Up and Running Blog

November 2009

Do You Really Want That MBA Degree?

by Tim Berry on November 13, 2009

I received an intriguing e-mail today, well-written and thoughtful, from someone considering going for an MBA degree and asking my advice about it. Here’s a portion of it (quoted exactly):

I’ve been thinking about developing some actual products for sale; but basically I have about a million ideas and as I trudge forth, I am realizing how little experience I really have when it comes to the nitty gritty. Things like accessing risk, being a better sales person, managing and dealing with potential employees, it’s all new to me. And the more I read about it and learn about business, the more interested and passionate about it I become. But reading only gets you so far. I feel like I’m at a stopping point and I need a shove to get over it.

I’m very against just going to back to school because I don’t know what to do or I’m bored or whatever other reason people cook up for avoiding real life. I don’t NEED an MBA. I wouldn’t be going for the degree, I would be going for the experience of it. Which makes me think maybe it would just be better to try to get a mentor and learn by doing, but at the same time… I think it might make me much for successful and give me the confidence to go big. And then of course, do I really want to “waste” 2 years in school when I could be running a business, and I would absolutely need scholarships to get me through.

gildedgraduationiStock_000000962916XSmaller[1]Great question. I want to answer it. I’ve been posting about this a lot on my main blog (link here). I think it’s an important subject, and I’d like to spread the discussion to this blog. But I need to answer with a somewhat disorganized collection of points. I’d rather have a clearly worded, simple response, but it’s a complex question.

  1. Do you like school? Rank yourself from 1 to 10 where 1 is “I hated every minute I ever spent in a classroom or doing homework” and 10 is “I love school as long as it’s a good teacher, and if it weren’t for needing the money, I would just be a full-time student forever.” If you aren’t above a 7, or maybe a conservative 6, you’re going to regret going back to school.
  2. An MBA degree from one of the top 10 (or so) schools gives you special job-seeking powers, bragging rights, and, probably, more money. It’s awkward to say in print, but I always say “Stanford MBA” instead of just MBA, and so do the MBAs from Harvard and Wharton and a few other schools. Probably this also means you get a swollen head and swollen ego. But when people stop appending the school name to it, it doesn’t do as much for the job power.
  3. I loved my two years back in school getting an MBA degree, starting when I was 31, ending when I was 33. School was exciting. I liked what I learned, I liked studying, I liked the classes and the professors and my classmates. It was a great time. My wife and kids and I lived in family housing on campus, which was a lot like paradise. Even though I consulted full-time to make ends meet while I also studied full-time, I loved it. It kick-started my business career and taught me tons and made a huge difference to the rest of my life. But it was two years on campus.
  4. You refer to experience when it comes to the nitty-gritty, and I’m afraid few if any MBA programs give you that experience. Life does, work does, entrepreneurship does, but school doesn’t. School gives you perspective and analytical tools,  deep background, vocabulary, understanding of principles of finance and marketing and all. But not nitty-gritty. Background: this post on five things the b-schools can teach, and this one on five things they don’t.

One final point, one that I’m pulling out of the list for emphasis: Don’t quit working and get an MBA degree full-time for the money. There’s an odd chance, a small chance, that the extra money you generate in your career might compensate for the money you lose in two years of not working; but that’s only if you’re in one of the really top schools, in my opinion, and even then, it’s only a chance. You’d better do the MBA degree because you want to, because you want to spend two years in school again, and you’re interested in the subjects they teach. Otherwise you’ll be disappointed.

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The Blog Week in Review — 11/12/09

by Jay Snider on November 12, 2009

Can B-Schools Teach Entrepreneurship? — Tim Berry discusses what can be taught in businesses schools, and how the value of studying entrepreneurship can really depend on who’s doing the studying.

The Best Startup Funding is Initial Sales — Nothing funds a new business like actually having sales.

Want ECP News? Check Your Dashboard – A cool widget on your Email Center Pro dashboard connects you to news from the ECP Blog.

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Are Pop-up Shops the Latest Retail Phenomenon?

by Steve Lange on November 12, 2009

Pop-up shops seem to be going mainstream this year. A Time.com story, Why Pop-Up Shops Are Hot, looks at this new retail business model.

While pop-ups have had a dubious reputation in the past, of being fly-by-night outfits, they have recently been gaining respectability. The main indoor retail mall here in Eugene, Oregon has had kiosks for several years, modeled after NYC push-carts, positioned down the center of the main walkways. Some of those businesses, such as mobile phone sales, earrings, and sunglasses shops, have been in business a long time, month in and month out. Others have been seasonal, e.g., holiday decorations, and calendars, sprouting in October or November, disappearing in January, and returning again a year later.

This year some big-name retailers are experimenting with pop-up locations. Toys “R” Us, American Eagle, The Gap, and J.C. Penney have been taking advantage of the numerous empty retail storefronts to test product lines, or new target markets, or to maximize exposure for seasonal selling. Shop owners are realizing that even a short-term rent is preferable to no rent at all.

So, perhaps, a pop-up shop might be just the ticket for you to start your new venture, requiring less startup capital, no long-term leases, in potentially high-traffic locations. However, don’t think that a short-term, quick start eliminates your need to plan. Planning your cash needs up front and watching your monthly cash flow is still important.

Steve Lange
Palo Alto Software

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Paul Graham on What Startups Are Really Like

by Tim Berry on November 12, 2009

If you’re serious about starting a business, take a few minutes and read Paul Graham’s Web essay “What Startups Are Really Like.”

Graham’s essay collection site is a valuable resource. He tends to post essays–a lot longer, and usually a lot more thoughtful, than a standard blog post–about once a month or so. He has a large following for good reason.

The “What Startups Are Really Like” essay includes 19 points and a conclusion, so it’s more like a 10-minute than a two-minute read, but there’s a lot of real content there.

Not that I agree with everything he says there; hardly. But he sticks his neck out a lot, writes a lot of things that could sound wrong when quoted out of context, but even these–such as “don’t worry about competitors” or “investors are clueless”–make much more sense when you read through his explanation. And if it makes you and I think about it, it’s good stuff. There’s no clear, hard, fast truth in this subject area. Thought-provoking can be as valuable a trait as true.

There are also parts of this essay that are unmitigated pure gold. Read the section “Things Change as You Grow,” for example. Oh, and “Lots of Little Things,” and “Start with Something Minimal.” He really nails it.

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Tantalizing Testimonials

by Cidnee Stephen on November 11, 2009

The world of testimonials is changing and with it are some incredible opportunities to strengthen your credibility in the marketplace.  But the very first question I need to ask you is,

“Are you even collecting testimonials?”

Don’t panic if the answer is NO. Most of us aren’t as diligent as we can be in the collection process.  The main reason I hear is that people feel they need to ask for them.  While this certainly is one way, there are some other ways I find work extremely well.

1) RECAP – My favorite way to capture a strong testimonial is when someone has shared a success with me verbally.  When this happens to you, ask them right then and there if you could quote them for a testimonial.  When the answer is yes, take 2 minutes to type out the testimonial as you heard it.  Put it into an email to the source along with any other info you require (like a result or the link to their site, etc).  Ask them to confirm that this is correct and “ta da” you have your testimonial.

2) FEEDBACK FORMS – Once you have finished working with a customer, send them out a feedback form regarding the experience.  Add questions, like “how would you describe this experience to a friend” or “what is the biggest result/benefit you received?”  When you get some great responses, go back and ask if you can use this as a testimonial.

3) TESTIMONIAL PARTIES – I love connecting people so the idea of a testimonial party really appeals to me.  I got this idea from John Jantsch with Duct Tape Marketing and can’t wait to try it out.  Consider renting a videographer and asking individuals to record a structured testimonial or asking the videographer to approach attendees and capture testimonials.

4) PHONE IN TESTIMONIAL – Do you have an extra extension you can set up on your phone system, or perhaps just have individuals leave a voice mail message on your phone.  Either way your message or instructions can direct them as to what type of information they need to include and then you can either transcribe or use as audio samples on your site!

Capturing Killer Testimonials
Okay, so now you know how to collect them.  My next question to you is how strong are your testimonials?  Those that simply say you’re great or your product is great are what I call  “VANILLA”  or washed out testimonials.  Avoid run of the mill and aim for RESULTS and testimonials that point out what makes you different or better than others in your industry.  In order to garner stronger testimonials, you need to ASK for this type of information.  Consider encouraging your sources to share the following:

Why they chose you
What they were expecting
What they ended up getting
How that helped them and/or exceeded their expectations.
Why would they recommend others should work with you?

Answers to questions like this will get you some KILLER TESTIMONIALS!

Types of  Testimonials

While text emails are great, these days it’s becoming a no-brainer to add audio and video testimonials as well.  The technology has made this super easy.  Digital Recorders and VOIP phone systems will conveniently record in MP3 or WAV formats.  Inexpensive Digital Video Cameras are on the market to record your own video testimonials and services from companies like BizBoxTV have made it cost effective to get nicely produced videos as well.  When your product or service is emotion based or complex, I highly encourage you to use audio and video!

WHERE

Of course your testimonials should go on your website.  But I hope you don’t hide them under some lame tab called testimonials!  Be creative.  Pepper them throughout your website, or rotate them in your header or along one side.  At the very least, change the name of the tab, to “What OTHERS have to say”

Remember to also use your testimonials in promotional pieces and sales presentations.  Why not add them to your email signature or even to your business card?  The opportunities are endless and remember: we always gain more credibility when OTHERS say we’re great!

ducttapemarketingbadgeCidnee Stephen is the owner of Strategies for Success – a marketing company that focuses on the needs of budget-minded small businesses and professional services. She has helped hundreds of small businesses get out of their peak and valley ruts to finally achieve that next vital level of success. Cidnee is also a sought-after speaker, writer and blogger on marketing topics that affect small businesses and B2B service based operations.

If you would like to build a system to reach those goals quicker, check out Cindee’s Speak for Leads & Expertise Program.

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The Best Startup Funding is Initial Sales

by Tim Berry on November 11, 2009

We all forget too easily: The best startup funding is sales. Sure, we all think of angel investment, friends and family, and SBA loans; all of those options are necessary for most startups. But sales is better.

If you can, find the early customers. Give them a deal, make them important, work with them to optimize their needs; but make a sale.

Even if you do need to go out and find investment–and I speak now as an actual angel investor–there’s almost nothing as convincing as actual sales. People are spending money on your product or service. It makes a new business proposal far more credible.

True, not all businesses can do that. But a lot of them can. And, as we write about business plans and seeking investment and all, we forget the real sweet spot: financing growth by making the sales.

(Note: this is a repost from Planning Startups Stories, where I posted it a few days ago. I can’t remember the last time I reposted from that blog to this one – it has been a while – but I decided to do that today because it seems to be very appropriate here too. It’s been on Twitter a lot already, from the first time I posted it.  Tim. )

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The Health of the Home Office Business

by Tim Berry on November 10, 2009

Hooray for starting a business at home. I did. And that business now has more than 40 employees, multimillion dollar sales, market leadership in its niche–and no debt.

Still, back then, when I started, there was a certain stigma to the home business. I fought that stigma by never apologizing for the home base and never trying to hide it. But I felt it.

I’m glad to see how much this has changed. I just read Steve King’s The Home: A Great Place to Start–And Run a Business on the American Express OPEN Forum. He writes:

The home has long been viewed as a great place to start a business.  Lower costs are, of course, the key reason.  Many large enterprises such as Ford, HP and Apple Computer started as home businesses.

He cites a recent SBA study that showed a lot of growth in home-based businesses; both in the number of these businesses in the U.S. (some 15 million) and in their likelihood to survive and prosper. He adds data from Homepreneurs: A Vital Economic Force, a study by Emergent Research, conducted on behalf of Network Solutions. Thirty-five percent of home-office businesses take in more than $125,000 in annual sales and 8 percent do better than $500,000 per year. They’ve existed on average for 10 years.

Don’t discount the home-business option.

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Living with Planning, Not Just the Plan

by Tim Berry on November 9, 2009

I like this Plan B idea. Consider this, from Discover Your Plan B, a write up on the Business Standard (from India) on co-author John Mullins’ visit to India:

If you ask investors, how did they make money, they’ll tell you they didn’t make it on the original plan, but on the second or third when the entrepreneur adapted the original plan and found a better plan. Rarely do initial plans with which entrepreneurs begin work the way they have been planned. Almost always there are twists and turns on the road.

This is about a new book, Getting to Plan B. I haven’t read this book, but I like what its authors are saying.

The challenge is not to make a better Plan A, the challenge is to recognize that however good your Plan A is, it is probably not very accurate. So your mind-set, as you enter a process, should be to work out the best plan and at the same time, to get beyond that initial plan. Get it into the market and see if the market can tell which parts of that plan are correct, and which are off base, so that you can quickly adapt to the reality. Plan As are mostly partly correct, but not completely correct.

That sounds right to me.

Amazon.com: Getting to Plan BISBN: 1422126692
ISBN-13: 9781422126691

I have to admit that I like how much this sounds like The Plan-As-You-Go Business Plan, my book from 2008. All business plans are wrong, but vital. It’s about change, course corrections and management.

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WSJ on Why You Need a Business Plan

by Tim Berry on November 6, 2009

Browsing and searching last night, I discovered “Why You Need a Business Plan” by Colleen DeBaise on the Wall Street Journal’s website. This is a good, strong post and a good reminder. Her five reasons:

  1. Identify your company’s strengths and weaknesses.
  2. Figure out how much money you’ll need.
  3. Get clear direction, which can help eliminate stress.
  4. Summarize for lenders, investors or partners.
  5. Evaluate the market for your product or service and size up the competition.

My personal favorite is No. 3, particularly the phrase “help eliminate stress.” It’s not as if the business plan eliminates uncertainty, but business planning does manage and reduce uncertainty by laying things out where you can see them more easily (like cash flow, for example). The interrelationships between the different parts of the business are not all intuitive.

Point No. 4–summarize for lenders, etc.–bothers me. Too many people miss the benefits of business planning because they don’t need to show anything to anybody else. If that’s your case, look at points 1, 2, 3 and 5.

That link is “Why You Need a Business Plan”–WSJ.com

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diane cropped

A New Fan of the Plan — Diane Peloquin's Success Story

by Jay Snider on November 5, 2009

Diane Peloquin found out recently that she had secured the property she was hoping for: a much sought-after piece of commercial real estate in Surrey, British Columbia. She intends to turn it into Cafe Pelorina, a high-end cafe featuring not just coffee, but art, books, and a community involvement component.diane cropped

When she first began exploring locations for her cafe, she says, “I was told by my commercial realtor that the developers would not even look at an offer unless I had a business plan. Being of the strong mind that you don’t re-invent the wheel, I went on the Internet to search programs that offered business plans.”

Peloquin needed to get the business plan together quickly, as there were several other businesses interested in the property she had her eye on. She had never written a business plan before. “Instead of taking time, which I didn’t have, trying to figure out what a business plan is even supposed to look like, I Googled business plan software.” And that’s when she found Business Plan Pro, and discovered how helpful it was.

She says the planning process provided a lot of insight into her business. “As I was going through I realized how much detailed information I really had to get to be better prepared. I also realized that it was going to actually cost twice as much as I had thought!”

Her cafe hasn’t even opened yet, but Peloquin is already going back and fine-tuning her business plan. “I have already had to go back a couple of times to adjust numbers when I would look at the final outcome and see where there could be a problem in prices I had set. I was going to be paying too much for some supplies, which led me to get new suppliers and allowed me to achieve the margins I needed to make to be successful.”

Now a big fan of business plans, Diane would hate to think of what would have happened if she hadn’t written one. “If the developer hadn’t required that I have one I wouldn’t have made one, and I now realize this could have led to a huge disaster.”

Peloquin believes there’s no substitute for having a concrete plan when you’re starting your business. “Until you have everything in writing in front of you, you don’t know everything you should know.” She adds that Business Plan Pro made the entire process painless for her to accomplish. “I was amazingly impressed by how easy it was to do and how very professional the finished business plan was,” she says.

“I feel that doing a business plan gives you a great idea of how your business is going to work. You will be amazed by everything you learn about your industry.”

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