From Clean Up To CEO

As ironic as it my sound, it is very true. People can definitely become superstars from something very small. You might think that I am going to tell a story about someone who made it from cleaning up in a restaurant, to becoming a CEO of a company, but I'm not. Instead, I am going to talk about the many cases where employees at entry level positions have made huge differences, and made it to management in many of my businesses.

I always say you should value everyone's thoughts and ideas, but I'm not sure if I have made a clear statement. For instance, I do value each of my employees thoughts, so whenever there are meetings or brainstorming sessions for ideas to grow the business, I have each employee contribute their opinions- even if they are part time employees. At each of my retail locations, I have made it very clear that there is always room to move up on the ladder and many have taken advantage of that and have helped themselves in getting promoted. A lot of marketing ideas that have been successful in growing some of my retail businesses, have came from young and ambitious people who have been hired to just help out with cleaning and such.

Many of my friends own companies where they only let senior management in on what the company is cooking up for its next marketing campaign or what they are planning to grow their business. But I feel like this is unnecessary. If you shut out some of your employees from contributing ideas to better your business, you might be hurting yourself in the end.

And it is a win-win situation in the end because if someone brings positive results with their thoughts, you can bet that they will be sticking around with a better title for a long time to come. I have a one friend who started out working in a McDonald's as a guy who just cleaned up, but now he owns multiple fast food restaurants. He always says, if it wasn't for his ambition and liberty to contribute his thoughts with management, he might have not been as successful as he is today.

So the bottom line is- take input from everyone and VALUE it. Don't just act like you are listening, but have your brain off while the person is talking, because it just might be a golden idea to help you grow.

Setting Up Good Pricing

Setting up good pricing structures can be harder than they sound. Even the slightest difference in pricing can mean the difference between many sales or no sales. There are many things I look at when pricing out products for different businesses, but I base my pricing off of some base factors.

A few things to look over:

Exclusivity: Is the product or service a premium luxury or is it something people use on a daily basis? If any of my businesses provide a luxury service or product, I don't rip people off, but I am not jumping around giving out a bunch of deals. If you look at real life examples, you will see that if you want to buy a regular, everyday car, there will probably be some kind of "special financing" or "cash back" going on. On the other hand, if you go out to buy a Tesla, in this case, there is no special pricing, in fact, you end up paying a deposit upfront and are put on a waiting list before the car is even manufactured.

Competition: When someone is determined to buy, they are either going to buy from company A or company B. There is nothing more to it. Capturing a customer in this case, heavily relies on pricing factor. I always try to price products at all my businesses fairly and under my competition, in most cases. I don't always undercut the competition, because in ALL cases, at any of my businesses, the service is TOP NOTCH. Employee attitudes are always positive towards customers and the purchasing experience is ALWAYS delightful. Even if your prices are a little higher, you can win on service. But you should always consider what others are pricing similar products at.

Hot Product: If a product is hot, it is just that. There is no need for discounting the product. If everyone is coming to me for what I offer, I will charge full price for as long as I can and make all the profit possible.

How Quick is the Sale Executed: Time is money. If a product or service takes more time to complete, the price should definitely be in correlation with the time involved. For example, I do a lot of consulting for various companies. I charge a fixed price, in addition to per day, plus travel costs. The companies that find true value in my consulting will not hesitate to pay, other companies won't waste my time or theirs. By charging per day, instead of hourly, I can be sure that I set aside the whole day for the company that wants me to consult. If they use me for 1 hour or 3, it remains the same price.

Location: When dealing with retail business, pricing always factors in location and area demographic. The product prices for a store in Beverly Hills, would usually be higher than the same store in neighborhood with less average household income.

Driving A Business Into A Hole

The title sounds ironic. Not one business owner would wish or intentionally act to drive their business into a hole, but sometimes they do it unknowingly anyways. There are many instances I've personally seen, that influence a business to dip and plummet into a hole. Much of the reasoning behind the failure of a profitable business is lack of owner acknowledgment. When people are too caught up in the blue, they don't focus like they did when the business was just new or when it was growing.

What can you watch out for and do to keep a business profitable and not drive it to the ground?

- Don't be fooled by cash flow. - Often times business owners are fooled by the amount of cash that flows into the business that their expenses go out of control and they find themselves in tremendous debt when it comes time to pay the bills at the end of the month.

- Don't take it easy. When a business is at it's peak, some business owners start taking it easy, thinking "nothing will change." This approach gives an owner a sense of ease because they think they should take some time to enjoy their hard work, but in reality, they tend to lose control little by little and the business loses its strengths.

- Be aware of changing policy's and laws. Laws are always changing and in regards to business, it is extremely important to keep up with the current tax laws and such. Missing out on paying taxes can result in penalties, but there are worse things that can happen. I have my attorneys closely watch all my finances, in order to make sure everything is being properly managed. A little mistake can COST a lot.

- Watch out for employees who are "taking it easy." Many business owners hire friends or family and when they take it easy, they don't speak up and tell them to pick up their slack. If an employee is not performing to their fullest, maybe you should reconsider having them on your staff. After all, it is just business.

- Seek new opportunities to grow. Sometimes business owners get lazy and they don't want to take more risks or even stay innovative. This might be okay for a small amount of time, but if you never come up with anything new or different, customers might start dropping off because they like to see new products that they can choose from.

- Keep up with trends and wants. If there are some hypes in your industry, keep up with them. Even if you haven't started a hype, it is necessary to know what people want and where the trends are going.

- Know when and how to act. This is probably the most important factor as a business owner to watch out for. Knowing when and how to act upon certain situations can mean the difference between extreme profit and extreme loss. Certain times might be a great time to sell, others might be a great time to buy. Your judgment is the bottom line.

As a business owner or entrepreneur, you have to have a grasp of reality. As soon as you drift out of that reality, you are vulnerable to huge losses or downturns of any kind. Don't drive your profits into the ground!

The Domino Effect

I am pretty sure you have heard the phrase “Domino Effect” before, but have you ever questioned how a domino effect can impact your business in particular? There is always an outcome for every decision you make, whether it plays out for your business in a positive or negative manner. I’ve seen many entrepreneurs that make decisions based on narrow-vision- or not looking into the distant future, which isn’t bad, but you need to plan for outcomes of your decisions so you can take the proper steps in order to avoid potentially closing your doors or even prepare for higher sales.

First off, I want to explain how you can plan for the “Domino Effect” in your business. Whether you make decisions on a macro level (decisions based on long term goals) or at a micro level (daily operations) it is important to map out “routes” that you can take once the decision plays itself out. Lacking to plan different options for when it comes time to take the next step, can often lead to taking a bad step or even not taking the maximum beneficial step for your success.

For example, if I was to hold a product giveaway for my business, which drew a lot of attention, leading to more sales, but I didn’t have enough product inventory for the bump in sales, I would be shooting myself in the foot essentially. On the other hand, if I overstocked my inventory, but instead didn’t see enough sales flow through, I would end up with blocked dollars in my inventory on inflated projections. However, if I were to map out potential routes I would be able to take for the spike in sales I would find that I might be able to work with suppliers and have priority shipments made to me on a daily, bi-weekly, or semi-monthly basis depending on the amount of traffic coming through. I would also be able to explore other options beforehand, which would give me an upper hand when dealing with the “Domino Effect” of the initial decision, which was to hold a product giveaway.

A “Domino Effect” can be seen in internal operations as well. When dealing with human resources for example, I would have to plan for future hiring for product promotions. At the same time, I have to be thinking about how much I have afford to blow on payroll, while my sales are the same. Since I am bringing in the same dollars in sales, while working on innovation for new products or publicly promoting new products, I will be seeing less cash on hand, but more being sucked up into the business. If I don’t plan for a reserve or more funding through the launch of new products, I will end up closing my doors before any new sales are made, since all my funding will be consumed.

Overall, I hope I made the point across that you have to not only plan for your business, but you have to plan different options or paths you can explore after your initial plans are implemented into your business. If you don’t plan the “Domino Effect” for any decisions you make, you will be brought to a dead end and be forced to make decisions on the spot when the “Domino Effect” plays itself out.

Hype Doesn't Last

I have ran businesses that have picked up "hype" and I have also seen many businesses running into a stage of hype and then taking a drastic fall into the red. It is always great to have some buzz around what you are doing, but you should realize that it will never last forever and you should plan for those times so you don't end up pulling the plug on your venture.

-Some hypes are natural and some are artificial, but what is the difference?

Natural hypes are when the public or users create a craze for a certain product and an artificial hype is when companies create their own "fame." I have personally owned businesses that have dealt with both situations and I can say that, natural hype lasts longer than artificial, but both eventually die out. A natural hype would be something like Facebook. Facebook didn't create it's own fame, but instead capitalized upon it occurring, taking advantage of all who wanted to invest. On the other hand, companies that create their own fame, usually end up tripping on their own shoe laces.

-How can you take full advantage of a hype and still keep some "buzz" around yourself after it dies down?

Taking advantage of hype means being prepared. I don't just mean that you should have a plan, but you should have a plan, execute the plan, and keep up with innovation. There was a MySpace craze once upon a time, but MySpace didn't really "innovate" so they weren't able to hold on to most of their users, who ended up heading to Facebook. Another good example of how a company didn't take advantage of their product hype was Krispy Kreme. Krispy Kreme doughnuts were some what of a "delicacy" when they went nation wide, but then people soon realized that Dunkin' Donuts had bigger doughnuts, so eventually the customers went back to Dunkin' or became Dunkin' customers if they weren't previously. I think that Krispy Kreme should have came out with a cheaper product or something that could be compared to big names like Dunkin' which would have saved many stores from being in financial trouble. Recently, the word on the street seems to be that Krispy Kreme might end up closing all of its doors for good.

To sum up taking advantage of a hype, I would say that you have to present new products or services while people are naturally (or artificially) obsessed with your business. When you truly appeal to them while they are coming your way, there is a higher chance that you will be able to sustain the "hype" and potentially keep some sparks around after it dies out.

-Does hype always mean that you will be in the green or can you lose money during hype?

It is important to note that you don't always have to be profitable during a hype and you can be going in the red big time if you don't see it coming or ending. Many businesses don't judge properly when they are in the middle of a hype. This causes them to over expand, over staff, or even overspend projected budgets during the hype. The worse thing is that companies don't see the hype fading away and still keep the same amount of spending and budgets around. While it is necessary to have staff for the hype, you shouldn't end up like some Web 2.0 companies which hire a bunch of people and then the service loses its luster and it is facing laying off 70% of its staff. If you are able to visualize the future and current standing of your business, there is a greater chance that you will be getting a clear projection when you sit down for future planning.

Always remember, anything that grows fast is likely to collapse twice as fast. You should never assume that you are set for life when you start tripling or quadrupling your expected earnings, but on the other hand you have to take maximum advantage of the "hype," when or if it occurs. And don't over expand on "hyped statistics."

Running A Transparent Business

Being transparent as an entrepreneur or running a transparent business gives you an upper hand in whatever you are dealing with. If you have been transparent with your business year after year and continue to be, you will more likely deliver higher customer service, at the same time run into less troubles. Being transparent will also help you deliver more quality within your business.

If you have not been running a completely transparent business or haven't started a business yet, you will notice that when you do start being transparent, there will be a stronger relationship between you and your employees and also you and your customers. The strong link will probably get more customers to come back to you, essentially giving you repeat sales and at the same time get your customers talking about your business among their friends or family.

Why would customers be happier if I told them something the way it is?

People look for what is really up these days. Nobody has time to listen to manipulated things or even that same sales pitch they have heard a thousand times. If you become honest with your customers, they will probably see through the sales tag and find that it is more beneficial to THEM to buy from you instead of the competition.

Admit your mistakes...

Making mistakes with a business or as an entrepreneur is only natural. It happens to everyone. But what everyone doesn't do is admit their mistakes and say they were wrong, instead they try to cover up their questionable judgment. For example, if you are working with a team to launch a new product, but a decision you make is incorrect, and you try to draw attention to another problem or incorrect decision someone made along the way of the product launch, instead of your own, people will notice that and they might become distasteful with you. On the other hand, if you took action and faced your incorrect decision, people will probably be more willing to work with you to fix it quicker, so less "chain-reactions" arise.

Same thing goes with a business. A matter that comes to thought instantly, is when Facebook launched their Beacon project a couple years back. It was a service that displayed what everyone's friends were buying online and notified people in their mini-feed. People's thoughts for "privacy" suddenly jumped out of the roof and Facebook acted on the feedback. Mark Zuckerberg, addressed the issue on a company blog post, and apologized for the lack of privacy with the project.

What about my staff?

While you cannot think for someone else, you can influence how they act if you create a surrounding that is persuasive. If you try to scope out people that are transparent and hire them, it is more likely that the people that are not transparent, will become more inclined to be transparent. After all, do you really want a employee that isn't transparent, working for you? You are the first step to having them become transparent.

What it all comes down to...

The bottom line shows, being transparent with your business or being a transparent entrepreneur will give you a better reputation in the end. If you remain transparent through the years, consumers will put their trust into you and that is the true key to crossing the finish line successfully.

Maybe the first step to becoming transparent, is to get a transparent business card. :)

Instinct

Yes, no. Right, wrong. This or that. Everything that you have to make a decision for basically has two or more options. There are always different outcomes for each decision you make, but you never know the outcome until the decision actually plays itself out. I often see people hesitating or debating endlessly over taking route A or route B, when clearly they are just wasting time still standing at the point of origin. I think that many entrepreneurs slow their development by pondering upon options.

Why is it beneficial to go with instinct?

Less time wasted- Mapping out all decisions can take a matter of minutes, but it is the analysis of how each decision can possibly turn out that can take a long time. If you go with your instinct, you will waste less time on possibly the same result.

More time for trial and error- Failure happens. The more time you use debating which decision to make the first time around, the less time you will have to make the same decision the second time around. You can't possibly expect to know what to look out for before you have actually experienced something, so usually it is beneficial to have more time to make a decision the second time around, since you will have more data and factual information to look at.

Not as much "second guessing" yourself- This or that? Have you ever found yourself unable to come to a decision because you have scoped out alternatives? But then you find yourself going with the first decision you made anyways resulting in a positive outcome? The more time you take to map out alternatives, the more options you will come up with and the more you will second guess every decision. This can possibly be an endless route.

Less controversy- If you make a decision and think about what you will need to look out for while you are implementing it, you will have some idea of a buffer. If you have to map out the possible damages for 5 options, you will have more to dispute between. Going with what you think is right, will probably help you think more clearly through the process. You won't be as confused and there is probably a higher success rate with your instinct.

To conclude, I would say that in reality, about 75% of the time I go with my instinct. Sometimes there just isn't enough time to go over all of the possible scenarios and play each one down to how it can work out. By going with your instinct, I don't mean to say that you should just go with any weak decision, but you should go with what you feel is best...in your mind. As soon as we start thinking about options, our minds automatically start thinking of how things will play out. This is what causes instinct feeling to be usually right.

I would also add that when making major decisions, instinct may also not be the best way to tackle things. Instinct is usually for more micro-situations. Obviously if you were planning to make a major move, you should map out everything you can possibly think of and plan, plan, plan until you can't plan anymore.

Too Many Cooks Spoil The Food

I'm not sure if you have heard the saying, "Too many cooks spoil the food," but it is very true in terms of business- and cooking. While it can be very possible that five chefs have a different way of making the same dish, if they all try to work together, it may turn out to be the next Hell's Kitchen. Each person has a different style of delivering success and there are many ways to get to the same result. This is why in management there could be multiple "correct" approaches that a company can take, in order to increase exposure, the bottom line, sales, whatever it may be.

Why should you limit the number of "cooks" making decisions in your business?

While it is very good to take in advice from numerous people, there should only be a few or maybe even one person making all the major decisions- at least that is how I view it. If you have 10 advisers for your company, there should be one appointed person or two, that make the final decision. If you try to implement everyone's thoughts and styles of management, eventually you will see that either nothing works or nothing gets done. Even though you are having only a couple people have the final say on something, you should welcome ideas from all because every idea can potentially be a winner, but no idea is a loser.

In a partnership business...

A lot of people start up businesses with two or more partners, which is great, but when it comes to decision making, many people have different say from their business partners. For this very reason, it is good to have a managing partner- or one who has majority say. Usually the person who has invested more into a company has the greater say, but it can be different if the person who invested less is managing the business. By having one person making all the decisions, you will run into less feud between the partners and potentially make more "right" decisions for the company's well being.

Notice I said less feud because there is always difference of opinion in a partnership. Nobody thinks alike, 100% of the time. When people have different opinions, they are bound to back up their thoughts and push towards those to be implemented into a business. And nobody can make all of the "right" decisions even if they are having the final say because there is a chance- whether slim or large- for everyone to fail.

Better to let experience decide...

Being part of many businesses, I cannot know every detail of every business as it is happening. Therefore, I don't have as much experience with each particular venture as say the manager or team director would have. That said, even thought I may be the owner or majority stake holder in a company, I don't always appoint the final say to myself. While it may be that I can overrule anything said, I choose not to operate that way. I feel that it is best if the person in charge of a particular business take the decision THEY feel is right and most beneficial to the success of a business. Even having multiple locations of the same brand can have less weight compared to the person who runs a specific location being discussed. While I oversee every major decision made, since it is my investment, I oftentimes let individual management go with what they think.

Voting can be pointless...

Many times you will hear a board say that they will vote on a decision to be made and you can choose from X or Y, with having the majority votes win. In my eyes, I can see both ups and downs to this scenario. There is always a chance that 9 people can vote X and 1 can vote Y when clearly Y could be better for a company. This is why I choose to discuss ALL decisions being made and not just go by how many votes one can rack up. When discussion arises to the table, chances are details can be pointed out, where otherwise it would not be.

Overall, decision making and the whole management process seems to work out better when there are fewer decision makers- or "cooks"- in the kitchen making the decisions. If you run a fortune 500 company or just a mom and pop shop down the street, always welcome various voices to the table. It can be to your benefit to listen to different people because you don't know what they are thinking until they say it, but if you never listen, you will never have the options to chose from.

The "Cards" Can Change

If you watched the Super Bowl, you will notice there were turning points for both teams in certain points of the game. There was an equal chance for each team to win after their "cards" changing. But in the end the Super Bowl win was "stolen" from the Cardinals and the Steelers took it home. How can you learn from the Super Bowl and invest the thoughts into your business for the greater good?

There are always turning points- In the game there were times when people started to think the Cardinals were going to win and there were times when the Steelers were going to win. In the end the game was very close and one play determined the win. If you look at a lot of companies today, they have all had their up's and down's, nonetheless, many of them have made changes for the better and have come out on top eventually. In your business, no matter how doubtful it is that more profit or growth can be made, there is a chance that you can make it happen.

Nobody can stay on the top forever- The game never went one way and stayed that way. With the game never turning into a one way streak, it wasn't guaranteed that either team was going to win. Even though the Steelers had the hand up over the Cardinals throughout the first half, it didn't keep the Cardinals from going all out and eventually leading them to take the lead for a little while in the 4th quarter. That said, the same thing can happen in business. Any big player who dominates an industry can fall to 2nd, 3rd, or even last place. I don't believe that any company can stay on the top forever because eventually competition takes a big share of the market share. Don't think that your market share will always stay intact forever either.

Don't underestimate your competition- Neither team underestimated their opponent. By not doing so, they were able to keep a clear mind and expect to be beaten. Staying fearful kept both teams trying their hardest for the win. You should never underestimate your competition either. Even if they are not as strong as you or even only take up a very micro-level market share, they might come out with something 10x better than you and take over the majority of the consumers.

Think clear under pressure- While I'm sure both QB's were under pressure throughout the whole game, they tried to play their best and keep up with what was going on in the field. Maybe on the last play Kurt Warner hesitated, but still kept a fair balance through the rest of his pressured plays. If you are under pressure with the operations of your business, you should still try to keep a balanced and clear mind. By being under pressure, sometimes judgment can be clouded and wrong decisions can be made for the worst.

Congratulations to the Pittsburgh Steelers for the win!

Build A Loyal Customer Base

Check out The Loyalty Effect (click here)

Businesses are always focusing on how to bring in new customers or users to their services, but sometimes lack to think that instead of spending tremendous amounts of time on how to bring in a new audience, you can potentially make far more with a LOYAL customer base. Before I go on, let me just say that you should always be working to build a bigger base of customers, but that shouldn’t sway you away from keeping an eye on creating a strong and repeat customer base.

The scenarios…

Let’s take a look at a mechanic. Mechanics are either good or they are not. If they can diagnose the problem, fix it, and clearly tell their client what was wrong, more often than not they will get repeat business from the same customer. In another scenario, if a mechanic were to play games or even show lack of knowledge/ability to resolve a problem, chances are they won’t see repeat business; in addition to have the person tell five other people that a certain mechanic can’t get the job done.

Next, let’s look at a web service. Say you are providing a data tracking service for people. You charge $10/month for unlimited use and data tracking. If you have 1,000 clients and you increase your client base by 20% each month you will be building your sales month after month. If you are losing 30% of your clients month after month and bringing in that same 20%, it is not benefiting your company because in addition to losing out on revenue, you are spending money in terms of marketing. If people don’t stick around, YOU LOSE MONEY!

A basic rule of thumb goes to show that if you invest more time, money, and efforts into taking care of what you already have, then focus on growing, you will be coming out ahead in the long run. If you have a loyal customer base- your customers also market and live your product in the long run. Even if you compensate the 30% loss of clients with the same amount of new customers, your customers don’t live your product so you won’t spread within their communities.

Besides the general situations…

Forget about everything from a marketing prospective and revenue flow for a minute. If I am running a business where I am selling lemonade and I have the whole neighborhood coming to my stand everyday for five years, it shows that I have built a strong and loyal customer base. Now I get innovative and change my lemonade making strategy- because I think it will “taste better and be more energizing,” but instead most people end up not liking it at all. The consequences would show that generally most people will be willing to give my lemonade stand another chance since they have been coming to me for the past five years. Let’s say I end up losing a permanent 20% of my customers. But now let’s say that I was focusing on bringing in new customers, instead of having repeat customers. Now I lose 80% of my customer base and word spreads that “nobody should come to my lemonade stand.” Virally- bad things spread quicker if there is nobody to defend a problem from a different viewpoint. Since I had only 20% repeat customers and 80% new daily, the 80% will be bad mouthing my stand while only 20% potentially defend me. If I had more loyal customers than new customers, the bad experiences might have been contained better and people could possibly be a little easy going due to my failed innovation giving them a bad experience.

Overall, marketing efforts can become costly if you are not earning repeat customers to your business. If you build on top of your existing customer base and the majority of people keep coming back, THAT is when marketing efforts and ROI really shows up. Along with the fact that if people have a bad experience with a business -besides in terms of "bad service"- that they have been a loyal customer to, they will probably give it another chance...people that have no been a loyal customer to a business, who visit a business for the first time and have a bad experience, will probably never come back due to them assuming its how the business always operates.

Small Business For The Win

There's no question that most businesses-small or large- are hurting in this economy, but it seems like many small businesses are able to hold on to that last string while hope stirs for things to turn around. As you may have already heard, Circuit City among other large companies have recently gone bankrupt, and in my opinion, this is only the beginning of large enterprises failing.

I recently spoke to a friend who owns a Toyota dealership, who said that even they are facing trouble despite being the #1 car manufacture in the country. Toyota as a whole reported it was losing money after a long time, but car dealerships seem to be having a real tough time to make profit on each vehicle. My friend said, "We're lucky to see the cars being sold, even for minimum to no profit, just to see inventory flowing through." This goes to show, if odds are against you, despite having an excellent product which is to the highest quality, you are still a business and can be dragged through sand anytime.

Many of my friends have multiple small businesses and say that some locations are not doing as bad as they had expected. I always say, "In good times, big businesses can make a lot, but in bad times they can lose more." From personal experience, having ownership of a large private company, I think that there are pro's and con's to both owning a small business vs. a large business, but chances to salvage a business seems to be higher when the business is small. The reasoning behind small business strength is the fact that most small businesses are able to control costs tightly. In a bigger company there are far too many lose ends to keep track of when there is damage being done from all sides.

Why do large businesses have "lose ends?"

In my opinion, many large businesses don't think small when profits are flowing in. Company expenses go out of the roof because revenues and profitability can sustain the lavish company dinners, corporate vehicles, etc. When the time to control those expenses comes, it brings the company to a barricade, they are unable to control anything, leading to a huge loss.

What is the true winner?

A large business that thinks and acts like a small business. It is quite simple. I run multiple franchise businesses, but what helps me keep everything profitable, even in the current economy, is my ability to think small. I'm saying that as a company grows, expenses should be kept at the same ratio they were when a business was small. I have had ownership in a large private company as well, where profitability was maintained due to the fact that all staff was able to think small yet look at the macro picture when the time was right. Everything should be kept in prospective. In the end, I always try to prepare for the worst, so when it happens, I'm not being drained.


What is your take on small business?

Slumdog Millionaire Business Model

First of all, I would like to say that Slumdog Millionaire was an extraordinary film, so if you have not seen it, I think you should check it out. But, have you ever questioned what made it a hit in the box office? ...Besides the fact that the movie was based upon a kid winning a million dollars? It was great because it captured the hearts of all the people who saw the movie and enough for them to promote it within their communities.

What did Slumdog Millionaire do to create a long-lived positive response and how can we learn from it for our businesses?

It was different- Too many movies these days involve action and just action. I have never seen a movie that can even relate to Slumdog Millionaire. It shows that if your business is different, no other business can steal your reputation.

It had a new cast- This was the first movie that Dev Patel and Freida Pinto had ever filmed! This shows that someone who has had no experience in a certain profession, can still make it! Starting up a new business or even if you are starting a business for the first time, is no reason to say, "I'm a newbie, I won't make it." You have to give yourself AND your business a chance to prove what is possible.

A great product, will find its way- A lot of the movie was filmed in another language, even so, people still enjoyed the film. If your product is something that people really can use, it will find its way.

It was not predictable- Often times, you can tell where a movie will end up. Slumdog Millionaire was not the least bit predictable. There was always a twist to things or the unexpected happened. In your business, you should have a different approach and make things ironic. If you are offering some sort of service, go a step beyond than what the users or customers will expect from you. It will set your business apart.

It was ready for the attention- The cast didn't know that the film would be such a success, but when it was they were ready for the attention. Even, if you think that your business won't explode with sales all over the place, you should be ready for it. You never know when the rush will flow in for YOUR product.

The stars look up to others in the industry- When Dev Patel and Freida Pinto were asked who they would like to work with in the future, they had answers. This shows that they are not glamored by their own success. Even if you are running a superstar business, there is probably someone better than you -in some aspect, even if not sales- in your industry. You should always learn from someone better and try to adapt their knowledge.

Danny Boyle had a sense of openness- Danny Boyle was working in a whole different country, with a brand new cast. He had an open mind and was willing to work with a new setting. In business, if you are narrow minded, it will only anchor your success, however, if you keep an open mind, chances are you will be able to adapt to new situations.


What are your thoughts on Slumdog Millionaire's Business Model?

Get Known & Stay Ahead

One of the biggest problems running a web service, is being copied. It has happened in one way or another to many of the popular services. Other than in a web service, it can happen anywhere...in retail, running an online business, etc. Once you have an established service or product you are more vulnerable to be copied and even surpassed. Sometimes the cause of a similar product or service taking the lead over the original, is simply because the original business didn't have the ability to keep thinking outside of the box. How do you initiate your start-up business from being superseded, whether in your area, country, or even continent? I use a "thinking global" approach to make sure I appeal to the widest audience before a copy-cat business does.

-Be compatible and operable to a wide audience- While it may not be that you are running a "worldwide" business, it sure can't hurt to think like one. If you think about how you can adjust your business to appeal to the most diverse audience, you will more than likely find that it is harder for others to copy your business model once you have became larger.

-Ask for user feedback- Customers/Users ARE the ones who will tell you what they want. Chances are, if you can alter your business model to accommodate their needs, your business will become more popular in its niche and the word will spread automatically.

-Don't become blind with your growth- If you think that your business has everything any client can possibly want from it, you stop putting effort into it, leading to your business not growing or introducing new products. When this happens, there is a HUGE chance that another service will pop-up and slip ahead of the curve because you lacked to keep being innovative.

-Make it easy- Customers/Users ALWAYS look for the easiest option when it comes to buying something, using a service, etc. People chose Facebook over MySpace for a reason. People chose drive-thru locations over locations without a drive-thru. Making your business easy to use and purchase from will help people stick around.

-Find the people- If people know about it, it will be instilled in their minds. If a copy-cat business reaches them first, the copy-cat, will be noticed as the original.

-Put a twist on it- If you have a unique product or service, make sure people notice it. Putting a twist on something gets people talking. When people talk, people notice, the business grows. A unique style is VERY HARD to copy- next to impossible.

To conclude, having a global business approach will give you a better sense of reaching a broad audience and potentially dodge becoming overtaken with a copy of your business model. Staying ahead of the curve constantly is a must and it is always beneficial to take in customer feedback and consider the good stuff to be part of future business expansion. Everything basically boils down to "getting there first" and "maintaining the goodness." If you reach your audience first and keep innovation going, you become proactive and make it difficult for someone to steal your thunder.

Has Your Growth Stopped?

It is very true that you cannot grow your business or even grow as an entrepreneur each and every day. However, I see that it is common that sometimes entrepreneurs stop growing for a long time. They don’t even try to look for new ventures to take on or try to come up with new ideas for businesses. While it is not necessary come up with new business ventures every day, it is necessary to sit down once every now and then and try to think about where you want to be after the next six months. Entrepreneurs, who fail to plan, never grow. Without having a vision of the future, you cannot expect to get ahead randomly. Some get fed up with planning because nothing ever becomes a reality and others get fed up because they cannot come up with any innovative ideas for the “next big thing.”

While it may be that you might not come up with the next craze that everyone is addicted to or something that everyone wants, it doesn’t hurt to try to come up with something that you think everyone may be interested in. Try to look at your daily life and see what you want to be able to do. Don’t look too deep into it. Some of the best ideas come from simplicity. Don’t expose your idea to the outside world, but ask around in your family to see what they think of your new ideas. If you actually try to come up with something innovative, you never know what you will come up with.

If you are not the type to start something new, then maybe you are the type that takes something and twists it into something incredible that nobody else can deliver upon. For example, if you are running a photography business, try to make it stand out from the rest of the photography companies by offering different options for your clients. Embellish your service to the extent that people crave having your company as their photography service and when the word photo comes to their mind, they think of your company.

In my mind, I think that turning existing products or services can often times be more lucrative than actually coming up with a product or service. When you take a concept to the next level, there is an unlimited amount of opportunities for growth. If you take a look, some of the simplest concepts have made a lot of money for entrepreneurs by building off of existing services. With MySpace, there are a lot of people who make tons of money creating layouts and provide services for pictures, animated text and more. These entrepreneurs built their service off of MySpace’s business.

Being innovative can be done, without being the first to grow a concept. If you don’t look too hard at something, surely you will find an idea that you can embellish in your current business, which could possibly take it to the next level. Take some time and see where you can grow and make some plans for the future. If you don’t do it, you can’t expect to grow!

Living Large

Once in your life you have probably wished you could live large, before you could actually do so. I know when I was really young, I always wished I could buy all the toys in the world. The feeling of "living large" does come across most of us some time throughout our whole life. Unfortunately, many people seem to be living large before they can actually afford to do so. And by afford, I don't mean that some don't have the financial means to do so, but in a few cases, they blow everything they have on living large. As an entrepreneur, living large thinking that you have a lot of cash, can be a bad thing.

I know people who are just starting their lives as entrepreneurs and I know others who are heading towards retirement (although, I believe being an entrepreneur, I will never "retire"). Some of the entrepreneurs that are just starting out, seem to be living larger than the entrepreneurs that are almost at the age of 70! I have a few friends who buy exotic cars, when they should be really investing more into their business or at least keeping the cash on hand, but they don't seem to get the main picture. By no means are any of them broke, but if an opportunity were to arise, I bet they wouldn't be able to invest funds right away and let a chance of a lifetime get away from them just because they chose to invest extra money into buying a Bentley.

Another thing I've seen is when people are just starting out with their first or second venture, they want to roll it out like the big guys do. The try to get the best office space, on one of the highest floors in a downtown building, when a smaller space, 1/2 the rent, in the suburbs would have done just fine. Blowing away extra cash on long-term leases can really be foolish, in my eyes.

While entrepreneurs can have a great income, if they tend to spend it all on luxuries, they will probably be broke one day. I've seen this happen way too much. I have known families who are well known for their wealth and people in the family just keep spending, spending, spending, and one day you hear they are filing for bankruptcy.

I'm not saying that entrepreneurs shouldn't "live large," but priorities should be mapped out. If you don't need something, don't be tempted to buy it because chances are if you buy one thing, it won't be the last time you are "tempted" to buy something and the cycle will continue. On the other hand, don't forget to treat yourself to a little something special, if you think you deserve it! Instead of buying that Bentley, buy a Mercedes-Benz....it will save you on gas and the car will probably cost way less!

A friend of mine lives large after years of hard work. Had the money to buy this antique Rolls Royce because he lived and worked within his means at the beginning stages of being an entrepreneur.

Getting Off The Drawing Board

Entrepreneurs all over the world map out their ideas on drawing boards before they actually implement any of them. Over time as entrepreneurs are coming up with ideas, they tend to discard many of them because they probably don't have a profitable business model or they simply wouldn't work. While it is good to take your time and study possible business opportunities, you can't study forever, which leads to a point where you have to make a decision and go with a certain venture.

What are a few things you should know about a venture before getting off the drawing board?

-Know the possible obstacles that could arise.

I can't stress how important it is to know about and plan for potential troubles that may arise when taking on a new venture. Although nobody can predict anything that can set an entrepreneur back, they can try to come up with potential scenarios that may trouble them. If scenarios are pre-planned and a solution is thought about, if a obstacle comes up, chances are it might be able to be tackled.

-Find out what resources you will need.

Knowing the resources that will be needed is also very important. If it is known that certain people or expertise will be needed and at what times through the process of rolling out the venture, it can be easier on the entrepreneur to pre-plan and have things coordinated instead of running around at the last minute trying to figure things out.

-How much time will be needed in order to get the ball rolling?

Having a feel for how much dedication and time will be needed for a venture can mean the difference between a fail and a success. Running out of time for a venture can definitely set it back months if not years, by which time another similar venture might have stole the thunder, leaving the original entrepreneur trying to roll out the venture with a failure.

-What kind of capital will you need?

Getting accurate- or close to accurate figures of dollar amounts that will be needed to fund a venture can be crucial to the project as a whole. No matter how much an entrepreneur has put into a venture, without proper capital, a project can sometimes be brought to a complete and permanent halt.

-Is there any reserve capital in case you need more 1/2 way through the venture?

Just in case proper numbers are not predicted, an entrepreneur should always plan for needing more capital. Having some thoughts and possible paths to gain more funding can really be beneficial if the time comes to rely on backup funds.

-How much do you plan to grow after 6 months? 12 months? 18 months? etc.

Knowing where a project is expected to reach after certain periods of time gives an entrepreneur what to expect and achieve along the growth of a venture. Sometimes entrepreneurs are more motivated to achieve success faster if there are goals set before-hand giving them some feel for where they want to take the whole project.

In the end, all the planning in the world can never make a new venture be successfully launched without any flaws along the way. Entrepreneurs always need to plan for unexpected events and should try to figure out what they will do in scenarios of needing more capital, more time, etc. The reason for many failed projects is poor planning, but the reason for many projects that are potentially profitable never seeing surface, is too much planning. Trying to tackle the main issues on the drawing board will take some burden off of an entrepreneur of launching a venture, but never launching a venture, or launching it too late, can lead to no success.

Innovation For 2009

As the new year begins, many people are hoping for economic improvement throughout the year. It is a good time for everyone to start thinking about where they want to take their business by December of 2009. Whether it may be planning to do something on a large scale or just smaller goals to improve certain areas of your business, it is very advantageous to sit down and think about what the future holds for your business.

Many people chose to focus on better bottom lines and higher sales in day to day operations, but that is only one aspect of improving a business. I would say the maximum benefit comes from planning to grow- or expansion of products or services. When there are either higher quality products or various varieties of products offered, usually the sales figures will go up. However, sales figures going up, doesn't necessarily mean higher profits or better bottom lines. Introducing new products or services in your business can be a risk, but it may be a rewarding one.

Innovation always helps a company explore new horizons. Customers like to see new products and services introduced with companies they already purchase from. This can help retain customers for to your business, instead of suffering from losing customers to your biggest competitor.

While there are always options for new products or services, there is a chance that you may end up scraping the idea. Some argue that it is a waste of efforts if you have a far fetched idea to introduce a new and innovative product to your company, but I personally believe that it is one of the best ways to appeal to new crowds and get the word out about your business.

In addition to adding or taking away products or services, you may wish to make other changes with your business that may help attract new customers. Remodeling and changes to everyday operations can always be a new way to keep things fresh. If you are running a web-based business or service, you may consider giving a redesign to the website to make it stand out and a new look for the new year.

Learn From Competitors

In most businesses, it’s common to have competition. In fact, I think there is some sort of competition in every business. Even a lemonade stand has competition because there is probably another kid down the block who has a slushy stand. If you are running a professional service, like a law firm or medical practice, you also have competition. Running a web 2.0 service or business can be really competitive because users get to chose from numerous possibilities across the web. You probably get the point that there is competition anywhere and everywhere. I’m going to talk about how you can analyze your competition and acquire their good parts an implement them into your business model. I often speak of providing a great service or sell quality products, which can help attract new customers by viral marketing, but often times that simply is not enough to draw in a big crowd around your businesses product or service.

When I was a young boy, my parents always told me to be nice to everyone and try to adapt other kids’ good qualities and not their bad habits. I think this really explains how I do business now. I am always analyzing my competitors and seeing what they are doing better than I am and I often times implement what they are doing better in my business. This usually gives me leverage over them because I still provide the great customer experience I have been, in addition to what I have adapted from the competition.

How do I “Analyze” My Competition?

- Figure out how they are attracting the customers I am not.
- In retail business, I try to see if they have a better location or better property than I do.
- On the web, I try to see if my competitions interface is more user friendly than mine.
- Find out how they promote their product/service.
- Analyze how they handle daily operations.
--See how I can implement everything my competition does well, into my business.

By figuring out how competitors are attracting customers I am not, it gives me an idea of how their promotions are working to reach audiences my promotions are not. For future marketing, I get a prospective of how to appeal to those customers.

If my competitors business is located at a major intersection, it shows that they are probably getting more customers by visibility. Some of my businesses don’t have the best visibility so I tend to have to advertise more in some markets. I try to put most businesses up where there is high visibility so I rarely run into this situation.

In a web-based business, it is probably –by far- the most important thing to have an easy to use interface. People really hate when the product search process is web 1.0 and now a day’s people really want “1 Click Shopping.” With a web service, you have to make sure that the user-friendliness is better than your competitors; otherwise you can count on losing potential users.

I see how many competitors are promoting products and some of my biggest competitors in retail business really blow advertising dollars like it’s a walk in the park. I don’t take an approach where I blow a lot of advertising dollars in most businesses, but price my products lower than my competitors, so while they might attract more customers by reaching an audience that doesn’t know about them, my customers market my products by word of mouth. However, I do find that there are some marketing tactics that work really well, which I learn through my competitors.

I would say if you really want to learn how your competitors handle and do business. Try out their service or product. It is really the #1 way you will learn how they work. I own many fast food businesses and I am always visiting my competitors. I judge the experience I have, what I like and dislike about it, and see how I can capitalize on the good and bad things they are doing. By “capitalize” I mean implement the good things I feel they are doing and stay away from the bad things I experience.

Overall, there are plenty of ways to run an analysis on your competitors, regardless of any industry that you are doing business in. I think it really is necessary to learn everything you can about your competitors to really provide better products and service than them. If you implement all the good things they do, in addition to the good things you do, your product/service might end up at the winner with the customer base. Learning from your competition doesn't even have to do with direct business. You can learn from anybody in your industry that is your competitor.

How do you learn from your competition?

Starting A New Concept

That's unheard of! When starting a new business, if you really want to make it big, it has to be more than just starting a new business. You have to start a new concept, trend, or niche. Look at any franchise, the founders are usually the wealthiest in the "food chain," then come the franchisees and so on. Take a look at Google, it dominated search, then there were multiple search engines that came along after Google was named king, but Google was and is still the master of search.

Now, it isn't true that you have to come up with a new concept in order to succeed because surely, Yahoo was around before the Google days, but Google still dominated the search industry. This shows that just because you started a concept, you might not dominate it. Yahoo still gets more page views with the number one Alexa web rank and dominates the web news industry. Google has entered the markets for news, but people still resort to Yahoo for that more than Google from what I see. Another example would be Friendster and MySpace. Friendster was around since 2002, in which it had been the successful in breaking the ground to social networking, but it had not done much after that. MySpace came along and took over the original concept, but allowed users to tweak their profile in newer and better ways. If innovation is not kept going, a company can soon face being taken over or even worse- surpassed and left in the dust.

It should be kept in mind that when trying to innovate new ideas into an existing business, the quality should be consistent, if not improving. The web browser business is a great example of this. Internet Explorer was always what people were using in the beginning of the internet era, soon after there were competitors, but none significant until Mozilla Firefox came along. The reason why Firefox was able to "steal" Internet Explorer users, is simply because they had a more secure and faster browser. Although Internet Explorer still has the largest user base, there are competitors slowly creeping up due to lack of quality.

After your business becomes an authority, you don't have to stick to the original concept of the business you are involved in because surely you will want to enter other industries. With that authoritative image, more respect will be given to your brand and it will be easier to acquire and dominate other markets. Since Google's authority in search, they have captured other web markets such as RSS feeds with Feedburner, the email industry with Gmail, the blogging industry with Blogger, the video industry with YouTube, and much more.

The Customer Experience

In the business world, it is very important to always deliver great customer service, but as we all know, it doesn't always take place. If you went somewhere and had a bad experience, what actually goes on in your mind? The same thoughts flow in the minds of customers that can come to your business and are unsatisfied. On the other had, if there was a good experience taken place with a customer, it can be extremely advantageous to a business.

Watch the video for more of what I think on the whole "Customer Experience" issue...