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Business and Faith Connected: One Man’s Journey

By | Business By The Book, Ownership & Purpose, Uncategorized | No Comments
Waiting on the Mist to Lift

He told his wife he’d be a millionaire by age 30. But that year he was forced to file for bankruptcy protection. Phil Drake worked a feverish 100 hours a week — his business’s debt was six times as large as its income. His wife was left to care for their three young children — living on food stamps. And the IRS was knocking at their door — threatening to shut him down. He thought about suicide. At least the insurance money would let his family eat. For Phil, “business and faith were not connected. God was only there for emergencies….

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How to React When a Customer Prospect Says “No”

By | Business By The Book, Sales, Sales, Sales & Marketing | No Comments
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I recently received an email from a couple of young entrepreneurs that I am mentoring that were a bit downcast. They had given their best pitch to a prospective client, but it fell flat and they did not get the business. Here are a few tips that I shared with them on how to think of the sales process as a pipeline (see this blog post that explains the process in more detail along with definitions of the terms used below): As in any pipeline, the more you dump into the opening of the funnel, the more will come out the…

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How to Save a Retail Store That’s Losing Money Every Month

By | Business By The Book, Business Improvements, Cash Flow Management, Increasing Profitability, Organization & Strategy | No Comments
Avoiding Business FailureQ: I launched a retail store about nine months ago, but I need immediate help. My business is losing several thousand dollars per month and I am not even drawing any salary for me or my family. My revenue has flattened out due to the economy and is around $40,000 per month, but my expenses are running around $46,000. I have an SBA loan payment of $6,600 per month and a building lease of $3,300 per month. I" />

Q: I launched a retail store about nine months ago, but I need immediate help. My business is losing several thousand dollars per month and I am not even drawing any salary for me or my family. My revenue has flattened out due to the economy and is around $40,000 per month, but my expenses are running around $46,000. I have an SBA loan payment of $6,600 per month and a building lease of $3,300 per month. I’m thinking about trying to refinance my SBA loan to get a lower payment. Any suggestions? A: The first thing I would suggest…

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Business Planning in a Down Economy

By | Business By The Book, Buying a Business, Buying a Franchise, Growing a Business, Growth Strategy, Increasing Profitability, Investing in Small Businesses, Planning, Starting Up, Valuing a Small Business, Writing a Business Plan | No Comments
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Q: Should the economic forecast be an important factor in determining the type of business to start or acquire? A: Most businesses that are acquired or started are done so with a long time horizon in mind. Add to that the fact of the typical continuous cycles of any economy: (downturn, bottom out, upturn, and peak). Given that long-term view and the necessary expectation of economic cycles that almost defy the ability to forecast the timing of those trends, it’s more important to pick an industry/market in which you have loads of experience and create a superior offering with a…

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The Perfect Brainstorm

By | Business, Business By The Book, Business Improvements, Leadership, Leadership | No Comments
Startup Stock Photos

  Poet Robert Frost once described the brain as something that “starts working the moment you get up in the morning and does not stop until you get into the office.” Okay, so you can jump start it again with a stiff cup of Folgers. The point is, much of what passes for work in the workplace requires—admit it—very little of your cerebral cortex. The mundane tasks that constitute the average workday are often far from intellectually stimulating—but that’s probably a good thing. A certain amount of routine helps us balance the stressful elements of operating a business. Too much…

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How to Win in the Midst of an Industry Consolidation

By | Business By The Book, Exit Strategies, Growth Strategy, Organization & Strategy, Selling a Small Business | No Comments
Big Fish Little Fish

Industry consolidation is the process when a few companies start buying up other companies in the same industry and the number of competitors in an industry shrink dramatically. The main goal for the consolidators is to grab market share, cut costs, boost productivity, and improve investment returns through scale economies. I’ve studied industry consolidation in business school, participated in a few industry consolidations as a consultant, and I founded a company in my current portfolio to take a lead role in consolidating its target industry. Industry consolidation is almost inevitable: over time, most industries will consolidate to where the largest three…

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How Employees Really Act When the Owner Isn’t There

By | Business By The Book, Compensation Management, HR Management, Human Resources, Leadership | No Comments
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As a follow up to my The Key to Motivating Employees post, I wanted to share an incident I experienced a couple of years ago that highlights the necessity of creating the proper incentives and culture to encourage employees to think more like owners. My family and I pulled up to a specialty cabinet store about twenty minutes before closing – sufficient time to run in and make a large purchase of around $1,000 for our farmhouse renovation project. Unbeknownst to the employees, we already had been all over their website and we knew exactly what we wanted. As I…

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Successful B2B Startups Always Ask These Two Questions

By | Business By The Book, Coming Up with an Idea, Planning, Starting Up | No Comments
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During a mentoring session with some interns, one of them brought up an idea he was working on based on informal market research he had conducted by striking up conversations with prospective customers in his target industry. He was zeroing in on a particular process that was the most frustrating part of the life of his prospects in the daily life of running their business – his target customer’s “pain.” If there is sufficient “pain” in the life of a business owner, they will usually seek a solution to that pain and if there are enough such prospective customers with the…

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Warning! Don’t Marry an Entrepreneur, Unless…

By | Business By The Book, Ownership & Purpose, Running a Business, Starting Up | No Comments
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I was in the middle of the dot com crash and the emotional journey from the heady days of preparing my company for an initial public offering to the disheartening task of cutting a massive cash burn rate. The company had chewed up $30 million in the race to be first to market in our chosen space. Not only were we out of cash, but we owed millions more in unpaid bills and our lead investors were refusing to invest additional capital. I felt the crushing weight of 335 employees in offices across the U.S. and Europe (many of whom…

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