"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. 

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.   

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 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.

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.

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.