12 Pieces
of Advice for Erstwhile Entrepreneurs
by James T. Berger, 11 May 2005
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As I think back to my 22 years as an entrepreneur,
I have come up with a dozen important pieces of advice that I suggest
that anybody who embarks on this track should follow. Here they
are:
- Facing the Challenge of Doing
Business and Getting Business — This is the universal
trap most new entrepreneurs encounter. In the entrepreneurial
honeymoon stage, they get very, very busy and start making some
pretty good money. They devote their efforts to doing this work
and one day they wake up and it’s all done, and they have
nothing to do. All of a sudden, they must move into a marketing
mode and seek out new business. Unfortunately, the toughest time
to get business is when you really need it. You get more and more
desperate. You press. It becomes a vicious circle, and potential
clients sense your desperation. The bills mount up and the unexpected
ones like home or car repairs suddenly appear. The entrepreneur’s
mettle is truly tested during these periods and many don’t
survive. Such crises can be avoided by constantly being on the
lookout for new business no matter how busy you are. You must
continue to network, meet new people and try to close new accounts.
As an entrepreneur peer once told me – “You have to
take on the mentality of a shark — you have to consume even
when you’re not hungry.”
- Collecting Receivables
— Unlike salaried employee, the entrepreneur requires payment
from customers and clients to run his/her business and household.
Unfortunately, such payment is not constant and steady, which
leads to the occasionally cash crunch. If you are established
or wealthy you can ride out the bad times with a credit line from
a bank or personal savings. Most of us, however, rely on payments
from accounts receivable to support ourselves. Perhaps the most
unpleasant task that entrepreneurs face is calling a good account
and asking for money. It has taken me years to get comfortable
doing this. Here is a formula that has worked well for me. First,
get a substantial advance or retainer before you begin work, and
enter into a written agreement that stipulates that you expect
to be paid within 30 days or some other mutually acceptable time
frame. Next, manage your receivables. If they are not paid within
the agreed-to time frame, call the account and remind the client
of your agreement and that you expect payment within the agreed-to
time frame. Such a gentle reminder usually takes care of 80 percent
of the problems. If the client is having a problem, the client
has to tell you about it and enlist your support. At least you
know where you stand and have some idea when you can expect payment.
Never be afraid to ask for money — be persistent without
being a pest!
- Learning How to Be a Self-Starter
— When working for others, life can be very passive. You
are expected to come to work at a particular time and generally
it is the employer’s responsibility to provide work for
you. Entrepreneurs must be both boss and worker. You have to motivate
yourself. While you can’t be fired if you work for yourself
— your clients certainly can fire you.
- Developing Self-Discipline
— Closely akin to the previous point, there is no
time clock for entrepreneurs. You stay until the task is done
and often you must work weekends and holidays. A great way to
develop self-discipline is the simple “To Do” list.
Create specific tasks that you know you must complete that day
or that week. As new circumstances arise, add these new tasks
to the list By the time the week is over, you can see how this
self-discipline has resulted in some big-time accomplishments.
It’s also valuable for billing purposes since it enables
you track your time.
- Tireless networking —
Most successful entrepreneurs and corporate rainmakers
are tireless networkers. Most enjoy meeting new people and the
challenge of developing new relationships. They go to breakfast
and lunch with either networking partners or new contacts several
times a week. Entrepreneurs constantly strive to help others.
They ask probing questions and seek knowledge. They get great
satisfaction putting networking partners in touch with other networking
partners.
- The Need for Continual Re-Discovery
— Entrepreneurs are life-long learners. Many ready
voraciously. They continually seek to re-discover themselves and
find new ways to work more efficiently and effectively.
- Don’t Get Mad –
Get Even — This principle has been attributed to
shrewd politicians like the original Mayor Richard J. Daley of
Chicago and the Kennedy’s. Entrepreneurship is a tough business.
When you have been wronged, don’t react emotionally but
through a controlled and thoughtful process of finding the appropriate
opportunity for retribution. As an old newspaper colleague once
told me — “you pass the same guys on the way down
as you do on the way up.”
- Developing Creativity —
Creativity is not what most people think it is. When asked to
conjure up an image of creatively, one often thinks of the advertising
copy writer dreaming up new slogans and jingles. Not so. Creativity
is not the ability to write or draw as much as it is the ability
to see relationships and apply principles from one area into another
area.
- Be Thrifty in Managing Resources
— The entrepreneur has to be ever mindful of conserving
his/her resources. Even the best entrepreneurs have bleak days,
weeks or months. While it’s not necessary to be a miser,
wild spending and conspicuous consumption can be dangerous. A
good entrepreneur will know at any given time exactly what he/she
has in his/her savings and checking accounts, what his/her receivables
are and how much gross income can be anticipated in the next 30-60
days. Don’t forget profitability comes from BOTH what you
get from increasing the top line and expense savings that enhance
the bottom line.
- Creating Marketplace Awareness
— The ability to make a sale or close a relationship
begins with AWARENESS. People must know who you are, what you
do and what you can do for these prospective clients and customers.
An entrepreneur must use his own personality as well as network
contacts to make the marketplace aware of his/her distinctive
competencies.
- Follow-Up, Follow-Up and More
Follow-Up — Take absolutely nothing for granted.
Make sure that every important letter, FAX and e-mail has been
received. Assume nothing! If you make a phone call or write an
e-mail and you don’t get a response within a reasonable
amount of time. FOLLOW-UP. If you make a proposal for new business
and you don’t hear from the prospect, FOLLOW-UP. When you
meet somebody new, send a FOLLOW-UP e-mail. If you haven’t
heard from an acquaintance or network contact for a long period
of time. FOLLOW-UP. FOLLOW-UP is the best way to create and restore
top-of-mind awareness. Don’t let people ever forget about
you!
- The Ability to Close
— If it’s business generation, always ask for the
order at the end of the presentation or some other appropriate
time. If you are doing a task, complete it; close it out. Too
many people take work to near completion and don’t make
the last few turns of the screw. Don’t leave any loose ends
and don’t let your clients or customers leave any loose
ends. When a task is near completion, finish it off and move on
to the next one.
While these are a dozen rules that I as an entrepreneur
live with, I’m sure there are many others. Please share them
with other Wiglaf Journal readers. E-mail me at JBerger@WiglafJournal.com
and we’ll publish your comments in future issues of The Wiglaf
Journal.
_____
Author
James T. Berger, managing editor of The Wiglaf
Journal, has been in his own strategic marketing consulting business
for 22 years. As a free lance writer he has written over 100 articles
and he teaches marketing courses at Northwestern University and
Roosevelt University.
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