Growthink Blog

Entrepreneurial Skills and Traits: Are You the Next Richard Branson?


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What traits and skills really make Richard Branson, Bill Gates, Donald Trump, and countless other entrepreneurs so successful?

Over the past decade, we've identified key ingredients that lead to success, which we've observed both in celebrity entrepreneurs and in our most successful clients. When it's all said and done, they have all of the following critical skills, which are essential to entrepreneurial success:

Vision & Leadership: Entrepreneurs must have a vision of where the company will be in the future.  In addition, you must be able to communicate you vision so as to motivate employees, investors, and partners to help you achieve that vision.  You must be able to identify staffing needs, expertly fill them, and lead your team to success. Rarely do entrepreneurs build successful companies all by themselves.

Focus & Execution: Entrepreneurs must focus to make sure that goals are achieved, customers are satisfied, and employees are motivated. For most entrepreneurs, staying focused is harder than it sounds.  Be careful not to be seduced by the next exciting opportunity without executing on the priorities at hand.  And don't let perfectionism prevent you from taking action, either; at the end of the day, a product on the market is better than a product shelved due to lack of focus, execution, or perfectionism.  Get to market and get feedback from your customers as soon as possible.

Persistence & Passion:  As an entrepreneur, you must be passionate about what you are trying to accomplish. In addition, you must be willing to commit whatever is needed of them, whether it's time, energy, money, or other resources.  You must persist through trying times (which will be frequent), and fight as much as needed to achieve the goals you have set for yourself and your team.

Technical skills:  As the owner of your firm, you may not need to be the most skilled technicion on your team.  But you need to have necessary foundational knowledge to be able to lead your technical team and make informed decisions. 

Flexibility: Successful entrepreneurs understand that the world and the environment in which they operate are constantly changing. While you must focus on the end game, you also must adapt your strategies and offerings to meet changing market conditions.

There has often been debate regarding whether entrepreneurship can be taught. Can you really teach persistence or passion? Perhaps you can't.  But if you understand the importance of these entrepreneurial traits, you can focus on them and make the necessary adjustments to succeed in your entrepreneurial endeavors.


What about you -- what skills or traits do you think make entrepreneurs successful? 


Vision, Business Plan, Success


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Just for a moment, consider the following press release headlines:

"Company X Receives Top Marks in Bloomberg Article..."
"Company X Ranked #1 Global Provider...Second Year Running"
"Company X Acquires Leading Provider of..."
"Company X Launches Philippines Operations"
"Company X Names Industry Veteran as Vice President..."

Now imagine what it would feel like to be the founder of Company X. For one Growthink client, Liam Brown, this isn't a dream - it's a reality.  

A few years ago, Liam had the vision to come to Growthink for assistance with a business plan for his vision - a company named Integreon. Liam, with a solid business plan, turned his vision into a business, raised capital, and attracted a highly motivated work force. Today, Integreon is a leading business process outsourcing (BPO) service firm that employs over 2000 people, with offices ranging from Mumbai to Fargo and New Delhi to midtown Manhattan.

Even with an amazing business plan, heights and milestones like the ones listed above cannot be achieved without vision. Simply put, you must have a vision of where you want your business to be in the future.  You must be able to communicate your vision in an exciting manner to employees and investors, so that they too share your vision and are motivated to help you achieve it.

Unlike your business plan, your vision doesn't provide a specific roadmap for your business.  Rather, your vision paints a picture of what the your business strives to become in the future.  A leader with a strong vision motivates his or her team to achieve this picture, regardless of the action plan that will be employed.

Vision provides motivation to both the leader and employees.  It gives employees something that they can believe in and rally around.  While it doesn't tell the employees exactly what to do to achieve it, having vision instilled in them helps positively mold their decision-making when problems must be solved that don't have clear answers.

A strong vision combined with a strong business plan is critical to the success of a growing venture.  The vision motivates everyone to achieve success, while the plan guides them to where they need to go.  In addition, the plan is significant in that it documents the vision.  By "cementing" the vision on paper, the team gains more confidence that the vision will not be easily changed and that the organization is truly committed to achieving it.

How a Business Plan Consultant Can Improve Your Business Strategy


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In my previous post, I explained how getting an outside perspective improves your chances of raising capital.

There is a second, equally important, benefit of retaining a business planning consultant to develop your business plan: it improves your business strategy.

Let's start with some facts...

Fact #1: There are 24 million businesses in the United States alone.

Fact #2:
History tends to repeat itself.

What I mean is, if you have an idea, whether it's a marketing idea, operations idea -- anything really -- chances are it's been tried before.  Chances are also that if it failed the first time, it will most likely fail again.

That's not to be discouraging, because there's a decent chance that it wasn't executed properly the first time, or lacked the nuances you bring to the idea. Regardless -- if your idea has been tested before, I bet you want to know about it.

When you are aware of the earlier attempts of an idea, you can quickly learn from them and either 1) Determine that it won't work (and cut your losses) or 2) refine the strategy and make it work.  But, if you never know about those other attempts, your chances of failure are increased.

A competent business plan advisor can provide a lot of value during this research and discovery phase.  Reputable business plan consultants not only perform market research, they leverage their existing knowledge and experiences regarding their own businesses and the businesses of their colleagues. This positions them to point out those potential pitfalls and strategies which have failed in the past, as well as strategies that have been proven to work.

This is very important, because unrealistic assumptions can kill a business.

To explore this, let's take an example from a company I just spoke with yesterday.  This firm is about to launch a new division offering BPO (business process outsourcing) services.  When I asked about their expected sales cycle (the time it takes from when they contact a prospective customer to when they secure the client) they answered 3 to 6 months.

Well, 3 to 6 months is a reasonable sales cycle in this industry. But what if they told me 3 to 6 weeks? Worse yet, what if they went out and succeeded in raising financing -- expecting revenues to come in within a 3 to 6 week period?

Most likely, they would have raised too little money and gone bankrupt while anxiously waiting for prospects to become customers.

There's another piece to business strategy consulting, which involves taking interesting (or even seemingly mundane) ideas from other industries and finding creative ways to adapt them to your business. These types of insights are frequently offered by outside advisors and have been known to result in breakthroughs responsible for transforming entire industries.

Consider roll-on deodorant. The "roll-on" part was inspired by the ball-point pen. Before that, deodorant was packaged in cream form. Or, consider Fred Smith's Fedex. Smith applied the banking industry's method of clearing overnight checks to the overnight delivery of packages.  Each of these cross-industry breakthroughs resulted in billion dollar industries.

I'll admit it... As a kid, I hated history class. I couldn't imagine information less relevant to my life than what happened in Europe 600 years ago. But you can't be ignorant about what has happened in the past or what is happening around you -- even half-way across the globe -- because it does affect you. Knowing what other companies are doing, what's working and what's failed -- that's the information that will prevent you from repeating failures and allow you to replicate success.

Who knows? A well-researched busines strategy might just result in a breakthrough that establishes your place in business history.

 

Related post: How Business Plan Writers Help You Raise Capital


How Business Plan Writers Help You Raise Capital


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Yesterday I was looking at an online forum that deals with all aspects of entrepreneurship. I quickly found the capital-raising section and started reading a post from someone who was considering outsourcing the development of their business plan to an outside firm.

Shortly thereafter, I saw a comment from an entrepreneur named Joe, who said, "How could you even consider outsourcing your business plan? Only you know your business well enough to write it."

Well, I'm probably pretty biased on this topic, since Growthink has been developing business plans for clients for a decade. I want to put that bias aside for a minute, though, because I'd like to explain the value of letting nearly anyone outside your company help with the development of your business plan.

Here's my stance: Only outside viewpoints can ensure that your business plan includes both a solid Business Strategy and Communications Strategy.  Right now, I want to talk about Communications Strategy - I'll touch on Business Strategy in an upcoming blog post.

Before we go any further, however, I want to dispel the biggest myth about business plans.

Most people think that the goal of a business plan is to provide an in-depth analysis of your business. If you have any aspirations of presenting your plan to outside investors, then this thinking is incomplete.  But most entrepreneurs are looking for a business plan to raise capital  to market your company to investors.

Yes, your business plan is a marketing document.

Would you buy toothpaste whose packaging states, in huge letters, "Sodium Fluoride," "Tetra Potassium Pyrophosphate," and "Titanium Dioxide?"

NO.

We all purchase toothpaste whose packaging promotes the BENEFITS such as "freshens breath," "whitens teeth" and "prevents cavities."

The same is true with business plans.  You should never -- particularly at the beginning -- pile on information about the details of your business. Rather, you need to focus on the benefits that investors will care about: the size of the addressable market, the milestones you've achieved to-date, what you have that your competitors don't -- and, importantly, how you expect them to get a return on their dollars.

A great communications strategy, in business planning, or in anything else, starts with figuring out what your audience wants to, needs to, and/or is willing to hear. Then, of course, you have to give it to them.  You must put yourself in your audience's shoes and figure out the most compelling way to convey the benefits of your business to them.

Back to Joe's quote, "Only you know your business well enough..." Following his logic, there would be no advertising agencies or public relations firms.

Actually, imagine if all of your competitors decided to do all of their advertising and PR in-house, and you were the only one to seek outside, professional assistance.  Your marketing would likely dominate your competitors'.

In the same way, when your business plan brilliantly communicates the benefits of your business to investors, you give yourself an immeasurable competitive advantage over the thousands and thousands of other businesses out there competing for capital.

It's no wonder that only a very small percentage of companies seeking venture capital successfully raise it.  Yes, the majority of contenders may "know their business well enough," but sadly, not well enough to convince others to invest.

 

Related post: How a Business Plan Consultant Can Improve Your Business Strategy


Gain Valuable Market Insight in 10 Minutes Flat


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Are you looking to enter new markets or better serve your existing markets? If so, here's a technique that will allow you to gain insightful market research and learn best practices REALLY QUICKLY.

And for no cost, thanks to Google.

The other day, my son told me he wanted to take up lacrosse, so let's use lacrosse as our example. So, let's say I want to get into the lacrosse business, selling equipment through stores and/or online.

To start my market research I went to Google's new keyword search volume tool here: https://adwords.google.com/select/KeywordToolExternal

I typed in "lacrosse" and Google then shows me all the related keywords and how many times people searched on them last month. It immediately showed me the following:

Keywords_________ Approx Monthly Search Volume
lacrosse.......................... 2,740,000
lacrosse equipment........ 110,000
women's lacrosse........... 74,000
girls lacrosse.................. 60,500
high school lacrosse...... 49,500
lacrosse sticks................ 49,500
lacrosse wisconsin......... 49,500
lacrosse camp................ 40,500

From this, I see that lacrosse is a pretty popular sport; in fact, when I download Google's list of the top 150 lacrosse-related searches, I see that the sport gets 4.9 million searches per month.

To put this in perspective, and to see if the market is growing or expanding, I go to Google Trends at http://www.google.com/trends and type in "lacrosse."

Not only does Google Trends show the number of searches that people have done on lacrosse monthly beginning in 2003, but when I type in additional sports like football and basketball, I can see the relative size of lacrosse. Also, from the Google Trends graph, I quickly saw that lacrosse is a seasonal sport with peaks and valleys in search volume.

My next area of research is to determine the level of competition for selling lacrosse equipment. For this, I simply type in terms like "lacrosse," "lacrosse equipment," and "high school lacrosse." I find that general terms like "lacrosse" and "high school lacrosse" have very little competition (based on the few Sponsored Links I see on the top and to the left of the search results), thus providing a significant opportunity if I can figure out products and/or services to fulfill the needs of those who search these terms.

For the term "lacrosse equipment," which is a term that shows more buying intent (i.e., someone who searches this term has more intent to purchase a product than someone who simply searches "lacrosse"), I see several more competitors. Finally, when I search the term "lacrosse sticks," I see even more ads, since someone who types in this phrase has even more buying intent.

The next tool I use is Google's Traffic Estimator, located at https://adwords.google.com/select/TrafficEstimatorSandbox, which shows both the estimated clicks per day I would receive if I advertised on the term, but more importantly, the average estimated price that I would pay each time someone clicked on my ad.

Why is this important? Well, it gives me an estimate of how much my competitors are spending each time someone clicks on their ads.

For "lacrosse sticks," Google estimates that the top 3 advertisers pay between $0.99 and $1.26 per click.

The final stage of my research is to return to Google.com, do a search on "lacrosse sticks," and conduct competitive research. I click on the ads of the companies advertising on the keyword, and figure out how they are generating more than $1.26 per click.

I assess things like:

1. How their web pages are organized

2. Whether they are trying to generate profits from merely a one-time sale or whether they have long-term revenue generation systems (e.g., a paid membership club)

3. Whether they have a newsletter or other mechanisms to collect the email addresses of their prospects so they can market to them on an ongoing basis, etc.

This process provides me with significant competitive intelligence on current practices in the industry.

So, maybe this takes a little more than 10 minutes to thoroughly assess a new or existing market, but this technique and the tools listed above will quickly give you great information and insight really quickly.

 


Martin Conroy's Billion Dollar Story


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storyOn a beautiful late spring afternoon, twenty-five years ago, two young men graduated from the same college. They were very much alike, these two young men. Both had been better than average students, both were personable and both - as young college graduates are - were filled with ambitious dreams for the future.

Recently, these men returned to their college for their 25th reunion.

They were still very much alike. Both were happily married. Both had three children. And both, it turned out, had gone to work for the same Midwestern manufacturing company after graduation, and were still there.

But there was a difference. One of the men was manager of a small department of that company. The other was its president.

What Made The Difference?

Have you ever wondered, as I have, what makes this kind of difference in people’s lives? It isn’t a native intelligence or talent or dedication. It isn’t that one person wants success and the other doesn’t.

The difference lies in what each person knows and how he or she makes use of that knowledge.

And that is why I am writing to you and to people like you about The Wall Street Journal. For that is the whole purpose of The Journal: to give its readers knowledge - knowledge that they can use in business.

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The above story/sales letter, written by Martin Conroy, was used by the Wall Street Journal for 25 years starting in 1974. Doing the math regarding how many people this letter was sent to, the percentage of orders that came from it, and the subscription prices, it is estimated that this story resulted in $1 billion in sales for the paper.

So, what’s the point?

The point is that stories are an extremely effective, but often overlooked, sales tool that can allow emerging ventures to compete with large established companies. Stories allow companies to get their prospects involved in their message. It gets them excited. And then they want to learn more.

Here's an example of another startup who crafted a great story...

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I’m about to tell you a true story. If you believe me, you will be well rewarded. If you don’t believe me, I will make it worth your while to change your mind. Let me explain.

Lynn is a friend of mine who knows good products. One day he called excited about a pair of sunglasses he owns. “It’s so incredible!” he said. “When you first look through a pair you won’t believe it.” What will I see? I asked. What could be so incredible?

Lynn continued. “When you put on these glasses your vision improves, objects appear sharper, more defined. Everything takes on an enhanced 3D effect and it’s not my imagination. I just want you to see for yourself.”

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The story goes on to discuss all the benefits of Joe Sugarman’s BluBocker sunglasses… over 20 million pairs of which have now been sold!

Does your company have a great story?

Landing Page Optimization, Business Planning and Google's Success


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Over the past few weeks, I've spent a lot of time studying a field called Landing Page Optimization. It's a fascinating field that deals with improving landing pages, which are the pages of your website that visitors come to either organically or through paid marketing initiatives. The goal of Landing Page Optimization is to maximize conversions (e.g., sales, newsletter signups, etc.) of these visitors.

One of the guiding principles of landing page optimization is that landing pages need to be simple. If there is too much information on the page, the reader gets confused and either clicks the back button or closes the browser.

This principle is the same as a guiding principle of business plan development; mainly that the plan, and particularly the executive summary, needs to present the business concept concisely so that the audience quickly understands it. If not, they will simply discard the business plan.

Interestingly a concise message might not only improve your business plan and your landing page, but your entire business’ success. Consider the case of Google. The Google homepage has always had very little text on it. In fact, if you go to it, it doesn’t even say that it is a search engine. But, by having a big empty box in the middle and having a button underneath it that says “Google Search”, it is pretty intuitive that Google is a search engine.

Now, when someone was referred for the first time to Google over the past few years and came to Google.com, what do you think they did? Well, due to its simplicity, I think we can assume that nearly all people who came to Google.com typed in a search term and hit the search button. Then, they instantly saw high quality search results and were sold on the fact that Google is a great search engine.

So, by keeping their landing page and business concept/proposition extremely simple, Google was able to get people to try its product. Because the product is high quality, those trials resulted in loyal users.

While there are many examples out there, one interesting company that I think could really improve its business plan, landing page, and thus chance of success is SpinVox. I first read about SpinVox in this Guy Kawasaki post in which he says, “This service translates voicemail to text and then sends a text message to your phone and/or an email to your computer.”

While Guy Kawasaki does a great job clearly explaining SpinVox in this 22 word sentence, I don’t think SpinVox does. On its homepage, SpinVox has the following text:

"SpinVox captures spoken messages and cleverly converts them into text. It then delivers your message to a destination of your choice – inbox, blog, wall or space. Right in the moment. Giving you the power to Speak Freely... Simply put, we do one thing – turn voice into text. But it's one thing that can be applied to the many ways you communicate, from your Voicemail to your Blog. Use the finder below to find the right one for you."

If I were to come to this page without Guy Kawasaki’s clear explanation, I would most likely leave without trying the service. It neither clearly explains the most common use nor the value proposition of the service.

To sum up, KEEP IT SIMPLE. Use simplicity to hook the investor, the customer, the partner, or whoever else you are trying to influence. Once hooked, over time (which could be as little as 2 minutes later), you can tell the full story.


The 6 Untold Reasons Why Businesses Fail


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There have been many articles written on the subject of why businesses fail, and most of them point to the same reasons, such as:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

These reasons are widespread and no doubt cause many businesses to fail. However, the reason for a company’s failure is not always something so obvious. Here are 6 lesser-known reasons why a business might fail.

Why do these reasons remain untold? Simple. Most of the time, the business owner doesn’t realize that these reasons are what caused their failure, and consultants generally don’t ask the kinds of questions that would identify them.

 

1) Focusing on Short-Term Profits Rather than Building Long-Term Value

It’s important to be profitable, but NOT when short-term profits come at the expense of the long-term value of the business and the lifetime value of the customer.

Here’s a real-life example: In the late 1990s, there was a franchise of a national smoothie shop located in West Los Angeles, CA. At this store, smoothies sold for about $4. They cost only around $1 to make, resulting in a solid profit. However, certain ingredients, like mangoes and berries, cost more than the other ingredients, such as juice and frozen yogurt. Since juice and frozen yogurt were cheap, the franchisee put more of these ingredients in their smoothies and less of the expensive ingredients. By doing this, their profit margin per smoothie grew by approximately 20 cents, which seemed great… on paper. Unfortunately for the store, customers weren’t satisfied with the taste of the lower cost smoothies, people stopped going there, and the store eventually went out of business.

As you can see here, it’s important to consider the lifetime value of a customer. Repeat business is way more valuable than short-term profits. Saving 20 cents on a smoothie today will cost you big in the long run.

(Another great example of this concept is Google giving preference to relevant ads in order to improve the user experience, even though there are less relevant advertisers willing to pay a higher price per click.)

 

2) Ego Business vs. Business Opportunity

The foundation of a good business is a good business opportunity. As an entrepreneur, you want to fill a need in the marketplace. Unfortunately, many businesses are started solely to fulfill an entrepreneur’s ego (or, to put it less harshly, to satisfy one of the entrepreneur’s interests).

This can often be seen in the restaurant & bar industry, where too many entrepreneurs open shop because it’s a “cool” thing to do. Such businesses rarely succeed.

 

3) Life distractions

The best ideas don’t always come between 9 and 5. A person might have a great idea while driving, or in the shower, or while working out. It’s moments like these when an entrepreneur leaves behind the day-to-day tasks of running a business and gains a better perspective of the big picture.

Sadly, there are a lot of things that can disrupt a person’s home life. Illness, death of a family member, divorce, relationship trouble, and problems with a child are just a few of the many issues that can affect a person’s mindset. When things like this occur, moments of clarity are replaced by stress and anxiety.

Many entrepreneurial ventures depend heavily on new ideas and creative thinking, and when an entrepreneur’s head isn’t clear, business can suffer.

 

4) Bad feedback & white lies

People like spending time with friends and family.

Unfortunately, when it comes to business, friends and family members don’t always give the best advice. This is especially true at the birth of a business. Nobody wants to be a buzz-kill. No one wants to tell an entrepreneur their idea is bad, or their location stinks, or anything else negative. Most people are conditioned to be supportive of their friends and family regardless of the situation.

Plus, nobody wants to be wrong. Imagine your friend has an idea that you think is terrible. You share your objections, but the friend goes ahead with the idea anyways, and it succeeds. Now you’ll always be the naysayer that never believed in them. Nobody wants to be that person.

That’s why you’ll rarely get honest, objective business advice from friends or family members. And yet, oftentimes friends and family are the first people entrepreneurs turn to for advice.

 

5) Maybe the owner is just a jerk

There are a lot of great people in the business world, but there are also some jerks. And these jerks sometimes start their own companies.

A jerk, in this case, is someone who a lot of people can’t get along with. Maybe it’s because they’re a super-perfectionist, or they yell a lot, or they demand that everything be done in a certain way, or they constantly complain. Or maybe they’re annoying in some other way.

The key is that nobody -- not employees, customers, partners, suppliers, clients, etc. -- wants to give 100% for a jerk. Clients and customers will be turned off, and employees will start cutting corners. Most people believe that life is too short, and don’t want to spend their time working with someone they can’t get along with.

 

6) The entrepreneur never took the full leap

In most new business attempts, the entrepreneur never leaves their day job, or they create a back-up plan, or they have a job lined up in case the new business fails. In these cases, failure IS an option, as the entrepreneur has a safety net to fall back on. In cases where failure is NOT an option, and the entrepreneur depends on the new business to provide food, shelter and clothing, the business has a greater chance of succeeding.

There’s a great example of this concept in this NY Times article. Xiang Yu was a third century (B.C.) General in the Chinese army. He led his troops into enemy territory by crossing the Yangtze River. Then, in order to inspire his troops, Xiang Yu took some unorthodox measures. He burned all of his troop’s ships and destroyed all of their cooking materials. This left the troops with only two options: Move forward and conquer the enemy, or perish. The maneuver did not make Xiang Yu very popular with his soldiers; nevertheless, the troops advanced and ultimately emerged victorious.

Xiang Yu’s methods might be a little drastic in this day and age, but the moral of the story is what’s important. Author Anita Roddick has said that entrepreneurship is a matter of survival, and the truth is, if you’re not totally committed to your business, your chances for success will be greatly diminished.

 

Related articles:

 

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About Growthink

Since 1999, Growthink's professional business plan writers have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.

  • Want to ensure that your business succeeds?
  • Need help with your business plan? 
  • Looking to raise venture capital?

 

Speak with a business plan consultant today!

 


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