Tag Archives: entrepreneur

A rant about business plans: When was the last time you looked at yours?

By Aaron Hoos on May 3, 2013 in Business

When was the last time you looked at your business plan? Last week? Last year? Last decade? The day before you officially opened for business?

In my experience, surprisingly few people write a business plan (I made exactly that mistake!); and those that do, write it and then let it grow dusty on the shelf, as if the plan was just a small and annoying step that needed to be checked off of the list. I’ve met many people who spent more time fretting over a new car purchase than the start of their business. They don’t mind pouring over vehicular statistics and comparing models of the car they’re going to drive (which will immediately depreciate as soon as they drive off the lot) but they’ll cringe at the thought of writing some ideas, strategies, and financials down to give a little proactive thought to an investment of their time, money and effort that should appreciate over the years. Heaven forbid that they do a little business planning now to figure out the trajectory of their company for the years to come!

I think part of the problem is the we we perceive business plans. They are often thought to be stuffy, formal documents. They are thought to overflow with buzzwords that would make any MBA drool. Their numbers are said to be nearly meaningless. In many ways, these documents need to be written at the worst possible time — usually the point when the aspiring entrepreneur feels the most passionate and energetic about their business and they just want to get out there and take action… they don’t want to get bogged down in research and details and buzzwords and proformas. Business plans are perceived to be soul-crushing documents that are purely optional and typically only written by the anal retentive and extremely cautious.

But good business plans aren’t like that. They shouldn’t be stuffy or stuffed with buzzwords. A good business plan doesn’t have to be arduous to create and highly formal in how it’s structured and written. A good business plan shouldn’t crush your eager-to-start spirit — it should stoke the coals of your imagination and motivation by sharpening your focus. (Mixed metaphor alert).

A good business plan is meant to be used, not stored on a shelf. A good business plan should be both strategic and tactical, and something that a business owner can refer to every single day. Yes, a business plan is a high level document that you might use for banks or investors but it should also contain your operational plan, your sales funnel (your marketing and sales plan), and contingencies for when things go horribly wrong. It should inspire and guide… EVERY TIME YOU LOOK AT IT.

Heck, don’t even bother getting a professional to write it (unless you are going to use it to help you find investors). Just sit down and do it yourself. Roll up your sleeves and dig in. Write your goals and then the steps you want to take to get there. Create financial statement projects and proformas that are useful for you. (Tip: Create 3 versions of each financial statement — a set of high projections, a set of medium projects, and a set of low projections). Research. Add information based on what you’ve seen so far (if you’ve been working in the industry already). Create a document that you can hand off to someone else while you go away for a year-long vacation and when you get back, they’ll have built the exact business you had dreamed of!

Starting and running a business is like going on a long journey — it’s best accomplished when you have a map that you can refer to, which will help you get to your destination.

Like a map for a long journey, it’s not something you should write once and put away. It’s something that you should leave open on the seat beside you while you drive. When you’re not sure where to go, you can consult your map. When you’re tempted to veer away and chase new ideas, you can be reminded of the original plan. When you are forced to take an unexpected detour, you can get back on track. THAT is the value of a business plan.

If you haven’t looked at your business plan in weeks, months, or years, go get it right now. (Do you know where it is?) Dust it off and look it. Is it practical? (Probably not since you haven’t looked at it in so long). So figure out what you can do to make it practical. My suggestions are:

  • Erase the buzzword-filled nonsense that doesn’t help anyone. Replace it with some unpolished ideas in raw form — specifically, big-picture goals, smaller-picture goals, and the actions you’ll take to get there.
  • Write about how you want your business to grow, what you plan to do to get it there, and what you’ll need to scale up along the way.
  • Create financial projections that actually mean something by doing a bit of research and writing 3 sets of financial statements, with high-priced assumptions, medium-priced assumptions, and low-priced assumptins.
  • Add an operational plan.
  • Add your sales funnel (a marketing plan and a sales plan).
  • Add in your document templates, logo variations, branding rules, operational checklists, etc.
  • List contingencies and plans to implement them if the need arises.

If you have never created a business plan, do it now. Here are a couple of good sites to start with. These sites contain a mix of information, step-by-step instructions, and even templates to get you started.

Go and make your business plan useful to you!

Aaron’s Answers: Should I buy an existing business, buy a franchise, or start my own business?

By Aaron Hoos on April 26, 2013 in Business

There are a lot of choices to make when starting up a new venture. One of the things that entrepreneurs have to decide is whether or not they should buy an existing business, buy a franchise, or start their own business. Each one offers advantages and disadvantages that must be weighed.

BUYING AN EXISTING BUSINESS

Buying an existing business is one that has already started; one that has been marketing, selling, and earning revenue from a client-base. It might be in various stages of start-up — perhaps a relatively new company that the founder is selling, or perhaps a well-established company from which the founder is looking to retire and move on.

I think you’re looking for two types of businesses: Either, you’re looking for an established clientele, positive word of mouth, a strong supply chain, good processes, and strong financials that you can buy, walk in on day one, and continue earning profit; or, you’re looking for a business that is currently struggling but has potential to grow.

Compared to the other two options (buying a franchise or starting your own business), you’ll need a comparatively large amount of money up-front to get into this business because it’s established already. But the advantage is, you can potentially start earning an income almost right away (depending on the stage of the business and whether or not the previous owner was active and successful in the business prior to your buying it). Expect to pay more for a healthy company that has existing cash flow.

BUYING A FRANCHISE

Buying a franchise is when you buy a brand and marketing system from a company for a business that hasn’t yet started. This is a nice hybrid model between buying an existing business and starting your own. The business may not be started up yet but you are shortcutting the process with an established and recognized brand, and a business system already in place.

You’re looking for a company that has a strong, positive presence on a larger scale (i.e. in the national market) but has not saturated your marketplace. Look for a franchise that provides support and education and all of the marketing tools you need. Perhaps compare several franchises within the same industry to identify the best one for you.

Expect to pay a franchise fee for the right to use the brand and the business system, and expect to put in time to grow your business. Depending on the franchise, the up-front fee and the ongoing fee could be small or large. If you have some money and some time, but you want a slightly faster start with an established brand, this might be a good option for you.

STARTING YOUR OWN BUSINESS

Starting your own business is the third option. It’s when you create a brand from scratch and build your own business model and products or services.

You really are starting from zero and building it up from there. Not surprisingly, it can take longer to do but many entrepreneurs prefer it because they have the most control over the process plus it generally has a lower “cost” to start.

There are costs, including financial costs, but most of the costs are likely going to be your time. And it might take a while before you establish your brand and start earning money. This is an advantage for people who want to start a business part time while they are working. But be prepared to spend a lot of time! The fail rate is potentially higher with these types of businesses because they can take a while to get off the ground and there is a lower-perceived cost to start them.

SO WHICH ONE IS RIGHT FOR YOU?

The short answer is: It partly depends on how quickly you want to earn money, and it partly depends on how much money and time you have available. (There are other considerations but these are the big ones, in my opinion). If you want to earn money as quickly as possible, buy an existing business; if you have time, start your own business. If you have more money than time, buy an existing business; if you have more time than money, start your own business.

Marketing is an investment. What’s your marketing’s ROI?

By Aaron Hoos on February 9, 2013 in Business, Portfolio

Marketing is an investment of time, effort, and money. Entrepreneurs invest these valuable assets in the hopes of getting a return (i.e. a response by prospects that leads to more business).

All of your business’ marketing is an investment, which means you need to decide whether or not a marketing effort is worth it based on the return on that investment.

Recently a business information resource site, I wrote an article called 5 Laws of Marketing ROI in which I outlined 5 useful rules that will help entrepreneurs make decisions about the return they can get on their marketing.

Check out the article here:

5 Laws of Marketing ROI

(The above link opens in a new window and sends you to the article on EvanCarmichael.com)

 
 
 

The four questions every entrepreneur should ask before embarking on a new joint venture

By Aaron Hoos on November 22, 2012 in Business

I love joint ventures. They are a great way to combine the strengths and resources of two or more entrepreneurs to create a business or project that is meaningful and profitable and satisfying.

(Want to read more about joint ventures? Check out what I look for in a joint venture and be sure to check out this guide to joint ventures for entrepreneurs)

I’ve been in some successful joint ventures and I’ve been in some unsuccessful ones. What was the difference between the two? There are several things that can make a difference but they can be boiled down to the answers to these 4 questions, and when I think back to many of the joint venture projects I’ve worked on that failed, the reason was related to one of these 4 issues.

1. What will it take for this project to become successful and does that effort fit in my current schedule?

It’s easy to look at a project before it gets started and to get starry-eyed about the opportunity… only to overlook the sheer volume of work required for the project to succeed. When you’re thinking about the anticipated effort, generously double what you expect to do on the project. It always takes long.

In JVs that I’ve worked on that have succeeded, they only succeeded because we worked through regardless of the effort. In the JVs that I’ve worked on that have failed, they failed because we didn’t accurately anticipate the workload ahead of time.

2. Are all parties likely going to deliver what they promised?

This is a big frustration in joint ventures. Make sure that all parties are going to deliver on what they promised. In many JVs I’ve participated it or observed, some of the parties are wholehearted while other parties are half-assed. Try to assess the likelihood that all parties will continue to participate once the going gets tough. In particular, consider whether the incentive or remuneration plan rewards people proportionally to their contribution or they will be quick to disappear. In one joint venture I did a ton of work in the beginning to write an ebook and then the person responsible for marketing just disappeared. Not cool.

And related to this concept: Figure out what happens if the joint venture fails. What do you end up with? Can you use it elsewhere?

3. Once successful, will my workload decrease while profits increase?

This is another huge one. I’ve been in a couple of failed joint ventures that only failed because my workload INCREASED (or at least stayed the same) after the project became successful. In other words, the deal should have been carefully structured to ensure that success rewarded us rather than punished us. I’m okay with putting in a bit more time at the beginning but I don’t want that excess effort to continue into infinity.

4. What’s missing and how critical is it?

Every joint venture is like a machine, and each person is responsible for some of the moving parts. But a machine won’t work the way it’s supposed to if parts are missing. As you think about your joint ventures, consider what parts are missing from the existing relationship… and how you’ll have to address those parts. For example, a joint venture might be made up of two people who are each making a key contribution but no one is marketing the project. Those things need to be addressed early on or else the project will stumble as each party realizes there is still more that needs to be done or invested in.

Joint ventures are fun and profitable. But not every JV is right to participate in. Use these four questions to help you evaluate joint ventures before you participate in them.

How to be an Olympic-level entrepreneur

By Aaron Hoos on July 23, 2012 in Business

Later this week, the 2012 Summer Olympics will begin with an opening ceremony. Then, we’ll watch as athletes from around the world compete over two weeks in competitions like wrestling and track and BMX cycling and badminton. (As a Canadian, I’m pleased to see hockey in there, although I’m not sure why it’s included as a summer Olympic sport).

As we get ready for these events, I am reminded of what it takes for an Olympic-level athlete to earn the right to compete in the games: This isn’t a competition among weekend hobbyists or junior-level enthusiasts. The winner of the gold medal in each category can proudly call themselves the very best in the world. THAT’s an achievement!

And just like there are different levels of athletes, there are different levels of entrepreneurs — from the wannabes who sit on the couch and dream to the hard-working amateurs who grind it out everyday to the top-level masters who train relentlessly and can truly be called the best in the world.

During the 2010 Olympics, I created a list of 31 qualities that make up an Olympic-style entrepreneur and I’m listing them below. If you’re an entrepreneur, what level are you playing at right now? What level do you aspire to be? And what are your plans to get there?

To be an Olympic-level entrepreneur…

  1. … you need to remember that there is a right time for training, parading, competing, and reveling.
  2. … you need to be ready to leverage your success.
  3. … you need to trust your teammates to perform at the expected level.
  4. … you need to pick yourself up after failure.
  5. … you need to sign up for the whole package.
  6. … you need to work at a higher energy level.
  7. … you need to be willing to fail.
  8. … you need to be willing to go where you need to go.
  9. … you need to ignore the competition.
  10. … you need to slow down only after you’ve crossed the finish line.
  11. … you need to control as many factors as you can.
  12. … you need to recognize that things will be different after… then prepare for it.
  13. … all of your life centers around this moment.
  14. … you need to play fair to win.
  15. … you need to love what you do.
  16. … you need to overcome obstacles and use them to grow stronger.
  17. … you need to have the right gear.
  18. … you need to understand and embrace the extreme risk/reward relationship.
  19. … you need to go when the starter pistol fires.
  20. … you need to be single-minded while competing.
  21. … you need to decide to be an Olympic-level entrepreneur.
  22. … you need to find your optimal competition zone.
  23. … you need to always be training.
  24. … you need to make improvements, however small.
  25. … you need to make sacrifices.
  26. … you need to be part of a team.
  27. … you need to know your competition. Really well.
  28. … you need to climb the proficiency ladder.
  29. … you need to understand and accelerate your processes.
  30. … you need to be confident in your delivery.
  31. … you need to master one thing.

The 3 most important skills every entrepreneur MUST master

By Aaron Hoos on July 12, 2012 in Business

I periodically assess where I am in my business and how I want to push myself and my business further. (It’s not a formal assessment but rather just a review of what is going well, what isn’t going well and where I need to spend more time.)

The same three results keep coming back and, as I talk to other business owners, I’ve come to realize that these three areas of growth aren’t exclusive to me. I believe they are the 3 most important skills every entrepreneur needs to master.

1. RELENTLESS FOCUS

Owning a business means wearing many different hats. And the more successful your business, the more hats you end up wearing (even if you try to delegate some of it). It’s SO easy to flit from one responsibility to another as you try to connect with prospects and customers and vendors and peers, as you try to market your business and deliver on the promises of your marketing, and as you try to achieve that ever-evasive “life balance” that we all hear so much about.

What happens (at least in my business and the businesses of some of my friends and clients) is that you touch different aspects of your business each day without actually moving those aspects forward significantly. You end your day feeling productive without actually having made a lot of changes in your business.

Achieving a highly skilled state of relentless focus solves the problem. Although it doesn’t take away from the number of hats you wear, it helps you to concentrate on just one thing until you’ve dealt with it.

There are two parts to this equation:

  • Focus: You can temporarily block out all of those other important things vying for your attention and concentrate on just one thing until you do something significant in one particular area
  • Relentless: You keep at it without fail until you’ve made progress

So entrepreneurs who want to grow their businesses effectively need to improve their focus and their determination to be complete the activity. There are some good (and not-so-good) resources available online to help entrepreneurs learn to focus.

If you can get past the first 2 and a half minutes of this video, which are less helpful, you get to a fairly decent exercise on focus.

2. SALES

Owning a business is awesome. It feels good. But too many aspiring entrepreneurs get caught up in the idea of being a business owner and they forget one important thing: Businesses sell stuff… and selling isn’t easy. The marketing part can be fun and creative and easy but the sales part is much harder and takes… well… relentless focus.

The better you are at selling, and the more consistently you do it, the more successful your business will become. So developing a personal curriculum on selling will transform your business. (And I should add an important qualifier here: When I say that you should study sales, I mean that you should study the art of telephone or in-person selling EVEN IF your business doesn’t rely on these methods to sell. The skills you learn from studying these types of sales will translate into other aspects of your business.

To improve your sales skills, study the following things…

There are other things you should learn, too, like how to handle cold-call rejection and this 2-minute tip to proactively analyze your likelihood of making a sale. Here are 37 ways to improve your selling skills.

3. THRIVING IN ADVERSITY

If you had asked me six months ago what the most important skills of an entrepreneur were, I’d probably the list above two. But lately, I’ve come to realize that handling adversity is a HUGE skill that needs to be developed. (For that reason, it has become a top focus for me this year). Businesses face adversity all the time — sometimes of their own doing and sometimes outside of their control. It might include bad customer reviews or the turning tides of the economy or a vendor who decides to pull the plug or a customer who doesn’t pay their bills. There are so many things and I can’t possibly list them all there.

Learning to thrive in adversity is a two-step process:

First, entrepreneurs need to anticipate as many problems as possible and build contingency plans around them. Keep those contingency plans up to date, easily accessible, and step-by-step. That will minimize the amount of adversity you face.

But it won’t eliminate it. For that reason, there’s step two…

Second, entrepreneurs need to built a good adversity-handling system. It’s too easy to let adversity pull you off your game and grind your business into the ground. So an adversity-handling system is sort of a contingency plan when you don’t have a contingency plan! Your adversity-handling system might go something like this:

  1. Pause. Don’t act! Get some space from the situation. Check your attitude.
  2. Take some time to de-stress so you can approach the problem with a clear head
  3. Sit down and explore as many scenarios as you can, ranging from lose/lose to win/win
  4. Consider the costs and benefits and challenges of implementing some of the ideal solutions, as well as the motivations of the people involved
  5. Move forward with a plan

(There might be more steps than that but those are some of the bigger ideas you’ll want to include in your adversity-handling system).

To improve your adversity-handling skills, you need to develop your own adversity-handling system and then improve each aspect. Find creative tools to help you find solutions; strengthen your ability to bounce-back instead of letting fear or frustration freeze you solid; develop skills of decisiveness so you can act quickly; and (one of the most important of all) learn to shake it off so you can keep going.

MAKE TIME TO GROW

These three skills are foundational to any successful business. No entrepreneur ever truly finishes learning these three skills. They are skills that can always be improved.

Develop a personal curriculum for each of these skills and spend time weekly (or even daily!) mastering these skills.

Confessions of an ineffectve executioner: Qualities of a great finisher (part 3)

By Aaron Hoos on June 1, 2012 in Business

I always have ideas bubbling in my head. I get them down on paper. I sort through them. I start a bunch. I finish much less than I start.

I’m okay with that to some degree because I believe everything in business is a test. You need to get something out into the world and see what happens. Maybe people run with it. Maybe they don’t. You need to try. The stuff that gets a lot of attention can give you enough juice to finish it. And the stuff that doesn’t get a lot of attention should be wrapped up (or shelved and looked at later if conditions change).

But then there’s a whooooole bunch of stuff in the middle. Maybe the market liked it (but didn’t love it) and you need to tweak it a bit to really get some traction. Or maybe it was a big project that was put aside because something else appeared on the horizon that needed to be dealt with… and then you just never picked up the first project.

In my opinion, it’s okay to start a bunch of stuff and see what sticks. But I also want to finish a lot more than I do. If you’re reading this, maybe you do too.

I’m an entrepreneur. I think that makes me a great starter by default. That’s my natural state. What I want to do is ALSO become a great finisher. Here are the qualities that a great finisher has, plus notes on how to implement them (or how I’ve implemented them). This list isn’t definitive and some of the qualities overlap or are subordinate.

But the best part? I believe they’re all LEARNED skills. And I want to learn them. (By the way, if I’m missing any qualities you think I should add, please include them in the comments section below.

QUALITIES OF A GREAT FINISHER

An effective finisher fights through procrastination: I think procrastination comes from two things — a desire to avoid the hard work that lies ahead and a “Shiny New Object” syndrome where something newer and more exciting seems more interesting. Each one is very powerful on its own, but together they are an almost unstoppable force. The biggest challenge for me is that I don’t procrastinate by doing some hobby or leisure activity. I procrastinate by doing different work. So I end up fooling myself into thinking I’m productive when I’m really just being productive on the wrong things. To correct this, I need to constantly go back and revisit the things I’ve committed to and prioritize them, and assign some projects as “must-do-now” and other projects as rewards for completion.

An effective finisher breaks big projects into smaller ones: This has been really helpful for me. By breaking big projects into smaller ones, I get the joy of “starting” several new projects that call contribute to the big, overall one. So a big, daunting book becomes 16 smaller, easier-to-start chapter-projects (for example).

An effective finisher seeks accountability: Early in my days as a writer, one of the best ways that I got client work done was to offer a guarantee: The work was free if I didn’t deliver it on time. I’ve stopped offering that (mostly because my business has changed and I do far less client work now, and it’s a lot more collaborative). So I’ve had to find other outlets for accountability. This blog series is one of them.

An effective finisher acts: Action is the opposite of procrastination. So a finisher overcomes procrastination (see my earlier point) with focused action that moves toward the goal. (Anything else is just a new kind of procrastination). A finisher who acts is an action figure!

An effective finisher is not distracted: I tend to think of procrastination as intentional and distraction as unintentional. With procrastination, I choose not to work on something because I want to work on something else instead. With distraction, some other matter needs my attention first. I might be splitting hairs on this but I find that I, personally, need to fight both. The solution to both is focus.

An effective finisher is focused on the goal: This is key. Because anything less than moving toward the finished product or end goal is either intentional procrastination or unintentional distraction. I should also point out that the goal here should be the ultimate completion of the project. Any lesser goal is not sufficient. I’ll give you an example that frequently appears in my life: In writing a book, my goal is to finish the book. But after the grind starts to grind me down, my goal becomes “finish the first draft”. And when that’s done, I’m worn out to complete the rest of the project — the second, third, fourth, (etc.) drafts required to complete the book.

An effective finisher does the hardest things first: I don’t know if this is an actual quality that great finishers have but it’s a quality that I *think* they have. It’s a quality that I aspire to possess and I try to model it. I am at my most productive and focused early in the day so it makes sense to do it. What I really need to guard against (and perhaps you do, too, if you struggling with finishing) is dealing with the urgent issues in the morning and letting that define how you spend the rest of your day.

An effective finisher is consistent: Good finishers are consistent. They show up and hammer out the work day-in and day-out until the project is done. Starters tend to spike. Finishers plod through. Both are good but I trend towards the first and need to have more of the second.

An effective finisher sweats the details: I think one of the reasons that starters struggle is that they get excited about the big, positive, undefined stuff but once the details start coming up, it becomes a challenge. I’m learning to embrace details. A few years ago, I worked on a huge project with a guy who was great in the details and although he doesn’t know it, I learned so much from him about managing the details. I still use elements in my work today that I learned from him years ago.

An effective finisher is rewarded by the process and by a sense of completion: This was a big “aha!” moment for me. I feel rewarded when I start something and I feel rewarded when I complete something. But where I really need to do some work is in feeling rewarded by the process. The process CAN be fun. But it’s all up to you to make it enjoyable for yourself. Many of the projects I’ve had to stop working on were not fun. In retrospect, could I have made them fun? I don’t know. Lesson learned.

Can you list any other qualities that finishers have, which starters could do a better job adopting? Put them in the comments!

THE FINISH-WHAT-YOU-START CHALLENGE

In a previous blog post, I introduced a finish-what-you-start challenge. I listed 14 projects I have to complete in the next 10 days and I’m sharing them here with you. I’ve crossed them off as I go through them.

The projects I’m working on are…

  1. Finish an ebook for a real estate investor about investing in empty land
  2. Finish an ebook for a real estate investor about wholesale investing
  3. Finish an ebook for a real estate investor about marketing system
  4. Finish an ebook for a real estate investor about a real estate investing method he pioneered
  5. Finish a book for a debt repair expert
  6. Finish a sales letter for an internet marketing company
  7. Finish a sales letter for a health and fitness company
  8. Finish a sales letter for a social media marketing firm
  9. Finish 100 articles for an income trust client
  10. ((Rescheduled by client: Finish a report and autoresponders for video marketing site))

So I’ve finished 3 (indicated by the crossed off projects) and one of them was rescheduled by a client (indicated by the parentheses). I put some work in on a couple of the others… and I hate to admit it but some of them weren’t touched.

It’s easy for me to make excuses — I have other projects to complete in order to run my business, I’m renovating my house, my wife is starting a business. But what can I learn about what I finished and what I didn’t finish? Well, it reveals one key that I need to remember: I say yes to a lot of work and I tend to work until I burn out. That’s a problem I need to address. I also did procrastinate and I was distracted. That’s a problem I need to address.

Now it’s time for me to stop blogging and finish these projects!!!

Older posts