Here’s a situation that may sound familiar to many small-business entrepreneurs. A very bright woman, let’s call her Betsy, has a business providing ESL (English as a Second Language) instruction to corporations in a Spanish-speaking country where she lives. She works for some big firms in her market area and has a great reputation. Historically, her students have been engineers and other middle managers, and her client has been the HR department. Now, with the economy in recession, her pipeline is not as full as it once was. Training budgets–at least for middle-level employees, are being slashed. She feels nervous about the future of her business. If this trend continues, she will have difficulty making ends meet.

Here’s what our coaching led her to consider as she navigates the current turbulence with a view toward turning a problem into an opportunity:

• Plan your future market strategy. Are middle-managers your ideal clients? While they have been your bread-and-butter up until now, what about C-level executives? With business becoming increasingly global and more competitive, the advantage of being completely comfortable with English is no small issue to CEOs, COOs and others in the corner office. While Betsy’s business model up until now has been teaching classes of a dozen mid-level people at a time, she could reposition herself as an ESL coach working one-on-one with senior management–and charging a multiple of her current fees.
• When business contracts, go broader and deeper. She has identified a market of 20 companies in her area, mostly Fortune 500 technology firms. That’s a great start, but what about the hundreds of companies just under those big ones? Would their top-level executives perhaps have even a greater need for ESL coaching? And what about other-than-tech sectors–tourism, for example. Wouldn’t an up-and-coming hotel general manager need excellent English to advance in her company?
• Get in the business networking mix. How will Betsy get in front of these new prospects? She hasn’t spent a lot of time thinking about (or engaging in) business networking. But she’s smart, attractive and engaging and should have no trouble building a referral network through attending Chamber of Commerce events, joining a business referral group and making sure everyone she knows is aware of what she does.
• Craft a new message. When Betsy does get in front of these high-level prospects, what will she say? We talked about imagining meeting a potential client at an event. What would you say to introduce yourself? How would you find a way to ask, “Are you less competent in English than you want to be? Is that holding you back? Why do you tolerate it? Do you want to do something about it? What would it be worth to you to leave your insecurity about communicating in English behind you forever?”

Many small-business owners cling to their original business model, whether it was a model they intentionally conceived or one that evolved on its own. Entrepreneurial business has to evolve to survive. Betsy’s business teaches some valuable lessons about identifying new market segments, repositioning existing services (perhaps only slightly) to appeal to new customers, and evaluating pricing structures to be in line with customers’ expectations.

What else would you have advised Betsy to do or think about?

Tags: BNI, Entrepreneur, market segmentation, recession, success

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A great inspiration came today, as it so often does, from one of my entrepreneur coaching clients: How do you make sure you reach an important goal–in this case doubling sales in the second half of the year vs. the first half?

If you are moving up in the world, getting higher-value clients all the time, but still driving a six-year-old Honda Civic, the answer may be the one he came up with: Reach the goal and give yourself a reward that fits the accomplishment and where it takes you and your business.

My client’s reward: the 4.0-liter, V-8, 414 horsepower BMW M3 Convertible above. This goal and the car are not an abstraction. I am completely convinced he as good as owns this car right now. He regularly calls his dealer salesperson to ask him, “How’s my new car doing?” even though he won’t be “picking it up” until January. I’ve already reserved a cruise on the first sunny day after he’s got it.

This is the same client who recently needed to reach a particular business objective and wrote a check for $1500 to a political candidate he detested; gave the check to his best friend and told him to mail it if he didn’t reach his goal within a specified time period. He reached the goal and the money went to buy a new wardrobe.

A great by-product of setting an ambitious sales goal is that is forces the entrepreneur to evaluate all aspects of the business. Driving top-line sales is obviously the most important objective. But speeding up accounts receivable, building an active and efficient referral network, engaging in new business development activities that will spur revenue growth, getting clients to use new automated systems and tools to manage projects–all go a long way to making it possible to reach a stretch sales goal.

Have any other creative ideas for entrepreneurial self-rewards? Send them my way.

Tags: Entrepreneur, incentives, motivation, rewards, success

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Sometimes entrepreneurs can be the victims of their own success. Here’s a situation that may sound familiar: your own a service-oriented business with one full-time employee—you. You have had hundreds of clients over the years. You use subcontractors to do certain jobs that you don’t have time for. You are really busy and business is very good. But you feel overwhelmed. There are a couple of problems you’ve identified.

1. The Tail Wagging the Dog: Your have a subcontractor to whom you give a great deal of work. But he’s mercurial. Sometimes he’s prompt and communicative, other times he vanishes. Sometimes he makes you feel like you work for him. Every time you take on a job he’s your go-to guy and it makes you queasy.
2. This Business Would Be Great if It Weren’t for the Customers: You have clients who love you and come back to you again and again. But they are constantly late meeting deadlines for feedback that will enable you to get to the next stage of the project. This costs you money and adds to your stress level.
3. Small Potatoes: To paraphrase one of my least favorite figures from American history, you go to war with the customers you have, not the customers you wish you had. You have lots of smallish customers who are price sensitive. You wish you had big customers who were less penny-pinching.

Despite the problems, business is good. You feel successful. Just not as successful as you’d like to be. And the level of success you have creates inertia: You don’t want to rock the boat for fear of capsizing. Well, to paraphrase that dreadful American once more, small business is messy. But it can be cleaned up! Corresponding to each problem above, do these things and your effectiveness in, and enjoyment of, your business will soar:

1. Show ‘Em Who’s Boss: If you use subs, you must have a locked-down, no-nonsense, no-exception, written and iron-clad contract they sign and live up to. Sounds complex but isn’t. Write down in plain English exactly what you want and expect from your subs, and give that document to a lawyer. She will turn it into a contract. Best $750 you ever spent. (If it costs more than that, get another lawyer.)
2. Be a Client-Whisperer. Clients will stop bucking you in the head if you train them! Give them a process for working with you and lay it out at the start of a project. Make sure they understand their responsibility and accountability to the project and its outcomes. Create deadlines that are real. Think about building in incentives for meeting deadlines, or disincentives for failing to meet them (a rebate or a penalty). They will respect your taking a disciplined approach.
3. Go Big-Game Hunting: It’s as difficult to service a small account as a big one, so you may as well have the big ones. If you don’t have them right now, is it because you feel unqualified to handle them, or just fearful? Do you honestly believe you can handle bigger clients and service them better than anyone else? If so, the only thing stopping you is, perhaps, not having a locked-down, bolted-in process for managing your business. Get that done and the rest will follow.

Tags: customer service, Entrepreneur, success

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The single most important success factor for entrepreneurs is choosing the right business. Many entrepreneurs make their choice based on what they have done successfully in the past or what they are naturally good at. Those are important considerations but there’s one thing that’s much more critical—and easy to overlook: the lifestyle you want. I know–how un-American! We’re supposed to pick a business by the scale of the opportunity, the size of the payoff, the hockey-stick curve of the spreadsheet, the number of toys!

Try putting lifestyle first as a filter for possibilities you will consider. Say you love the excitement of a retail environment, and you also love gourmet coffee. So, perhaps you want to open a café. Except….the hours are 6 am to 10 pm weekdays and 6 am to midnight weekends. Are you up for that lifestyle? You think you’ll hire a manager to work the non-lifestyle hours? Nah. You gotta make the donuts! You won’t manage yourself out of the underlying lifestyle, not for a few years, if all goes well.

Another example: you are a superstar salesman but got fed up with all the travel so you left your corporate job. You’re thinking of launching your own media rep firm. Wait a sec! Didn’t like travel then? It’s going to be worse now, because you’re paying. No more favorite airline. (Does anyone still have a favorite airline? Not to mention the only flying perk left is a free can of soda and a big helping of attitude from your flight attendant.) If you really were sick of business travel, no matter how many clients you might have on Day One of your new startup, you are getting into the wrong business.

How do you identify lifestyle considerations first? Honestly answer these questions for yourself and then use your responses as an absolute, totally fortified boundary for what you will or won’t do:

1. How many hours a week do I want to work?
2. What kind of people (customers, employees, co-workers) do I want/not want to have around me all day?
3. Do I want to travel for business and if so, how much?
4. What are five family events I missed because of a current or previous job that I will make a commitment not to miss again? And how will I choose a business that ensures this?
5. What kind of person am I?

On the last point, it’s a good idea to take an assessment test like DISC or Myers-Briggs. They are inexpensive and interesting. I’ve taken DISC many times and my independence score comes up aberrantly high every time—which means I have a big problem with authority, as most of my former employers will attest. It helps to know yourself and seek out business opportunities that fit well into your personality type. For example, if you’re super-independent, franchises may be a bad idea because you may have trouble following a system–and that’s what you are buying with a franchise.

Have I missed important questions to ask yourself to figure out the right business for you? Do tell!

Tags: Entrepreneur, lifestyle, success

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