe it or not, before you even say a word, you will become a more interesting and intelligent person in their eyes.
  1. Never criticize, condemn, or complain. In business as well as personal relationships, the most harmful force of all is destructive criticism. It lowers a person’s self-esteem, makes him feel angry and defensive, and causes him to dislike you. If your target is someone not present, it still causes a loss of trust in you, since your listener could be the next target.
  1. Be courteous, concerned, and considerate of everyone you meet. When you treat a person with courtesy and respect, they will value and respect you more. By being concerned, you connect with their emotions. Consideration is the discipline to do and say things to people that are important to them.

Think back on your own recent experiences as a customer or contractor. You don’t always buy the cheapest product or service, if you have a good relationship with the people involved. On the other hand, I almost never buy from someone that treats me like I’m not important.

If you want to be a leader, you need to inspire followership. Great leaders develop a good relationship with good people, who are then inspired to follow. A successful leader inspires people to do more than they might have done without the relationship, and more than they may have even dreamed possible.

So, if you follow all these seven ways to make other people feel important, you will receive a seven-fold payback on your own objectives of being a leader and building a successful business. That’s a lot cheaper and lot longer lasting than the best advertising and public relations you can buy.

Marty Zwilling

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Sunday, September 27, 2020

8 Strategies To Improve Your Odds Of Getting A Loan

debt-loan-approvedA common question I get is “How do I get a bank loan to fund my startup?” The default answer is that it probably won’t happen, because most banks just don’t make bank loans to startups. The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. That’s why angel and equity investors are so sought after by entrepreneurs.

In my experience, some startup founders do overcome these odds, but you need to be realistic and do your homework. Here are some tips and rules of thumb to improve your odds and help you understand when a bank loan or line of credit is possible, and how to get it:

  1. Write a good business plan first. Approaching a banker without a business plan, and asking for money, is a sure way to be rejected and leave a bad first impression. Pay particular attention to the financials, and have a CPA friend review for reasonableness before presenting.

  1. Clean up your credit rating before you apply. Good credit ratings, both personal and business, are essential to getting a loan or line of credit. This is just common sense, since every loan has a repayment schedule, and your credit score reflects your track record of paying bills on time.
  1. Pick a business domain that is squeaky clean. Certain business sectors have historical high failure rates and are routinely avoided by banks and investors. These include food service, retail, consulting, work at home, and telemarketing. Also, don’t expect enthusiasm for your gambling site, porn site, gaming, or debt collection business.
  1. Show a significant personal investment. Most loan programs, and most investors, want to see that you have “skin in the game’ before helping you. If you have nothing at risk, your own level of commitment is suspect. As a general rule, your investment should be at least 20 percent of the total projected loan requirement.
  1. Demonstrate an ability to repay from revenues, not collateral. Bankers will insist that you have collateral to back the loan, like equipment, or even your home. They actually prefer to see that you have a revenue stream to repay the loan, since they don’t want to own another home. The more conservative ask for two years of positive cash flow.
  1. Demonstrate experience in starting a business, ideally in this domain. Bankers, like investors, fund people rather than ideas. Your idea alone will not get you a loan, but your experience running businesses may get you a loan, even if not intimately related to the current proposal.
  1. Conduct meetings at your site, not at the bank. You have an advantage if you can get them on your turf, and even get several key employees to tag-team the presentation. If you are a startup operating out of your garage or basement, you are likely too early in the cycle to get banks interested.
  1. Eliminate your salary from the use of funds. Most startup founders don’t take a salary for the first year or two, since most investors as well as bankers won’t give you money so that you can pay yourself. The most positive use of funds is to buy raw materials to build product for existing customer orders. In fact, customer orders are great collateral.

Even if you can’t meet all these criteria, it’s definitely worthwhile to utilize the free services of the Small Business Administration (SBA) and SCORE in the US to get their help in preparing for the loan option. They have contacts with the more “startup friendly” banks in your area, like Silicon Valley Bank, and might even be able to arrange a “loan guarantee” if you meet these criteria.

In all cases, the loan option should be investigated before looking for an angel investor, since the “cost” of a loan is usually considered less than giving up a large share of your company equity and control to angel or venture capital investors. I’m told that 21 companies on the Inc 500 list started with bank loans, so you can do it too.

Marty Zwilling

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Saturday, September 26, 2020

8 Inspirational Insights For Those Chasing Your Dream

chasing-your-dreamEvery entrepreneur has an idea for transforming a market with innovative new technology, or transforming society with a new process. But unfortunately, most of these ideas fail at the execution level, or are not truly innovative. Entrepreneurs who have been really transformative, like Steve Jobs and Walt Disney, seemed to know how to deal with all the right elements.

Jeffrey A. Harris, in his classic book “Transformative Entrepreneurs,” provides examples of key elements of transformative ideas and leadership abilities that separate the winners from the losers. I found his observations, like the following, to be inspirational for those of us chasing an entrepreneurial dream:

  1. It’s all about the people. Ideas have to be implemented well to change a market, or the world. Good implementation requires a plan, and a great plan and great operational decisions come from great people. That’s why investors look for entrepreneurs who have true grit, dogged persistence, and a disdain for the status quo.
  1. Seek innovation that begets invention. It doesn’t always work the other way around. According to an MIT study a while back, only about 10% of patents granted in the United States have any meaningful commercial importance and less than one percent are of seminal importance. True business titans deliver both invention and innovation.
  1. Find enough venturesome capital. Nearly all new businesses aspiring to reach meaningful scale require some sort of outside funding to finance a competitive growth trajectory. The objective must be to get sufficient capital, with experienced and motivated counsel, to make the venture succeed.
  1. Create a formidable and durable business model. Your business model is your value proposition. “Free” sounds like a great model, but it doesn’t imply value. Look for customer-focused value creation. Make your business model your competitive differentiation, like Fred Smith with Federal Express, or Ingvar Kamprad with IKEA.

  1. Grab the next-mover advantage. First-movers have an initial advantage, but this position is fraught with risk, and often comes with a high price. Herb Kelleher, who started Southwest Airlines, wasn’t the first in the airline business, but he saw the need for low-cost short hauls, with exemplary customer service, and transformed the industry.
  1. Failure is an option. Building a business from a raw start is hard, risky work. That means that the process of innovation is not always pretty and rarely successful. The best entrepreneurs always regroup after a failure, learn from prior mistakes, persevere, and launch a new venture with considerably improved odds of success.
  1. Government matters. Government policies, initiatives, and leadership set the stage for economic growth, and provide resources for improving living standards, and enabling technological advantage. Transformative entrepreneurs pay attention and capitalize on these cues, rather than ignore or fight them.
  1. Innovate or die. In a world connected through a broadband Internet and mushrooming social networks, information flows quickly and relatively seamlessly, expediting the pace at which new innovations gain traction and speed. Standing still is tantamount to giving up. It is not an option.

These elements and the people stories in the Harris book highlight just how difficult it is to build a truly transformative business, yet at the same time illustrate that it can be done, and has been done many times, with no correlation to geographic, ethnic, age, or sexual boundaries.

In fact, I’m convinced that it needs to happen more often, with all the challenges we have in our modern world. So it’s up to each of you to assess your activities, and your potential, to be transformative. The investors I hear from want to see more innovation, and fewer “me too” startups. Can your idea generate some excitement to really change the world?

Marty Zwilling

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Friday, September 25, 2020

5 Ways To Focus Your Strategy On Delighting Customers

my-tesla-arrivedThe world keeps changing, and visible business strategies that worked well in the past, including being the premium brand or low price producer, simply don’t get the customer loyalty they once did. Today, customers are looking for real relationships, a memorable shopping experience, and satisfaction of a higher purpose. They follow leaders who live and promote these strategies.

For example, Tesla and Elon Musk have capitalized on the environmental benefits of electric vehicles, coupled with a more memorable shopping experience by eliminating dealers. Other companies, including Ritz-Carlton, now incent their employees to build real relationships with guests, by authorizing them to spend up to $2,000 per guest to solve an individual concern.

Of course, these new customer-facing strategies shouldn’t preclude you from focusing behind the scenes on reducing costs and broadening your product line to supersede competitors. Amazon and Jeff Bezos have managed to do this well, with customers only remembering the fun and ease of shopping online, seemingly instant no-cost delivery, and no-hassle returns or replacements.

If you are rolling out a new business, or focusing on a revamp for your existing one, here is a summary of the key elements I recommend as a long-time business advisor for a winning customer-centric strategy today:

  1. Demonstrate a commitment to purpose and vision. What you say in your mission statement means nothing unless customers see you and your team living it every day. They need to see results in the form of sponsored events, social media, and feedback from influencers and customers that your mission is more than the low-cost producer.

    Whole Foods, for example, have continuously demonstrated their commitment to natural and organic foods, and have amassed an large and intensely loyal customer following for their 475 stores. As a result, they recently were acquired by Amazon for $13.5 billion.

  2. Highly focused customer segment targeting. This has to start with doing the customer interaction work to isolate the needs and drivers in the market you intend to serve. Trying to be everything to everyone doesn’t work any more. You need your team to be engaged with customers, finding what gets them excited, and tuning your message and offerings.

    In addition to their focus on purpose, Whole Foods continues to target high-income, educated city-dwellers who are health- or eco-conscious. This approach may not have worked in the startup days of traditional grocery stores, but it fits today’s urban reality.

  3. Dominate your industry before expanding to others. Many businesses are too quick in their efforts to become a conglomerate like General Electric, rather than globally dominating the one they are best suited for. Today, scaling an existing business in a large interconnected environment is generally easier than growing a disparate portfolio.

    Apple, as an example, have consistently focused on consumer electronics, since their early days with personal computers. They now dominate that industry, and achieved massive growth, loyalty, and credibility, without trying to move into enterprise solutions.

  4. Align employee incentives with customer values. Many companies still measure and reward employee productivity on internal processes, such as service calls closed per hour or revenue generated, rather than delighted customers. Results in the short-term may be optimized at the expense of repeat business, customer advocates, and loyalty.

  5. Seek opportunities to leverage competitor shortcomings. Make sure that everyone in your business understands your competitive advantage from a customer perspective, and continually seeks to optimize it. This requires continuous communication up front, agility in adapting to change, and continuous innovation improving satisfaction and experience.

Above all, continuing success requires a constant focus on strategy, and an agility to move quickly with the latest trends and innovation. Too many existing business become complacent, and the world changes around them, including former growth leaders Radio Shack, Nokia, and Enron. All too quickly, customers move on to other players that address their changing needs.

If your business strategy today doesn’t reflect one or more of the elements outlined here, your time for change may be past due. Winning customers in business is a lot more fun than the alternatives.

Marty Zwilling

*** First published on Inc.com on 09/10/2020 ***

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Wednesday, September 23, 2020

6 Drivers For Aspiring Entrepreneurs To Finish School

finish-schoolA continuing question I hear from young entrepreneurs is whether a university degree is important to startup success, or just a distraction in achieving their purpose in the world. They are quick to point out that many of today’s top entrepreneurs, including Evan Williams (Twitter), Bill Gates (Microsoft), and Mark Zuckerberg (Facebook), dropped out of school to get on with their dreams.

I certainly agree that you won’t learn all you need in school to run an innovative and successful startup, but I don’t believe that universities and entrepreneurial efforts have to be mutually exclusive or serial paths. In fact, I think the evidence is clear that many entrepreneurs started their journey while still in college, and capitalized on all the resources there, before moving on:

  1. Extend your technology focus with business basics. Most colleges have now added classes in entrepreneurship to include the necessary business focus to technical majors that usually drive innovative ideas. Contrary to a popular myth, a great invention and passion alone won’t drive a great business. Good business basics are not intuitive.

    Mark Zuckerberg, while still in school, tested the viability of his “FaceMash” technology as a business by rolling it out to other students at Harvard as customers. He learned quickly that several pivots were required for business, legal, and customer acceptance reasons.

  2. Take advantage of free startup programs and mentors. Every school recognizes the power of “hands-on” work to help you develop your own ideas into a business. They provide peer group organizations, usually called incubators, with free resources, practice environments, and outside mentoring that can help you learn and pivot with minimal cost.

    For example, I do business mentoring at nearby Arizona State University and Embry-Riddle Aeronautical University. Both provide entrepreneurial “head start” programs for aspiring entrepreneurs, free legal guidance, and access to experienced staff members.

  3. Initiate networking to find peer partners and investors. Universities have the links you need to patent attorneys, prototyping companies, investment groups, as well as a wealth of peer talent to round out your team and share the work. Startups are not a solo operation, so the sooner you find the right connections and partners, the faster you move.

    For most young entrepreneurs, the best networking you can do is to pitch and discuss your startup idea with peers in a school-sponsored “startup weekend” or competition judged by outside investors, where everyone wins with minimal cost and no jeopardy.

  4. Write a business plan and pitch deck for learning. Many real entrepreneurs don’t get beyond the passionate talking stage until later, and then find that building business plans is costly and time consuming. School mentors, professors, and peers will give you the critical feedback without passing judgment. Learning by doing is the only way to go.

    It may seem strange, but I find that entrepreneurs still in school procrastinate less and are less intimidated by the process of writing their plan. Unfortunately most people can’t tell a consistent story and fill in the gaps until after they have a written plan and pitch.

  5. Build a web site and incorporate while in school. These tasks are not rocket science, but there is no better way to learn than to start doing the real job, while you are still in a supportive and risk tolerant environment. Your experience will put you well ahead of most of your competitors, and familiarize you with the issues of contracts, insurance and taxes.
  6. Find employment connections with other startups. If you are not absolutely confident in your own startup idea, it pays to work first for another startup to solidify your view of the skills and resources required, to assess your own risk tolerance, leadership interests, and generate some required funding. Make a summer internship your best learning class.

In the entrepreneur world, all the facts you might have memorized in school change quickly and will be of minimal value. The real value of schooling is learning how to learn, and building a broad base of processes and connections to keep you ahead of your competitors. Rather than focus on academic credentials, keep your focus on getting business results, and investors will find you.

Marty Zwilling

*** First published on Inc.com on 09/08/2020 ***

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Monday, September 21, 2020

5 Basic Ingredients For A Startup Recipe For Success

cooking-for-successI realized a while back that creating a new company for the first time is a lot like whipping up a great dinner entrĂ©e for the first time – you need a recipe, even though it may look simple. You know the basic ingredients, and you can visualize the results you want. Yet you may not be so sure where to start, and how to put it all together.

In all cases, don’t skip the basic training. Any startup coach or business advisor will tell you that, on your way to being a great chef, you don't start your journey by inventing the ultimate entre. First you work in the kitchen for a while, learning some tools of the trade, experiment with a few recipes, and test on willing clients. Finally you create and document your recipe (business plan).

There are two parts to every recipe – the specific ingredients, and the instruction steps for putting the ingredients together. For a new business, you can provide unique ingredients, but the preparation steps in your business plan must follow a tried and true recipe for startup success:

  1. Identify a market with a real need. This means find some hungry people who would love a good dinner, and be willing to pay for it. If you can’t identify customer interest, it doesn’t matter how good your product is. (not a solution looking for a problem)
  1. Be sure you have a great team. You need a good cook, good marketing, and first-class service. Domain knowledge and experience is a huge success factor. All the investment money in the world won’t make your company succeed, if you have the wrong team. (investors invest in people, not ideas)
  1. Effective and timely go-to-market. Don’t be afraid to test your ultimate entree on customers. Make them “feel the love.” Be adaptable to cultural tastes, trends in the market, and economic realities. But don’t practice too long. If your startup is over a year old, and your business isn’t yet ready, you have a problem. (time-to-market is critical)
  1. Viable financial model. Have you set the right price for your entree, and correctly included all costs? Have you projected sales and marketing costs, cash flow, and capital requirements? Show return on investment, growth rates, and market penetration. (validate your business model)
  1. Continuous improvement. Don’t stand still. Emeril Lagasse is always ready to “kick it up a notch!” Companies and cooks who rest on their laurels don’t last. Develop metrics with which to measure yourself and use these to incrementally expand and improve your offering as fast as the market and capital will allow. (scale up the business)

If you are already a chef, and you have your own money, you can skip the instructions. You can vary the ingredients, change the formula, or add an extra pinch of salt, and your pasta salad will still be great. If it’s your first time, don’t try to get creative on the “how to” side just yet.

If you are already a celebrity chef like Emeril, meaning you have a record of success using your creativity despite the odds, you don’t even need your own money, and you only need to scratch your business plan on the back of a napkin to get funded.

For the rest of us, the business plan must be the complete recipe, combining ingredients with process. If you don’t have one, your chances of success are low, even if you are an experienced chef. Now you know why professionals and experienced investors are quick to toss an incomplete plan.

Follow the “how to” instructions above for combining the ingredients, combined with you own “special sauce” (competitive edge), and I’m sure you will deliver a tasty dish, on time and with a profit. You can look forward to being a celebrity chef later. For now, get cooking!

Marty Zwilling

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