ericknopf:

When starting a business, people can get caught up with the idea of needing more education. Somehow people have correlated more college with higher business acumen. Now, I loved my college, but in many ways it taught me a lot of theory but left me high and dry for some key lessons on entrepreneurship and business management. Check this article back later as I will write followup how-tos for each one of these areas.

1) How to setup a business… (yeah, really)

After going through several business courses, the topic of actually forming a business never came up. Sure, we covered basic corporate structures (LLCs, S-Corps, etc) but never learned about how to set one up and the various requirements of opening and running your business. Things like insurance, payroll, taxes and compliance were headaches awaiting me.

2) How to bootstrap your business

Every scenario used in college when referencing your own business either implied you raised millions of dollars through investors or were independently wealthy. Full time academic professors who have never been in business for themselves have little to contribute about how to fund your business outside of these two paradigms. They take for granted how hard it is to fund your own business without banks or investors and offered no teaching or theory on how to self fund your business with little or no available cash. 

3) How to ignore your business plan

If you want your business to fail, simply write a business plan and try and do exactly what is written. Business plans are wild guesses that merely get you started but will never reflect how your business will develop in reality. Most business plans need to be ignored and forgotten as they will keep you chasing fairy tale ideas.

4) How to adapt, iterate and change on the fly

Since your business plan is useless 5 seconds after you go into business, you need to get used to nothing ever going to plan. Business and Entrepreneurship is about staying nimble and agile and being able to change course quickly. Business schools typically teach “build it and they will come” mentality that everything works according to plan. Hundreds of changes, iterations and tweaks are needed to get your business viable and stable. 

5) How to Build a Team

When you are building a business, the personalities and past histories of the people you choose matter a lot. Your company may live and die and by who work with. There are painful lessons to be learned in selecting the wrong people to join you and work with.

6) How To Make Money

As ironic as it seems, I don’t recall a single lesson regarding making a profit. Too much of what is taught today is focusing around getting lots of momentum and worrying about profit later. Other alternatives to making a profit include selling your business to a billion dollar company. Selling a business through an acquisition should never be the primary strategy to make money. Every business should be able to support itself and actually produce a profit..

7) How to take on a competitor

Rarely were competitors and entrenched market leaders ever discussed in college. Collegiate entrepreneurship puts a great emphasis on creating something that doesn’t exist when the most viable opportunities are to create alternatives to existing solutions and to face a fierce competitor. Understanding how to take on a competitor and how to out maneuver, out perform and out price a competitor has been one of the most important things I have learned on my own.

8) How to know when to quit

People are taught that ideas always work, when in reality, they are difficult to make work even when doing all the right things. Sometimes an idea, business or opportunity needs to be abandoned and people need to move on. This is especially hard because people become so emotionally involved in their business. Sometimes it’s just time to turn a page.

9) How to think beyond textbooks

Collegiate curriculum is lopsided with outdated text books and antidotes for business that predate the internet. Everything in business has been redefined by the internet. If your business books don’t mention Facebook or Google, you are wasting your time. It is also impossible for any book to provide solutions to all of your business problems. People need to learn how to think critically for themselves without having to rely on academia or a text book for direction.

10) How to seek advice and direction

Every business and every business owner needs help and a fresh set of eyes once in a while. You won’t be able to see every opportunity and spot every threat. You need people who have been there and done that and can give perspective beyond yours. However, you need to right people with the right abilities with the right relationship with you.

11) How to Hire (and fire)

There are certainly right ways and wrong ways to hire and fire people. Making mistakes hiring people will likely lead to you firing them. There is an art to finding people and also placing them in your business at the right time. I never was taught either.

12) How to do bookkeeping

One of the most useless courses I took was accounting. Sure it taught me for 5 minutes how to understand a balance sheet and I spent a week learning how to create a balance sheet, but the rest of the accounting principles I learned had little to do with running a business. Instead I stumbled through teaching myself quickbooks and repeatedly messed up my books because I had no knowledge about bookkeeping. (My bookkeeping software produces a balance sheet with 2 clicks by the way.)

13) How to manage customers

When you are learning about business in college, keeping and maintaining customers is completely taken for granted. Keeping and maintaining customers is foundational as your business model. If you are not careful, you will lose your customers faster than you got them. Getting a customer is often the easy part. Keeping them is difficult.

14) How to optimize your efforts

Each day when you go into your office, there are a million things you could and should work on. Knowing what is most important, what can wait and knowing how to not waste your time has been critical for me. Left to myself, I literally could spend 8 hours a day answering emails and never accomplish anything significant. Personal time management and development business critical priorities has been a life saver.

15) How to lead people

Effectively leading people and developing leadership qualities are rarely mentioned when talking about business in college. People don’t want to be managed, they want to be led. Your business growth relies just as much on how you lead people as your business model.

16) How to manage projects

One of the most difficult challenges in running your business is taking a huge endeavor and breaking into bite sized pieces. Combine that challenge of continual adaptation and you have a combination that can kill your business simply through mismanagement.

17) How to Establish a Work / Life Balance

Business can easily become an all consuming obsession that devours your marriage, friendships and family. Young professionals going into business need to learn the principles and practices of a work life balance in order not to become a slave to their business. Your personal life can infiltrate your business and people need to establish a healthy balance.

18) How to stop thinking and start doing

College teaches you to over think and over analyze. Sometimes the most important decision one can make is making a quick decision. It has become all too common to see a paralysis by analysis and mismanage your business through inaction.

19) How to expand or contract your business

In theory, getting an office, buying more inventory and hiring more employees always goes smoothly. In reality it rarely does. Also, I have never learned about how to downsize and scale back. Priorities, cashflow and timing are all critically important in these areas.

20) How to write

The skill I use the most every day is writing. However, I had to develop my writing skills through roundabout methods in college. Writing for business could be a semester long course in of itself. Understanding simplicity, clarity and brevity would have served me the more than any economics course that I took. 

When starting out your business, chances are you’ll have a fierce competitor in your market trying to squeeze out any new entrants. It can feel like you’re a tiny mosquito on a gorilla’s butt, but take heart. The best thing about being significantly smaller than a behemoth competitor is that they stand to lose a lot more than you. 

It’s important for every startup and small business to keep a close watch on its competition and capitalize on their mistakes. Making the right move at the right time may create a huge windfall of success for you. 

Here are 6 tips to capitalize on a competitor’s mistake that will turn their headache into your profits:

1. Be the first to spot a bad move in the making. Make sure you know more about your competition than they know about you. Staying on top of your competitor’s email newsletters, press releases, twitter feed, website updates, product videos, and anything else that is publicly available. Doing this will allow you to understand bad moves in the making and be able to plot your response. One thing I have learned is that competitors pay for mistakes over a long period of time. You’ll have lots of time to exploit the mistake to your advantage – you just need to be able to start it early enough. 
2. Take a stand: Make some noise. Don’t be afraid to get your hands dirty with your competition. If they raise their prices, decry foul on your website, newsletter, twitter, and every other avenue to say how much their price increase sucks. Don’t be afraid to call a competitor out on the mistake they’ve made. Have a little fun with it and crack some jokes about it. On one venture, we have an actual GougeMeter that allows you to see how much our competitors are gouging their customers with enormous pricing. Chances are you’ll strike a chord with other people who feel the same way.
3. Create a promotion in honor of the mistake. As existing customers are feeling the effects of the mistake – whether it be a price increase, huge service outage, a political issue, or whatever – have a promotion ready that is exclusive to your competitor’s existing customers. It lets your competitor’s customers know you’ve noticed and are thinking about them. They will begin to consider switching with a promotion just for them.
4. Don’t be afraid to lose money for the new customers. When acquiring customers from a competitor, don’t be afraid to lose money for the first year or two. We have offered a free year’s worth of service to switching customers before knowing we would lose money. Sometimes you need to do something drastic to get people to switch to you. This is also important because you want to think long term with your converted customers. You want to have them for years to come. When we have lost money on a converted customer, we have always been able to make it up in subsequent years from their service. 
5. Make an easy transition for customers switching. Don’t mess this one up. The one place you can make a massive mistake, causing customers to flee back to their former love, is to make the transitioning to your service a nightmare. It’s imperative that the whole process is seamless and easy. If it’s not, you’ll likely lose those customers forever. 
6. Treat your converted customers like gold. When you get a newly converted customer, you want to treat them like royalty. Send them a starbucks gift card to say thanks. Personally call them each year. When we had a big account switch over to Webconnex, we ordered frozen yogurt to be delivered to their entire office. You’d think we walk on water now! If you treat your new customers well, they will tell other people about their process in switching and how happy they are. 

Stop feeling bad about charging people. Not everyone wants nor expects the lowest price for a product or service. Often, I am deterred by the bargain busters offers. If you had to have life-saving heart surgery, would you be looking for the medical group offering 75% off? Not likely.

Read more …

If there is one thing frustrating to me, it’s cookie-cutter, carbon-copy business idea that’s virtually identical to the competition. How many identical daily deal websites are there now lacking competitive advantage or increased value? How original is it to rip off someone else’s business, product or idea without any creative or innovative contributions added to the mix? 

Read more …

Has that loving feeling started to drain from your venture? Do you find yourself re-checking your facebook every ten minutes to avoid your work tasks? Then it’s time to revamp how you work. 

I think it’s critical to understand what your exact strengths are, and more importantly, where they are not. I had a work epiphany when one of my business partners clearly defined the difference between us. I was the idea guy, a person who comes up with ideas out of nowhere, and he was the guy who loved to take ideas and expand on them to make them happen. We equally hated each other’s roles. So we decided to swap responsibilities and re-arrange how we spent our time working together. The result had us glued to our work and engaged through the entire time. Here is how you can do the same.

Read more …