Before You Take the Entrepreneurial Plunge, Consider Various Business Models

There are some business models that are more accessible than others, to individuals who have little or no collateral, little or no cash, little or no entrepreneurial experience, little or no training, and little or no choice but to pursue an entrepreneurial dream without the benefit of resources which would ordinarily be nice to have. The purpose of this article is to briefly review some of the alternatives.

First, there are product oriented businesses versus service oriented businesses. In the case of the former, questions arise as to the source(s) of supply, how the inventory is to be managed, whether the product is perishable, and how the product is delivered into the hands of the customer. The business may need a substantial physical infrastructure. In the instance of a product like new cars, you need a lot, a parts department, service and cleanup capacity, and a sales, financing, and administration area. You will also need lighting, security, and other amenities to ensure that buyers have a sense of confidence in the business. If you’re selling ice cream, you need to keep it cold; this implies freezers and refrigerated trucks, perishibility, and substantial energy bills. If you’re selling clothes, you need display and storage space for a variety of sizes and styles. In all of these cases, you need the product itself in inventory. You might also wish to categorize this type of business as having one other similarity among others of like kind: these are “brick and mortar” businesses.

Service businesses may also require “bricks and mortar,” so just because a product is not physically stocked or otherwise identified as tangible, one must not jump to conclusions. A day spa, a bank, or a hotel, are all examples of service businesses that are also brick and mortar businesses. Generally speaking, brick and mortar businesses rely on a “place” where they must exist, and acquiring such a place requires capital. The “place” characteristics of a given business may carry great weight in the eyes of its customers or clientele. It should not be a surprise that many hotels and apartment complexes invest heavily in lobby and entrance areas when designing their facilities.

One might expect that professionals such as attorneys would charge significantly more, or less, simply judging by the type of offices in which their practices are located. Let’s compare two hypothetical situations. The first is the instance of an attorney whose office comes complete with marble floors, collectable paintings, and an attractive, albeit somewhat pouty, reception area representative. We could then compare this to another attorney, whose office is combined with an income tax service and a small engine repair business. The difference between the two is about $300 an hour. There’s a reason that high profile celebrity defendants hire so-called “dream teams” for representation: they get positive results.

Some businesses sell undifferentiated products or services. This means that the product or service offered by one business is the same, or substantially the same, as the one offered by competing businesses. A gallon of gasoline is probably a good example. (At the present time, it appears that every provider has the same goal: reap substantial profits from consumers.) One station may attempt to distinguish itself from another through slight pricing differences. Oil companies may proclaim “we do research to protect the environment with clean burning fuels that are better for your car”; but, a gallon of gas is a gallon of gas in the eyes of most consumers. Any slight price differences, auxiliary services such as clean rest rooms and a convenience store, and location largely determine where consumers will ultimately spend their money (in ever increasing amounts, it seems).

All business models require some form of promotion. The “person on the street” typically confuses terminology that is actually quite specific. The terms promotion, advertising, and marketing are often incorrectly used interchangeably, for instance. Marketing is inclusive of price, product, place, and promotion. A business can be promoted through word-of-mouth and referral; therefore, a good reputation and testimonials should be cultivated by any business. Some products require heavy paid advertising. “Paid” is the critical word here, in that it suggests that the advertiser has some choice in placing a message before a desired audience. By definition, advertising is paid, non-personal communication; ordinarily it is underwritten by an identified sponsor; it is meant to be informative, if not persuasive in nature. By far, most advertising is local, even though one might tend to first think of national advertisers and brands in an advertising recall test (a test of what someone remembers).

Another way to promote a product is through personal selling efforts. Some types of businesses use independent representatives for this purpose, because it makes sense. For example, suppose that one has a line of porcelain figures that are sold primarily through gift stores. However, as a small business, it would be hard to afford a staff of in-house sales representatives to call on thousands of gift stores nationwide. One could use a firm that represents several product lines (such as greeting cards, writing pens, and silver) and simply add the porcelain figurines to the list of products that might be presented to gift store owners and buyers during sales calls. In a small business, it is the management team’s job to make sure that someone is doing the selling. It helps if the owner is comfortable with this role, as his or her passion for the business can usually be leveraged. However, if you are a prospective business founder, and you are not comfortable addressing audiences one-on-one, in small groups, or behind a podium, you’d better enlist one or more individuals who are competent in this area, for the sake of your future success.

After reviewing more marketing and business plans than I can any longer count, I can just about bet that material under the heading “Promotion,” will be the Achilles’ heel in a majority of plans. Authors of these plans, who are often lacking adequate financial wherewithal, tend to sum up an entire treatise on promoting a proposed product, service, or business with: “We will use word-of-mouth to advertise [sic]…” Word-of-mouth is a fantastic way to promote, if is nurtured. A large “buzz” can be created with a great product that is professionally represented through an in-house sales force, or independent representatives. Companies selling encyclopedias, vacuum cleaners, and cosmetics were built through independent representatives who approached consumers directly. More recent examples have utilized network marketing, where an emphasis on building organizational teams has been made. Senior representatives’ roles are to mentor the development of new representatives.

There are labor and equipment intensive businesses, and there are knowledge intensive businesses. Either can be relatively easy, or relatively difficult for a competitor to duplicate. It all depends on the degree of investment and specialization necessary to get into a business. This concept also suggests that there are certain “entry costs” into a given line of business or industry, and these costs represent barriers that must be overcome. The opening statement to this article, where I outlined various “little or no” scenarios, should be reiterated here. You should find a business that meets the “little or no” test according to your set of circumstances. A personal service or consulting-type business is far less expensive to launch than a restaurant or a retail store. If you have speaking skills and a set of overheads and hand-outs, consider a training and development business. If you’re good at matchmaking, become a recruiter or a dating expert.

Most of my own prior business endeavors have been service oriented businesses that required some specialized knowledge. Building a clientele and personally servicing that clientele has been a central premise in each of these entrepreneurial instances. That has often entailed long hours, scheduling dilemmas, and few breaks in between: clients want what they want, when they want it, which, more often than not means “yesterday.” With the advent of the Internet, an entirely new realm of entrepreneurial opportunity was opened to me and millions of other would-be entrepreneurs around the globe. Recognizing some fundamental differences in business models, I registered the Internet domain name, “WebPreneurship.com,” along with numerous others.

The main difference in Internet business models has to do with the fact that one can create an online presence, with the capability to represent numerous types of products or services, many of which can be entirely transacted and delivered using the Web as a facilitator of that process. Digital products can be downloaded; physical products can be delivered through contracted fulfillment services. A related concept, known as drop-shipping, can allow an Internet business to overcome this latter obstacle as well. Drop-shipping means that when an order is generated on an entrepreneur’s Web site, the product supplier or manufacturer will receive the order and send the shipment directly to the consumer. There is a virtual presence facilitated by technology and strategic relationships, as compared to a physical presence with associated brick and mortar costs. Hence, my own working definition of “webpreneurship” began to take shape.

Information products such as electronic books and reports have also created yet another new term in our vocabulary, known as “infopreneurship.” Infopreneurship has to do with making a living (on the part of the infopreneur) by providing information of value. Prior to the advent of the Internet infopreneurs did exist, although they operated under a whole different set of constraints that had to do with the costs of advertising, mailing, shipping, printing, and other expenses that the Internet has largely eliminated.

Even those business types that cannot complete the full product or service creation, selling, and delivery cycle, can enhance their presence over the Internet. For example, you can’t get a haircut on the Internet, but you certainly can look at styling options, pricing and service options, and location information (including interactive maps and directions); subsequently, you can book an appointment time and date. Basic Internet businesses can be created at relatively low cost, and can be maintained with a flexible schedule, assuming that they are fully automated and sell a product such as information and reports as compared to one that requires a physical product to be shipped. An entrepreneur may exercise the drop-shipping or fulfillment services mentioned above, or handle this for him or herself in-house. Of course the latter situation, relative to business models, entails providing availability to customers that confines the entrepreneur to the business during its publicized hours of operation.

Franchises and business opportunities (including buying an existing business) provide one major advantage over other business ventures that are started from scratch: greater certainty derived from a formula that is “tried and true.” If you have no idea where to start, but you are trainable and ambitious with a few dollars to spend, consider a franchise. There are some franchises that use what amounts to a “promote from within” approach, favoring successful managers as candidates for franchise ownership (and providing a helping hand toward financing the franchise fees). Bootstrapping and sweat equity go hand-in-hand, and if you really want a piece of the action, there are individuals out there who are looking for partners–you could quite possibly earn your way into owning a share, or even all, of an existing business.

As for me, I have come to enjoy having multiple roles and avenues for personal as well as professional fulfillment. I teach entrepreneurship at a university, write, and engage audiences as a public speaker. I have invested in several Internet sites. I have created several of these sites myself, while others are turn-key sites. (A turn-key site is one where a system is already in place to provide a product or service as well as technical support, transaction processing, and customer service.) For instance, I have one site that provides Internet domain names, and that is a turn-key site which I purchased for less than two hundred dollars. I am also an independent consultant for a network marketing firm that offers consumable health, wellness and beauty products. A network marketing structure offers me the opportunity to develop, train, and mentor persons who are interested in growing a business opportunity. Meanwhile, as a continual learner myself, I can enhance my skills and knowledge and benefit from peers and individuals who have already blazed a trail before me.

Every business model implies trade-offs and unique characteristics as well as lifestyle choices. I enjoy teaching, but I also think that staying connected as an entrepreneur makes me a better teacher. I like to learn, so I am always pursuing new insights through casual as well as formal research (which I share through writing and speaking). I enjoy helping others, and teaching, mentoring, and guiding others is essential, to me. As a person of humble beginnings whose accomplishments have often been the result of starting from scratch, my most profound lessons have been acquired from the “school of hard knocks.” If I can smooth out someone else’s path, I’d like to do that. I also have enduring financial obligations, like most people, as well as responsibilities and love for friends and family members. Thus, any entrepreneurial decision has a direct impact on every aspect of my life.

In your own way and given your own set of circumstances, you will have to juggle to achieve your own unique entrepreneurial and lifestyle solutions. Before you take the entrepreneurial plunge, consider various business models and their implications completely. Your decisions will impact your life in ways that are to be considered just as seriously as the business models that you scrutinize. The right model will serve as a pattern for your fulfillment and success. Whatever you do, I suggest that you seek spiritual, emotional, and professional balance as a guiding light in your entrepreneurial journey. Making the right choices will enable you to find your “groove,” gain your freedom, and live the kind of life that you’ve always wanted, both on and off the entrepreneurial playing field.

Groove Network. Are you in it?

If you are in a business that passes documents around to be reviewed and edited over and over before they are ready to be posted for advertising or for a client, then you have probably already heard of a software solution to help keep your “floating” documents organized from Groove Network. You may not be aware that there is another option out there. In this article you will be presented with some basic information about the differences in collaboration software from Groove Network and NextPage.

Idea behind collaboration software.

The central idea behind having collaboration software is that it allows business professionals to work directly with other business professionals by allowing them to work together to create business documents, presentations, and budgets. Most collaboration software is centralized. This allows business professionals to work on the same documents at the same time from different locations. Some centralized collaboration software solutions include Groove Network, Microsoft SharePoint, Documentum, and Filenet.

Groove Network Advantages.

There are a few advantages to using centralized collaboration software such as Groove Network. The main advantage being that they work very well for team collaboration. Groove Network’s software keeps all files, projects, and data in one centralized location that everyone who is working on the project can access. This allows them to review and update the same document that everyone else has used, which essentially keeps everyone working on the same page.

Drawbacks to Groove Network.

While the collaboration software solution provided by Groove Network is very useful and beneficial, there are a few drawbacks to using it. The main disadvantage being that Groove Network’s software requires the use of an IT infrastructure. Another potential drawback is that it requires an extensive amount of installation time. Other collaboration software options out there also require everyone you work with to have the same software in order to share information. All of these drawbacks to centralized collaboration software can be very expensive and inconvenient.

Are there any other options?

An alternative solution to the centralized collaboration software is NextPage. NextPage 1.5 Collaboration Software tracks documents with Digital Thread technology. Say, for instance, that you are working on your company’s budget. You want to make sure that your facts and figures are correct so you send your spreadsheet to several of your co-workers for review. They look over the spreadsheet and make the necessary changes. They then return their spreadsheet version to you, and with NextPage 1.5, you simply merge the document versions together into one. NextPage 1.5 lets you see all of this visually via a graphical version history. With the graphical version history, you would always know where the various versions of your spreadsheet are stored, what changes have been made, who has reviewed your spreadsheet, when the revisions were made, and how the revisions fit together. NextPage makes it easy to see where the document has been and what revisions have been made.

So what are the major advantages of using NextPage?

The major advantages to using NextPage’s collaboration software include the following:

o Do NOT need a centralized server

o Do NOT need an IT infrastructure

o Installation can be done in a matter of minutes

o Will work with associates who are NOT NextPage subscribers

o Solves document management problems where they originate

In conclusion, if you are in a business that could greatly benefit from using collaboration software, look at and evaluate the possible software options out there and see which one will be of the most benefit to you in your company. I have presented a few ideas for you to think about and get you started in your decision. So get out there and organize your document management!

Intuition in Business – A Key for Decision Makers

Do you ever hire or put work teams together? Are you ever developing relationships with clients, advisors, supervisors, or your staff? Do you ever have to make career choice decisions? Are you ever in position to decide about a new product and what quantities to produce, distribute, or acquire? Do you have to stay ahead or at least up with the trends? If you answered yes, then you may want to read on and explore how you can tap your deepest and strongest levels of wisdom…

An executive buyer for a national retail chain of full service department stores played a “hunch” and created huge profits and national recognition for her stores. She had learned her job over several years and understood her customers but when it came to predicting the fashion trends she was still more guessing than using statistical analysis. Her intuition told her that an overlooked style would be a “hit” and proceeded to order the dress in certain fabrics and in large quantities. The manufacturer, being an honorable business associate, tried to dissuade her knowing that every other major buyer had overlooked or discounted this particular style. The buyer being strong willed and very strong on this “gut feeling” maintained her large order. A large promotional campaign was launched and to everyone’s surprise, except the buyer, the dress sold out rapidly causing every other major store chain to demand this product. Thousands of this dress style were sold and the buyer’s reputation was elevated by this business decision. Though it seemed to go against logic and current reasoning, this bold act sent this retail market spinning in a new and profitable direction. This buyer developed many unexplainable projects in her successful career and she still considers her intuition responsible for much of the recognition that brought her to the very top of her profession.

Recently an increasing number of reports are pouring in, unexplainable situations of great decision making that appear to be “lucky guesses.” Executives who did not play the “odds” and chose instead untested teams of people or products that overnight created huge growth and huge profits for the developers and investors. Some new technologies are so “cutting-edge” that no one can accurately predict the direction and outcomes of these activities. This includes investing in high-tech, foreign markets, trends of the national market, world political trends, and the needs for NEW products and services. Who could have predicted that that within the past ten years products and services like: cellular phones, pagers, E-mail, faxing, the internet, bio-technology, even Dilbert, would be the necessities of business executives competing for world business. Trends are evolving but being ahead of the trends takes, guts, fortitude, and a deep insight that accurately can feel the “right” directions for the future.

The story about the buyer has been repeated in every industry. The “gut feeling” decisions that have lead to success seem to be increasing with the advent of new technologies and the “uncharted” arenas that must be negotiated. With no “track record” many business decisions must be made quickly and without historical support. Executives with good instincts are driving the explosion of instant millionaires that many industries, particularly “high tech” businesses, in the past decade.

Have you ever experienced ultimate satisfaction in a business activity or decision? Have you ever “played a hunch” and had it come out better than your expectations? Have you ever experienced being totally “connected” or “in synch” with your client or team and had profound results? Were you ever “in the groove” with your sales and marketing activities? Most importantly, did you ever have a “Gut Feeling” about a decision that was so powerful it could even override prevailing thought or certain statistical facts, and achieve great results? Did you ever “know in your Gut” that you had chosen the “right” people for the project even though they were relatively new, inexperienced, or had never worked together before, they just developed the “Right chemistry” to make “it” happen?

Sometimes, for a not fully explained reason, an executive will make great decisions that far exceed expectations. For some managers this happens only rarely, and their track record may show that they are careful and do not take risks. This has been a successful strategy for some managers. But increasingly, business is moving into new areas, perhaps uncharted territory, and the smaller companies who play the “hunches” may wind up winning, creating large payoffs in these new arenas. Some executives have the reputation for “big wins” and develop a track record that make their hard work and great “guesses” produce big leads over their competition. These “guesses”, “hunches,” and “gut feelings” separate the innovators from the managers that follow the leaders. “You can make dust or eat it!”

Customer service also can rely on special qualities where salespeople, managers, or executives can “connect” in a special way with their customers and create a relationship of trust and rapport that develops special loyalty and long term success. People who are “good” with people as managers or in providing customer service produce good returns on the company’s bottomline.

Many executives when in training, in teaching, or in business activities use metaphors from sports. They play aggressively. They “have their head in the game.” They are “in the groove,” “hitting on all cylinders,” and sometimes totally in the “zone.” Athletes describe “being in the zone” where their perceptions are so sharp that time seems to slow down. Their decisions are so clear and precise that they can surgically pick apart the other team’s defense and score in the almost impossible ways. Examples of this abound, where a quarterback, or point guard, or sales executive, intuitively knows what his teammate/client will do, and in a split second delivers the “ball” to the perfect position for it to be received, “in stride,” to complete the drive for a score! This “state of being” is a rare pleasure to experience under any circumstance. When you feel this on the field or in business, it adds to the satisfaction of the experience. In its way it has addicting qualities that brings you back time and time again. This can motivate an executive, letting him/her feel that they are at the very “top.”

Too often we wait for these situations to manifest. We are not proactive in creating the proper emotional, mental, and physical environment to perform at this level and with this satisfaction. Some experienced veterans can pull these qualities out in key situations and use them with great aplomb. Some younger, creative executives seem to have these abilities and can “hit a homerun” early-on. But this is an experience that is an emotional skill that can not happen upon command, consistently, without proper training and nurturing of this skill.

Every competitive company and executive leader wants every advantage that they can develop. Consultants and trainers showcase the latest business techniques. Most business management techniques can be taught through normal teaching methods in classes or through verbal instructions. The “Gut Feelings” of a clear intuitional decision is derived in an entirely different way. It comes through a special “connection” or “feeling” that can not be taught in normal teaching methods. The experience must be provided, guided, enhanced, supported, and nurtured for its full development in a consistent trustworthy “feel-set” (skill-set with feeling.)

Major disruptions to intuition and focus occur in the presence of stress and fear! Controlling fears, insecurities, and your stress response is the first step to preparing for the connection with your intuitive insights. In other words, you must control the background noise and distraction that we most often feel when we are not “in the present moment” and not “in our bodies” in a healthy way. Much has been written about stress management for business and optimum performance can be achieved for athletes or business people through the focus of relaxation and then the special visualizations of success and “peak performance” programming.

The next steps involve immersion through ritual and developed exercises that reconnect you with certain quiet parts of yourself. Physical and emotional blocks need to be circumvented through awareness, acceptance, and then re-channeling of consciousness. A sensitivity to these feelings must be established and then honed to gain the “clarity” that will make this more consistent, trustworthy, and predictable. This phase is not the easiest. It requires diligence and practice. The skill of being able to “let go” physically and emotionally takes some time. It takes mastery of fear to trust that the unconscious forces can give special protection and then guidance. Then the levels of self-awareness and acceptance lead to self-confidence in the special way that successful, creative producers have achieved (for consistent success.)

The phase of balance and grace is a rewarding and beneficial achievement. No matter what the activity you participate within, these levels of focus and of being centered, create the proper internal environment for success. These attributes are not just for business but for all life activities and pursuits. Most people never take the time to achieve these states and never find the deeper satisfaction with their lives. Relationships, families, health and business can suffer from the lack of balance and grace. At a universal level, the world would have more peace, less crime, and fewer environmentally stupid occurrences if balance and grace were honored and cultivated.

© L. John Mason, 1996

7 Steps to Intuitive Power

  • 1. Awareness
    Be exposed and learn the “Process” of the Intuitive Warrior. Know of historical, cultural, inherited responses.
  • 2. Self-control (Self-care)
    Learn and install lifestyle adjustments for health, wellness, and Clarity Development. Demonstrate the benefits of centering/connecting.
  • 3. Self-Confidence (not false confidence)
    Learn and Know yourself to the core. Develop the control to center yourself: mind, body, and spirit
  • 4. Self-Esteem
    Elevate your feeling/knowing of your self. Develop the sense of self-connection and self-love.
  • 5. Trust in the Universe
    Develop the awareness and the skills to trust the highest levels of connection and conscious. Prepare for “Letting Go”
  • 6. Letting Go (Easier Said Than Done)
    Be able to “Let go” physically, mentally, emotionally to be open for intuition and Insight
  • 7. Acceptance
    Intuitive Insight & Power (Also called Enlightenment) Release the fear of failure, Death, and conscious loss of control. Find your power and deeply connected safety nets of empowerment.