Monday, July 14, 2008

Integrating entrepreneurship into your every day life

I recently visited some friends that work for themselves as construction contractors. Their business is small (just the husband and wife team for the most part) and they live modestly. When I pulled into their driveway, there were flowers blooming all around their home that took my breath away - hundreds of lilies in almost any color, hostas everywhere and quite a few other flowers that I do not know their names. When they moved into the house three years ago, there was not a single flower there. You see, flowers were their passion and starting the following summer, their plan was to start selling them.

We then went inside their home where their dog had eight puppies that were just two weeks old - my daughter did not want to leave them! I then learned that this particular breed of puppies would sell for over $200 a piece, and that was their plan once the puppies were old enough.

I left thinking about how entrepreneurial they were with their passions and their every day life -- and how smart they were to be able to find a way fund their passions and bring in a little more money while doing so. I learned first hand that entrepreneurship doesn't always mean writing long business plans and integrating cutting edge technology - it can also mean simply being smart and creative - or entrepreneurial - with how you live your life.

Do non-profits need social media?

If you are an entrepreneurial non-profit, or wish to be, some of the questions that you might be wondering is (a) what social media applications are appropriate? and (b) how should I integrate them?

Like for-profits, I suggest starting with a bit of market research. See what your 'competitor' non-profits are doing, or perhaps better stated, what other best practices are out there that you can learn from. If someone else is doing it, it makes much more sense to take what they have done and customize it to your specific needs/preferences. A website that was recently referred by the Church of the Customer blog is the "Association Social Media WiKi." Although the number of associations that have registered to date is not huge, you can definitely pick something that is relatively close to your industry and see what social media venues it is using and check them out. A great start.


Thursday, July 10, 2008

Assumptions versus Knowledge

One of my favorite quotes is that new ventures have a 'high ratio of assumption to knowledge' (McGrath & MacMillan, 1995, p. 4). Essentially, when you start a business, you are relying on a huge pile of assumptions. Take the business plan, for instance. It is an important tool that I highly recommend, but it is based almost completely upon assumptions such as what price you think you can charge, how you think the customers/competitors will react, the sales you think you can get, etc. You will likely get financing if your assumptions appear believable, but it is still not a guarantee of success.

As a business grows, however, this ratio of assumption to knowledge should change. You will get customer feedback regarding your prices and products/services. You will see how your competitors react. You will find out how much sales you can actually build. Then, if you are going to be successful, you integrate this knowledge into your working business plan to reduce your reliance on all those unknown assumptions. 

As I am writing this blog, I am sitting here at my favorite coffee shop and just finished a conversation with the owner. (By the way, if you ever get to Linton, IN, you have to look up Francisco de Borja!!!) They are in their second year of business and he described their experience thus far asA cup of coffee. a roller coaster as they try to figure out what works and doesn't work for their business. One example he gave me was their pastry cases, they realized that customers are more apt to purchase pastries if they are on the counter where they can see it and help themselves rather than in the case. I've also noticed that they have modified what they sell for lunch and also what they sell retail.

What I admire about their business is that they are willing and open to taking in new knowledge and integrating it to produce a more successful business. Other businesses can get stuck on that initial business plan (based entirely on assumptions) and don't take the opportunity to adapt and grow into a mature business with the new knowledge being given.


Wednesday, July 9, 2008

What to read?

While there are many, many books related to entrepreneurship out there, an author that I would recommend is Robert Kiyosaki. He has not only authored many top selling books, but also produced games, programs and coaching to help get his point across and that provide in my opinion a valuable educational service. His focus is primarily financial, and this has everything to do with YOU and/or how YOU view the financial aspect of your business.

I was initially turned off by the wording of his best selling book Rich Dad Poor Dad, as my goal in life is not to be rich. However, after giving it some thought, I strongly agreed that I would rather be efficient and smart with my resources than foolish and wasteful.

To give you a taste of Koyosaki's philosophy, here is a table that he uses to describe his 'poor dad versus rich dad' comparison:

Poor Dad vs. Rich Dad

My Poor Dad Says   My Rich Dad Says
  "My house is an asset."   "My house is a liability."
  Rich dad says, "If you stop working today, an asset puts money in your pocket and a liability takes money from your pocket. Too often people call liabilities assets. It's important to know the difference between the two.
  "I can't afford it."   "How can I afford it?"
  The statement "I can't afford it" shuts down your thinking. By asking the right question, you mind opens up and looks for answers.
  "The reason I'm not rich is because I have you kids."   "The reason I must be rich is because I have you kids."
  "I'm not interested in money."   "Money is power."
  "When it comes to money, play it safe - don't take risks."   "Learn how to manage risk."
  "Pay myself last."   "Pay myself first."
  Rich Dad always took a percentage off the top of any income he earned. He put this money into an investment account that went toward purchasing his assets. Poor Dad spent all his money first and never had any remaining for investments.
  Believed that the company you worked for or the government should take care of your financial needs.   Believed in financial self-reliance and financial responsibility.
  Focused only on academic literacy.   Focused on financial literacy as well as academic literacy.
  Learned only the vocabulary of academia.   Learned the vocabulary of finance – "Your words are the most valuable tools you have."
  "I work for my money."   "My money works for me."
  Thought that making more money would solve his financial problem.   Knew that financial education was the answer to his financial problems: "It's not how much money you make that's important – it's how much money you keep and how long you keep it."

You can learn more about Robert Kiyosaki and the products/services he offers by visiting his website. If you are familiar with this series, let me know what you think.