Tuesday, June 24, 2008

Make Time for Coffee

As temperatures in Virginia head back into the 90s, I am reminded of the importance of coffee to the world of small business regardless of the time of year. Starbucks and Panera have provided a virtual network of conference rooms for entrepreneurs. It seems as though any Starbucks at any time of day is playing host to one or more small business meetings. The locations are comfortable and convenient to grab an hour with someone to share and learn.

The to-do here is to make a regular habit of reaching out to folks for these meetings. A 7:30 meeting makes it easy for someone to grab coffee and still make it to the office by 9:00. It's also the time of day at which people are most likely to be engaged. Productive meetings such as these occur much more frequently in the mornings than at lunch or after work. These other times are much more likely to be conflicted with last minute changes to the day.

Keep your network active and growing. Take advantage of the natural forces of coffee and the ubiquitous coffee houses. If you have not already done so, take a look around on your next visit. I guarantee you will see a number of these meetings occurring. And as you network, you will soon discover how many of these people you can get to know. Networks spider-web out quickly, but it takes initiative and attention.

Tuesday, June 17, 2008

Dipping your Toe in the Water

One of the difficulties in considering small business or entrepreneurial ventures from within Corporate America is often the lack of appreciation for a day in the life of small business. Frequently, the world you know in Corporate America is something like: drive to large parking lot, enter building with ubiquitous badge on an acronym-branded lanyard, read email, attend meetings, scavenge for lunch between meetings either in cafeteria or from lunch meeting leftover pizza, do a bit of work, have some conference calls, read email, review tomorrow's meetings, and go home with laptop to do work you didn't have time for between meetings.

"Surely," you think, "the life of an entrepreneur must be different. But how?" I'm not suggesting that it's rocket science or even that it's better, but it is unequivocally different. The best way to learn if the change is for the better for you is to find a way to give it a trial and see first-hand.

I was fortunate to make this seemingly odd request of a friend in Richmond and spent two days with him at his small manufacturing and retail business. My offer for his time to do this was to identify some small area in which I could assist him during those two days and with a bit of follow-up. So, for two days I was part puppy and part sounding board. As for the mini-project, I gathered some data while there, did some high-level analysis (quantitative and qualitative), and made a couple follow-up phone calls before presenting a recommendation back to the owner.

It was a minimal investment and hugely helpful. I had a real chance to get a taste of what "normal" days in small business present. A day full of meetings it is not! You also learn a lot about the types of people with whom you will interact all day long.

Think about the cost and the payoff here. Particularly, if you are able to discover that you don't care for the small taste that you get. And if you do like it, it will help accelerate you on the journey.

Monday, June 16, 2008

Ground Your Medical Benefits Assumptions

[As I feared, this post ended up a bit long, but I hear so much discussion on this topic.]
A couple of previous posts ask you to consider what's the worst that can happen and obstacles you place in your path. A frequent objection I hear that prevents an alarming number of people from ever getting off the dime is health care benefits. I always encourage people to investigate their options and to consider their costs today.

Pull out your pay stub and remind yourself of the amount you pay in health care premiums today. It's typically more than you remembered. And it's been increasing at a rate much higher than your gross pay ... typically. Additionally, consider deductibles, co-pays, etc. that you incur. This doesn't have to be a higher order math problem. Simply jot some numbers on the back of an envelope.

Armed with this set of data, check out some web resources or contact an insurance broker who writes individual/family policies. Now, the big problem at this point is that the process is now stacked HEAVILY in favor of people/families with pretty good to great health records. The options and/or costs for those deemed "undesirable" by the health care companies are sadly limiting to say the least. This unfortunately drives some back to the safety of company/corporate plans that can absorb these individuals. Over time this has the potential to create a "negative selection" within company plans, but the insurers are constantly working to avoid this problem.

For those who have good health records, the options are more numerous and MUCH more cost-effective than you think. Beware, however, that the underwriting process with insurers is not necessarily logical or fair. (See plug for some form of universal health care below.) Plus, you can get these numbers before you take the plunge. Simply ground yourself and make the obstacle tangible. Sitting back and hiding behind this corporate benefit is doing yourself a great disservice. As your back of the envelope exercise is likely to reveal, this corporate "benefit" often costs you more than you think.

Two final points. Number one, in order for individual plans to make sense, you often need to change some habits around health care. "All you can eat for $20 copay" is a fading reality. Shifting family habits can be painful. This is particularly true with high-deductible/HSA plans. These are not for everyone, but they are definitely worth investigating. Again, do the back of the envelope. You may be surprised. You might also learn that it's not worth going to a doctor to have them say, "Your child has a cold. Good luck with that." whether you're paying $25 or $100.

Finally, small business has made me strongly consider the benefits of some form of universal health care. Are there budding entrepreneurs out there unable to make the leap due to some illness of theirs or a family members? Given the nature of the underwriting process (i.e. Have you sneezed in the past 5 years? If yes, please provide Kleenex samples with dates.), I can guarantee you that there are some. For those worried about the tax implications of universal health care, ... check out your paycheck, dude! You're being taxed now. I will stop short of commenting on the government's ability to run a health care system, but I can say that the current system is stacked against small business and entrepreneurs in many ways. That's it. No presidential endorsement follows. And after posting this, I'll certainly never be able to run for office!

Wednesday, June 11, 2008

Defining Small Business / Entrepreneurship

In addition to being an unduly difficult word to spell, entrepreneurship is difficult to define. (My recent posting mentioned obstacles. Maybe an inability to spell the word keeps people from pursuing entrepreneurial ventures!) If you ask 10 people to define it, you'll probably get 15 variations. In my opinion, the definition truly is in the eye of the beholder. On a high level, one can envision three paths to pursue: starting a business, buying an existing business, or franchises. These are probably the most commonly used conceptions, although you will find many people overlook the middle one. (Not unlike Otto in A Fish Called Wanda.)

A commonality across these 3 is the concept of ownership and "being your own boss." That is one aspect of small business, but not necessary, in my opinion. People who pursue a smaller business (think: relative to their options) are frequently throwing in their lot with small business. This choice often requires sacrificing the perceived "gifts" of Corporate America for the perceived "risks" of smaller businesses. The trade-off's can be lower salary, but an equity stake that is more within your control or longer/different hours, but a stronger emotional connection to your work.

These characteristics are more fundamental to the small business than being the sole owner. I have met and worked with people in a variety of roles that I would consider entrepreneurial. It is more of a personal trait than a defined role. What are your goals and how do you approach your job? The path to small business is a journey and simply beginning that journey gets you in the game.

Tuesday, June 10, 2008

What's the Worst that Could Happen?

Recently I spoke with a friend currently considering a move to a small business from a large company. Actually, that is a common enough occurrence that the timing is almost irrelevant. Anyway, a point that I remind folks of when considering a move such as this is to put a fine point on picturing the "worst case."

Many people create a long list of excuses when considering small business ventures. It is important, however, actually to spend some time defining and thinking through these. In the end, you are left with a picture of "the worst that could happen." I suspect you will be surprised with how livable this case actually is. Seriously. Also, you will find ways to minimize the risk. For example, if you are concerned that the opportunity doesn't pan out, and you have to go back to "a real job," keep your network active to keep that option open. It's a minimal investment to help insure options you may need.

The goal is to move beyond a point of worrying about worst case scenarios in order to focus on the opportunities. Think of Maslow's hierarchy--if you have some comfort that self-preservation is taken care of, you can reach for self-actualization.

Humans have a limitless ability to create obstacles to their own progress. Defining these will enable you to address them. And by addressing them, you will enhance your ability to reach your goals.

Thursday, June 5, 2008

Your Corporate America Peers

Beware "someday." You will hear this word a lot within the walls of Corporate America. If you had a nickel for every person you talk to and hear "Someday, I'm going to pursue this small business opportunity ...." A good barometer of your own readiness and willingness to pursue this path can be found in your belief in what your cohorts are saying. Over time, you will likely realize that 90+% of these folks will never in fact come close to taking that plunge.

It's not your place to point this out to your peers. What's the value in that? And remember, "there but for the grace of God go you"! The golden handcuffs and the perception of security are strong within those walls. My conviction is that the companies want you to believe in those. The more you do, the more those intangibles help to keep you there.

But don't allow yourself to fall victim to the "someday" story. The trap here is that you find yourself telling that "someday" story year after year. And the next thing you know, you too are handcuffed and thinking about that plunge you planned to take.

Monday, June 2, 2008

Gaining Small Business Experience in Corporate America

Generally speaking, it is possible to customize your experience in Corporate America in order to better prepare yourself for small business. The catch, however, is that you likely have to be prepared to choose the road less traveled. Large companies often reward those who specialize, those who excel at internal politics, those that make stellar Powerpoint decks, those that attend the most meetings, etc. Consider how these pursuits fit with your long term goal. Are these getting you further down the path in the (at least) general direction of your goal? It is unlikely.

Make conscious choices to seek variety and experience in areas that will apply to your goals. Pay particular attention to areas in which you feel deficient. Generally speaking areas that will translate well for entrepreneurs are going to be operations, finance, and sales.

Seek experience on truly managing a business for profitability. Salespeople that know how to drive top-line without regard to profitability (I'm sure you don't know any of these) will fail in smaller environments. Finance people that lack an appreciation of the realities of operating a business will likely be hanged by peers in a small business (this is an optimistic outcome!). Operations people (engineers take heed!) that fail to appreciate the pitfalls of "efficiency at any cost" will drive a business into the ground.

These choices may not always be the most popular or rewarded in the short term, but they will strengthen your foundation for future success. I might even go so far as to suggest that if you choose the road less traveled, it will make all the difference!