My Life as an Entrepreneur

Judgement Day

2009-01-22T01:57:00Z

2008 was a challenging year for me as an entrepreneur. However, I met each and every challenge thrown at me and lived (barely)...and learned a tremendous amount from each. I was hoping to start applying some of the lessons I had picked up, but apparently, I'm not done learning yet. If you've been following my blog, you'll remember that I sold the coffee kiosk business early in 2008. Unfortunately, I sold the business more to get it off my hands...and when you sell a business when you HAVE to, you almost never do well. The lesson there is selling a business when you want to or have to is most likely a bad time to sell. If you DON'T want to sell a business, that's probably a good time to sell a business (you might have to think about that one). It reminds me of a Warren Buffet quote: "Be afraid when everyone else is being greedy. Be greedy when everyone else is afraid."

Anyway, I figured it was going to be tough to sell the business. It was a business that had a good concept and good branding, but it had a bad location and was losing money. In order to help the business move a little quicker, I offered to do a seller financing deal. These are the things that desperate people do. The person that bought the business (not surprisingly) opted to take the deal. I negotiated an 8% interest rate over a 4 year term. A few months after closing I looked into selling the promissory note (there a couple companies/investors that will buy these types of notes). However, as I learned, companies/individuals typically want at least a 13% interest rate to even look at such an investment (mental note to myself for the future...well that's if I would even offer a seller financing deal).

The thing that I did RIGHT was hire a lawyer to right the promissory note. He had a bunch of legal mumbo jumbo in the document including using the business' assets as collateral for the note. He also did a UCC filing (Uniform Commercial Code) which is a central filing office for certain financial documents. There a full 3 pages of text on this promissory note so there are quite a few other provisions. Anyway, this is all relevant now because the buyer is now two months behind in his payments. It's been a challenge because I have been trying to avoid taking legal action, but that is quickly becoming my only option available to me. According to my lawyer, the one option we have is to issue a judgement against him in court. The issue with that is that it will probably cost me more in legal costs than he owes. However, if I remember correctly, I can go after him for legal costs as well. I'll have to read the promissory note more carefully when I get in tomorrow. Anyway, I will give you an update in the next month or two in this developing situation. I do have some good things that are starting to happen with my primary business, CTE Healthcare Communications. I don't want jinx them as nothing concrete has happened as of yet, but 2009 has started with some promise and some frustration.

Books on Sales

2009-01-14T15:50:00Z

Hope everyone had an enjoyable holiday season. Here's my belated gift to you. I sent out to a request to most of my contacts to provide me a list of the best sales books that they have read. And here's what I got back. Enjoy!

7 Habits of Highly Effective People - Covey

How to Win Friends and Influence People- Dale Carnagie

Good to Great by Jim Collins

Integrity Selling by Ron Willingham

The Little Red Book of Selling by Jeffery Gitomer

How I raised myself from a failure to success in selling by Frank Better

INFLUENCE: The Psychology of Persuasion by Robert Cialdini

Waste not a moment

2008-11-22T11:48:00Z

So, I know it's been more than a minute since my last entry. I got called out on it by a couple people over the last couple weeks. The fact of the matter is, this failing economy is teaching more lessons about being an entrepreneur than I would like to be learning. Once I work through these economic challenges, I will have a limitless number of blog entries to write about...assuming I don't throw myself into the Schuylkill River first (that's a joke).

Everywhere I turn, I'm encountering shrinking budgets - even within the health care industry, one that has historically been considered "recession-proof". I guess we will have to create a new term - "depression-proof". And I don't know if there's really an industry that I can think of that falls into that category.

The only thing you can really is look for ways to make your company more competitive and eliminate as many weaknesses as possible. For me, I've always known that sales is probably one of the weaker skills that I have. I think I have a fair grasp of marketing and management. Accounting and finance I've taught myself what I've needed to over the years. However, I've never had the sales experience that I wish, in retrospect, that I had gotten in previous jobs.

So what can I do about it? Teach myself as much as I can about the subject. For those that don't know, I've recently moved from Philadelphia to Delaware. My commute went from what was a 25 minute walk to a 10 minute drive (I moved my offices about a year ago) to now what is hour to an hour and a half. That now means I'm sitting in my car for a total of at least two to three hours a day...BRUTAL.

Luckily, a contact of mine asked me to speak to one of his classes that he teaches about entrepreneurship which I was happy to do. As a thank you, he gave me a gift certificate to Audible.com, the iTunes of audio books. I decided to use the gift to purchase an audio book on sales - "Little Red Book of Selling: 12.5 Principles of Sales Greatness". I burned it onto a CD and listened to it on my drives into work. Not only did I enjoy it thoroughly, I turned a couple hours of wasted time (yes, it was for the most part wasted) into time that was extremely productive. How can you make dead time more productive? Carry books with you wherever you go. Read self help books while you wait for the flight, at the doctor's office, for your car to be serviced. People hate waiting for things - I know I do. But turn those times into opportunities to improve on a weakness. In this economic downturn, it is vital to "waste not a moment".

I'll try to do a better job on these entries, I promise!

The Value of Setting Goals

2008-08-22T16:07:00Z

Ok, so I've been a slacker on this blog. I've been spending much of my free time on the golf course. As I mentioned before, it has become my drug of choice - can't get enough of it. But when I thought about it, golf has taught me a very valuable lesson: The Power of Setting Realistic, Achievable Goals. I started this year shooting a 150 (not taking any mulligans, counting swings and misses, counting every singles HORRIBLE shot) - pretty standard score for me before this year. That's playing once every other year.

Well, I'm now living in Delaware, which means that there is nothing for me to do BUT play golf. Golf was always an activity that I've wanted to improve my skills in and this was my chance. I set as a goal for myself breaking 100 for 18 holes before the end of this year. That would be a 50 stroke improvement from the beginning of the year. The beauty of golf is that here are SOOOOO many ways to improve. In setting my goal, I realized that the biggest areas which were keeping me from my goal were my putting, my wedge game, and my iron consistency. What have I done? I've read articles on the internet, attended clinics lessons, gone on YouTube to improve these areas of my game - and they have improved dramatically. Last week I shot a 106 - almost there...in a few short months.

How does this apply to business? You have to have goals. If you have no goals, you have no direction. If your company's goal is to hit $2 million in revenue, you are forced to figure out a way to get there and then develop a plan to do so. Your plan might be to get two new $500,000 clients to get the necessary revenue to reach your goal. You are then forced to come up with a plan to obtain two new $500,000 clients. How are you going to prospect for these clients? Which companies are large enough to BE $500,000 clients?

I love golf - there I said it. I'm addicted to it and I need help with my addiction. But golf has made me realize that power of setting realistic, achievable goals. Without goals, there is no plan. Without a plan, there is no progress.

Startup.com

2008-08-08T01:27:00Z

It's been quite some time since my last entry. I've been indulging in my newfound drug - GOLF! I've discovered the attraction of golf is that it appeals to my EXTREME type A personality - there are SOOOO many parts to try and perfect that it's going to keep my interest for years and years until I perfect all the parts (yeah right).

But golf is not the subject of my blog entry today. I was going to show a documentary today to my employees to generate a discussion, and I ended up showing to a group of high school kids (in addition to my employees) taking place at The Enterprise Center (yes we do movie day every now and then at CTE). The movie is entitled "Startup.com". It is a documentary that follows the rise and fall of Govworks.com during the dot.com boom of the late 90's/early 2000's. It is a fascinating movie and I highly recommend it. The company raised about $60 million, but failed less than 2 years later.

You can have your own opinions if you watch the movie, but here are the reasons why I think the company failed:

Failure to have a clearly defined brand/mission/vision. At a meeting with a VC group, the two co-founders found themselves contradicting themselves as to where they saw the future of the company. The CEO (Khaleil) later had a discussion with his co-founder, Tom, on the topic. His point was that they cannot give conflicting messages in an external environment - and he was 100% correct in this. As the CEO, though, it is his responsible that the company has a clear vision.
Failure to clearly defined roles. Throughout the film, the co-founders find themselves in a power struggle over decisions. I felt that one of the major issues was that Tom did not have a clearly defined role. More importantly, I think the unclearly defined role that Tom was filling was poorly suited to his skill set. He later admitted in the movie that he wasn't suited to directly the product development and that he just didn't have the experience. Seems like a HUGE issue for such an important role for a dot.com.
Growing too fast. The company grew from 8 to 50 to 200 and back to 50 in the course of a year and a half. That's CRAZY! The CEO has a moment where he says "Our infrastructure is ridiculously inflated". I think they just grew too fast which a lot of times breeds inefficiency. Which also probably leads to the lack of clearly defined roles in point 2.

You will have to watch the movie yourself and take away your own lessons. It's a solid movie and there a lot of "what not to do's" for startups.

A conversation with Simon Sinek

2008-07-14T20:35:00Z

I've mentioned Simon Sinek's name several times in previous blog entries - his talk I heard him give at a recent conference I attended made a definite impact on how I look at marketing, business, and just relationships in general. I was both surprised and impressed that he took the time to give me a call after I had sent him an e-mail about a month back. He called me this morning and we had nice half-hour chat about branding, his Golden Circles, why companies fail, among other things.

One of the topics that struck me this morning was one of "discipline" - the discipline to keep your company focused on the "why" of what they do. We talked about how a lack of this discipline can cause many companies to eventually fail. He brought up an interesting example of a man with tremendous discipline - Craig Newmark, the founder of Craig's List. Craig is a huge advocate of making the internet free to use for all. I did some research and Craig's List does between $10-20 million dollars worth of business a year with 19 employees. Using a formula used to value eBay, it has been estimated that Craig's list is worth between $1 and $2.4 billion dollars. I saw another article that had it valued at about $5 billion dollars. Yet, Craig Newmark refuses to sell the site as he wants to ensure that the majority of the site remains free (apparently there is a small charge for job postings in some of the larger markets). Simon also mentioned that he met Craig Newmark at one point. He was most impressed by the fact that Craig's cards said "Customer Service Representative AND founder" - yes, founder was second. He also said that many customer service issues are handled by Craig himself.

Talk about discipline - TURN DOWN A COUPLE OF BILLION DOLLARS BECAUSE OF WHAT YOU BELIEVE IN!!!!!! That is deep - I'm pretty disciplined and I have some pretty firm beliefs, but I'm not sure I could have done something like turn down a billion dollars. It probably is not a coincidence that Craig's List popularity continues to grow at a rate that far exceeds many of its competitors. It's difficult to stick to your beliefs instead of chasing the almighty dollar.

What's your motivation?

2008-07-09T15:44:00Z

I took quite a bit of time off since my wedding/honeymoon. It's taken me quite some time to get myself going again since coming back burnt to a crisp from Cancun, Mexico . By the way, for vacations - "all-inclusive" is the way to go. It's really the first time I really felt like I was on vacation. There's really a relaxing feeling about getting out of bed, leaving your wallet in your room, going to breakfast, eating, and getting up and leaving. No calculating 15-20% tip, no worrying about the bill, NOTHING! Love it. It was some much needed rest and relaxation after an intense period before the wedding.

Sorry for the aside, had to get my plug in there for "all-inclusive resorts". I was at a recent dinner event for aspiring young entrepreneurs. An older gentleman got up to speak and he said something that really struck me. He was talking about one of his friends that had started many companies. He said something that has stuck with me. He said, "My friend told me that the companies that he started for the sole purpose of making money, he lost his shirt on. The companies that he started to help others, he got rich on."

For some reason, that statement fascinated me to no end. But it makes a lot of sense and actually ties in well with Simon Sinek's concept of inspiration - "People don't buy your product because of what you do. They buy your product because why you do it." Going a step further, Simon makes the argument that there are often very little differences between product features - so ultimately, it comes down to the "why" a company does something - and "helping" people or in a marketing sense "fulfilling a need" is a heck of a reason to do something.

That comes to my second point, using the motivation of helping people or fulfilling a need keeps a company "consumer-driven" or "consumer-focused". In other words, product development and innovation are driven by making lives better. This means your product development dollars are spent better and smarter. You'd be surprised by how many company aimlessly spend research and development dollars aimlessly to develop "cool" technology does not solve a problem.

Bottom line - start with the problem, then develop the solution. And focus on a solution that truly changes peoples lives for the better. And finally, don't just start a business to make money. That's a side effect of starting a business. The reason for starting a business has to be bigger than money. If you are solving a problem that no one else is solving and you are solving it well, money will come (well except in an economy after a Bush administration).

You have to spend money to make money...

2008-06-06T20:04:00Z

I'm leaving on Tuesday to head to my wedding, so I will be out of commission for a few weeks while I say "I do" and head to Cancun on my honeymoon. I thought I would sneak one more entry in before I head out.

Through CTE Healthcare Communications, I pulled together a Entrepreneurial Boot Camp in conjunction with Urbanphilly.com a few weeks ago. We had about 80 aspiring and new entrepreneurs attend a 2 day workshop. I was one of the panelist for a section I entitled "Growing Your Business" and I covered the topic of branding. One of the questions that I got was "How can you create credibility for your company?" There are a lot of ways, but operationally, there a couple very simple ways to create credibility. One of the SIMPLEST and one of my pet peeves is register a domain name. You don't know how many entrepreneurs I've met that hand me business cards with the following: XYZbusinessname@yahoo.com. You can register a domain name at Godaddy.com for $10????? For $10, you get a FREE 100 mb e-mail address with that. Seriously, can you really not spend $10 for a domain name? Unless I have developed a rapport with their yahoo-emailing azz, I REFUSE to take them seriously.

As small business owners, one of our biggest challenges is to balance the advantages of being a small business (lack of bureaucracy, low overhead, no shareholders to try to constantly please) without APPEARING to be a small business. We work with the pharmaceutical industry. We are dealing with Fortune 500 companies. It is important to make them feel comfortable about giving us a significant contract. Keep in mind, THEIR job is on the line when they are giving you a contract. They want to be sure that they can trust that you have the capacity to complete the contract and make THEM look good. The thought of one guy sitting in his living room with his boxers on answering his kitchen phone (pretty close to how I started) doesn't necessarily breed confidence. What did I do, I invested (yes, I said invested) in subletting office space from a company in downtown Philadelphia, a PBX phone system from Packet8, and a website. Our phone system had very professional sounding automated attendant with voicemail, hold, and transfer capabilities. Between these investments, many people have indicated that they thought we were much bigger than we are. And that's exactly what we want.

When I started my coffee drive-thru business with my partner, we have very different philosophies of starting businesses. He wanted to be a cheap as possible on as much as possible. Once we "generated enough revenue", then we could start to spend money on "more expensive" things. I, on the other hand, wanted to "start as strong as possible". I wanted to invest in a "point-of-sales" (POS) system that had a touch-screen to make entering transactions as efficient as possible. I wanted to invest in our branding by getting a professionally designed logo, etc. We battled over these decisions. My argument for the POS system was this - if we were selling the convenience of a coffee drive-thru, we would KILL ourselves if we opened and we were slow.

From a branding standpoint, it is not easy to "undo" a customer's perception of your business. Who can think of Joey from Friends as anyone other than "Joey from Friends"? No, those images stick and can't be forgotten easily. Matt LeBlanc can only get roles that are similar to his role on Friends. Same goes for branding - if you start up your business as a shit hole - it's going to be VERY difficult to convince customers that you are no longer a shit-hole if you happen to later decide to renovate your place. A GREAT example is Friendster. Friendster beat Myspace to market as a social networking site. However, Friendster's membership grew SOOO quickly that their servers ended up crashing. Well, that opened the doors for Myspace. How many of us have Friendster accounts vs. Myspace accounts? All because Friendster didn't INVEST in their servers up front. Perhaps they said, "Well we can upgrade our servers as we need them." How much is Myspace worth? Wow, that decision cost them BIG TIME!

Here's the bottom line. Invest in you company UPFRONT. If that means getting outside financing to do it, SO BE IT. YOU HAVE TO SPEND MONEY TO MAKE MONEY! First impressions are lasting. Don't hurt your chances for success by being cheap.

Go On a Mission

2008-05-30T03:42:00Z

After my last entry on Focus and branding, I felt that this entry was an appropriate follow up. I will try to refer back to previous entries as much as possible to show that these entries are very much interrelated.

Monday and Tuesday of last week, I attended a Diversity for Life Sciences Conference. A long two days, but VERY valuable from a business development standpoint. However, the keynote speaker, a man by the name of Simon Sinek, made by far the biggest impact of the event for me. Many of his ideas fit in with some of my already formulated ideas surrounding branding, but he had a very unique way of organizing the "branding" process.

He called his process The Golden Circles. Visit his blog, entitled "Re: Focus" for more information on The Golden Circles. In a nutshell, Simon talks about how many companies and people focus on "what" and "how" they do things. For example, many companies focus on what the features of their product are or many people focus on what their job is. His argument, however, is that true inspiration and brand equity come from the "why". "People don't buy your products because of what you do, they buy them because why you do them," was what he repeated over and over again. He used Apple's mission to oppose the status quo and Southwest Airlines' mission to become the common man's airline as keys to those companies LONG-TERM success. Companies that tried to emulate the iPod and low-cost airlines failed because they failed to effectively communicate WHY they were creating it.

These companies that do have long-term success do so for a number of reasons:

They effectively communicate the "WHY".
Their customers buy their products because the "WHY" of the company fits in with their own belief systems.
These companies hire people whose belief systems mesh with the "WHY" of the company.
They stay true to the "WHY" in each and everything that they do (and how they do it).

First of all, I want to preface that I'm sure I'm not doing his teachings any justice so visit his site to learn more. But #3 on this list brings me to my second point - the importance of a clear and concise mission statement. When I first started my company, I didn't have a mission statement. I always thought they were a little hokey. But one of my employees, the most junior one by the way, really pushed us to write a mission statement AS A COMPANY. I want to make a point here - our newest employee made a VERY important contribution to the company when she made us write our mission statement together. NEVER underestimate each person's contribution to the company.

Now why is a mission statement important? It is important because it keeps the "WHY" at the forefront of every employees mind. We keep our mission statement posted in our office so that everyone can view it. You want the essence of the companies mission to be in EVERY DECISION that they make. You cannot be there to watch over every decision that your employees make. However, if you provide the framework (the mission statement) for where your company wants to be, employees can make decisions that fit in with the framework of the companies belief system.

Because the mission statement is, in a sense, the framework for decision making of all of your employees, I think it's also very important to keep the mission statement VERY simple. Narrow the keys to your companies success to two or three points MAXIMUM. If you try to put too much meat into the mission statement, its very easy to lose focus. However, if you only have 2-3 points, it is so much easier for your employees to "test" to see if each decision that he or she is making benefits the overall mission of the company. If their decision does not help the company achieve the overall mission, then they should rethink their decision.

Here is CTE's mission statement:

Our mission at CTE Healthcare Communications is to provide engaging and interactive educational resources for both people living with various medical conditions and for caregivers. We understand that education is vital in order to reach treatment goals and we work to empower patients and caregivers to take a more active and informed role in their treatment. Our unbranded initiatives provide pharmaceutical, biotech, and medical device companies a vehicle through which they can develop long-term, meaningful relationships with patients, caregivers, and advocacy groups.

What are the key points here? We want to create engaging patient education. We want to empower patients and their caregivers. We see patient education as a tool for the pharma industry to develop meaningful relationships with their consumers and stakeholders. Is there more to our business than this...ABSOLUTELY. However, if we stay true to these three core values, then the rest will take care of themselves. For instance, a lot of what we do involves seeting up educational meetings for advocacy organizations. If we focus on the fact that these educational meetings are about developing relationships, we understand that the little details of each meeting are important factors in developing these relationships - making sure food and AV are delivered on time, that our customer service when we deal with advocacy organizations are top notch...these are VITAL. Does our mission talk about making sure food is delivered on time? No. It doesn't have to be. It doesn't have to be because we understand the relationship aspect of what we do. The rest takes care of what we do.

It's been a long day and now I'm losing focus. But here are a few final thoughts - understand WHY you are doing what you do. If YOU don't know, then how can you expect your consumers or your employees to know. Write a clear and concise mission statement that incorporates this why. Use the KISS method - KEEP IT SIMPLE STUPID! Visit Simon's blog. He is a AMAZING speaker.

Focus

2008-05-24T14:43:00Z

Yes, it is 9:00 AM on a Saturday and I am writing a blog entry and yes I'm a nerd. But I get these random thoughts at odd hours and I like to write them down as I get them...wanna hear it? Hear it go:

For those that don't know, the first company I started was X-Marketing. I originally started this company to provide branding strategy and marketing plan implementation to small businesses. I was warned by a marketing professor at Villanova not to do that - "Small businesses don't have money but they need a lot of help" he said...BOY was he right!!!!! For three years, we struggled to find viable small business clients that could be profitable to work with. "We'll grow as they grow" was the plan. We worked basically for free with companies that a lot of promise but would not spend money. Again, I stress - you have to spend money to make money!

Throughout this period, we were providing patient education services to one of the biggest pharmaceutical companies in the world. These patient education services that we provided were always "the other thing" that we did...LOL. Imagine 110% of your revenue coming from the "red-headed step child" - no offense to red-headed step children.

We finally got a break one day and we landed a commercial cleaning company as a client. They were a sizeable company with over $15 million in revenue. They were looking to rebrand themselves and hired us to develop the strategy. For the next 6-8 months, we underwent a MAJOR market research project to understand the commercial cleaning market, the trends, and the consumers. We developed what I consider a couple innovative branding strategies that we thought could really take them to the next level.

Probably one of the best books on branding that I have ever read was The 22 Immutable Laws of Branding by Laura and Al Ries. The most important concept in the book is that more focused the brand, the more powerful the brand. As we worked on this project for the commercial cleaning company, we looked at our own brand. We created a couple branding options that had a clear and narrow focus. We, on the other hand, provided ALL sorts of marketing services: market research, branding strategy, graphic design, web design, advertising...the list went on. We offered to companies in any industry that we could get our hands on. We offered to companies of all sizes. The branding strategy company NEEDED TO EXAMINE ITS OWN BRAND!

Then we looked at what we provided to the pharmaceutical company. It was a service that relatively few companies offered, it fit in well with current trends in healthcare, and we had instant credibility from the work we had done with our current client. WHY WAS PATIENT EDUCATION "THE OTHER" SERVICE THAT WE PROVIDED THAT WE RARELY TALKED ABOUT? This doesn't make sense we said to ourselves...yes, I said we. We met as a team on this. Read Power of the People to see why I believe this part is so important.

Then we looked at our current brand, X-Marketing, and realized that this brand did not fit in with patient education. Thus, CTE Heathcare Communications was born. CTE stands for "Caring Through Education". CTE now ONLY focuses on providing patient and caregiver educational resources in partnership with the pharmaceutical and biotech industries. The brand is only about 8 months old, but the new brand has already opened quite a few doors that would not have been open to us as X-Marketing.  The rebranding effort was a BEAR! Changing e-mails, voicemails, websites, mission statements...but it was a change that I think saved the business.  Our goal for 2008 was to earn $2 million for the first time, and I think there is a good chance that we will hit that goal...check back with me in January of 2009. But if we do hit that number, I can say this with almost 100% certainty - WE WOULD NOT HAVE HIT THIS NUMBER AS X-MARKETING.

The new focus of the brand has changed EVERYTHING. I know EXACTLY who I am looking to sell to right down to the position in the company. I know EXACTLY what I am selling - I don't have 15 services to try and sell. My employees have renewed optimism because they see a direction now - which we did not have before. We pulled this rebranding effort took about 6 months to complete. I just filed the paperwork to disolve the X-Marketing name and that is the last remnance of our old identity.

I can't say for sure if or how successful we will be - I'll say I'm trying my hardest to have CTE make an impact both financially and socially. You are coming into the story on the ground floor - so this blog will be like a reality show over the next few months. Stay tuned to see who gets voted off!

READ The 22 Immutable Laws of Branding!!!!!  I cannot stress that enough. It has had a big part in shaping how I look at business strategy and marketing in general. It is time for me to go - so until next time!

Thanks, Partner

2008-05-22T02:48:00Z

"I'm dying to hear about Mudd Coffee." This seems to be the topic that my small group of readers have been asking me. I've been delaying writing about this topic, because months and months later...it STILL makes be bitter.

Partnerships are tough...no matter how you cut it. Finding the right business partner is as difficult as finding the right person to marry. In fact, business partnerships are very much like marriages...WITHOUT the sex. That's not very attractive is it?

To be perfectly honest, I'm not sure I would go into business with a partner again. I'm 100% sure I would never enter a 50/50 partnership again. I'm not saying that partnerships can't work. I'm sure they can just like a marriage can work. However, you need to find the right person and you have to plan for the POSSIBILITY of failure.

So what happened, you say? Well, I had a business partner that came to me with this phenomenal concept of the drive-thru coffee kiosk at a time when I was a relatively new entrepreneur and I was "blinded by the bling" as Dr. Boyce Watkins would say. When he asked me if I wanted to partner with him, I said yes before he even finished his sentence and before I truly thought through the ramifications of that decision. For those that know me, I make A LOT of my decisions in a similar manner...for better or worse. The thought of "what if this kiosk concept doesn't work?" didn't even cross my mind...and if it did, it was countered by the thought, "if it doesn't work, I'll figure my way out of it!". To be quite honest, I need to be a LITTLE more cautious with some of my business decisions while maintaining my "dive right in" attitude that enables me to do the things I do.

So, my business partner was a salesman, and a good one in many ways. He sold me not only on the concept, but he sold me on his merits to be my business partner. He told me about all the businesses he had started and sold successfully. I was so eager to start this new business that I didn't take the time to check out any of the things that he had done. I should have... As we started the business, there were some basic things that he had no clue how to do or even that we SHOULD do them...such as forming an entity. My intuition told me that something was not right. Why would this man who had started so many businesses not know how to START A BUSINESS? "Someone else always took care of the paperwork for me". Ok, that makes sense.

We formed our partnership - but in doing so we failed to do 2 things: we failed to put down IN WRITING how we were going to make decisions and we failed to talk about what we would do in the event of the failure of our business. Well, the next few months turned into a battleground. Most of these arguments were over money...we were on the OPPOSITE end of the spectrum - I'm a firm believer that you have to spend money to make money and he was of the opinion that we should spend as little money as possible until we were profitable. I'm not going to get into a discussion on why my philosophy was right . The point is that we had no way to solve these disputes - it was mostly a matter of who had the stronger will which is no way to make business decisions. This was the beginning of our downfall.

The second step was money itself. We were a 50/50 partnership which meant we should have been contributing capital equally. Well, I learned early on that there are A LOT of excuses why a person doesn't have money available - a person who had bragged to me that they had a net worth well into the millions. But because I can't stand to see things done half ass, I paid for a lot of our initial costs. We got to the point where it was probably about a 33/67 split (and yes, I was the 67 percent). It was at this point in the partnership that I started to learn troubling things. I learned that some of the businesses he had started were NOT as he made them out to me. The jazz club he told me he started - well it turns he was one of 10 silent partners in the deal and he had NOTHING to do with the operations of the club. I'm not going to get into details, but during the time when he said he didn't have any money to put into the business, he was doing things like putting a pool and an addition at his house. WOW!!!!!

Now this would have been all right if the business had been doing well. After our grand opening, we thought we had a winner. We had 90 cars come through in 2 hours and we made $435 our first day in business - which works out to well over $100,000 in revenue a year. Well, turns out that's about all we made our entire time in business...no seriously, it wasn't that bad but it was BAD. We went from break even to losing money to HEMORRHAGING MONEY. I will go into more details why I think we failed in a later entry, but ultimately, it came down to our location. Our grand opening experience made me believe that our marketing and our concept were solid but our location was less than ideal. When you are selling convenience, an inconvenient location KILLS your business.

Anyway, I put myself in a precarious situation. How could I get myself out of the situation? I didn't have a lot of options available to me, especially given that I was in a 50/50 partnership with someone that I DID NOT TRUST. I did the only thing that I felt that I could do - I bought out his half of the business. I did a seller financed deal so that I spread out my payments over 5 years which limited the amount of money that I had to come out of pocket for. As soon as we signed the paperwork for the buyout, I contacted a business broker. Without going into details, I was able to sell the business within a few months.

Believe me, I lost enough to pay for an MBA degree at a top university when it was all said and done. And that's how I look at the situation - I received an MBA in the University of Experience. I don't regret anything, as painful as the situation was for me. I learned an INCREDIBLE amount of information from this experience and it has made me a smarter entrepreneur. Although, I'm not sure if I will ever do a partnership again...but if I do, I'll be a LOT smarter in regards to who I choose to partner with. I'm going to be a LITTLE smarter before I jump into some of these new ventures (and I stress a LITTLE LOL). But I learned invaluable lessons about the retail side of business. Going through the process of selling a business was fascinating to me and I think it will only make me better in future ventures. I'm most proud of the way I handled "failure" and how I actually did "figure my way out of things". I took a huge hit and I'm still alive and not THAT much worse for wear. It gives me confidence in my abilities. It also taught me to plan a lot better to AVOID failure, but also plan better for the POSSIBILITY of failure. I'm sure that I will write more about this experience, but that is the jist of "what happened to Mudd Coffee". If you're interested, the owner kept the site that we designed for the Mudd Coffee.

Plant your seeds now. Trees take years to grow.

2008-05-16T17:43:00Z

I know in one of my earlier entries, I said that failure was an entrepreneur's best friend. Well, I really should have said failure's a good wing man because an entrepreneur's best friend is networking. I know, I know, my blog's first contradiction. Anyway, back to networking. Networking is probably the most important skill for an entrepreneur to have - it is a way to develop strategic partnerships, prospect for clients, and to find new business opportunities. No matter how you spin it, business is about relationships. People like to do business with people that they know, like, and trust (that's a nugget I have to attribute to Sulaiman Rahman who founded Urbanphilly.com). The better you are at building MEANINGFUL relationships, the higher the likelihood of your success as an entrepreneur.

In my 4 years, I've done a fair amount of networking. And I have to say, it's tiring for me. What's most tiring is an endless line of aspiring entrepreneurs that pretend to be something much more than they truly are - in other words, they like to waste people's time by talking big and lacking any substance. These are the same people that follow the "Myspace" approach to networking: they figure if they can get as many business cards as possible, they are successfully networking. Me? I'd rather have 5 connections that are really STRONG connections. What's a strong connection? One that will answer your calls and knows who you are as a person not just what your e-mail and cell phone number are, one that will do what they say they will do, and finally, someone that knows a lot of other strong connections. I often call them connectors...that's a term from the book The Tipping Point by Malcolm Gladwell. These are people that have the ability to bring people together for the purposes of accomplishing something bigger than the sum of the two parts. I want a Rolodex of ALL connectors as they are the gateway to MORE connectors. "Myspace networkers" are dead ends.

"Myspace networkers" are dead ends because they approach everyone they meet from the prospective of "how can I benefit from this person"? What they don't understand is the hierarchical nature of most relationships. I believe that very few relationships are between "equals". Most relationships have one dominant and one submissive participant - in other words, one party is control of more power than the other. If you are a relatively young entrepreneur and you are looking to meet connectors, you most likely are sitting in the submissive chair (sorry)! That means that you have to approach networking from the perspective of "what value can I provide this connector?". As the submissive, not only do you have to deliver additional value to the connector, but more importantly, you have to establish a reputation with that connector that you are someone that will DO WHAT YOU SAY YOU WILL DO. In other words, you have to prove that you are reliable. This may mean that if a connector invites you to one of their fundraisers, you go even if it means you have to fork out $150 bucks. Or if there's someone that you know that the connector wants to meet, YOU arrange the meeting. Little things like that help to build trust and what I like to call "relationship equity". This type of equity takes a LONG time to build. You cannot build it overnight.

I've been building relationship equity with some of my best contacts for 3-4 years. However, this investment of time and sweat has JUST started to pay off. Now, many of them are starting to come to me and bring them into their closest circles. Some of the events I've been invited to recently are like "connector candy stores". A mistake a lot of people make is that they wait until they need someone before they start to build a relationship. That's too late. You could easily be 3-4 years away from benefiting from that relationship.

I know the types of projects I want to get involved in over the next 5-10 years: private equity, educational speaking to entrepreneurs, and real estate. When I meet someone, I don't always know exactly how, but I can usually tell if that person has knowledge that I can truly benefit and learn from. But even if I see them benefitting me, I spend very little time at the very beginning of the relationship telling that person about what I want because I know I'm the submissive in the relationship (that just sounds dirty). I ask A LOT of questions about the other person and understand their challenges both on a business level and on a personal level. Then I look at my Blackberry and my contacts list and see if there's someone I can put this person in touch with that will help them. You don't want to ask for anything or you'll be spending relationship equity that you haven't built up yet...and we all know about the subprime crisis and how that's going...

This was a long one for me so let me end it here. But let me end with some final thoughts: plant your seeds now. Don't wait until you need a contact to try and foster a relationship. It will be too late. Building relationship equity takes a lot of time, money, and effort to do it correctly. Approach it in a genuine way. And if you have the choice between having a lot of superficial contacts and a few choice meaningful contacts...choose quality over quantity ANY day of the week.

With Adversity Comes Opportunity

2008-05-14T21:06:00Z

It's 5:00 PM and I'm waiting for the traffic to die down before I head home so I decide to write an entry. I have two quotes that have had strong influences in my life as an entrepreneur. One is by the Roman philosopher, Seneca who said "Luck is what happens when preparation meets opportunity". I have this quote on the door of my office so that everyone can read it as they come in. The second was told to me by the president of the last company that I worked for (I don't know who originally said it). He said a lot of stupid things, but this one I actually liked. He said, "With adversity comes opportunity". Ironically, it was his company that laid me off. They herded 60 people into the conference room on a Tuesday. They had the big wigs from corporate come in to give this PowerPoint presentation to us to tell us that we were laid off. In the PowerPoint was a revised org chart...why would ANYONE care what the org chart looked like at the company that just laid them off???????? Seriously, that one still bothers me 4+ years later . Anyway, they told us that everyone's last day would be that Friday. However, since they didn't have a complete transition plan in place, they also told us that we could not tell our clients about the layoffs. I was like?????? - I'm sorry, I don't work for you any more.

"With adversity comes opportunity..." - I heard those words in my head during the meeting. Well, for those of you who saw the movie, I pulled a Jerry McGuire ("Show me the money!!!!") RIGHT after the meeting. I had started a marketing consulting business a few months before to do some small projects to develop and implement strategic marketing plans for small businesses. Well, I called my client up and told them the news...my client said, well, we want to do business with you - BAM! Six figure contract right off the bat with a major pharmaceutical company. "With adversity comes opportunity..."

"Luck is what happens when preparation meets opportunity..." My family always says I'm lucky and I'm always in the right place at the right time. What they don't see is two things - 1) my behind is always out there meeting new people and developing relationships and 2) I'm constantly researching and learning new things. The more people you meet and the more things you do, the more opportunities that you will make available to yourself. In other words, you CREATE your own luck. At the same time, you need to set yourself up correctly so that you can TAKE ADVANTAGE of those opportunities. I meet so many aspiring entrepreneurs that tell me that they don't want to create their entities until "they are ready" to do business. NO - create it NOW. If you need to create another one later because the first one isn't quite right, create another one later. I've created two companies in ONE NIGHT before to handle a real estate transaction, and it cost me all of $250. If I hadn't created my entity, set up my accounting system, opened my bank accounts, registered my domain name, etc....would have I been in position to take on $150,000 project within a couple of weeks? Probably not, and then I would have lost out on a tremendous opportunity because I wasn't PREPARED.

Creating opportunities - I've been getting more and more involved in real estate lately. I like it because I've always had a fascination with building things. That is why I like the development side. I ALWAYS go to open houses...it's like an illness I have. I see an open house sign and I HAVE to walk into the house. It does two things - 1) I see lots of product and what people are asking for it and 2) I talk to A LOT of real estate agents. These agents start sending me different deals. I don't take all of them, but I'm creating opportunities for myself.

"Luck is what happens when preparation meets opportunity." "With adversity comes opportunity". It's easy to say, "I'm so unlucky." But that mindset closes one off from "seeing" an opportunity. Prepare yourself for your next opportunity through knowledge and action (not by "waiting 'til your ready"), and look for opportunities where no one else is looking or while everyone else is sitting on the couch watching TV.

Failure - An Entrepreneur's Best Friend

2008-05-11T22:51:00Z

Failure is an entrepreneur's best friend???? What the hell am I talking about? To understand this, let's look at learning...I believe learning is an individual changing their behavior in response to "failure(s)" until a desirable result is achieved. By this definition, learning CANNOT HAPPEN without failure.

How a person reacts to a fear of failure is what I believe separates an entrepreneur from a "non-entrepreneur" (I think I just made that word up). A "non-entrepreneur" typically fears failure and avoids it at all costs. An entrepreneur embraces it and knows it is a part of growing and becoming successful. I've heard many times that the average entrepreneur has three companies that fail before he/she has one that is successful. I'm a third of the way there! I believe what an entrepreneur has to do to be truly successful is a) shake off past mistakes just as a good shooter in basketball must not let a missed shot affect his/her next shot and b) break down those past mistakes and squeeze as much knowledge as possible from those mistakes.

Now it is important to note, that an entrepreneur should not get USED to failure. Mistakes do cost money and too many of them will put someone out of business. What I'm saying is that an entrepreneur's plan must include steps to avoid failures, but the plan must also ACCOUNT for failures as well.

By that same token, just as an entrepreneur must learn from failures, their employees also learn from failures. My philosophy as a manager has always been to provide your employees a safe environment to make mistakes and put them in situations where the mistakes they make can have limited negative impact on the company. As the employee gains confidence and proves himself/herself, a manager's job is to place them in an environment that is slightly less "safe" and increasingly more challenging.

Failure is an entrepreneur's best friend. Learn to embrace failure, learn to LEARN from failure, learn to beat failure, don't make the same mistakes twice, and allow your employees to do the same.

Power of the People

2008-05-11T02:36:00Z

For those that don't know me, I am a serial entrepreneur and have been one for the last 4 years. Four years ago, I started X-Marketing, a full-service marketing consulting firm. We have since rebranded as CTE Healthcare Communications, a patient and caregiver education company. I will save the explanations for the rebranding for another entry. In addition to CTE Healthcare Communications, I have also started Xpresso, Inc. DBA Mudd Coffee and X-Investments, Inc. Mudd Coffee is a coffee drive-thru kiosk business which I have since sold and X-Investments is a real estate development company.

I have learned so much from all the businesses that I have started, but for the purposes for this entry, I wanted to focus on what I feel has been the single most important factor that has contributed to the success of CTE Healthcare Communications: it's people. CTE is forecasted to have $2.0 million in revenue this year, and my two employees have had just as much to do with its success as anything that I've done.

Although technology plays a bigger and bigger role in the world of business, I'm not sure technology will ever be more valuable than a good employee. If you haven't read it, I highly recommend reading Good to Great by Jim Collins. In this book, Collins compares companies that have done well in their respective industries (the "good" company"), and compares them to companies that have done EXCEPTIONALLY well in those same industries (the "great" company"). In most cases, the good company had that one charismatic leader that had a vision and lead his company toward that vision. The great companies, on the other hand, had a great leader that first built a team of "Level 5" leaders (read the book on this) and AS A TEAM, the company developed a vision and direction for the company and worked toward this common goal TOGETHER.

Although I tell them that I ultimately have the final decision, my employees always get a tremendous amount of input when it comes to important decisions. I strongly believe that this is important for a number of reasons. Most importantly, it provides each employee a sense of ownership in their company. It's now no longer "just a job" - the company becomes something that they have had an important part of growing. From a branding perspective, if the company develops the strategic direction for the company TOGETHER, each person becomes a part an integral part of the brand. Each and every employee owns and believes in the brand and therefore presents the brand to the outside world in everything that they do.

Another important end result is that employee turnover is reduced. Employee turnover increases operating costs as a result from having to hire and train new employees. Low turnover also makes clients comfortable as their points of contacts are not constantly changing.

How else can you reduce employee turnover as a small business owner in addition to including them in developing the strategic direction of the company? Same way to do it as a large company - money and benefits. Although it can be expensive for a small business, it is important to provide your employees with benefits such as health and dental benefits. Again expensive, but it is an important investment in your employees. In addition, a retirement plan such as a 401K program shows that you care about your employees futures. I also encourage them to have "side gigs" or things outside of the company and do whatever I can to support these outside interests through flexible scheduling. Another benefit I provide my employees is that I pay for their cell phone bill. I ask my employees to be accessible to their employees essentially 24/7/365. If I'm asking them to do this, I think its only fair that I pay for their cell. Whenever possible, I try to give them raises and bonuses.

What else can I say? People are your MOST important resource - show them how important they are to the company by showing that you value their thoughts and opinions, but also show them how much you value them as people by providing benefits, bonuses, raises, and helping them cultivate their outside interests.

My first blog entry...

2008-05-07T01:56:00Z

Hello. My name is Leexan Hong and I want to welcome you to my first blog entry. I was inspired to write this blog this weekend when I met Dr. Boyce Watkins, a professor from Syracuse University and a well-known African-American scholar, when he was the keynote speaker at the UPPN Entrepreneurial Boot Camp that I helped pull together this past weekend. He contributes to quite a few different blogs. I realized that I have had so many interesting experiences as an entrepreneur over the last year or so, that other entrepreneurs could learn quite a bit from my experiences.

On a more selfish note, I also believe that by analyzing my various experiences in my blog, it will optimize the amount I can learn from my own experiences. I'm a true believer that experience is the best teacher. However, in order to truly learn from your own experiences, you must invest the time to revisit these experiences and think about what went right and wrong. On an even more selfish note, I hope to either write a book about my experiences or get involved in educational speaking about them, so this blog is in a way preparation for that portion of my life.

This first entry will lack any true substance. It is more about becoming comfortable with the blogging process. Here's to more entries on entrepreneurship.