SustainableWork

Here is a quick follow up to the previous post. I just came across a new article by Ray Unger, who writes an excellent financial column for my local paper. Ray is the Chairman of Forward Investment Advisors of Madison. I like his writing a lot. Ray has provided a long record of open, transparent service to his community through his writing over decades. Great in-the-trenches stuff from a no BS guy.

Ray talks about how the legislation behind the Clean Air Act of 1990 entered the world and changed environmental history. The Clean Air Act used a "cap and trade" system to allocate the burden of cleaning up the air.

You may or may not have strong feelings about cap and trade systems, but as Ray points out, the Economist Magazine in 2002 crowned this system, "probably the greatest green success story of the past decade."

The article continues, "Today, much the same thing is happening in the area of global warming and carbon dioxide emissions. And like after OSHA, winners and losers will emerge."

The rules that will emerge will likely be based on a cap and trade model. The difference between political parties will be on the timetable.

Either way, it's coming, and the numbers are big. One estimate is $3.32 trillion dollars in costs to non-sustainable practitioners between now and 2050.

Green ROI is here. Our society is about to create a measurable, marketable return on investment for enterprises greening their operations. Green is getting monetized. Big time. Those that can demonstrate continuous improvements in sustainability and stay below the cap get increasingly valuable credits to sell. And there will be a large market for buyers of these credits going forward as large commodity based commercial systems plod through their conversions. You get to sell them increasingly valuable credits for a long while. For getting greener. Green ROI.

A current cap and trade bill has been introduced in the Senate by people considered to be pro-business. The Lieberman-Warner Climate Security Act probably won't be the final version that passes, given the national elections, but I think it defines the debate going forward. The lobbyists will help all involved sort out the timetables.

As Ray Unger closes his piece, "… it's never too early to work out such details. One thing's for certain: It will raise the cost of virtually all goods and services that depend on energy. And that's just about everything."

Creating ever-tighter sustainability practices has become a security issue and a survival issue for our economy. It's also about to become a lot more profitable.

Will this act as a tax on enterprises that are bad environmental actors? Yes. Will they try to pass along the tax to consumers? Of course. Are we bound to do business with them? Only at your own risk. Greener substitutes will arise, and we'll leave the bad actors to drift off.

And oh, by the way, getting greener will make your own products and services more profitable.

Not to mention the marketing avalanche anyone can create by documenting their sustainability gains.

When you can fix up the place and measure the payback, life is good.




Ray Unger's article, Confessions of a Money Manager: Carbon dioxide cap will change investment playing field


I love still saying "my paper", but reading it online. My afternoon paper for decades moved to the web and is doing a great job. I read it several times a day... The Cap Times online

Labels: business plans, entrepreneurship, green tech

Today we had the biggest one day jump in oil prices in history. A couple of big economists at major banks predicted $150 or $200 per barrel oil this year.

Is this the end of the world? Of course not. Some Europeans are coming here to take driving vacations because energy is so cheap.

Is it the end of the road for inefficient, wasteful, energy intensive commerce? Yes, thankfully.

In my last startup I skimmed & recycled industrial fluids. I saw millions of gallons of oil going to waste. The industries I worked in called that oil a contaminant or pollution. They were paying to have oil hauled away. Oil. Honestly. I'm talking this century.

Long ago Buckminster Fuller said pollution is resources in the wrong places. If he knew how dysfunctional the transition would be, I'm sure he would have been shocked.

I used to give talks around the country, mostly in industrial settings. I loved speaking at the yearly industry conventions and professional education seminars for our industries.

I had to travel on the night of Sept. 11, 2001. I was giving a talk in Cleveland the next day for some of the heaviest hitters in my business. It was an awful drive. My society was seizing up. There were people waving flags on almost every bridge across 4 states. There were reports of Indiana Troopers seizing gas stations in Gary, IN for hoarding fuel as I drove past wondering where I could find the next open gas station. Weird, scary times.

During the seminar the next day, we were all politically numb but a new economic reality was in the air. The focus of every discussion was the need to protect our exposures - as a nation, as states, as industries, and as individuals.

Every single day since 9/11 more and more people have equated the idea of increasing efficiencies and cutting energy use as a way of decreasing exposures of all kinds.

Today - especially today - you can't escape the tidal wave of public support/demand behind getting all areas of our culture greener and more sustainable.

My point for this post is as follows: Think of energy use as a 'sin tax'. Something that costs you dearly for your guilty little pleasures. You'll pay more because you just gotta have it…..

Sure the revenues may not be going directly to the government as true taxes, but the money is flying out of your world as lost, not as a productive investment. You've got exposure. You're going to pay. Fix the exposure and you become safer, more productive, and more sustainable.

The idea of 'we just gotta keep to our old ways' is NOT inevitable. Good design can reduce the 'gotta'. Thoughtful, sustainable practices reduce the 'gotta'. Day by day, you reduce the 'gotta'. Day by day you get stronger, more efficient, and less exposed as an organization.

If you are an entrepreneur, or if you are an entrepreneurial company, this is a time of great opportunity to help.

I know the industrial world the best. The way we manufacture things, the way manufacturing energy is expended, the way manufacturing fluids are spent, the way manufacturing affects air quality and the overall effects of manufacturing on carbon emission issue are all significant, immediate opportunities.

Remediating these issues will only get more expensive over time, especially as inflation returns to the economy. Energy costs may dip now and then, but the upward trend is inexorable so long as we're exposed to energy insecurities.

The way to get the biggest bang for the buck is to remediate these exposures and build out new sustainable systems as fast as possible. Do the math. There's no other solution to that problem. Do it fast. Save the most. Decrease exposures and increase security immediately. Payback is forever. Duh.

There is a lot of low hanging sustainability fruit in many parts of our industrial and commercial worlds.

If you are an entrepreneur or work in an entrepreneurial enterprise, this economy is not the end of the world. You are living through a world-wide economic system change.

Thankfully there is a vast, public demand for measurable improvements in sustainable practices at every level of commerce. Thankfully you can be here to help.

We had a gentleman in town this week doing a seminar at the University for regional marketing execs. While not exactly talking about my world of commerce, his thoughts about branding any enterprise in this economy is an apt way to close.

The following quote is from Mr. Gary Hirschberg, one of the founders of the $300+ million revenue per year Stonyfield Yogurt and a well regarded business writer.

"The best brands are truly the most authentic ones. Brands that really set out to be solutions to environmental problems, water problems, energy problems, climate problems, are going to have an inherent competitive advantage, especially in a world where oil is heading for $200 a barrel."

Sustainable practices make money. Sustainable practices decrease exposures. Sustainable practices increase security.

Measurable, sustainable practices are also the greatest opportunity to build an authentic brand and to create a company that people want to do business with.

The world is changing. Change with it, my friends. Be diligent out there.

Labels: business plans, entrepreneurship, green tech, innovation, marketing, new product development

I've used QuickBooks to run the last several businesses and I'm using it for my current startup as well.

This is excellent accounting software from Intuit. We like it; our CPA likes it; it's easy to learn, bingo.

I don't normally expect big insights from big companies, but I have to say I've been reading and re-reading a new report sponsored by Intuit, produced by the Institute for the Future.

The good folks at Intuit have seen your future as an entrepreneur and, as anyone who has followed these posts know, I couldn't agree with them more.

I have been trumpeting the ascendance of the independent entrepreneur for all of my working life. I work in those trenches. Intuit has just released (Feb. 2008) a great report with a really nice description for the new world of entrepreneurship called, "The New Artisan Economy".

This is the third in a series from Intuit called, The Future of Small Business Series.

Beautiful, smart, direct stuff. This is a publicly available download so I'll attach a link to Intuit's download page for these reports.

If I copied everything I liked about their Phase 3 report into this post it would be too long. So, here are just a few nuggets…

"The next ten years will see a re-emergence of artisans as an economic force."

Yes, many of us have been in this movement for a long while, but there is a palpable tipping point being reached right now. This idea is going mainstream at the speed of light. It's in the air and the water, and it's emerging into the world economies like a welcome spring day.

"The coming decade will see continuing economic transformation and the emergence of the new artisan economy. Many of the new artisans will be small and personal businesses - merchant-craftspeople producing one of a kind or limited runs of specialty goods for an increasingly large pool of customers looking for unique, customized, or niche products. These businesses will attract and retain craftspeople, artists, and engineers looking for the opportunity to build and create new products and markets."

A short comment on the quote above: This is exactly what we were able to build at our first start up, Banner Graphics, right through our last startup, SmartSkim™. You develop systems to produce unique services and products under the aegis of mass customization. You're world-beating within a niche subject area and then you find a way to scale your output and your productivity effectively. The time for this is not coming. It's here.


"They'll be equipped with advanced technology, able to access global and local business partners and customers, and will be competing in any industry. Their firms will be agile, flexible, and will often partner with larger firms to accomplish their business goals. Most will be knowledge artisans, relying on human capital to solve complex problems and develop new ideas, products services, and business models."

In my startups, I always follow this path. The critical piece I don't want you to miss is the last thought about developing new business models. The access to tools and innovative business partnering is virtually limitless within the scale of small businesses right now. Business models - how you organize and go to market - are limited only by your imagination and adherence to applicable laws.


"The new artisan economy will see rapid growth in the formation of small and personal (one person) businesses. The artisans will create new organizational structures and provide greater opportunities for work-life balance. These small and personal businesses will be run by a diverse group of entrepreneurs with a wide range of business objectives, but many will choose to join the ranks of the new artisans to match their work with their values."

… matching work with their values. Sustainable work at its core.


"Small business has generated the majority of net new jobs in the United States over the last several decades, and the number of personal businesses has been growing much faster than the overall economy. This trend will continue over the next decade. We expect that the small and personal business growth will again outpace the growth of the overall economy, and the number of personal businesses will grow from 21 million today to more than 32 million by 2018."

This predicts 10 million new jobs over the next decade, just within the subcategory of 'personal (one person) businesses'. Those growing into the small business category will rise proportionately.

The report describes our economy evolving into a pattern of development across most industries that they call, "barbell economics". This is a term from McKinsey & Co. describing industries, "…with a few global giants at one end, a relatively small number of mid-sized firms in the middle, and a large number of small businesses at the other end."

It is inevitable that the exponential growth in small business formation will create this barbell structure. The economics are obvious. Getting yourself ready to participate in this movement seems obvious. The Kauffman Foundation refers to this movement into entrepreneurship as, 'developing your personal economic independence'.

"Lightweight infrastructures will expand and redefine the boundaries of the small business. They will provide greater agility and flexibility in collaborating, pooling resources, and outsourcing functions to other firms. These changes will reduce the risk of starting and operating a small business by lowering capital requirements and shifting fixed costs into variable costs. Lightweight infrastructures will also open new markets and create new opportunities for small and personal businesses."

Lightweight infrastructures. It's lovely to hear these terms coming into vogue. Lightweight infrastructures are an essential tenant of sustainable enterprise. Moving hard costs to variable costs so that the enterprise can rise and fall and breathe like the (economically) living entity it is. Yep. Dead on.


"The small and personal businesses of the future will build upon information technology to extend their capabilities. Decreasing IT costs, coupled with increasing computer power and the growing popularity of "software as a service" delivery, will provide small businesses access to rich and complex business applications. These new applications will require less time, money and technical skills than traditional business applications, and offer flexibility and ease of use of desktop software. They also provide small businesses with tools and capabilities once exclusively available to large corporations."

What makes me most enthusiastic about all this is that all this guidance is not coming from the usual feel-good suspects. This is coming from hard headed accounting folks. Intuit, no less.

I type this standing under a photo of Buckminster Fuller, who long ago predicted the ever increasing utility of the knowledge economy, resulting in ever increasing possibilities and pathways for all of us to make the world a better place. For me, this report documents that progress.

Intuit really got it right with this report. This is the time, and this is the place for the re-emergence of the artisan entrepreneur.

The idea ties perfectly into the slow startup movement I've been touting. Smart, creative enterprises launched in support of the greater good and designed to support the entrepreneur and their communities. And oh by the way, it ties into the clear realities of the emerging global economy.

This is a time of major transition in economies worldwide, and small business entrepreneurs all over the world are emerging to lead the way to a better life for everyone.

Artisan entrepreneur. A great job title, just waiting for you.



Intuit's PDF links to this study I've been quoting from the Phase 3 report in this post, but they are all great.

Institute for the Future Report authors

The Kauffman Foundation

Labels: boomers, Buckminster Fuller, business plans, entrepreneurship, startups, The slow start up movement

There was a great article in the Jan 7, '08 issue of Business Week by Vivek Wadhwa. Mr. Wadhwa is a tech startup guy and is executive in residence at Duke University and is a Fellow at Harvard Law.

From things I've learned in my own experience with startups and from helping entrepreneurs as students and clients, I will agree with his opening paragraph.

"Before I launched my last startup, I prepared a business plan exactly as I had been taught in business school. I was determined to lure professional investors, and I thought the key lay in creating lofty financial projections and carefully documenting the details. If all went according to my 40-page plan, my software company would be worth billions in five years by capturing just 1% of the market. My CEO friends told me this was one of the most professional business plans they had seen. Yet it didn't take me long to realize that it wasn't worth the paper it was printed on. It bore no resemblance to the company I finally built. I don't think that any of the 100 people I sent in to read more than the executive summary."

Mr. Wadhwa finds some merit in his research, but concludes, "But the two to three months I spent creating the plan would have been better spent if I had instead focused on building my product and speaking to potential customers to understand their needs."

There is much truth here, my startup friends.

It's my experience that the enterprise world is awash in people with ideas looking for money. The world is also awash in money looking for great ideas.

So what's the problem? The muddy middle.

For most of us the money can't see ideas. The money needs to see results and customers and buzz.

The money isn't going to pay you to do that. That's your job as a startup.

Mr. Wadhwa is exactly 100% dead on right. He encourages building prototypes and letting potential customers break them. Based on that knowledge he then offers up the 7 key points your biz plan should address with your newfound, reality-based knowledge: (summarized)

1. How are you going to find customers?

2. How are you going to set yourself apart?

3. What can you charge that's profitable for you and valuable for your customer?

4. How do you close your sales?

5. What are your sales channels to sell and service your customers?

6. How do you support customers with problems and product/service failures?

7. How do you be so good that your customers sell for you?

Yikes. If you answer those questions after you've skinned your knees on your beta tests, you've got yourself a business plan that will be the easiest pitch you'll ever make.

I personally gave the absolute worst presentation of my life to a room full of bankers. Technically the thing was a disaster. On the social stuff, I was worse than inept. I cringe as I type this.

But I was coming in from the field with a battle report. All I wanted to do was deliver that report, resupply, and get back out into the fight. It didn't matter to those good folks that I acted a bit shell shocked.

I addressed the points that Mr. Wadhwa so clearly identifies and the group signed the check.

If I'd been in there talking about what I was going to do, I am 100% certain that not a single person in the room would have approved that deal. However, I would never have been able to talk to them with just an idea in my pocket, so it's a moot point.

Here’s how Mr. Wadhwa closes, "The good news is that once you've perfected your business model, professional investors are likely to be much more interested in you. And you will have all the information you need to create a credible business plan they will take seriously."

Yep. Don't think your ideas will get you money. Lightening strikes but it's a risky bet. And if you're selling off an idea just to get money, you're not selling it for what it's worth. You'll be sorry about that later.

Do it the smarter, harder way. Get in the game. Get muddy. Get smart. Get going.



Business Week article by Vivek Wadhwa

Thanks to the Wisconsin Entrepreneur's Network, WEN, for pointing out this article.

Labels: bootstrapping, business plans, entrepreneurship, new product development, startups, The slow start up movement

If your new biz is some kind of gotta-have-it, Web 2.0 breakthrough, it really won't matter what you name your enterprise (my hat's off to Wufoo.com).

If, on the other hand, you'll be among the 99.99% of us that will need to convince our potential customer base that our new biz has merit and value for them, I've found that you have to start selling your proposition immediately. This starts with the name of your enterprise.

It's the first thing your potential customers hear. I recommend you weave what you do into the name. Be subtle or not, just get your value proposition stated so that the target audience gets it and wants to hear more.

I apply this test to all kinds of enterprises... for profit, non-profit, social entrepreneurs, everyone.

My ex business partner Mary just told me about a GREAT name along these lines, called Bag, Borrow or Steal, the name of a new firm that rents designer handbags. It's fast, funny, hip, and gets the value proposition into the first moments of contact.

So, here's a short 10 step test I take clients through when naming their new biz:

1. Make the name say what your enterprise does. Use subtlety, humor, in-your-face shock or drama, but get the value proposition stated in your name.

2. Check that the domain name is available before you name your biz. You need a domain name equal to the name of your biz. Period. It's not as daunting as you think. Unexpected word combinations that describe your project will be laying around.

3. Make sure the name is legally available in your state. Most states have the name registration done through the Secretary of State or their Dept. of Financial Institutions, etc. You need the legal name as well as the domain name. Do these in parallel and do this quickly. When you find you have availability for both, and you REALLY like the name, jump on it.

4. Search the name online and see how many direct and closely related hits you get. If it's going to take you generations to climb the search rankings with a generic name, consider something more specific. I've had clients show up within 2 weeks at the very top of Google searches just because they named their enterprises wisely.

5. Say it out loud to see if you REALLY want to introduce yourself with that name, as in, "Hi, I'm Helen from Jumbledoodle Widgets". You're going to be (hopefully!) saying this a lot, so make sure you like the way it sounds to you and gets your meaning across quickly to your potential customers.

6. Answer a pretend phone call with that name in mind to see if it works for you, as in "Good Morning, Unsightly Undershirts, this is Bill"

7. Type out the name inside the space of a business card (2" x 3.5") to see if it fits, as in "AAA Articulated Angles and Architectural Anomalies of Albuquerque, LLC". Anything left for a URL or a phone number?

8. Put your new name into an elevator pitch, even if the content of th pitch isn't in place yet. Can you live with that name in that venue? "Hi. Scientific Sausage Products makes the best hot dogs for kids parties ever created." Hmmm. Perhaps reconsider if that's the market. What about, "Wacky Wieners will make parties so weird and so fun, that every kid in attendance will remember it 30 years from now."

9. Type up an imaginary eMail signature using your proposed name. Do you like the way that works?

10. Does the name attract attention in a press release. All small enterprises rely on guerilla marketing (link below). You need to snatch the interest of people who are being pitched more than you can realize. "Acme Products announces new flavors" does not hold a candle to "Flavor Explosions breaks Richter scale with new taste treat".

These are good tests. I do them with each start up for myself and for clients. Importantly, it helps set me up with a name I can be proud of and speak confidently about as I launch it into the world.

That confidence is priceless for a startup.

Choose well, and go get 'em friend.

Bag, Borrow or Steal

Guerilla marketing

Labels: business plans, marketing, naming enterprises, startups

I don't think I've posted the content or the class schedules for the courses I'll be teaching on line through the WI Technical College system starting next month. These are based out of Waukesha County Technical College (WCTC) and will be available to anyone in the US with a telephone line and an internet connection.

There are six separate courses, each devoted to a specific subject area of micro enterprise: Intro to micro enterprise, Business planning, Organizing, Managing professionally (money and taxes), Marketing, and Preparing your enterprise (data management).

I'm even setting up free demo web sites for members of the first (Intro) class, under their direction.

I really like the way this content has developed and look forward to teaching these courses.

They will be on either Tuesdays, Wednesdays, or Thursdays from 6:30 to 8 PM CST, taught live on the phone (toll free) and internet. I hope to have a wiki set up for each class to follow up with class members after each session.

You can see the schedule of all courses, download the info from WCTC and get registration info from the Business Diligence link below. Hope to see you there!

Micro Entrepreneurship course schedules and registration info

Labels: business plans, entrepreneurship, marketing, startups

I'll start by saying I just can't keep up with Guy Kawasaki's blog. It is jammed with valuable entrepreneurial storytelling, guidance and fun every time I open it. I've posted references to his blog, and link there permanently from this site.

Guy just did an on line interview with Tim Berry, the founder of Palo Alto Software that sells a software program called Business Plan Pro. This is probably the most widely used software program out there for writing business plans.

They discuss in good detail the merits and challenges of writing business plans. I recommend it.

Here is one question and answer I think has special resonance for small, self-funded or micro-funded start ups...

Question 6: What are some of the common mistakes (in writing a business plan)?

Answer: The worst by far is focusing on the plan instead of planning. This generates the idea that you create a plan as a document, and the related misunderstanding that the plan is for somebody else. You don’t postpone life while you’re developing a plan; you’re always developing the plan. In the meantime, “Get going.” Here are some other common mistakes:

• Blue-sky blurry: lots of strategic thinking without any hard facts. Planning requires specifics: dates, deadlines, responsibility assignments.

• Trying to do everything. I use the rule of displacement: everything you do rules out something else.

• Thinking that being the lowest price option is important. It isn’t. The price and volume thing they talk about in economics classes is for 200-year-old lumps of coal, not your business. Use price as a statement of quality. Leave the low-price strategies for Walmart and Costco.

• Mistaking profits for cash. Profitable companies go broke all the time. You don’t spend profits. Plan your working capital well.


Mistaking the plan for the planning. Amen. This is the easiest mistake for new entrepreneurs to make. It's not the document. It's doing the document.

Incidentally, Business Plan Pro is what my new teaching venue, Waukesha County Technical College (WCTC) uses in their business courses. WCTC is making this software available at a really good discount to any class members of my new courses.

Now as Mr, Berry so aptly says about start ups, "Get going!"


Guy Kawasaki's interview with Tim Berry of Palo Alto Software's Business Plan Pro.

Tim Berry's blog. Excellent writing about business plans and planning, as well as a perspective from deep in the trenches.

Business Plan Pro software.

My training courses for new start ups at WCTC

Labels: business plans, Guy Kawasaki, Tim Berry

I've made arrangements with one of the really great schools in the Wisconsin Technical College System to begin teaching a series of courses online to train new entrepreneurs.

I'm very excited about these courses. I've been writing and refining them over the last several years. Six courses will be available, starting this fall, to anyone in the U.S. with an internet connection and a telephone line, through Waukesha County Technical College. (The courses will cover these 6 topics... Intro to Entrepreneurship, Business Planning, Organizing, Managing, Marketing and Preparing/Executing for Micro Enterprises). I will post more info as it becomes available.

So two things crossed as I was preparing to take these courses public.

The first involved the course on creating sustainable business plans. I'm researching and writing about smart ways to encourage new entrepreneurs to think through the commercial details of their new enterprises. It's interesting work and I really love the way this course is turning out.

What crossed this in the background was a periodic purge of old saved stuff in my eMail folders. A little gem fell out called 'Why women live longer than men'. It's in a PDF with no attribution that I can find. I pass along the images in the link below. The photo above represents the idea pretty well.

Sustainable business plans encompass research to keep you from trouble and guide you toward your goals. The photos in this PDF exemplify the opposite path.

When I write the marketing course, I'm going to be encouraging new entrepreneurs to identify their ideal target customer.

After seeing this fun little PDF, I'm beginning to think I would answer that for myself by choosing women entrepreneurs first.

Enjoy.


Download the top 10 photos of why women live longer than men.
This is a single PDF file of about 468 worthwhile KBs. If anyone knows the origin of this, please let me know and I'll credit it here.

Labels: business plans, diversions

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There are many ways to solve problems. Physical proximity is not necessarily a requisite piece of the solution.

When we first started Banner Graphics our technology limited us to production of graphics that could only be used indoors. This was a big piece of the market, but adding the capability to offer work that could be used outdoors was also valuable. Often, one customer had both needs. The biz was growing nicely and we were always busy, but we were looking for sustainable ways to grow.

In between jobs, we tested changes to ink chemistries and fooled around with different substrates and overlays.

But we kept coming back to the fact that we WERE always busy and finding a fix was taking too much time away from our day job. So we set up our first remote partner. We visited with a local firm doing high volume laminating and learned from each other what kind of problems could be solved if we worked together. Ultimately we decided to make their capabilities part of our business model, and they made our services part of theirs.

Yes, outsourcing. Well, sorta. We weren't eliminating jobs, we were trying to grow our own jobs into something even cooler. Initially we took graphics there once every week or so. Within a couple of years, we'd moved next door. Within a year or two after that, a near continuous stream of graphics flowed out the back door of our shop, into theirs and back to us as finished product.

The core component of this little dance was data control. Knowing where everything was all the time and when it should be somewhere else. By starting early with this vendor, we both were able to work up data management strategies specific to the process. Even at high volumes (that neither firm expected at the start of the relationship) the process was easy and profitable for both because we'd thought it through at the beginning. Neither company's core business was hurt by intrusive production problems caused by their partners. That's because the data management just plain worked.

Over the years we were fortunate enough to expand that network considerably. Different enterprises, with different specialties joined the network. The next was down the block. The one after that was across town. The one after that was in the next county. After 25 years the network was many states wide. Everyone in the network contributied their core competencies to each other and everyone played nicely or they got yanked from the pool.

My current day job is based on the best remote partnering relationship I've ever been blessed to participate in. My friend and business partner Dave lives and supervises manufacturing of our equipment in the next state over, Illinois. We headquartered the biz in Wisconsin where I live and work. By planning our enterprise around this circumstance from the beginning, it feels as though we're just a cubicle away most of the time.

How does this work? Surprise. Good data management. Knowing where everything is all the time and when it should be somewhere else. Everything. All the time. Heard that before?

This remote partnering idea works with employees and co-workers as well. If you have an employee that you have to be standing near to supervise, I'd suggest that is an employee you don't necessarily want anyway. Why not let your coworkers live somewhere else too? They're grown ups. If they're good at what they do, their contributions are obvious.

This model requires moving physical goods and digital data effortlessly. I believe you'll need to have access to the commercial shipping grid (FedX, UPS, DHL, USPS, etc) and as fast a data connection to the internet as you can afford. It's doable without these, but a lot trickier and subject to problems. More on shipping in a future post.

For remote partnering data management, you can start with pen and paper, telephone and faxes, but I'd go digital ASAP. There are terrific database programs available to run on multiple platforms that we, the un-digerati, can readily make use of. Database programs allow you to present the same data a zillion different ways depending on how you want to look at it and what you want to do with it. Data files can easily be sent over the internet or live wired to a network.

At some point organizations will find the sweet spot where coalescing around a physical 3D location has merit. We've done that, but much of the organization is still remote, including me. Very little in life has to be all or nothing.

Remote partnering takes people of good will acting justly to keep the enterprise sustainable. As the complexity level goes up the need for written documentation for these relationships grows. But that's not new legal ground here in the 21st century. It's been done and any good biz attorney can match up an appropriate solution to your circumstances.

Remote partners can be your friends or relatives (careful!), new people you've carefully networked with to create the opportunity, outside businesses, or people directly employed by your organization. Most likely it'll be a mixture of these.

Downsides? This remote partnering stuff really confuses the bureaucracies set up to support small enterprises. Monies to support local businesses aren't available when your employees live in another state. State tax breaks for many business aren't available when the headquarters is someplace else. But who cares. Better not to rely on that stuff any way. You're better off spending your time selling than begging bureaucrats, but that's also for another posting.

I'm convinced remote partnering is an extremely valuable tool for sustainable enterprises, given the right individuals, the right talents, and good execution.
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Labels: business partners, business plans, entrepreneurship, startups

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I keep feeling a need to start writing about the blue-sky stuff swirling around start ups. That part is so fun and so beguiling, I can't wait. However, I also hear the cartoon "good" angel whispering in my other ear, over and over, "Good bones first. Good bones first...".

If you don't build in good bones from the outset - that is, a solid structure to support your enterprise - you can quickly drown in blue sky. In my opinion, you shouldn't even start until you get the following things underway. It doesn't cost you anything to get smart. There are low cost entry points for all the following subject areas. You just need to find the pieces that fit you and your budget.

Accounting. You need to talk to a few CPA offices before you start. You need to present the case for your enterprise and how much of it you want to do under their supervision. Ask if they want to be involved and how much it's going to cost. The CPA won't do your books. You will do the books initially, and you'll be supported as needed by one of their lower rate employees. Good people, that they've trained in their systems. So that at year end you're not scrambling at tax time. It's all there, done correctly, consistently and independently. Good CPA outfits would be wise to have some kind of free start up tools in a box available for this situation.

Others will disagree, but I believe even the smallest enterprises need numbers that are certifiable by outsiders for those numbers to be worth a damn. It's not a cost to you, it's a benefit to you. You can trust the numbers and sleep better at night knowing you haven't blown something important inadvertently. Unless of course, you really love reading business and tax law.

If not today, then sometime in the future, when you've got less time and capabilities for making it happen, you're going to need to present numbers certified by outsiders. You'll need to show your numbers to someone you really need to understand your situation... bankers, investors, grant folks, tax auditors, god-forbid. Start now. Start when there are no problems of retrofitting your accounting data into yet another software program. That always, always, always beautifully illustrates the famous efficiency task of stuffing 10 pounds of crap into a 5 pound bag.

Once you get your accounting protocols in place, it becomes easy background noise for the fun stuff ahead. Without those protocols in place, I sure hope you're really lucky.

Insurance. You need business liability protection. It's not expensive. You can add bigger umbrella coverage cheaply. Yes it's a cost, but you get to sleep at night. My kind of benefit. We're trying to make this sustainable, remember?

It doesn't matter how benign the stuff of your enterprise is. Get the insurance. Talk to several agents. Get it from an agent you like. They're business people also. They need to do their best for you to keep themselves sustainable. Good ones will explain carefully what each part of their policy does for you. Most small start ups will need coverage for general liability and medical expenses. Most startups (my kind anyway) don't typically have much physical property involved so the costs of that portion should be cheap.

Personal health insurance is another subject for another blog. That's the 500 pound gorilla in the corner for small start ups, and I want to give it it's due.

Insurance companies would also be wise to put insurance specific start up info in a box and hand it out to attract business.

Data management. While I was traveling this week, the first comment came into the blog. Thanks, Don! What Don posted should be a good lesson to anyone reading this. I can tell Don's been through the start up wars because he's talking about seemingly boring stuff that makes or breaks enterprises. Don knew to focus on it as mission critical... "We also spent the first two, very difficult, years standardizing on the tools we use and our businesses processes. That's how we're still around...". Word from the trenches. He's right. Pay attention.

You can start with pencils and notebooks, but you'll need to go digital as soon as possible. There are many tools and many approaches to this problem and we'll parse them out in time here. For now, try to anticipate every separate data point that you can think of and find a way to capture them in a way they can be searched and manipulated in every single way possible. You won't get them all but if you're smart about designing your info systems they'll stay flexible forever and can grow with you. I'll blow up this data management section into a million more postings as time goes on because, well, I love this part and it's REALLY important.

Banking. A little secret here. In spite off all those puppy kissing bank billboards and electronic ads, you're not really big enough for them to really care about. Sorry to break it to you. However, until something goes haywire, it's possible that someday your company will be one that banks would run down an alley after. As long as you're not expecting too much, banks have a lot of good perks for small start ups.

Banks are not a good source of start up money. It's not their job. They are better at financing on-going operations. You'll want to have a demonstrable "good citizen" track record in place before that first real money meeting; you know, the one you wear your best clothes to. Build your track record with a bank you like, starting now.

Most banks are OK with new business mechanicals, but every one I've worked with could have been a LOT better. I've got an idea... what about a banking version of "everything in a box" kits? Have I heard this somewhere before?

Legal. As an attorney, I'm a very good plumber. Everyone's circumstances will include a greater or lesser need to lawyer up your enterprise from the beginning. There are simple, low cost ways to do the initial registration stuff on line. This is ideal for a single person as owner. For most of us, we may not need much more lawyering at this stage of our enterprises. When you add a second person as an owner (please don't tell me you're friends and nothing can go wrong) you need to get advice from an attorney. The problem is not how either of you are going to get INTO business together, the problem is how you're going to get OUT of business should that become necessary. More on this later. For other people with more complicated financial lives, you probably need better planning up front. That's going to have to be your call.

Law firms are businesses, too. They need new blood in their customer pool just like everyone else. Even if you can organize and register your business without a lawyer, you'd better be thinking about finding one you'd like to work with, should it become necessary. Talk to a few. Most will explain their fees and requirements without charge. It can't hurt. Many lawyers even tell lawyer jokes!

Summary. If you want you and your business to be sustainable, then build in good bones from the beginning. Accounting, insurance, data management, banking and legal.

For those professionals interested in start ups, I should start helping them design "Start Up In A Box(TM)" kits to fit their circumstances. Good idea. Note the TM. Starting 'em mid blog. Damn.

Professional enterprises need to be sustainable too. They need effective ways to find you to keep growing their own enterprises. It would be a great benefit to these professionals to get you up to speed as fast as possible about what it takes to work with them.

As start ups, we would benefit from user friendly introductions to their brands of information. Start ups and expanding enterprises should always be looking for a great fit with market partners. Start Up In A Box Kits. It would sure make our jobs as start ups one hell of a lot easier. Then, bring on the blue sky.

This emphasis on good bones is NOT an unnecessary paper pushing exercise, slowing down your ascent into lofty entrepreneurial heights. Without good bones, your new enterprise will turn into just one more thing causing problems in your life.

Done right, with good bones in place, your own sustainable enterprise can be one way out those problems.
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Labels: business plans, entrepreneurship, startups

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There's only three key things you need to focus on to keep your enterprise sustainable. Easy to remember too. I'll probably get drummed out of the start up club for telling you this deeply held secret stuff.

Most of us who've been through start ups a few times will tell you we've screwed it up six ways to Sunday and lost, or nearly lost everything we've bet because of three key issues. If somebody tells you they've been through start ups and haven't screwed up one of these three key issues, they're lying.

Ready?

Rick's 3 key things for sustaining your business:
Cash flow, cash flow and cash flow.

Everything else in your enterprise can be hitting on all cylinders, but if cash flow goes bad my friend, I promise, you're out of the pool.

If you forget the second two, just remember the first. It's the most important. Don't tell anyone I told you.
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Labels: business plans, entrepreneurship

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Professional Engineers (PEs) are not a notoriously funny bunch.

Oh, they'll drink a beer with you, but you wouldn't search them out if you were looking for the funniest thing you could do on a Saturday night. That's probably good, though. They are smart folk who are damn hard to fool with.

My day job company got picked for a nice award recently by the Wisconsin Society of PEs. Our outfit makes very rugged, very simple tools for a really nasty problem. Nothing high tech. You couldn't plug them in if you wanted to.

There's a good lesson in this for you, my start up friends.

It was sort of a beauty contest for innovation and new products. Entries were judged on design, engineering, innovation and economic impact. No bathing suits for this crowd.

They announced the winners from the bottom up. By the time they got to second place, I thought we were toast. Second place went to a very cool company that had figured out a new way to limit radiation needed for medical treatments. Right. Even I didn't think we should beat this company.

Then a most remarkable thing happened. The presenter started telling a story about his brother. He said the guy was a big deal. He'd owned a number of businesses with heavy numbers attached. Commercial experience all over the place. The presenter said he wanted his brother's opinion of the winners they'd picked and showed him the list, without telling him who'd won. The brother said every single one could win and how cool it was to have so much innovation around. But, his brother said, could you get me the telephone number of the guy with the oil recyclers? I've had that problem in every plant I've ever run.

The presenter quit his story there and said, "That's what we're here for. To fix problems, to make people's lives better." Then he announced us as first place, best of state.

Simple stuff. Fixing problems. Get it?

I was supposed to say a few words when they presented the award. I should have pretended I knew something profound about innovation and technology, but I only had one thing on my mind.

"Thanks very much", I said. "Could I get your brother's phone number?"
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Labels: business plans, entrepreneurship, startups

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Sustainable doesn't mean navel gazing.

Sustainable means being able to quickly get at purchase orders and invoices and contact info for some screwed up job from 3 years ago with someone from that company on the phone screaming at you about god knows what. Sustainable means having those docs available to prove your point and cover your ass.

Simple, basic, bulletproof data control is essential. The blue sky stuff is equally essential of course, but without data and document mastery in place, that blue sky stuff gets cloudy fast.

If you want both you and your business to be sustainable, you need smart, rugged control systems in place from the start.

Then you can go navel gazing in peace.

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Labels: business plans, entrepreneurship, startups

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I'm a start up guy.

I don't know how to make you rich. I have no idea what business you should start, though I do know something about how you should start. I don't know how to get you into fancy cars. Unlike every other form of media, I have no idea how you're going to get laid.

I don't know jack about managing companies with more than a dozen or so people involved as owners. I don't know jack about taking companies public.

I do know about starting businesses. Small, cool enterprises. Ones that help you and help the planet. Most importantly, ones that keep going. I'm a start up guy. I know how to make startups smarter and more sustainable.

I've been involved in more startups over the past 30 years than I can probably remember. Here's what I've learned: you'd damn well better get smart about what makes them fail.

The startups I've been involved with have been across many industries and markets, non profits and for-profits (and those that hoped to be profitable). Some ideas were dumb. some were great. Some were done with toxic partners, some done with partners and friends I'd give my life for.

I've started new businesses as a sole proprietor. I've started partnerships. I've started LLCs. I've started S Corps and I've started C Corps. Most have been done with owner's money. In recent years, I've worked within the start up system to raise outside money. I've been through angel investment rounds. I've been through venture capital investment rounds. I've raised outside money for our manufacturing business during the worst recession in manufacturing history since the Great Depression. I've been blessed by magical mentors who’d been through many startups of their own. They will forever be my insiders. I've set up outside boards of directors to help run our start ups. I've also squeezed hands with my wife, best friend and business partner during vicious cash flow meltdowns.

This isn't easy, but it's much better than not trying. Are you going to wait for a better life to come in the mail? Nothing happens until you take a shot. My point is to aim carefully.

I'm going to use this blog to talk over ways to help get your enterprise started smarter. I want to help you aim it.

I want your new business to keep going. For your sake and for all the rest of us.

Once you figure out how to get rich, famous and laid, eMail me.

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Labels: business plans, entrepreneurship, startups