Peer Pressure

Steven Pressfield wrote that “the highest treason a crab can commit is to make a leap for the rim of the bucket.”

When you commit to building a business, the resistance from friends and relatives might be greater than if you lived in a suburban environment.

Many people in your town are there because they chose a superior lifestyle. But you are surrounded by many people who live there as the default situation. Inside themselves, they know they have more to offer in the city. They are ashamed that they lack the courage to either leave or to blossom where they are. They rarely admit it to themselves, and usually construct complicated, vivid stories to explain their lack of courage.

If you decide to be the crab that tries to crawl to the bucket rim, these people will try to drag you back in, so that you don’t expose their self-disappointment. Here is what they might say, and the translations of their words.

“This plan just isn’t feasible.” = “I wish I had thought of it.”

“That kind of plan never works around here.” = “Why can’t you just work at Walmart like the rest of us.”

“Have you heard about ___’s new business? He always was a little crazy.” = “I hope it fails.”

“If you want some advice, you need to work hard on marketing.” = “Why didn’t they call me? I’m the marketing expert in town.”

“If I were you, I would quit this and just get a safe job.” = “I should have been successful, but it was impossible because of ____.”

Learning to ignore the other crabs is essential.

Customer Service, continued

Last time we discussed direct client-facing businesses. Now let’s talk to those who sell mainly to those outside the region.

The good news is that the internet almost completely erases barriers to entry to a business. (You can sell to people all over the world, while sitting in your underwear in front of a computer on a table in your bedroom.)

The bad news is that the internet almost completely erases barriers to entry to a business. (So anyone can replace you by providing the same product or service at a lower price.)

So you need to differentiate yourself, creating an unassailable fortress. A good way to do that is with superior service. My wife differentiates her quilt fabric business by superior procurement (she has excellent taste in fabrics), by responding quickly, by shipping quickly, and by wrapping nicely (a skill she learned in Japan.)

So instead of competing on price, compete by differentiating.

To repeat today’s tips:

o   Respond quickly, in an upbeat style, to inquiries

o   Don’t push

o   Ship promptly

o   Wrap it up nicely

o   Turn off your webcam, in case you are sitting in your

          underwear in front of a computer on a table in your bedroom

           whilst you sell. 

Customer Service

Chillicothe, Missouri, seems to have kept its Piggly Wiggly. I looked for it as I drove through yesterday. I never shop there, but I can’t help but stare as I drive by, because the store name is so fun to say.

Now they have a Walmart. Why? Maybe people prefer one-stop shopping, or perhaps because they believe the “lowest price” hype (which is sometimes true.) The residents know that Walmart will erode the value of their town, but the lure is so irresistible.

So why do people still shop at Piggly Wiggly?

Perhaps they are skilled at the human connection.

Does your business sell primarily face-to-face to people in your area? Your business might be the next one to be driven to disaster by global competition. So why not be proactive now, and start treating your customers in a polite way?

A lot of small rural businesses actually do treat their customers well. But I am appalled by some of the horrific service I’ve experienced recently.

These are some of the philosophies that seem to be running through the minds of shop owners and their employees.

“I have too many customers, and I want to retire soon and close my business without selling it.”

“I want my customers to realize that I’m busy and work hard, so I need to complain when they make a request.”

If your employees are mistreating employees, either you have not trained them correctly, or you are treating them well (remember what Steven Covey used to advise: treat you employees the way you would treat your most important customers, because they will be the ones interacting with your customers.)

Here are some examples of things I’ve experienced in the past week:

A health food store in Burlington, Iowa…

“We don’t take Amex!” (Then flinging the card back at me, even though they display the American Express logo on the shop door.)

…and how it might be improved

 “I’m sorry, we don’t currently have a merchant agreement with American Express. Do you possibly have another card?”

A McDonalds in western Kansas…

“I don’t know.”

…and how it might be improved

“Let me find someone who does know the directions to the interstate.”

Seem like common sense, hardly worth reading about on a blog? They why is it so uncommon in real life?  For certain, being rude doesn’t take less energy than being helpful and polite. If you need to make a statement about how busy and overworked you are, don’t use a customer as your punching bag. 

Silver Entrepreneurs

Dear post-career-aged reader:

In Japanese, they say "silver" instead of "gray" to refer to their elders. It is respectful. A "silver seat" is a seat on the train designated for the elderly. It is now time to address the Silver Entrepreneur segment. As population collapse appears imminent in many countries, WE NEED YOU!

Some facts:
    - The idea of retiring at age 60 or 65 and engaging in constant leisure is
       historically new. Until an economic quirk in the 1950s allowed people
       to stop working, people retired from their jobs, then started a second job
       (or grew vegetables and sold them, or worked temp positions.) Spending
       the last third of one's life watching Matlock reruns is a historic anomaly.
       It is not an inalienable right.
    - People of 65 have so much to give our economy. We should be drawing
       on their knowledge experience, not relegating them to fetching our
       shopping carts. Society needs you to start businesses.
    - Middle age is now defined as 60 years old. So if you take care of
      yourself, you don't approach old age until your late seventies.
    - As population declines are nigh in many countries (and will be soon
      enough in the U.S. and China), societies need people over 65 to
      participate in the small-business economy. Please fill the gap.

Respect Your Elders

I am not the first source to say that society is aging. But you may not realize that it is not a problem only in what we call the First World. Evidence indicates that society is getting older in South America. Retirees in China, now supported by only 5.4 workers, will in my lifetime be reduced to 1.6 workers. Think of how everyone will be different when the world's dominant superpower is a country where almost no one has ever had siblings, cousins, aunts, or uncles. Demographic shifts will be the driver of change in the next few decades.

This relevancy for you, as a rural entrepreneur:

    - Advertising that glorifies youth and mocks the aged is
      a dumb idea
    - A business that serves the elderly is a smart idea
    - Governments made commitments to retirees before they
       knew so many people would be retired at the same time,
       and now cannot possibly cover their commitments. A
       business that serves the elderly, increasing efficiency to
       compensate for revenue shortfalls so lifestyle doesn't suffer,
       is a smarter idea
    - Retirees should start businesses (we'll cover that in more depth
      tomorrow)

(selected reference: http://www.weeklystandard.com/articles/america’s-one-child-policy)

Control freaks: time for some introspection

How strong is your Research and Development function?

Okay, so your small business on the Banks of Plum Creek doesn't have a large R&D team full of scientists. And you don't hold a PhD in computer science.
No problem. Research is increasingly outsourced now, even in large companies. P&G's goal is for 50 percent of all new products to come from outside the company.


A lot of ideas about trends in our world you hear about from experts originally came from Alvin Toffler 40 years ago, when he wrote Future Shock. People are still re-packaging his ideas. So he may be a good source for again predicting future trends. 

         "Technologies will not be developed in-house.  Successful organizations will 
          become adept at integrating large problem-solver networks, linking 'answer 
          seekers' with “problem solvers” across the globe to rapidly harness the 
          brainpower of international experts."

So you can buy or rent ideas from other people. Many people have great ideas, and are waiting for YOU to help them develop those ideas. Remember that 99 percent of success is perspiration. Hordes of people have great ideas which will never see fruition because they don't have your ability to execute. 


Don't feel like you need to invent everything, come up with all the ideas, develop processes yourself. 

Networking

Again, how sparse is your hometown?

If you live where the buffalo roam, networking with other entrepreneurs is crucial.

Alistair Nolan, at a Main Streets of Tomorrow conference in Kansas City in the late 1990s, said that "entrepreneurs who develop and maintain ties with other entrepreneurs outperform those who do not." How do you network when no other people are near you? You connect with people of similar interests on line. A profile on LinkedIn or Facebook is not sufficient. You need to go where other business owners in your field go. Engage with them.

Another fact from Nolan is that "businesses that are started by teams of entrepreneurs are more likely to succeed than those started by individuals." That could be another discouraging fact for those of us in sparsely-populated regions. But it really only means that you need to create virtual teams. Some of the most innovative new companies I'm seeing are composed of teams who rarely meet. Some of them NEVER meet. You are not obligated to hire people in your neighborhood, so you are free to find the most creative people in the world for your teams.

The summary: networking and team-building will require more creativity for you. But you also have the world as your neighborhood. You don't need to rely on the Chamber of Commerce for support.

Think locally, recruit globally.

Don't work smarter

We always hear the phrase "work smarter, not harder." The idea is to use your brain to develop a way that requires less effort, so you can accomplish more with the same amount of work.

But too often we use concept as an excuse for not working. We sit around, thinking of a better way. Meanwhile, nothing happens.

Like this blog posting, for instance. I have nothing to say today, but I post anyway. Moving forward, staying in the habit of working, is extremely important. So that is the lesson of the day.

Evangelize yourself, not your movement

Here is a rule I once learned from a wise man. "Never talk religion at a political gathering and never talk politics at church."

Your job as an entrepreneur is to make money. You want to sell to Democrats, Republicans, Baptists, atheists, Lakers fans, Celtic fans, every color of people, and those with chicken pox. 


Your goal of making money should be so important that you are willing to stop evangelizing people for your pet cause. Leave it at home. 

So few farms, so little time

We've discussed the idea of farming as a viable business option for those living in a farming area.

Have you ever met a farmer who has become wealthy from farming? (Those who inherit land became wealthy by inheriting land.) Few would admit to becoming rich by farming.

But an increasing number of researchers claim that farmers don't farm or market the correct way, and that is why few make a decent living by working the land. They cultivate and sell commodity products at commodity prices, so they can never win the game. Commodity prices are determined by hedge funds trading on exchanges. The farmer just tries to lower costs in order to survive.

An increasing number of farmers are making respectable money on small farms, often leasing land. Their approaches are quite different from what traditional farmers are doing.

Here at the Nauvoo Commuter, we don't farm, so we can't say which way is better. But if you are searching for a business that you can do, where you are today, then you should investigate the research.

Examples:

Beginning Farmers

Beginning farmers and ranchers

And be sure to check out the Greenhorns on Heritage Radio.

Your Personal Manifesto

The Great Recession of 2008 will probably continue for some time. It was five decades in the making. Some causes can be traced back to LBJ's administration. You don't solve something like that immediately, by adjusting monetary policy, or by repaving rural roads, or by spending $212,000 to create a $35,000 job, or by making a speech about new policies. It will take time.

But for you, the recession is over. You're creating a new economy. You are building something that makes the economy more efficient. That brings you more money. You are in expansionary mode.

Now we just need a few more people like you.

Who Wants to Be a Billionaire?

Harold Hamm grew up milking cows, gathering eggs, and feeding chickens. The youngest of 13 kids born to sharecropper parents in Oklahoma, Hamm says that he hardly remembers a time when he wasn't working. "We came up working for the family unit," Hamm says. "You certainly learned quickly to do your part." At the age of 20, he bought a water pump truck to deliver drilling fluids and service drilling rigs. "That is the company that became Continental Resources (CLR)," Hamm says. "It was a very meager start." He says he raised his kids in much the same way he grew up. As his fledging company got off the ground, Hamm's wife kept the books and his daughter, starting as young as six, would answer telephones. At the end of last year, the Enid (Okla.)-based company estimated its proved reserves at 257.3 million barrels of oil, with interests in 2,317 wells. Continental Resources generated $627.7 million in revenue, according to the company's 10-K. Hamm remains at the helm. As he puts it: "I get as much excitement going to work today as I did when I was 20 years old."

The above is from Hamm's BusinessWeek profile. Could your profile someday read this way? The magazine recently profiled twenty billionaires who started with nothing. 

So some excuses might work, but you can't reasonably use "I have nothing" as an excuse.

Purity of Purpose Test for Gloom Merchants

Both the right wing and the left wing agree on one thing: the world is ending shortly. They don't agree on the cause. One thinks it is government debt. One thinks it is polar ice cap melting. But end it soon must, this ideal life we now enjoy.

Just remember one thing: the purpose of preaching doom and glom is usually one thing: to sell something. Most prophets of doom are selling a newsletter, a book, an investment vehicle. Their motives are rarely pure.

One more warning: if you are unhappy with your life, if you don't feel personally successful, then you are more susceptible to being swayed by the Gloom Merchants.  Some may have pure motives. But the man behind the curtain is usually manipulating your fear reflex to close an order for a subscription. Name any celebrity or pundit who preaches doom, and I will tell you the personal motive.

So of all end-of-the-world predictions, be wary. Tough times might be ahead. But this is the best time in history to start a business, as long as you sell to needs, not wants.

The Importance of Being Numerate

"I'm never going to use this stuff," we would tell our mathematics teachers. And we were right, because if you don't learn math well, you never use it.

But those who learned it now use it to map the human genome or to model derivatives or to invent new formulas or to manipulate survey results. They make big money.

We live in a world based on numbers. The numerate win.

Let's say you avoided mastering mathematics and work in a field of soft skills, such as marketing. Even that world belongs to people who can use numbers to prove why their ideas are better.

If you must choose between two marketers, which will you choose to hire? One who can conclusively prove, numerically, that "my plan will increase market share by 12 percent." The other one that says "my plan feels right in my gut, so choose me."

You are 90 percent more likely to choose the one with the numbers.

Here is a story problem. Let's say rap singer 50 Cent (Curtis Jackson) earns an annual salary of 150 million dollars. For every singer at that level, 150,000 youths struggle to break into that level. They all did gigs and called themselves rap artists.

Question: what is the average (mean) salary for all those artists?

Answer: 1,000 dollars. That is not enough money to live on, especially after deducting costs of sound equipment and necessary excessive bling. So stay in school and study calculus.

Economic Predictions and Your Business

I don't know if the U.S. is on the verge of inflation, deflation, stagflation, or unbounded prosperity. I know even less about the rest of the world. If I did, I wouldn't tell you. I would sell that information.

But I do have one prediction. I believe that state and local governments will significantly cut back services. They will have to break commitments. Many municipalities are bankrupt so have no choice but to cut back.

I don't believe this is the end of the world, and I hope you also feel cautiously optimistic. But we are going to need to use our own bootstraps for picking ourselves up. You can seek SBA loans, government grants, and public advisors for assistance. But if your business model hangs on it, disappointment might be your lot.

Defining Rural Entrepreneurship

Do you live in a rural area? 

That is like asking "are you tall?" Regardless of your height, you are tall compared to someone. You can always find someone shorter or taller than you.

You might live in a town of less than 50,000 and call it rural. You might be the only person within 100 kilometers. 

We aim to speak to all of you, but the message will need to be received differently. 

Which Category Do You Represent?

Here are the Nauvoo Commuter, we seem to like categorizing people. But that is the best way we can think of to isolate issues requiring confrontation and the best way to isolate for instruction.

   - Are you a current business owner, seeking to grow or improve your business?

   - Are you in the middle of trying to start a business, possibly bogged down because of a glitch?

   - Are you hoping to start a business?

The question of how to move forward can, to some extent, be answered the same. But it is also very different. Some of the postings will apply severally to each category of reader. That is something to keep in mind if you think some information here is irrelevant for you.

Introduction

I have always been dubious about entrepreneurship education. Running a business, in fact, is not about theories. It is about covering payroll next Friday. You don't learn it by reading about it.

But reality doesn't agree with me.

A large portion of the really innovative new companies, the really cool companies, are coming out of university entrepreneurship education programs.

Education in this area helps you to make sure you haven't missed something, it gives you mentors, and it helps you realize that you don't already know everything. It might give you crucial feedback about your plans, before you use real money. It does work.

Sign of things to come

As you enter my town from the north, the first thing you see is a grand hotel. Or it would have been, if they had built it. Now all you see is a crumbling foundation. The builders used large blocks rather than pouring concrete, and some of them have shifted, making it look like a failed Lego project, all in gray. It hasn't changed in years. The land was recently sold at a sheriff's auction.

This is your first impression of the town, and it has discouraged many would-be entrepreneurs, and certainly investors. "My business could end up like the Lego Hotel," people lament. So they keep their heads down at Walmart jobs in a nearby county.

Here is the good news. If you attempt to start a business, it might fail in a big way, and might leave a Landmark of Despair and Shame.

But you might knock the cover off the ball.

As mentioned a few months ago in this forum, our culture has become too fearful of risk. Risk is what makes success so remarkable. It is why success is worth it. Let's embrace it.

Did the internet 12-second-business-plan era scar us forever? If we have to make an effort, over an extended time period, do we wilt?

Let's round up our shoulders and take the challenge. It will take time + effort. It might makes us cry ourselves to sleep more than once. And it might fail the first time or two. But the law of averages guarantees the success of the persistent.

Luck favors those who move forward

Recently I was traveling in the midwestern United States and met a family that had struggled to earn a living in a very sparsely-populated area.  So they set up some hoop houses and began growing vegetables and herbs to sell in a larger city.

Their situation analysis: "The Lord has been good to us."

The Lord just might be good to you. So start your business this week.

Friends and Family discount

If you sell to the residents of your area, you know your customers. You have more than an e-mail relationship. Their kids go to school with your kids.

But what happens when they don't buy from you? You notice them carrying Walmart bags, those ungrateful turncoats. Maybe they came to your shop, asked you for a brain dump of all your product knowledge, then drove to the city to buy the product.

How do you respond? My recommendation is to be generous and forgiving.

Some people might be reluctant to buy from you in the first place if they think you will be offended when they ask for a discount, don't buy enough, or just browse without buying. So they don't enter your shop or dealership.

Some people like business to be anonymous. You need to help them overcome that anxiety by making it clear, through words and non-verbal cues and actions, that the transaction is not personal. Forgive them when they stray. But be aggressive about wooing them back.

State of the State

I spent the morning analyzing entrepreneurial growth in the U.S.  Not such great news for the midwest. The West, particularly in states where property tax is low, is producing more rural entrepreneurs than other areas.

Interestingly, even though this blog is written in English, it has almost as many followers in China and Russia as it does in North America.

These two facts mean that region does matter. Some regional cultures are encouraging business formation and others are discouraging it. And national culture does not matter as much as local culture.

Negotiation Power

In building your negotiation ability, you need to learn two things:

  - how negotiation works
  - how to negotiate

The first one deals with structure, knowing how the negotiation process should work and how to be aware of the other party's combative tactics. Understanding this is essential for large-scale deals.

The second deals with personal skills, and includes overcoming your own personal weaknesses.

The second one is more important for you. You probably will not be negotiating nuclear disarmament treaties for your country. But you may very likely fail when negotiating rental terms for your shop, employment conditions, transportation costs for your materials, or agreeing to a bedtime with your children.

Here at the Nauvoo Commuter, we like people to focus on developing their strengths instead of spending their self-development time in mitigating weaknesses. But you probably have one short coming, one bad habit, that prevents you from negotiating success.

Market Research that works

Here we repeat the Nauvoo Commuter philosophy of starting a business.

Your goal is to prove your hypothesis as soon as possible. Explanation: everyone starts a business based on a hypothesis:
     - People need a more convenient way to purchase books
     - Area residents would pay a premium for coffee that doesn’t taste horrible
     - Senior citizens would jump if you offered in-home computer support
     - People would flock to a discount store if it were located in the middle of Maple Street

You should start some type of business that does the actual business, and test that hypothesis. See how people respond. That is real market research. So you expand as those signals dictate.

Compare that way to that of the typical start up, let’s say an internet-based company: spend six months writing the business plan, do a road show and secure funding. Rent an office, hire a team, buy cubicles and Aero chairs for all of them. Let people bring their dogs to work, because motivating people is your priority. Then start writing the site’s software. Hire SEO experts to bring in traffic. Set up shopping cart and start selling. After burning through millions of dollars, learn if anyone is interested in your product. Or not.

Our philosophy is just the opposite. Start doing the business as soon as possible, on as small of a scale as possible. Today. 

Competence

A non-American boss once told me that Americans often confuse arrogance with competence. It is a national failing.

But in the end, real competence, if consistent, will win. Bank on it.

It's not personal. It's business.

Some of us are sensitive. So when someone is aggressive, or even a little loud, we get our feelings hurt.

"Only a really bad person would do something like that. So I don't want to work with him. The deal's off."

We assign the worst possible motives to the person. But in fact, people's motives are usually better than we assume.

Evil people do exist in this world, but they are rare. And they're trying to take over the world, so probably don't have time for a small business in the countryside.

Go ahead and open your heart, not just your head. Just don't be a doormat.

Today's Number

The number of the day is 250 billion.

Honestly, you don't have time to start your own business. In between working your day job, attending your kid's sports games, shopping for birthday cards, laundering your socks, commuting, acquiring food to eat, volunteering to make the world better, attending meetings, and occasionally sleeping, you are too busy.

But America watches 250 billion hours of television annually. That's about 28 hours per week. (The average English citizen watches the same number, and the rest of Europe is not much better.)

According to the Sustainability Institute, cutting out television can add 12 years to your life. Those 12 years, well spent, can create an enormous legacy for yourself.  The 10,000 hours it takes to master a skill (see earlier comments about Malcolm Gladwell) can easily come in 6.5 years by cutting out television.

If you have spent more than three minutes of your life watching any program featuring Miley Cyrus, you have no excuse for not accomplishing something significant.

Next decision

This is a follow up to Monday's posting. 

Now let’s assume you are instead in the other category: you are trying to avoid a decision.

Here are some of the signs of avoidance:

-       you believe you need a really, really good business plan

-       you feel you need a little more formal education first

-       you think you need to make another major decision first

-       you are not sure you are really a “business type” of person

-       you think this recession makes business start up impossible, but maybe in a year

These signs do not indicate you are a bad person. Bad people drown kittens, or destroy a person’s career, or deceive investors. These signs only indicate you are anxious about making a decision. Lots of things can cause this anxiety.

Maybe that is okay. Or maybe you can deal with your anxieties and move forward. We’ll keep talking about that.