The Smallest Things Can Help You !!!

Many of us business owners devote endless hours trying to come up with the next big thing. That's not necessarily a bad exercise, but sometimes we need to give our brains a rest. I'm a realist though, and I realize it's hard for entrepreneurs to shut their minds down entirely, even for a short time.

So instead of thinking big all the time, maybe you should take a break and think small. Understand that small does not equal trivial; sometimes the smallest change can have a huge positive impact. Here are 9 little things you can do to advance your business without breaking a sweat.

1. Just say no. I hate to lead with a negative, but I know how hard it is for business owners to turn away business, especially when the economy is in slow recovery. However, some clients are not worth having. Before you take on a new client or renew an existing contract, do a quick ROI to make sure it's all worth it.

2. Stop worrying so much. I am not a worrier (though I sure know a lot of them). Worrying just saps your energy and diverts your brain from thinking about really critical things. So don't worry, be happy!

3. Don't hesitate. What are you waiting for? Being flexible is still an advantage small businesses have over the big guys. I am not saying you should blindly leap into new situations, but you should heed the words of George S. Patton who said, "Opportunities do not come to those who wait. They are captured by those who attack."

4. Seize control. This is possibly the reason many of you became entrepreneurs -- it certainly was a motivating factor for me. I truly believe you will not succeed unless and until you take charge of your life. However, and I believe I've said this before but it bears repeating: Don't try to control the uncontrollable. It's an impossible and frustrating task.

5. Give back. In last week's interview with JJ Ramberg, I discussed how you can do well by doing good. You don't need to make grand gestures or donate thousands of dollars. All of us can help make a difference. Participate in community events. Donate something of value to a fund-raiser. Volunteer. Teach a class. Just do something.

6. Be innovative. Most of us know small businesses drive innovation in this country. And yet many business owners are intimidated by the "I" word. Innovation is relative. It can range from the truly inventive to the more mundane (but highly effective) aspects of business ownership. Any business can be innovative. Restaurants can add "different" food to their menus, retailers can open new channels of distribution. All of us can change our marketing strategies. As one of the greatest innovators of our time, Apple's Steve Jobs says, "Innovation is what distinguishes a leader from a follower."

7. Give customers what they want. Remember, even as the economic recovery gathers strength, consumer behavior has changed. Consumers are (and likely will continue to be) looking for value when they shop. And they're expecting the companies they do business with to offer coupons and promotions to not only draw them in, but to keep them coming back. In fact, a new poll from ShopSmart magazine reports 91 percent of women shoppers use coupons to get a better deal.

8. Take inventory. I'm not talking about conducting a physical inventory. Rather, we should all do a top-to-bottom assessment of our businesses. The key is to be keenly aware of what's going on so we can quickly move in a new direction if we need to. Markets have changed. Consumers are looking for new products and demanding new services. Start by asking yourself these questions:

·         What am I doing right?

·         What am I doing wrong?

·         How can I deliver more value?

·         How has my market changed?

·         What will I need to change in order to meet future consumer demand?

9. Speak up. Not just because the squeaky wheel gets the grease, though that is certainly true. If you don't ask, you won't get. But more important -- and this is one of my favorite quotes -- as Eldridge Cleaver once said, "If you're not part of the solution, you're part of the problem."

Small Business: Saving the Earth

For the last week my inbox has been bombarded with pitches from businesses, large and small, helpfully informing me that April 22 is Earth Day, and explaining how their companies are commemorating the event. Don't get me wrong; some of their products sound pretty cool, like the ecobutton from Staples promotional products, which, at the press of a button, puts your computer in "ecomode" (more energy-efficient than sleep mode).

I've learned some interesting facts as well. According to the folks at Nitro PDF Software, every person on the planet consumes about 123 pounds (or 12,500 sheets) of paper a year. Approximately 37 pounds of that is used just printing things out, which (hanging my head in shame) I admit I even did while researching this column. All this printing not only hurts the environment, but, according to Melanie Atta at email marketing company Campaigner, "About 1 to 3 percent of corporate revenues are spent on printing costs."

To save on paper consumption, both Campaigner and their competitor Constant Contact encourage all business owners to increase their email marketing, while cutting back on direct marketing. In fact, Constant Contact senior vice president Eric Groves says last year Constant Contact customers sent 28 billion emails in their marketing campaigns, saving more than 3.5 million trees.

This is all sound advice, but truthfully it makes me sad -- and mad -- that 41 years after the first Earth Day we're still concerned about these problems. I'm not saying we shouldn't be worried about the environment; I'm upset we haven't really fixed anything yet.

I realize I am an idealist; at times admittedly I'm even a Pollyanna. When I was in high school back in the 60s, my friend Barbara and I used to trek into the city, head to a dingy office and collect our folding table, petitions, and "Save the Environment" buttons, which we'd sell on the streets of New York, trying to raise funds and awareness. Fueled by the naivete of youth we thought we were doing our (very small) part to help change the world. So it stuns me that today we're still fighting that very same battle.

When I first moved to Los Angeles in the late 1970s, the sky was often colors that skies weren't meant to be. Smog alerts were routinely issued, warning the old, the young, and the infirm to stay indoors and not breathe the outside air. But aggressive new regulations, while not completely eradicating LA's infamous smog, have virtually eliminated smog alerts. Yet despite this triumph, some politicians are calling for an end to the Environmental Protection Agency (EPA), saying it hinders business.

I don't buy it. I believe businesses can simultaneously thrive and be environmentally considerate. Many businesses have embraced that philosophy as well. A new study released this week by CompTia, the trade association for the information technology industry, shows green IT initiatives are increasingly important to businesses. According to the 2nd Annual Green IT and Insights study, in 2009 only 9 percent of companies rated green IT as a high priority. This year 37 percent of businesses do, and that's expected to hit 54 percent by 2013.

In fact, says Tim Herbert, CompTIA's vice president of research, "It's likely many firms eye green strategies as a means to help the bottom line." Currently, 20 percent of businesses have a dedicated budget for green IT initiatives, but the survey says 44 percent are "moving in that direction."

So what is a green IT strategy? The CompTIA study says it includes factors such as reducing energy consumption, equipment usage, recycling and product disposal, a company's carbon footprint, and employee behaviors.

Technological advances make it a lot easier for small businesses to be environmentally conscious. Many businesses have already adopted a pro-environmental stance, making the ones that haven't look even less socially responsible. Last month research firm BBMG released a new report, Unleashed: How New Consumers Will Revolutionize Brands and Scale Sustainability [free registration required to read report], in which it labeled more than 70 million American adults "New Consumers." These are the people who are "defined less by demographics than by shared values … and are increasingly concerned with products' impact on the planet and its people." BBMG says that even during the recession, 25 percent of the New Consumers were willing to pay more for sustainable products.

Lately from Washington we've heard a lot of concern about the rising U.S. deficit and the debt future generations will be saddled with. I'm a bit more concerned that those generations have a future with water they can drink and air they can breathe. On this Earth Day, let's think about why we're still fighting many of the same battles from 41 years ago, and how businesses like ours can help create a greener and more sustainable world.

Small Businesses: Use Social Media

From the buzz it generates, you'd think almost all small business owners would be actively involved in social media. But you'd be wrong.

This disconnect becomes clear in the latest Small Business Success Index survey conducted twice a year by Network Solutions (disclosure: they're a client of mine) and the University of Maryland's Robert H. Smith School of Business. While the SBSI showed an "almost universal awareness among small business owners of Facebook and Twitter" only 27 percent of the entrepreneurs used Facebook for business purposes, and a mere 7 percent were Twitter users. Linked In garnered 18 percent.

Despite the tepid survey results, Network Solutions is a big believer in the power social media has to impact business. To gain some insight I talked to Tim Kelly, Network Solutions' CEO and the company's Director of Social Media (known on Twitter as the Social Media Swami) Shashi Bellamkonda (@sashib).

And those small businesses who have tried social media often see results: 63 percent say it helped make their customers more loyal. Other say social media it has helped them:

1.     Stay engaged with customers.

2.     Build brand awareness.

3.     Identify and attract new customers.

So why aren't more small companies doing it?

More than half of small business owners (56 percent) worry that social media is too "time-consuming." Bellamkonda acknowledges that at the beginning, "it's hard for small business owners to keep up with their many responsibilities, without adding social media into the mix." But, he adds, "Rather than viewing social media as time consuming, you should integrate it into your marketing plan from the start. Once you become familiar with social media, you'll find it's an easy and affordable way to grow a loyal customer base, and more often than not, see that it's absolutely worth the time investment."

Bellamkonda believes the benefits are more than worth the time for small businesses. "If building a loyal customer base is a top priority (which it probably should be), social media is a great way to start. Its reach is immense with more than 500 million active users on Facebook and 1 billion tweets [sent] per week. Putting your small business out there gives you an opportunity to build relationships with your customer base, and allows customers to personally bond with your business."

Bellamkonda is a big proponent of Twitter, especially for dealing with customer service issues. "Twitter is fantastic because it's real time, and an easy way to [quickly answer] customer questions."

Even so, getting started with social media can seem overwhelming. Bellamkonda recommends starting slowly. "Ask your customers what social media platforms they use the most and start there," he says. "When you get a feel for your voice and presence on that network, you'll find it easy to expand to other platforms."

He boils it down to a 2-step process:

1) Listen. Where is your key audience online? Set up Google Alerts for your business. You'll begin to see where the conversations about your business are taking place. Listening helps you develop your voice.

2) Engage. Be sure you aren't just blasting out information and news about your business. Interact directly with your followers. Ask them what else they would like to see from you and your business.

Network Solutions CEO Tim Kelly puts it this way: "Social media levels the playing field" for small businesses, giving you "access to the exact same audience that the big brands" have. "No matter whether a business is large or small," Kelly adds, "you have to go where your customers are. Given the huge popularity of social media, odds are that's where many of your customers will be."

Entrepreneur and AllBusiness blogger Gini Dietrich, CEO of Arment Dietrich, recently put it in perspective: "This is not the Field of Dreams. If you build it, they will not come. Choose one tool, implement it into your overall business strategy, get good at using it, refine its use, and move on to the next one. And be patient. It does take time. After all, you're building relationships online. Online or off, relationships don't happen overnight."

Don't Turn Back, Entrepreneurs!!!

The economy is in meltdown. Wall Street is floundering. Corporations are laying off thousands. The national unemployment rate is at a five-year high. But the New York Times thinks if you're an entrepreneur, you should close your business and get a job.

In Sunday's paper an article headlined Economy to Entrepreneurs: Turn Back was filled with example after example of entrepreneurs who have given up their businesses (for various reasons) and returned to the workforce. And miraculously, despite the lousy economy and that current 6.1 percent unemployment rate, none of the people profiled seemed to have a hard time landing a job.

The article also mentioned that we're headed for an increase in business bankruptcies this year (though since the bankruptcy laws were recently changed, it's hard to make comparisons to the past). It didn't mention how many of those bankruptcies were filed by big businesses. Lehman Brothers, anyone? Or the fact the federal government has interceded and bailed out a number of corporate giants before the ax could fall. AIG is just the latest example, as the Fed gallops to the rescue with an $85 billion loan.

When I first read the Times on Sunday I was so enraged I didn't even know where to begin. This article simply shows how easy it is to make your case by only interviewing people who prove your point. The opposite point could easily have been made by interviewing some of the hundreds of thousands of Americans (like me) who have started or will start a new business this year.

We don't know how many businesses will actually open their doors this year, but it's a good bet it will be more than 600,000, since that's been the case for quite a long time. I know from the folks at Microsoft's Office Live Small Business (where I also do some blogging) that, in just under the last three years, over one million people have gone there to create a business Web site.

A blogger from the Wall Street Journal took issue with the Times' point of view. And obviously I echo that position. If you're an entrepreneur whose business is hurting and you're thinking of quitting and finding a job, more power to you. But my guess is that's a small minority of business owners. Who really believes you can find "stability" (as one of the people interviewed said) or security as an employee these days? Or ever actually?

But we don't need to speculate. Look back to the stock market crash of 1988. Major corporations shed employees by the thousands (like they're doing now) who had no recourse but to start their own companies. I've long referred to these entrepreneurs as corporate refugees or accidental entrepreneurs; they didn't set out to start businesses, but realized they needed to do something to pay the bills. From this (and a few other factors) the entrepreneurial revolution was born. In fact, a record number of new businesses were created back then. The 1990s was the decade of the entrepreneur, and indeed we ended the decade with millions of new jobs created, innovative new businesses started, and a robust economy, all courtesy of the nation's (mostly new) entrepreneurs.

So let's talk about why you entrepreneurs actually are better suited for riding out this economic downturn than many bigger businesses. Lots of big businesses are cutting back on their marketing efforts right now, creating a vacuum you and your business can leap into. Remember all the advantages owning a smaller business gives you -- you can act quickly, adjusting your offerings, prices, and marketing efforts. Now is a good time to explore adding new product lines or offering lower-cost items. If you're a service provider, you might want to offer discounts to clients who pay early or sign multi-year contracts with you.

More people are shopping online now. So if you don't have a robust Web site, build one. And if you're thinking of starting a business, make sure the Web plays a big part in your business plan.

Be bold. Everything is negotiable now, particularly if you are in good standing with your banker, suppliers, or landlord. You'll never know what can be yours simply by asking.

I would never force entrepreneurship down someone's throat. Certainly, some people aren't cut out to run their own business. And circumstances can force some entrepreneurs out of business. But to imply that entrepreneurs should cut and run shows that the New York Times really doesn't understand entrepreneurs very well. We don't look to others to provide a safety net; entrepreneurs take control. Security is not lining someone else's pocket while being grateful for the tiny slice they dole out to us. Entrepreneurs are entrepreneurs because we don't run from risk, we face it head on. So New York Times, if you want to show the other side of the story, the side most entrepreneurs are on, gimme a call.

Issue to be Considered for Entrepreneurship -7

Is Entrepreneurship an Instrument of Free Markets or Is it an Alternative to the Market Versus Government Debate?

Long after Frank Knight emphasized the importance of entrepreneurial "judgment" in creating the very notion of "profit," entrepreneurship scholars from Schumpeter to Baumol have bemoaned the lack of a central role for the entrepreneur in economic theory (Baumol, 1968; Knight, 1921; Schumpeter, 1942). The oft-repeated quote about the Prince of Denmark is a notable symptom of this lament. Yet economists refer to the "entrepreneur" all the time--a word that pinch-hits for the firm, the production function, the manager, and more recently the innovator, besides being a surrogate for a variety of other mechanical devices at the heart of the economic system of supply and demand equilibrated by the invisible hand. In this rhetorical free-for-all, the entrepreneur has simply disappeared into the market versus government debate. Instead of empirically examining where new markets come from we simply assume this elusive and obliging figure called the entrepreneur will miraculously produce it out of thin air. Even Arrow (1962) acknowledged it: "When a market can be created, we assume it will be." Clearly entrepreneurship, embodied in the process we have so far sketched in this essay, is not merely an instrument of free markets. Instead it uses both markets and governments as instruments in formulating and achieving new ends, even inventing other types of institutions along the way. Entrepreneurship thus provides a way to transcend the market versus government debate just as it provides new pivots away from the old dichotomy of for-profit and nonprofit ventures. In our view, entrepreneurship is a method, a meta-logic or procedural rationality if you will, to help us coherently yet pragmatically rethink and reformulate the categories that matter to human and societal progress.

It may be useful at this point to remind ourselves once again of the historical analogy with the development and role of the scientific method. For millennia, until Francis Bacon spelled out the techniques and logic of systematic discovery embodied in scientific experiments, inventions were occasional events, products of serendipity or thanks to so-called gifted men who could "read" the signs of nature (North, 2003). But by the nineteenth century, to paraphrase Whitehead (1997), invention had been routinized and millions of scientists trained in the scientific method have since helped move the world (literally) from a speed record of about 20 mph in chariots to over 18,000 mph in orbit over the course of less than two centuries (Toffler, 2005).

Imagine what the entrepreneurial method could do if we are able to extract, codify, and disseminate the "how" as well as the "what" of the outcomes of entrepreneurship. Already, the artifacts attributed to entrepreneurial action include not only firms and economic value, but also the creation of new markets (Santos & Eisenhardt, 2004; Sarasvathy & Dew, 2005), new opportunities (Alvarez & Barney, 2007; Sarasvathy et al., 2003), new institutions (Battilana et al., 2009; Pacheco, York, Dean, & Sarasvathy, 2010), and social change (Austin, Stevenson, & Wei-Skillern, 2006; Dean & McMullen, 2007; Mair & Marti, 2009; Townsend & Hart, 2008; Zahra, Gedajlovic, Neubaum, & Shulman, 2009). In order to nudge future entrepreneurship research in the direction of this task of spelling out the entrepreneurial method, we offer three immediate possibilities that we hope serve as stepping stones to the real work ahead of us.

Issue to be Considered for Entrepreneurship -6

Investing in Social Problems?

Why is it that we invest in Genzyme or Microsoft, but give to Red Cross or Transparency International? Why is it that it takes 44 cents on a dollar for a good nonprofit to raise a dollar compared to about 5 for for-profits (Sargeant, Jay, & Lee, 2006)? Arguments fly back and forth that nonprofits subsidize for-profits or that nonprofits are less efficient and more fragmented than for-profits. And of course, the same tired old pivot--that for-profits are profitable and nonprofits are not. We find it difficult to believe that investing in software is more profitable than investing in the creative fount from which such a thing as "software" originated in the first place. If a piece of code that moves around a bunch of electrical impulses can create wealth, it is absurd to think that the mind that creates that piece of code is less profitable--and societies that foster and develop such minds even less so. We seek answers elsewhere.

For millennia, human beings did not realize how to harness and use the energies locked up in steam or in the movement and structure of atoms--just as we today struggle to usefully harness the energy locked up in sun, wind, and corn. Similarly, we simply have not yet found the mechanisms that can unleash the potential to close the virtuous circle connecting healthy societies with healthy babies and wealthy futures. Once a society has grown the baby and the ensuing adult has produced goods and services of value, we have relatively efficient and useful ways of pricing them and distributing them to those who want them and are willing and able to pay for them. With the invention of credit, we even know how to identify some of these in advance and reap the benefits within reasonable time lags. But credit markets are relatively new in human history (Poovey, 2008). There is considerable creative work ahead of us to expand them effectively to close the larger circle of human and social improvement. We do not believe this is a task better left to the revolutionary or to the policymaker. Instead we find tremendous scope in innovations already existent in today's credit markets. Moreover, these innovations can be transferred and transformed through entrepreneurial initiatives. The history of micro-credit alluded to earlier attests to such a profitable transfer. There is more where that came from. To give you but one new example, we present a brief case study:

Issue to be Considered for Entrepreneurship -5

Are Social Ventures Different From For-Profit Ventures?

One simple answer to this question is that some ventures declare themselves for-profit by explicitly incorporating themselves as such and subjecting themselves to the discipline of markets--or price mechanisms of one sort or another. Others eschew the necessity to seek a positive cash flow at the end of the accounting year and deny any individual the residual claims of ownership at the end of the day. Several compelling arguments have been presented for the separation between for-profit ventures and other types of organizations--including market failure, the psychology of giving, the biblical equation of money with evil, cultural and historical dictates against profiting from the unfortunate, and of course, sheer habit (Bator, 1958; McKean & Browning, 1975; Wolf, 1979; Zerbe, Richard, & McCurdy, 1999). All these arguments and even the very question "Are social ventures different from for-profit ventures?" however continue to perpetuate a dichotomy that may not have served us well in the past and may hinder the promise offered by our project of spelling out the entrepreneurial method.

Consider the fact that some goods and services are set aside to be produced through the for-profit system and others through either governmental or some form of not-for-profit system. And as a practical matter, this difference usually means that entrepreneurs have to deal with at least two different systems of funding and accountability when endeavoring to stitch together the local optima in social choice. For practicing entrepreneurs this further means that valuable skills acquired in the production of wealth cannot smoothly be transferred to the production of social welfare. For example, knowing how to make a pitch to investors for funding a casino does not always translate into compelling arguments to private foundations for funding child healthcare. Nor can the creativity and passion that drive people to save the earth or protect children be easily leveraged to produce economies that can nurture and sustain them after they have been seized from the potential ravages of climate change or disease and poverty. That is why we find that societies with large well-meaning public sectors are not always leaders in job market growth or rapid commercialization of inventions. And as Mancur Olson demonstrated, countries with the most markets are often the ones with large numbers of unresolved social problems (Olson & Kahkonen, 2000). The friction between for-profit and nonprofit costs a lot more than individuals and societies can afford--not to mention being theoretically unnecessary and practically harmful to the very causes it is supposed to serve. Even Mohammed Yunus calls for a re-labeling of nonprofits to nonloss enterprises. We would like to point out that all enterprises are de-facto nonloss for when they run out of positive cash flows, they, in fact, cease to exist.

But Professor Yunus' call for relabeling is not to be taken lightly. History often pivots on a single word or phrase--slavery, kismet, God, royalty, government--battles are waged and debates seem endless--until another word turns the pivot in another direction altogether--equality, choice, reason, evolution, democracy, market. It appears to us we are stuck for the moment on profit--for and against. May we suggest an easier pivot? The word is investment.