photo credit: davitydave

Well, we have made it to deadly mistake number 6 in our discussion on the 7 deadly mistakes new entrepreneurs make and how to avoid them. I hope by this point you have learned how to avoid some of these mistakes based on the information I have supplied. Why repeat mistakes others have made if you can avoid them?

Deadly Mistake No. 6 – Not Placing a High Value on your Customers

Many entrepreneurs have been taught how important the customer is but few have really embraced this concept so that it permeates every aspect of their business. Valuing your customer goes beyond customer appreciation days and rebates. In order to value your customer you must take the time to get to know them and then design your business around them.

Many entrepreneurs start out with the customer at the heart of the business but somewhere along the line the customer becomes secondary. This is especially true of growing companies. The entrepreneur’s focus moves from the customer to building the business and dealing with internal issues. This is a hugely costly mistake. The customer must remain the main focus of the business if the business is to thrive.

Here are three simple keys to help you keep your customer front and center in your business:

1. Focus on your customer – As the leader of your business the customer must be your personal focus. Spend time thinking about your customer’s lifestyle. What do your top customers do for work? What do they do for recreation? What are their biggest problems?  You also need to know how your customer interacts with your product or service. Why do your top customers buy from you and not from your competitors?  How are your top customers’ needs changing? What is the biggest problem your customer is having using your product or service. Start thinking along these lines about your customer and you will help keep them front and center in your mind.

2. Build your systems around your customer – This is really self-explanatory. Any system you build in your business should be built only if it helps you serve your customer better. If it doesn’t help you serve your customer better it is not a good system for your business. Simple.

3. Teach your employees how to treat your customers- Your customers are gold to you and they must be gold to your employees. Make sure every employee knows the link between their jobs and how they treat every customer. They must understand that without the customer there is no business and therefore no job for them. It is your responsibility as the entrepreneur to communicate this message to your employees both orally and by example. You may also want to reward your employees for going the extra mile for your customer.

In the final post in this series we will discuss the 7th deadly mistake. As always I welcome your comments.

photo credit: hans.gerwitz

In part one of this post we discussed the fact that many entrepreneurs allow their past failures to hold them back. We discussed 3 bite-sized nuggets that entrepreneurs should consider to help them move past these failures on to success. 
In this post, we will introduce and discuss the four remaining nuggets.

Seek the advice of others who have gone before you – This is probably a step that many entrepreneurs skip. I think for many of us it is a pride thing.  However, it is imperative that we take this step my entrepreneurial friend. Seeking competent advice is very wise. You should seek advice on three levels:

1.Seek advice about whether you have properly defined the failure . Knowing how to properly describe and define the failure is key in determining the causes. It is also a key factor in ensuring you don’t have a repeat performance.

2. Seek advice about whether you have correctly identified the 1 or 2 key factors that led to the failure. It may be hard to be objective about what caused the failure. Discussing your list of possible key factors with a competent advisor can help you clearly identify the key contributing factors.

3. Seek advice about possible approaches to circumvent the failure in the future. This is very important if it turns out that your failure was due to an error in judgement. We all have blindspots in our lives that others see clearly. By seeking advice about solutions you will multiply the odds of succeeding this time around.

Create an action plan – After you have sought competent advice and combined it with the information you gleaned from your own analysis, it is time to create a plan for moving forward. Take your time and consider all the steps you need to take to move forward. A great action plan should include steps to take, deadlines for completion of each step, resources needed to complete each step, possible obstacles to completion and steps to circumvent any known obstacles.

Implement the action plan – There is no need to create an action plan if you are not going to put it into action. At this point, you need to commit to the action plan and get started. After each step, review your plan and see if you need to make any adjustments. Remember things change and we need to be flexible.

Review - After you have accomplished your goal it is important to review. You want to see what went right and what you can improve. The key is to understand the process so you can improve it and repeat it. 

When you face failure this way you will no longer fear it. You will eat failure for lunch. As always, I look forward to your comments.

photo credit: markwgallagher

Do you want to fail miserable as an entrepreneur? Well in this post I will share with you 22 things you can do if you want to fail miserable as an entrepreneur. Follow these steps I can almost guarantee you will be a big failure.

1.Neglect cash flow and cashflow management. Don’t even create an Excel spreadsheet to show your daily, weekly and monthy expected cash inflows and outflows. Who cares about cash and the timing of those flows anyway as long you have profits right?

2. Forget about marketing and personal selling. Don’t even bother to create a marketing plan. Who needs to do all of this work. If you build it they will just come right?

3.Don’t bother to setup and document systems for your business. Run it by the seat of your pants. Who needs all of these structures?

4. Listen to no one. Don’t seek advice from those who have gone before you. Just go it on your own. You are smarter than everyone else anyway. Or even better, pretend you are listening to them and then do your own thing.

5. Don’t build your financal intelligence. Don’t learn about financial ratios that affect your business. All that matters is that you are making some money.

6. Spend no time talking to your customers. Or if you do talk to them don’t ask them questions about the business. Just shoot the breeze all of the time.

7. For goodness sake don’t spend time analyzing the metrics of your business. Who needs to know how many new customers are coming in and where they are coming from anyway? You don’t need to know why they chose you instead of your competitor. Stuff like that is useless.

8. Don’t write the vision plan for your business. Just work it everyday like a job. A business is just a glorified job right?

9. Don’t focus on a particular niche. Try to do it all even if you don’t have the budget for it. Be all things to all people.

10. Make sure you think of the glass as half-empty all the time. Don’t be tricked by those who think optimistically and implement realistic plans. You want to be as negative as possible so if something positive does happen in your business then great. At least if you don’t expect great things you won’t be disappointed.

11. Neglect your customers and focus only on the mechanics of your business.  Your customers are a nuisance anyway. They are always asking for something different. Can’t be just be satisfied with what you give them?

12. Work in the business but don’t spend time working on the business. It is the day to day that matters anyway, forget building the business for the long-term.

13. Do not waste your money on educating yourself and learning more about your industry and your business in general. Who needs the extra expenses? You already know everything you need to know about your business. What worked in the past will continue to work. All this talk about change is just that, talk.

14. Don’t bother to work on your leadership skill and your sales skills. Who needs the headache? You are good just like you are. Anyway, who wants to a bunch of people following you.

15. Don’t change with the times and please don’t anticipate change and try to get ahead of it. This takes too much time.

16.Don’t spend time growing your employees. If they want to grow they have to do it on their own. That is not your problem.

17.Don’t delegate. Try to do everything yourself. You are a one-person show anyway. Who needs other people?

18.Don’t take the 80/20 rule seriously in terms of your work. Don’t even spend time determining what the 20% activitives are in your business that brings you 80% of the results. What’s the use of that anyway?

19. Don’t take the 80/20 rule seriously in terms of your customers. Treat them all exactly the same even though about 20% of them provide about 80% of your profits. Don’t even identify these people.

20. Isolate yourself. Who needs to network with others who are in the same line of business or others who can provide critical services.

21. Don’t read. Spend all of your time working on your business and don’t bother learning new material. If you do read, only read about your industry, don’t bother expanding yourself to see if something in other industry can help you.

22. Forget being creative. That is for the artsy types. Don’t even learn anything about creative problem solving.

Ok. I know you know that I am being sarcastic. I don’t want you to think about failing as an entrepreneur but I do want you to take these things seriously. Obviously you want to do the opposite of what is suggested here. Take a good look at this list. If you are an entrepreneur, you may be doing some of these things. If you are, you may want to make a change. If you have not started on your entrepreneurial journey yet, please look at these items and avoid them like the plague. On Wednesday I will give you another batch of these items. Happy entrepreneuring.

Suggested Additional Resources

photo credit: pfala

Life is full of ups and downs, successes and failures.  The landscape of business is no different.  The longer you stay in the business world, the more likely you are to see that bear out.  But, don’t hold back your entrepreneurial dreams because of potential failure.

Determine how you will respond to failure and setbacks in advance. When you do this, you take away the power of failures and setbacks. Decide now that you will treat any setback as a learning experience.

The basis of scientific research is trial and error.  You try one experiment and it fails.  The next time, you vary one chemical or condition and try the experiment again.  Each time that you do this, the end results are recorded regardless of whether they are the results you wanted or not. 

The entire scientific process is about evaluating the outcomes of your experiments.  The failed experiments are as important as the ones that succeeded.  Here, we are speaking of failure as an outcome that was unexpected and unplanned. 

Failure is one reason that many individuals won’t realize their entrepreneurial potential.  One mistake or error makes them gun-shy.  It prevents them from taking another step forward. 

Anyone with an entrepreneurial spirit knows that nothing is certain in life or business.  The only way to find success is to take a leap forward and risk failure.  At the least, you will learn something about yourself in the attempt:

1.  You weren’t afraid to try.
2.  Failure is not fatal.
3.  Now you know what not to do.

One way to avoid some mistakes it to solicit the advice of a mentor or coach. There are those that have gone before you. Don’t neglect their wisdom. You will still make mistakes but you can avoid some of the most deadly ones.

For an entrepreneur, even a failure is a great opportunity.  There are at least 3 categories of failure.  Entrepreneurs can make rookie mistakes, trust mistakes, and poor business decisions.  No one is immune to any of the three. 

Rookie mistakes could be choosing a poor domain name, not performing enough market testing, or issues with business start-up.  A good way to avoid these rookie mistakes is to get an advisor who understands this area. If you do make a rookie mistake the best thing to do is begin again with new knowledge that you didn’t have the first time in these areas.

Further down the line, maybe you formed a partnership and they got the better end of the deal.  Once again, you dust yourself off and start over. 

No one said it wouldn’t be painful to deal with these setbacks, but the challenge is to profit in these areas as well.  If you scan the business information on the Internet, you’ll see that there are as many courses and eBooks on what not to do as there are on what to do.  How do you think the entrepreneur got the information for the former?  They experienced it.

People new to entrepreneurship want to know what they should and should not do.  The ones who have experienced failure are more than happy to share their knowledge so someone else can avoid hard knocks.  That, in itself, is a marketable business opportunity.

Embrace all aspects of business including the possibility of failure.  Once you dig yourself out and dust yourself off, you could be standing in a goldmine.

photo credit: alexdecarvalho
In my second post on the 7 deadly mistakes new entrepreneurs make and how to avoid them, we discussed two more potentially deadly mistakes many new entrepreneurs make. In this post we will address another deadly mistake that both new and experienced entrepreneurs make. This mistake can be quite deadly and can affect all aspects of your business and personal life. What is it?

Deadly Mistake 5: Not recognizing and consistently applying the 80/20 principle

The 80/20 principle has been called by many names including the Pareto Principle, the Pareto Law, the 80/20 Rule, the Principle of Least Effort, and the Principle of Imbalance. As some of the names suggests this principle was discovered by Italian economist Vilfredo Pareto (1848-1923) in 1897.

What did Pareto discover?

To put it in its simplest form Pareto discovered a counterintuitive imbalance between causes and results. In other words, we naturally expect that 50% of the inputs to a process will produce 50% of the result, but this is not usually accurate. It is more likely that a smaller percentage of inputs will produce a disproportionately large amount of result. Indeed many times 20% of the inputs produce 80% of the result (see important note at the end of the post).

What does this mean to the entrepreneur?

This principle has far reaching implications for the entrepreneur. For example, we tend to think that all the activities we do are equally valuable in moving us forward. This is simply not true. There is an imbalance. Indeed 20% of the activities provide 80% of the results we desire. Further, the other 80% of the activities only add an additional 20% of the results we seek. This is instructive because it says that as entrepreneurs we should focus on the 20% activities that give us 80% of our results and delegate the other activities.

Another example of the 80/20 principle at work

We as entrepreneurs tend to think that all of our customers are equally valuable and should be treated equally. Using the 80/20 principle we would discover that 20% of our customers provide 80% of our profits. Here are a few ways you could use this information:

1. Do research and determine who these customers are
2. Interview these customers and find out why and how they use your product or service
3. Profile these customers so you can go after other customers with similar characteristics
4. Align your resources to serve these customers more effectively
5. Figure out ways to convert more of your customers into this category of customers

There are many other such imbalances. For example 20% of your products provide 80% of your profits and 20% of your employees produce 80% of your desired results. The point of this post is to get you to diligently look for these imbalances and find ways to use them. If you don’t, it can be deadly to your business.

Why not using this principle can be deadly

Hopefully it is obvious how this principal can be useful to you. It can be deadly if you don’t recognize and use this principle because you will not move forward effectively and you will miss huge opportunities. For example, simply not focusing on the 20% of customers that bring 80% of your profits can cause you to go out of business. This is deadly.

Important note

I know that this is an over-simplification of the Pareto principle. I wanted to keep it simple for the purpose of making it useful. There is a lot of variety in this principle that I plan to present in future posts. For example, it is an over-simplification to say that the split is always 80/20. It is not. It can be 60/40,70/30 or 99/1. The key is that there is an imbalance and we can exploit this imbalance.

Additional resource

For more information check out Richard Koch’s site.

Please let me hear your comments and please don’t keep this blog a secret. Tell your friends. Thank you.

photo credit: Ernst Moeksis

There are many reasons you shouldn’t quit. In this post I share 5 reasons I believe you shouldn’t quit in your endeavor to create or improve your business or your life.

You are probably close to your breakthrough

It is strange the way life works. Many times when the temptation to quit is at its strongest is when you are closest to your breakthrough. It is as though your commitment to succeed is being tested right before reach your goal.

I know you have been working hard to get that next contract, that next business idea, the funding for your enterprise or any other worthy endeavor. I know it has been hard. I encourage you to step back a moment and gain perspective, approach it from a different angle, rest if you must, but don’t quit. Try again because you are almost there. Don’t quit.

Read a great poem about quitting.

You started this for a reason

This quest that you are on, you started for a reason. Take time to remember the “whys” of this endeavor. You did it for your family.  You did it because you believed it would make a difference. You did it to make a better life for yourself. You did it because you wanted to live as a better version of yourself.  Go back and rediscover the reason for your goal and here you will find the reason you shouldn’t quit. Don’t quit.

People are depending on what you are working on

You were put in this world to make a difference. Someone is depending on you. There is some person that deeply needs the very project that you are working on. You are not here just for yourself; you are here to solve a problem. Don’t quit because your project is very important to someone else. Don’t quit.

Even if you fail on this attempt you will have learned something important

You may be thinking of quitting because you are afraid to fail. I invite you to change your thinking about a failed attempt. If you have a failed attempt it doesn’t mean you are a failure. In fact, failure can be very good if you learn from it. Failure is meant to teach you something. Failure is only failure if you don’t try again. Don’t quit.

You don’t want to develop a habit of quitting

Don’t quit because quitting can become a negative habit. When you quit, many times it leads to a feeling of low self-esteem. This can drive you to quit other endeavors when it things get hard. You soon develop a habit of quitting which leads to a string of failures. This creates a vicious cycle and quitting and failure. Don’t quit.

What are some reasons you can think of not to quit? I look forward to your comments.

photo credit: alexdecarvalho

Since this post is so popular I decided to repost it. Please let me know what you think.

So, you have decided to go into business for yourself.   I applaud you. This is big! As an 18  year veteran, let me say that being an entrepreneur is both exhilarating and exhausting.  You love it and you hate it.  It can cause the best of times and the worst of times. Ok, maybe I am being overly dramatic, but you are in for a heck of a ride! (Ok ,I am going to cool it with the exclamation points.)

Before you get started, please allow me to share 7 deadly mistakes that many newbies make and show you how you can avoid them. There are more than 7  mistakes,  however, these can be particularly lethal. Why?  Because their effects can go undetected while they silently and slowly kill your business. 

Deadly Mistake 1. -  Not Defining a Clear Mission

Many new entrepreneurs, excited that they have a new business idea, want to run out and start taking on new customers. Stop. Don’t make that mistake. First, take the time to define a clear mission. This mission should take you beyond just making money.  Here are 3 good questions to get you started:

• How is my business going to be uplifting to my customers?
• What need is it going to fulfill for my customer?
• Why is fulfilling this need so important to my customer?

 In his book Rich Dad’s Guide to Investing , Robert Kiyosaki explains that his Rich Dad said: “If a mission is clear and strong, the business will weather the trials every business goes through during its first ten years. When a business gets big and it forgets its mission, or the mission it was created for is not longer needed,  the business begins to die”.  (Richard actually describes some fundamental keys to forming a winning business, I would suggest reading this section his book (chapters 31-36)).

The mission is what raises your business above the mundane. It breathes life into your enterprise. Don’t underestimate it.

Need help? There are lots of resources you can find doing an Internet search. One such resource is  http://www.missionstatements.com .

 Deadly Mistake 2: Working in the Business but not Working on the Business

This is a classic mistake. I have been guilty of this one myself. This can be especially deadly if you are flying solo. Fred had this problem.

Fred is a computer-networking expert. A friend encouraged him to start a computer networking business to serve small businesses in his town. Fred wholeheartedly opened this business. Fred had a special touch with his clients and he did fine the first year.  He was a technical genius and his clients loved his work. Things were good.

Then it happened…Fred started getting threatening calls from bill collectors,  his accounts receivables were increasing, customer complaints were increasing and he hadn’t acquired a new customer in months. What was happening?

Fred was so busy working in his business that he neglected to work on his business. He was doing all the technical things that a network specialist should do. Indeed, this is what he enjoyed and where he invested all of his time (working in the business).  The problem was that important activities that would allow him to stay in business were cast aside (working on the business). Activities like creating and executing a marketing plan, paying your vendors on time, managing your accounts receivable were simply not done in a systematic way.

How do you solve this problem? A good place to start is as follows:

•  Write out and separate “in the business” and “on the business” activities into 2 categories; 
•  Set aside specific blocks of time to work on the business and only on the business. 

Want to learn more? A classic book that addresses this very subject is  The E-myth Revisited, by Michael Gerber .  It graphically lays out the problem and then provides workable solutions. It is a must read for new and seasoned business owners alike. Also, check out this post Organizing for Growth from his blog .

In my next post I will address a few more of the deadly mistakes.  Please keep an eye out for it.