Who should be the successor of a family owned business when the founders are no longer available, willing or capable of continuing to run it?  That’s definitely a mind over money matters choice. 

My friend and colleague Dawn Fotopulos, a much sought after small business advocate and coach is the Founder of Best Small Biz Help.com, The Solopreneur’s Lifeline(http://bestsmallbizhelp.com/meet-dawn-fotopulos/).  She says usually one or two people are in charge of the business and have been the ultimate decision makers and they must be willing to delegate authority before they’re ready to sell or turn the business over to be run by someone else.  Why?  Fotopulos says because such a transition requires a three year on-ramp/off-ramp time frame to do it successfully and suggests the following: 

• Think about succession at least three years before you want to transition
• Delegate authority and not just tasks to your key proven people
• Seriously consider non-family members as viable leaders of the business 

If you’re the founder of a family business, are facing this decision and considering appointing two people to run the company and use an accountant as a referee – Fotopulos says you might want to reconsider.  She is a firm believer that you can never have a 50/50 split in ownership. 

“It’s a recipe for disaster,” she says.  “Designating more than one owner in a succession plan doesn’t work.  Someone must ultimately be in charge.  That person needs to understand the mission of the business.  Although a business should be able to run independent of the founder,” she goes on to explain, “it only can when the owner delegates authority regarding decision making and not just delegate tasks.”

A succession plan takes time.  So does identifying the right person.  Mentoring a successor requires good, time consuming, on-the-job training, nurturing and giving adequate lead time for a smooth transition.  Most family business founders haven’t done that or identified their successor because they’re structured the business around themselves.  Even if the owner/leader has identified the person to succeed them, often they can’t let go or they don’t think far enough ahead to implement change and find that it’s a crisis that forces putting a succession plan into play.

Lost time is lost money.  Forward thinking about the transition of power is a bottom line issue.  Mind over money really matters when it comes to this decision.  It should be made from the mind of a good business owner rather than the heart of a hopeful parent/founder.

Fotopulos says the successor boss must be responsible for the business viability year in and year out.  The entrepreneurial generation (founders) made the sacrifices but need to be sure that when the second generation (adult children) takes over, their willingness or motivation often isn’t the same.  Thus the s suggestion to consider a longtime, loyal employee – a person who is considered your critical second in command – to become your successor.

When choosing the person to succeed you in your successfully run and profitable family business, as you consider who best can do that, remember:  It’s your money so take it personally (TM).  It applies here more than ever before.

Here’s to your health and wealth.

TAGS: Communication Skills, entrepeneurs, financial planning, Women and Money

This Saturday’s New York Times featured a front-page story about how the recession is prompting some people to start their own businesses instead of looking for new jobs. It’s an encouraging story if you’ve ever considered the option of creating your own venture, large or small.

While some people decide to dive headfirst into entrepreneurship, others feel more comfortable dipping in a toe, then an ankle, then a knee before swimming solo.  The choice is very personal and depends on your experience, finances and overall comfort with risk.  But, if you’re thinking even just a little bit about starting your own business, it’s never too early to take actions that will set you up for taking the plunge when you’re ready.  Here are some suggestions for first steps to take if you’re thinking about starting your own small business or becoming a full-time freelancer:

Find Real and Virtual Mentors. I guarantee you are not the first person to start a business in your industry. Use Facebook, LinkedIn, Twitter, DowntownWomensClub.com, Make Mine a Million $ Business, Yahoo groups and other networking organizations and websites to make connections with people who have started similar-sized businesses (though not potential direct competitors  — as you can imagine, it makes me really cranky when someone asks me for advice on how to start a business exactly the same as mine!).  Ask people how they got started and what advice and recommended resources they might offer.  You can also use the web to research successful entrepreneurs.  What do their websites look like?  What experience is listed in their bios or LinkedIn profiles?  What professional credentials do they maintain?  Take notes!

Understand the Essentials. It’s not the most exciting part of starting a business, but it’s crucial to research any licenses, taxes and insurance you’ll need to go solo, and I recommend doing this sooner rather than later.  Start a list or folder to keep track of everything, and don’t be afraid to ask experts for help, especially an accountant and a lawyer.  You can look to freelancers unions, entrepreneurial websites (my faves are StartupNation.com, FastCompany.com, Inc.com and Entrepreneur.com) and the Small Business Administration for free or low-cost help determining what “official” steps are required. Above all, be sure to find independent health insurance. Never take the risk of being uninsured.

Learn How to Market Yourself. One of the most important requirements of entrepreneurship is the ability to sell yourself and your ideas.  Even before you launch your own venture, you can begin working on this aspect of self-employment: Join high-profile committees of industry organizations to make yourself visible to members (who may be future clients of your new business). Volunteer at a nonprofit organization related to the business you’d like to start. Take professional development classes online or at a community college to enhance your business skills and industry expertise. Start a blog on a topic related to your entrepreneurial interests. Start posting comments and articles on Twitter that establish your expertise in the area of your choice. Check out the Personal Branding Blog for ongoing tips on marketing yourself.

Read up. Many, many, many people have written great books on how to start and run businesses of all shapes and sizes. Here are some of my personal favorites for young entrepreneurs.

Free Agent Nation: The Future of Working for Yourself

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything

Getting Started in Consulting

Six-Figure Freelancing: The Writer’s Guide to Making More Money

The E-Myth: Why Most Small Businesses Don’t Work and What to Do About It

If you have more how-to-be-an-entrepreneur books you’d recommend to aspiring entrepreneurs, please share in the Comments section!

Each of the above activities will increase your leadership experience, expand your network and, perhaps most importantly, build your confidence that there is a world outside of full-time employment.  The plunge into entrepreneurship could even take place sooner than you thought possible.  Or, if you find yourself resisting these actions, it may be a sign that you’re not quite ready to leave the regular paycheck pool, even if it is hard to find a job right now. Either way, self-employment is an option that many people consider at some point in their careers, so it’s always worth a bit of exploration.

A version of this post originally appeared on the Lindsey Pollak Career Blog.

TAGS: entrepeneurs, Generation Y

This is the second post I wrote to help entrepreneurs- both the finalists in the Yahoo Seeds for Success Program as well as The Think Pink Line readers. :

In addition to the negotiation planning process I wrote about earlier, I also offered some suggestions to the Seeds For Success finalists about negotiation process. Among them:

1. Create your business’s “standard” way of doing things and use that as a way to kick off a negotiation. For example, a “Usual Terms and Conditions” one-pager that you can use to describe the ways you do business. This is not to say that you can’t change any or all of these but it can make opening the conversation easier and can keep you on track so that you remember to bring up the things that are important for you to discuss.
2. Choose the method you’ll use to negotiate. Think about the people with whom you will be negotiating and plan a strategy. For example, one of the business owners is planning a trip to China to meet her suppliers in person later this year. While email has had to suffice in the meantime, she wants to build the relationship by spending some time fact to face.
3. Strike the business deal first, then ask your attorney to document it, advising you of the legal issues you should consider. Don’t delegate negotiating the business part of things to your lawyer – that’s not her expertise.

Paying attention to the negotiation process won’t solve all the issues that you’ll be negotiating about, but my experience is that it can certainly help!

This post also appeared on Shine, Yahoo’s new destination site for women.

TAGS: business owners, entrepeneurs, negotiation skills, playing to win, small business

Lois and I are both serving as mentors for the three finalists in the Yahoo Seeds for Success Program – how much fun it is to talk with such enterprising, energetic women!

Each of the entrepreneurs I spoke with was very clear about the myriad of opportunities to negotiate ─ with suppliers, service providers, independent contractors and, of course, customers and prospective customers.

For these three businesses as well as every other start-up I know though, when it comes to negotiation, it can seem as though it’s a clear case of David v. Goliath. So the question is:

How do you negotiate effectively when the other party has more leverage? (more…)

TAGS: business owners, entrepeneurs, negotiation skills, playing to win, small business

Maintaining excellent relationships with clients should be a top priority for anyone who provides services; sadly, some ignore the basics. Here is my top five list of “what not to do”:

1. Learn on the client’s dime.
   Don’t be shy to take on a project even if you are not sure that you have the skills and experience to do it; particularly if you are on a per diem or hourly arrangement. After all, whatever you learn while you are on the clock for this client, you’ll know for your next project.
2. Blame the client.
   This is particularly effective when you have failed to estimate project costs appropriately. Tell the client that you can’t be responsible for “scope creep”; not only will you get paid for you but you didn’t know (see #1), but you will introduce guilt into the dynamic.
3. Don’t deliver on time.
   Deadlines are made to be compromised. Your client won’t mind a little slippage here and there; he/she will understand that you are busy.
4. Share your problems with your client.
   Be open about the fact that you have personal problems, technological problems, competing projects etc. Your client, a nice person, will surely understand and make allowances given your troubles.
5. Let your client know you don’t trust him/her.
   Insist on being paid regardless of your failures. Don’t try to rectify the damage you’ve done, trusting that the client will abide by your agreement. Stop work if the client withholds payment; it’ll probably cost your client a lot of time and added expense to hire someone else to finish up what you failed to deliver.

Of course there are more obvious ways to damage a client relationship — for example, not responding in a timely manner to the client’s questions. Rest assured, however, adding these to the mix will ensure you will never get more business or referrals from this client. So keep up your marketing efforts!

TAGS: entrepeneurs, fixing mistakes, growing your business

Last week I provided a list of things to consider if you’re thinking about starting your own business.  Today I want to give you a list things to avoid.  Most people know me as the author of Nice Girls Don’t Get the Corner Office and other books, but, in fact, I’ve been the President of Corporate Coaching International for over 20 years.  I can tell you my worst day working for myself is better than my best day working for someone else.  That doesn’t mean, however, there weren’t a few rough spots along the road to ultimate success.  Let me tell you about 3 of the most common pitfalls women experience when starting their own enterprises and how to avoid them:

• Reinventing the wheel.  One of the biggest mistakes women make is thinking we have to go it alone.  We may ask for directions more than men, but we don’t ask for help.  There’s no need for you to go it alone when there are people out there who have been there, done that.  Many cities have free services for small business owners and there are business coaches who cater to entrepreneur
• Undervaluing your product or services.  Women, more than men, are afraid that if they place too high a price on their services no one will buy them.  Placing too low a price on your product causes people to think it’s not worth it.  Charging more than the market can bear will cause you to lose customers or clients.  Do your research, find out the going price in your market and charge accordingly. 
• Listening to nay-sayers.  When I started my own business, my mother said it made “her stomach turn” to think of me being “unemployed.”  I had two brothers who already owned their own businesses, but she doubted my ability to go the same route.  Surround yourself with “yea-sayers” – people who think like you or who support your efforts.  Join the National Association of Women Business Owners (NAWBO) for the support you need.  

For a free entrepreneur’s quiz to see how prepared you are to run your own enterprise, contact me at info@drloisfrankel.com. Good luck with your venture!

TAGS: entrepeneurs, entrepreneurial mistakes, women business owners

By now it’s no secret that women are leaving corporate America to start their own businesses at twice the rate of men.  Statistics show that over 75% of women-owned enterprises open for business in 1997 were still operating in 2000.  That’s about equal to the survival rate of all U.S. businesses.  Recent data also indicates that women invest more in their businesses than do men.  Which just goes to show – women have it what takes to run and maintain successful operations. 

If you’re in business for yourself (or thinking about starting your own company) there are some things you can do to grow your company:

1.         Follow Mrs. Fields Recipe for Success.  Debbi Fields, founder of Mrs. Fields Cookies, once said it was all about passion, persistence, and perfection.  Whether it’s starting a non-profit organization or a for-profit business, you’re going to put a lot of time and energy into it.  Your focus has to be directed toward something you are so passionate about doing – and doing well – that nothing can deter you from success.

2.         Develop a clear vision of where you want to go and a strategy for getting there. Many entrepreneurs with great ideas fail because they think their product or service should sell itself.  They work hard, but not smart.  Your vision of where you want to be a year, five years or even six months from now will guide your day-to-day actions.  Write it down.  This makes it concrete and tangible rather than just an idea floating around in your head. Then develop specific and measurable steps for how you’re going to achieve it. This is your blueprint for success.

3.         Create a distinctive brand.   There are thousands of motivational speakers, meeting planners, and trainers marketing their services.  What distinguishes you from your competition?  It may sound counterintuitive, but rather than try to be all things to all people, create a narrow niche that identifies you as an “expert” in your field.  Author Barbara Stanny uses the tag line “The Leading Authority for Women and Money.”  I use “Get and Keep the Job You Want.”  Make your brand synonymous with your area of expertise. 

4.         Think and act BIG.  When Jamie Foxx accepted the Academy Award for the starring role in the movie Ray he thanked his grandmother for teaching him to “act like you’ve been somewhere.”  Big is relative.  You may never aspire to be the biggest agency, but you should act as if you already are.  Doing so causes you to see things and consider options you would otherwise overlook or think impossible.  When I started my business I put thousands of dollars into marketing materials at a time when I could ill afford to do so.  But it made me look and feel competitive.  I had to live up to the “big” image I conveyed to potential clients and eventually my firm became it.

5.         Learn the language of money.  In  Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make with Money I talk about the fact that women are less likely to understand the basics of money and investing than men.  Regardless of the size or nature of your venture, you need to understand how to make it profitable.  As an entrepreneurial leader you’ll be involved with budgeting, investing, payrolls, or other forms of money management.  Take a course in finance for non-financial managers at your local community college, start reading The Wall Street Journal, and other money magazines.

TAGS: entrepeneurs, growing your business, women business owners

If you own your own business or consulting firm — or if you’re thinking of becoming an entrepreneur — you’ve got to think beyond your technical expertise to your relationship with your clients or customers.   Any good entrepreneur will tell you, you can be the best in your field, but if you can’t build relationships with the people who hire you, you won’t be in business for long.  Author David Maister wrote a book that I just love:  The Trusted Advisor.  He talks about the fact that as our relationships with our clients or customers deepen, we become more than an expert to them.  We become “a trusted advisor.”  Someone they look to for honesty, a sounding board, and sometimes plain old friendship.  Here are some coaching tips for how you can become a trusted advisor in your own business or even working for someone else:

1.  Be a better listener than talker.  Entrepreneurs fail all the time because they provide clients with services they think they need, but that don’t really solve a problem or fit the situation.  I recently “fired” my insurance agent because he kept trying to sell me products unrelated to what I told him I needed. 

2.  Be discrete.  This means you don’t talk about your clients or use their names without their permission.  I once overheard a cell phone call in the airport that was totally inappropriate.  It was a consulting firm that was working on the campaign of a famous senator.  By the time the call was over I knew all the tactics they were going to use in an upcoming election.  If the senator ever got wind of it I’m sure this company would have been fired.

3.  Be generous.  No one likes to think they’re being gouged.  Set a fair price on your product or services but know when it’s appropriate to throw in something extra or not bill for a ten minute telephone consultation.  In the long run it won’t make much difference to you but it will to your customers.

4.  Be someone others want to be around.  People don’t buy your product or services, they buy you.  There are plenty of people who can provide what you sell — why should anyone buy from you? 

5.  Be honest.  If you’re not the best person for a particular job, recommend someone else who is.  Remember the scene from Miracle on 34th Street where Santa Claus was sending shoppers to other stores?    It wound up getting his store even more customers because they appreciated his honesty.  Similarly, if your client or customer asks for something you think isn’t appropriate for the situation, say so rather than simply provide it in order to make the sale. 

TAGS: business owners, consulting, David Maister, entrepeneurs, small business, trusted advisor