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By Donald McMichael, May 12, 2012 1:55 pm

In business the most valuable tool you possess is the ability to gather information. You’re constantly on the lookout for insights on industry trends, competitor actions, economic forces, key supplier grumblings, and most importantly what job(s) your idea customer needs done.

Good insights are worth their weight in gold, but bad information can be deadly. Actions predicated on it waste not only money (salaries, prototype expenses, misdirected marketing efforts, etc.) but more importantly can tank professional relationships and your business’ reputation.;

But how do you avoid being burned from unreliable information?

Think like a reporter.

They aren’t compensated for finding the story but for verifying to the best of their ability all sources and ensuring that the information they’re using to weave the full story is authentic before it hits the light of day. Unfortunately for most, but great for those who excel at it, evaluating the reliability of information is an art as well as work – much of which is detective work.

Here are three ways that you can find key data/proof points that support your primary research.

Climb to the mountaintop. Confirm your information with a 3^rd party. Seek out 2 to 3 experts to cross verify the information. These could be individuals who are deeply familiar with an area like the targeted market, industry economics, or the particular company.

Dig for details. Ask pointed follow-up questions, not only to your source but also to the world. Tap into the knowledge of the collective by utilize tools such as Twitter and LinkedIn to push a specific question to a knowledgeable sub-set of your connections. Granted individual data that comes from ‘crowdsourcing’ has its own creditability issues, but widespread beliefs can verify trends and core issues.

Extrapolate upon existing creditable sources. Utilize sources of secondary information, the main providers of which are governments, trade associations, academic institutions, research houses, and national & international institutions.

Do you agree? What other methods can you add to our knowledgebase?

Donald McMichacel teaches BE 261 – Starting a Small Business.
Follow him on Twitter at @DonaldMcMichael or Google+ at +Donald McMichael

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By Donald McMichael, April 14, 2012 1:33 pm

7 Behaviors You Must Know

Last month’s post touch a raw nerve and set off a series of conversations. What did this? We talked about selling, in particular how to become more confident in our skin while selling.

It’s great to get feedback and have the post’s life extend beyond the pages of the blog. But, what I don’t want to be overshadowed is an assumed foundation point – when given a choice we deal with people that we know, like, and trust. Without these three working in your favor you’ll be in for a very long voyage.

It’s that simple.

So, it stands to reason that if we would like to make the sales process easier we should focus on strengthening our know/like/trust quotient.

Seems straight forward enough. We understand that to be ‘known’ we have to present, or be presented, to our target market. There’s tens of thousands of blog posts, articles, and books on business networking. ‘Like’ as well is also a fully covered topic. In fact, I’m going to go out on a limb and say that we’ve been honing our like skill our entire lives. Just think back to all the times your mom decided that it would be nice if you spent more time with [fill-in relative of choice], encouraged you to go meet your new classmates, and the all time classic “play nice”. This leaves us with ‘trust’. This one’s not so straightforward.

Trust needs to be earned…
We’re all familiar with the first half of this mantra (see section title), but it’s the second half “and should come only after the passage of time” that we never hear. So, exactly what should we be doing to shorten this incubation period? Here are seven simple, everyday behaviors we can follow.

1. Don’t waste others time. Be on time; show that you have a high level of respect for and commitment to other people. Prepare, failing to do so not only wastes their time, but is also a very loud signal that you don’t feel they are worth your time. Question for you. If you waste someone’s time how likely is it that they will trust you with something else that matters?
2. Be present; listen with complete attention. Focused listening provides you with enough information to carry on a robust conversation. You’ll be able to ask pertinent questions, deepen the engagement, and possibly provide insight that helps them with a need or want.
3. Share your knowledge. There’s no better way to earn trust than to help others succeed. An added bonus is that it makes you look like an expert.
4. Honor your promises. Try your best to keep your promise, but if you realize that you can’t let them know early and have a Plan B teed-up. I the end, you might not be able to ultimately come through but you did honor the commitment and more importantly the relationship.
5. Be big enough to admit when you don’t know. We would all love to be perceived as the ‘go to’ source. In reality admitting what we don’t know is a sign of strength. Why is this? It allows us to focus deeply on an area of knowledge, thus when we do speak people stop and listen. Doubt this, think about Warren Buffett and how it works for him when he talks about how to identify a strong business.
6. Own your mistakes. In fact, do it one better own your mistakes and take responsibility for the consequences.
7. Extend trust to others. All the above is great and you should certainly engrain them into your behavior. The most powerful behavior to earn trust, however, to is to extend it to others.

What do you do to ensure that you’ve done everything you can to establish trust?

Donald McMichacel teaches BE 261 – Starting a Small Business.
Follow him on Twitter at @DonaldMcMichael or Google+ at +Donald McMichael

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By Donald McMichael, March 10, 2012 11:00 am

For as much as we humans love to share experiences and insights with each other (just checkout Twitter, Facebook, and your local water cooler), why does the thought of ‘selling’ conjure up nightmares for many?

• Talking about yourself feels uncomfortable.
• Public speaking opens you up to public criticism.
• Haggling, it’s just not you.

But, at least you seem to be in control and after, at most, an hour it’s done. So we can handle them.

When we look at selling though, we just can’t see an end so we don’t even want to try. Instead we choose to hide behind tools like social media sites, glossy brochures, and others, hoping that our good work wins the day. At a time in the past this might of been enough to pay the bills, but in this day and age we all need to be at a minimum comfortable selling ourselves.

I know this fear
While I’ve been fortunate enough to have finance and engineering as my base disciplines it did little to develop my sales acumen. I was horrible at it and as a consequence turned away from sales because I didn’t understand selling. I thought it was about being pushy and arrogant. Something that you do to people.

The rub is that if you want to advance in business… heck life, you need to sell and in such a way that they want to help you succeed. So, somehow I had to change my perspective. This led to a voyage of self learning and understanding. What I ultimately discovered is that selling is helping people fill their needs and wants; a mutual win-win activity.

5 keys to becoming comfortable with selling

Focus on selling what you geek out about. The more you know about and love the value derived from your product, the easier it is to identify and convince those who can gain the most from buying it.

Pullback the curtain. Follow (replicate) the leaders. Discover how they overcome their hurdles. Yes, we all still and always will have them.

Control your inner dialogue. The greatest discovery of all time is that you become what you think about all the time. Focus on helping those who can benefit from your solution. The feeling experienced from truly helping someone is powerful.

Commit to lifelong learning. Here are three authors that can provide you with a solid base.

1) Brian Tracy
2) Zig Ziglar
3) Harry Mackay

Resolve to work hard.  This just might be the secret ingredient to most successes. I guess there’s good reason then that we heard it from our parents from day one.

What are you going to commit to doing?

Donald McMichacel teaches BE 261 Starting a Small Business.
Follow him on Google+ at +Donald McMichael

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By Donald McMichael, February 11, 2012 3:00 pm

picture via Flickr Commons

When it comes to growing your business one of the most significant functions is business development. Often people push this off as being just sales, if you are one that does this then you’re making a big mistake. Business Development has a intense focus on growing a business in a sustainable manner.

This charge means that the potential activity list runs the gamut from leading service/product introduction initiatives, to designing and implementing market expansion, to locking down strategic partnerships. It is one of the ultimate transformer roles, however, since it incorporated aspects of marketing, finance, and sales it is easy for a streamlined organization to rely on individuals, or better yet cross-functional teams, versus building out a dedicated department.

But what if you’re a soloprenuer? You can’t do it yourself – well, you can but the execution time would be too costly – but don’t worry you can easily implement the quick start tips below.

Business Development Tactics that Work: The Hacks
If taken seriously this role will deliver solid returns for years to come. But, it requires a significant investment of time and energy. So what do you do if your shop is already stretch too thin or you need to kick start growth now? I’m here to help, here are five hacks that you can run with today.

Co-marketing
This is where two businesses work together in their advertising efforts. Ideally they have complementary product or service which they push your product down one or both partners marketing/distribution channels in return for incremental marketing dollars and/or a sales commission. A perfect example of this is the recent agreement between Verizon and Comcast to market each others products as a bundle (wireless, cable TV, landline and internet services) in selected markets.

Leverage referrals
Word of mouth matters. It’s no secret that today, buyers rely more on their friends and peers to help vet buying decisions. According to InsideView, a negative review on Facebook, Twitter or YouTube can cost a company 30 customers. Make yourself available on platforms where your customers congregate and use all of your communication pieces to encourage them to share their experiences.

Improve your unique service proposition
Think Zappos. Ensure that the service that you provide to your customers and potential customer is phenomenal. There is no doubt that you have to supply a spot-on product, it’s just that the overall experience (purchase, fulfillment, and after sales support) is what drives repeat business and referrals. What can you do to better serve your market?

Charge more
That’s right, charge more for your service. This has a two fold benefit:

• For those that love your service you’ll receive compensation closer to the value your customer derives.
• More importantly, you’ll drive away marginal customers who’s lifetime value is typically dramatically below that of a good customer.

The fringe benefit is that it will free resources that can be used to attract, service, and retain more core customers.

Collaborate
Work together with another business to realize a shared goal. Granted when businesses collaborate they typically generate a bigger bang for their buck, but the benefits can extend beyond the bottom line and into a more sustainable environment and community. Of all the above hacks collaboration is the hottest growing trend. the most basic form is powered by social media where “communities of interest’ operate as an information exchange.

Getting Started
Pull together a basic business development plan.

1. Evaluate your environment. Pull together a market research plan. This exercise will help you better understand how you can thrive by uncovering the right opportunities to exploit.
2. Set your goals for what you want to accomplish; service line expansion, new market entry, more core customers?
3. Determine how you will recognize success. What are the Key Performance Indicators (KPIs) and how will you measure them?
4. Action plan. What is it the you need to be successful? In house knowledge, strategic partners, freedom for trial and error?

This post is meant to get you started on (and thinking about) very specific opportunities and tactics you can execute.

What’s your favorite? Let us know in the comments…

Donald McMichacel teaches BE 261 Starting a Small Business.
and follow him on Google+ at +Donald McMichael

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By Donald McMichael, January 12, 2012 11:16 am

Go on a walkabout:
Give yourself the freedom to explore ideas, opinions, and perspectives beyond your, and the entities, comfort level. In a sense undertake a corporate growth journey.

Discover the vein of gold:
Start with a strategy not a partner. Find the intersection at which your entity and another could create significant and sustainable value. Don’t run off of your gut, put into writing what you believe to be the right framework, then share with your advisors the why, how, and what.

Be specific:
You have 8 seconds to grab initial interest. Vague, unfocused general requests will find the circular file because you’ll appear confused and a waste of time. Set the agenda by asking a specific question.

Minimize the swagger:
I know this doesn’t happen to you, but often ego tends to trip people up more than they realize. Almost everyone wants to avoid blowhards. At this point your role is to learn and receive just as much as you give.

Don’t jump ahead:
The glue that holds everything together is relationships and there is no substitute for the hard work of getting to know people / organizations. You each have to get to know, like, and trust one another before serious conversations can be had. To keep from becoming frustrated, set a series of goals (returned email , call, etc.) that build upon one another.

Donald McMichacel teaches BE 261 Starting a Small Business.
and follow him on Google+ at +Donald McMichael

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By Donald McMichael, December 10, 2011 11:07 am

Who doesn’t want to be more productive in the coming year?  After pushing hard for the last several we all want a brighter 2012. But there’s no reason to wait on a turn of a calendar sheet, so let’s get cracking.

I have the great fortune of living by the head of Scotwork North America, a division of an international negotiating consultancy. Not only is he a great negotiator he also has proven his metal as a business leader by building out a sizable well regarded business that services the Fortune 500 market. Don’t let this fool you, for through and through he is a SMB entrepreneur. From time to time I have the opportunity to pick his brain about business development.

Here are three insights that can pay dividends for anyone looking to achieve sustainable top line (revenue) growth in 2012:

Continue reading '3 Things You MUST Know To Grow Profitably in 2012'»

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By Donald McMichael, November 12, 2011 12:38 pm

This is the sixth and last post in a series that focus on showing you how to improve the prospects of successfully launching a business.

Traditional wisdom dictates that a business financing sequence goes as follows:

1. Identify a perceived market need/issue.
2. Craft a plan on how you might address the void.
3. Present the plan to stakeholders (investors, key partners, etc.) to secure anticipated resources.
4. Consume resources as you seek to prove your theory right.

Ok, for storytelling purposes the wording above is not the most positive, yet this exact phenomenon occurs over and over again every day in every industry.

The problem is that in today’s environment, unless your concern has a proven track record or you’re launching a ‘business format franchise’ concern the riskiness associated with ‘lets give it a shot’ is to high. So what are we to do?

Present the Evidence

The vast majority of business plans are equivalent to a house of cards. The cards in this case are the assumptions around the need, cost, sales volume, and market receptiveness. Just think about it, you have the profit projections stacked on top of executional assumptions, stacked on market assumptions. With this perspective it isn’t hard to imagine how one well meaning but misguided thought can cause an implosion.

The smarter move is to quantify the validity of the assumptions by exposing them to the market – in essence turning them into ‘quasi’ knowns – before using them to construct a plan. The gathered insights dramatically increase the odds of finding and following the right path. But more importantly, arms you with evidence that can be presented to stakeholders demonstrating the soundness of your concept.

Sounds Good, but How?

The how is not hard but beyond the scope of this post. I encourage you to checkout the books listed below. They will provide you with a better appreciation for this inverted business development process and give guidance on how to justify your case.

• The Lean Start-up, Eric Ries
• Business Model Generation, Alexander Osterwalder & Yves Pigneur
• Four Steps to the Epiphany, Steven G. Blank

Have any comments? Your feedback is valuable.

Donald McMichacel teaches BE 261 Starting a Small Business.

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By Donald McMichael, October 15, 2011 1:24 pm

This is the fifth in a series of six posts that focus on showing you how to improve the prospects of successfully launching a business. Click here to view previous posts.

Here it is:

Customer Development Model

What could be simpler?

In reality, doing the wrong thing. That’s because the right thing above requires a good level of dedication and focus to execute properly. Going into the specifics is well beyond the scope of this blog, that’s why the purpose of this post is to point you in the right direction of study and shine a light on the key concepts.

There are two books that you need to reference.

The first is ‘The Four Steps to the Epiphany’ by Steven Blank. Here is what I see as the key points:

• Get out of the building. Qualify your hypotheses about what kind of product your customers (or potential customers) will ultimately buy.
• Theory of market types. Different start-ups face wildly different challenges and time horizons; the key drives of which are if you are creating a new market, entering an existing market, or re-segmenting a market.
• Find a market for the product as specified. Do everything possible to verify your belief. Don’t get caught up in a destructive (capital burning) cycle of including new features just because they were mentioned.
• Phases of product and market growth. A four segment road-map that helps orient you as to what leadership should be doing as the company changes.
• Iterate, return, or exit. Expose your guesses to the marketplace, refine based on feedback, and repeat. Don’t be afraid to pull the plug and asking if you’re in the right market.

The second book is ‘E-Myth’ by Michael Gerber. It is based on Gerber’s observation that most people launch their own business for the wrong reason. Being a skilled technician – they do a good job of what the business provides to the customer – they believe they can earn more by doing it in their own business. In short order they find that the role of the business owner is really quite different.

A business owner’s mission is to create an entity that works independently of himself or herself. And this is where Gerber’s work steps in. It focuses on helping you develop repeatable, teachable processes so that the concern isn’t as reliant on you being involved in every operational aspect.

Why heed this advice?

Recent research has indicated that some of the most successful start-ups did not follow the traditionally prescribed product-centric model. They intentionally, or not, utilized a game plan that was centered on institutionalizing customer learning and discovery.

Donald McMichacel teaches BE 261 Starting a Small Business.

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By Donald McMichael, September 10, 2011 11:43 am

This is the fourth in a series of six posts that focus on showing you how to improve the prospects of successfully launching a business. Click here to view previous posts.

Have you ever wondered how certain businesses all of a sudden pop-up on a market’s radar screen from seemingly nowhere? Well, with this post we’re going to expose one of the most powerful ways of making it happen. Quite simply strategic relationships are on deck.

The power in strategic relationships is that they allow each party to leverage the other brand’s perception, get the inside scoop on mistakes, and utilize seasoned distribution relationships. Sounds terrific, but why then do they often fall short of expectations? The most common reason is that they haven’t incorporated the two pillars of a thriving alliance:

• the right framework
• trust building

The Framework – Begin with a strategy, not a partner.

As one of my favorite Yogi Berra quotes puts forward, you need to know where you want to be so you know how to get there. This means you have to have a game plan, correction not just a plan, a guidebook that outlines the alliance formation mechanics and offers a way to make clear decisions about managing it once established.

This is exactly what Steve Steinhilber, the former alliance guru at Cisco, outlines in his book ‘Strategic Alliances’. He encourages following a 6-step process:

• Evaluation – define strategy / identify potential partners
• Forming – examining the value proposition(s)
• Incubating – build operating model
• Operating – execute on plan
• Transitioning – review for success and adjust
• Retiring – mutually letting go gracefully

It’s All About Trust – Relationships are solidified by trust. Institutions are built on it.

In business just like in life, it all comes down to relationships. Relationships are the heart of an alliance; nothing is a substitute for the hard work of getting to know people.

Unlike the framework above this relies on soft skills that take time and effort to master. Fortunately there are a lot of good books on business relationships and networking. Some of the best practical advice out there that can help accelerated your voyage up the mastery curve has been penned by Keith Ferrarzzi. According to Keith what it all comes down to embracing three mindsets.

• Generosity – build trust right out of the gate, and never stop, by sharing your insights and ideas.
• Intimacy – understand it is about creating a web of interwoven connections.
• Candor & Accountability – embrace open honest dialog and follow through on your promises.

Bottom line: If you are serious about growing a solid business then it behooves you to study in more detail the advice above. Even if you are not interested in forging an alliance find a way to help, and find a way to care about both your customers and business advocates.

Donald McMichacel teaches BE 261 Starting a Small Business.

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By Donald McMichael, August 9, 2011 11:03 am

This is the third in a series of six posts that focus on showing you how to improve the prospects of successfully launching a business. Click here to view previous posts.

In my last post, ‘Are You the Fool at The Door?‘, you tested your business assumptions by running it through a sieve of close connections. Now it is time to turn up the heat. Our goal this week is to truly leave the guesswork behind.

For those of you familiar with technology development the term ‘beta testing’ is an old friend. The principal behind this stage is similar. Work with a small group of outside customers, but instead of determining if the product/service works as specified we want to discover what the market values.

The entire formula is comprised of just two parts, examine & express.

Examine

Study and be able to explain the value proposition from the consumer point of view.

We want to determine whether the problem you believe you are solving is in fact important, or better yet what is significant. Successful businesses are rooted in their ability to exploit observable behaviors.

For this you need to take on the diagnostic approach followed by the Mentalist’s (CSB television show) lead character Patrick Jane – astute observation. Introduce your service to a limited market of early adaptors and map their reaction.

And, if the evidence proves your intended value proposition wrong admit it. This is perhaps the most difficult step on the path to epiphany. It takes a significant amount of humility, effort, and willingness to scrap every belief when the results dictate doing so. In a society that views going backwards as a failure few of us can easily do this. But it is critical that it be done with integrity and honesty.

So exactly how is this done? By instilling a mind-set that rewards controlled experiments. Provide yourself the freedom to honestly see the marketplace and put forward your observations.

Express

Get it in one sentence; X helps me Y by Z. You know that you’ve hit the core value when you can tell a first grader why people use your product or service and they get it. Here are a few examples:

• Google helps me understand something by getting me correct information fast.
• Wal-mart helps me spread my dollar farther by providing the best prices.
• Nike helps me play better by having clothes that keep me comfortable in hot weather.

The Bottom Line

It’s OK to screw up… if you learn from it. You’re on a journey of discovery.

What have you learned from your most recent misstep?

P.S. Want a clue as to where to look for real value? Most often it comes from:

• better processes (FedEx)
• better people
• better raw materials
• scarcity (diamonds)

Donald McMichacel teaches BE 261 Starting a Small Business.