The American Entrepreneur

Some Reasons Why You Might Not Be Successful

Let’s face it, winning in business isn’t easy. For starters, most entrepreneurs (and there is a significant difference between an “Entrepreneur” and a “Small Business Owner” --- I’ll cover this in a minute) can only afford one, or maybe two legitimate swings at the ball. This is a matter of both money and time.

Furthermore, there are some very smart and ambitious people out there. Each and every one of them is trying to foreclose you and your idea from the marketplace.

And yes, there is also that age-old problem of differentiation. How do you truly create something that the world has never seen before?

(Which brings me back to my original comments about “entrepreneurs” and “small business owners.” Think of a small business owner as someone who is creating an enterprise that in most regards is merely a “copy” of another, already-existing business; while an entrepreneur is someone who is creating a product or service the likes of which the world has never seen before. Current and common terms that define an entrepreneurial start-up include, “disruptive technology,” and/or “game-changer.”)

Way too many small business owners consider themselves entrepreneurs, and this is wrong. In fact, use of the term “entrepreneur” has become grossly over-used. Folks, if it even has the “aroma” of an already-existing product or service, then what you’re doing ain’t at all entrepreneurial. Sorry.

It seems as if everyone wants me to give them some type of “magic formula” for succeeding as an entrepreneur. Almost every day, someone will come up to me and ask, “Well, can’t you just tell me how you did it?” Or, I’ll get an e-mail from someone asking for an hour or two of my time, so that I can reveal the “Secret Formula” to entrepreneurial success.

Again, sorry. As an entrepreneur, I certainly am an “overnight success.” The trouble is, my “overnight” success only took about two and a half decades to achieve.

But there are some things that many, many entrepreneurs (and small business owners) completely overlook that are really quite easy to incorporate into one’s business plan and/or enterprise. So, here are just a few of my favorites:

1. Talk to the experts! – Just about everyone knows that you begin your entrepreneurial journey by researching your idea or concept. Some smaller percentage also know that anyone starting a business should conduct both secondary and primary research. Generally, secondary research is considered to be the already-compiled information that gives one an idea about such things as competition, the marketplace, and overall growth trends in the marketplace. An example of good solid secondary research that recently crossed my desk was conducted by a student who was looking into opening up an automobile service center. A quick glance at the secondary research told this individual that people were holding on to their cars longer and, in many cases, even servicing them themselves. A further review of the secondary research also told this student that more women than men were likely to take advantage of a service-oriented garage. This is obviously quite useful information, especially when it comes to the downstream marketing and advertising decisions.

An even-smaller percentage of the populace understands both the value of, and how to conduct primary research. Primary research includes such things as surveys and questionnaires. Perhaps the most overlooked facet of primary research is good old observation. You’d be amazed about what you can learn from retail businesses by simply sitting in the parking lot of the facility itself (if the situation warrants), writing down license plates, gender, age, and other observations.

But invariably, students, entrepreneurs, and small business owners will overlook talking to the experts. Why this is, I don’t know. But what I do know is that this should be the absolute first place one “shops” when investigating competition, markets, and trends.

In almost all the businesses I have started (13 in all), I have worked very hard to find and talk to people who “live” in the world that I am researching. These are called experts. Sometimes these experts are retirees and sometimes a mere cup of coffee is the total and complete investment one must make in order to gain insight to their lifetime of experience.

Sometimes your expert is a salesperson. Some might think it duplicitous, but I have gained tremendous insight through conversations with really good sales people in my targeted industry. In this case, it’s not only a question of what they know, but who they know. (Note: If you’re nervous about talking to experts in your targeted geographic segment, simply drive a couple hours to the next big metropolitan area. There you will find total strangers who will again open up and fill your head with interesting facts about their niche. No charge.)

Occasionally, I will find an expert who is so insightful that I will make that individual an offer to join: a.) my start-up, b.) my board of advisors, or, c.) even my board of directors. This has happened. But don’t think for even a minute that you can gain a lifetime of insight into a business area that intrigues you without having some industry veteran available for at least a one or two-day brain drain.

2. Understand Distribution! – I guess if I were listing these points in order, this would be the first one I would make. I say this because, and quite frankly, Distribution Rules!

I am forever telling my students such things as: “seek fat margins,” “differentiate,” “have barriers to entry,” and, perhaps even more important than all of these, “find effective and efficient ways to distribute your products and services.”

And not just traditional ways, either. Here, one must be creative and one must be unique. But at the end of the day, you must find ways to expedite, and in the most efficient way possible, the flow of your product or service from maker to consumer.

During the American Revolution, the great Prussian general, Friedrich von Steuben solved his distribution problem rather nicely by selecting one hundred of George Washington’s finest soldiers for special and intense training. Once trained, he gave each of those one hundred solders orders to, “Go out and train one hundred more.”

Distribution problem solved.

More recently, products such as Jason Fried’s book entitled, “Getting Real” found their way to the marketplace via the Internet. This enabled Fried to vastly broaden his consumer base, thus generating audiences more than willing to pay $22 a copy for his subsequent book, “REWORK.” And it cost Fried absolutely nothing to put his initial product out on the Internet for downloading.

Those familiar with Chris Anderson’s latest book, “Free,” learned in the very first chapter how the makers of Jell-O set the stage for consumption of what previously had been a (in my opinion, rather gross) “delicacy” of the elite. Unable to sell the product for literally decades, the owners of the Jell-O brand (this was back in the beginning of the twentieth century) instead printed up thousands of pamphlets with Jell-O recipes. Salesman then delivered these pamphlets – at no charge – to homemakers around the country.

It wasn’t long after that that housewives began flocking to their local grocery stores, to load up on this new and exciting treat! (BTW, and I hope you’re not having dinner when you read this, but jello is actually the gelatinous mass of goo that boils out of the marrow of a large bone. Of course, the added sugar and food coloring help out a lot!)

Distribution rules because, and regardless of how many dollars you may have for marketing and selling, unless there is a smooth and efficient path from producer to consumer, every other dime spent is spent in vain.

3. Communications Platform! – Lastly, I’d like to tell you about a concept/precept that, and in my mind, is absolutely part and parcel of a successful enterprise. Unfortunately, you’ll find this in very few textbooks. In point of fact, the only individual I have ever even discussed this with is Regis McKenna, marketing consultant to Apple, Intel, and half of Silicon Valley --- I consider Regis to be the absolute guru when it comes to high-tech marketing --- he more than anyone else seems to “get it.”

My explanation of exactly what a Communications Platform is requires simply that one consider the political platform of a typical candidate.

In essence, a political platform is made up of planks. Those planks are the hard and fast beliefs and principles of the candidate and his/her party. For example, a conservative plank might be support of the second amendment --- guns for all!

One of the primary reasons why a political candidate will create a political platform is to ensure that his or her “stump speech” never varies regardless of who might be delivering it. The listening audience will hear the same points, over and over --- and those points will be expressed in the same exact way, regardless of the speaker or brochure.

A communications platform is the same thing. It is the business enterprise itself “telling the world” who they are, why they are in existence, and exactly what they stand for.

Furthermore, the platform will ensure that this same enterprise defines and describes its products and services in the exact same way each and every time. In fact, a well-deployed communications platform will include all relevant “catch” phrases, pricing policies; feature/function descriptions; product/service support policies, functions/warrantees; as well as the overall mission statement of the company itself.

It only needs to be written once, and then it becomes the wellspring for every single letter, blog, brochure, web site, and the like ever generated by the business enterprise.

Think about this. A communications platform written and approved by executive management can “live” virtually forever. So say a salesman is running out the door to propose a deal and he/she needs language for that proposal. No problem, the relevant and appropriate copy is simply excised from the communications platform and voila!, the business is transacted. No need to “check with” the CEO, the VP of Sales and Marketing, or even the sales manager. The copy that that young salesperson is using is pre-approved and representative of the collective mindset.

I hope you enjoyed reading these concepts as much as I enjoyed writing them. I also hope that I did not insult or embarrass anyone by telling them things that they already knew. I guess I’ll just have to take that chance.

In the future, I’ll provide more of these types of columns, that is, if you want them. For as part of our on-going effort to fulfill the mission of The American Entrepreneur, which of course is to help all businesses grow, compete, and prosper, it is these “meat and potatoes” type columns that best help our customers grow.

Until then.

Respond

6 Comments

Josh Bulloc

Dear Ron,

Well I guess based on your description I am probably not an entrepreneur but I do not think it matters what term I use to describe my venture.  What matters is that I am doing something that fulfills me and adds value to others.  Also, a there is much overlap between what it takes to be a business owner and a entrepreneur, the long nights, the mortgaging the house, the hard work, the creative solutions to problems, etc.  Heck, it takes one small tweak and a business owner is turned into a entrepreneur. 

Side question: Was von Steuben the first to use MLM?

Josh Bulloc
Kansas City, MO

James Sproat

On a quick scan, found it to be great stuff.  thanks Jim Sproat

Joe becker

Webster`s defines Entrepreneur as;
a person who organizes and manages a
business undertaking , assuming the risk for the sake of the profit.
By that definition , small business owners and the self employed qualify.
Inventors and market makers are a more rare and special breed .
Thought provoking article , thanks

Ernie Romanco

In life, we are all small business owners in the life we handle. Only a few become the entreprenuer in terms of businss, but many become social entreprenures and do far more for the world than the inventor…..Todays, entreprenure and business people have to live in a world that did not exist only a few years ago. Where the opportunities are many, but fleetingly quick in a rapidly changing world market…....It is here one must begin to know, or to find, who they really are, and more so, are they happy with what they find…..The small business owner becomes one mind set and only is an entrepreneur within that business. Where the entrepreneur is always that, even with each small business they run…...They are the ones who sell it off, to move on, to move sideways, or to make the world better as they find out who and what they are…...Lest one know who they are, the challenges become only the fire one dances in until the flame no longer warms….
And then one looks for the next new fire to dance in.
Be it outside .....or ....within…it must burn. Hopefully the world it changes is beyond only the immediate of that person, and for the better of all.

ron morris

Josh - I’m getting a lot of feedback on the “who is really an entrepreneur?” thing. Look, it’s OK to copy an existing business model, and I’ve done it many times before. And, please understand that this is MY definition of “entrepreneur”—- no one else’s. Finally, please know that one can BE “entrepreneurial” INSIDE OF an idea that itself may only be a copy of an existing small business model. Just becuase the main idea isn’t new doesn’t mean that parts of its implementation can’t be completely creative.

Keep your notes coming, Josh—- I love ‘em! 

Ron

ron morris

Joe -

Thanks for the kind words. I believe that you also posted this same definition on talk/shoe the other day.

Are you the Joe Becker who owns the insurance company in Carnegie? (If so, and if my memory still works, your model is very entrepreneurial.)

Thanks for being such a loyal listener.

Ron

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