Posts Tagged ‘Entrepreneur’


Why Most Business Mergers Fail (and What to Do About It)

It starts off as a brilliant idea. The small business owner is interested in buying another company or they want to sell theirs. Dollar signs and possibilities float around in their head. After a lot of hard work, the transaction is done and everyone celebrates. But then, it ends up hurting the future of the combined companies more than grow them. In fact, 70% to 90% of all mergers fail.

What goes wrong? Here is how to get the odds in your favor:

1.     Product offering synergy. Determine if the two products or services really fit together. Will they compete or cannibalize customers when the companies are merged or are they complementary? Many times, the offers have less synergy than the two companies initially think. How to test before the sale: Approach five current customers to see if they will buy the other product or service. Then, find out why or why not.

2.     Management match. Can the combined teams work together? Which executives will lead which functions? Many times there is overlap and certain managers and departments need to be eliminated. Remember, there should be clear leaders in the new company and not management by committee. How to test before the sale: Have both management teams participate in making a few important decisions for the proposed new company. Hire a consultant to observe how well this works and report back.

3.     Culture blend. Can the cultures of the company work not only together, but will they blend over time? Often, one culture dominates the other and valuable employees can’t thrive in the new environment and leave. How to test before the sale: Set up three teams of employees from the two different cultures and have them accomplish a task. It should be planning an event for the company or a new recognition program. Evaluate the results.

4.     Setting expectations. These are usually set too high for a short period of time. Many mergers actually push the company back in terms of profitability before it propels them forward. Assume no gains from synergies for at least the first six months. How to test before the sale: Review the growth and profitability of the two companies before the sale and cut their future growth by 50% for the next six months to get a closer estimate of what will happened post-merger.

5.     Market assumptions. How will the other companies and customers in the market actually react to the merger? Many times the expected changes never come. How to test before the sale: There is no way to test his since it is impossible to simulate what the market will do realistically. However, similar past transactions in the same or parallel industries may provide a clue.

How successful was the merger of your company?


Work Your Biz Wednesday: 5 Business Books to Boost Your Small Business

Normally, I give a list of the latest business books I’ve read to give you a guide to resources that will help you grow your business, but this is a list of classic books and ideas. Many of the books on this list have been updated recently, but they are solid and relevant as they were when they were first published. Read to feed your soul and give you a new perspective on your life and your business.

Growing Pains by Eric Flamholtz and Yvonne Randle

This book is all about transitioning from a start-up to becoming a professionally managed business. Growing Pains, now in its 6th edition, is a classic resource for businesses who want to scale. It will help you think about growth strategically without loosing the the special spark that launched your business in the first place.

Never Eat Alone by Keith Ferrazzi with Tahl Raz

Ferrazzi lays out in-depth advice for making connections in the digital world. 
What distinguishes highly successful people from everyone else is the way they use the power of relationships—so that everyone wins. In Never Eat Alone, Ferrazzi explains easy-to-follow strategies he used to cultivate relationships with people he admired, and you can use them to start becoming a master networker to grow your business. 

 So Good They Can’t Ignore You by Cal Newport

Passion is an over used word in small business. In So Good They Can’t Ignore You, Newport debunks the long-held belief that "follow your passion" is good advice. Not only does he explain why leading with passion is a flawed strategy. He also explains how it can be dangerous, leading to anxiety, chronic job hopping, or starting a business with poor business model. Passion comes after you put in the hard work to become excellent at something valuable, not before. He’s not suggesting you give up on your dreams, but he invites readers ensure that you pair them with a dose of reality and make yourself valuable in the marketplace. 

The Power of Habit by Charles Duhigg

The Power of Habit is one of the most useful books for business owners looking to set themselves up for a lifetime of health, happiness, and business success. Duhigg explains how the road to success – whether that means loosing weight, starting your dream business, or putting an end to procrastination – is paved with tiny behaviors you can implement every day. It takes 21 days to turn a daily action into a habit, but when you’re striving for success in any field, you know that keeping routine is important. Consistency is key.

Intentional Living by John C. Maxwell   

I am a huge John Maxwell fan. He believes that we should think of ourselves in terms of growth and not goals. In his latest book Intentional Living, Maxwell helps readers take the first steps to living a life that matters. We all have a longing to be significant. We want to make a contribution, to be a part of something purposeful. But many people wrongly believe significance is unattainable. They worry that it's too big for them to achieve. He teaches that anyone can achieve significance and create a lasting legacy. The only thing you need to achieve significance is to be intentional everyday. This book will inspire you.


Mondays with Mike: 4 Signs of a Lousy Business Opportunity

Opportunities are a dime a dozen, so the real problem isn’t a shortage of opportunities, but the difficulty in discerning which ones are good.  Some opportunities aren’t even worth your dime.  You’re not helpless, though.  Here are four signs you should walk away from a partnership, buyout, merger, or investment:

  1. More talk, less action.  Everyone can talk a good game, and in fact, there are many great prospects with slick, buttoned-down pitches.  How can you tell when an opportunity sounds too good to be true?  One way is when you’re seeing all talk but very little in the way of evidence to support grandiose claims.  If an offer’s legit, there will be more than just a sales pitch.  How can you sift out the real deal from the pie-in-the-sky?  I suggest building milestones into any deal.  Set clear, measurable goals that must be met for the deal to proceed.  If a prospective buyer fails to submit satisfactory financials or if a potential partner doesn’t have anyone willing to vouch for her, then you should build fail-safes into your deal that let you get out without a loss.
  2. Sketchy history.  The surest way to predict what a business (or person) will do in the future is to look at the past.  Take the time to vet the people you’re looking at doing business with.  If you’re considering selling your company to a firm known for gouging customers on price, then you’re not likely to be more fairly treated.  If there’s a partnership on the table, but your prospect has a history full of unhappy clients, then you should ask yourself how you can expect to be treated.  I’m not saying a leopard can never, ever change its spots, but I am saying that leopard is unlikely to be transformed into a lapdog. 
  3. Radically different goals.  This sign is most relevant for budding partnerships, but its importance can’t be overstated.  Before you begin negotiations, it’s critical that you ask any potential partners what their goals and objectives are.  If you’re fundamentally interested in raking in as much money as possible, while your partner values giving back to the community regardless of the cost, then there’s no way on earth your partnership is going to work.  While different approaches and perspectives can absolutely enrich joint efforts, fundamentally different goals will kill your venture before you begin.  Make sure you have a heart-to-heart before you ink a deal.
  4. You’re desperate.  We’ve all been there.  You need a cash infusion, and you have a prospective buyer, or you’ve been looking for the right company for a merger to alleviate a thorny challenge.  Anytime you’re really desperate to close a deal, you’re vulnerable.  Make sure you take a step back, take a look at your motives, and be aware of any circumstances that might lead you to make a foolish decision.  You can’t eliminate the reasons you might have for needing to close a deal, but you can certainly be aware of your desperation and take extra steps to evaluate the pros and cons objectively. 

We all enter into business opportunities for different reasons, but my single best piece of advice is this:  make sure your business is in good shape before you take any leap.  Getting your expenses under control and your financial house in order makes you a more attractive prospect for a sale, a partnership, or as an empire builder. 

 

    


Top Apps for Small Business Owners

top apps for businessOwning a small business is a tough job, and purchasing the appropriate systems for organization, communications, finance, and more can be stressful.  In today’s mobile world, it is essential that you can access tools while on the go.  Thankfully, there are many applications that are inexpensive, easy to use, and extremely helpful!  I’ve rounded up the top mobile apps that will help you streamline your business and stay connected from anywhere:  

Evernote

Evernote is a multi-purpose organizational app that is amazing for assisting small businesses in keeping track of tasks, discussions with employees, and more.  It seamlessly syncs with your computer, so your information and notes can be accessed from any of your devices.  You can also use it for personal documents and keep that information completely separate from your work files.  Pricing varies from free for basic components, to $12 per user per month if you’d like to take advantage of more advanced features.  Easily share content, coordinate projects, and keep remote coworkers up-to-date in one app!

Tripit

If your business involves any travel, Tripit is a must-have app to keep you on track.  You simply send your email confirmations for any flights, hotels, etc. to Tripit, and they are automatically converted into a custom itinerary.  You can manually or automatically update the plans, add them to your calendar, and share plans with others.  If you purchase the Pro version for a small fee per month, you can access even more features, including receiving real-time flight alerts, tracking rewards points, and getting seat upgrade notifications.

Nextiva

The Nextiva App is an all-in-one communications tool for your business, and can be especially helpful if you have employees frequently on the road or working remotely.  It provides a complete VoIP softphone, allowing you to use any functions available on a desk phone right from your desktop or mobile device.  Additionally, it includes instant messaging, video collaboration, cloud sync, and call controls, serving as a complete communications package.  The app is available with our Nextiva Office plans.

Expensify

Expense reports may never be an activity you look forward to, but with the help of Expensify, your company’s reporting process can be modernized and easy to manage.  Employees can quickly add expenses and automatically import credit card charges within specific dates.  Mileage can be captured via your phone’s GPS, receipts are scanned and input into the system, and approvals are made via rule-based workflows.  You can also connect bank accounts to the app to make reimbursements even simpler! 

Square

If you’ve made a purchase from a food truck, farmer’s market, or other independent vendor in the past couple years, you have likely seen Square at work.  It is a great app for any small business with a need for accepting in-person payments via credit card.  After purchasing a chip or magstripe reader that is compatible with both Apple and Android, basically any mobile device can be transformed into a point of sale system.  It can also integrate with other applications such as Weebly and QuickBooks, making account syncing a simple process. 

These apps, along with many others, can be extremely helpful in mobilizing and organizing your business tasks.  Take advantage of the user-friendly applications available to business owners today, and keep your company tech-savvy, flexible, and secure.


How to be a Successful Mompreneur

12-30 Working Moms smallBeing a mother is a full-time job. Once you have a little person, the most important thing in your life is the health and wellbeing of your child, and then there’s your marriage. Then when you add business owner to the mix, it’s like having three full-time jobs.  To say that striking a balance between home and your business is a challenge is a vast understatement. Mompreneurs who successfully balance motherhood and business make it look so easy, but there are a few key things to know that will help you not feel so overwhelmed. Here are a few secrets of successful mompreneurs.

1. Start Early

The rise-and-grind mentality is one that many business moms embrace, but I suggest you start the day by slowing down and thinking about how you want the day to unfold. I start my days in prayer because I want to take a minute to focus before chaos ensues. It’s helpful to mentally prepare myself for the day. I also take the time to have breakfast with my son and see him off to school before I jump into a productive day of work.

2. Limit Your To-Do List

Itemizing your priorities can be a useful tool so that you don’t overwhelm yourself! To maintain balance in your life, cut your to-do lists down to five things that you will get done during the day. Try to get those tasks done by 11am each day. Consider everything else you achieve to be a bonus. This will require some prioritizing the day before, but it will stop you from feeling like you never get anything done.

3. Keep Your Schedule

It’s incredibly important to budget your time if you want to be a successful mompreneur. This means that whether your hours are 9 a.m. to 6 p.m. or 6 a.m. to 2 p.m., they need to stay consistent to keep your schedule. You might be tempted to become a workaholic, but resist the urge. You family needs you as much as your business does. Give 100 percent and be productive during your workday. Don’t be distracted by social media or your cell phone, get your work done!

4. Use One Calendar

As a mompreneur, your have a work calendar and your family has multiple calendars. Use one calendar to manage the master family schedule. Using a single calendar for all of your commitments will make sure you don’t drop any balls. In doing this, you’ll never absent-mindedly forget about the school play or schedule a business meeting that conflicts with that dance recital.

5. Self-Care is Key

Mompreneurs fire on all cylinders, so self-care is key. You move from home to work to school, and if you are really organized, you’re able to hit the gym too. If you want to be a success mompreneur, you’ve got to take care of yourself. This means eating well, exercising and getting plenty of sleep. If you’re sick, take the day off. Your business and your family need you to be healthy. I also try to get regular massages to reduce stress. You can’t be productive at work or attentive at home if you aren’t healthy.

6. Hire help

As soon as you can afford it, hire help. You can get a college student, retired person, or another mom in your community to help with your children. Drop off and pick up can be quite time consuming, and you want to focus your time on high revenue activities, so that you can afford to do special things with your children.           

7. Unplug

I firmly believe that everyone who works should take the time to completely shut off. This means that you are not checking emails at the dinner table, you’re not taking calls in the middle of bedtime stories and you are not looking at your computer in bed. Once your workday is over, go home and enjoy your children, at least until bedtime. You are never going to get this time back with your family. Do not sleep with your cellphone in the bedroom.

Being a busy Mompreneur can be a challenge. Your work never ends, but if you can set reasonable limits for yourself and follow the tips outlined above, you’ll see that you really can have it all.


Mondays with Mike: 3 Reasons Why Small Businesses are Better than Big

12-21 Small is better smallWe all know big businesses have a number of advantages.  They’re better capitalized, better known, and many of them have the benefit of years of history.  It’s easy to get caught in the trap of wondering if small companies will ever have a chance to catch up.  Here’s the good news:  Not only do small businesses have a shot at taking a piece of the market, but there are actually advantages to being the little guy.  What makes your small business better?

  1. Speed.  Say you decide your business needs to begin taking advantage of the positive exposure Twitter can give a company.  You can literally get started in a matter of minutes.  Your ability to make changes at lightning speed is a definite advantage over massive corporations that would take months to assess the problem, make recommendations to the powers-that-be, and maybe – sometime in 2016 – get around to setting up a Twitter account.  You’re able to take action right away.  Given the speed at which markets shift, being able to move quickly is more important then ever before.
  2. Efficient decision-making.  When Amazon started the Kindle Unlimited program last year, I decided right away I wanted to participate in order to get my books into as many readers’ hands as possible.  Big publishers – the kind that require analysis, market research, and the agreement of a committee – took far longer to make the decision, and that gave independent authors like me a big advantage.  Until the big guys got in the game, independent authors had the advantage of a large pool of readers with limited choices.  Getting into a new program or a new method of going to market early means far less competition – an advantage for those of us who can make decisions quickly and efficiently.  Again, efficiency makes you able to pivot at light speed, while big companies are like unwieldy ocean liners that require miles to change direction.
  3. The underdog role.  Don’t ever underestimate the public’s love for the little guy.  We root for small business, and the growing emphasis on shopping local benefits those of us who operate small companies.  Anything you can do to emphasize your role as the challenger, the underdog, will rally support for your brand.  Focus on your company’s relationship to your community, and make it clear that you’re in business for reasons other than just stacking up a bunch of cash so your CEO can get an 8 million dollar bonus. 

Your ability to move quickly and make decisions independently allows you to interact with consumers efficiently and with a personal touch.  You’re not a faceless corporation shifting profits overseas; you’re a local employer whose roots make you just like the people your company serves.

Emphasize your independence.  Embrace it.  Let your customers know they matter far more to you than they ever could to a big, faceless business.  Make the advantages of being lean and agile work to your very best advantage.


Adding Revenue without Adding Costs (The Value of Past & Current Customers)

12-18 Value of Current Customers smallChances are, your company spends a significant amount of money to acquire new customers. The significant costs associated with acquiring new customers are a necessity because the revenue generated by these new customers allow your company to grow and succeed in today’s competitive marketplace.

The good news is, there is a way to increase your revenue that is less expensive than new-customer acquisition. The answer is actually quite simple. As long as you are improving and adding to your product line, your company should be selling to both current and past customers.

Compared to acquiring a new customer, marketing to current customers is up to 10 times less expensive. The reason for the significant drop in marketing and selling costs is that you eliminate the capital spent on lead generation. You are selling to a customer who is already interested in your product line. You have an established relationship with past and current customers and, by leveraging your history, you can grow your revenue stream without investing a large amount of money.

Let’s explore three practices that will reignite sales from past customers and maximize your profitability:

Maintain a Communication Avenue

Maintaining communication with your customers is essential to building a strong relationship and will help you gauge interest of additional product offerings. The more you can communicate with your customers (e.g., via phone and email), the better your relationship will be. Customer relationship management (CRM) software, such as Salesforce, store customer’s information for later use, so you can identify upselling opportunities.

CRM software can also provide reminders to contact current customers once they reach certain milestones such as completing the onboarding process, using your service for a year, etc.  In some cases, while not as personable, you can automate the process with emails requesting feedback, sharing news of a new product, or thanking them for their continued support of your business. Also, it is important to check in with your customers to measure product satisfaction. Your customers are your best source of feedback for product and service improvement. The feedback will you help acquire more customers in the future. You can also use the feedback to see if there is interest in additional products/services from your company.

Sell Additional Value

Selling, without providing additional value, can have the opposite effect of what you wanted. Asking your customers to spend money on products that do not benefit them can leave a bad taste in their mouth and can cause you to lose that customer’s business forever.

Instead, you should sell products that will benefit your user. Whether its an additional product, a service that can work in conjunction with your current offering, or a new feature of your current offering, you need to demonstrate the value of your product and show how it will benefit the customer.

Leveraging your past relationship with a customer will grant you access to key decision makers who have the ability to purchase your product. If your customer is satisfied with your past products/services, they will be more inclined to listen to how your product can save them time, make them more money, or make them more competitive in the marketplace.

Referrals = Less Expensive Lead Generation

Word of mouth is the best form of marketing your company has; it is an extremely cost effective way to generate new sales. Compared to advertisements, consumers are more likely to consider purchasing products and services that their friends and colleagues recommend. Focusing on creating a superior customer experience builds trust with your customers. In return, they will be much more likely to recommend your product or service to their network. Offering some form of incentive for referrals, such as a discount on their next purchase, will further the effectiveness of this strategy.

While acquiring new customers is exhilirating, don't forget about those that are already loyal to you. They're your best (and cheapest) way to increase your revenue stream. 


Mondays with Mike: 6 Sure-Fire Tips for Better Flying

Crying babies.  Delayed flights.  Uncomfortable seats.  There’s a lot to hate about flying, but it’s a fact of life for many entrepreneurs.  The global marketplace means I have clients all over the world, and since I typically rack up about 100,000 miles every year, I know a thing or two about making it less painful.  Here’s my list of top strategies for getting from here to there without losing your mind.

  1. Use TSA PreCheck.  You know those lines at security that raise your blood pressure as you stress about making your flight?  Yeah, you can just skip those.  TSA PreCheck lets you take the fast lane past the crowds, and you can also leave your laptop in your bag and your shoes on your feet.  The $85 every five years is more than worth it to breeze through security.
  2. BYOB and BYOF (food).  Now, the disclaimer is that airlines don’t want you bringing your own booze on the plane, but the TSA doesn’t stop you.  Bringing your own 50ml bottles lets you have a cocktail for way less money, and if you stop by a local sandwich joint before your flight, you can get a meal to go (condiments on the side so it stays fresh,) rather than starving on the plane.  Don’t get stuck on the runway without provisions.
  3. Get up.  I always choose an aisle seat, and I get on my feet every chance I get.  Sitting not only compounds the physical discomfort of flying, but it also measurably shortens your life span.  As soon as that fasten seatbelt light goes off, I’m standing in the aisle, Kindle in hand.  I always feel better after a flight if I’ve spent some time standing.
  4. Let the music play.  Screaming kids?  No problem.  Loud talker behind you?  No worries.  I rotate a couple of flight playlists – one for sleep, one for energy – and the flight goes by in a flash.  Bonus:  a number of new planes now have power outlets at each seat, so you don’t have to worry about running out of juice on a long flight.
  5. Ask for a new seat right away.  If you’re uncomfortable – whether it’s a large passenger spilling over into your space or a couple of squirming toddlers, ask a flight attendant immediately if there are open seats you can take.  Asking ASAP improves your chances of getting the available seat, and there’s simply no good reason for you to be uncomfortable if there’s another option.
  6. Join an airport club.  Whether you get access via frequent flier miles or you have to pay an annual fee, it’s so worth it to have a place of refuge in a busy airport.  I typically arrive at the airport hours before I have to just to settle into the lounge, use the free wifi, take advantage of the snacks, and get some work done.  My memberships are worth their weight in gold.

Airplane travel doesn’t have to be miserable.  Sure, you can’t control flights cancelled due to lousy weather or mechanical difficulties, but planning ahead can certainly make your flight more pleasant.


Mondays with Mike: Taking a Step Back from your Business

11-23 Step back from biz smallMost entrepreneurs I know – myself included – eat, sleep, and breathe our businesses, at least at the beginning.  It’s easy to see how it happens.  We start with nothing but a great idea and determination, and we nurture our companies.  We’re proud of what we’ve built, and we want to see it continue to grow.

But there are times when we need a break, and it can be very difficult to walk away and trust that our business can survive without our hands-on, day-to-day attention.

Meet Donnie Miller, CEO of Technical Adventures.  He started his full-service IT company about ten years ago, and he did it just the way most of us have.  He did everything – sales, customer service, numbers, lead technician, fire extinguisher, and chief bottle washer – all by himself.  And he needed a break.  He hadn’t taken a vacation in years, and his company had plateaued.  What did he do?

He walked away and took a six-month sabbatical.  Now he didn’t just walk out the door one day with no notice and vanish.  He took specific steps to set his company up to run in his absence.  His steps:

  1. Hire the right people and put them in the right positions.  Donnie had hired great, trustworthy people, folks he could rely on to run his business well, but it wasn’t until he actually took a day off – physically left the office – that his employees really started to shine.  If your staff relies on you to be the final arbiter of every issue that arises, you’ll never see them reach their potential. 
  2. Start small.  Donnie started by leaving for a few days at a time, checking in by phone.  He realized quickly that he was used to feeling needed and the phone calls were really more for his benefit than that of his managers.  When Donnie figured out that his staff would call when they needed him, he was ready for longer breaks from the office.
  3. Assess results.  After Donnie’s first six-month sabbatical, his business had dropped by thirty percent, mostly because he’d been the entire sales force before his departure.  He put people in place to handle sales, evaluated the successes and failures of the systems he’d put in place, and made the necessary changes. 
  4. Look at the big picture.  One of the chief benefits of Donnie’s absence was the fact that he knew his company could manage everyday matters without his assistance.  That freed him up for all sorts of new projects.  He could focus on all the new ideas and growth-oriented projects he’d never had time for back when he handled everything personally.  He was finally able to steer his company the way he’d always wanted.

It takes guts (and no small amount of humility) to step back from your business and let it run without you.  We get so wrapped up in thinking our value is in our hands-on micromanagement that we forget it’s our vision that’s our chief asset.  By following Donnie’s example and removing our ego from the equation, we often find the solution is far simpler than we realize.  Stepping back can give you and your company opportunity to grow.  




 
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