The Entrepreneur's Mentor

Don't Hire the Next "You" too Early

Your early hires need to have your values and they need to share your vision. Their behaviors have to be in accord with those that you want representing your company. But they should not otherwise be images of you- for several reasons.

You need diversity of thought, of approach of style.

You need people who appeal to different market segments.

You need people whose competencies complement yours rather than duplicate them.

If you hire someone to be a major player in your organization, that person needs to be strong in areas where you are not and who feels comfortable and passionate about excelling in those areas. If you are a freewheeling entrepreneurial type who shoots from the hip, don't sell your style to the person you need to be the detail-oriented button down type.

There may be a time for the 2nd you down the road. If you start to back out of your day to day role; or if you are thinking about succession, then having someone ready to fill your role makes sense.

But, early on, you need to keep your bases covered, your gaps filled. Don't be a magnet to draw people from who they are and why you hired them toward you.

Hiring Your First Salesperson

Every entrepreneur growing a business beyond a very basic level reaches a point at which he or she realizes that the business will not grow further without additional employees carrying some of the weight. Fighting the urge to keep everything important close at hand, the entrepreneur nervously hires the first salesperson.

This is a big step for several reasons. The first is an admission on the part of the owner that he (from now on he = he or she) cannot do everything himself. Another part of the admission is that there are other aspects of the business that are as or more important than sales and he must focus on them.

Secondly, the boss may be the best technician or the most creative person, but not necessarily the best seller.

Third, is the trust that the owner is putting in another to carry the company banner out into the world. If there is a problem with trust, it is actually a two part problem. The obvious first part is whether the owner can trust someone to know his business and its products/services and capabilities/limitations well enough to present them honestly to the public with the right spin on them to make them palatable to the most people.

But the less obvious part lies within the entrepreneur. He must trust that he understands his own business well enough to relate its nuts and bolts and vision and strategy to customers. He must trust that he can communicate it in a way that the salesperson understands it and can then communicate it to others.

A business cannot sell or market well without knowing why it is in business; what need it fills in the marketplace; how it is going to fill it better than others; and where its value proposition lies.  If an owner doesn't know these basics, he cannot give the salesperson the tools to be a successful company representative.

Take a client like a local ice cream parlor. They are doing okay with walk-in traffic during the summer, but that will slow down quite a bit as the weather changes. They need to think of other marketing ideas. We talked about the huge corporate complexes within a few miles and we talked about ways to reach out to them. The owner wanted to distribute fliers announcing the location and hours.

I suggested thinking like the managers of the businesses. They don't care about ice cream. But they may care about showing appreciation for their employees. This could mean birthday ice cream or Friday ice cream or ice cream for team building. What the businesses would then be buying would be a fun way to make their employees feel good or bond. The means is ice cream.

Know what is important to the customers you are attempting to reach. If you can figure out what they are buying, you may have an easier time selling what you are selling. And if you get it, you can pass that knowledge on to your salesperson and help them sell it. Once they "get it" they can create different packages of products or services to line up with what the customers want to buy.

So, in simple steps:

Understand your business and your products and services.

Communicate it clearly to your sales team. Make sure they get it.

Continue to strategically advise the sales team.

Let them sell, sell, sell.

What You Don't Know Can Hurt You

Nobody likes to be blindsided. Bosses don't like it and neither do employees. Being blindsided implies getting hit from a direction from which you least expect it.

This can happen in business and it is no fun. It typically occurs when we don't know what we don't know. And of course, under almost every circumstance, "ignorance of the law is no defense."

There are laws at the federal and state level that apply to almost everything. There are clauses in our insurance policies that we may never read, and thus never know about, that can have serious consequences. So, how do we avoid being blindsided?

First, we need to assume that there is some regulation over almost everything  do in business. From the moment we even interview, before we even hire employees, there are laws covering our conduct. There are questions we can legally not ask. If we ask them and then don't hire based on the answers, there is potential legal liability. That means getting with your lawyer before beginning the employee route and learning what you can and cannot do. If you don't want a lawyer, research on the internet. But your research needs to be state specific too. While federal laws apply no matter where you are in the US, state law varies.

There are legal questions around treating a person as an independent contractor and an employee, with serious consequences if you make the wrong choice.

There are legal consequences in how you treat your employees with regard to overtime and in paying them a salary rather than on an hourly basis.

How you classify your people matters for workers compensation premium purposes. If you play games and then get audited at the end of the year, there can be a huge audit premium.

If you truck across state lines and have CDL drivers, there are a whole batch of requirements that must be met. There may be random drug and alcohol tests. Truck logs must be kept. Fuel tax issues arise.

How are we supposed to know this stuff if nobody tells us?  We have to learn to ask. If we rent trucks, ask the rental company? Your accountant, your lawyer, your insurance company all have a lot of information that you need to have. If you have fork lifts in your warehouse, the forklift company has valuable info for you.

If you keep hazardous materials in your shop, how they are stored and handled is a matter that OSHA cares about and so does your insurance company.

And of course, the big one is the tax man; except it is tax "men" and they reside at the federal level, state level and numerous more local levels. Make sure you know what jurisdictions have taxing authority over you. Penalties and interest are often way higher than the tax owed itself.

Do you know "what a hostile work environment" is? Do you know what a "zero tolerance policy" is?

So much to know, all of it far afield of the work that our businesses usually do. But don't ignore this stuff. If you do, it can put you out of business and stick you with personal liabilities.

Entrepreneurs need to recognize there are things they don't know and find the right advisors to give them the right information.

Recession Blues

Things have been going along pretty well. The business has been growing at a steady clip and it looks like you are going to "make it." Then the economy "goes south."

Orders get canceled. Customers are much slower paying their bills. Vendors are much more demanding when it comes demanding payment of their bills. There is not enough cash. What to do!!

The first thing to do is make sure you don't panic. Take a deep breath and chant your mantra. This too shall pass.

Then come up with a strategy. Start by doing a cash flow analysis and gain an understanding of what your cash looks like going forward.

Second, begin looking to where you can tighten your belt. Some might start with marketing expense, but I would not. You have to keep your name out there or risk losing your position in the market. I would look in operations. I would look at part-time positions. I would look at full-time positions that seemed like a good idea at one time, but don't now. Nobody likes layoffs. But the business comes first. Make the hard decisions.

Revenue producing expenses should be maintained where possible.

You need a plan for your payables. Do I pay some in full and others not at all? Do I pay everyone some of what they are owed and try to stay on a schedule? Whatever you decide, you need to communicate it to the vendors and it is important to stick to your promises if at all possible.

You need a plan for sales. Lowering prices might be a short-time fix. But it may be a long-term disaster, as it may be hard to bring them back up when the economy strengthens. Think about running incentives or specials. Do things for your loyal customers rather than the occasional buyers.

This is tough going, but it is an opportunity to "go to school" and "get smart." It is a chance to see where you have been deceiving yourself about items that are "necessary" but really aren't. It is a chance to see how good your people really are.

Tough times are a real test under fire. Those that pass the test will gain valuable knowledge contributing to long-term survival.

Double Vision

I am a big proponent of every business owner having a vision for the growth and development of his or her company. Why leave success to chance? A strategic plan for achieving the business goals is a must. Remember, "Hope is not a strategy." We cannot just hope that we are going to hit our marks.

At the same time we are growing our businesses according to a plan, we should be living a personal vision made possible by our business success.  We all know that "all work and no play make Jack a dull boy."

I guess I am at that age....I tend to read the obituaries in the morning papers to see who has passed away. Of course I have a curiosity as to whether death has taken anyone I know. But beyond that, I am trying to get a sense of how people have lived their lives, if they have left a legacy beyond  their business and their assets. Have they enjoyed the fruits of their success? Have they enjoyed their lives?

It is important to remember that our business success is a means to achieve our personal goals. Let me say that again. Our business success is a means to achieve our personal goals. When I look at obituaries, I look at what people did with the life they had. Did they do volunteer work? Did they support certain causes? Did they have a family life? Interesting hobbies?

Life is not about amassing the most wealth, the most "toys." If you could write your own obituary, what would you want it to say about you? If it was the only reference your great, great grandchildren had about you, what would you want them to know? What message would you want to send by how you lived your life?

Would you want it to be "Joe was worth $1 billion when he died, and it was all buried with him?"  Or "Joe was worth $1 billion at his death, all of which he gave to charity?" Or "Joe's funeral was attended by all 100 of his employees, his many friends, the boards of all of the causes he supported, and his children, grandchildren and great grandchildren?" I am not saying there is a right or a wrong response. But as a friend of mine says, "Life is not a dress rehearsal."

We need to live and enjoy our lives as much as possible. We can best do this by aligning our personal vision and goals with our business vision and goals. We work hard to provide us with the lives we want. There is a connection and we should not forget it.

If we have choices in life (and all of us do, though many believe they do not) we should choose to be happy, to choose our career to do something we find meaningful, fulfilling and enjoyable and to spread that happiness into our personal lives.

So, take a few moments to sit down and write your obituary. And then work to make it happen the way you have written it.