Be Brave Not Safe

Building on a prior post related to mentoring SCORE clients on preparing for the potential launch of a business, one of the key activities is that of “running the numbers.”

Running the numbers includes estimating, to the best of our ability, the:

• One-time start-up costs
• Ongoing expenses – the basic / fixed overhead costs to keep the lights on as well as those that are variable (i.e., will fluctuate with the volume of business and/or decisions that we make)
• Potential revenue we expect to receive. This step is based upon what we defined as our target market, which was covered in a prior post.

The obvious goal is to make sure that we are taking in WAY more revenue than the expenses we incur, so that we achieve a profit!

Now, let’s cover each of the above areas of “numbers” that we’ll want to run for a “service-related” business. This, as opposed to a manufacturing or distribution business, which have additional variables to consider.

Start-up Costs

These are the costs that will be incurred to get the business enterprise off the ground which can include, but are NOT limited to:

• Incorporating
• Training, certification and/or licensing
• Tools, equipment and furniture
• Establishing a website
• Business cards
• Professional services in the areas of legal, accounting and finance
• Etc.

To be clear, we can pay as much or as little for ALL of the above as we want. Frugality is the key. To be clear, I’m not suggesting that we go cheap. I’m simply reinforcing the fact that the above does NOT have to cost thousands upon thousands of dollars.

Ongoing Expenses

These are the costs that will be incurred on an ongoing basis. Some will be flat or incrementally grow with the business (and inflation) while others will be completely variable based upon the decisions we make and the volume of business we do. These costs can include, but are NOT limited to:

• Insurance policies – professional liability, health and workers’ compensation
• Facilities – be it your home office or rented space
• Telecommunications – phone, internet
• Office supplies – printer ink, paper, etc.
• Travel-related – gas, parking, tolls, airline tickets, hotels, meals, etc.
• Marketing and advertising
• Labor – What we plan to pay ourselves and/or those we may employ or subcontract
• Our state’s annual corporate filing fee
• Taxes
• Etc.

Potential Revenue

Here is where, based upon the anticipated market opportunity, we project how much we plan to “sell” each month, quarter and year for the next 2-3 years. In projecting revenue, it is highly advisable to be very conservative (actually, low ball it) during the first several months of the business. And, then BEAT those numbers.

The process of running the numbers need not be overly complex and can be done quite simply in an Excel spreadsheet. And, some may ask: Where will I find all these numbers? The answer: You will dig for them. The answers can be found online, by calling service providers and just plain shopping around.

Why do I use the phrase “run the numbers”? Because, this is a never-ending exercise: each day that passes and contact we make presents new information, challenges and opportunities that will serve to adjust the numbers. And, during each iteration (review by yourself and/or with a mentor) these numbers will be tuned up and down, as necessary, to make them increasingly accurate and realistic.

Doing so will provide a solid set of guidelines from which to operate your business. That is, you’ll want to stay well within the expense structure and strive to beat the revenue numbers. The result: a profitable business!

I know, I know, some of the more sophisticated readers will say this is pretty basic stuff Craig. Well, yes it is. However, I have now been involved in mentoring several new SCORE clients and NONE of them had yet taken the step to run the numbers.

As such, we need to be sure to cover the basics!

All the best!

Click here to view the next article in the series.

In a prior post I mentioned I’m now a SCORE “mentor in training.” One of the key requirements to becoming a fully-qualified / lead mentor is to co-mentor with 5 separate lead mentors, for 2 mentoring sessions each.

Earlier this week I began the process, sitting in on 3 client mentoring sessions. In these sessions we met with individuals who are considering launching service-related businesses. I shan’t provide additional details as to the nature of these services as we must keep our client information confidential. And, we certainly don’t want to create any competition for their potential enterprises 🙂

During these mentoring sessions I made a number of observations. Following are just a couple that impacted me the most.

• Each of these humble individuals had given considerable thought to a business idea, all of which would seem viable. Viable because:
  • We can easily identify other businesses offering relatively similar services (i.e,. the need exists in the marketplace).
  • Others offering similar services are not doing so in our client’s target market, aren’t doing it very well and/or aren’t clearly differentiated as to the true value they can ultimately bring to their customer. The perfect opening for an entrepreneur!
• The client’s potential success with their enterprise is NOT “primarily” about the business idea itself. It is primarily about the mental game…

A few apt quotes:

When you reach that elite level, 90% is mental and 10% is physical. You are competing against yourself. Not against the other athlete. ~ Dick Fosbury

Golf is 90% mental. Once you know how to hold the club, swing it, it’s all in the mind. ~ Dan Jenkins

Baseball is 90% mental and the other half is physical. ~ Yogi Berra

My personal experience tells me that this (90% of the challenge is mental) applies just as much to business as it does to athletics.

You see, a big/huge outcome these thoughtful individuals were looking for was – validation. Validation that their idea has merit and that “it” has a chance to succeed. In fact, one of our clients asked the question point blank. My response was something to the effect of: To answer that question, I’d like to put a mirror up in front of you, as this is ALL about you: your belief in your idea, yourself and how hard you are prepared to work to deliver a high quality service.

While we can provide specific business-related guidance (on corporate structures, finance, marketing, sales, operations, website, etc.) a big/huge ingredient to our client’s success is, quite simply, preparing for the mental game. Because, if they can win that, the sky is the limit 🙂

And, the American Dream is quite alive…

As such, my guidance to would-be entrepreneurs is to certainly learn all you can about business and the area(s) you wish to serve, which comes through training/education, work experience, engaging with SCORE, etc. That is the whopping 10% – truly the easiest part.

The other 90% is working on your mental game. This can be done by reading and listening to motivational and inspirational materials that serve to strengthen our self-image and resolve. For the convenience of the reader, MANY recommendations are available on this blog site. Simply click here to prepare for the mental game.

I can personally attest to the SIGNIFICANT impact that each and every book and audio program recommendation has had on my life (personally and professionally), and that of others who have similarly applied each. It is just a matter of doing it – every single day!

In closing, I have found that mentoring would-be entrepreneurs is an extremely rewarding experience. It just doesn’t get any better than being in a position to actively fan the flames of someone’s dream. And, providing concrete guidance to aid in their success.

All the best!

In a prior post, Launching A Consulting Business – Engage A Board Of Advisors, I failed to cover a particularly useful advisory resource to help launch, grow and successfully manage a business.

You may have heard of the Small Business Administration (SBA). Their website (www.sba.gov) offers a ton of great content on starting, growing and managing a business. This can serve as a very useful reference point to aid in one’s success.

Like most people, when I was preparing to launch my own firm, I needed someone I could talk to. Someone to bounce ideas off and practice “pitching” my offering to get feedback that I could use to tune my plan and messaging for clarity and impact.

After researching, I came across an organization that offers free (yes FREE) mentoring services to entrepreneurs.

SCORE!

To be clear, I don’t use that term in the sense of just having accomplished something (i.e., a win). The name of the organization is: SCORE, which is a resource partner of the SBA.

When I first engaged with SCORE in 2001, while still employed by Corporate America, I believe that it stood for:

• Service
• Corps
• Of
• Retired
• Executives

On meeting with them, the experience pretty much confirmed that: Retired, Executives. I found that some of their input and perspective was, quite frankly, outdated. More specifically, I was using phrases and concepts in my “pitch” that we used every day in the real business world. But, they argued with me, insisting my terminology was incorrect…

I simply took a deep breath and moved beyond those points 🙂

To be fair, it was a very valuable experience. And, I would highly recommend SCORE to others.

Fast forward to present day.

I was recently considering how I might offer my own skills and experience to mentor others who may be considering launching their own business, or who need insight and advice on how to successfully grow or manage their business. MANY people helped me along the way so I figured it is now time to give back.

I was quickly reminded of SCORE.

After reaching out and meeting with the leadership of a local chapter of SCORE I was pleasantly surprised. Surprised at a number of things:

• After they asked about my prior experience with SCORE they promptly confirmed that times have changed in 15 years, and so has SCORE. Certified SCORE Mentors are client-centric, regardless if they are retired or working professionals.  SCORE recruits mentors for expertise, not age.
• The quality of their on-boarding process and training for new mentors ensures professionalism and consistency in the mentoring process.
• Their commitment to using technology to streamline and manage the process, including a centralized CRM (Customer Relationship Management) system that all mentors are expected to use (nationally) to manage their clients.
• Their commitment to ongoing support and development of their mentors.
• How they now have many mentors who are still working on a part- or full-time basis. Not “just” retirees.

As a result of the above surprises and the steps I’ve taken so far you can now consider me a SCORE “mentor in training.”

Bottom-line: If you are considering launching a business (any kind of business) or grow/better manage your existing business, I’d encourage you to visit score.org. Here you will find valuable online resources as well as the ability to seek out a mentor who is experienced with the most pressing matters facing your business, whether it is still just an idea or a going concern.

And, while any given mentor can offer guidance, no single mentor is the expert in all areas. As such, you can expect that the mentor initially assigned to you will seek to help you, through mentoring, as best they can. And, if/when there are topics for which they are not an expert (or experienced) they can reach into the network of other SCORE mentors to identify somebody more appropriate to work with you on a particular topic or topics.

As a reminder, this service is 100% free, with no limit to the number of times you may engage with your mentor.

In summary, SCORE is a nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship.

Clearly a win-win: SCORE!

Feel free to click on the above image to visit SCORE’s website.

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