I recently spoke with two aspiring entrepreneurs about launching new businesses. Unfortunately, their chances of success seemed slim because they were more focused on their dreams of wealth than on the essential groundwork needed to thrive. They were simply unwilling to do the thinking, research and planning to be successful. Try not to be part of the 90% of entrepreneurs who fail within 5 years.
For example, the first requirement is to simply write things down. Let’s break down what’s crucial: first, you need to document your plans. This doesn’t have to be fancy; goals and strategies. Start with a flexible document that evolves as you progress, focusing on substance over style. If you can’t articulate your plans in writing, you probably haven’t thought them through.
The initial requirement to develop a successful business is to be able to describe it. What is your business concept? What do want to do, why are you different and why will you succeed? This will change as the concept evolves, but you need a framework to develop and evaluate the components of your business. This framework further guides your development and evaluation process as your idea evolves. Entrepreneurs who fail frequently don’t do this.
Consider the key components of the business. Pricing, quality, service, variety, distribution and marketing are just some of the considerations. Your approach will vary greatly depending on whether you’re selling high-ticket items or everyday goods. For example, selling Superbowl tickets for thousands of dollars is quite different from the cheap umbrella salesman who suddenly appears when it rains.
Communicate your unique value proposition to your target audience. This is one of the most difficult tasks of launching a new business. We all get excited about our differences, but does anyone understand them? Do enough customers care about your difference to change their behavior, or are they committed to a “we’ve always done it this way” mentality?
Develop, test, measure, and adapt. Business is dynamic, so your approach must be too. Many plans, forecasts, and proposals are done in a static format, with one-dimensional analysis and results. Often, they are flawed because we live in a more dynamic and interactive world.
For example, branding, marketing, pricing, and operations all must be viewed as an integrated program rather than separate and isolated activities. Similarly, businesses need to have alternatives at the ready, and processes in place to adapt. Mistakes will occur. Remember, Thomas Edison tested thousands of light bulbs before succeeding.
Will you make money? Many entrepreneurs who fail start with the wrong question: How do I raise money? But they haven’t worked out the details of why they need money, what they will do with it, and how they will pay it back.
I suggest an almost opposite approach. Develop your needs, resources, plans and cash flow and then execute programs to raise capital. Some tips to improve this:
Develop initial timed estimates that will be continually revised.
How much revenue, expenses and profit will you generate over certain periods?
What assets do you and associates have and how much can you afford to risk?
When it comes to financing, focus on understanding your needs, resources, and cash flow before seeking capital.
There are a number of tools to reduce investment needs. These include borrowing against cash flow, outsourcing, pledging personal assets, and developing investments as the business progresses. Outsourcing efforts like manufacturing, distribution, services, and rent are particularly recommended to reduce requirements and adjust as the business grows.
As a rule, most businesses take six months to a year to even start. Consider how long it will take to get off the ground and calculate your startup expenses accordingly. Have you detailed the startup expenses and investment costs to start the business? Those include overall expenses, equipment, salaries, website development, product development, administration, pre-payments (like rent deposits) and more. Remember that upfront marketing, promotions, public relations, and development costs can affect income and cash on hand.
Digital is a critical aspect of almost any entrepreneurial pursuit today. Digital tools are essential in today’s business landscape, so plan to invest in a website and other tech necessities. Digital marketing, like Google ads, frequently has the advantage of both testing and pay as you go. As a result, revenue can occur much earlier than with traditional marketing efforts.
Can you deliver what you sell? Operations and logistics are frequently viewed as secondary functions that can be outsourced. However, efficient management of inventory and staffing can make or break a business.
Balancing and managing inventory to serve demand and reduce closeouts can be critical to success. Even in service businesses, scheduling staff to meet demand and avoiding time and money wasted can be critical to success. Reducing lead times, improving flexibility, and planning can improve effectiveness and lower costs.
Many operations experts have shown that 80% of sales are derived from 20% of offered products or services. Simplicity is key. Entrepreneurs waste time, money, and frequently add confusion by adding too much complexity to their business models. When and if possible, always go to the KIS Method (Keep it Simple).
In summary, success in entrepreneurship requires careful planning, evaluation, and execution. Many failures could have been avoided with better preparation. As my former manager once said, our low success rate wasn’t due to lack of effort; it was because many entrepreneurs were better off keeping their day jobs.
Starting a business is not easy. An entrepreneur needs to understand and express his/her passion. To do so, means to develop a mission statement and a plan. But that’s just the tip of the iceberg. Starting a business also requires enthusiasm, energy, and persistence to market your business concepts to suppliers, customers, and investors.
For more information download a free copy of my book, Passion & Reality for Business Success.
Dr. Bert Shlensky, president of Startup Connection, prides himself on his ability to define what is unique about each and every business. He works closely with individuals to develop a personalized approach that targets specific areas of concern and offers solutions based on his 40+ years of experience. His expert team will address your particular needs while working to save you time and money.
In recent months, we’ve witnessed two impressive instances of technological advancements:
Both Philadelphia and L.A. faced bridge collapses on their major highways. Surprisingly, instead of enduring lengthy repair times, both bridges were up and running in just a few weeks. What made this possible was a refreshing shift in approach—various agencies put aside their usual squabbles over goals and methods and focused on speed and quality. This collaboration led to the implementation of new methods and processes.
Similarly, amidst the tragedies of mass shootings, there has been progress in handling such events more effectively. The scathing report from the Justice Department on the Evolve Texas shooting indicates a growing recognition and demand for proper techniques. Key strategies in dealing with these shootings appear to be clear: authority, training, speed, and coordination among agencies. Although we haven’t yet figured out how to prevent them entirely, we’re making strides in responding more efficiently.
Both of these examples underscore the value of the proverb “it takes a village” when it comes to improving decision-making and outcomes. Another pertinent adage is “the chain is only as strong as its weakest link,” emphasizing the importance of addressing vulnerabilities.
Despite these seemingly obvious recommendations, they are often overlooked. Too frequently, we pursue simplistic solutions without fully understanding the complexity of the problems. For instance, proposals aimed at improving education or alleviating poverty often fail to consider the broader context. Enhancing education, for example, may prove ineffective if children are grappling with hunger, homelessness, or lack of support.
Here are some key considerations for fostering a collaborative approach:
View the whole issue and team: Just as in football, where quarterbacks are essential but dependent on the entire team, organizations should recognize the interdependence of different functions. Focusing solely on product and marketing without addressing logistics or customer service can lead to failures, as evidenced by the Boeing 737 Max situation.
Identify and remove bottlenecks: Streamlining processes and activities can enhance efficiency. Companies like Amazon have excelled in this area, significantly improving customer satisfaction through innovations like one-day shipping. Identifying and addressing bottlenecks through changes in procedures and technology can yield substantial improvements. Self-checkout, automatic tolls, and developing apps are just some examples of how this can be implemented.
Balance risk and opportunity: Fear of risk often hampers efforts to pursue promising opportunities. Sports teams are increasingly embracing risk by taking more three-point shots, stealing more bases, and going for it more on fourth down. Outsourcing can be an effective tool to find great resources, speed development, manage fluctuations and increase effectiveness. Businesses can similarly benefit from taking calculated risks to capitalize on opportunities. Additionally, effective management of liabilities, such as costs and inventory, is crucial for long-term success. For example, developing more common parts, stocking components, and focusing on high volume items can increase efficiency and reduce lead times.
Don’t ignore outlying opportunities and people. Optimizing resources, such as expert personnel in medical teams, can significantly enhance effectiveness. For example, head surgical nurses are critical to provide and manage processes, prep and recovery. Similarly, focusing on high-value customers rather than pursuing a broad market can maximize profits for businesses. For example, banks are focusing more on high wealth individuals which provide the most profits than diverse groups with little potential.
Incorporate change in your programs. Change is happening faster and is more volatile and diverse than in the past. Some examples include museums that have recently been directed to not show Native American exhibits unless they are properly approved and owned, resulting in shutting down many of those exhibits. Women’s rights and demographics are all causing dramatic changes as well. In another example, my granddaughter takes four courses via Zoom at an excellent university. Some professors have adapted to this well by developing new and creative programs. Others just put up a boring lecture in front of a few hundred students. Another example is the world’s largest cruise ship holding over 4000 passengers and 40 restaurants just began its first voyage. And organizations are still developing emotional solutions to work at home rather than understanding strengths and weaknesses and maximizing appropriate solutions. Whether it’s adjusting to new regulations or embracing innovative technologies, organizations must be agile and proactive in responding to change.
Address the weakest link: Pay attention to the viability and profitability of markets and initiatives. Understand the root causes of failures, such as the decline in IPOs. As a result of this, many investment bankers, analysts, real estate developers and lawyers are unemployed or underemployed. On that, it’s important to focus on sustainable growth strategies rather than short-term gains.
Manage exceptional people and solutions better. The University of Iowa women’s basketball team is energizing the game because of the excellence of their star player. While they focus on maximizing her skills, they also incorporate the team, and she is one of the team leaders in assists and rebounds. Michael Jordan is famous for passing the ball to a teammate in an NBA final when he was guarded by multiple defenders. In business we can get too dependent on a simple tactic in devolving competitive strategies. For instance, even though pricing is more complex than we generally acknowledge, there are other factors like service, speed, and in-stocks than can make pricing irrelevant.
In conclusion, while analytics and problem-solving are essential, fostering teamwork and addressing weaknesses are equally critical for organizational success. Remember, it takes a village. By considering alternative approaches, measuring outcomes, and embracing change, organizations can enhance their effectiveness and adaptability in an ever-evolving landscape. This includes incorporating new approaches, intuition and out of the box solutions.
Contact us for a FREE evaluation and get an alternative perspective on your business. We’d love to help you identify ways to adapt to current trends. No one has time for BS—so we’ll cut straight to the point and answer any questions you have. Reach us at:
Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. Please visit our website: https://www.startupconnection.net/ for more information.
When we discuss misinformation, lying is the most common focus. However, there are numerous other types of misinformation. In particular wrong information, missing information, and unavailable information are key challenges that need to be addressed and possible resolutions provided.
We underestimate the importance of simply wrong information in our decision-making. Sources can change, measurements can be incorrect, and suddenly we’re faced with a bunch of errors that inhibit making accurate conclusions and better decisions.
Economic Forecasting, COVID-19 Impact and Embracing Humility
Many economists and forecasters were mostly wrong in forecasting a recession in 2023. While they understood inflation, they ignored the growth in employment, the economy, and consumer spending. Similarly, we are still adapting to the impact of COVID-19 on current analysis. The shifts from 2020 in almost everything from vaccine practices and death rates to how we consume entertainment to remote work must be considered as we’re considering decisions.
Changes in retail, wars, labor battles, politics, etc. are all causing disruptions in our understanding. And because we lack information and experience on issues like electric cars, A.I. and immigration, we’re in the dark and that makes it far more difficult to be able to make the best decisions.
Critical thinking isn’t just about spotting logical fallacies or identifying bias. It’s about fostering an attitude of intellectual humility, a willingness to admit we don’t know everything and to change our minds when presented with new evidence. It’s about creating a habit of asking, “Is this true? What’s the source? Are there alternate viewpoints?”.
Psychological Constraints in Risk Assessment
Certainty and risk both play a big role in misinformation. We need to understand the probability and value of decisions. We need to understand all the information that is available to us – background, probabilities, and parameters – which can greatly impact outcomes.
Figuring out risks, however, can sometimes be tricky, due to several psychological constraints:
People tend to take more risks to win back losses and less risks to follow up on winnings.
Marketers love to push our pain points and focus on our fears.
We overestimate our skills and luck, as shown in the betting industries, where huge profits are made based on countless people believing that they can beat the odds.
Navigating Bias from Statistical to Social Influences
Bias is one of the greatest complications when it comes to making accurate decisions. Professionals usually focus on statistical problems, but things like demographics, measurement, and timing matter as much, if not more. Remember, your data is only as good as your worst input.
But I think social bias – our preconceived ideas about things – is more misleading than statistical bias. Culture and the environment also factor into bias, affecting how we see things. For instance, in presentations, I’ve learned that having food available to the attendees is a hit. I’ve also learned to never be the last speaker. Past experiences and what we want to see can also cloud our judgment more than future expectations.
Misinformation in Setting Parameters, Taboo Topics and Cause-Effect Confusions
Misinformation also messes with understanding our decision parameters. We tend to see decisions as win-lose but flipping that to a “win-win” mindset can be a game-changer. We often miss out on opportunities because we underestimate the chances of everyone coming out on top.
Misinformation is prevalent in topics we tend to avoid discussing – things like religion, sex and I.Q. Santa Claus is one of the only exceptions where it seems proper to include misinformation.
Cause and effect are frequently misused in reaching decisions as well. Figuring out what really causes what, citing wrong connections, and mixing up relationships with causes – those are all common errors.
Trusting Intuition and Debunking “Bubbbe Meise”
Sometimes you must ignore some of the information and just listen to your gut. In Yiddish, there is the word “bubbbe meise” which basically translates to “old wise tales”. This would include things like chicken soup being a cold cure, or the 5 second rule where it’s safe to eat something that’s fallen on the ground if it hasn’t been there for more than 5 seconds, knocking on wood for luck, and numerous unproven folklore we follow.
My favorite is the 60-40 investment rule which has been wrong for over 10 years. We tend to overthink things or we let fear stop us from taking risks, but there is no gain without trying and no reward without risk. If your intuition is telling you something, it’s usually worth listening.
Measurement Challenges: From Gym Scales to Performance Metrics
Measurement is a clear issue in misinformation. For instance, my scale at the gym had me excited because it showed I’d lost 10 pounds over a few months. However, when I went to the doctor, that scale showed only 4 pounds lost.
So how do we improve goal setting and measurement? The first step is to think about it and consider more details and considerations. Long-term versus short-term, quantitative versus qualitative, risk and caution, objective versus subjective all need to be considered in setting goals. We also need to consider the process and complexity of measurement. For example, do you want specific, general or directional results?
Measurement has become similarly complex. How important are results, speed, motivation, innovation, and quality in measuring performance?
For example, I believe automation has improved the speed and efficiency of many customer service processes. However, customer service and satisfaction are frequently sacrificed for that automation. How many times have we been completely frustrated with ineffective electronic customer service efforts?
Promoting Social Responsibility in Fact-Checking
How do we nurture the social responsibility of fact-checking? First, let’s normalize it. Make fact-checking a routine part of how we interact with information. From the news articles we read to the social media posts we share; each piece of information should go through a fact-checking filter.
Similarly, the bandwagon effect can propel us to jump on board with popular yet baseless narratives. Understanding these psychological tendencies is key to unravelling why misinformation can sometimes be so tricky.
Let’s remember that misinformation isn’t just a problem of the information era; it’s a human problem, rooted in our cognition and emotions. By acknowledging this, we can begin to address misinformation in a more holistic way, weaving psychological insights into our strategies to counter false narratives.
Let’s strive to understand not just the ‘what’ of misinformation, but also the ‘why’. After all, knowing our adversary is half the battle won. And in this fight against misinformation, a solid understanding of the human psyche is a weapon we cannot afford to neglect.
Dr. Bert Shlensky earned a PhD from the Sloan School of Management at M.I.T., mentored a few thousand clients at Score and in his own practice, grew Sure Fit products from $50 million to $150 million in sales, including $60 million of direct internet sales, was President of WestPoint Pepperell’s Apparel Fabrics Business and headed the $400 million Culet Shirt Group. Dr. Bert knows what works and can help lead your company to greater profitability and success. For a free initial consult, reach out at bshlenksy@startupconnection.net or 914-632-6977.
At StartupConnection, we’re all about delivering blogs that are not just informative but also packed with actionable insights. We understand that information overload is real. So, we’re testing a new approach – a blog solely dedicated to parameters, giving you the space to prioritize what truly matters. We’d love to hear your thoughts on this, so feel free to drop us some feedback! In this post, we will be discussing optimizing strategies regarding making decisions and taking action.
Developing Programs with Precision
Sometimes, we’re so engrossed in creating programs that we forget about the parameters needed for optimizing strategies. Let’s simplify it. Here are some straightforward tips to consider parameters effectively:
Crafting Your Money-Making Plan
The “Pro Forma Income Statement”
This may sound a bit grand, but it’s your roadmap to cash flow.
Consider how a big marketing budget can affect your income. It may seem counter-intuitive but spending more on marketing might just boost those unit sales.
Investor-Worthy Plans
Investors crave plans but hate wild guesses. Be the entrepreneur who delivers realistic projections using templates. Specific numbers matter, even if they’re just a start. Remember that sales volume goals and pricing strategies are the building blocks of any plan.
Holistic Planning
Comprehensive Considerations
Levels of marketing, overhead, and administrative costs – they all play a role. Analytical, social, and intuitive considerations should also blend seamlessly into your plan.
Adaptability is Key
The world changes fast, and so should your strategy. Regularly review parameters like population, economy, and social values. Stay updated as the latest variables might just be the game-changer.
Navigating Cause and Effect
Decoding Relationships
Cause and effect can be spurious. Relationships involve a mix of factors. Analytics is critical, but don’t ignore intuition, risk, and low probabilities. Just like Gates, Bezos, and Jobs – master the art of thinking outside the box. It is the outliers and risktakers who create much of the innovation, excitement and change in our society.
Managing Bias and Embracing Risk
Navigating the Bias Maze
Bias, especially in small businesses, is human. Be mindful; assumptions, analysis, and data can sway your decisions. Consider different age groups without falling into bias traps.
Risk and Outcomes
Predicting results with historical data is straightforward. However, for new programs or inconsistent data, it’s about educated estimates. Embrace risk as it’s where innovation thrives.
Commit to Action
Nike’s Wisdom: JUST DO IT!
Not making a decision is a decision in itself. Recognize the importance of parameters in your decision processes.
Balancing the 80-20 Rule
Strategic Account Maximization
The 80-20 rule suggests maximizing old accounts with increased potential before reaching out to new accounts. Balance critique with support, collaboration, and teamwork.
The Expertise Quotient
Seeking and using expertise might be the missing link in your strategy. Collaboration enhances effectiveness, so let’s focus on teamwork as well as obtaining expert support.
In summary, understanding and incorporating parameters into your decision-making process is the secret sauce for success. So, let’s navigate these parameters together and remember that optimizing strategies will help to pave the way for effective and strategic decision-making.
Contact us for a FREE evaluation and get an alternative perspective on your business. We’d love to help you identify ways to adapt to current trends. No one has time for BS—so we’ll cut straight to the point and answer any questions you have. Reach us at:
Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. Please visit our website: https://www.startupconnection.net/ for more information.
In a world saturated with negativity, particularly in the wake of the pandemic, it’s high time we shift our focus towards opportunities and unlocking our true potential. Let’s explore some straightforward guides that strike a balance between wisdom and relatability.
Begin with a sprinkle of wisdom. Consider these two thought-provoking quotes:
George Bernard Shaw once mused, “Some people see things as they are and say why? I dream things that never were and say, why not?”
Sheryl Sandberg, addressing the self-doubt that still holds many women back, challenges us with, “What would you do if you weren’t afraid?”
The Realities: A Charted Journey
We all crave success, but let’s not be blind to the ups and downs of the journey. Picture this – a chart revealing the common, bumpy ride to success. It’s a visual cue that appearances can be deceiving, much like those optical illusions where all the lines are r the same length.
Diverse Paths of Entrepreneurship
There are different approaches to entrepreneurship that we sometimes fail to recognize.On one side, big company are all about growth and raising capital, as seen in the fact that 83% of IPOs in the last year were in the red. On the flip side, the majority of entrepreneurs are simply hustling to make ends meet year after year.
Much of corporate innovation is focused is on uncovering superior or novel solutions to existing challenges. Picture this: car companies investing years in refining combustible engines, retailers dedicated to enhancing the shopping experience, and giants like IBM striving to build bigger and better computers.
And yet there’s a whole other league of companies carving a different path. Their mission is to develop entirely new solutions. This shift has given birth to groundbreaking innovations like the electric car, the E-Commerce revolution, and the ever-expanding realm of cloud computing – all championed by these visionary new players. It’s a dynamic landscape where established players and fresh faces alike are shaping the future.
Embracing Change: Cooperation and Collaboration
Change is the only constant, and it’s time to adapt. Cooperation, collaboration, and embracing new resources are the keys to evolving. The game-changer is recognizing that taking risks isn’t synonymous with failure. Testing alternatives to find optimal solutions and gaining experience are crucial aspects of success. Risk is a critical part of every decision. And, frankly, I think we all need more of it. We tend to think of risk as a taboo concept when it’s really not—once you understand it.
Balancing Vision and Execution
“Vision without execution is hallucination,” echoes the wisdom of Thomas Edison.
While we celebrate excellence, we often overlook opportunities to do things better. Streamlining processes, cutting unnecessary costs, and tackling bureaucracy can enhance organizations. Customer service is a function where companies can devote new efforts to improve. Pricing is not a dirty word, and there are numerous tools to improve results without deteriorating your brand. All these actions can contribute to progress and improvement if an organization embraces them.
Battling Bias: The Unseen Culprit
Bias lurks in the background, often leading to unreliable results. Here’s the thing. We love to be right and hate to be wrong. Acknowledging and challenging bias is crucial. The “It won’t happen to me” mindset can be a silent contributor to unexpected volatility. Our brain, working surreptitiously in the background, doesn’t alert us too how biased we actually are. Recognize this unseen force, and decisions become more informed.
Injecting Fun: The Secret Sauce
Don’t forget the fun element!
As Steve Jobs wisely stated, “The only way to do great work is to love what you do.”
And Walt Disney’s advice to “Do what you do so well that they will want to see it again and bring their friends” emphasizes the joy in mastering just having fun.
Tools for Excellence: Reaching Higher Potential
Armed with these insights, recognize the toolbox available to enhance excellence and unlock higher potential. Realistic goals, strategic plans, understanding risks, biases, and having the confidence to embrace your potential – it’s all part of the journey. So, strike that balance, enjoy the ride, and let’s embark on the path to unlocking our fullest potential.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. This combination has been the key to client success. We welcome comments, suggestions and questions You can write him at bshlensky@startupconnection .net or call at 914-632-6977
When you want to stand out, reach out to Bert for the tools that will build your “sticky” brand. My focus is on understanding and analyzing your dilemmas and challenges, so your company becomes profitable faster.
Call (914) 632-6977 or email me at bshlensky@startupconnection.net. Don’t leave without signing up for our useful free eBook!
Feeling stumped or overwhelmed? Contact Bert at (914) 632-6977 or Email to start the process. Thanks!
