This, again, isn’t rocket science. To succeed with a business on any scale you must be able to read and interpret the three basic reports common to all businesses, organizations, churches, governments and Cub Scout Troops:
- The Profit and Loss Statement. This answers the intriguing question, are we making money?
- The Balance Sheet. Which answers the starting question, do we owe more than we own?
- The Budget. Your personally maintained crystal ball which attempts to predict with reasonable certainty, how much money you need to stay open next month or next year, and how much you feel your business will bring in?
Doing your own books is not part of this skill. Being an accountant or CPA isn’t necessary. My father-in-law with his eighth grade education can tell at a glance whether a business is doing well and what problems it has simply by scanning the first two reports. It’s an acquired skill anyone can learn at their local SBDC or community college.
Budgeting, on the other hand, is something the business owner must do him or herself. The only way you can incorporate budget numbers into your day to day is to keep your budget yourself – at least until the point your business is too big for this. In the beginning? It’s something you do, and no one else.
It is the small business owner’s job – and no one else’s – to sell the business's products and services. You can hire salespeople, but unless you have the sales and sales management experience to guide their efforts, you may as well toss the money out the window. This is knowledge you can pick up at your local SBDC or community college, and from there – it’s practice, practice, practice.
A mindset is a combination of attitude, expectations, understanding what your time is worth, and the skill to manage attitude, expectations and time. While we haven’t time or space here to discuss how to do this, I do teach some basic, scientifically proven techniques for self-managing. This includes simple mental imaging exercises that anyone can learn, understanding the nature of goals and expectations, and computing in simple dollars and cents what every hour you have available to you to invest in your enterprise is worth.
Traditionally, these questions were organized as a business plan, but NOT the modern form of business plan. What’s wrong with the modern business plan? Besides being an exercise in wishful thinking and mental masturbation, nothing. Far too many prospective entrepreneurs buy expensive software or hire expensive services to write “The Business Plan” to present to bankers, Angels, Venture Capitalists and whoever else they can pigeonhole long enough to read their fiction. Which they won’t, because they know the damn thing was written using expensive software or by high-priced writers and has no more connection to your business than the book, “Huck Finn”. At least Huck Finn has a plot. Your Business Plan doesn’t, and your ending is very predictable.
What does this rant have to do with asking questions? Well, originally, a business plan was an organized set of answers to questions that only the business owner and closest associates or advisers would ever see. It was a living document that was used and updated and used more. The questions aren’t rocket science nor do they require an MBA to answer. Simple questions like,
- “Who is the prospective customer?”,
- “Where do they live?”,
- ”What price are they willing to pay?”,
- “What competition is there?”,
- “What will it cost to start and operate this turkey?,
- “How do we make this happen?”, and so on.
Very basic commonsense questions that anyone, including me, can pose and find answers for – usually with a reasonable investment of time and a little money.
It's critical to seek out other’s opinions and to have a circle of professional advisors near at hand when needed. Yes, this is an attitude, and could be included in mindset, but it is so critical to an entrepreneur that is deserves a separate listing. Business management is a huge field, and no one, no matter how well educated and experienced, can know it all. The successful know who to call, who to talk with, and the benefits of doing so.
Yes, I teach two classes scheduled for this May at North Seattle College. They are listed below. So, yes, I wrote this column to sell my products. So sue me. At least these classes are research based and focus on what a person needs to learn and do to become a successful entrepreneur.
The SmartStart Workshop for
Starting the Business of Your Dreams
Not sure how to start a business? You’re not alone. According to data from Dun & Bradstreet, most failed entrepreneurs started a business with little or no management training or experience. It’s this lack that caused them to fail, not necessarily their business idea or concept.
The good news is, you do not need an MBA or an undergraduate business degree to successfully start a business. You do need to – before you start –
- an inventory of your management skills and personal resources, before we
- work to set realistic goals for your life and business, then
- learn to evaluate your business idea like an experienced entrepreneur before you risk your money and time. The class also features a discussion of the
- 25 known ways to finance the business of your dreams.
- Don’t most small businesses fail? No, they don’t. According to research published by the Kauffman Foundation, the Small Business Administration and the IRS, over one half of start-ups are still in existence five or more years later. To read the latest research, visit my blog, Small Business for Real People and read: The Facts of the Small Business Survival Rate
- Some variation of “I need $100,000 to start my business. Who do I talk to?” Research shows that the vast majority of new businesses are financed out of the entrepreneur’s own pocket. This is a topic we spend quite a bit of time discussing in the workshop, including a list of the 25 Known Ways to Finance a New Business. I suggest reading my blog post: The Myth of Venture Capital
Spring 2014 Class Schedule: Saturday May 10th, 9:00 a.m. to 4:30 p.m. (1 session)Click here for enrollment information on:
If you’re going to be self-employed as an architect, IT consultant, housekeeper, gardener as well as an artist, writer, photographer, or musician, I recommend ~
Business Basics for the Self-employed
Are you currently self-employed, or considering becoming self-employed, and want to take the next big step to make a profit with your work? To be successful in any self-employed craft, professional or art, you have to craft a winner’s attitude, and incorporate a simple set of financial and marketing skills into your existing daily routine.
We’ll talk about how to approach and manage clients or buyers, how to price your work, how to negotiate work-for-hire contracts, what records to keep, and how to maximize your income.
Common questions I’ve been asked at past classes:
- As an artist don’t I have to sell-out to be commercially successful? The answer is no. You do not have to sell out in any way, shape or form to turn a hobby or passion into a money-maker. Running a business has nothing to do with politics, selling out or becoming “commercial”. Wouldn’t you like to earn enough from what you’re doing to be able to do it full time? The basic skills of business I teach have been around for thousands of years, and while they have become more sophisticated over the centuries, you can learn to use the basics quickly. Most successful self-employed people have figured these things out, usually the hard way, by trial and error. We’re not talking rocket science here. It’s simple but powerful stuff.
- I don’t have time to keep books and market my products or services. Is there an easier way? To succeed in any form of self-employment, you must make basic business skills a daily and routine part of what you do. This takes a combination of an entrepreneur's attitude and an understanding of the basic business skills that will add to your success. Join us as we work to help you develop a holistic approach to your art, craft or professional practice.
- Do you know why research says the first ten seconds of your first meeting with a gallery owner, prospective client or customer is critical?
- Do you know the one thing research says you most likely do in front of a prospective buyer that kills your sale every time?
- Do you know how to set realistic prices? Or, do you know the one thing that Mercedes-Benz did in pricing their cars that made them such a huge success. It’s not illegal or immoral, but does it ever work.
- Most basic of all, do you understand how much your time is worth? Most people who take this class are shocked when they work this out for themselves.
Spring 2014 Class Schedule: North Seattle College, Thursdays 6:00 p.m.to 8:30 p.m. May 8th, May 15th, May 22nd (3 sessions)Click here for enrollment information for: