The Challenge of a Family-Owned Business
The Challenge
George’s high productivity got stopped dead in its tracks.
His mother was demanding meeting after time-consuming
meeting over the details of how to renovate their new
facility. George was making a major expansion in his
family-owned business. He was adding a new home care
division. The expansion was consuming much of his time.
Now mother was telling George what bids to take and what
contractors to use. And of course, all those meetings ate
up his precious time.
George needed additional funds to make the new change.
Mother was one of the big investors. Now mother had taken
her position as a major investor as permission for her to
tell George what to do.
George was in a quandary. Mother was undermining his
authority as CEO, interfering with his decisions and
wasting large amounts of his valuable time. Furthermore,
he wanted a high quality facility, not a cheap one that his
frugal mother was bent on providing. What was he to do?
He couldn’t fire his own mother – could he?
It was a tough decision!
Show Me the Money: 7 Cash Stashes for Small Business Start-Ups
As a small business start-up coach, I get asked a lot of questions. The most frequent one: Where do I get start-up cash?
I’m always glad when my clients ask me this question. Their
readiness to take financial responsibility for their
business is a sure sign that they’re serious about starting
it.
Not All Money Is the Same
There are two types of start-up financing: debt and equity.
Consider what type is right for you.
Debt Financing is the use of borrowed money to finance a
business. Any money you borrow is considered debt
financing.
Sources of debt financing loans are many and varied:
banks, savings and loans, credit unions, commercial finance
companies, and the U.S. Small Business Administration (SBA)
are the most common. Loans from family and friends are
also considered debt financing, even when there is no
interest attached.
Debt financing loans are relatively small and short in term
and are awarded based on your guarantee of repayment from
your personal assets and equity. Debt financing is often
the financial strategy of choice for the start-up stage of
businesses.
Equity financing is any form of financing that is based on
the equity of your business. In this type of financing,
the financial institution provides money in return for a
share of your business’s profits. This essentially means
that you will be selling a portion of your company in order
to receive funds.
Venture capitalist firms, business angels, and other
professional equity funding firms are the standard sources
for equity financing. Handled correctly, loans from
friends and family could be considered a source of
non-professional equity funding.
Feeding the Small Business Ecosystem
Forgive what may seem like a bit of a theoretical argument
today. Sometimes you have to step back and get a sense of
the biggest picture in order to understand how all the
simple, practical parts relate.
Small business is often held together with sweat,
creativity and a heavy use of duct tape. (In case you ever
wondered where I came up with the term Duct Tape
Marketing.) That’s the outer reality of small business. The
inner reality, the part that most don’t see and even the
owner of the business might not understand, is more like a
living breathing ecosystem.
I didn’t really excel in science in school, but to me the
parallel is obvious. In an ecosystem, the many parts are
dependent upon each other for success. In a small business,
this is equally true and just as hard to measure and
control.
There are lots of small businesses out there that appear
healthy and happy on the outside but are being held back by
some component of the overall system. The very first thing
you must do is acknowledge this idea of dependant parts. If
one isn’t thriving, isn’t even noticed, others will suffer.
Four Brand Identity Myths That Will Hurt A Small Business
Having a brand identity is extremely important to your
business’s success. However, many business owners have
misconceptions about brand identities that can damage their
businesses.
“Brand identity” is the result of the combination of
consistent visual elements that are used in your marketing
materials. A basic brand identity consists of a logo,
business card, letterhead, and envelope. It can be extended
to include a website, brochure, folder, flyer, or any other
professionally designed pieces.
I’m not a big company:Â I can’t have/create/build a brand.
Just because your company’s not huge doesn’t mean that you
can’t benefit from creating a brand identity. Even for the
smallest company, a brand identity will make you look
bigger than you are, will make you appear more
professional, and will make your sales process easier.
You’ll also have a starting point for designing all of your
marketing pieces, and your brand identity will make your
marketing a breeze as well.
Critical Small Business Tips On Vision!
Do you have a clear small business vision?
A small business vision can be compared to planning a
holiday! People usually decide where they want to holiday
based on the offerings of the destination.
If it’s a relaxing holiday they are after, they may go to
Fiji. But if it’s for shopping, then Dubai may be their
choice. If it’s to climb the Sydney Harbour Bridge then
they will go to Sydney, Australia.
Holiday destinations are determined by desires, with a few
restrictions like budget and time available.
The same should apply to your small business. In 5 years
time what do you want your small business to look and feel
like?
Do you want a large street frontage or small office at home?
Do you want to be actively involved or have a manager
controlling your employees?
One Product / Service / Client Does NOT Make a Business
Recently a new client came to me in total frustration. She
had been working with another coach who had insisted she
focus on offering, and aggressively marketing, only one
service. Now she was out of energy, out of money, and
couldn’t understand why she was failing. A great
salesperson in her previous work, she was struggling to
sell enough of this one service to support herself.
This talented and skilled professional was on a slippery
slope to a failed business. She was using one of the most
enticing and dangerous models for the direction of her
business: Offering just one service to just one market.
One service, one big client, one product, does not make a
one-person business that can thrive. And, it can get you
in hot water if your one client with your one product or
service is corporate: you start to look too much like an
employee to keep the IRS happy.
So, what’s the answer? For this new client, my first
question was “Have you done the numbers?”
This Is Not Your Parent’s Workplace: The Case for Becoming a Small Business Owner
Workplaces, and how we view them, have changed dramatically
since the beginning of the 20th century. Particularly in
the last 30 years, the complexity of business has grown
enormously, making traditional jobs nearly obsolete. With
punishing, productivity-sapping expectations and vise-like
deadlines the norm, old assumptions about how to work and
how to advance are out of date. The old-school work ethic
of doing “whatever it takes” to get the job done is a
present-day formula for disaster and burnout.
Your Parent’s Workplace
The old-school work ethic was based on the notion that
security, peace of mind, and a steady income came from
having a job, being loyal to the company, and maintaining
the status quo. Indeed, less than 70 years ago,
generations of men and women confidently built their family
economic and security systems around this way of thinking.
Then, people generally had one job, advanced through the
company ranks, and kept that job for life. In return, the
company was there for them in good times and in bad.
The Changing Workplace
Today, if you want to work in the traditional workplace,
don’t expect the same work environment your parents
probably experienced. You need to be ready for a brutal,
80-hour-a-week “extreme” job. You need to accept that your
workspace is a little cubical on the third floor, where
people driven to excel and win at all costs surround you.
It is likely that you will come in early, stay late, and
work weekends. And, in the end, there is no guarantee that
all this hard work will help you get promoted or keep you
from being down-sized.
Today’s Workplace
Today’s workplace is driven by an information and
communications technology that wouldn’t have been
considered in previous generations. In addition, it is
fueled by a Baby Boomer generation whose dominant
characteristic is individualism and supported by Gen Xers
who aren’t motivated to do anything unless they find
meaning in it. These harbinger trends of our times are,
arguably, the most significant factors that have influenced
our changing workplace and how we think about work.
Many Baby Boomers, once the stalwarts of the production
work force are getting ready to retire, if they haven’t
already done so. Education has lost its distinctive power
to get you hired. What’s more, experience and long service
to the company do not guarantee continued employment.
The Baby Boomer generation knows that as company fortunes
rise and fall, jobs are created and destroyed. Security,
peace of mind, and benefit packages are casualties of the
process. Vastly different from their parents, Baby Boomer
workers find themselves in a less stable and predictable
work environment, with the length of time spent at each
job, whether by choice or otherwise, getting shorter.
For the first time, they are faced with something that
their parents never had to consider:Â how to make ends meet
while ensuring a secure retirement and financial future
with adequate health coverage. The traditional workplace
is gone, and left in its wake is a confused and discouraged
workforce wondering about its future.
The Case for Owning Your Own Small Business
Small Business ownership is on the rise. According to the
U.S. Small Business Administration, the estimated 25.8
million small businesses in the United States:
• have generated 60 to 80 percent of net new jobs annually
over the last decade,
• employ 50 percent of the country’s private sector
workforce,
• represent 97 percent of all the exporters of goods,
• and represent 99.7 percent of all employer firms.
According to The Global Entrepreneurship Monitor’s 2005
Report on Women and Entrepreneurship:Â “Women represent
more than 1/3 of all people involved in entrepreneurial
activity.”
The U.S. Census Bureau reports that “black-owned businesses
are the fastest growing segment, up 45 percent between
1997-2002.”
Entrepreneurship among seniors is growing due to jobs
disappearing and people taking early retirement. AARP
reports that in 2002 “those age 50 comprised 40% of the
self-employed.”   Definitely, the trend for going smaller
is growing bigger. As large corporations scramble to keep
pace with the latest business developments and trends,
independent contractors and small business owners are
stepping in to fill the gap. Security, peace of mind, and
a steady income (once thought only possible by working for
a large company) are now being viewed by millions of small
business owners as “doable.”
For the individualistic Baby Boomer generation, becoming a
small business owner is the mother-load of opportunity.
For value-driven, looking-to-make-a-difference-in-the-world
Gen Xers, owning a small business is the way to go. In
light of today’s changing workplace, now is a great time to
become a small business owner.
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Susan L Reid, MS, DMA, Small Business Start Up Coach &
Accidental Pren-herâ„¢ is the soon-to-be author of The
Accidental Preneur: Discovering Your Inner Samurai.
Transforming start up woes into start up goes, she provides
value, inspiration and direction to entrepreneurial women
starting up small businesses. For ideas and start up tips,
subscribe at http://SuccessfulSmallBizOwners.com Add your
pren-her story at http://susanreid.typepad.com
