Entrepreneurs must have many skills. They must be able to spot opportunities. They must be able to create plans to seize those opportunities. And they must execute on those plans.
And, for most opportunities, and clearly for those opportunities that are really big, execution involves hiring and managing employees. Because no single entrepreneur can do everything themselves.
But you just can't have any employees. Companies that succeed have employees that are highly motivated.
So how do you ensure that your employees are motivated to succeed?
Clearly, giving them fair salaries helps. And clearly, stock options that allow employees to benefit when the company benefits are good practice.
But, there is an even better way. In fact, authors Adrian Gostick and Chester Elton in their book, The Carrot Principle, found a better way.
Where did they come up with this better way? Well, they conducted a study involving 200,000 people over a ten-year period.
Importantly, their study showed that the key characteristic of the most successful entrepreneurial managers is that they provide their employees with frequent and effective recognition.
That's right, significantly better business results were realized when managers offered recognition in the form of constructive praise and meaningful rewards (typically non-monetary).
The authors found that recognition is most effective when it is:
Carrots are needed to motivate employees. But what I found most interesting about the author's findings was that recognition is more effective than monetary rewards. This is a critical finding for all managers, and particularly entrepreneurial managers who typically operate in cash-restrained environments.
The authors created a "Recognition Frequency Log" that you can use to keep track of how you recognize your employees and for what. You can download it here: http://carrots.com/managers_tools/downloads/recognition_frequency_log
Knowing how to motivate your employees will allow you to build a team that is as passionate about success as you are. And this will ultimately lead to your company achieving its goals. So, while it may not seem like a mission-critical focus today, it's definitely worth your time and effort. So don't delay...
Do you remember the Faberge Shampoo television commercial from the 1980s?
The one in which the woman says, "I told two friends about Faberge Shampoo, and they told two friends, and they told two friends and so on, and so on..."
Now imagine this happened to your product or service....that one buyer told two more buyers, who told two more buyers, and so on, and so on. Your revenues would go through the roof, and with virtually no marketing expense.
Ah, the entrepreneur's dream.
Unfortunately, I actually categorize this as a "dream" because I don't think any company can count on this type of viral marketing. Even if your product or service is that great, there's no guarantee that people will refer it to their friends.
But you CAN change that.
You can maximize the chance that people will refer your product or service if 1) you make it really easy for them, and 2) you give them the right incentives. In fact, employing a proven referral marketing program can be your most cost-effective marketing tool.
To learn more about referral marketing programs and other cool, cutting-edge marketing techniques, I interviewed Trevor Shanski, the founder of eWORDofMOUTH Inc.
I was not only interested in interviewing Trevor because eWORDofMOUTH seemed so cool, but because I knew Trevor was such a great executor. Specifically, in his previous position as COO of Warehouse One Ltd., he helped grow the company from 13 local stores to 108 national stores, and grew revenues to nearly $100 million in sales.
In the interview, Trevor provided some great tips on referral marketing including:
- What you need before you generate referrals: all you need are current customer and/or prospects
- The key requirement to get people to refer your business to them: they must be satisfied with you or they will not refer you
- How to reward people for giving you referrals: give them something of value; but that something doesn't necessarily have to cost you anything
- Tips to generate the most possible revenues via referrals: give rewards that encourage them to buy even more from you; for example, if you give them discount coupons, redeeming them would increase your sales
Trevor also gave some great tips on improving your email marketing success including citing the importance of personalizing your emails to recipients and to keep an eye on your open rates in order to determine the right frequency of your emails.
Importantly, Trevor gave me a private demo of the eWORDofMOUTH platform which combines email marketing with referral marketing into one, simple-to-use system. The system also allows for text messaging and multi-location emailing (i.e., if you have multiple business locations, you can centrally manage and customize emails to customers of each location) making it extremely powerful.
As you can imagine, by using eWORDofMOUTH, you can generate a significantly higher ROI on your marketing dollars than traditional marketing methods.
To see a demonstration of eWORDofMOUTH's system for yourself, click here.
Growthink University members can listen to the full interview with Trevor Shanski and/or download the transcript here: http://www.growthinkuniversity.com/members/356.cfm.
Not only does the interview cover referral marketing, email marketing and mobile media marketing, but I got Trevor to reveal his secrets to operational success (as mentioned, as COO of his last company, he grew it to nearly $100 million in revenues) and how he developed a highly-impressive, nine-person Board of Advisors.
To hear a short clip of the interview, click the blue triangle in the player below:
I just finished conducting an interview on how to be an entrepreneur.
And near the end of the interview I asked an interesting question.
I wasn't sure regarding the response I would get, but I was pleasantly surprised.
The question I asked was, "What do you think makes the difference between a good and a great entrepreneur?"
I was expecting a list of qualities that the great entrepreneurs have.
But instead, entrepreneurship expert Dr. Bruce Barringer, gave a really great answer.
He said, "A great entrepreneur makes a difference in your life."
He went on to explain that the founders of Google have changed his life as he spends so much time on Google these days. But you don't have to be the next Google to be a great entrepreneur.
The founders of the local coffee shop have also changed his life. As have the companies that created the podcasting technologies that he employs every day.
The point is that great entrepreneurs are those that create products and services that truly benefit their customers in such a way that the customers integrate them into their lives.
When I think about my life, I can concur. The entrepreneurs who started the gym I go to, the gasoline station I frequent, and the supermarket where I buy my lunch have done a great job creating products and services that meet my needs. If they didn't, I'd patronize their competitors.
So, as you start and/or grow your business, you should make all of your key decisions with this question in mind: "will this decision allow my company to better serve customers and make a bigger difference in their lives?" As Dr. Barringer pointed out, if you solve the customer need, the money will follow.
To hear Dr. Barringer's answers to all of my questions on how to be a more successful entrepreneur, listen to the full interview on Growthink University here:
The other day, a BusinessWeek reporter contacted me with a question about entrepreneurial success.
She wanted my thoughts on a new business opportunity that one of their readers was considering.
The opportunity was "to open a sports store to sell products just from the four major sports teams in my city."
I hated the concept.
I immediately wrote back to the reporter:
"Is there really a need for this store? Who else is currently selling these items (stadiums? national retailer like Champs?) If there is no directly competing store, maybe there is no market? Is it hard to purchase these items online? I would think most of these items are easily found online at decent prices.
Will you offer anything that a national chain (http://www.champssports.com/) doesn't. Even a formerly local store (http://www.cosbysports.com/ in NY) now sells all teams' stuff online. And Cosby has a lot of unique items (e.g., autographed equipment and pictures that you can't find elsewhere).
The only thing that I think could work is offering unique items that you can't find elsewhere, mainly stuff like autographed pictures/equipment and collector's items. This stuff is available on eBay, but many people still like seeing/touching used stuff over buying online. With new items, I can't see this concept working since there's too much competition.
Finally, note that with the new items, the online stores have so many items. A physical store can only have so many SKUs or the inventory cost will go through the roof.
Once again, the concept only seems to work if the store offers items not available elsewhere (which will also make it more authentic - which is GOOD)."
So, why I am telling you all this?
The point that I want you to get is that your success in business is predicated on just one thing - your ability to solve the needs of your customers better than alternative methods.
In this case, unless the store carried merchandise that others didn't, it simply didn't solve customer needs any better.
So even if this entrepreneur quit their job, raised money and worked 24 hours a day, they probably would fail.
You need to worker smarter and not harder. And working smarter means that you are always looking to better satisfy customer needs; since that is the key.
Whether you are a detergent company looking to get clothes even cleaner, or a chair manufacturer looking to make chairs even more comfortable at a lower price, you must constantly be thinking about solving your current and potential customers' needs.
Why do entrepreneurs start new businesses?
Well, for some, they simply love the thrill of starting a new business. For others, they have a great idea that they think will help people, and are eager to fulfill this unmet customer need. For some, they want to create a paying job for themselves and/or not have to answer to a boss. And for still others, they have grandiose plans to "change the world."
While the individual goals for each entrepreneur may vary, most sophisticated entrepreneurs share one common goal when starting a business - to eventually exit the business for a large sum of money.
Savvy entrepreneurs know that they can make money day-to-day running a successful business. But, they know that the real money comes when they "exit"; that is, when they take the company public, or more likely, sell the business. That is when the million-dollar windfall comes that most entrepreneurs dream about.
Having successfully bought and sold businesses in the past, I have my own views on the topic of "exit strategy planning" or how to prepare a business to maximize the likelihood of 1) selling it and 2) the price at which it eventually sells. (Note that I tend to equate "exit" with "selling a business" since this is the most likely form of a successful exit.)
But, in order to provide more expertise on this subject, I recently interviewed John Davies.
Not only is John the co-author of "Selling Your Business For Dummies," but he has significant experience buying and selling businesses as the CEO of Merrymeeting, Inc.
In fact, not only does Merrymeeting own Sunbelt, the world's largest business brokerage firm, but Merrymeeting owns and/or has a majority interest in numerous national and international service franchise businesses.
In my interview, John conveyed his five insider tips for successful exit strategy planning.
The first is to make yourself replaceable. That is, if you as the business owner are too critical to the business' success, no one will want to buy it. You need to make sure that you have trained others that can run the business successfully in your absence.
The second tip is to make sure that your business has "predictable future revenues." The predictability of revenues has to do with how many new customers you get and the number of times your customers buy from you over time.
Clearly, a business that has repeat customers is more valuable than a business that has to constantly search for new customers. If your business is the latter, you need to figure out how to extend the lifetime value of your customers.
To learn more about these two insider secrets, get three more great secrets, and to learn John's personal 3-point plan that he's used to start, grow and run numerous multi-million dollar empires, listen to the full interview on Growthink University here.
To hear a short clip of the interview, click the blue triangle in the player below:
Imagine a business opportunity that had a 95% chance of success.
Would that interest you?
Now, what if I further told you that not only was there a 95% chance that you would make money year after year from this opportunity. But that you would also continually be building equity in a business that you could sell in the future and retire.
Well, I'm not here to tell you about a specific business opportunity like this. But I am here to tell you about an interview with someone I did who has experienced over 1,000 opportunities like these.
That person is Ed Pendarvis.
Around 30 years ago, Ed founded Sunbelt Business Brokers Network, LLC. He has since grown Sunbelt into the world's largest business brokerage firm with approximately 300 licensed offices. Also, Ed has personally managed the sale of more than 1,000 businesses.
Few, if any, people have this level of experience and expertise. So, I was fortunate to get Ed on the line to get answers from him on key areas to help you grow a successful business.
And one of the incredible things that Ed told me was the approximately 95% of businesses which are purchased succeed.
Now, after digging a little, the reason we concluded that this happens is because there is a serious vested interest in these business.
To begin, typically with these businesses, the buyer invests all or a substantial portion of their life's savings in buying the business. As such, they have a serious vested interest in the business' success.
And, Pendarvis goes as far as stating that he would not buy a business if the seller didn't provide seller financing. The result of seller financing? The seller doesn't get paid if the business doesn't succeed.
As a result, the seller has a vested interest in the business' success and works to train the new owner how to expertly run the business.
Which leads to the question of "who has a serious vested interested in your business?" Obviously the more and better qualified the individuals and companies which have a vested interest in your business, the better the chance of your success.
So, if you have not done so already, get qualified personnel, advisors, joint venture partners, investors, and others who can take a vested interest in your company, and your success should skyrocket.
Growthink University members can download the full audio of the interview I conducted with Ed Pendarvis here:
In the interview, Ed revealed tons of great tips and information regarding buying a business, including:
* Why the success rates of buying a business or buying a franchise are over 10 times greater than starting a business from scratch
* The key things you should look for when buying a business, and the first thing you must do
* The most qualified person in the world to teach you how to run the business you bought
* The easiest place to find ideas to grow your new business
* How to maximize the productivity of your workforce once your acquisition is complete
* The 3 places to get financing for the business you buy
* Why buying a business is so much different than buying a house
In addition to great information on buying a business, I got Ed to reveal tons of useful information for those starting a new or growing an existing business, including:
* How to build a business that makes others want to buy it at the highest price
* The common traits he has found in over 1,000 successful business owners
* The technique he used to ensure quality control as he grew Sunbelt from just one to over 300 offices
* How Ed ensures that he is as productive as possible every day
If you are looking to start, buy and/or eventually sell your business for a lot of money (which I hope applies ALL of you), this is an interview you want to check out!
Listen to the full interview here: http://www.growthinkuniversity.com/members/357.cfm
Non-members can listen to a brief clip of the interview by clicking on the blue triangle in the player below:
You can watch the video below: