Bootstrapping’s Impossible Promise : Stop Pulling And Start Pushing

What happens when you realize that you’ve built something that requires more expertise than you have? Usually, anxiety happens. And this can lead us into a trap of believing that if we just try harder for longer, we will figure it out. After all, isn’t that how we made it this far—trying harder? Inevitably, we may find ourselves exerting a tremendous amount of energy trying to lift ourselves up by our own bootstraps.

As I wrote about earlier, pulling on our own bootstraps is usually a fight we can’t win.

So, I propose a redirection of all that energy toward understanding what you can do better than anyone else.

I think Gary Keller and Jay Papasan illustrate this concept well in their book, The One Thing. They explore the power of understanding how and where to focus our energies to make the greatest impact, and they point to the example of “the domino effect.” In short, I can push on a domino that’s a fraction of a square inch, and 29 dominos later, if each domino is one and a half times the size of the domino in front of it, I could knock down a domino the size of the Empire State Building.

Let’s dwell on that for just a second.

By investing our time intentionally to understand where we need to push, we can exert less effort and have a greater impact than trying to pull ourselves up by our own bootstraps. After accepting that your greatest benefit to what you have created is to apply your energies where you will get the greatest return on that investment, dig deeper to find and define your strengths and weaknesses. I recommend StrengthsFinder 2.0 from Gallup and Tom Rath to get started. This is also an easy-to-read book that can have profound implications.

Understanding your natural strengths as a business owner and leader can help you identify quickly where you are lacking. For example, my top five strengths are ideation, strategic, input, futuristic and connectedness. I have learned to embrace those core strengths. I also have acknowledged that some of my weakest characteristics further down the list, like harmony, competition and discipline, are necessary for leading a successful business.

I could say that I need to work harder to turn my weaknesses into strengths and be a well-rounded person. And to be clear, there is nothing wrong with striving to be well rounded—but that is a journey of a lifetime that our businesses cannot wait for us to complete. Instead of throwing all my energy toward what I am not good at, I’ve found the best use of my energy is to invest it where I can generate the greatest amount of return on investment.

Using another physics example, take the gears on a bike. The point of having gears on a bike is to create the ability to adjust the return on energy input from our legs, to the petals, to the gears, through the chain, to the wheels. By adjusting up and down through the gears, we can ensure that we are getting as much return on investment for our energy as possible.

At too low a gear, we are pushing harder than we need to and expending energy we will need later. At too high a gear, we are pedaling fast but not getting the maximum amount of return per push. Understanding our strengths is tantamount to being able to dial in the gears on our bike based on the financial terrain to maximize the return on investment for our energy spent moving our business down the road.

Instead of trying to pedal faster or harder to make up for our weakness, we need to know where to push to generate the greatest return on investment and find others to invest their time and energy in the areas where they are strongest. There are people who are amazing where we are lacking. Finding them and adding them to our teams is a much greater use of our time and resources than trying to become mediocre at doing something we weren’t good at to begin with.

Lastly, I suggest taking time to read Jim Collins’s Good to Great or a current take on it in Gino Wickman’s Traction. Collins uses the example of a flywheel. His proposition is that if we are willing to focus our energy on moving forward the thing(s) we are best at, both personally and as a business, we can build momentum and get the greatest return on investment.

Whether it is a domino, bicycle or flywheel, there are numerous examples of how the most important journey we will embark on is the one where we invest in discovering how we can apply our strengths to a focused area that will generate the greatest impact and return on investment for our time and energy.

We can choose to expend our energy pulling on our own bootstraps—usually out of some sense that we have to do it all by ourselves. If we do, it’s likely that our business will never be more than what we have to offer, and our return on investment will be limited to our own strengths and by our own weaknesses. Or we can choose to start pushing from a position of our greatest strengths, setting our domino, bicycle, flywheel, business in motion, potentially changing the course of our careers.

If you are going to exert all that energy, why not send it in a direction that can create change and foster success? Knowing your strengths can help you identify the kind of strengths you need to find to supplement your business strategy—more on that in the next article.

Christopher M. White, Managing Partner, Eques, Inc. Read Christopher White’s full executive profile here.

Source: Bootstrapping’s Impossible Promise Part Two: Stop Pulling And Start Pushing

.

Critics:

By: https://valerianfunds.com

How revenue-based financing can support bootstrapping

Let’s say you’ve built your MVP using your existing resources, you have some initial sales and you’re ready to take things to the next level. Venture capital isn’t looking like the best option for you, but you definitely need some working capital.

These circumstances require a smarter method of financing. On top of bootstrapping, companies in the eCommerce, subscription, marketplace and SaaS spaces now have the option to apply for revenue-based financing (RBF) to support their growth.

A type of non-dilutive funding, revenue-based financing is near-instantaneous capital that you repay over time solely as a percentage of your company’s future revenues.

So, what does this mean for you in the early stages of your business? It means you have a source of funding to boost efforts in marketing and sales, without having to give away equity or pay back rigid amounts that you can’t afford.

You get resources to grow further, while ensuring you only make payments that are proportionate to your revenue. For example, founders might choose to use funding to support their inventory or their marketing efforts. 

This is a game changer for founders, and it suddenly means that bootstrapping is a real and accessible option. It means they have another tool in their arsenal for growing a business without turning to less-than-ideal financing methods. 

That being said, taking an advance through revenue-based financing doesn’t rule out venture capital as a source of funding in the future. Plenty of companies bootstrap and utilize RBF before reaching a point in which VC makes sense for them….

More contents:

How To Stay Motivated and Stick To Your Goals

Goals are priceless if you have tools in place to keep you motivated and ensure you are accountable throughout the year. The more you can return to them, measure your progress and see how you’re tracking, the more likely you are to achieve them.

The key is to find out what motivates you. It’s a personal process, which means not every technique will necessarily speak to you. Here are some ways that might help you build a stronger focus on your goals in 2017.

Set aside quality time

Many people rush through their annual goal setting, yet this is a precious exercise for yourself and your business. If you are able to turn your attention to the process, it really pays off.

Take the time to find value in the process, and understand what a greater focus on personal and professional goals could mean for your future success.

To stay motivated, you want your goals to hold meaning and give you a clear purpose. By using this time to understand your purpose, your goals are more achievable when life gets busier later in the year.

Break goals down

Start with the broad goals, and break these down into smaller objectives that you can work towards. Then be sure to reward yourself and your team along the way to avoid losing motivation.

For example, if you want to build a new website for your business and don’t have the skills or resources to do so, the fear of failure can be off-putting. Instead, break the overall goal of having a new website down into milestones you can start to achieve.

Focus on what you can do today and ensure you reward success, even for the steps as you go. The ability to reward yourself as you make progress is a great motivator, and means a bit more than just ticking something off a list.

Also be sure to measure how far you have travelled, not how far you have to go.

Work with the experts

With your list goals, you can enlist others to help you achieve them and keep track of how they are going.  This applies in both your personal and business goals.

Work out who will be the most helpful in working towards specific goals, whether that’s your partner, a colleague or an external advisor.

For example, say your personal goal is to set up a self-managed super fund. It is likely this will take a lot of unnecessary leg work to get right, so rather use your time to find a professional to make the most of your efforts.

If outsourcing helps you achieve your goal, do it.

Be resilient

Like everything in life, meeting goals involves sticking it out and dealing with the challenges that will inevitably arise along the way. Ideally, to stay resilient you’ll want to try and keep your emotions in check and avoid getting flustered if things don’t go exactly to plan.

How flexible you are able to be with your goals will also affect how easy it is to stay resilient. Be prepared to put some goals aside, add new steps or refocus altogether, as long as they continue to align with a key purpose or vision, you will keep heading in the right direction.

Staying motivated is first and foremost in finding your purpose to achieve your goals. Be sure to have clearly laid out plans and a realization that you can’t do it all on your own. And you will be well on your way to creating achievable goals to keep you motivated throughout the year.

By: TEC Alumni Chair, CEO mentor and coach Richard Appleby

Source: How to stay motivated and stick to your goals – TEC

.

More contents:

How to Overcome Your Fear of Failure

A client (who I’ll call “Alex”) asked me to help him prepare to interview for a CEO role with a start-up. It was the first time he had interviewed for the C-level, and when we met, he was visibly agitated. I asked what was wrong, and he explained that he felt “paralyzed” by his fear of failing at the high-stakes meeting.

Digging deeper, I discovered that Alex’s concern about the quality of his performance stemmed from a “setback” he had experienced and internalized while working at his previous company. As I listened to him describe the situation, it became clear that the failure was related to his company and outside industry factors, rather than to any misstep on his part. Despite that fact, Alex could not shake the perception that he himself had not succeeded, even though there was nothing he could have logically done to anticipate or change this outcome.

People are quick to blame themselves for failure, and companies hedge against it even if they pay lip service to the noble concept of trial and error. What can you do if you, like Alex, want to face your fear of screwing up and push beyond it to success? Here are four steps you can take:

Redefine failure. Behind many fears is worry about doing something wrong, looking foolish, or not meeting expectations — in other words, fear of failure. By framing a situation you’re dreading differently before you attempt it, you may be able to avoid some stress and anxiety.

Let’s go back to Alex as an example of how to execute this. As he thought about his interview, he realized that his initial bar for failing the task — “not being hired for the position” — was perhaps too high given that he’d never been a CEO and had never previously tried for that top job. Even if his interview went flawlessly, other factors might influence the hiring committee’s decision — such as predetermined preferences on the part of board members.

In coaching Alex through this approach, I encouraged him to redefine how he would view his performance in the interview. Was there a way he might interpret it differently from the get-go and be more open to signs of success, even if they were small? Could he, for example, redefine failure as not being able to answer any of the questions posed or receiving specific negative feedback? Could he redefine success as being able to answer each question to the best of his ability and receiving no criticisms about how he interviewed?

As it turned out, Alex did advance to the second round and was complimented on his preparedness. Ultimately, he did not get the job. But because he had shifted his mindset and redefined what constituted failure and success, he was able to absorb the results of the experience more gracefully and with less angst than he had expected.

Set approach goals (not avoidance goals). Goals can be classified as approach goals or avoidance goals based on whether you are motivated by wanting to achieve a positive outcome or avoid an adverse one. Psychologists have found that creating approach goals, or positively reframing avoidance goals, is beneficial for well-being. When you’re dreading a tough task and expect it to be difficult and unpleasant, you may unconsciously set goals around what you don’t want to happen rather than what you do want.

Though nervous about the process, Alex’s desire to become a CEO was an approach goal because it focused on what he wanted to achieve in his career rather than what he hoped to avoid. Although he didn’t land the first CEO job he tried to get, he did not let that fact deter him from keeping that as his objective and getting back out there.

If Alex had instead become discouraged about the outcome of his first C-level interview and decided to actively avoid the pain of rejection by never vying for the top spot again, he would have shifted from approach to avoidance mode. While developing an avoidance goal is a common response to a perceived failure, it’s important to keep in mind the costs of doing so. Research has shown that employees who take on an avoidance focus become twice as mentally fatigued as their approach-focused colleagues.

Create a “fear list.” Author and investor Tim Ferriss recommends “fear-setting,” creating a checklist of what you are afraid to do and what you fear will happen if you do it. In his Ted Talk on the subject, he shares how doing this enabled him to tackle some of his hardest challenges, resulting in some of his biggest successes.

I asked Alex to make three lists: first, the worst-case scenarios if he bombed the interview; second, things he could do to prevent the failure; and third, in the event the flop occurred, what could he do to repair it. Next, I asked him to write down the benefits of the attempted effort and the cost of inaction. This exercise helped him realize that although he was anxious, walking away from the opportunity would be more harmful to his career in the long run.

Focus on learning. The chips aren’t always going to fall where you want them to — but if you understand that reality going in, you can be prepared to wring the most value out of the experience, no matter the outcome.

To return to Alex, he was able to recognize through the coaching process that being hyper-focused on his previous company’s flop — and overestimating his role in it — caused him to panic about the CEO interview. When he shifted gears to focus not on his potential for failure but on what he would learn from competing at a higher level than he had before, he stopped sweating that first attempt and was able to see it as a steppingstone on a longer journey to the CEO seat.

With that mindset, he quickly pivoted away from his disappointment at not getting the offer to quickly planning for the next opportunity to interview for a similar role at another company.

Remember: it’s when you feel comfortable that you should be fearful, because it’s a sign that you’re not stepping far enough out of your comfort zone to take steps that will help you rise and thrive. By rethinking your fears using the four steps above, you can come to see apprehension as a teacher and guide to help you achieve your most important goals.

By: Susan Peppercorn / Harvard Business Review

Susan Peppercorn is an executive career transition coach and speaker. She is the author of Ditch Your Inner Critic at Work: Evidence-Based Strategies to Thrive in Your Career. Numerous publications including the New York Times, Wall Street Journal, Fast Company, the Boston Globe, and SELF Magazine have tapped her for career advice. You can download her free Career Fit Self-Assessment and 25 Steps to a Successful Career Transition.

Source: Pocket

.

References:

17 Traits That Make a Successful Person Stand out from the Crowd  What Is Creativity?

We All Have It, and Need It 

How to Think Critically: 5 Powerful Techniques 

What Are The Levels Of The Mind And How To Improve Them 

How To Improve Short Term Memory: 7 Simple Ways to Try Now

7 Traits That Make a Successful Person Stand out from the Crowd

  Is There a True Measure of Success? How to Define Your Own

  How Do You Measure Success: 10 New And Better Ways

  50 Habits of Highly Successful People You Should Learn

 8 Daily Habits of the Successful People (Which Are Rare)

3 Ways to Get Minority-Led Small Businesses Back to Business

3 Ways to Get Minority-Led Small Businesses Back to Business

If the pandemic deepened the challenges of dealing with long-felt issues among business owners of color, the recovery is putting them in focus. Access to capital and racial inequity in America continue to weigh on underrepresented small-business owners.

That was the key takeaway from a recent virtual briefing dubbed “Back to Business: Restarting Main Street in the Wake of Covid-19,” which was hosted by Reimagine Main Street, a project founded last year to lead small businesses toward an inclusive economic recovery. The discussion convened business leaders and officials, who offered their own ideas for how to resolve these longstanding issues so that minority-led businesses can get back to business.

Here are their top three tips:

1. Help people get vaccinated.

As the pandemic fueled much of the recent difficulty hitting underrepresented business owners and entrepreneurs, a good first step is to do all you can to overcome the pandemic, which can be achieved by helping people get vaccinated. “You can’t get the economy back on track without beating Covid,” says Cedric Richmond, a senior adviser to President Biden. Specifically, he suggests offering vaccine incentives to employees, customers, and the communities you serve.

He proposes offering paid time off for employees to get a jab, and providing compensation for missing work because of vaccine complications as motivation. “So many people can’t afford to lose a day or two of work,” says Richmond, therefore servicing the needs of your employees is a crucial part of getting the economy up and running again.

As for customers, the more people who are vaccinated, the quicker it is you’ll return to normalcy. So consider rewarding consumers who are fully vaccinated. United Airlines, for instance, last week launched its “Shot to Fly” campaign, offering the chance to win a year of free flights to vaccinated customers. “We just appreciate the business community partnering with us to get it done,” says Richmond.

2. Create an inclusive recovery.

Ensuring Black and Latinx business owners continue to receive financial support is vital, says Tammy Halevy, co-lead of Reimagine Main Street. Passing the American Jobs Plan, Biden’s nearly $2 trillion plan to shore up the nation’s crumbling infrastructure and boost green jobs, would be a start, adds Halevy. Additionally, it would be helpful to offer new grant programs and to “push the [Small Business Administration] to process forgiveness applications faster” to Black and Brown business owners, who need help accessing capital.

But you can’t just rely on the government for help, says Richmond. It is important for all small-business communities to help one another. Yes, you need to focus on supply chains and other internal matters. However, intentionally supporting other ancillary businesses, such as law firms, accountants, and even the local car wash, is an important step in getting minority communities as a whole back in business.

3. Demand greater access to capital.

For many minority-owned small businesses, federal relief was not accessible throughout the pandemic, says Chiling Tong, president and CEO of Asian/Pacific Islander American Chamber of Commerce. “Sixty percent of AAPI businesses, who did not apply for federal relief, did not apply because they did not think they were eligible for relief.”

Tong notes that a lack of awareness was a problem. But also, she adds: There was a potential language barrier. She says that information regarding some federal aid programs was not translated into other languages, at least initially.

These technical disadvantages pervaded long before the pandemic, she adds. The government at all levels needs to partner with various chambers of commerce to disband technical disadvantages these communities face, making sure they have the capability to apply for and maintain the same access to capital that other businesses have, says Tong.

Through investments targeted toward an inclusive recovery, vaccine incentives, and expanding access to capital, small businesses will thrive, says Richmond, and “as [small businesses] succeed and flourish, we know that the economy and the country will do the same.”

By Alicia Doniger

Source: 3 Ways to Get Minority-Led Small Businesses Back to Business | Inc.com

.

Critics:

Marketing plan

  • Market research – To produce a marketing plan for small businesses, research needs to be done on similar businesses, which should include desk research (done online or with directories) and field research. This gives an insight into the target group’s behavior and shopping patterns. Analyzing the competitor’s marketing strategies makes it easier for small businesses to gain market share.
  • Marketing mix – Marketing mix is a crucial factor for any business to be successful. Especially for a small business, examining a competitor’s marketing mix can be very helpful. An appropriate market mix, which uses different types of marketing, can help to boost sales.
  • Product life cycle – After the launch of the business, crucial points of focus should be the growth phase (adding customers, adding products or services, and/or expanding to new markets) and working towards the maturity phase. Once the business reaches the maturity stage, an extension strategy should be in place. Re-launching is also an option at this stage. Pricing strategy should be flexible and based on the different stages of the product life cycle.
  • Promotion techniques – It is preferable to keep promotion expenses as low as possible. ‘Word of mouth’, ‘email marketing’, ‘print-ads’ in local newspapers, etc. can be effective.
  • Channels of distribution – Selecting an effective channel of distribution may reduce the promotional expenses as well as overall expenses for a small business.

References

5 Ways to Keep Your Business Going in Hard Times

https://i0.wp.com/onlinemarketingscoops.com/wp-content/uploads/2021/04/960x0-8.jpg?resize=840%2C490&ssl=1

Keeping a small business afloat in difficult economic times is challenging, and the coronavirus pandemic has definitely roiled the waters on which owners must sail. Unfortunately, there is no set playbook to follow to ride out the storm and right the ship. Every small business is different, and each carries its own risks and rewards. These differences make copying another company’s turnaround strategy to the letter unrealistic. Still, there are some general strategies business owners can follow to help them stop taking on water and start bailing themselves out.

Key Takeaways

  • Keeping a small business afloat in challenging times can be difficult, but extra attention to detail can help ensure that a business survives.
  • Because every small business is different, and each carries its own risks and rewards, there is no set playbook to follow for survival.
  • Some useful advice that applies across small businesses includes looking at the big picture, inventorying the staff, making sure the business has ready access to cash, sweating the small stuff, and avoiding a sacrifice of quality.

1. Look at the Big Picture

People have a tendency to attack the most obvious immediate problems with vigor and without hesitation. That’s understandable and might make good business sense in some situations. However, it is also advisable to step back and look at the big picture to see what is still working and what might need changing. It’s an opportunity to better comprehend the size and scope of existing problems and further understand your company’s business model—determining how its strengths and weaknesses come into play.

For example, suppose a small business owner discovers that two employees are consistently making mistakes with inventory that cause certain supplies to be overstocked or understocked. While an initial reaction might be to fire those employees, it could be wiser to examine whether the manager who hired and supervises them has properly trained them.

If the manager is to blame, that person could be fired, but this might not be the best approach. If the manager’s relationships with existing clientele have a history of bringing in repeat business and substantial revenue, they are likely someone you’d want to keep. Retraining might be a better alternative than termination.

.

.

While businesses have been hurting financially, Steve Leondis’s air freight company has remained strong and prosperous. .. The Christian Broadcasting Network CBN http://www.cbn.com

.

.

By thoroughly scrutinizing the strengths and weaknesses of the employees, the owner is looking at the issue from a top-down perspective, reducing or eliminating the chance that the problems will recur while avoiding a change that could adversely impact future sales.

Fix a similar kind of lens on analyzing how your product or service fits into the marketplace now, how the economic crisis has affected your customers and suppliers, and all the other key aspects of your business. You need to know how well your business model fits the current environment and forecast what various alternative scenarios of the future might mean for it.

2. Inventory Your Staff

Payroll is often one of the top costs a small business owner has, so seeing to it that the money is well spent makes sense. This may involve a thorough review of the staff—both when a problem arises and during the normal course of business—to make sure the right people are on board and doing their jobs effectively.

Both small business owners and large corporations tend to be penny wise and pound foolish when they hire the least expensive workers. Sometimes the productivity of those workers may be suspect. Hiring one worker who costs 20% more than the average worker but works 40% more effectively makes sense, particularly during periods of crisis. By constantly seeking résumés and interviews from new people, business owners can make changes to staff when needed to increase efficiency.

3. Ensure Access to Cash

Small business owners should take steps to ensure that the company has access to cash, particularly in periods of crisis. Visiting a bank loan officer and understanding what’s required to obtain a loan is a good first step, as is opening a line of credit in advance to fund possible short-term cash-flow problems. Establishing a good relationship with a banker is always useful for a small business. For example, business owners who had such relationships had an easier time accessing PPP loans during the COVID-19 pandemic.1

Small business owners should have other potential sources of capital lined up as well. This might include tapping into savings, liquidating stock holdings, or borrowing from family members. A small business owner must have access to capital or have a creative way to obtain funds to make it through lean times.

4. Start Sweating the Small Stuff

Although it is important to keep an eye on the big picture, a small business owner should not overlook smaller things that may have an adverse impact on the business. A large tree obstructing the public’s view of the business or the company’s signage, inadequate parking, lack of road/traffic access, and ineffective advertising are examples of small problems that can put a big dent in a business’ bottom line.

Considering and analyzing the numerous factors that bring customers in the door can help to identify some problems. Going through your quarterly expenses line by line may also help. Owners should not be checking for one-time expenses here, as those items were most likely necessary charges. Instead, they should look for small items that seem innocent but are actually draining the accounts.

For example, the cost of office supplies can quickly get out of hand if they are ordered improperly. Similarly, if your supplier increases product prices, you should consider looking around for a cheaper supplier.

5. Don’t Sacrifice Quality

Keeping a handle on costs is crucial in tough times. Owners need to stay on the offensive and get employees on board with changes that are being made. However, be cognizant of not sacrificing quality when making these product changes.

Business owners seeking to improve profit margins should be wary of making dramatic changes to key components. For example, if a pizzeria is going through a dry spell, the owner could seek to expand margins per pie by purchasing cheaper cheese or sauce ingredients. Note that the strategy could backfire if customers become dissatisfied with the taste of the pizza and sales decrease. The key is to make cost and other cuts that don’t compromise the quality of the finished product. Perhaps there is a way to cut the price of takeout boxes or paper napkins instead.

Compete Risk Free with $100,000 in Virtual Cash

Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you’re ready to enter the real market, you’ve had the practice you need.

Source: 5 Ways to Keep Your Business Going in Hard Times

.

.

%d bloggers like this: