Looking for ways to build a brand, and other challenges of entrepreneurship.
Another month, another round of great questions from readers -- about taking a business to the next level, getting a chance to run and own a company, improving management skills, and developing a business idea.
Moving On Up
I am the owner of a small eponymous handbag company that is facing a tremendous amount of competition, as designer handbags have become a big retail category. My business was doing very well until about a year ago, when sales started to slip. I have received wonderful editorial credits in the top fashion publications and have had placement in the finest stores in the country with good sell-through. Last year I decided to take sales in-house, instead of using a sales rep, because I thought I could be the best spokesperson for my product. I'm still looking for additional sales, but my primary goal has always been to build a solid brand. I've established my name, and my company is known as a viable player. How can I get to the next level? --Nancy
"If you want to get to the next level, you're doing it exactly the wrong way," says veteran entrepreneur and Street Smarts columnist Norm Brodsky. "Handling your own sales is not how you build a brand. You need to develop a certain mystique as the founder, the designer, the person whose name is on the product. You can't do that if you're spending your time qualifying leads, making sales calls, getting doors slammed in your face, and doing all the other things that go into making a sale. It's fine for the salesperson to bring you in to close an important deal, and you should certainly know all your customers, but you shouldn't be doing all the nitty-gritty work of selling, even if you are the best spokesperson for your product.
"Getting to the next level means letting go. To build a brand, increase your sales, and grow the company, you need to turn responsibilities over to other people. That can be hard, I admit, particularly when you believe you can do a given job -- like selling your product or service -- better than anyone else can, as most entrepreneurs think. I was the first dispatcher in my delivery business, and I always thought I was the best dispatcher we ever had (which probably isn't true). But if I were still dispatching, I'd have a very small company today, and I wouldn't be enjoying the wonderful life I'm able to have because of my business."
I recently lost my job as a chief financial officer when the start-up I worked for couldn't raise the money it needed to continue. Now I'm trying to figure out what to do next. I'd like to get back into the entrepreneurial world, but I have no savings to speak of, and my personal network is limited. On the other hand, I do have a record of success in entrepreneurial companies.
My goal is to become a president/CFO of a company and have a chance to earn an equity stake. I'm sure there are entrepreneurs who are near retirement or who want to get out or whose business has grown beyond them. The problem is, I don't know how to link up with them. Can you recommend a way to uncover these opportunities? Right now I'm spinning my wheels. --Paul
"Unless you have an established track record in a particular industry, Paul, the kind of opportunities you're looking for come only through personal networking," says Martin Babinec, founder and CEO of TriNet, in San Leandro, Calif., a five-time Inc 500 company that provides online and in-person human-resource services to small and midsize companies. "Even though your personal network is limited, that's where you have to start.
"But to be successful as an executive, you must continually expand your network -- through consulting, speaking, writing, and volunteer activities with industry groups, professional associations, the chamber of commerce, whatever. You might also try to develop relationships with commercial banks that lend to small companies, and especially with people in the banks' loan-workout departments. Let them know you're available as a resource to help on troubled loans. One of those situations might lead to just the kind of opportunity you're looking for. In any case, you want to make sure there are enough people out there who know your skills, talents, and interests -- and who will think of you when an opportunity arises."
Growing Up As a CEO
I have a company that makes women's belts and other fashion accessories. After eight years in business, our sales are approaching $20 million. I realize that you can't run a $20-million company the same way you run a $10-million company. My fear is that my management skills and knowledge aren't growing as fast as my business. How can I make sure that I keep up with my company? --Steven
For this one, we turned to Ken Hendricks, founder and CEO of ABC Supply Co., based in Beloit, Wis., which he has taken from zero to $1.4 billion in sales in 20 years. Along the way, ABC Supply -- a wholesale distributor of roofing supplies -- became the only company ever to go from the #3 to #2 to #1 spot on the Inc 500 in successive years.
"You need to begin by giving yourself more credit for what you've done," says Hendricks. "It isn't easy to build a $10-million company, let alone a $20-million company. I'd say you're doing a fine job, and I'm sure your management skills have grown in the process. If you want to learn more, you should get involved in industry associations. Go to trade shows. Attend business conferences. Spend more time with people who have real hands-on experience in your industry and other industries, and from their ideas, pick and choose the ones that make sense for you.
"There's really no big mystery to keeping up with your business. The main thing is to make sure the company continues to do whatever made it successful in the first place, and never lose track of where you want to go. Everybody told me my company would be different at $100 million, and then at $300 million. People said, 'Oh, man, when you get to $700 million, it's a whole different ball game.' I didn't listen to any of that crap. I just did what was necessary to keep moving forward -- staying in touch with customers and employees, focusing on the basics, learning from mistakes -- and my knowledge and skills more or less evolved. Yours can, too."
The First Step
I have an idea for a business that I think could be very successful -- a gym and recreation center with three or four basketball courts and some weight and exercise equipment. It would be a clean, safe, comfortable place, open seven days a week from 6 a.m. to 10 p.m., where men and women would come to work out and play or watch basketball. We'd cater to real basketball fans, although the space could also be used for parties and small-business events. There would be vending machines with snacks and drinks. We'd also videotape the games so that players could watch and analyze their moves the way the pros do. My question is, What should I do first? --Randy
Ari Weinzweig has cofounded seven companies, including a world-famous delicatessen, all of which are part of the Zingerman's Community of Businesses, in Ann Arbor, Mich. He has also advised many other entrepreneurs through Zingtrain, Zingerman's training and consulting business. "I'd start by writing down what success will look like," he says. "You need to have a clear, inspiring, and strategically sound vision, which is different from a business plan. Think about where you want to be in 10 years. What will go on in the gym? Why will it be special? How will customers talk and feel about it? What will the staff feel about it? How will the community view it? What will your role be? How much money will you make? How much time will you be spending in the business? All those things. I've written articles on this, if you'd like to see them.
"Without going through some such process, it's very difficult to know how to proceed. If your vision is to have 300 gyms across the country and a publicly traded company, you need a start-up plan that's very different from the one you'd have if you just wanted one really special gym in Des Moines. For that matter, you might handle the launch one way if food was going to be the differentiating factor and another way if you were planning to emphasize some sort of special equipment.
"So it's important to think through all those issues. Of course, you'll eventually have to decide on specific action steps, but that comes later. You need to begin with the end.
"Once you have the vision down, you should bounce it off people you respect and those who play a significant role in your life -- family members, bankers, partners, advisers, and so on. Not that you should necessarily let them change your vision, but their reactions will help you clarify what you want to do. You can then figure out the near-term action steps you have to take. They'll pretty much flow from the vision."
HAVING TROUBLE SLEEPING LATELY?
Could you use some advice from an experienced entrepreneur who's been where you are and figured out what works and what doesn't? Send your questions to IncQuery@inc.com. Editor-at-large Bo Burlingham, aided and abetted by Street Smarts columnist Norm Brodsky, will find the best people around to answer them. And if you don't like their answers -- well, you can tell us that, too.
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