Radio Free Enterprise

People often ask me about my background - where I cut my teeth in business. In this podcast you get a pretty clear peek at my entrepreneurial roots in the printing business.

This week I was invited to speak to the Franklin Technical Society, a group of folks involved in providing printing and information services to government agencies, corporations and other large organizations here in the Washington, DC area. It was quite a trip down memory lane.

In attendance were executives from the American Red Cross, Library of Congress, Government Printing Office, United States Army and large local printing companies including Stephenson Printing and our hosts, Goodway Graphics.

Though I spent over 25 years in the printing industry, it had been at least six since I last addressed a room full of printers and their clients. This industry has been enduring wave after wave of technological onslaught for decades. And, every time they think they can come up for air, another unforseen marketplace upheaval rocks their world.

Well before desktop publishing, optical disks, the Internet and sub-$100 desktop inkjet printers with photographic quality, printers have dealt with revolutions like the Linotype in the late 19th Century and offset printing in the mid-20th Century. The pace of change only seems to accelerate over time.

If you’d like to hear me tell some stories on myself, and learn about how one industry has continually adapted to change, give a listen to this week’s podcast. And post a comment to let me know what you think.

In just our third year on the list, owners of small businesses topped the Harris Interactive poll of most trusted leaders of societal institutions in America.

In 2007, over half of U.S. adults (54%) polled expressed a great deal of confidence in leaders of small business, followed by the military at 45%. University and medical leaders tied for third at 37%.

Other institutions such as Congress, religious leaders and law firms did not fare so well. The White House has dropped from 50% to 28% in just five years. OUCH!

I am very pleased to learn of these results as they support my experience that the vast majority of business owners are extremely hard working individuals whose high level of personal and professional ethics are manifested in a superior customer experience.

The fact is, that’s what business owners have to do to succeed. Today’s consumer is not only smart - but well informed. They have access to almost unlimited information and innumerable options when making their purchase decisions. Their belief in small business owners is based on their experience, not on some idealized notion of the The Great American Entrepreneur.

Congratulations.

Karl Marx hated capitalism - and capitalists.

One of his biggest gripes was the way he felt that the holders of capital exploited the holders of labor by selling the fruits of that labor for much more than they paid their workers. He referred to this as the “Surplus Value of Labor Theory” and postulated that this was the primary way that Robber Barons and successful industrialists like Henry Ford built their fortunes.

I can’t disagree with his analysis, but I do take issue with his perspective. The Surplus Value of Labor is the only reason why jobs are created. By combining plant, equipment, knowhow and marketing with labor, business owners are sometimes able to charge their customers more than the cost of all those inputs. Sometimes. This is what we call profit.

Other times they lose part or all of their capital - and their own labor investment - in the process. That is what we call risk.

The Surplus Value of Labor theory came to mind when I was giving a seminar on entrepreneurship to a group of prospective business owners last weekend. I used it to explain why businesses hire workers and to discuss my belief that one should always “measure twice and cut once” when it comes to hiring. Just like marriage, an employment relationship can be easy to enter into but difficult - and expensive - to get out of.

The important point is that leveraging the value of employees is only one way to build a fortune. Other inputs such as creative marketing, innovative products and services, great customer service, high-value partnerships and intellectual property can also create above-average profit levels. Which will work best for you depends upon the specifics of your industry, your firm, your target market and your competiton.

Business owners have it all: wealth, power, prestige, a life of ease.

Now they even have their own feature film: The Call of The Enterpreneur.

According to the Acton Institute (producers of the film) PowerBlog:

The Call of the Entrepreneur tells the stories of three entrepreneurs: one a farmer in rural Evart, Michigan, another a mercantile banker in New York, and finally an entrepreneur in Hong Kong, China. The film examines the drive behind what these people do: Why are they driven to create wealth? Why do they produce? Who does it benefit?

The film premieres May 17 in Grand Rapids, Michigan and will probably be available on DVD shortly after that.

I’ll bring you a review of the film once I’ve seen the whole thing but a quick “Ah Ha!” moment I got from the trailer (which you can watch below) is that primitive farmers may have been the first entrepreneurs, risking resources today in the hope that their crop will pay dividends a few months in the future. And their willingness to risk it all to bring a steady supply of food to all of their customers was the foundation upon which all civilization was built.

The film argues that this same cycle of entrepreneurial risk driving societal advancement is at work today. Watch the trailer and tell me what you think.

Entrepreneurs take risks, right?

But the question of how much risk to take always hangs in the air. The answer depends on the calendar, the business model, the competitive landscape, the resources being put into play (and at risk) and the risk tolerance of the entrpreneur in question.

Would you invest in an entrepreneur whose risk tolerance was sufficient to allow him to negotiate his own ransom with armed kidnappers - and then renege on the deal?

If you’re a stockholder in the venerable 121-year old retailer Sears, that’s just what you’re doing.

Edward S. Lampert has never been one to shy away from risk - if he’s convince the potential payoff adds up. He left Goldman Sachs at age 26 to start his own hedge fund. Now 45, worth an estimated $4.5 billion and Chairman of Sears Holdings, he is using his considerable business savvy, experience, war chest and moxy to transform Sears and Kmart into properties which can compete with the 800-pound gorilla of global retailing, Wal-Mart.

According to this article in the Washington Post he appears to be succeeding - at least on Wall Street if not on Main Street.

I don’t know about you but I like this guy Lampert. He’d make for one heck of an Entepreneurial Success Story Interview!

Stacey Griffin lost the psychiatric facility she had founded in New Orleans to the torrential rains and floods caused by Hurricane Katrina.

Ironically, she found a way to build a new business based around water. And she got a big hand in promoting it from Ellen DeGeneres.

Stacey decided that the best way to get her kids to drink more water was to package it the same way as sugary juice products - in a box. She founded Aqua2Go in her home town and sent samples with cover letters pleading for promotional help to 30 different talk shows.

The Ellen Show not only publicized Stacey and her product but also wrote and produced a humorous jingle that Ellen performed live from her stage. It now appears that Stacey will sell as many as 2.3 million boxes of water in her first year in business.

How’s that for guerilla marketing?

In a recent post about Education-Based Marketing, I told you…

Very soon I’m going to bring you an interview with an executive from a huge multinational corporation which has just begun employing Education-Based Marketing in a very novel way.

Well here it is. In this week’s podcast you’ll hear from Mateo Alejandre, Senior Marketing Manager with Dell Computer in Round Rock, Texas regarding Dell’s new Small Business 360 initiative.

Let’s face it, IT (Information Technology) can be confusing. Hardware, software, networking, servers, email, web sites, Internet marketing - YIKES! Small business owners had enough headaches to deal with before all this wonderfulness entered our lives in the 1980s. Fortunately, the good folks at Dell have heard our cries in the wilderness and are mustering resources to help us.

Interestingly, Dell’s direct-marketing business model was part of the impetus behind Small Business 360. Their sales consultants were hearing the same problems and concerns being expressed over and over by their small business customers and it occurred to them that taking a proactive approach to helping their marketplace solve those problems would be a win-win for everyone.

There is a lot of territory being covered in a short amount of time in this podcast. If you find it interesting during the first listening I highly recommend you listen to it all the way through again. I’ve picked up different bits and pieces every time I’ve listened that I missed previously - and I did the interview for goodness sake!

I also want to strongly encourage you to check out Small Business 360 and tell Mateo and his team what you think. What are they doing well? What are they doing poorly? How can they bring you more value?

After all, they’ve created this enormous information resource for us. The least we can do is tell them what we think about it and help them grow it into an even more valuable solution source going forward.

Every business owner knows that ready access to cash can mean the difference between success and failure at critical points in their firm’s life cycle.

Generally speaking, these critical needs come in two forms: start-up capital and working capital. Start-up capital is self-explanatory but can be very hard to come by, particularly if both the company and the entrepreneur have no track record of success to point to.

Working capital is required during those inevitable times when you run out of money before you run out of month. You may have tens of thousands of dollars in accounts receivable that will show up in the mail any day now, but that won’t do you much good meeting payroll tomorrow.

This article posted on SmartMoney.com offers a quick overview of Six Source of Capital for Small Business:

1. Grants
2. SBA Loans
3. Banks
4. Credit Cards
5. Angel Investors
6. Venture Capitalists

If you’re weighing your options regarding “Sufficient Capitalization,” this article is a good place to start.

The ability to access critical files right when you need them can mean the difference between landing a deal - or losing it.

That’s why GoToMyPC has been so successful in building a business. Their online service allows you to remotely operate and retrieve files from your desktop PC from your laptop when you’re on the road - for a price.

A GoToMyPC license for a single PC runs about $20 per month, 2 PCs are about $30 per month and additional PCs are about $15 per month additional each.

But now there’s free competitor called LogMeIn.com which gives you much of the functionality of GoToMyPC with none of the cost!

The biggest downside of LogMeIn’s free version is that it doesn’t include the ability to transfer files, but there are a number of quick workarounds to this roadblock. First off, you can email files to yourself from your desktop or use an FTP application to transfer them to a third hard-drive. Worst case you can do an instant upgrade to LogMeIn Pro (the at-charge version) and take it from there.

Anyway you look at it, LogMeIn.com is a great way to try this type of service out before you make a cash commitment. I’m using it right now to let me Virtual Assistant synchronize all my contact databases from her office in the Soutwest.

Give LogMeIn a try and let me know what you think.

Education-Based Marketing.

I don’t think I coined the term but I sure use it a lot. And I often hear people say “Wow! I like that expression. Can I use it?’ To which I always respond with a request for a $5 bill and perpetual attribution.

Education-Based Marketing means giving away free information to targeted recipients as a means of establishing a relationship of trust and accelerating the courting process which eventually leads to a sale.

Companies of every size and from every conceivable industry use this approach. They do it every day and they been doing it for years. Why? Because it works.

How? You offer a free informational audio, video or booklet which explains how to solve a particular problem vexing a specific group of people. Interested parties qualify themselves by asking for your information and, in doing so, give you both their contact information and permission to contact them going forward. (For a more detailed explanation watch this video I posted a couple of weeks ago)

I do this and I encourage my clients to do it. In fact, I’m breaking the process down to a science (which I will be unveiling in a few weeks). As part of my research I have requested just about every free information package you could think of - much to the chagrin of my wife.

And, very soon, I’m going to bring you an interview with an executive from a huge multinational corporation which has just begun employing Education-Based Marketing in a very novel way.

By the way - you’re the one they’re offering the free information and resources to.

Could Education-Based Marketing work for you? Stay tuned…