 |
  |
|
Seeds For Thought
Capturing Your Entrepreneurial PotentialIs it perhaps, someone who is an individualist, a trail blazer, a person willing to take risks and for whom the risks have paid off? Maybe you think of a rough and tough person, an American kind of hero who has made it in our free enterprise land of eternal opportunities. Perhaps, you envision a history book type figure similar to the adventurous pioneers whose determination forged our boundaries. The word, 'entrepreneur' is a noun that serves best as a descriptive adjective. The title 'entrepreneur' doesn't reveal what someone does for a living, but rather, describes an individual's business style. An entrepreneur is a take-charge person of action. Think about your personal work history. Would you describe yourself an entrepreneur? Let's look at the entrepreneurial styles of three people: Joe, Barry and Beth. Joe Sells ShoesJoe has found a niche in the business in the shoe market. Joe intends to sell only luxury shoe brands. To sell shoes for hundreds of dollars per pair, Joe must create an extraordinary retailing environment. Joe hires an interior designer to create a sophisticated ambiance. There is thick carpet on the floors. There is dark paneling on the walls. There are glass backlit shelves to highlight the footwear. There is the soft sound of classical music in the background. Joe offers each of his clients (never customers) a glass of champagne in a crystal flute as they casually browse through his carefully displayed 'collection.' If Joe wants to sell expensive shoes, he must pamper his clients. He does. From the introduction to customers upon entering, to the handling of the expensive sales packaging upon leaving, everything about the store spells, C-L-A-S-S. Following each purchase, Joe will send a "Thank You" note to the client. Not everyone is interested in spending two hundred dollars or more for a pair of shoes. But, some are. And, these some are Joe's clients. These some will pay for the extras that Joe offers. To create an extraordinary retailing atmosphere does not necessarily have to come at an extraordinary price. The classical music is free on the radio. The champagne can be Cold Duck or Champale. The 'crystal' flutes may be from Harry's Bargain Basement Store. The important point is that he has done something different with style, panache. If Joe's research has shown him that he is in a location where a luxury shoe store can prosper, then, he will prosper. Joe can start to build a mailing list of clients. He can start to study these clients and their specific needs. He can adjust his business to accommodate the desires of his clientele. Perhaps Joe will find that his client base for luxury shoes is smaller than he expected. Joe can adjust. Rather than only relying on new customers to increase sales volume, Joe may find avenues to sell more merchandise to present clients. Joe may want to add a luxury leather goods department to his store. He might be inspired by the motto of the Gucci Family, "Quality is remembered long after the price is forgotten." Actually, before he opened, Joe chose to use the French equivalent of his name, Jacques, for business purposes. Somehow, "Jacques' Collection" had more luxury appeal than "Joe's Shoe Store." Joe would probably get along very well with Luciano Benetton, Founder of the Benetton chain, who said, "My business is a love story with the world." Barry Also Sells Shoes
If Jacques is operating and making money at one end of the market, Barry is also operating and making money at the other end.Barry practically sells shoes by the pound. Barry's favorite word is cheap. And, Barry wants his customers to think cheap when they come into his store. The shoes are all piled high in unmarked bins. A customer can spend hours finding two shoes that match. But, what a bargain price! Barry himself is rude. He gives a sharp insulting answer to any of the masses who dare ask him a shoe question. He smokes a smelly cigar. He allows ear-splitting disco music to be played. He does not offer bags. He does not take credit cards. And, if anyone tries to pay by check they are subject to fingerprinting and being photographed. The customers love it. Barry sells a ton of shoes, cheap. How about making your own decision to become an entrepreneur? How about Mike's Office Cleaning Company or Danielle's Secretarial Services or Danielle's Office Cleaning Company or Mike's Secretarial Services? What are your interests and where are your skills? What can you be excellent at? What motivates you? What job can you put time into that will not seem all that much like work? You can get rich young with many small business ideas. Why not start where your interests are? Beth's Ice Cream ShopBeth thinks about the restaurants that she can open. She can spend hundred of thousands opening a first class French restaurant or she can spend a few thousand and open an ice cream/sandwich shop. The choice is safe and easy; almost every city and town can support a number of sandwich/ice cream shops. People eat ice cream and sandwiches. Now, we've got to get them to eat Beth's sandwiches and ice cream. What does Beth need to open her shop? She needs a location. She needs kitchen equipment. She needs signs and other paraphernalia to make the place look like a sandwich/ice cream shop. She needs boxes and bags and napkins and silverware. She needs a victualer and other types of licenses. She needs the ingredients to make her sandwiches and ice cream. J C Penny, founder of the great department store chain, said, "Unless you are willing to drench yourself in your work beyond the capacity of the average man, you are just not cut out for positions at the top." Beth has got a lot of research to do. Beth is smart and is taking a night school class in small business operation. Beth's teacher can help her in general, but the teacher probably doesn't know about the specifics of small restaurant operation. Beth will have to do that investigating herself. The average person starting a small restaurant doesn't do the kind of research that Beth will. How do you think the average person starts a small restaurant? He or she looks for a vacant store. He or she makes a list of necessities and gathers them up. They toss everything together and "Voilà," the restaurant is ready to open. One day there are four sandwich/ice cream shop businesses in town. The next day there are five sandwich/ice cream restaurants in town. But, Beth is going to work a little smarter than average in opening her shop. All small business owners are not created equal. Some are smarter than others. And, some make a lot more money than others. Dr. Armand Hammer, the billionaire oil executive, said with pride, " My batting average has been good, so people ask how much luck is involved. I tell them when I work 14 hours a day, 7 days a week, I get lucky." Can you be a smart sandwich shop owner? Yes. Can you be a smart window washer, a smart rug cleaner, a smart dress shop owner, a smart sausage salesperson, a smart Karate school owner? Five more times, yes. Can you make a good living at any of these businesses? Five more times, yes. Follow the Action Principles. Beth is ready for research. She looks forward to the effort. She learns like never before. Beth has picked the learning agenda. She learns in detail like never before. Beth is learning what she wants and needs to know about her business. This is learning for her and her future. Beth is ready with pencil, notebook and instant camera. She may be the next Ben & Jerry's or Carvel ice cream chain. Dairy Queen presumably has the ice cream business down to some kind of a science. They will research an area before opening a new location. Why can't she? Beth is a detective looking for clues to her success. Study. At rush hour, she goes to a Baskin-Robbins ice cream franchise location. She buys a cone and observes. She observes everything. Details. Mr. Baskin and Mr. Robbins are already a success. What are they doing right? People are paying Baskin and Robbins big cash to buy their franchised formula for running an ice cream restaurant. Can you save the $25,000 or $50,000 or whatever they want for a franchise fee? What makes a Baskin and Robbins franchise click? What are the gimmicks, the hooks, the lures that made certain ice cream shops a success? Beth buys a few cones and she looks. What's on the menu and what isn't? What's the decor? Look for details. Where are the signs? How are the rest rooms identified? What are the employees wearing? Beth knows that all these big chains take nothing for granted. You know that they have PhDs from Harvard Business School telling them what color and size the salt shakers should be. Well, there's the salt shaker on the table. Beth's getting the same answers the franchisees paid thousands to get, for free. Beth doesn't act like a crazed lunatic sitting by herself in a booth taking pages of notes or whispering into a mini-recorder. She wants to be a cool kind of detective. She relaxes, has a cone and observes. When she leaves, if she's learned anything significant, she writes it down. Just by going and casually observing the different franchise operations, a whole lot of other people's research work is open to her inspection. As Beth observes other people's operations, the pros and cons, a picture starts to form of her own shop and how it will operate. Beth investigates the chain operations. Beth learns the franchise formulated way to sell sandwiches and ice cream. If she went the franchise route, she'd be buying some degree of proven safety and a chance to buy napkins in bulk with a thousand other owners. Beth researches and learns from the franchise operations. She continues her investigation to include the top independent shops in the area. How does she know which competitors are tops? She observes. She asks. There are four other ice cream shops in her town. Beth's shop will be their competition. If Beth is average, she'll just take a small scoop of the business that already exists. Not too bad; the other four average owners will accept her competition with a shrug. But, of course, Beth is blessed with the entrepreneurial spirit. She isn't going to be average competition. Beth finds her mentors exactly the same way that Kevin Romano did when he started his restaurant. She can't antagonize her 'in-town' competitors by asking for their assistance in starting her sandwich/ice cream business. She goes to four sandwich shops in each of the surrounding towns. These other ice cream shop owners in other towns won't see her as direct competition and more than a few, probably most, will be happy to discuss their operations with her. In approaching one of these owners, Beth simply tells the truth. She's starting a sandwich/ice cream business. She wants to do what they've already done. They're the experts. She's asking for their advice. What pros and cons do they have to offer? What tips can they offer from their experiences? Which suppliers do they recommend using and which do they advise avoiding? How do they choose and add and delete from their menu? What are their major expenses and what steps do they recommend to control costs? What advertising strategies, if any, have they found to be cost effective? Beth has prepared for her interviews. She isn't fumbling or wasting the person's time. She has her questions ready. Beth asks her direct questions in a friendly, "I really want your help" manner and she receives positive feedback from these other business owners. Beth gains years of experience and insight into the small restaurant business for the cost of her time. Beth goes to twenty shops in twenty days. Each visit will probably only take an hour or two. She makes sure that her visit coincides with a lapse time in the business day. Every night she takes time to compare her notes and ponder her conclusions. Beth understands the tough but true words of the great advertising man, David Ogilvy, who said, "Hard work never killed a man. Men die of boredom, psychological conflict and disease. Indeed the harder your people work, the happier and healthier they will be." Being an entrepreneur in the ice cream business or in any business isn't as much one big thing as it is a lot of little things. Research. Beth became an expert in the sandwich/ice cream business long before the doors to her sandwich/ice cream shop opened. How mysterious is this? Visit other businesses similar to the one that you want to own. Observe all you can. Each day consider and record your observations. Interview non-competing owners in your industry. Lastly, take five minutes and spend a couple of dollars thanking the people who have assisted you. Send a postcard or a note, "Peter, thanks a lot for taking the time to answer my questions. You were very helpful. I'll let you know how I'm making out. Thanks again. Beth." How much time does this little touch take? If one of more of the owners was especially helpful, buy a decent, eight-dollar bottle of Italian wine. Put the wine in a wine bag that costs about a dollar. Deliver the wine yourself. No big deal. No more questions. Just walk in the shop. Put the bottle on the counter. "Pete, thanks again for your help" and out the door. How much time does this little touch take? Any questions in the future, call Pete. "Pete, sorry to bother you, a fast question, who do you buy sugar from?" 
Beth was able to do all of her research part-time before she left her waitressing job.Was all this research necessary to start a sandwich/ice cream shop? Yes. It's a few hours each day for a month that's well worth the effort. A successful entrepreneur never tires of researching and learning more and more about his or her industry. Can an exception to the researching be made for Darrell who has worked in an ice cream shop for five years and now wants to start his own business? Would researching help him? He'd be looking at the business from other sandwich shop owners' perspectives. What would you recommend to Darrell? Take one small part of the business, ordering soda cups. What does Beth do? Look soda cups up in the Yellow Pages. Play hit or miss with different suppliers until she finds a satisfactory product? In the meantime, her initial customers are wondering what the heck's going on? They get a soda in a ten-ounce cup one day, then the next day Beth's using twelve ounce cups. But, let's say that Beth has a mentor, Douglas, from one of the other shops. Douglas has given Beth good advice before, why not now? Beth doesn't have to experiment with ten cups from ten-cup companies. Douglas has already gone through this hassle. Beth can pick up the phone and get years of experience in a single answer. Which supplier sells the best paper goods and operates a dependable delivery service? Ask. Is Beth a pain in the neck with her questions? If she hounds poor Douglas, day and night with stupid questions, that's unfair. Beth must be fair. Remember, she's asking for something for nothing. The Douglases in her business circle must be cultivated. They are valuable resources. Beth keeps her waitressing job and continues her research into a second and third month. She slowly starts planning her business based upon the data she is gathering. Beth starts talking to the "best" sign companies. Beth starts looking for the "best" available restaurant locations. If a suitable location isn't available, she may have to wait a bit. She works out a cost and expense sheet. What will the total start-up costs be? What will be the recurring expenses for food, personnel, etc.? How much income can be expected during the first six months of the operation to offset the expenses? What will your capital sources be to start the business and pay expenses until the operation is in the black? Does she have enough money saved? Can she borrow from family or friends? Can she arrange a bank loan or SBA (Small Business Administration) guaranteed loan? Should she consider starting the business with a working or absentee partner? With a clear concept in mind, Beth will have to begin thinking about promotions and how she will get people to become regular customers. In the beginning, many customers will try her shop because of its novelty. Beth has got to be ready to offer a menu superior to her other four competitors. Because she has done her research, Beth knows exactly what her competitors are offering. Beth wants her initial customers believing that her sandwiches and ice creams are worth the drive of an extra block. One person who likes what she sells may tell ten other people. Favorable word of mouth advertising is important for a new business. And, people are always curious about new businesses. The first few months of operation is not the time to cut corners. This is the time to offer more for less. If Beth has to spend more to offer the best, then she has to spend more to offer the best. Newspaper and other forms of media are expensive for new businesses. Does Beth really need to have the largest and costliest ad in the Yellow Pages? Does she need any listing beyond the free listing? Different types of businesses must rely on strong newspaper and Yellow Pages advertising but usually not sandwich and ice cream shops. In Beth's case, through inexpensive thoughtful promotions, she begins to build a solid customer base by word of mouth. Friendly, prompt service and a fair value for the dollar build strong word of mouth advertising. Word of mouth advertising is often the best advertising and the cheapest. Beth knows that it is only the people who walk through her shop door who are going to give her the money to pay her bills, pay her salary, increase the value of her business and eventually make her rich. Beth needs her customers and she never lets them forget that fact. And, when she hears, "Thanks, Beth, that ice cream was great." Beth isn't shy. She says, "Thanks, I appreciate your comments. And, I'd appreciate anyone whom you can tell about the shop. Have them mention your name when they come in." If there is a customer who does send her some new business, next time she rewards that customer with a sincere "Thank you" to him or her and a free cone. Beth does extraordinary things for her customers in building her extraordinarily successful business. Entrepreneurs know how to make choices. Beth could easily spend $500 for an ad in the Yellow Pages. But, instead she considers how that $500 could be put to a better, more entrepreneurial use. She reasons, what does it cost you to make a quart of ice cream that you sell for $4.00? Maybe a buck. That means that she can either have the Yellow Page ad or she can have 500 "free" quarts of ice cream to give away. You'll get a free line listing in the Yellow Pages, anyway. Five hundred "free" quarts of ice cream. Or, a 1,000 "free" cones of ice cream. Think of the promotions she can run with a 1,000 free ice cream cones. Free cones for every boy or girl scout on July 4th. Free cones to every senior citizen on the first day of each month. Give a free cone to everyone on their birthdays. How about a free cone with every half-gallon purchased? Or, a free cone after buying 10 cones? The extraordinary efforts of Beth leave her competitors in the dust. Her fame and name will spread quickly. The fact remains that most small businesses fail within the first few years of operation and it doesn't matter whether it's a beauty shop or an ice cream shop. Why? In many cases, the answer can be traced to the fact that the owner was a know-it-all who felt that he or she didn't need to research. These owners thought that they were smarter than everyone else in the business even those who had survived the test of time in the business. But, know-it-alls never fail for any reason of their own. How could they? They know it all. Know-it-alls always fail because the global economy failed or for some other excuse totally independent of their ideas or efforts. Beth knows that an entrepreneur doesn't presume that enough is enough when it comes to ingenuity. She will keep doing research, keep looking at the competition and new trends in the restaurant industry. Eventually, Beth will find something that clicks. With perseverance, the odds improve that she will find a new or innovative product or a marketing gimmick that makes her business take off. She may be ready to expand her one shop into a larger restaurant. Or, she may want to open a second location. Beth's extraordinary success will give her options. She may decide to choose one or stay happily doing what she is doing. Success will give her the choice. How can Beth get rich? Beth is an expert at opening small sandwich/ice cream shops. Is that so bad? No, it's great. Let's say that she makes $500 net per week from one shop. If she opens up three more average ice cream shops, will she net $2,000 per week? How about eight shops? Now, Beth is smart enough to realize that opening up a string of shops has its pros and cons. She'll be doing more supervising of employees rather than doing the actual work herself and that may be good or bad. She'll be able to do more group buying like franchises and that's good. Maybe she'll be able to design a profit incentive program for her managers based upon their performance? Maybe some managers will turn into store owners with the assistance of Beth. An entrepreneur is always looking at his or her business from as many different vantage points as possible. Can the present location be expanded? Can other shops be opened? Can the concept be franchised? Can proprietary products be offered elsewhere? Can one shop be sold? Can the whole chain of shops be sold? You don't have to take any of these options. You just have to keep your thinking fresh and your mind focused by considering them. You also have to keep a constant eye on developments by competitors and the industry as a whole. You want to be on pace with or ahead of trends in your industry. You don't ever want to become complacent, taking your customers for granted and lagging behind your industry. Remember, if you don't keep moving ahead, you will surely begin to hear the footsteps of young competitors behind you. Lesson Ten ResourcesGo to Lesson Eleven5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15Index
|
|
 |
© Copyright 1994-2008, American Success Institute. The Action Principles® is a registered trademark of the American Success Institute. We are a nonprofit research, publishing, and educational corporation headquartered in Natick, Massachusetts. |
 |