Читать книгу Passion to Profits - Alice LaPlante - Страница 12

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2

Your Vision

To begin building a business, you have to start at a very high level, first identifying your overarching vision and then drilling down deeper into the opportunities until you come up with an actual concept for a real business.

■ The vision. You have a vision. There are two aspects of this vision: personal and professional. Your vision encompasses your passions and talents; your business, personal, and financial goals; your lifestyle; and everything else that will determine the quality of your life as you start and run your business.

■ The opportunities. Next, identify the opportunities that exist in your chosen field. How will you apply your vision to the real world? What are the new or improved products or services you can offer?

Finally, you get down to the specifics. How do you exploit the opportunities you’ve identified to create an actual business? Your business concept must include all the details about making the product/service, financing it, and getting it to market.

The Four C’s

When you start out, it’s important to understand your personal goals. Some entrepreneurial ventures fail and others flounder precisely because their founders or executives are uncertain of what they really want to achieve. They don’t structure the company and their responsibilities in ways that satisfy their personal needs and ambitions.

Most entrepreneurs’ personal goals can be summed up by the Four C’s: creativity, control, challenge, and cash. Of course, everyone wants all four of these to some degree, but knowing which ones you most want or need can help you structure your company to best achieve your goals.

Which of the Four C’s motivates you most?

■ Creativity. Entrepreneurs want to leave their mark. Their companies provide not only a means of making a living but a way for them to create something that bears their stamp. Creativity comes in many forms, from designing a new “thing” to devising a new business process or even coming up with a new way to make sales, handle customers, or reward employees.

If you have a high need for creativity, make certain you remain involved in the creative process as your company develops. You’ll want to shape your business so it’s not just an instrument for earning an income, but also a way for maintaining your creative stimulation and making a larger contribution to society. But don’t over-personalize your company, especially if it’s large. Allow room for others, particularly partners and key personnel, to share in the creative process.

CASE STUDY

Mona Lisa Sound: Rocking the Classical World

What happens when classically trained musicians take on Pink Floyd? An entrepreneurial success story emerges that all music majors should hear.

The Grammy-nominated Hampton String Quartet was created in 1985 by RCA, which wanted to record an album of Christmas music played by a classical ensemble. The debut album of the group, “What if Mozart Wrote ‘Have Yourself a Merry Little Christmas,’” was a smash hit, selling more than a million copies. The quartet is made up of Regis Iandiorio, first violin; Abe Appleman, second violin; Richard Maximoff, viola; and John Reed, cello.

After releasing another best-selling album that featured the Rolling Stones’ “Sympathy for the Devil,” the group received so many requests for its classical arrangements of popular rock songs that the group’s cellist, Reed, along with his partner, Janna Glasser, created Mona Lisa Sound, a sheet music publishing company and record label, in 2000. The Hampton String Quartet later released three albums through Mona Lisa Sound.

“When we started publishing our sheet music, we expected to sell the arrangements primarily to professional musicians—quartets like ours,” says Reed. “But, surprisingly, we’ve really found our niche in the education market.” What apparently happened, says Reed, is that high school string teachers discovered Mona Lisa Sound’s arrangements and eagerly snapped them up for students bored with the usual classical repertoire. Once he realized what was happening, Reed placed advertisements in the American String Teachers’ Association (ASTA) magazine, String Teacher, and in String magazine, and participates each year in ASTA’s annual convention. So popular are Mona Lisa Sound’s arrangements that Reed has to operate two booths there.

One of Reed’s biggest challenges is managing the intellectual property issues that arise from arranging the work of other composers. For each new work he arranges and publishes, he has to track down the copyright holder—which is not necessarily the composer of the work—and negotiate a licensing deal. “When we started, no one would pay attention to us when we asked to license the music,” he recalls. “It took us two years to break through. Finally, we actually went to England and asked Led Zeppelin’s manager personally if we could license ‘Stairway to Heaven.’” The members of that band got so excited about Reed’s arrangement that they convinced Warner Bros. to license the rights to their music.

But there was a major gotcha in all the licensing arrangements. Try as Reed might, he could not get a copyright on his arrangements—the copyright for all the music, no matter how much he changed his versions from the original, belonged to the people or businesses that held the print rights to the music. “There was no way to protect our intellectual property,” he says. “It was a hard pill to swallow.”

Despite that, Mona Lisa Sound is thriving. It has plans to release two more Hampton String Quartet CDs, and its list of sheet music arrangements keeps growing. It makes the majority of sales via its website, although it also has a catalogue that it sends out every other year to 35,000 music educators and schools.

Reed credits the firm’s ability to turn a profit on its low overhead. “We financed it all ourselves and never borrowed any money,” he says. They also chose to selfpublish the sheet music on demand rather than use an offset press, which would have been considerably more expensive. “To make offset printing cost-effective, you’d have to print thousands of copies,” he says. “But we’re always tweaking our music—fixing typos or changing a note, and so we bought our own printer and only print music when we get an order in.”

Reed believes that every classically trained musician should be thinking entrepreneurially. “The odds of making a living as a classical musician are horrendously low,” he says. Yet by being creative, musicians can come up with very viable businesses, he says. “I would absolutely encourage young musicians to try.”

■ Control. Many people start businesses because they want more control over their lives. Perhaps you want more control over the way your good ideas are implemented. Perhaps you want, or need, more control over your work hours or conditions so that you can be more involved in family, community, or hobbies. Control is a major motivation for most entrepreneurs—usually more important than money. But how much control you need—especially on a day-to-day basis—directly influences how large your company can be.

If you need or want a great deal of control over your time, you’ll most likely need to keep your company smaller. In a large company, you have less immediate control over many decisions. If you’re a person who needs control, you can still grow your business larger. You’ll simply need to structure communication and reporting systems to ensure that you have sufficient information about and direction over developments to give you personal satisfaction. If you seek outside funding in the form of investors, understand the nature of control your funders will exert and be certain you’re comfortable with these arrangements.

■ Challenge. If you’re starting or expanding a business, it’s clear you like challenge—at least to some degree. You’re likely to be a problem-solver and risk-taker, enjoying the tasks of figuring out solutions to problems or devising new undertakings. Challenge-hungry entrepreneurs can be some of the most successful businesspeople, but they can also be their own worst enemies—flitting from one thing to another, never focusing long enough to succeed.

If you have a high need for challenge in your business life, it’s important to develop positive means to meet this need, especially once your company is established and the initial challenge of starting a company is met. Otherwise, you may find yourself continually starting new projects that divert attention from your company’s main goals. As you plan your company, establish goals that not only provide you with sufficient stimulation but also advance—rather than distract from—the growth of your business.

■ Cash. Every entrepreneur wants to make money. Perhaps it’s just enough money to provide a decent income; perhaps it’s so much money you can buy a jet. How much you want or need affects how you’ll develop your business. Will you need investors and when? Will you sacrifice control to grow the business quickly?

Keep in mind there are sometimes trade-offs between personal goals. For example, wanting more cash often means having less control, while staying at the center of the creative process can necessitate having a partner or growing slowly—once again trading off control or cash.

business Buzz

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“monetize”

Monetizing is the process of transforming something—an idea, invention, or creation; a website or software programming; or an action—into a product or service that someone else deems valuable enough to pay for. For example, writing and selling a book can be seen as monetizing one’s thoughts into a product that people will have to purchase. Accepting ads on a “free” website monetizes that website for its creators. Likewise, building a company to sell your new invention can turn an abstract idea into something that actually brings in money.

The Four Aspirations

Once you have considered the Four C’s, you must continue to define other aspects of your vision. A good way to proceed is to choose which one of the following Four Aspirations fits your personal, professional, and financial goals:

■ Actualizing Activity

■ Solo Sustainer

■ Balance Business

■ Visionary Venture

Actualizing activity

Everyone likes to make money, but for some entrepreneurs, making money is not the primary reason to start a business. Actualizing Activity businesses are those launched by entrepreneurs who are primarily interested in meeting personal interests or fulfilling personal goals. The key factor is that money made in the business is not critical for financially supporting the business owner’s lifestyle. The fortunate individuals who launch Actualizing Activity businesses already have other sources of income—for example, pensions, spouses or partners who are already bringing in sufficient revenues, or investment income. These people can choose which business to start based on how it meets their personal goals rather than their financial needs. Thus, a previously successful engineer might open a gallery to fulfill a need to be involved in the arts or a model railroad enthusiast might establish a retail hobby shop to satisfy a desire to build a local community of like-minded individuals—even if those businesses don’t make them much money.

Solo sustainer

The largest number of all businesses fit into this classification. These are one-person ventures that provide critical income for the entrepreneur—and often the only source of income for the entrepreneur’s family.

Solo Sustainer businesses represent the classic self-employment business model—frequently called “sole proprietorships” (see the Independent Consultants/Solo Practitioners Special Section at the end of the book). These businesses are owned by one person, are typically non-incorporated, and it’s not unusual (although never recommended!) for the entrepreneur to mix business and personal expenses. Self-employed accountants, physicians, and others who provide professional services fall into this category.

Businesses in this group share these characteristics:

■ Income from the business is critical to maintaining the lifestyle of the entrepreneurs and their families.

■ The entrepreneur generally works alone (or perhaps with the aid of part-time administrative assistants or independent service providers, such as attorneys and accountants).

■ The business generates current income for the entrepreneur rather than creating ongoing income streams that could continue even if the entrepreneur were to leave the business.

In other words, in Solo Sustainer businesses, the business sustains the entrepreneur, and the entrepreneur sustains the business. Once the entrepreneur stops working, the business stops—period. In essence, the entrepreneur is the “product” that the company sells, and is the sole income generator for the business. There is no “business” independent of the entrepreneur.

Balanced business

When someone uses the term small business, they usually mean this type of business. “Balanced” doesn’t mean that the books are balanced. Nor does it refer to any other specific aspect of the business’ management or financial well-being. Rather, it means that the goals of the venture’s founders are fairly well balanced in that:

The business is designed to be a career for the owner.

And

The business provides jobs for others.

The business is designed to provide income for the entrepreneur.

And

The business may be capable of building value independent of, and lasting longer than, the entrepreneur’s personal involvement.

The business is small enough for the owner to be able to control it.

Yet

The business is big enough to be able to support growth.

Ideally, a Balanced Business will develop value in addition to the annual income it produces for the owner and the paychecks it generates for employees. With good planning and development, many of these businesses can be sold to others when it comes time for the entrepreneur to retire. They can also be passed down to family members or employees. Restaurants fall into this category, as do construction companies, automotive repair shops, and just about any kind of Mom and Pop retail stores.

Visionary venture

The entrepreneur who starts a Visionary Venture has a different kind of ambition than those who start other types of businesses. Yes, they may be starting small, but their vision doesn’t stop there. These entrepreneurs have plans to grow big. Their goal is to develop a company that will grow into a major enterprise—one worth many millions of dollars. They envision a company so substantial that it will become a household name, with publicly traded stock. Or they may hope that an even larger corporation might acquire the business in the future. Don’t be surprised, these entrepreneurs think, if one day you see them on the cover of Fortune magazine. Google founders Larry Page and Sergey Brin right from the beginning hoped to make it really big by creating search technology that would harness the chaos that was the early Internet. Ray Kroc saw the possibilities in a small hamburger franchise and grew the McDonald’s empire based on his vision of applying mass production concepts to a service industry (food preparation). And every day venture capitalists are presented with business plans from would-be entrepreneurs whose definitions of success go well beyond simply earning a decent living.

Visionary Ventures are the types of new companies that get a lot of press. They are exciting, innovative businesses that aspire to new heights and to break new ground. They are also risky. Since an entrepreneur creating a Visionary Venture wants to create a company with huge potential, the entrepreneur often has to put personal considerations—such as the business’ ability to generate current income or provide financial stability—second to the need to find a concept that can support the growth of a large enterprise.

Because Visionary Ventures inevitably involve finding and securing big markets—or developing new products or technologies—they typically require a great deal of money to get started. This means that the entrepreneur not only has to spend a lot of time seeking financing, but they also will probably have to give up a significant portion of the ownership of the company to investors.

business Buzz

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“corporate culture”

At its most basic level, a corporate culture is made up of the aggregate attitudes, experiences, beliefs, and values of all employees at a business. According to Charles W.L. Hill and Gareth R. Jones in their book Strategic Management (Houghton Mifflin, 2001), corporate culture can be defined as “the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.” A corporate culture can be one in which employees work very hard but also play hard. Or it could be one in which individual workers possess a great deal of autonomy – to the point where they don’t need to come into the office except for meetings or other special occasions. Some businesses attempt to formalize their corporate cultures by writing down their corporate “values”; in other cases, the culture is simply the spirit that infuses the organization more spontaneously.

Your Personal Vision

Visions differ from goals in that they tend to be large, grand, and encompass a broad range of factors. Goals tend to be the tangible, nuts-and-bolts accomplishments we set to fulfill our visions. When creating a business, you start at the very top with the personal vision, and gradually work your way down through business vision to opportunities to actual goals and milestones that you can check off a list. To better define your vision, you’ll need to:

■ Identify your passion. First, what are you passionate about? What truly interests you? What will keep you up at night, thinking and working, long after you should be asleep? This is your passion, and you should always pay attention to what you are passionate about. Aligning your vocation (how you earn your living) with your avocation (how you prefer to spend your time) is one of the most satisfying things you can do. In many cases, it’s the reason entrepreneurs have become entrepreneurs.

■ Identify your skill sets in this field. Once you know what your avocation is, you need to decide how personally qualified you are to pursue it. You may have a passion for helping people in emotional difficulty and think you want to be a psychologist, counselor, or even a psychiatrist operating your own practice. But what are your inherent skills that make this an appropriate choice of profession for you? Are you naturally intuitive and insightful when it comes to understanding other people’s emotional states? Likewise, if you would like to head your own business consulting firm, what specific skills do you possess that would make this a good match? Do you have an analytical mind that can spot problems and come up with solutions? Do you have the people skills to convince people you have the answers to their questions? Taking a long, hard look at yourself is an essential first step in starting a business.

■ Assess your training/education. Once you’ve identified your inherent skills and talents, it’s time to investigate how well you’re prepared to go into this field based on your formal training and education. It may turn out that your native skills are enough to qualify you to jump into a profession with both feet—for example, dog grooming does not require a degree or certificate—but in many cases you will need to have a credential, academic or trade, or some sort of formal proof that you are qualified to do what you want to do.

■ Evaluate your experience. Likewise, experience often matters—sometimes even more than a formal education. In the software field, for example, someone’s innate programming abilities coupled with hands-on experience writing computer programs are often worth more than a degree from even the most prestigious university. As has been often noted, Bill Gates never graduated from Harvard. Instead, he took his talent for programming and his experience experimenting with computer languages to found his own software company, Microsoft. The rest is history.

■ Assess your lifestyle goals. How you want to live your life is a big part of your vision. Are you willing—or even eager—to devote 60 hours a week to your business? Or is your ultimate goal to leave the running of your day-to-day operations to someone else while you relax on your sailboat? Do you want to grow a business that employs hundreds of people, or do you want to remain an independent sole proprietor? Do you want to work out of your home, or do you wish to establish boundaries between your personal and professional lives by getting an outside office? The more you can articulate this aspect of your vision, the more prepared you will be later to identify the actual goals and milestones for judging whether you’re meeting them.

■ Identify your geographic preferences. Where would you like to live? Do you want to be able to travel extensively, and to run your business from wherever you happen to be? Or do you want to reside in a particular location? Technology is enabling people to run “virtual” companies that can be operated from anywhere, so depending on the specific type of business you hope to start, you may have a whole gamut of choices that were previously unavailable to entrepreneurs.

■ Articulate your financial dreams. Finally, there is the very important question of money: you may simply be hoping to get enough to support yourself (and your family) and save sufficiently for retirement. Or you may be more ambitious, and have visions of accumulating real wealth. Whatever your goals, it’s best to articulate them upfront as part of your vision so you can plan your business accordingly.

Your Business Vision

Once you’ve articulated your personal vision, it’s time to consider your business vision. This includes thinking about the type of company you want to build and run at a fairly high level. Some questions to consider:

■ How big a company do you want to build? As you begin to think about your business, keep in mind that the business itself may dictate the size. Some people deliberately keep their business vision small: they want to be sole proprietors and have no interest in employing others or growing a business that requires more than their particular input. Those with professional skills like accounting or business consulting often fall into this category. Big ideas often require big companies to make them come to fruition. It would be difficult to run a furniture manufacturer with mass-market reach with just three employees. A lot of this comes back to control. It’s hard to maintain a high degree of control over a larger company—although some people certainly try.

The Four Aspirations outlined on pages 14–15 provide a good yardstick for determining the size business you will run. If, for instance, you come to realize that your aspiration is to start a Visionary Venture, you’ll be able to eliminate ideas that can only sustain one or two people. If, on the other hand, your aspiration is a company that is a Solo Sustainer, you’ll want to avoid businesses that require you to invest a great deal of money up front.

■ Do you want to work by yourself or with other people? This is a critical question. You may be a self-sufficient type who prefers being in control of every aspect of your business to delegating responsibility or partnering with others. Or you may be gregarious and socially inclined and need others to support you, to bounce ideas off, and to socialize with. Or your business may absolutely require others with complementary skills to make it a success. Your preferences in this regard will determine the type of business you will start.

■ What business values/corporate culture do you want to create? What’s important to you about the nature of the business you build? How will you treat your employees? Interact with your community and the world in general? What code of ethical conduct will you adhere to when doing business? Management style plays into this: you may prefer a buttoned-down, traditional workplace. Or you might want to foster a more fun environment that includes scooters, video games, and even nap rooms. Here is where your commitment to socially responsible behavior comes into play, as does your vision of how you want to be viewed by others in your organization. Do you want to create a role for yourself as a traditional authoritarian boss or nurture a more collaborative, “flat” organizational culture? You can be very specific about the rules and mores of your business: for example, Kinkos for many years had a strict organizational mandate against gossiping. Other organizations are committed to family values, allowing four-day workweeks and guaranteeing that employees can leave at 5 p.m. Your business values represent an important aspect of you business vision.

■ What are your business skills? What are your leadership/management qualities or other personality traits that stand you in good stead pursuing this passion? Do a careful inventory of your business skills at this point, because it will determine whether and how you should bring in other individuals to complement your skills, or what additional education or training you need if you hope to go it alone. Can you motivate others? Can you communicate? Are you willing to learn these skills if you don’t currently possess them? Keep in mind that your inventory of business skills should include not just the ones you have now, but also the ones you’re willing to work on or develop.

worksheet: Your Personal Vision

To help bring your vision into sharper focus, fill out the following worksheet. Don’t be shy about writing down your wilder dreams—that’s often how the most innovative and successful businesses begin!

What’s your passion?

What are your skills/talents in this field?

What’s your education/training?

What’s your experience?

What’s your optimal lifestyle?

Where would you like to live (geographic location)?

What are your financial goals?

worksheet: Your Business Vision

Now it’s time to focus on the vision you have for your business. After filling out the following worksheet, you will have a better idea of what your business goals are and what you need to do to achieve them.

How big a company do you want to build?

Do you want to work by yourself or with other people?

What are your business values? What kind of corporate culture do you want to create?

Which of your leadership/management qualities or other personality traits will stand you in good stead pursuing this passion?

What business skills are you willing to develop to make your venture a success?