Business advice from the field

One of the most enjoyable moments during the Renaissance Business Planning Class is when we invite graduates back to the classroom to share their experiences and their business advice. They talk about their successes but also reveal their struggles and mistakes, and what they might have done differently. Their advice has a profound impact on the current students who are about to launch or expand enterprises of their own.

In that tradition, I asked some of my clients and past students to share their thoughts on a common growth challenge for small business owners: balancing business skills with the complexity of the business. I recently shared six key considerations on this topic. I was curious to hear from small business owners in the trenches.  How did their business skills match the complexity of their business when they first opened? How have they dealt with this tension throughout their business’ evolution? What advice would they want to share with others?

Here is one story…

Heidi Gibson and Nate Pollak
The American Grilled Cheese Kitchen

advice
When Heidi and her partner Nate opened The American Grilled Cheese Kitchen they already had general business expertise, people management skills and financial management experience but they were new to the restaurant industry and lacked specific industry skills. Heidi and Nate’s approach was to be honest with themselves about their own abilities and get help. “We took a cold hard look at what we did and did not know how to do, and then we recruited advisers who could teach us, or hired staff who already had the skills we lacked.”

Heidi and Nate took a similar approach when opening their second location. They had never run a multi-unit operation before. They sought consulting from other multi-unit operators, and hired general managers for each store who had come from multi-unit backgrounds. “We tasked the managers in the stores with the responsibility of ensuring consistency across the stores, not just within their own. For us, hiring managers who brought experiences and skills to the table that we did not have ourselves was crucial.” With the added complexity of two locations, Heidi and Nate decided to outsource their bookkeeping, too. “We hired a bookkeeper who had deep experience with multi-unit restaurants, which brought more expertise to our operation and freed up our time to handle other issues.”

Just this month Heidi and Nate opened their third location and published a cookbook, Grilled Cheese Kitchen: Bread + Cheese + Everything in Between!

Heidi’s advice for other small business owners:

 

Be brutally honest about what you are good at and what you’re not.

For the things you are not good at, find a way to outsource them to someone who is good at them. This goes double for bookkeeping and accounting if you are in a high-volume, low-margin business.

Ask for help.

There are a lot of resources out there for growing business owners, including Renaissance, SBDC, ICA and most importantly, other business owners. People want to see you succeed and you’ll be surprised at how much they want to help.

Don’t skip financial forecasting.

Many small business owners underestimate their financial management needs and make mistakes with finances when starting or expanding a business. The worst-case scenario is running out of cash, and sometimes growing can really chew up cash. You’re in a much stronger position to secure financing before you run out of cash rather than waiting until you’re down to the wire. Take the time to forecast cash flow, accounting for your growth needs, and start investigating funding options early rather than late.

Check out these tips on balancing your business skills with your business’ complexity and stay tuned for more words of wisdom from small business owners!

Grappling with change

The only thing constant is change.

As small business owners, we constantly navigate change. The ups and downs of product sales, hiring employees or letting them go, adjusting (or pivoting) our business model to match the marketplace, or simply dealing with our own drive and ambition. Change is inevitable and necessary for our businesses to survive and thrive.

change

Predictable changes
It would be nice to know when change is coming. We can then predict how it will affect us or our business—such as a seasonal spike (or dip) in revenue or a competitive advantage opportunity—and then plan for it. For significant shifts to our business we can take initiative and create transition plans. These plans can map out specific action steps and a management timeline. This could be for a new affiliation, a joint venture, a ownership succession or a business sale. Through a series of steps over months (or even years), we can make sure that a big change happens in the best way possible.

The unpredictable
Sometimes change happens to us. Someone we love dies, we get sick, we lose a contract, or someone important moves away. When something unexpected happens—either in our personal life or in our business—it can easily disrupt our world. We lose our sense of control and can be at a loss for what to do next. Are we going in the right direction? Are we on the right path? Should we be doing something else?

Here are some strategies that I find helpful when navigating unexpected changes.

Acknowledge the change and your fears.
When experiencing an unexpected change, it is natural to feel awful, fearful or just uncomfortable. The first step is to acknowledge what you feel and that you are in a difficult place. The situation usually doesn’t get better by pretending it didn’t happen.

Seek support.
Reach out to others to share what you are experiencing. Your loved ones and colleagues can help remind you that you are not alone. Your community will understand the impact of this change for you and can be there for you as you deal with it.

Be here now.
Mindfulness meditation (even for just a few minutes a day) and other awareness or spiritual practices can help you relax and stay calm. It can help you focus on the present moment, instead of worrying about what has happened or what will happen.

Put it in perspective.
How have you handled past changes or challenges, and what helped you? Support from friends? Taking care of yourself? Actively seeking solutions? Waiting patiently for a solution to come? How you dealt with past experiences may help you now.

Keep putting one foot in front of the other.
Sometimes, the easiest first step is to just keep moving! As a small business owner, your business passion is integral to who you are. Keep doing what you love. What you accomplish each day will help you deal with the challenge at hand.

Above all, though, be patient with yourself. We all have the capacity to adjust to what life throws at us… eventually!

Elements of effective mentoring

“The delicate balance of mentoring someone is not creating them in your own image,
but giving them the opportunity to create themselves.”

– Steven Spielberg

January is National Mentoring Month so it feels like the right time to be talking about small business mentoring — a key ingredient to success for every entrepreneur.

At some point, we all need guidance, a sounding board and a cheerleader to navigate through changes, growth and challenges in our business. Guidance can come in many forms — from a business “buddy”, through a peer support group, or directly from a trusted business adviser or a team of advisers. No matter the form, what is most important is that our mentors encourage us to look closely at issues and opportunities, and to maximize our potential. With their support, we can develop our business skills, take risks, and be successful.

mentoring

Our support system must include people who have been in our shoes.  We must surround ourselves with subject-matter experts and experienced small business owners who have dealt with similar challenges first-hand and can help us make sense of the clutter and make decisions with relevant, timely advice.

Though I believe that the best small business mentors are other small businesses owners, success in business does not qualify someone as a good mentor.  That person must also be a skillful listener and motivator, know how to ask questions, and know when and how to give honest advice. In addition, the best mentors open doors to a wider network that can support us and our business.

To sum it up, I believe that effective mentors…

  • Listen carefully to what you say (and don’t say)
  • Understand your needs and respect your point of view
  • Ask questions and challenge assumptions
  • Guide based on their own experience/expertise
  • Share relevant and immediately actionable advice, and
  • Are accessible and supportive over the longer term.

Above all, the mentor-mentee relationship should be a partnership, based on mutual respect and trust.

As we develop our mentoring services at PTA, I have been reading many articles about mentoring and asking others about their mentoring experiences. What “words of wisdom” about mentoring have inspired YOU?

 

Mentoring matters

What really matters to us as we move through life? For many of us, it is family, friends, good health and making a difference in the world through the work we do.

I recently read the Steve Jobs biography by Walter Isaacson and watched a documentary on his life and last few months. Jobs didn’t ever seem to give up. He pushed himself and others to be different and make a difference. He is an example of someone who had a passion for life, a commitment to make an impact, and a curiosity that never went away.

Jobs felt that “the only way to be truly satisfied is to do what you believe to be great work.” He went on to say that “the only way to do great work, is to love what you do.” Do we all have this passion and enthusiasm? Are we committed to being a success no matter what stands in our way?

Most small business owners are driven… to do something our own way and to be a success. Yes, we want to be financially successful but other types of success matter to us, too: doing something unique, being remembered, teaching others, and leaving a legacy — something that will last.

But what happens when we get stuck? What if we cannot stay connected to the passion? What if success feels elusive and failures do not all become lessons learned? Innately, we know we must keep moving forward and that we will learn from our failures if we can figure out a different path. (Of course, trying to do the same thing the same way over and over is not wisdom, it’s insanity.) Success usually doesn’t just show up. We have to go out there and get it…tackle it, embrace it, own it.

small business mentor

Sometimes we have trouble figuring out the next steps on our own, though. There may be too many options. We may be spinning our wheels around one particular issue. We may hesitate instead of taking action. When we stumble and panic, who can guide us and nudge us forward? Finding someone we trust to mentor us can be critical.

I have a client who is a long-distance open water swimmer. When his group is on a long swim they have escorts in kayaks, rowboats and inflatable motorboats. As he explains, the escorts “look out for our safety, fending off other boats, telling us where we are, where to go, they feed us. They make sure we are okay in mind and body. They are our cheerleaders and companions in our journey to the goal.”

small business mentor

Small business owners also need guides through rough waters. We need escorts, cheerleaders and supporters as we deal with changes and difficulties in our businesses. We might be forced to move locations unexpectedly, have an important employee abandon us, or struggle to make the business financially sustainable. In these times, mentors are essential.

According to the Startup Genome Report, “having helpful mentors” is key to entrepreneurial success. This survey of 650 internet startups found that “the right mentors significantly influence a company’s performance and ability to raise money.” Though we may not have the data to prove it yet, I believe mentoring matters for all small businesses, both new and established. With great mentor support, we can all become the small business owners we want to be.

Remembering a great friend and mentor

As we celebrate another year around the sun, I have been reflecting on what matters to me most and, in particular, the important relationships and mentors in my life. I have been thinking a lot about my late friend and PTA associate, CeCe Phillips.

mentor

CeCe Phillips

CeCe and I were born the same year, just a few weeks apart. Our closeness in age felt like a special bond. I often joked with her about how she was older than me. She would always reply, “ Now Paul, you don’t want to go there!”

I thought I was her best friend…at least that is how she made me feel. She was so supportive and always made it clear that she truly cared about me. We talked on the phone, exchanged e-mails, saw each other at business meetings, met for lunch or coffee, and often co-taught classes together. Many years later, when she was too sick to travel because of cancer, I would visit her. At the celebration of her life after she passed, it was clear that she had been a best friend to so many. She loved all of us and had a gift for treating everyone in her life as someone special.

CeCe was a great listener, a quality so important in a friend and mentor. She was curious about me, my family, and my small business. Every time we were together she asked good questions and gave me the space to answer. When giving advice, she was careful to say just enough and not more.

mentor

Paul and CeCe back in the day

CeCe was also quick to share with me how I was a support to her. I remember giving her advice once about what she could say in a speech to a small business group. Though she didn’t end up using any of my exact suggestions, she told me afterwards, “What you shared with me was in there. Your ideas helped me think through what I wanted to say. Without talking to you first, I might not have ever gotten there on my own.”

In the last weeks of her life, I called her every couple of days and we would talk while I did errands and she sat in her chemotherapy treatment. We chatted about family, business colleagues, and what we wanted to do next. (We were always planning our next big idea or business venture together.) We laughed together and shared stories. She continued to mentor and inspire me with her passion for life, even as life was ebbing from her.

Of the many lessons I learned from this remarkable woman, three stand out:

  • Listen closely and watch carefully when someone is talking to you.
  • Do whatever you can to empower and provide support to all the people around you.
  • If there is a choice between playing and working, always choose play.

It is hard to label many things in life as “perfect” but this may have been the perfect friendship. Thank you CeCe for being a wonderful friend, mentor and teacher.  You continue to inspire!

Leading you in the Right Direction

expert

 

As business owners, we cannot do it all by ourselves. Small business specialists can help tackle problems in accounting, law, insurance, graphic design, marketing, management and other critical areas.

I’ve found there are three primary reasons for a business owner to hire an outside expert:

  1. For the short-term when over-extended, such as market expansion or preparing a business for sale
  2. For specific or sensitive issues, such as personnel problems
  3. For issues demanding special expertise, such as computer systems, taxes or engineering help.

Here’s how you can choose the right professional for you and your business:

Before your search begins
Determine what you really need, when you need it and how much you can afford to spend. This will help you decide the type of professional to look for and the criteria you’ll want to use in evaluating your options. Know the results or outcomes you would like to obtain. This will help clarify the level of expertise you’re looking for.

The Search
Ask for recommendations from colleagues in businesses of similar type, size and philosophy (instead of blindly searching the internet). If colleagues have been satisfied clients they will be happy and eager to refer the professional or consultant to you. You can also find quality help through business associations and industry-specific professional groups.

The Screening
Find an advisor who can really listen, evaluate the situation, make recommendations and then, if appropriate, help you implement solutions. When you first talk with the professional, notice if he or she can connect your problem to his or her previous experience. Pay attention to the questions the professional asks you.

The Meeting
Spend the first few minutes of your first face-to-face meeting setting an agenda, identifying possible outcomes and getting agreement on the length of the first session. This will help focus your time, set criteria for measurable results and keep you in charge. The professional should be able to define the basic issues and then estimate time, terms and fees.

The Agreement
It’s wise to get things in writing, including a work plan and timeline. Many professionals will provide a letter of agreement but don’t expect consultants, like a computer or management consultant, to provide a full analysis for free. A thorough analysis of your business situation and expert recommendations are worth paying for in advance of a solution being implemented. This important step, if done properly, can actually save the overall expenditure of certain projects and should be included in the total budget for the project.

Using professionals in your business is not a sign of weakness! It is an indication of sound management practices. As a business grows, staff can be added to replace outside experts or you can continue to use contract professionals.

Eating Well from Street to Street

On Saturday I joined the crowds in San Francisco’s Mission District to experience La Cocina’s fourth annual Street Food Festival.

The sunny streets were full of happy people enjoying tasty delights from 85 vendors—including from some of my former students: Gail Lillian of LIBA Falafel, Claire Keane of Clairesquares, Antoinette Sanchez of Endless Summer Sweets, and Neal Gottlieb of Three Twins Ice Cream.  What a treat!

food festival

Neal and Paul at SF Street Food Festival

As a small, start-up food business it is a challenge to break into the industry and be successful. Food entrepreneurs can have great ideas and delicious recipes but they also need to afford legal kitchen space and the start-up costs to open their businesses, find a niche, compete for shelf space and break into a crowded marketplace. Motivated entrepreneurs like Gail, Claire, Antoinette and Neal are making it work by renting kitchen space and/or selling out of a food truck. (Neil started very small over 6 years ago and now sells ice cream in almost every state.)

Luckily, food businesses don’t have to jump into business ownership without some support. La Cocina’s non-profit kitchen incubator and programs for low-income, immigrant and women-owned food businesses and Renaissance Entrepreneurship Center’s programs and small business incubator provide valuable training and support. There are other non-profits and businesses sprouting up around the city to help food entrepreneurs and strengthen the local food movement—from the Underground Market and Forage Kitchen, to the new Good Food Merchants Guild and Good Eggs.

City government is also helping to make the climate easier for food start-ups, such as easing regulations for street food vendors and even passing an ordinance to allow community gardeners and city farmers to sell their produce directly to the public on site. And we’re all waiting to see what transpires with the California Homemade Food Act.

It was great to see the success of small street merchants and so many supporters of the Bay Area’s local food movement this weekend. Let’s keep up the support for sustainable food businesses!

Are you all alone?

Being the owner of your own small business is a fantastic undertaking.  Here is where you prove your concept, sell your product for a profit and become a social entrepreneur, changing the world one transaction at a time.  Yet, being a small business owner CAN be isolating and sometimes lonely. alone However, there IS one simple and successful support strategy that is free, motivational and really helpful from a practical perspective.  This is a solution that will provide information, motivation, and access to resources.  This is a solution you can develop without spending a lot of time and money on professional advisors and/or consultants.

Solving Isolation

All business owners need personal support, access to accurate information, and to be around people who can motivate and inspire. Business is an interdependent environment of vendors, competitors, and resources. Business owners need to set up support systems that are appropriate (for level and content), easy to use (accessible) and timely (available when and where they are most needed).

The first step and easiest solution is to find a support partner who will help make you accountable.  The support partner is your unconditional “business friend”. Ideally, this is someone also in business like you who can listen, give emotional support for your business issues, and can provide constructive feedback on business dilemmas and opportunities.

The relationship is bi-directional – each support partner helps the other. You may agree to meet weekly, catch-up, share problems and successes, and then use your partner as an objective reviewer for your plans of the week. The meeting should be a check-in for ongoing support and follow-up. It is also key that this be on-going and long-term (e.g. 6 months) so that your support partner gets exposed to the issues and understands the context and the players in your world. Your meetings with your support partner can be a catalyst for positive change and an opportunity to talk discreetly about business issues outside of your own business environment.

Roberto felt that getting his business marketing efforts off the ground was so difficult he ignored many of the key initial steps. He felt the isolation and frustration and had no one to really talk to that could relate to his issues of time management, cash flow and making internal decisions. Then he found Maria who was in a very similar situation, yet in a totally different business. They liked each other, respected each others’ opinions and set-up a weekly review meeting over coffee every Friday when they could talk to each other, give each other feedback, and commit to an action for each week. These meetings continued weekly for many months and were supported by the occasional e-mail and phone call.

All you need to starts is to find ONE person in business like yourself.  This will need to be someone you like and trust…and is willing to help you just as you will help them.  Try it out and see if this will help you build your business and get the support you need to keep going and flourish!