Read an Excerpt
Unlocking Your Entrepreneurial Potential
Marketing, Money, and Management Strategies for the Self-Funded Entrepreneur
By Tim S. McEneny
iUniverse, Inc.
Copyright © 2011 Tim S. McEneny
All right reserved.
ISBN: 978-1-4620-3244-0
Chapter One
Stage 1:
Preparation and Planning Mind-Set
You gotta make your own kind of music. Sing your own special song. Make your own kind of music. Even if nobody else sings along.
Make Your Own Kind of Music Written by Barry Mann and Cynthia Weil
There are many reasons for starting a new business. Building wealth, becoming famous, working your own hours, working in your own home, and "changing the world" are all good reasons for starting your own business.
Mine were somewhat different.
I spent eleven years working for large corporations such as IBM, Singer, and Sara Lee. During that time, I learned a lot but felt like I wasn't getting an opportunity to use what I had learned. I wanted to make a difference. Everywhere I turned, I saw too many people doing too little meaningful work.
In my eleven-year corporate career, I held many management positions, including Production and Inventory Control manager and Materials manager. My first job was at IBM as an industrial engineer and later a cost estimator.
Anyone who has ever worked for a large organization knows what I'm talking about. There was something about working in this environment that bored and frustrated me.
I don't think I realized it early in my career, but I really needed to do my own thing. I began thinking about starting some kind of a business about five years before I actually made the break.
Don't get me wrong—there were many things I learned along the way that ultimately helped me become a successful entrepreneur. I learned the right way and the wrong way to do things. I certainly received a solid foundation in management, managing both people and money.
For example, at IBM I learned how to treat employees with respect. I also saw a company that had become bloated, a victim of its own success. I used to tell my coworkers and manager that IBM had twice as many employees as it needed. There were 400,000 employees worldwide. Lou Gerstner, IBM's CEO from 1993 to 2002, eventually fixed that problem by cutting the workforce by 40 percent and repositioning the company to sell more services and rely less on hardware revenue.
At Singer, I learned how to introduce and manage change in an oldline organization that was highly resistant to change. I also learned how to manage and motivate people of various backgrounds, points of views, and capabilities. At age twenty-nine, I had 120 people reporting to me. My area of responsibility included both union and nonunion workers. It was a great learning experience.
At Sara Lee, I saw how one person could make a difference by taking some risks. This led me to totally automate the manpower-planning process and reduce monthly planning time by 90 percent.
Take-Away #1
Work for one or more companies before starting your own business. You'll learn the right way and the wrong way to do things. These insights will help you build a solid foundation for starting your own business.
Ultimately, my experience in these larger companies inspired me to start my own software company, PurchasingNet, Inc. During my corporate career, I had come to learn firsthand how a purchasing department (sometimes procurement department) functions within a large company. This experience helped me develop personal-computer applications to automate the procurement process in midsized to large companies. (More on this later.)
I acknowledge that when the economy is soft and few jobs are available for recent graduates, there is a temptation to start your own company rather than find a job. Unfortunately, starting a business with no previous business experience is a prescription for disaster for most people. If you do go down this path, make sure you build a business around things you have personally experienced, such as college life, online experiences, or games.
One of the most important things you can do in building your own company is to learn all you can about your potential customers before starting your business. You have to know what makes them tick, what problems they need to solve, and how they go about making decisions.
In our case, I had experienced the challenges of being a procurement manager in a midsized to large company. Procurement managers spent lots of time on routine administrative tasks, lacked timely and accurate information, and were under incredible pressures to get things delivered on time (or early)—all without the lead time or tools to do the job. They were always stressed!
These insights were critical in the formation of our company. After considering a number of other products and services (such as software for hazardous-waste management), we decided to develop a software package we later named P.O. Writer. The original vision was to help purchasing departments automate the preparation of Purchase Orders (POs) and generate meaningful management summary reports.
Our original vision was to replace the typewriters, word processors, filing cabinets, and large mainframe computers used by purchasing departments in the 1980s and '90s.
Reasons for Becoming an Entrepreneur
My original objectives for becoming an entrepreneur were to:
• Create something new, unique, and useful that would improve industrial productivity.
• Stop working in a slow-moving bureaucracy.
• Be independent and control my own destiny.
• Spend less time traveling and commuting. That gets old in a hurry. (At two different times in my career, I commuted five hours a day. I totaled all the time I spent commuting plus working and calculated an hourly rate. At the time, if I could figure out a way to start a business and make ten dollars an hour, I would be way ahead of the game.)
• Apply management skills I had learned working at various companies.
• Do meaningful work.
You'll notice that making money was not a motivating force in the beginning. I viewed making money more as a scorekeeping method than a step toward creating great personal wealth.
That changed over time. My secondary objectives became:
• Make a good living and save for retirement.
• Lead a balanced lifestyle.
• Grow the business.
• Eventually sell the business and do something else (like writing this book).
It took twenty-eight years, but we accomplished each of these goals. It was a great ride and rewarding in so many ways. It was by far the greatest experience of my professional life. I hope you get the same opportunity I had. I hope that the things I learned can help you succeed and achieve your goals, whatever they may be.
Dreaming
Don't be afraid to dream about starting different types of businesses. I spent about five years thinking about the kind of business I'd like to own. I ran hundreds of possible scenarios through my mind before starting my initial business: a management consulting company run by myself and a partner.
This thought process will help you get comfortable with the business without starting down the wrong path. By running through all those scenarios in your mind, you will substantially minimize the risk of failure.
Take-Away #2
It's okay to daydream about starting hundreds of businesses before starting your first. In fact, it will help you minimize your risk.
Avoiding Analysis Paralysis
Do you have the courage to make decisions with incomplete data? This is critically important to starting and running a business. An entrepreneur rarely has all the information and data needed to perform a perfect analysis and make the right decision all of the time.
An entrepreneur makes hundreds if not thousands of decisions every day—most with imperfect, incomplete data. In most cases, it is far better to make the best possible decision with 80 percent of the desired data than to wait until all of the data is available to you.
Take-Away #3
You don't need all the facts before starting your business. Sometimes it helps to be a little naïve. If you understood all the risks and how hard it would be, you'd never get started in the first place.
With that said, you will not make the correct decision all the time. One of our mottos at PurchasingNet was, "Progressive improvement beats the hell out of postponed perfection."
After carefully considering the risk of making the wrong decision, plot a course and get started! Naturally, you don't want to get started down a potentially disastrous path, but don't be afraid to start with a small first step that's less than perfect. You can correct or refine your ideas as you move forward. Just think of it as a mid-flight correction.
Many people study things to death. They suffer from "paralysis of analysis" and never get started.
Take-Away #4
Progressive improvement beats the hell out of postponed perfection.
The Four M's
One of the critical activities you'll need to tackle early in the planning process is evaluating your skills, likes, and strengths to see if you have what it takes to launch and build your own enterprise. I like to talk about the Four M's needed by the self-funded entrepreneur. They are Mind-Set, Marketing (including Sales), Money, and Management.
I have found that it is very unusual for a single individual to have adequate knowledge, skills, and experience in each of these areas.
For example, despite my background in two of the Four M's (Management and Money), I had little experience in Marketing, and I wasn't sure if I had the right Mind-Set to succeed.
I teamed up with a colleague at Singer who had a much more outgoing personality and had built good relationships with two well-known MRP consultants. MRP stands for manufacturing resource planning (today known as supply-chain management). These two men, Hal Mather and George Plossl, were internationally known gurus in the industry. I worshipped these guys. Frankly, I'm not sure I could have picked up the phone and talked to either of them without freezing. They were truly icons in the industry, and I was a wannabe.
Hal Mather was originally from the UK. He was a really smart guy and a great speaker. Hal used to speak to large groups around the world on a regular basis. At the time, Hal charged something like $5,000 a day to consult with companies.
Mather and Plossl had just produced a video series that was designed to educate manufacturing people in midsize to large companies. My colleague and I talked Hal Mather into letting us use their video series to conduct training courses at client companies. This provided instant credibility and was a win-win. They would get more exposure for their video series, the client would get hands-on instruction, and we could charge for our services.
So now we were in business. We designed business cards and stationery for our new enterprise. We named it IPM Associates (for inventory production management) and created a crude logo consisting of a triangle with one side each for I, P, and M. Not a thing of beauty, but we were off to the races. It was exhilarating!
But now what?
We decided to mimic the design and format of the newsletter Mather and Plossl published every month. This was a four-page newsletter that was sent out to their mailing list of clients and prospects.
Our newsletter described the education and training services we were providing (or hoped to provide). The Mather and Plossl video series gave us credibility and made us appear bigger and more established than we were. The fact is, we were just starting and had no actual customers.
But we knew we could provide a great service. We had successfully used the video series at multiple companies (as employees) and knew the material inside and out.
We convinced Hal Mather to let us use his mailing list, so we printed a thousand of our newsletters and mailed them out.
A week later, we landed our first customer: a company named Simonds Cutting Tools in Ohio. I began to see how important the sales and marketing process was to starting a new business, and I knew I would need a partner to get this off the ground.
Shortly thereafter, we landed a big deal with National Steel in Houston, Texas. Life was beautiful. We were on top of the world!
As my confidence grew, I started to feel comfortable talking to prospects, and even to George Plossl. George was like a god to me. He started out as partners with the legendary Ollie Wight and helped put MRP (also now known as ERP) on the map. He was known and respected by everyone in the field—and now he would even take my phone calls!
Hal Mather took a liking to me and became a mentor. He showed me the best way to give a presentation to a group ("Never turn out the lights during a presentation, maintain eye contact with several audience members, and above all else ... keep them awake!").
Hal also encouraged me to write a book to become known in the industry. He agreed to help me edit and publish the book. I ended up writing a takeoff on the popular book of the 1980s called Up the Organization, which was authored by Robert Townsend, the CEO of Avis. I loved that book! It was irreverent and humorous, but provided many great insights into big business.
My book was titled, Up the Manufacturing Organization: The Modern Materials Manager's Guide to Survival. Hal helped me edit the book. In the process, I learned a lot about writing.
After nine months of writing and editing, Hal decided to go off on his own, so he wouldn't be able to publish the book. This was devastating news for me.
When I asked Hal how I was going to get it published, he looked at me and said, "You can publish it yourself." That led me to form TSM Publishing (my initials) to do just that.
At the time, there weren't any online tools to help people self-publish, so this became a time-consuming task. I found a company that printed books and made a deal with them to print a thousand soft-cover books at a cost of four dollars a book. They agreed to stretch out the payment terms so I could conserve my cash. I hoped that I could sell a few books before I had to make my first payment.
I ended up selling three thousand copies (three printings) and received speaking invitations from sixty different professional organizations throughout the United States. I actually became a mini-celebrity in the industry and formed Tim McEneny, Inc., to provide management-consulting services.
I learned a lot about speaking and became comfortable speaking to groups of five hundred people.
I racked up a ton of air miles and rented Avis cars everywhere I went. (Besides being inspired by their CEO's book, I liked Avis's slogan—"We're number two. We try harder!")
All of this was done while I was still an employee at Singer. Singer had previously announced its intention to shut down the plant in Elizabeth, New Jersey. I worked out a deal with management to take unpaid personal time to start my business while remaining with Singer to help wind down operations at the plant.
Take-Away #5
Start your business while working for someone else. Even if it means working fifteen hours a day, it's the best way to become a self-funded entrepreneur.
I had formed three companies in a space of one year, all while working for another company and still receiving a paycheck. The self-funded entrepreneur was born.
Writing
A skill that is particularly important is the ability to write. If you think about it, the need for good writing touches every part of a business, whether it's writing a brochure, a website, an instruction manual, an e-mail, a proposal, or even a simple business letter. I am constantly amazed at the number of college-educated people who don't have good business-writing skills.
Take-Away #6
Read William Strunk's book The Elements of Style. It has been around forever, but it can help you write in a clear, concise manner. This is critical in business.
(Continues...)
Excerpted from Unlocking Your Entrepreneurial Potential by Tim S. McEneny Copyright © 2011 by Tim S. McEneny. Excerpted by permission of iUniverse, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
