Give me a break!

The Nauvoo Commuter will be on a business trip March 1st and March 2nd. No posts will come through on those days. 

Be the Exception

In our town, a common practice has been for out-of-state tycoons to start businesses based on business models that they have used to succeed in other regions. "We've been successful, and we'll show these locals how to succeed."

In almost every such case, those businesses have either failed or have not reached expectations.

This model is common. We want to trigger success in a town, so we bring in successful outsiders to share their vast experience. Sometimes it works. But often it feels like a sandwich that combines peanut butter and tuna. You can't necessarily overlay one strategy onto a mis-matching situation.  Someone that succeeded in the ice cream business won't necessarily replicate that success in Antarctica.

The new model, conversely, identifies local successful outliers who have succeeded. They succeeded under the same conditions, so they can show how to succeed again in those conditions. We replicate their style of business because it works here. 

Crushing Criticism vs. Friendly Feedback

Let's say you've just finished writing your novel, a lifelong dream finally realized. Just in case you misspelled a word somewhere, maybe asking a friend to proofread it might be valuable.

Your friend returns scathing criticism. The plot is weak, the grammar is unreadable. The whole concept is completely flawed.

  Is your friend reflecting jealousy?
  Trying to protect you from disappointment, thereby holding you back?
  Offering needed feedback?
  Creating an excessively difficult avenue to improvement?
  Mirroring disappointment from his own childhood?

You don't really know. How do you discern the difference between needed feedback and criticism that might hold you back?

The answer is the same for a situation where you seek feedback about a business idea or business plan. Many of the truly game-changing businesses of the past several decades were mocked by friends and experts, but the entrepreneur's perseverance overcomes, and the world is bettered. But some people, inspired by those stories, ignore warnings and make really, really, bad mistakes.

One option is to ask advice of many people. When choosing subjects to interview, expand the sample size.

Another important strategy is to analyze yourself. 
  Are you an overly sensitive person? 
  Do you tend to be too stubborn? 
  Are you a poor listener? 
  Are you less skilled at discerning people's motives?

Entrepreneur, know thyself.

The New Regime

Recently I drove through a small town in the midwestern U.S. The entire main street was boarded over buildings: it looked like Baghdad. This was once a prosperous community.

I followed up through social media links to the town, and found that a lot of anger exists. Some people choose religious or racial bigotry, some find other sources to blame. The story is a very common one, unfortunately.

But overall, I think it is a happy story.

The suffering that accompanies decline started a generation ago. Several decades of slow decline, like a man watching his powerful chest muscles fall into his stomach as he ages, is difficult. But that degree of suffering might be what it takes to break the back of the old idea that we deserve prosperity simply because of where we are born. Your factory job will be outsourced, regardless of legislation. Why should you be paid triple, because of your birthright?

The idea that we deserve something based on birth is a bankrupt philosophy. Now we finally believe that. A new system is arising, one that requires us to work hard and think hard and create something really special. Don't try to compete with factory workers in Guangzhou.

The new system will reward differentiation. Embrace it. 

Help is on the way

So much help, so much need. Just in the past two days, I have uncovered dozens of government programs designed to assist entrepreneurs and would-be entrepreneurs. Loan programs, education systems, ....

I really am amazed. Why are these programs not more widely publicized? Is the actual available money less than it seems? Or are we not working hard enough to research options? Or do we believe governments shouldn't help entrepreneurs? Should they?

We'll keep thinking about this question.

Needs

In booming economic times, we focus on our higher psychological needs. In tougher times, we focus on our basic needs. Maslow's hierarchy, shows the baser needs people are focusing more on recently.

Where is the economy headed? Here at the Nauvoo Commuter we still don't have that answer. But we think fat times are a long way away. So selling things that people really need (safety), might be a better bet in the short term. People use to say "I need to use visualization techniques to attract that Ferrari to my garage." Now they say "I don't like visualizing myself as a homeless person. Better keep my head down and work harder."

Food shortages probably will not affect the First World much, but people in my neighborhood are concerned about it anyway. I should try to address their concerns if I want to connect and sell. 

Your Market Size

So you live in a town, population 356. Only 100 of those people are old enough to shop in your establishment. That market is too small. So you can shed tears of grief and give up, or you can sell to everyone on the planet.

Do you sell on the internet? If so, you have access to billions of people. Here are just those in the biggest-usage countries:

Position	Language	Internet users	% of all
1	English	536,564,837	27.5
2	Chinese (Mandarin)	444,948,013	22.6
3	Spanish	153,309,074	7.8
4	Japanese	99,143,700	5.3
5	Portuguese	82,548,200	4.3
6	German	75,158,584	4.0
7	Arabic	65,365,400	3.3
8	French	59,779,525	3.2
9	Russian	59,700,000	2.5
10	Korean	39,440,000	2.1

You can limit your market. Want to target only rural Americans? Last year $2.5 billion was allocated to bring broadband to rural America. Already, most farmers use the internet.

Not everyone has internet access, which concerns some do-gooders. Almost one billion people in the world have no access to safe water, but the "digital divide" people ignore that problem to focus on the fact that many children in the world cannot play World of Warcraft with those in other countries. But their pushing is good news for you, as you sell your handcrafted items on Etsy.com (sample site) to people in Norway and Hong Kong.  Two billion people is a big market. 

Citizenship vs. Tourism, and intelligence gathering

A person's familiarity with a locale depends on the relationship of that person to the area. 

Listed in rank, from clueless to conversant: 

 - Passer-through (person who stops and maybe buys fuel)

 - Tourist (spends a week or a few months)

 - Citizen (born and lives in the area)

 - Citizen who has traveled widely (understands the hometown better than the homebody)

Don't take advice about a town or region from a passerby ("I was in Glenview once, and I can tell you, they need more shoe stores... and I heard some strip mall space is available.") 

On the other hand, the local person can't see the forest for the trees, so the person who has left and returned is the best source of advice. T.S. Eliot taught us:

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

That's what you really want, is the person who really knows the place.

The new way to buy

This is how I bought books prior to 1997:
1) enter bookstore and browse until I find a compelling book
2) purchase it at the register

Since 1997:
1) browse on Amazon (I also tried Barnes and Noble once)
2) read reviews, read the free excerpts, decide on a book
3) purchase it, (or increasingly the Kindle version) through
  Amazon checkout; since 2003 I usually then order it
  through Audible.com.

The moral of the story for rural entrepreneurs is:
 - If you want to operate a bookstore, you better be selling more
   than just books (like overpriced coffee via alluring store
   environment)
 - You don't need to live in an urban environment to sell; your
    book/music CD/revolutionary garden tool can be shipped
    from any post office (this is good news for you)

Intimately connected to the "new way to buy" is the "new way to sell."

The retail industry is offering less and less variety. If you had watched over the past 10 years, you would have noticed. Wholesalers offer such impressive statistical analysis explaining what most people buy, and retailers use that intell to cut inventory times (by not ordering slow-selling items). But variety is actually increasing, because you can order anything you want, in any size and color you want, from any place on the planet. More good news for you: you can do what the Sears Roebuck catalog did (for rural America) in 1897. 

Entrepreneurship Education

Here is an article about the project we are doing in our area.

Entrepreneurship Education (from The Quincy Whig)

Today's business idea

Do you want to help the environment and make money? Here is today's idea, featured in Clean Technica. A Japanese inventor created a machine that turns plastic grocery bags into crude oil.

The machine costs around US$10,000. If you can get the bags gathered for free (into recycling bins), the negative carbon system could make money in even a small town. 

Bootstrapping

The term "bootstrapping" comes from the phrase "pulling yourself up by your own bootstraps." In this case, instead of relying on financial institutions and investors. You self-finance until you have a provable operation. Then you can borrow to fund expansion. Whether you are a family business, a partnership, or a solo-preneur, you can brainstorm some appropriate bootstrapping options. Start by cutting your costs so much that you need less money to start. Here are some ideas to get you started:
  - Instead of renting office or operation space, use the spare bedroom or
    garage (don't ever use your own bedroom)
  - Use Vonage or Lingo or other internet based phone system
  - Create an inexpensive website (ask us if you need ideas), then pay
    someone to create a better site after you have cash flow
  - Outsource menial tasks to a lower-paying country
  - Suspend a sheet of plywood over boxes rather than buying a desk
  - Hire students. They want the CV experience and need part-time work,
    but cost minimum wage.
  - Buy equipment off of eBay (but remember that it is not always the cheap
    way)
  - Use freelancers rather than employees
  - Ask lots of people for advice

Years from now, when you are a mogul, you will look back and relish the bootstrapping days.

Why people buy your stuff

"Your stuff" could refer to a product, a service, or an ideology you are spending effort to propagate.  Why buy from you?

 - someone needs your product, and has difficulty obtaining it elsewhere (insulin)

 - they like you and want to support your business to show the depth of the friendship 

   (network marketing exploits this dynamic)

 - your selling format is so convenient (Walmart)

 - they can't beat your price, or your value 

 - you do a better job of selling; you tell a better story (Obama campaign)

 - your product is so neat, or has free features that are really neat (iPhone)

 

Other possibilities exist. Conversely, the "not why people buy from you" list:

 - because you hope people will buy from you

 - because it would make your parents proud of you

 - it would make your investors would yell at you less

You should choose a reason from the first list, and make it a compelling reason, and make sure you are the compelling answer to that issue. Sometimes people buy from you because you got lucky. But that is an incident, not a business model. 

Cover your assets

Here in Nauvoo we enjoy the oldest winery in the state of Illinois, Baxters. The oldest vines from the 1850s have been killed by herbicides from neighboring farmers (thank you very much), but some hundred-year-old grape vines still exist. They cultivate acre after acre of grape vines. Guess what industry they operate in?

That's right! You guessed correctly. They make wine.

As a rural entrepreneur, an obvious method of finding the most appropriate business model is asset analysis. Towns can do this, as they seek the best types of businesses for their communities.
Individuals do it as well.

Following your passion is fun, but it is a different approach. In the hinterland, starting with what you have is usually a shorter route to success. 

We have lost sight of what entrepreneurship means. The stories of over-night billionaires still have us jaded. We still have, in the back of our minds, 


Here at the Nauvoo Commuter, our audience is not internet tycoons, not world-shifting high flyers, but average, successful, job-creating entrepreneurs. We address you and those you support in your town. 

Can these traits be taught?

Are the seven traits of successful entrepreneurs teachable?  Or must people born with those traits? If teachable, can it be done in a classroom, or must it be out in the field?

Seriously, can we train people in rural areas to have these entrepreneurial characteristics? This is more than a mindset or attitude. To be genuine, they need to be deeply rooted in a person's being. The person may not need all of them in the same measure, but none of them should be described as a "weak area."

Entrepreneurship training should have two goals:

First, the program should instill the characteristics discussed yesterday. Training in this area generally teaches people the traits that they should have, and how important it is to have those traits. To actually change bad habits and become a different type of person, that is a much bigger challenge.

The other goal is to teach the needed SKILLS: bookkeeping, marketing, management, etc.

Success Formula: more ideas

Let's add two more traits to yesterday's list:

5) Ability to work in ambiguity
     A non-entrepreneur needs to know "why" and "how." They
     struggle in situations of uncertainty. An entrepreneur--particularly
     a successful one--does not freeze despite not having all the
     answers. They can still move forward.

6) Lack of fear of disappointing people
     If you fail, you will disappoint your family and friends (except the
     jealous ones). More so, you will disappoint investors and lenders.
     Some people cannot handle that fear, so they never take the leap.
     Entrepreneurs do not necessarily have more risk appetite than the
     average person. But they embrace, or at least accept, certain types
     of risk.

So here we have six traits needed to succeed in your own business. Good luck. 

Success Formula

Today we will offer a list of the traits of successful entrepreneurs. First, our definition: we look at long-term success. The one-hit wonder (The Knack of Entrepreneurship) and the flash-in-the pan lucky venturer are easier to define: they got lucky.

The problem with discussion in this area is that people do not agree. For every person who embodies successful traits, it seems you can find another successful entrepreneur who has done the opposite.

1) Ability to analyze the deal
     Some people are better at assessing the viability/success potential of a
     business concept. Some people think they are good at it but are not.
     Some know they are not good at it.

2) Perseverence
     Some people succeed because they persevere with a venture long
     after others would have quit. Some quit as soon as they recognize
     they've hit The Dip. They persevere, not in a particular business,
     but in the in idea of being an entrepreneur. Which way is better?

     We can't say yet, but we can say that trait #1 and trait #2 need
     to be combined. Have you ever met a serial entrepreneurial failure?
     These people are constantly trying new ventures, like speed dating,
     but nothing ever works. They eventually realize the idea was stupid
     --long after everyone else realized it--and they quit, looking for the
     next idea. They seem to have an unseen fear of success, but mask
     it with seeming to be persistent. These people are cannon fodder
     for multi-level marketing schemes.

3) Love of money
     The love of money is the root of all success. It is also the root
     of all evil, but this is not a discussion of morals. Every consistently
     successful person I have met has loved money.

4) Willingness to work hard
     Successful entrepreneurs work smart, but they also work hard.
     Keep in mind what a wise man once told me: lazy people work
     harder than hard-working people. Lazy people do things twice,
     they have to work much more briskly and later into the night
     because they procrastinated, and they don't make the effort to find
     easier ways to do things.

The list is longer, but these are some essentials. Each trait does not seem to be as important as the combination of the traits.
    

And that's the rest of the story...

Recently I was watching a movie with a cookie-cutter formulated plot. Very predictable. But I persevered, and was rewarded with a rewarding ending.

So it is with our lives. Misfortune, and nonfortune--the absence of anything interesting--can cause us to feel cheated.  But the movie is not over. The next scene might bring an interesting plot twist.


And so it is with your business. Bad news, bad luck, bad timing, all are just plot twists. Persevere, and the end of the story might be much more interesting than the one you had planned.

Let's hear your story

Do you have a question about rural entrepreneurship?  Maybe we have an answer.

Contact us directly at coachbrock@gmail.com.

Financing: DIY

Yesterday we spoke to communities, encouraging them to build coalitions to support entrepreneurs, by sharing our experience. We'll keep you updated on our progress.

But most entrepreneurs will have to secure their own financing. Two types of businesses need funding: existing business and business ideas. If you just have an idea, you will need to self-fund until you have cash flowing. Venture capitalists do still occasionally fund raw ideas, but that option is like winning the lottery. Don't plan on it.

Following are some options that are commonly used.

Credit card: this is highly risky. If your business fails, you still have to pay off the card balances, and that might take several years. That puts a strain on the business owner, and on any family relationships. But many successful businesses have been built this way. This is a recommendable scheme for SOME situations. 

Secured loan: you can use your home, your savings account, or your company cash flows to secure loans. This is less risky, but the downside is greater. If the business fails, credit card-financing means belt-tightening; personal real estate-secured financing means losing your home.  

Person-to-Person loans, some examples of which are:

Kiva.org

P2PFinancial.ca

Prosper.com

The Nauvoo Commuter philosophy encourages what is called bootstrapping. You use your own resources to start out, then use cash flows to fund growth. When your business has proven it works, then banks will talk to you (if you need a larger loan to scale your operations up.) You won't be the first person to try this. You won't be the first person to succeed this way. 

If you won't invest your own personal savings in your business, how can you expect the bank to invest? If you won't invest your own personal savings in your business, then what will you invest in: will you leave it in the bank, which means investing it in other people's businesses? If so, you don't believe in yourself or in your idea. 

Just remember to continually assess risk.