The American Legion offers an intensive, two-day workshop twice a year to veterans wishing to establish a small business. Nearly 50 veterans took advantage of the free schooling in late August during the Legion's national convention in Indianapolis, where most of the classroom work dealt with the technical, paperwork-driven nuts and bolts of doing business with the federal government. However, several workshop instructors talked more generally, offering their "principles of success" advice to the would-be entrepreneurs.
Among the instructors was TV personality and small business writer Susan Wilson Solovic. Solovic is the CEO of Small Business Television and is the author of the New York Times best seller, "It's Your Biz: The Complete Guide to Becoming Your Own Boss." Solovic also serves as a business correspondent for ABC News and appears periodically on the Fox Business Network and Fox News Channel. She spoke with The American Legion about becoming a successful entrepreneur.
Q: How long have you been in business for yourself?
A: I started my first business when I was 15 years old — I taught little girls how to twirl a baton. And then I opened up a dance studio. It was all because I didn't want to work in my parents' funeral home. But, my mother said, 'You have to work and earn money.' When you're 15 years old in a small town, working in a funeral home just isn't the cool thing to do. So I started my first business then.
Doing that, I really got a sense of loving to make money and figuring out how to make money. But my parents, who had grown up in the Depression, wanted me to go to college, get a job with a big company, work there all my life and get a gold watch. Of course, today, that's impossible. Nevertheless, I did go to college and I did get a corporate job for awhile. Then the entrepreneurial bug bit me again, and I've been a serial entrepreneur in various ventures ever since.
Q: Do you ever have feelings of insecurity since you're not employed in what is known traditionally as "a steady job?"
A: In today's environment, no matter what kind of career you go into, job security is an oxymoron — it doesn't exist anymore. But, it's a lot riskier when you go out on your own. The failure rate for small businesses is extremely high — something like 80 percent in the first three years. So, it is risky business. The thing about entrepreneurs is that they sort of march to a different drummer. They like doing things on their own, and they're willing to take those risks. I always define myself as 'unemployable' — no one would want to employ me because I like to do things my own way. That's why people who become their own bosses do it.
Also, the job horizon has changed so much because of the economy that traditional jobs aren't available. And technology is replacing many of the traditional jobs. I think we're going to see more and more of that even when the economy rebounds. So now people are looking at themselves and asking, 'How can I build my own income stream? How can I build my own destiny and my own security?'
Q: How can an entrepreneur help assure survival and success?
A: Be innovative. You have to learn to do a lot with very little. Technology certainly helps businesses get started today, making things a lot easier and faster with less capital spent on startup. Also, I always encourage people to 'think big' when they're starting businesses. One of the primary reasons businesses fail, or they just sort of flounder, is because their owner thinks small and never gets beyond that. A lot of small business experts will say, 'Follow your passion and if you do, you can't help but succeed.' I'm here to tell you that that's the biggest bunch of bunk that anyone can say.
Sure, passion is good — you need to love what you do or it'll be a horrible experience for you. It also gives you energy and keeps you going during the long hours you'll have to put in to build a business. But, it's the good, solid, basic business fundamentals that really grow businesses. And there's a huge difference between starting a job for yourself and creating a business. A job is: you are the product, you are the service and if you stop doing what you're doing, the income stops. If you build a business, understanding the building blocks it takes to put together a successful, sustainable business, you have something of real value, something that can go on beyond you, something that you can pass on to your heirs or sell to your employees, something that can possibly be acquired by another company.
Q: You're saying to think big, but what about daydreaming?
A: A little daydreaming doesn't hurt at all. You really need to consider 'where do I want this business to go?' This is the one time that you get to read the last page of the book first or look at the end of the movie first. Now, I can tell you as a business owner myself, that picture may evolve, things may change. But, if you don't have that sense of 'this is what I want to get to,' you won't be able to calculate what steps you need to take to succeed, you won't be able to assess business opportunities as they come — good or bad. You also won't be equipped to choose the right people to take the journey with you. It is so important to have the right people in the right seats with you in your business. It's what I call the MYTOP theory: Multiply Yourself Through Other People. We can't do everything, even though sometimes we like to think we can. So you need to surround yourself with really talented, class A type of people.
Q: What about a business plan?
A: Yes, you need a business plan. And, it's important to write it down. There's something about putting it down in black and white. Now, to some people there's something very intimidating about that process because they think the plan has to be in a certain format, or maybe you have to have a business degree or MBA to do it. You really don't. It's the process of writing it down, thinking through the questions, 'What is this business? Who am I going to sell to? How am I going to differentiate my product? How should I price my product or service to make sure my business is profitable?' All those things go into the exercise of writing this plan. Then it becomes more of an operational document. It's not something you write and then put in a drawer and never see again. It's something you'll use. You're going to be changing it, but it gives you those goals, those measurements, those ways to stay focused to make sure you're going in the right direction.
I encourage people to prepare a written business plan. I must share with you that I'm a creative person, I'm not a linear thinker. So the first time I went into business I didn't write a business plan, and I really suffered because of it. It really is worth the time and effort because it makes you think things through. It's not about the format, it's about thinking things through.
Q: Marketing is critical. Should you handle that task or hand it off to a marketing professional?
A: In my book I have a worksheet that talks about the various characteristics that it takes to build a successful business. You can rate yourself, evaluate yourself, on a score of 1 to 10. I actually think it's a good idea then to have someone else who's worked closely with you to rate you, too, because we see ourselves differently. Then you look at that analysis, you say 'Okay, what are my weakest areas?' Then you think about when you want to bring in that first critical hire or business partner. You want somebody who has those skill sets that perhaps you lack. To answer your question, if you happen to be a naturally good marketer and have some creative sense, then maybe that's something you want to focus on and bring someone else in to do operations or handle the financial side of things. You want to spend your time doing what you do best to drive that business and bring other people in to augment what you have to offer.
Q: Marketing messages can be lost to the outside world because they're full of jargon or fail to effectively communicate what is being offered. How do you avoid that?
A: That's why it's important to have others review your work. Now, I don't mean that you have to hire some big, expensive firm to conduct a focus group or marketing study. You can just get a group of friends or acquaintances or colleagues together — people you admire. Make sure they are a diverse group, a variety of people, not just those in the same kind of business you are in. Show them your messaging. Have them see your marketing materials and hear your sales presentation. Then, let them tell you what they are hearing. Because, as you said, what they're hearing may be entirely different than what you're trying to communicate.