Dr Jeff Cornwall

Too often I hear pitches from entrepreneurs only to be left less clear on what their business is all about afterward than I was before they began. Presentations to potential investors or even customers can be filled with too many technical buzz words. These entrepreneurs also use language that is intended to impress, but ends up confusing the intended audience. An article in StartupJournal offers some good advice for making a presentation about your business to any audience, but particularly to investors or customers.
“The ability to speak and write concisely and with clarity is fast becoming a competitive advantage for entrepreneurs and small-business owners….Articulating clearly what your business is, what kind of goods or services you sell and how much they cost helps the bottom line. Potential customers or clients appreciate clear and meaningful information. It even can make the difference between success and failure.”
Technology start-ups are some of the worst offenders. “Using plain English is crucial when seeking funding to start or grow a business. Venture capitalists and bankers have little tolerance for gobbledygook. If small-business owners can’t cut to the chase with answers to their questions, their chances of securing funds are basically zilch.”
I was once asked by a friend of mine (a former U.S. Senator) to help him with his struggling consulting business. I started my conversation with my usual question, “So, tell me about your business.” Twenty five minutes later, I finally had to ask him to “Stop!” (I found out from his reaction that Senators are not used to people cutting them off no matter how long they go on). However, I had no idea what he was providing through his consulting services even after his twenty five minute pitch.
So, like any professor worth his salt, I gave him an assignment (he was not used to getting assignments from people either). I told him to go away and develop a twenty five word, not minute, description of what he did in his consulting. I wanted his to be prepared so that when asked at a cocktail party in Washington about what he was doing now that he longer held elected office, he would be ready with a clear and concise answer.
He did it, and it worked. Soon he had a steady flow of business because people knew what kind of work he could perform for them. Good business communication should always be clear and concise, but especially when you are an entrepreneur trying to get the attention of badly needed investment money or customers.

Carnival of the Capitalists is up for the week of Labor Day. The host, Joe Grossberg, finds a certain irony in hosting on Labor Day. “Now let’s go celebrate the most socialist holiday in the US!”
From the number of great posts, it looks like the capitalists are hard at work today on Labor Day. And why not!

Anita Campbell over at Small Business Trends reports on eBay’s growing global presense through acquisitions in Germany, India, China and and Korea.
“If you want to see where the next hot eCommerce markets are across the globe, just watch where eBay is expanding. Everywhere eBay goes, opportunity for small businesses follows. Millions of eBay sellers in these countries will benefit, not to mention the myriad of businesses that inevitably pop up to service and support eBay sellers.”
It’s a small world, indeed!

We’ve all read the obituaries of organized labor in the U.S. But, there is one segment that has seen a growth in unionized workers: service businesses. And who is leading the way in growth in service industries? That’s right, entrepreneurs. Inc. tells of the growth of organized labor in small service businesses in this article by Amy Gunderson.
“True, union membership as a whole continues to decline. But groups active in professional and service industries are booming, their ranks swelled by workers who fear increased health insurance costs and the outsourcing of jobs to Asia. IT staffers, graphic designers, and engineers — this is the new face of labor. And guess where many of them work? The average workplace organized last year had just 53 workers. ‘More attention is being paid to smaller workplaces,’ says Bob Bruno, a labor and industrial relations professor at the University of Illinois at Chicago, who adds that ‘organized labor has a higher success rate in small businesses.’ There are several reasons for this. Labor activists have discovered that unlike large corporations, small businesses often lack the resources and the know-how to fight unionization. Plus, their employees are are often more receptive to organization because union reps can make a personal, individual appeal for their support.
And unlike the large old economy companies that they populated over the past century, unions are behaving rather entrepreneurially.
“Old-school union bosses, sensing a rare opportunity to grow, are devoting more resources to small-company campaigns. For example, the International Association of Machinists and Aerospace Workers, whose members have traditionally come from the likes of Boeing and General Electric, recently launched a Web-based effort to organize technology workers. Other established unions have made inroads in a variety of traditionally nonunionized sectors, ranging from restaurants to nonprofits to health care, where even doctors are now pursuing collective bargaining with HMOs. But it is tech workers who are, without question, the group that unions are focusing on with the most intensity.”
There are two old adages that I used to teach about in Management classes twenty years ago:
1. Poor management practices are the biggest single cause of worker unionization.
2. You get the union you deserve.
Probably still good words for today’s managers of small businesses to think about.

Professor Gordon Smith (you may know him from his site called Venturpreneur) has launched an innovative new blog site on Law & Entrepreneurship. This is a collaborative effort in which Prof. Smith works with student editors to compile entries on a variety of topics related to, what else, but law and entrepreneurship. It is a great new site that I strongly recommend. It shows great promise to build quite an archive of useful information.

Sometimes you have to say “no”, even if it is to a potential customer. While most entrepreneurs, desperate for sales, want to say “yes” to anyone who wants to business with them, bringing the wrong customer into your business can actually hurt your profitability. Jay Ebben highlights this in his latest column at Inc.com.
“A common trap that many new and growing small firms run into is attempting to take on business from both sides of the aisle. For example, a manufacturer of standard-sized pallets in the Midwest began getting requests from customers for unique pallet sizes. Seeing an opportunity for growth through higher-margin sales, the manufacturer jumped on this opportunity. The problem was that the firm was not set up for custom offerings: It had a generally unskilled labor force trained to operate standard machinery, and these workers could not effectively produce custom pallets. It also had to interrupt its normal production processes to produce custom pallets, which reduced efficiency. The company did hire some skilled labor, but found that at different times they would either have skilled labor working on unskilled projects or unskilled labor working on skilled projects. The basic result was that the company was not able to effectively maintain a low-cost position or effectively meet end-customer needs, and returns suffered.”
Matching market strategy with your operational model is critical, particularly during growth. Adding more and more of the wrong customers only adds to your growing pains, and may actually lead to decreasing profitability. Focus.

Carnival of the Capitalists is up and running at new dog old trick. Check it out!