Dr Jeff Cornwall

We have talked about the growing number of aging baby boomers becoming entrepreneurs later in life. This article at Entrepreneur.com reports that many of my comrades are choosing franchising as their entry strategy. This is not a bad approach, as many of these folks have spent their lives in the corporate environment. Franchises can help provide structure and systems to help with this sometimes difficult transition.

Well, that’s it for this stop of the Business Book Blog Tour. It’s been an enjoyable day!
Thanks to Tom Ehrenfeld for sharing his insights from his book The Start-up Garden.
Thanks, as always, to Todd at A Penny For for putting all of the BBBT’s together.
Join in the discussion with Tom tomorrow as the Business Book Blog Tour moves on to The Small Business Blog.

Question: Many entrepreneurs like to talk about a culture of “family” in their businesses. Yet, you talk about the importance of setting boundaries when relating to employees. Is it unwise to build a business with a sense of family as the basis of its culture?
Answer: First of all, the answer depends to some extent whether you are talking about the Partridge family, or the Manson family. In other words, a happy family or an unhappy one? Hint: the former tends to be better than the latter. Because everyone has a different sense of family, I’d state instead what seems to me an ideal to strive for in terms of creating a healthy culture at work.
On the extreme, and not necessarily unhealthy situation, great companies are “cults,” as several experts point out. The individuals feel a strong sense of belonging to and identification with the company, they understand the rules and beliefs and way of doing business. They are loyal to the company, and expect that they will where can i buy topamax serve the company as it will serve them.
In terms of startups, I think the key issue has to do with setting boundaries and being extremely clear about mutual expectations and agreements in the present and evolving future. Because the roles and responsibilities of individuals often cross functions, exceed traditional working hours or settings, and change on the fly, it’s critical that issues such as compensation, responsibility, and authority are explicitly discussed at the beginning, and revisited over time. Moreover, individuals must have some set of goals that are defined in a manner that supports and grows the company. None of these conversations need to be excessively formal or bound in absurdly overdone legal terms. The point is, however, that the people who run the company and do the work must establish a process of managing people that is perfectly transparent and never prey to personal fiddling. This means establishing a formal way of establishing goals, reviewing performance, sharing the upside, and putting so-called undiscussable issues on the table. Anything less essentially invites confusion and conflict down the road.

Question: What are some of the ethical challenges that can be created when building a business through bootstrapping and how best can an entrepreneur avoid them?
Answer: Do the right thing, always. I find it very difficult to discuss ethics in a generalized way. Starting a business can push individuals to stretch the truth for competitive advantage. This can come in any number of ways. Owners might claim to be bigger and more established to lure investors or clients. They could attract employees or customers with exaggerated tales of prospects. They might claim to have certain key elements in place before they are locked down simply to calm key players. The opportunities for fudging will only multiply as a company gains traction. Founder/owners can justify their extreme behavior by saying its all for the company—that it’s business, not personal. But of course it really is all personal, to someone.
So I think the real issue is quite simple. Do the right thing always. Be honest to people. Practice the golden rule. And always do what you say you will do. I truly believe that a culture of openness and honesty foments more of the same, while one that sanctions untruths will inevitably create more lies.

Question: Why do think it is so important to know how much money you will make before you try to figure out how much money you will need to raise?
Answer: The real issue is fit, in this case financial fit. Different types of companies have very different types of needs, in terms of people, resources, and capital, and you simply need to be clear about what your particular needs will be ahead of time, or run the risk of wasting time chasing the wrong capital, getting too much capital (a problem), too little capital (another problem,) capital that comes with onerous requirements, capital that comes with destructive investor/partners, capital that drives individuals to do foolish and counterproductive things, and so on.
Modest businesses have modest capital requirements. Capital intensive businesses call for, well, intensive capital. Those rare high-potential companies with great growth prospects might qualify for venture buy topiramate weight loss capital. But every choice has consequences—both advantages and disadvantages that the founders must reckon with prior to accepting the backing.
I hate to sound simplistic on this point. Maybe the real point is this: choosing a source and type of finance is essentially a strategic choice that has great bearing on the future of your company. And it’s not just that you need the right fuel in the tank, as it were (whether gas, diesel, or rocket fuel.) Choosing the right financial backing means vetting everything that comes with the funds: are you using this process to learn more about your company’s health? Are you seeking backing from people with industry experience or terrific contacts? Do you see this as a process in which securing the capital is a crucial part of a larger process that moves your company forward?

Question: The difference between business plans and business planning is one that you highlight in your book. Can you give an example of why this distinction is important?
Answer: Recently a really smart guy referred to business plans with what I consider the perfect word: currency. Business plans serve as a form of currency—a fluid and temporary repository of information (and imagination) that fuels conversations between the players and potential players in any venture. Business plans have two fundamental purposes: to engender meaningful dialogue among participants about how to move the venture forward, and to foster real learning about how to achieve the goals.
Therefore business plans must be realistic. Any seasoned investor will fail to be swayed by outrageous promises of return on investment if the players lack credibility. Having great numbers only makes sense if the plan displays a seasoned and well-reasoned explanation of how the particular business plan author will achieve the stated goals. This means having the right resources (people, strategy, context, etc.) to make this plan happen.
Planning is a constant process of conversation and testing and reflection and action and learning. Business plans are static documents that may or may not be proven accurate. In fact they will invariably be proven inaccurate, for few if any business plans are ever fully realized in terms of financial projections. The important function of the plan is to guide the principle players towards high-leverage action.
Oh yeah, a slick and credible business plan can help someone raise money, which is a good thing. But again, this usually generally benefits individuals who were already well-positioned to receive funding in the first place.

Question: You begin your book with the importance of conducting a self-assessment before beginning a business. How can entrepreneurs avoid losing sight of the insights they gain from this self-discovery as their businesses grow?
Answer: Ideally, the insights become embedded in their actions. That is, realizing what you care about and are good at should get you started on the entrepreneurial path. Given that success is invariably an iterative process, based on where you are rather than where you aspire to be, the ability to accurately assess your potential venture will situate you in the most fecund ground. (Pardon the flowery jargon here…) I guess what I’m saying is that the self-assessment should include a realistic stock-taking of what you know (i.e. the copper pipe market or the legal profession) as a way of spotting opportunity. It also includes what you care about, who you know, what you’re good at—but not for the sake of achieving enlightenment (which is not a bad thing of course) but as a way of forming an entrepreneurial vehicle with a realistic chance of health and success.
So get the insights right from the start. As you proceed down the path, remaining open to what you learn, you will continue to expand what you know, and continue to becoming truer to the insights. AND if you business begins to falter, it could be that you don’t have enough cash or customers (generally a bad thing.) But it could also be a function of straying from your source of value (i.e. what you know, care about, are good at, and control)—or never realized what that source of value was. So take the time to reassess.

Welcome to this stop of the current edition of the Business Blog Book Tour. Our guest today is Tom Ehrenfeld, author of The Start-up Garden.
Throughout the day I will be posting my questions to Tom and his responses. Stop by often and join the in the discussion. The author will be checking in to see the comments and questions that you post and will offer additional insights based on what you have to say. As I mentioned earlier this week, we did have a few glitches after we upgraded our software, but the comments feature is now working flawlessly. Jump into the discussion any time!
Question: I like your metaphor of a garden for the entrepreneurial process. Are there any values or personal characteristics common to “successful” gardeners that also would be useful for entrepreneurs to think about?
Answer: The core idea of my book is that there are essential skills for individuals to master in order to realize entrepreneurial success. That is, simply to get in the game you need to become financially literate, to understand the principle of boundaries and goals when employing people or dealing with professional colleagues, to get the notion of a customer at a fundamental level, for starters. I think that when you develop these skills you have more of an opportunity to leverage your personal passions, skills, and beliefs.
Are there common values or characteristics to successful entrepreneurs, in my book? I guess the answer is both yes and no. No, in the sense that I truly believe entrepreneurship can be practiced by anyone with a strong conviction to bring a product or service or experience to life for others. But to do so an individual must be willing to put up with certain elements of life, such as uncertainty, that just won’t play with others. If pressed, I would say that the following traits are in general quite useful for entrepreneurial growth and success:
*sense of self and purpose—an understanding of what you really are good at and want to do.
*willingness to live in gray areas—a relative comfort level with situations that are by nature not preordained.
*an ability to ask for help—whether it’s asking for an investment or for time from a customer or supplier or mentor, you should be able to make reasonable requests without flinching.
*tempered optimism about the world and your place in it—a sense that when you act on the things you really care about you can make a meaningful difference.
*sufficient imagination to make unexpected connections.
*the ability to think backwards from a situation as well as think forwards—which means, the talent to reverse engineer success. This means having the capacity to start with the end in mind (in this case a valuable and sustainable proposition for a distinct customer) and then work backwards to figure out how to make this happen.
*an ability to learn and grow—and most of all, a reflective capacity. That is, an ability to learn from experience! To do, to take chances, and learn from mistakes. And to learn from experience above all, rather than from simple argument or intellect or emotion.

Thanks to Bill Hobbs for bringing the golf picture back to my site! Public pressure is a powerful weapon, sometimes.
Speaking of golf, while I was out this morning I was thinking about how my swing had been going so well for the past few rounds. But, now it was once again starting to fall apart this week. It reminded me of my days as an entrepreneur. When things started to run smoothly I would find myself relaxing just a bit too much. I would start to take my mind off the little things–not paying attention to details like I should. I would not pay attention to A/R like I should. I would not keep my eye on managers that needed me keeping an eye on them. And then, bit by bit things would start to get off track.
That is like my swing, I’m afraid. When I finally get it worked out I stop thinking about the little things that keep me hitting the ball straight and solid. I forget to keep my head still. I get off plane on my back swing. I tighten up my grip too much.
Certainly one can over analyze a business or a golf swing. But neither can completely take care of themselves. Even golfers with “natural swings” have to focus on what they are doing. And even the best business opportunity requires careful implementation and management. They really both come down to one thing: execution.