Author Archive
Home Business: The Refuge of the Downsized
Posted by: | CommentsThere was an article in the business section of our paper yesterday. Nationwide there are about 3,000 attorneys who have lost their jobs. These are people who never thought they would be out of work because there was a sense the law profession was recession-proof.
Now what?
Afterall, these are people who were earning good salaries and most had good benefit packages. Suddenly they need to find a new source of income.
Since few law firms are hiring, they need to find other sources of income. For many, that means starting their own law firm and in many cases that will be a home based business.
One of the biggest challenges they face is learning new skills. Now they need to know how to market and run their business. They need to find ways to balance their time between all of their responsibilities.
Why is this important to you? This story may be about attorneys, but it’s true for many segments of our economy. People getting downsized and having few options for a new job.
Consequently, more and more people are starting their own home business, but just like the attorneys who have great job skills, many of these people don’t have business skills.
If you’re one of them, be sure you give yourself the best chance for success. Learn what you need to be successful. Surround yourself with good advisers. Get trained in what you need to do to run your home business or hire people to do what you don’t know how to do (or want to learn).
We do have a Home Based Business Starter Kit that is available. Certainly not a have-to-have, but it provides a solid foundation for all you need to know make your home business a success. You can read about it at Home Based Business Starter Kit.
Home Business Math: How Much is 2+2?
Posted by: | CommentsThis is a variation of an old joke. However, there’s also an important lesson here for all home business owners. I’ll have a comment after you’ve read this version.
The Accountant
There once was a business owner who was interviewing people for a division manager position. He decided to select the individual that could answer the question: "How much is 2+2?"
The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, "It lies between 3.98 and 4.02."
The mathematician said, "In two hours I can demonstrate it equals 4 with the following short proof."
The physicist declared, "It’s in the magnitude of 1×101."
The logician paused for a long while and then said, "This problem is solvable."
The social worker said, "I don’t know the answer, but I’m glad that we discussed this important question."
The attorney stated, "In the case of Svenson vs. the State, 2+2 was declared to be 4."
The trader asked, "Are you buying or selling?"
The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, "What would you like it to be?"
Cute, huh? But what’s the message I was referring to?
I like this because it demonstrates how people will look at a situation based on their perspective. Each of the answers is correct, and each is very different. You might even say some are more relevant or useful than others. But that would be from your perspective.
The point is, each of us sees things differently. When you include advisors in your strategic planning and in the running of your home business, you often get ideas that may be even better than what you would have come up with on your own.
Beware of being the Lone Ranger. All successful home business owners have some kind of help. None achieves their success alone.
Have a Home Business that Excites You
Posted by: | CommentsA friend invited me to a networking event for a college alumni group. I didn’t attend that college, but my friend said they like to use the event to connect with other graduates and meet new people. So I grabbed some business cards, the directions to the event, and I was off.
When I walked into the room, the first person I ran into was someone I’d met years ago but had lost contact with. In fact, it was the person who designed and printed business cards and stationary for one of our businesses. It was nice re-connecting and hearing how her business had grown and evolved. During the conversation she was so enthusiastic, it was hard to get a chance to speak. She has had some challenges, but it was clear she was enjoying the business.
After a few minutes, I moved on and continued to make my way around the room. I saw a few familiar faces, but most of the people were new. One woman I met was from Peru. She had studied here in the States at a culinary school and was now selling deserts from her homeland. She had a big smile on her face as she talked about the product and being able to use what she’d learned in school.
Near the end of the event I was chatting with the person who had invited me. The crowd had thinned out and everything was winding down. As we talked, we saw a man standing nearby. He had a plate with snacks, but was standing alone. Since this was a networking event, my friend and I decided meet him.
The conversation started with the usual. "Hello. What’s your name? I’m Philip and this is Eric. What do you do?" He said he worked in the family’s real estate business.
As we talked with him about the business and his role in it, his responses were lackluster. There was no energy or passion in his responses. My friend asked him what he had studied in school and how did that relate to the work he was doing. He said he’d studied in the hospitality industry, hotels and restaurants, but that it had nothing to do with his current work. His work is simply a job.
Then he said what he really wanted was to have a Bed and Breakfast. In that moment, his voice picked up. There was a brightness in his eyes, and his whole physiology changed. He stood up straighter and looked more vibrant.
He may be good at his "job", but it isn’t feeding his soul. His passion isn’t being fed and it shows in how he spoke to us during the first part of the conversation.
One day I hope he gets his dream. I suspect it will be a delightful place to visit.
We are creatures of emotions. When we do something because we have to or we think we should, the job may get done, but at what price?
When we do something because we want to, and because we have a passion for it, we feel good about. Apply this to the home business you choose.
If you don’t love what you’re planning to sell, don’t start the business. You’re only exchanging a job you hate for a business you aren’t enthusiastic about.
Success a passion go together. And you spend too much time working in and on your home business not to love it.
Are you Choosy About Your Customers?
Posted by: | CommentsI just got back from having coffee with a good friend who I consider to be a pretty savvy businessman. During our conversation he asked me an interesting question:
"Are you seeing that businesses are accepting anyone who walks through the door as a customer?"
I wasn’t sure I understood the question and asked him to clarify.
He said, "Are businesses being discerning about who they take on as a client or customer, or are they working with any and all prospects?"
I’m a good coach, so of course I responded this way: "Hmmmmm. Good question. What are you doing?"
His response showed a lot of thought. His business sells a commodity and there’s lots of competition. And yet his company is still discerning about who they accept as a customer. They don’t discount their fees and they don’t take on a customer who they believe will be a problem customer later.
He said they may get fewer customers, but they are having very little customer turnover. Their customers are staying with them.
He said he has people willing to pay his fee, which is sometimes higher than the competition, because his prospects have been impressed with his way of doing business and his belief in the value of what his company offers.
He also said it was especially satisfying for him when a prospect initially chose a competitor and later came back to him because they didn’t get what they expected from the other company.
The moral is:
- Know the value of what you offer
- Be fair in your pricing
- Be willing to stand up for yourself and your company
Lessons for Your Home Business from Bernie Maddoff
Posted by: | CommentsYou’ve probably heard about Bernie Maddoff. He just went to jail for creating a 50 billion dollar Ponzi scheme and will spend the rest of his life behind bars.
In case you don’t know what a Ponzi scheme is, here’s a quick overview:
Investors are enticed to put up money based on the promise of above average returns. The promoter gives a good sounding story about how the returns will be generated. People hear about the rate of return and want to join.
The reality is there is no investment. The first investors get their money from the investments made by later investors. Eventually the scheme, or pyramid, collapses.
Bernie’s story made all the newspapers but the truth is this process gets played out everyday in a much smaller way.
Lets say you get a credit card and you make a few purchases. When it comes time to make the payment, you only make the minimum. You keep that up, paying the minimum payment each month. Then something happens, maybe you lose your job or your expenses go up. You don’t have the money to make even the minimum payment.
Fortunately, you have another credit card that allows for cash advances. You take an advance and make a payment on the first card.
Next month, still no money so there’s another advance. Only this month you now have two payments – 2 credit cards.
You can see where this is going. Unless you increase your income or reduce your expenses, you’ll never catch up. In which case, I hope you know a good bankruptcy attorney.
Two lessons from all of this:
First: Be sure you manage your debt appropriately so you don’t end up in this situation.
Second: The US government is giving away billions as part of a stimulus plan. Next year’s deficit is estimated at 1.5 TRILLION DOLLARS. Estimates for the next 10 years show budget deficits every year … Even with significant tax increases. My reading of this says the only stimulus available to small business is the one we create for ourselves.
NOW is the time to start your own business.
NOW is the time to set it up properly.
NOW is the time to be sure it’s run for extremely high profits and sustainability.
The government may be there to help us out, but I’d rather be prepared to provide my own bailout.
How about you?
Home Business Board of Advisors
Posted by: | CommentsI’m teaching a class called "Small Business Success" at a virtual school I’m associated with. During our conversation this week, we discussed some of the challenges facing smaller businesses.
One of those was that management is usually the responsibility of one or two people, not a large contingent of vice presidents and others. There’s also no Board of Directors to work on strategic planning and other issues.
During the conversation, I suggested something I’ve seen at many smaller companies and that’s a Board of Advisors.
This is a group of people who simply advise the owner. They have no fiduciary responsibility and don’t need to be identified to the outside world.
Who you ask to join your board is completely up to you. There are no requirements other than the ones you set. You can meet as often as you like and people stay on the board as long as they want to and/or as long as you want them to.
So how do you use them?
That depends on who you choose and how much information about the company you’re willing to share with them. You choose the topics of conversation and they might include things like:
- Strategic planning
- How to deal with threats
- Should you expand your product line
- etc.
Some people will pay their board members some small amount or simply take them out for dinner at a nice restaurant where you can talk.
Some possible members are your:
- Accountant
- Attorney
- Insurance broker
- Other business owners.
My one word of caution is don’t choose people who will tell you what you want to hear. Get people who will challenge you and push back.
Home Business Joint Ventures
Posted by: | CommentsThere’s a saying, "If it’s meant to be, it’s up to me." Self reliance and accepting responsibility are good things, but not when they end up creating obstacles to getting something done. Too often homeprenueurs think that everything that needs to be done, needs to be done by them. Outsourcing and delegating are valuable resources. Another is a joint venture.
The concept of a joint venture is that two or more people or organizations have bring something to the table that allows a project to be completed quicker or more easily than if each did it on their own.
For example, lets say I want to put on a seminar. I have great material and I know I can be effective in the front of a room. The problem is that I don’t have a mailing list of qualified people who would be interested in my topic. If I want to do this on my own, I can spend lots of resources developing my list. I could also hire a salesperson to enroll participants. Both of those will take some time and may require resources that I don’t have or would be better used some other way.
Instead of doing is all myself, I could find someone who already has a strong mailing list and joint venture with them. They send a mailing to their dababase and I offer to split the seminar fees with them. It’s a win/win. I fill my seats, and they get some income.
Some things to consider before joint venturing: What is expected from each person? How will expenses be paid? How will profits be split? How will each of you be held accountable to do what you commit to? Is what the other person bringing truly valuable enough and is it the right resource? And finally, is the other person someone you want your name associated with?
A couple years ago, we thought about doing a joint venture with someone who has a 20,000 person mailing list. He would send a mailing endorsing us and telling people to attend our seminar. We planned to split the fee. Before we got very far, we asked him about how many people open his emails. When he proudly said, "about 2000," we withdrew our offer. Because he didn’t have an opt in list, we saw his list as 2000, not 20,000. Big difference.
Joint ventures can be a great way to leverage your resources and that may be just the edge you need to be successful.
Asking for Help in Your Home Based Business
Posted by: | CommentsOk, I admit it.
There are times I don’t like to ask for help. I could say "it’s a guy thing,." but the reality is that many home business owners don’t like to ask for help. For me it’s often that I don’t want to spend the money for the expert, I don’t want to admit I don’t know, and I don’t want anyone to know I have a problem.
Any of this sound familiar?
Well, I have a possible legal problem that’s been brewing for awhile. But, hey. I have strong business experience and thought I could figure it out without calling an attorney.
Today I finally realized I was going around in circles with this situation. I’m too close to it to see it in its proper perspective. So I broke down and called my attorney.
In 5 minutes she got me to see how much I was missing.
Do I really have a problem? I don’t know, but now I have an appointment to meet with her and figure it out. She’s independent and has no emotion about the situation. Already I know I’ll make a better decision with her guidance.
Are there things in your business you’re not seeing clearly or may even be avoiding?
What’s the price you’re paying for that?
Consultants and advisors have their place. Use them.
Who’s Going to Stimulate Your Home Based Business?
Posted by: | Comments
Are you tired yet of hearing about all the billions being spent as part of the "stimulus" package? Billions for Wall Street. Billions for big banks. Billions for Detroit. Billions and billions of our kids’ money. AND THERE’S NO ACCOUNTABILITY!!
Ok, lets step back for a moment. What Congress says (and this is BOTH parties) is, these businesses are too big to fail. Maybe that’s true, I’m not an economist. But the reality is, over half the businesses in the US are home based. The government says the majority of jobs are created by small business. So where is our stimulus??
Hello????
Is anybody listening? No!!
The focus in Washington isn’t on us. It’s on all these big businesses who have loud voices in Washington. You’d think someone would stop and think. With all the trillions of dollars (yes, that’s trillions with a capital "T") being spread around, you’d think some would go to stimulate the parts of the economy that will actually make a difference … Small and home based businesses.
Yeah, I know. The banks are supposed to help us. Right. Have you called your bank recently and asked for money to start a business or to even expand the one you have? What did your banker say? Probably not something like, "I can have that money in your account today.
So that means we need to find our own ways. There’s no handout, bailout, support, or anything coming from Washington for us.
And you know what? That’s actually fine with me. I don’t want someone looking over my shoulder. I don’t want to feel obligated to anyone. I don’t want anyone getting in my way. I want to run my business. But it would be nice to know that my kids won’t have to pay back lots of money that didn’t stimulate anything other than someone’s sense that they needed to do something, without thinking about the best way to do it.