Michael E. Gerber developed the E-Myth strategy for small business. There are a number of useful ideas and tools that he espouses in his E-Myth books but one of the ones that stuck the most with me is the simple phrase: Work on your business not in your business.

This simple phrase is packed with a lot of meaning, which we will talk about in this article. In this simple phrase, Gerber cleverly identifies the role that a business owner should take in his or her business.

When you work in your business, you are letting your business control you. In a way, it’s almost as if you’re an employee, simply doing what you’re told to do. Your schedule and your customers and your industry and your system of practices and procedures dictate what it is that you do each day.

When you work on your business, you are the master. You control your business. You set your schedule, you control your customers (in a good way), you work alongside (not as a result of) what your industry dictates, you create good practices and procedures. You are in command.

When you work in your business, you’re like a whitewater raft, pushed about according to the whims of other forces. When you work on your business, you’re like an engineering firm that redesigns and redevelops the river itself to flow where you want it to flow.

When you work in your business, it feels different. You’re busy and you don’t feel like you’re in control. It feels like chaos. When you work on your business, you know it. You do feel in control and it feels like controlled chaos. How do you really know whether you’re working in your business or on it? Gerber gave the perfect measuring tool: If you can step away from your business for a period of time (say, a day or a week) and your business continues to run, you’ve been working on your business. However, if your business struggles or folds, you’ve been working in your business.

So, what can you do about it?

One way to work on your business instead of in your business is to create systems. We’ve talked about that here recently.

Another way to work on your business instead of in your business is to hire (either employees or virtual staff) to do some of your work for you. Once you have systems in place, this will be extremely easy to do.

And a third way to work on your business instead of in your business is to focus on vision-casting and positioning. Create the big picture and position your company as a leader in the field. Let other people do the delivery work itself. Or, if your knowledge is invaluable to the delivery of your product or service (i.e., if you are a coach or consultant), employ others to do everything else but deliver your product or service. And, if your knowledge is invaluable to the success of the company, consider creating other products and services that you don’t have to be present to deliver (like information products or pre-recorded webinars).

Brought to by you by: Contemporary VA - Run your business instead of running in circles.

@ContemporaryVA on Twitter.  Follow the team to stay updated on business resources we deliver that cover strategies and tips, social media and more!

Do you want to make more money in your business? Do you want to drive down expenses? Do you want to work a little less so you have more time for family? The answer to achieving these things just might surprise you: The answer is that you need to do the same old thing.

The problem is, business owners need to be all things to all people and they can be pulled from one issue to the next throughout the day. Because of this, best practices don’t become "practices"! And good habits don’t become "habits".

Here are a couple of examples:

A freelance graphic designer might normally give great service and speedy turnaround times but takes on too much work and can’t deliver it on time.

A consultant who tries out Twitter one month and doesn’t get any benefit out of it so they try out Facebook another month and LinkedIn another month.

A real estate agent who tries different methods of lead generation and creative ways of showing homes and closing deals.

The problem, in each example, is a lack of consistency. Businesses will do far better, they will run more productively and profitably, and they will drive down expenses and increase customer satisfaction when they perform consistently. Consistency in business means finding the best options and then doing them over and over and over and over (instead of trying to do too much or jumping from one thing to another).

The freelance graphic designer will know how much work can be handled and will minimize the amount of time that they take on more. The consultant will choose just a couple of social media and will work those diligently. The real estate agent will find two or three lead generation methods and will run with them.

Sometimes, the temptation is to try out different things in case you find something better. While it’s okay to test new options to see what the result might be, the danger is that you give up way too much by neglecting proven methods. This is a mirage; a "grass looks greener" situation. Many businesses will be far more successful if they find just a few good practices and stick with them… occasionally (emphasis on occasionally) dialing in additional options to test them.

So, here’s how to make this happen for you:

1. Identify your best practices. You probably know them (even if you don’t realize it). They’re the actions you take that are the most profitable.

2. Turn them from concepts into actual systematic processes by writing them down and figuring out how you can do them efficiently.

3. Do them over and over and over and over and over.

4. Repeat #3.

5. Repeat #3.

6. Repeat #3

Now, I’m not suggesting that you just through innovation out the window. But I am suggesting that your business will be more successful when you harness your innovative ideas and instead focus your efforts on performing good habits again and again.

As a business owner you can only do so much on your own. You bring a set of skills to the table and, admittedly, there are skills that you probably don’t have. The result is that you might have a business with a big, gaping hole right in the middle of your skillset that you need to fill in.

Hiring is an option. You can hire employees or outsource. But that might not work for every circumstance. However, partnering might be your preferred choice; it’s the sharing of the workload and the credit and the reward. Partners come to a project with an ability to contribute and a desire for mutual success.

Partnering can be a great way to build your business to a degree that you weren’t able to accomplish before. That’s because partnering follows the principle that 1+1=3; when two people put their heads together, they can accomplish great things, much more than if they just each worked on their own and combined the results.

Here are some tips that can help you become a better business partner:

• When you approach someone to talk about the possibility of partnering, make sure that you are recommending an idea that has a mutual win-win scenario. Many successful business owners have a couple of great stories to tell where someone offered them an "amazing partnering opportunity" that was entirely one-sided… in the favor of the other person.

• Early on in the process, determine what skills and strengths (and even weaknesses) each person brings to the table.

• Outline the work and the reward and make sure that each gets his or her appropriate share. Fifty/fifty is not always the best option (although it is often the default option). You might consider giving more reward to a person who takes on more risk or does more work.

• Agree in writing to the parameters set out. It can sometimes feel like a hassle to do so but it is helpful when disagreements arise to go back and see what you agreed to.

• Create contingency plans. What happens if the project is super-successful? What happens if the project fails miserably? What happens if one of the partners needs to move on from the project? It doesn’t hurt to anticipate as many scenarios as possible to help you address any potential situation that could arise.

• Start with one partner and start small. If you have too many partners in your first project, you’ll end up managing instead of enjoy and contributing.

• Be prepared to lose some control. This is one of the biggest challenges that business owners face, especially those who have been operating as sole proprietors for years. Partnerships are relationships of give and take and sometimes you won’t always complete something in the same way that you foresaw.

Partnering can be an enjoyable and profitable way to grow your business. If you’re not sure where to start, consider partnering with someone you already know – such as a vendor, a client, a business peer, or a friend. This is a good way to get your feet wet.

And start small! Don’t commit your very first partnering project to aim for a massive multi-million dollar extravaganza. Instead, create something small and build from there.

Contemporary VA

Every business has some kind of supplier or vendor. It could be a supplier of raw materials; it could be a supplier of ideas or training. For the purposes of this blog, a supplier or vendor is any company that you buy from in order to do business – home builders need lumber and construction equipment while transcriptionists need a telephone line and email address.

So here’s the conundrum: Do you use one supplier or many? There are advantages and disadvantages to both decisions. In the last blog we talked about using just one supplier. Today, let’s explore the idea of having more than one supplier.

With more than one supplier, you reduce the likelihood that the loss of one will keep you from getting the job done. And, it might be possible that each will provide a higher level of service or a lower price in order to win more of your business.

This is good news for you if the raw materials you buy from your suppliers do not need to be absolutely identical or flawless each time, and if they are simple to build or use. A home builder, mentioned earlier in the blog, might consider getting 2×4’s from more than one supplier because they’ll be generally the same and a little minor variation is okay. And, if they use just one supplier and that supplier suddenly runs out of 2×4’s, it could be extremely costly for the builder to put everything else on hold.

There are disadvantages, too. Using more than one supplier might not earn you a bulk discount, and could even earn you a bad reputation if you try to play one off of the other. And there’s another issue, too, as illustrated by this example: If you get your domain name from one provider and your web host from another, you’ll need to figure out how to connect them and get them to talk to each other. That might be a small thing but it can be time consuming and illustrates the larger issue that you might play more of a liaison or management role between suppliers than if you had just one supplier.

If you have more than one supplier, and you need supplies that can handle a little variance, here is how you can mitigate the risks above: Don’t play one against the other for price. Offer to work with a handful of suppliers and specify what is important to you about the relationship. Determine if maintaining a multiple-supplier relationship is going to be more time-consuming and costly than a single supplier relationship. If necessary (and if possible) get your suppliers together in a room and describe your expectations and how you need them to work together to help you deliver your product or service.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!

Every business has some kind of supplier or vendor. It could be a supplier of raw materials; it could be a supplier of ideas or training. For the purposes of this post, a supplier or vendor is any company that you buy from in order to do business – auto manufacturers will have parts suppliers while coaches might have a "supplier" from whom they bought their domain name and web hosting.

So here’s the conundrum: Do you use one supplier or many? There are advantages and disadvantages to both decisions, and in today’s post (and the one that will follow later this week) we’ll explore this question.

Today, let’s explore the idea of having just one supplier.

With just one supplier, you can generally build a fairly solid relationship. Since you give them 100% of your business, they won’t be hounding you for more of your business and instead you can focus on maintaining and improving the relationship. As well, your supplier will probably be open to working with you to improve the production and delivery of the product you’re buying from them. In many cases, you might also have enough buying power by putting all of your eggs in one basket to get lower prices.

Having one supplier is particularly advantageous when you require products or services that are exacting in some way. With multiple providers, you might get some variance but with one provider you are able to minimize the variance. I’ve seen this in graphic designers, writers, painters, shinglers, and numerous manufacturing scenarios. Whenever you have a situation where variance (in quality, style, or design, for example) will become noticeable, you will probably want just one provider.

There is a disadvantage, too: The supplier could go away and then you’d have to start at zero. Sometimes the supplier might disappear simply because they’ve gone out of business, or sometimes they might decide to stop working with you because it’s no longer profitable (which can happen if you work less on improving the relationship and more on negotiating discounts!).

If you have one supplier, and you only need one supplier, here is how you can mitigate the risk: If appropriate, keep a small stockpile on hand just in case the supplier can’t deliver on time for whatever reason. And, work with your supplier and view that relationship as a mutually beneficial, collaborative relationship. In a way, they are not that different than your employees and they require just as much investment in training and "care" that you would give to an employee.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!

When the economy is strong, many businesses think about how they will to meet the next order with the resources and raw materials available. When the economy weakens, it sometimes becomes a question of survival. But, how matter what the economy is doing, our businesses are always at risk… even if you’re running a highly profitable business in an in-demand industry today, it could go sour tomorrow.

I’m not saying that to be negative, but rather to be realistic. Consider how the print industry has changed over the years and is now struggling to survive and find a new identity in the midst of web-based changed. Or, if you happen to read a book written pre-2000 about using the internet, you read about the "big names" in web search… none of which seem that big any more. (Who is Alta Vista?).

Business strategy guru Michael Porter developed a tool in the mid-eighties that helped to guide businesses to think about risks and threats to their survival. It was called the "Five Forces Model" and you can read about it here.

As good as Porter’s model is, I’ve become a fan of an updated model, called the "Corporate Survival Model" developed by A.S. Grove in the late nineties. Grove identifies 8 threats to corporate survival and each business would do well to review each of these threats and brainstorm ways to mitigate them.

In no particular order, the threats to corporate survival include:

1. Potential entrants – the threat that new businesses will come along which can out-compete for your customers. Example: Google.

2. Lobby groups – the threat that organizations can change attitudes and buying habits (or help to create legislation that do the same thing). Example: The increase of eco-awareness that has changed how many businesses do business.

3. Buyers – the threat that buyers will have a lot of power to demand increased service and/or lower prices. Example: We’re seeing this right now in the recession because businesses are desperate for buyers which give those buyers a lot of power

4. Complementors – the threat that your allies in business (i.e., businesses who sell complementary products) will continue to provide products that complement yours. An example might be VCR manufacturers. They made VCRs as long as the film industry puts movies on tape. But when that stopped, the market for VCRs diminished.

5. Substitutes – the threat that something better will replace your product. Specifically, this goes beyond the threat of potential entrants to include substitutes outside of merely buying from the competition. Example: If people take the bus to work instead of buy a car to drive to work.

6. Fashion and Fickleness – the threat that whatever you sell will become less popular (or even unpopular). Example: Today’s celebrity fashions are often tomorrow’s "Discount Bin" purchases.

7. Suppliers – the threat that suppliers will have a lot of power. This often happens in really good economies where their raw materials are in high demand. Example: Just look at what’s happening with the auto industry today. Car manufacturers have an abundance of cars that no one is buying, and the dealerships, who are down the supply chain, are suffering because of it. But in good economies, it works the other way!

8. Ideology and policy – the threat that the government will make legislative changes to positively or negatively impact business. Example: Legislation involving airlines in the wake of 9/11 was effective to help improve national security, but that people-focused legislation added another layer of challenge to couriers who shipped by air and require tight turnaround times on the ground.

This week, think about how each of these factors can threaten your business’ survival and consider what you need to do to reduce those threats.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!

Starting up a business can be a thrilling experience. There is nothing like the feeling of brainstorming ways to serve customers, dream up shockingly innovative products and services, and clever ways to deliver that offering to the marketplace. It’s no wonder that we’ve coined a word for the entrepreneurs who do this kind of thing over and over and over and over: "Serial entrepreneurs".

Your start-up might be something you operate from the dining room table in the evenings and on weekends when you’re not at your day-job or it might be a high-concept, high tech effort that has venture capitalists drooling all over themselves to get to you. Regardless of what it looks like, there is one truth about your business that you need to keep in mind:

You may THINK you have a business, but until your first sale is made, you do not.

As soon as you make that sale, you’re officially in business and you need to figure out whatever you did right to close deal #1 and repeat that process. But until that sale is made, you have a non-profit organization!

The problem is, lots of people have great ideas about business – innovative offerings or new ways of delivering a product. Great. But even if they set up all the infrastructure and legal documentation and advertising, they still have a non-profit. Only a skilled few can get that business idea (+ infrastructure and legal documentation and advertising) and turn it into a real business. And that is the reason why so many businesses fail in the first years.

Ask any seasoned business owner and they will tell you that "build it and they will come" is always the dream of every entrepreneur but it is rarely the reality. Instead, it’s more like "build it and then chase after them". Even advertising is not as effective as sales. Advertising just creates awareness and rarely brings people all the way to closing of the deal.

What business success really takes is good old fashioned sales: Generating leads, knocking on doors, cold calling, networking.

Case in point: A colleague of mine is a freelance writer. He says that every 3 to 6 months he’s asked by friends or family "can you show me how to make a living as a writer so I can do it too?". And of those people, very very few actually follow through. They’re always shocked to discover that it takes SALES to do the job.

Now, after having written all that, some of you will point to me that sites like Twitter do just fine without any revenue. That is an excellent question and almost deserving of its own post. However, I will link to this site – http://www.avc.com/a_vc/2008/01/twitters-busine.html – which helps to explain how many websites (especially web 2.0 and social media companies) start free but do eventually close the deal.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!

When your business considers its marketing mix, how do you decide what kinds of marketing are in and what kinds are out? Usually, there’s a combination of reach, frequency, and cost, and hopefully a consideration of whether the marketing medium is aligned with your product or service.

Those are important considerations but there is one that often gets missed, particularly from small (and sometimes midsized) businesses. It’s the target factor.

While it can be valuable to get your message out to as many people as possible, it is often far more valuable to get your message out to a highly targeted group instead. Unfortunately, the targeted marketing is often ignored in favor of the more general broad-based effort, often because of cost. After all, so the thinking goes, doesn’t it make more sense to spend less per eyeball?

Let’s look at an example:

Company A sells B2B services and pays $1000 for 5 ads in a general newspaper. The paper will reach 1 million households.

Company B sells the same B2B services and pays $1000 for 5 ads in a business newspaper. The paper will reach 100,000 businesses.

In this example, Company A’s marketing seems to provide more value because it gives a lower per-eyeball cost. However, Company B’s marketing will probably be the best value. The reason is the market reading the ad. Spending $1000 to reach a million households is just fine, except that only a fraction of those household readers are decision-making business people who are thinking about the needs of their business. And, by the time they have are able to act, even fewer will recall the ad or the company.

Company B’s marketing, which seems to cost more per eyeball, will likely return better value because its readers are business readers focused on business problems. The ad is delivered in a format the reaches them while their mind is on business. It’s a much better target.

So, while marketing reach is important, targeted marketing is more important. It will cost more per eyeball, but it can also deliver far more customers to your business.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!

Have you ever seen a herd of (well, anything – cattle, horses, buffalo, etc.)? They all end up going in the same direction and seem to work with one mind. If one goes over the cliff, the others follow out of sheer momentum.

Business can so easily be influenced by the "herd mentality". One new business might see opportunity in offering the same product or service as a competitor, but offering it at a lower price. Or another business might see that their competitor has foreseen a trend and embraced it, so they follow suit.

Soon, every business tends to look the same. Differentiation doesn’t last long when all the competitors in an industry seem to be thinking as one. Some examples: Once Chrysler produced the first minivan, all other automakers jumped on the bandwagon and now everyone has a minivan in their lineup. Or, want another example of herd mentality? Open your Yellow Pages to the "Pizza" section. You’ll find page after page of nearly identical offerings within a narrow price band.

To fight the herd mentality you need to stop following and start leading. Yes, others will follow but if you achieve market leadership and maintain that position, you’ll have the supreme competitive advantage.

Here are some ways to become a Market Leader:

First, envision what it means to be a market leader in your industry. And picture yourself in that role. This kind of "predictive imagining" sounds silly but plenty of motivational speakers and success coaches believe that the first step to success is to imagine that you’ve achieved it.

Second, become an expert. Don’t settle for knowing the same things that everyone else knows. Become the best source of information on your business. When your competitors call you up to ask you a question, you’ll have attained that coveted market leadership position.

Third, become a thought leader in your field. Don’t be content to keep doing the same things that others do in the same way that others do them. Develop new processes, invent new tools, and discover new methodologies.

Fourth, write. Produce content about your field for magazines, newspapers, or even a book. You may not be a natural writer, so you might need to outsource some help, but getting your expertise "on paper" (or "on screen" as the case may be) will help to position you as a market leader. It’s okay to produce work that others in your industry will read.

Fifth, teach. When you teach others, you become the true expert. Customers searching for the best of the best will want to work with the one who teaches all the others to be successful. Would you rather order pizza from a random pizza shop or from "the shop that taught all the others to make delicious pizza"?

Sixth, speak. Set aside time from your schedule to speak. You might want to speak at Chamber of Commerce meetings or industry events or local networking events. Host seminars for customers and speak on relevant topics. If you want to really be an industry leader, host seminars for vendors or for other organizations in your industry.

Seventh, advocate. Get involved as a representative of your industry in lobby groups, policy groups, and industry roundtables. Drive change among lawmakers. Become THE person in your industry who makes waves for positive change.

Market leadership. It’s the best way to accelerate beyond your competition and position yourself as the best person for customers to call.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!

There are a lot of differing statistics but most people can agree on the overall truth: Many (perhaps most?) small businesses fail within the first two years. I don’t know what the actual number is but it’s high. And with today’s economy forcing more people to consider self-employment because they can’t find work, that statistic could potentially worsen.

Now, there are a lot of reasons for small business failure. I want to talk about just one reason in this blog but I want to make the disclaimer that I don’t believe this is the only reason, nor is it necessarily the biggest reason. But I do believe that this can have a huge impact on small business success. The reason is this: Some business owners believe that everything has to be perfect before they can open for business.

So here’s what happens: They spend resources perfecting their business, they spend resources perfecting their product or service, they spend time perfecting their website. They’ve spent all this money and time and effort and haven’t even sold anything!

Businesses need to accept imperfection and embrace ambiguity. Business owners need to feel comfortable with not knowing everything. They need to bring their product to market at a point where it can be delivered confidently, but with still enough "wiggle room" to make changes as the market demands. The same goes for the business plan and the website and everything else.

Here are two case studies, both true (with some details altered for privacy) that demonstrate this necessity:

Trudy wants to import clothes from South America into North America. She finds stylish clothes at a great price and brings them in. But they sit in a warehouse while she tweaks her website and has brochures revised over and over again. She believes that everything needs to be perfect first. I’ve advised her to get out there and sell her clothes right now. Her market will tell her what they want, how they want her to communicate, and how her website should function. In fact, in her particular wholesaling niche, a website is secondary to the face-to-face contact she needs to be making. But those clothes remain in the warehouse, and have been there for four years, while she perfects her website and business cards.

Jason was in sales five years ago but hated his job and his boss and quit. He had a good design eye and a little bit of experience so he decided to get into freelance marketing. Cobbling together a really small portfolio, he went out into the marketplace and started pitching his services. No one bought in the first week so he made a few changes and pitched again. No one bought in the second week so he made some changes and pitched again. In the third week he acquired his first customers. Five years later, he runs a busy marketing consultancy that still embraces ambiguity.

Now, I’m sure to get some blog readers who will disagree, perhaps mentioning that ambiguity in the tech industry and in pharmaceuticals can be dangerous and costly. That is true: in some industries, for some products or services, or to some markets, a completed approach is required. But those are the exceptions.

Most businesses, most of the time, particularly if they are just starting out, should embrace ambiguity and allow the market to guide them.

Contemporary VA

@ContemporaryVA on Twitter.  Follow us to stay updated with our many resources that include business, accounting and bookkeeping, social media, and much more!