Entrepreneurial News^®

Why Should Anyone Be Led By You?

We’ve had two object lessons in leadership this week, one by Elon Musk and one by Tom Steyer.

And we’ve got another one unfolding in California between Hilton and Becerra.

Musk did a successful IPO for SpaceEx, even though it might be a tad overpriced, as other Musk stocks seem to be, but the growth might come in to justify it. I’m waiting, but I do own some QQQ which has a share.

Musk is clearly a leader…. has the vision and hires the people to execute on his vision. And he’s got a bunch of people willing to be led by him.

Somewhere around 5 employees, your people will look to you to take the company in the ‘right’ direction to achieve growth. If you do the vision thing and they execute, all is well. If not, you’ve got to sell or pivot. Or you can just coast along where you get to, which is what most company owners do.

The key for you as a leader is figuring out what’s next and where you should steer your company. Or if you want to steer it anywhere other than where it is.

This is where I think Tom Steyer came up short. He made a lot of money in coal and oil and venture capital. But he didn’t read the Californians as really seeking a wholesale change, as Steve Hilton did. As his campaign faltered, he became, IMHO rather embittered. Not a good look. Californians decided they didn’t want to be led by him.

Karen Bass isn’t a good leader, either. Who goes to Ghana when the Sana Annas are about to hit? And doesn’t rush back? And doesn’t issue an apology for being gone?

Steve Hilton has the leadership gene: he knows where he wants to take California, which is a u turn from where it’s been lately, and may have the followers to get it there. I hope he puts the luster back on the formerly ‘Golden State’.

Xavier Becerra is trying to ‘fail up’ in California, which normally doesn’t work. Newsom is an object example. And he’s up against what appears to be a good leader in Steve Hilton.

Spencer Pratt has the makings of a good leader, because he listens to what the people want and he was (and still might be) ready to take them there. And with Hilton in charge, he might be reborn or given the push he needs.

You as a company owner are looked to lead. To me, that means growth, maybe not to you.

If you find the right things to lead on and execute through your people correctly you do well. Your people think well of you, although your leadership journey isn’t all about that.

Price is Right?

If you have a new product or service that is unique to the field, there’s always a temptation to price it at the top of the field.

We understand this approach, because you want to maximize profits, but we don’t necessarily recommend it.

Look at your overall service package: are you first, middle or lagging?

If your service on your website is sort of non existent, or it’s not easy to use, you might have to lower your price.

One of your nasty competitors might just decide to undercut you on price, which always seems to be where people focus, rightly or wrongly.

If you limit your customers, to create exclusivity that’s also a factor.

As we’ve said before, your overall growth is related to how well you do on the overall promotion scale, e.g., about 5% per item done well. So, if you do all five promotional tools well, you should project about 25% growth per year.

I’ve also been in a position where, if you price on cost, your starting price might be lower than what the market will pay. And you might be capacity limited. So you might have to raise prices.

Bottom line: price it where you think it should go and see what the market does. Adjustments are the staff of life.

Watch Your Flanks

All entrepreneurs should be a little paranoid.

Somebody out there is going to do what you’re doing and do it better, at least in the minds of consumers.

Minds of consumers is key to not getting outflanked by someone.

If you’re launching a new product or service, one that no one else is doing, don’t launch at a high price, which will invite imitators.

It’s awkward to have to go back to customers who’ve perceived that yeah, maybe you overcharged them.

Do the product/service lifecycle right the first time.

We generally think the product/service lifecycle is around 18 months on average, before someone somewhere makes a run at your product or service.

Have your counterattack ready, too. What that might be is all over the spectrum but have one. Review it with a trusted consultant.

You don’t know it all.

How to Think About Operating Costs

Most entrepreneurs don’t think much about operating costs; they’re ‘just a cost of doing business’.

And, as a solopreneur, you get what you get. We advocate working backwards to examine what you get, but that’s another story.

Stop and think a minute about those operating costs that work for you. Are they what you want? If not, why aren’t you changing, especially in this era of AI? Are you hiring people that fit your vision for the company?

When I and a partner took over my family company, we found out we didn’t have the right people that would support growth.

We worked backward from cash flow to support growth, through revenues, to figure out what our personnel costs should be. They started our higher than objective, but by the end of the first year, and about 75% turnover, we had the right people. Even in Reno, Nevada.

We joined a manufacturer’s group, which allowed us to benchmark our manufacturing and personnel costs against those of other manufacturers. Our bank put the group together. This group was like Solutions Forum, as a peer group of owners, and generated a lot of good insight we might not otherwise have had.

Look around at groups through Meetup, Alignable and Linked in for resources. Even if the groups are online, spread out all over the country, they should be helpful. If not, keep searching.

But don’t give up on trying to benchmark your operating costs. There’s no one answer to getting and keeping costs ‘in line’ but the more information you’ve got, the better off you are.

First, Get Your Position Right

I was just on an Alignable call with a bunch of business owners, and only one or two of them had their business positioned correctly, IMHO.

To start with, you have to know who your target customer is, or who think it is.

What does that customer want in a product or service that you are providing or hope to provide?

Who else is providing it? What do you think of what they’re doing? What do your potential customers think?

You can go on Linked In or Survey Monkey to find out, although you run the risk of potential competitors finding out what you’re doing.

Normally, you have several areas of differentiation: product, presale service, postsale service, product quality, service quality and so forth. And, of course, price. PRICE IS NOT THE ONLY DIFFERENTIATOR.

Which of these is important to your customers? Do you know?

If you don’t know better find out, ricky tick.

You should be differentiated on at least three of them to start.

Ideally, you should be differentiated on all, but as you go along, you’ll get smarter about customer wants and needs.

An Object Lesson in Empowerment

We’ve always been fans of empowering your employees.

However, we recently went through an object lesson in empowerment when switching cell phone plans.

I’ve tolerated my T=Mobile cellular bill being outrageous for about six months, so I finally decided to switch. I started with Consumer Cellular, because I like their ads.

An earnest young lady at Consumer Cellular quoted me a rate that was about half T-mobile, so I said let’s switch, and then the fun began. CC couldn’t just switch me (there were a lot unscrupulous switchers in the Phone Wars of the 1990s), so I had to have TMobile’s approval. Of course, they said I had to get a switch code, which can only be given by a store. The store is presumably gonna pitch me on staying with T-Mobile.

Back in my MCI days, we had to get 3rd party verification of the switch.

The smart play by T-Mobile would have been to ask what I’d been quoted and match it; I even volunteered what I’d been quoted at by whom. Then the TM schuck and jive began: still gotta get a switch code from my local store (not over the phone).

So I go to my local TM store, and they have no idea what the switch code is. I come back to my office, prepared to rip TM a new one, but I get a very polished rep the second time who promptly with no fuss cuts my rate to close to CC, which is what the first person should have done. Clearly, not all the TM reps are the sharpest knives in the drawer, but they have a few good ones.

So I’m still with T-Mobile, but not too happily so, which is why I’m blogging about it.

But kudos to Consumer Cellular for empowering their employees to offer a good deal without any ‘I have to ask my manager’ jive.

Trust and Wills

All of us entrepreneurs think we’re immortal, but we’re not.

So, you need a will to stay out of probate, which will send some lawyer’s kid to college for a year.

You also need a living will, in case you are incapacitated.

So, here are our thoughts:

Our will guidance is to make it rather generic, to conform to state guidelines, so you stay out of probate.
Personally, I use an addendum to spell who gets what, which I’ve had notarized. I also sent copies to my two kids so they’d know what my thinking is. ee
My kids are co-executors, which was their idea, but you just need to have one.
I have final expense insurance, because asset sales might not be done fast enough to pay for mortuary expenses.
I also listed what my debts are, so that my executors know who to call to pay them off.

Go To Market Like You Mean It

OK, we’re borrowing a title this time.

A gent named John Braze wrote the book, for software people, but it applies more broadly. And John is aware that we’re broadening his concept.

The tendency is to do more research, if you’re conflicted about launching.

We normally say and do the opposite. Get to market as fast as your people and money will allow.

Case in point: there is a professional personnel lead site called Bark.com.

Dopey name.

Located in London.

Great concept, site doesn’t work worth five cents.

i and two associates can fix the programming, have developed a good name and are located in the US.

All solid reasons for launch. But all of us run multiple companies, and do we need another? And do we have the financial resources? And what are the financial resources?

And what would Bark do if we launched? We think they’re kinda slow, but who knows if your ox is being gored?

Two of us have a principals meeting tomorrow face to face to hash it out. At the end, we’ll go thumbs up or down, maybe in conference with our third principal, who’s located afar.

So, the bottom line, is go to market fast, but don’t be afraid to pivot or cancel if circumstances changes.

Rich Habits

Mary Hunt, writing for Epoch Times originally uncovered the work of Thomas Corley on how the rich behave, and he’s written two books on the subject. We will, as Mary did, gist some of his habits of the rich and you entrepreneurs can use.

Same house, same spouse. As you become wealthier, either stay in the same house, or modesly upgrade. As for spouses, divorce is a serious impediment to entrepreneurial riches. It’s not very romantic, but get a PreNuptial agreement if you can. If your intended has some money, she’ll probably agree.
Associate with people you want to be like. This is difficult, because you don’t want to be seen as snobby, but you can learn a lot from the sons and daughters of the rich.
Understand the habits of the rich. Corley has about 200 habits of the rich he’s profiled, and we’re trying to get a license to use them, and the profile of their habits from those who are middle class or poor and strikingly different.
Rich people are not necessarily smarter, but they mostly earned their riches, and do work harder than the non-rich.
The rich do a better job of networking with other rich people, either in person over lunch, cocktails or dinner, or just a simple ‘check-in’ phone call.
The rich create daily goals, and pretty much stick to them. They’re not rigid in accomplishing them all on a given timetable but they don’t lose sight of them. They probably use 10-10-10 goal setting, although Corley doesn’t mention it.
The rich read, and devote at least 30 minutes a day to self-improvement through reading, online courses, etc.

There are more, but start with the above and take them to heart.

Steal On, China

Intellectual property theft by China has been going on for years, maybe a couple of decades.

However, according to the July 30 issue of Epoch Times, Beijing has now ‘clarified’ a law that formally allows Beijing to steal intellectual property, under the Anti Foreign Sanctions Law, which allows the theft of property such as ‘cash, bills, bank deposits securities, fund shares, equity and intellectual property rights, accounts receivable and other property’.

I’m shocked, but I don’t see that anyone in the Trump administration is doing anything to at least slow down the theft.

I would think Ambassador Perdue, our ambassador to China would take this up with the Chinese, and President Trump should take the matter up with Xi when they meet.

In the meantime, I’ll put out a Tweet to Trump, which might stir up something. I’m not sure Kelly Loeffler, the Director of the Small Business Administration could do anything, but I’ll include her on the Tweet, too.

Entrepreneurial News®

Entrepreneurial News^®