Dr. Jeff Cornwall is the inaugural Jack C. Massey Chair in Entrepreneurship at Belmont University in Nashville, Tenn. Dr. Cornwall's current research and teaching interests include entrepreneurial finance and entrepreneurial ethics.
Much of my attention since exiting our high-growth healthcare business has been focused on helping entrepreneurs manage the many challenges that come with growth. In a post at Forbes, Andrei Petrik, CEO and Co-founder of NetHunt CRM, offers some suggestions for entrepreneurs to help their staff deal with the burnout that can come with working in a growing business.
Cryptix offers some sage advice for entrepreneurs in a post at Medium titled, “10 Things You Don’t Want to Hear About Founding a Startup, But Need to.”
Hashtags are a key driver for effective promotion of a business through social media. Here is a good summary of what to know about using hashtags effectively.
A financial dashboard is an important tool for business entrepreneurs. The dashboard provides a quick overview of critical metrics that summarize the health of a business.
Standard ratios derived from financial statements serve as the foundation of most dashboards. However, relying only on financial statement data means the entrepreneur is managing the business using numbers based on past performance.
Many years ago, an entrepreneurship professor shared an exercise he used with students to teach them the limitations of relying only on historic data in their financial dashboards.
He would have his students meet him in a commuter parking lot on campus on a Saturday morning (when the lot was empty). When they arrived, there was their professor standing next to an old car.
The professor set up a simple course for the students to drive using orange cones. When the first student got into the car, he realized that the professor had blacked-out the front windshield and side windows. He was told he must drive the assigned course going forward.
“But I can’t see where I’m going!?”
“You can only use your rearview mirror,” said the professor.
The result was hilarious. Student after student careened through the parking lot, driving over cones along their path. Most thought their professor had gone mad.
Eventually, one of the students would understand the point of the lesson.
“This has to do with financial dashboards, doesn’t it. We don’t know where we are going because we can only see where we’ve been!”
Lesson learned.
Although I have never actually used this exercise with entrepreneurs I work with, I do often share this story. I challenge entrepreneurs to find ways to “tear away the black paper” so they can see the road ahead for their businesses.
I give them an example from our healthcare business. We monitored various metrics related to inquiries and referrals, which proved to be good predictors of future revenues and helped us time the hiring of new staff more effectively.
My rule of thumb is that no more than half of the metrics on a financial dashboard should come from historic financial statement data. The rest should be specific numbers for the business that indicate where it is headed.
We used to teach courses in business writing in business school. Students learned how to construct effective business letters and memorandums.
Over the past decades, those courses faded away as formal requirements in most business schools. Business schools opted to integrate writing requirements into various courses in their curricula. Students now graduate with experience in writing business case study analyses and research papers, but get little or no instruction on how to construct formal business communications.
I see the outcomes of the lack of training in business communication in emails that I receive from students. Most students use a highly informal communication style in their emails. It starts with the salutation. “Hey, Professor”, or my least favorite, “Hey, Jeff”, are common salutations in emails I receive from students. Although this might be fine in an informal text message, email has become the new medium for business communication. Therefore, it needs a higher standard of formality and writing style.
From there, the content of the email then proceeds to go downhill. The text of the messages are full of poor grammar and language that sounds like it is pulled from a hastily constructed personal text message sent to one of their friends.
From what I hear from employers and investors, students carry this informal, unprofessional style of writing with them into their careers after college. I frequently hear from people in the business community about students and alumni of mine who send emails that are so long and rambling that they give up trying to understand the purpose of the communication. They complain about emails full of typos, muddled messages, and poor grammar.
David Cohen, an investor and founder of Techstars, wrote in a blog post that he commonly receives emails sent en masse to a large group of investors, many of whom he knows personally. At best, this shows a lack of respect for the recipients. At worst, it makes the sender look just plain lazy.
In a follow-up post, Cohen highlights what he calls “the perfect email.” The sender is clear about the purpose of the email. The sender takes the time to personalize the email to the recipient. The email is well-written with a clear and concise message.
If a student graduates and gets a corporate job, they will quickly get trained in effective business communication (however, these employers do wonder why it is left up to them to teach this skill).
For those pursuing a purely entrepreneurial career path, they are on their own to develop effective business communication skills. There are plenty of good resources out there (for example, here, here, and here).
By all means, find someone to proofread your important emails. If you are in a co-working space, find a group of fellow entrepreneurs who are will and able to review each others’ communications to help everyone get better. Effective business communication, like any skill, takes learning and practice.
There is no one best way to divide equity among co-founders and set founder salaries.
I am generally an advocate of one for all and all for one. Keep the equity equal among founders and keep your base-salaries the same. I have found it tends to reduce these issues as distractions while creating a stronger sense of team. Is it perfect? Nope. But, it has worked pretty well for me.
Here is a good summary of the pros and cons of a fixed approach versus a more dynamic, situational approach.
The key is to have a serious discussion among co-founders before the business is up and running, when everyone is still friendly and everything is still more or less hypothetical. Talk through the various models and don’t come to a resolution until you reach full consensus among the founders.
I hear from some small business owners that staffing is getting a little better for some employers, but it appears that it will remain a struggle for many others.
Here, here, and here are some ideas on how to win the staffing battle.
Mike Rogers made a great post on LinkedIn about the six things that matter most to venture capitalists when deciding on an investment.
You will need to nail all six of these to have a chance at landing venture capital. Experts estimate that venture capitalists fund as few as 1 percent of deals that they look at, so make sure yours has the best chance of making the cut!
Bret Waters has written a great post on the choice between sticking to your vision and pivoting based on what the market tells you.
I vote pivot (with a purpose).
If you are a B2C business model, social media is probably near the top of your list for reaching your customers. If current statistics about social media are to be believed, about half the world’s population now uses social media.
However, for small business owners, knowing how to effectively use social media to promote your business can be daunting.
The number one rule for choosing where to promote your business with social media is to know where your customers spend their time online. Although Facebook is still the most popular social media site, it may not be the favorite site for your customers. The preferred social media site varies by age, lifestyle, geography, and gender. For example, if your target market is younger, you may have better success finding them on Instagram or TikTok, as they view Facebook as the platform where mom and grandma hang out.
Even if you think you know where your customers go to engage in social media, make sure to experiment with a few different sites. People often go to more than one site for different reasons. For example, they may go to Twitter for news, but Instagram for finding trendy products.
Keep in mind that social media is a moving target. Where your customer go today, may not be where they go in six months. It is critical to keep up with these trends.
As social media has gotten more and more complex, even small businesses are relying on experts to manage their digital marketing efforts.
More and more entrepreneurs choose to outsource digital marketing and the management of social media. As Steven Clayton explains in his post at SmartBrief, outsourcing offers the advantages such as cost savings, specialized expertise, and better results.
If you do choose to manage your digital marketing in-house, make sure you understand all of the ins and outs of social media. Christina Newberry offers a comprehensive guide to effectively using social media in her post at HootSuite’s blog. How does she suggest getting started? It all starts with a social media plan:
But before you leap in feet first, remember: every good business strategy starts with a good plan. Yes, you can use social tools for free. But the time and effort involved still represent an investment in your business.
Without a plan, you have no clear goal for what you’re trying to achieve. That means there’s no way to know if you’re getting a return on that investment.
Effective management of social media requires the right tools. Here, here, and here are articles that offer reviews of social media tools.