One Minute Business Selection Blueprint
Special Report
One Minute Business Selection Blueprint
One Minute Business Selection Blueprint Table of Contents
The Big Question One Minute Life Assessment One Minute Business Models Building a Power Team Find a Coach Summary One Minute Tips for Selecting a Business
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One Minute Business Selection Blueprint
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One Minute Business Selection Blueprint It is Friday afternoon at 4:30. You are at work and looking forward to having dinner at your favorite Mexican restaurant with your family. As you type the last email of the day, you see your boss coming down the hall with a stack of file folders. Your heart sinks, because you know what it means—another late night at the office. “I know it’s late, but Bob called and we really need these files processed before the end of the week. Would you mind staying a little late and wrapping this up for us? Thanks! You’re a real team player.” Reluctantly, you pick up the phone to call home. “Hi honey. I’m afraid we’re going to save to cancel dinner again.” How many of us have lived this scenario in one form or another? It is frustrating to have someone else dictating our work hours, production levels, and even salary! It is enough to make you want to say, “Forget it, I’m out of here!” Millions of people have said just that. According to the Small Business Association (SBA), self-employment (self-employed divided by the labor force) went up during 2000-2003 for all genders and races. If that is not convincing enough, President Bush addressed the Small Business Administration in April 2006 and shared the following: •
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America's Small Businesses Are Thriving. Small businesses create two out of every three new jobs and account for nearly half of America’s overall employment. They have played a vital role in helping our economy add more than 5.1 million new jobs since August 2003 and have helped reduce America’s unemployment rate to 4.7%, which is below the average rate of the 1960s, 1970s, 1980s, and 1990s. Small businesses are also vital for supporting our communities. Small Businesses Create New Opportunities - Especially For Women and Minorities. Women own more than a quarter of all businesses, and the number of women-owned businesses is growing. Hispanic Americans are opening their own businesses at a rate three times above the national average.
Evidently, more people are starting businesses than ever before. Entrepreneurship is good for the economy and the individual.
December 2004 – Research Study [PDF file], Self-Employed Business Ownership Rates in the United States: 1979-2003, http://www.whitehouse.gov/infocus/smallbusiness/
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The Big Question One of the most daunting challenges facing an entrepreneur is determining what kind of business to incorporate. After all, there are a variety of business entities from which to choose. How do you determine which one is right for you? The One Minute Business Selection Blueprint will show you how to: • • • •
Determine your skills, passions, areas of interest, and expertise Weigh the alternatives and opportunity potential to create a business model that leverages your strengths Create a power team Select a coach that will help you to achieve your potential
One Minute Life Assessment Before you decide what type business you want to establish, it is important take a quick look at where you are now, what skills and attributes you have, and what kind of life you want. Take a few moments, and fill out the One Minute Life Assessment beginning on the following page.
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One Minute Business Selection Blueprint
One Minute Life Assessment Your Current Status How satisfied are you with the following areas of your life (rate these areas on a scale from 1-10 with 1 meaning deeply dissatisfied and 10 meaning highly satisfied).
Your physical health Your relationships Your creative expression Your work life Your spiritual life
________ ________ ________ ________ ________
What are your current responsibilities? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ List five things that make you happy (these do not necessarily have to be material). . 2. 3. 4. 5.
________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________
List five things that make you unhappy. . 2. 3. 4. 5.
________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________
Your Ideal Life In this next section, you will be invited to spend a few minutes envisioning what your business will become. While this special report focuses on your business, be sure to include personal items as well. After all, the goal of starting your own business is to enhance your overall quality of living.
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List five things you genuinely enjoy doing (even if you are not necessarily very good at them). . 2. 3. 4. 5.
___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________
List five things you do well (regardless as to whether or not you enjoy doing them). . 2. 3. 4. 5.
___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________
Is there anything from these lists in common? Which things you are good at, do you enjoy doing? . ___________________________________________________________ 2. ___________________________________________________________ 3. ___________________________________________________________ What are your areas of expertise (both personally and professionally)? . 2. 3. 4. 5.
___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________
Would you like to incorporate any of these items included as part of your ideal business? . ___________________________________________________________ 2. ___________________________________________________________ 3. ___________________________________________________________ What are your ideal work conditions? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
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One Minute Business Models The One Minute Life Assessment was intended to help you to identify areas in your life that you want to change. It will also help you to discover your passions and help you to identify potential entrepreneurial opportunities that align with your interests. Your business model embodies your overall strategies as they pertain to sales, marketing, and fulfillment. This report will address several components that you will have to determine as you construct your business model. As you begin the selection of a business model, there are several factors that you should consider. Some of the major factors include: • • • •
Products and Services Customer Base Business Type Personal Mission Statement
Products and Services There are generally two types of businesses: businesses that mainly offer products and those that mainly offer services. There are distinct advantages and disadvantages to businesses that sell products; likewise with those that offer services. There is no right or wrong answer when determining whether or not to focus on products or services. It is an individual decision that should align with your passions. Consider the following when deciding which product or service to offer: “If nobody will pay you to do what you love, you have a hobby, not a career.” - Ken Blanchard, One Minute Entrepreneur Product Advantages There are several advantages associated with selling a product as opposed to a service. One of the greatest advantages is that it is often easier to sell products on a larger scale because they are, by definition, replicable. Another benefit is that products can be sold while the business owner is on vacation or not in the store or office. Product Disadvantages Conversely, there are disadvantages with selling products. One main disadvantage has to do with fulfillment of orders. Packaging, storing, shipping, and handling are all issues when considering a product-based business. Also, product-based businesses generally have higher start-up costs. Take, for instance, the following scenario: Mama Anna’s Sauce Factory Anna has been getting compliments on her spaghetti sauce her entire life. Her friends often tell her, “Anna, this sauce is amazing! You should bottle it and sell it!” After years of comments like these, Anna decides to launch a company to sell her spaghetti sauce.
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In order to open her business—Mama Anna’s Sauce Factory—Anna must consider the following: • • • • • •
Where will she manufacture her sauce (from home or in a factory)? Where will she get the financing to establish the business and purchase the equipment? What are the health department regulations regarding food products? Where will she store the finished product before it is sold? How will orders be taken, processed, and fulfilled? Will she need to hire employees?
Service Advantages The primary advantage of a service-based business is that the start-up costs are generally lower than product-based businesses. Typically, special equipment, if required, is a one-time purchase. There are also fewer supplies that the owner needs to have on-hand to provide a service, which also means lower costs associated with inventory and overhead. Service Disadvantages Generally speaking, the market is not usually as well defined for a service-based business and, therefore, it is often more difficult to demonstrate a need. More often than not, people can provide the service for themselves. Therefore, service-based businesses must often establish a sense of need among potential clients for their specific service. The following is an example of a service-based business: The Catalina Island Bed and Breakfast For years John Doe and his friend Dan Investman have taken their wives to a Bed and Breakfast on Catalina Island. Last year, during their visit, the owners mentioned that they were selling the beloved Bison Bed and Breakfast. After much discussion, John and Dan decided to purchase the Bison Bed and Breakfast and change the name to The Catalina Island Bed and Breakfast. They decided that John and his wife would live on the property while Dan and his wife remained in Arizona, since Dan had a high-paying job. When contemplating prospect of opening The Catalina Bed and Breakfast, John and Dan had to consider the following factors: • • • •
Where will the customers come from (who will they market to)? What rates will they charge? Will they hire a staff, or perform all the services themselves? What will happen if John or Dan is unable to host The Catalina Island Bed and Breakfast?
Customer Base Another important factor as you begin to create your business model is to decide the customer base you are going to target. Your target customer base will determine your marketing efforts. It is a good idea to create as large of a target customer base as possible.
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Often, your customer base will be determined by the product or service that you are offering. Generally, your marketing efforts will be much less effective on people outside of the target customer base. There is an abundance of market research that will help you to determine a target customer base for your business. The following is an example of selecting a customer base: Suzie’s Sweet Lotions Suzie decided to sell a designer line of scented lotions. Suzie quickly realizes that not everyone will buy scented lotions. Suzie begins to do market research to determine who she should target in order to have the most success. In order to achieve the most success selling her sweet smelling lotions, Suzie must consider the following items: • • •
Who is most likely to purchase scented lotion? How can she tell them about it? Where will they look for it?
Business Type As you create your business plan, you will need to determine the type of business that works best for you and leverages your skills the best. You should also consider what your customers expect when shopping for the products or services that you are offering and how they expect the product or service to be delivered. There are several types of businesses that are available for you to consider. Each business type serves entrepreneurs and customers in a different way. It is important to consider which will work best for your business model. Keep in mind that you may combine various types to accomplish your goals. The common types of businesses include: • • • • • •
Retail store (brick-and-mortar business) Kiosk Internet business Online retail or auction store (Amazon.com or eBay) Home parties, trunk shows, craft fairs, and flea markets Home-based business
A brick-and-mortar business is historically the most expensive type of retail business to start, due to inventory, lease, and labor costs. Yet, many customers feel more comfortable shopping in brick-andmortar stores and they provide the greatest amount of customer exposure. If you like the idea of a brick-and-mortar store, but prefer a more fluid and affordable option, a kiosk might be the right choice for you. A kiosk is a free-standing store that sells anything from hair products to cell phone accessories. According to Entrepreneur.com, these businesses are most commonly found in malls, but many entrepreneurs are also finding success in airports, sporting events, and other creative venues. Your success may be limited only by your imagination.
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Nevertheless, do not be fooled by the fun exterior of a kiosk; they are challenging. If you decide to run a kiosk yourself, expect to work very long hours. Most kiosks remain open from the time the mall opens until closing. During the holidays, that is often 12 to 14 hours a day. If you plan to hire employees, you will need to set aside time to train them before you leave them alone with the kiosk. Also, while the risk with a kiosk is smaller than a brick-and-mortar business, the profits are smaller, as well. High-performing kiosks bring in about $200,000 in annual sales; however, your actual sales will vary greatly based on your products and location. Check out Specialty Retail Report (www. specialtyretail.com) for more industry information. While kiosks and brick-and-mortar businesses offer face-to-face interaction with customers, an Internet business suits entrepreneurs who are more comfortable with technology. Online stores work well for selling products that customers are already familiar with, such as stereo equipment, computer equipment, cameras, etc. Even so, online stores sell just about anything imaginable. Your key to success is to find and advertise to your target customer base on the Internet. The start-up costs associated with Internet businesses can vary greatly. If you create your own website, you business may be quite inexpensive. On the other hand, it can cost thousands for a professionally designed website. One obvious benefit of starting an Internet business is that it can be done part time and at any hour of the day or night. If you are not quite ready to jump into a kiosk or a brick-and-mortar business, and you are unsure about venturing into ecommerce, you can dip your toe into the entrepreneurial pond by opening a home-based business. These businesses give you flexability and offer low start-up costs. The downside is that home-based businesses are often difficult to market. You might start by selling your product on online retail or auction store such as Amazon.com, eBay, and Yahoo! auctions to get a feel for what customers are looking for when shopping on the Internet. There are myriad resources available to help you get started, and every good site has information for beginning sellers. Retail expert Gregory Fairchild says that home parties, trunk shows, craft fairs, and flea markets are a great launching pads. “They’re great for learning, and in certain businesses, you may not need to go further,” says Fairchild. “In fact, those distribution channels might be the best place to reach consumers [with your particular product].” These are the key selling venues for multi-level and/or network marketing businesses. Home shows, for instance, work well for products with a social component such as cosmetics or purses. Be prepared, however. “If you are thinking about trunk shows, you’ll have to be a bit of a showman,” Fairchild says. “You need to be good at pulling people into discussions and have a good sense of humor. You need a sense of showmanship and flair.” Determining the type of business to start is as much about your personality as it is about how much consumers like your product, therefore the possibilities are endless.
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Personal Mission Statement The final element of your business model is the personal mission statement. You should create a personal mission statement that identifies your core principle and the parties you are seeking to help. Your personal mission statement should be concise and cover this information in three or four sentences.
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Building a Power Team Those around you play a vital role in the success or failure of any endeavor. With a great support system, you can reach even loftier heights. Likewise, with a poor selection of associates, you can fall fast. In business, your support system is often referred to as your power team. The following portrays the importance of selecting a strong power team: “At any given time, we are becoming the average of the five people with whom we are most closely associated. Don’t ever underestimate the importance of who you choose to be with.� - Ken Blanchard, One Minute Entrepreneur Partners When it comes to business, not only can two heads be better than one, but two bank accounts can be a great asset as well. A partner can help you by pooling financial resources for a larger down payment. They can also improve your chances of getting the financing you need for start up or expansion. A partner can also help perform due diligence and research the background and history of a business prior to negotiating. Selecting the right partner is an important task. When looking for a business partner, look for someone whom you trust implicitly. However, partners are not necessarily a friend or relative who simply wants to get in on the action; rather, he or she should be someone who is going to strengthen your financial position when purchasing the business, add expertise in running the business, or both. Partners can run ideas by each other, provide support for one another, and allow for the other to take time off from the business. Therefore, you and your partner should have the same vision for the future of the business. The wrong partner can derail your business in a heartbeat. Flexibility on the part of both partners is absolutely essential. No two individuals will agree on every issue. In a business partnership, as with a marriage, both parties must learn to be flexible and be prepared to compromise in order to succeed. There are two basic types of business partners, active and silent. Active partners take part in the dayto-day operations of a business and give their input in many of the decisions of the company. A partner who knows and accepts his or her own strengths and weaknesses can effectively divide up the work and take on the tasks that suit them best. Once you have assessed your own strengths and weaknesses, look for a partner who complements your skills, knowledge, and interests. Silent partners seek a sound business investment but not looking to get involved with day-to-day operations. Yet, not all silent partners are silent. Some will have demands and want things done in a specific manner, even if they are not part of the everyday operation of the business. Thoroughly interview your prospective silent partner in advance to determine exactly how involved he or she plans to be with the business. Once you have found a suitable partner, be sure to draft a partnership agreement before you start the business. This partnership agreement should explain clearly how either partner can leave the
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business should they need to, what will happen if one partner dies or becomes disabled, and how disagreements regarding the business will be settled. The type of business entity you create is another matter that needs to be addressed. Many small businesses will be either a sole proprietorship (if there is only one owner) or general partnerships; however, you can—and should—consider setting up a Limited Liability Corporation (LLC) or S Corporation. This will help limit your personal liability, should the actions of your partner result in litigation. Team Members vs. Employees Regardless of the business model you select, and whether or not you decide to find a business partner. You may need to hire employees to help you run the business. Whether it is an administrative assistant in your home-based business or 25 employees to support a burger franchise, employees can make or break the success of any new business. Often, the difference is the attitude of the employees. An employee that feels part of a team will often reach a higher level of performance than his or her counterpart who does not see the bigger picture. So, what is the difference between a group of employees and a powerful, successful team? A team can be defined as “two or more persons who come together for a common purpose and who are mutually accountable for results.” The team member takes personal accountability for the outcome of actions where the employee would focus solely on his or her responsibilities and ignore the overall outcome. That is the main difference between a team and a group of employees. However, the definition alone does not capture how fantastic it feels to belong to a team. The following stories that illustrate the difference between being part of a team and working with a group of employees: Mike’s Story Mike is a 41-year-old manager of a large grocery store. Mike manages 12 employees, and each day when he wakes up, his first thought is, “What are they going to want from me today?” Mike dreads going to work. At one point, Mike did not harbor such feelings. Yet, ever since he got this promotion, he finds that he spends most of his day handling disputes between employees, managing conflict, and explaining his employees’ lack of performance to his boss. When asked about his job, Mike responds, “Let’s just say that if I died, and were sent downstairs it would be a step up from working here.” Don’s Story Don is also a 41-year-old manager of a large grocery store. Unlike Mike, however, Don wakes up every day excited to get to work. In fact, today his employees are participating in their annual Mismatched Clothes Day. Each employee wears the most ridiculous outfit he or she can put together. At the end of the day, the team member with the most ridiculous outfit (as voted on by the others) wins a gift certificate to a local restaurant.
Leading at a Higher Level, Ken Blanchard
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Being a part of such a great team is not all about fun and games. Don’s team follows Ken Blanchard’s team acronym; PERFORM. It stands for the following: Purpose and values—a team shares a strong sense of purpose and a common set of values. Empowerment—members of a team are confident in the team’s ability to overcome obstacles. Relationships and communication—a team is committed to maintaining positive relationships through open communication. Flexibility—team members are interdependent and realize that all are responsible for team performance, development, and leadership. Optimal productivity—a team is committed to producing significant results. Recognition and appreciation—a team experiences continual positive feedback and recognition on the part of the team members, team leaders, and the organization. Morale - If all the other PERFORM elements are in place, morale is high. When members are enthusiastic about their work, they are proud of the results and enjoy belonging to the team. Why Teams Fail Teams fail for a number of reasons, including poor planning for the implementation of teams and a lack of training. Research by The Ken Blanchard Companies® has identified the top 10 reasons for a team failing to reach its potential. . Lack of a sufficient charter 2. Unsure of what requires team effort 3. Lack of mutual accountability 4. Lack of resources 5. Lack of effective and/or shared leadership 6. Lack of planning 7. Lack of management support 8. Inability to deal with conflict 9. Lack of focus on creativity and excellence 0. Lack of training The Journey to High Performance Just calling together a team and giving it a clear charge does not mean the team will be high performing. High performance is a journey—a predictable progression from a collection of individuals to a well-oiled system where all the PERFORM characteristics are evident. To make this journey it is essential that team members adopt community building attitudes and perspectives. These attitudes and perspectives are:
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Team members must develop a learning attitude. Everything that happens in the team is “grist for the mill.” There are no failures—only learning opportunities. The team must build a trust-based environment. Trust is built by sharing information, ideas, and skills. Building trust requires that team members cooperate rather than compete, judge, or blame. Trust is also built when team members follow through on their commitments. It is critical that team members communicate openly and honestly and demonstrate respect for others. The team must value differences. Team members should encourage and honor differences. Different viewpoints are the heart of creativity. People must view the team as a whole. By seeing the team as a living system rather than a collection of individuals, team members begin to think in terms of “we” rather than “you” and “me.” Team members must become participant observers. To work well in a team environment, members should develop the skill of participating and, at the same time, observing. This practice, akin to being in a movie at the same time you are watching the movie, can give team members valuable perspective. All teams are unique and complex living systems.
Knowing the characteristics and needs of a high performing team is critical. It gives people a target to shoot for as they progress from a collection of individuals to a smoothly functioning, high performing team.
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Find a Coach Success Leaves Evidence It might be surprising to many that the one proven-effective key to success in entrepreneurship is coaching. If people genuinely seeking success understood the power of a great coach, and how they can significantly contribute to entrepreneurial success, they would recognize that a good coach dramatically enhances an individual’s ability to achieve their goals and objectives. Finding a coach and being teachable will save you time, money, energy, heartache, and frustration. What Is A Coach? There are different kinds of coaches and several definitions of what a coach actually provides. The specific duties or actions of each coach will vary according to the specific outcomes you seek. The following is a general definition: A coach is a person who instructs, demonstrates, directs, and prompts students. They are generally concerned with methods rather than concepts. There are four coaching roles and/or styles: • • • •
Hands-on—acting as an instructor for inexperienced learners. Teaches techniques and shows the student what to do. Hands-off—developing high performance in experienced learners. Allows the student to develop solutions with little direction from the coach. Supporter—helping learners use a flexible learning package. Provides encouragement for the student. Qualifier—helping a learner develop a specific requirement for a competence-based or professional qualification.
The role of a coach is to teach, support, and guide those they coach with integrity, compassion, and unrelenting care. The role of a coach is also to advise students to aid accomplishment of desired outcomes by identifying goals and objectives. The coach also builds trust and passionate determination, inspires and empowers others, transferring wisdom and experience into action. Through all of this, the coach is able to compress the timetable of accomplishment so that the student reaches a higher level of success faster than he or she would have on their own. Simply put, having a coach significantly increases your chances for success. Checklist for Selecting the Right Coach ○ Choose a coach with an outstanding track record in the field you wish to conquer. Look for testimonials and success stories of their existing or prior students. The coach should not mind you seeking references (in fact they will likely encourage you to do so). Occasionally, students do not wish to be made public, but in most cases, satisfied students are pleased to refer the coach that made a difference in their life.
http://www.neiu.edu/~dbehrlic/hrd408/glossary.htm
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○ Seek after the best. You deserve the best the life has to offer, so seek the best coach in your field and be fearless in approaching them. ○ Make sure your coach develops a plan that suits your schedule and your timeframe of completion. Interview and ask questions. Be specific in your descriptions of proposed outcomes. ○ Be sure you can develop a relationship with your coach that allows you both to be honest and comfortable. Have fun together. Enjoy each other. Chemistry is critical, as it will enhance your willingness to learn and thus make the lessons more palatable during difficult times. ○ Commit to a specific period of time. Be disciplined; follow commitments through to conclusion. Often, the results you desire will require that you make difficult changes within yourself or in your life. Generally, changes do not happen overnight. You must be willing invest time that it takes to make those changes. ○ Learn to trust your coach. There will likely be times where the learning is uncomfortable. You may not always understand, but that is okay, you must be willing to expand your comfort zones and learn new concepts. Developing a burning desire and passion for something you want is essential. The intensity of your emotion directed at the object of your attention sets off a chain reaction that becomes foundational building blocks of attainment. Having a great coach will assist you in creating and enhancing your level of desire and laser focus to obtain your objective. Knowledge is not power; rather it is potential power. Application and action brings about the power. A good coach effectively instills the will, drive, passion, inspiration, and empowerment. It also teaches skills that shape it into tangible, measurable results. It is the rapid, consistent execution of knowledge, coupled with a defensive plan, which brings dreams and desires to fruition more rapidly (and with fewer obstacles to overcome).
Summary Small businesses are thriving. As you begin your entrepreneurial endeavors, aligning your business selection with your passions and interests will greatly increase your opportunities for success. Identify the product or service and type of business you will offer to your customer base. Also, one of the greatest things that you can do to reach success, even quicker, is to find a coach to serve as a guide.
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One Minute Tips for Selecting a Business Choose a product or service that you are passionate about, but can also generate money. Do not pursue merely a hobby, but instead start a business. Match your business model to your personality. For example, if you an introvert do not choose a business that requires face-to-face selling. Be sure to draft a partnership before you start a business with someone else. Hire a powerful team instead of simply a group of employees. Choose a coach who has experienced success in business.
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Resources Choose your path: ready to start a retail business? Don’t get stuck at the fork in the road—we’ve mapped out 3 different retail paths so you can choose the one that’s right for you Entrepreneur, March, 2005 by Nichole L. Torres