August 2011

True Story: My Best-ever Business Plan Project

by Tim Berry on August 3, 2011

I got a call on a Tuesday from Mike Rashkin, who was Manager of Apple Computer’s Apple Pacific group. He told me (paraphrasing):

Tim, I have two guys who have Kanji word processing software that we want for Apple Japan. We want to invest $80,000 in their business but we need them to have a business plan. Can you do it for them? Very soon? I need that plan in no more than a week.

And I answered:

Mike, sort of, but not exactly … I’ll set them up with my business plan software and give them tasks and coaching, so that their plan is theirs, not mine. They’ll be able to use it, change it, revise it, and manage with it.

So I met with them the next day, talked it over, made some suggestions, and gave them the software. That was 20 years ago so it was a predecessor of Business Plan Pro, called Business Plan Toolkit, which was a collection of templates.

They sent me a draft the following day – Thursday – and we met in my office on Friday, with another revised draft. We made some changes together during that meeting, focusing mainly on the financial projections.

We met one final time Monday morning, made just a few final changes, and they delivered their plan to Mike on Monday afternoon, half a day before the deadline.

They got a check for $80,000 later that week. And I billed Apple several thousand dollars.

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Need Funds: What About Family and Friends?

by Susan Solovic on August 2, 2011

Various Federal Reserve Notes, c.1995. Only th...

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“I’ve got a great idea for a business, but I don’t have any money to get it started! Where can I get money from the government or find investors to help me start my business?”

If I had a dime for every time I’ve been asked this question, I’d be wealthy enough to establish my own small-business loan company. Almost every person with a start-up business wishes he or she had money—or more money to grow an established business. In fact, many people use their lack of funds as an excuse for not starting or expanding their businesses. Here’s what I tell them: You must not really want to make it happen! Successful entrepreneurs realize there are many ways to bootstrap yourself to success.

One of the most popular ways to find the business funding you need is to ask your family and friends. However, mixing money and relationships can be a recipe for disaster, but it doesn’t have to be that way. The Limited, one of my favorite trendy clothing stores, was started in 1963 by Leslie Wexner, who borrowed $5,000 from his aunt to open a small women’s retail shop called Leslie’s Limited. The Limited now operates in thousands of cities across the United States and boasts revenues in the billions. So there are a number of success stories that involve family/friend financing. However, there are many sad tales as well.

Most of the relationship problems occur because the transactions were handled poorly. Therefore, to avoid a relationship disaster, before seeking funds from family and friends, you have to do the proper preparation—it is vital. You need to approach a family/friend loan as professionally as you would any other source of funding. You need to be prepared with your business plan and a professional presentation. Demonstrate to your potential investors that you have a well-thought-out plan with defensible strategies and projections.

Even before you begin dialing for dollars, make a list of potential investors—people you know, including family, friends, and business associates. At this stage, you don’t worry about whether you think they’ll be interested, you just make the list.

Once you have your list, you can narrow it down. Here are some things to consider:

• Affluence. Can this person afford to lose the money? Remember, there is a high degree of risk involved in investing in a small business, so consider the individual’s financial well-being.
• Business experience. The best investor is someone who understands the entrepreneurial process and can evaluate your business prospects. Often successful entrepreneurs are interested in learning about new ventures and helping new businesses succeed.
• Emotional baggage. Avoid asking someone with whom you have had conflict in the past. A precarious relationship could lead to problems in your business. Additionally, don’t ask someone who may have to deal with repercussions from others in the event he or she loans you money. For example, a spouse who might become angry about the investment could create serious problems, and you don’t need additional issues to deal with when you are trying to get your business off the ground.

Once you have narrowed your list down to the top potential investors, schedule meetings with them to discuss the opportunity. (Don’t ambush them at a cocktail party or family gathering and ask for the cash.) After you meet with them and review your plan, give them time to review the information and think it over. Never put pressure on anyone to make an immediate decision. Ask when would be a good time to follow up.

Be careful about getting your hopes up just because someone agrees to meet with you. People will often say no regardless of their feelings toward you. Don’t take it personally. There may be issues in their lives of which you aren’t aware, and those may make them uncomfortable loaning or investing at this time. Never get angry or make someone feel guilty, and don’t resort to emotional blackmail. Maintain your integrity. Things may change and you never know when you might need to approach someone again in the future.

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Putting Out Fires with Troubled Employees

by Dave Thomas on August 1, 2011

If you’ve ever held a managerial role, you have undoubtedly come across the problem employee.

Whether they purposefully go out of their way to be an issue in the workplace or not, they become an issue the moment they start causing problems. While those problems can be professional and/or personal, the main goal is to nip them in the bud before they become a major distraction for the entire department.

On the professional level, the problems can include an array of mistakes, missing deadlines, being tardy for work and/or meetings. On a personal level, the issues can be bringing their home life into the workplace, not getting along with one or more co-workers and so on. Bottom line, you’ve got a problem to deal with.

Much like a brush fire, the key is to stop the problem from spreading. Once the problem has spread, it can lead to a dysfunctional department, an impact on the work performance of others in the company, and even a trip to court.

The first key to solving the problem is determining whether this is a professional or personal issue.

Is the employee’s work at the center of the matter? Are there things you can do as a manager to improve their workplace production or have you exhausted all your options? Did you properly train the employee or were they not given a fair opportunity to learn the required skills for the job? Can you afford to have this employee on your staff or will they continue to be a detriment to the team?

In the event it is a personal matter, how long of a leash will you give the employee before they hang themselves?

While individuals should leave personal issues in the home, it is inevitable that some of them will spill over into the workplace. The question becomes when is enough really enough?

Being we’re a society of giving individuals a second chance, most companies will also follow this mantra and allow employees the ability to work out the matter before any discipline or even termination threats are issued.

At the end of the day, job satisfaction and employee retention are directly tied to the quality and happiness of an employee’s relationships.

To wish for or expect every employee to be a perfect role model for the department is just that, wishful thinking.

As a manager, your ability to navigate through troubled waters with employees from time to time will serve both you and the company you represent well.

If the issue/s with an employee are becoming too much for you to handle personally, seek the help of your human resources department who may be better equipped to deal in such matters.

Being in charge of your department, be sure to document any and all issues with a troubled employee, seek a solution, and be sure to not let the matter spill over to your other workers.

When you work with a troubled employee to form concrete goals and a timeline for fixing the issue, it is a win-win for everyone involved.

If you don’t do that, your small brush fire could turn into a major alarm in more ways than one.