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Archive for October, 2009

david wojcikBy David Wojcik

How many times do I need to listen to someone pass the buck, tell me it’s not their job or blame someone because they couldn’t complete their own task?

It’s called accountability and it’s time that we all started taking a little more accountability for our actions.

At what point in our life did we learn that it’s not our fault.  Did it start at birth?  In our youth sometime?  Did our mama’s tell us it’s ok, it’s not your fault.

Character traits series - RESPONSIBILITYSometimes it isn’t but it’s the conditioning we fall into. It’s frustrating to see people blame others instead of taking responsibility.  It is refreshing to hear the words…”I made a mistake, it was my responsibility. Here’s my plan to correct the error. ”

How do you rationally argue with that statement?  Sure, if you’re a bully, you could berate the person for a while, drag them over the coals and humiliate them in front of their peers or staff.  But, what does that accomplish?  Nothing.  It does nothing for the recipient’s self-esteem.  It makes others listening feel uncomfortable and it makes the person delivering the harangue look stupid.

When your staff, peers, spouse or family members admit to an error, take responsibility and focus on being accountable, work with them on the solution.  Provide feedback in a positive manner.

As a business leader you are in business to make money and one of your greatest assets is your people.  Do your best to train them, mentor them and help them grow.  Help them understand the immense benefits of accepting responsibility and being accountable.

Coach them on saying “the buck stops here”.  I made a mistake and here’s how I’m going to fix it.”   You’ll get more respect from your staff, loyalty, productivity and solutions to your everyday business problems.

And if you do it only for selfish reasons, you’ll feel good about yourself for helping another human being.  As we all know, if you help enough people achieve their goals, they will help you achieve yours.

David is a seasoned business owner and management professional with 30 years experience. He is also the host of In Business on Rogers TV.

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michael hepworthBy Michael Hepworth

Networking is the marketing tool of choice for many business owners, but many are only mildly effective at it, resulting in a huge wasted opportunity. Street smart business owners looking to raise money for a new business or looking for clients to improve cash flow, constantly find ways to optimize every marketing dollar and every marketing activity. Here’s how you can optimize your networking.

I recently conducted a very unscientific mini survey with a small number of business owners who told me their principle marketing tool was networking. I asked them why they use networking as their marketing tool of preference. Based on what I heard, I have come to the conclusion that most like it because it doesn’t really feel like work and in most cases it is non-pressured and non-threatening. It obviously works because some people have built successful businesses that way.

I too like networking, but am seldom content with meeting people and swapping business cards. This may seem like work, but it seldom yields anything other than modest results. Time is your scarcest resource and also the most perishable. You use just as much time working ineffectively as you do when working more effectively, but with some key networking skills, you can get a much greater return on your time investment. If you go to a networking meeting and only generate one lead per hour or generate 5 or 6 leads per hour your time investment is the same. I want to get the best return on my time investment I can.

business card swapI was at a recent networking meeting, where we were seated in tables of 8-10 people. Each of us was given the opportunity to introduce ourselves, say what we do for a living and tell people who we wanted to meet. I’m sure you have been to meetings like this yourself.

At our table we had a real mix. We had 2 consultants, several CEOs of start ups, an internet hosting service and a writer. Most people offered the most boring traditional; undifferentiated introductions, some of them lasting several minutes. They started with their name and simply waffled on about all of the things they do. Most people lost me after their names and what they did. Their introductions were generally passionless, un-focused, made them sound generic and in most cases, unless you were looking for those specific services, would have had no impact.

Next time someone introduces himself in a business environment, listen and see whether you agree with me. Are you guilty of introducing your self in this way? What’s it costing you if your introduction is like that?

They mistakenly think the broader the appeal the more likely they are to attract business, however the opposite is true. People want to deal with specialists and experts. So the key to an effective introduction is to use something short sharp and highly targeted that positions you as an expert. 30 seconds is all you need, if you know who your target audience is and what you create for them.

For example I am describing my current business as follows. We reduce nature’s crude oil production cycle to a few hours and do a better job. We end up with an ultra-clean sustainable synthetic liquid fuel/biocrude that leverages existing fuels refining and distribution infrastructure.

It may not be perfect, but how much more likely are you to get an interested response from an introduction like that, than simply describing all the products and services you sell? If you can make garbage and fuel sound interesting, you can certainly make your new business idea sound stimulating.

The second mistake is not telling your contacts the kind of people you want to meet. The person you may be talking to is not always going to be a suitable prospect, but may be able to introduce some prospects to you. So my insurance friend could say something like; “I want to meet CEO’s or senior execs of companies that could be potential strategic partners. Ideally these would be chemical or oil companies. Do you know anyone who I might be able to help?”

I also like to offer to send something of value to the people I meet. This is usually some piece of information that they might be interested in or find useful. Sending this gives me two contacts with the person in a short time frame, increasing the likelihood that I will be remembered and a reason to stay in touch if I want to. It sets me up as giver, not simply a taker. One of the laws of human nature is that people are more likely to reciprocate, if you first give them something useful.

Street smart business owners know networking is important and how to wring the maximum benefit out of every networking opportunity. How many ways could you improve your networking skills?

Michael Hepworth is a serial entrepreneur, with a history of successful start-ups and exits. His newest venture is Alternative Fuels Corporation. www.alternativefuelscorp.com

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StephenBy Stephen Rhodes

The more things change, the more they stay the same.

In communities, or as Wikipedia says, groups of ” interacting organisms sharing an environment,” we recognize the need for people to come together, where intent, belief, resources, preferences, needs, risks, and a number of other conditions may be present and common.

Marketing guru Seth Godin wrote a book about these collectives called Tribes. He defines them as any group of people, large or small, who are connected to one another, a leader, and an idea.

He says, “for millions of years, humans have been seeking out tribes, be they religious, ethnic, economic, political, or even musical (think of the Deadheads). It’s our nature.”

communitiesGodin’s point is that the Internet has eliminated the barriers of geography, cost, and time. Blogs and social networking tools are building new communities of common interest where thousands, even millions of people, join forces around ideas, causes, sports team and product lines.  In Facebook alone, 250 million people are interacting.

People in small towns understand community. They get together at the local hockey game on a Friday night, or the market on a Saturday morning or church on Sunday. These communities within the community grow out of a common interest.  And within these communities an inherent trust develops between the participants.

In business, formal networking provides significant opportunity for growth on the strength of the trust developed within the group. If you have personal experience with an investment banker or venture capitalist in your networking group and a friend or associate needs one, you are likely to connect the two. But let’s say you don’t know one, but someone you trust in your group does.  The trust developed within the group provides the comfort you need to make a referral.

The Internet and community builders like Twitter, Facebook and You Tube allow you to build bigger communities faster and to connect on the basis of the trust developed.

Stephen Rhodes is President of The Marketing PAD, a full-service strategic communications and marketing company. Read Blogpad or visit  The Marketing Pad online.

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Andrew MaxwellBy Andrew Maxwell

Part 2

Yesterday’s blog post dealt with four of eight critical factors that can help you identify and overcome fatal flaws in your business. Read Part 1 here.

There are two technology issues that an entrepreneur must consider – creating a barrier to entry and stage of technology development – both of which provide important information about the stage of the company and the likelihood of long-term commercial success.

Importantly, for a company to make money in the long term, it must be able to create a barrier to entry. If it cannot, competitors can enter the market and reduce the profit potential. Issues around technology development are related to the remaining level of technological risk and whether this is a research project or a commercial company. If there are still fundamental technology issues to be addressed, the company needs R and D funding, and is not a viable commercial enterprise yet; it may simply be a timing issue.

For investors, too long a time to market, and too much technology risk, means they will be unlikely to invest yet.

cash flowFinally, the most important issues the entrepreneur faces are related to their own ability to manage the business, and the resilience of the business model in its profit forecast. Both of these issues are very complex, and will be the subject of my next blog, however I will provide two simple insights.

The first is that an entrepreneur should have a certain level of relevant experience, or failing this find a partner they can work with who has. There are many examples of this pairing in technology companies (Think Mike Lazaridis and Jim Balsillie or Bill Gates and Steve Ballmer).

Second, the most important financial issue in developing a business is managing cash flow. The simple question to be addressed is does the company have enough cash, or can it raise it from external sources, to last until the business can generate positive cash flows. Understanding these numbers is critical both for the venture and the credibility of the entrepreneur.

I would be happy to answer any questions on fatal flaws or send you a copy of my recent paper in Journal of Business Venturing on the subject amaxwell@innovationcentre.ca.

Andy is currently working at the Canadian Innovation Centre and pursuing a Ph.D. in the area of new venture creation at the University of Waterloo. In his spare time, he enjoys teaching technology entrepreneurship at UTM and the University of Waterloo.

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Andrew MaxwellBy Andrew Maxwell

Part 1

In working with many entrepreneurs and their innovative ideas, I have become exposed to the concept of fatal flaws. These fatal flaws, if not properly addressed, will likely doom an enterprise to failure.

It was not a surprise to me that based on more than 20,000 assessments of opportunities at the Canadian Innovation Centre over 30 years; the Centre had formally identified these same factors.

FailAcademics (particularly Tom Astebro) interested in predictive accuracy, confirmed the reliability of predicting both success (85% reliable) and failure (95% reliable).  In an effort to increase the ease of use of this tool, factor analysis extracted eight critical factors, which have now been used in a variety of applications, including my own research.

In this research, I found that the presence of a single negative factor, termed a fatal flaw, was indicative of failure, and would often be identified by investors as reasons for non-investment. However, in applying this approach to hundreds of ventures, I have found that the initial diagnosis of a problem does not mean that the venture is doomed; instead, there are a number of ways each fatal flaw can be addressed.

The first step in addressing a fatal flaw is identifying it.  I have identified the factors that lead to these flaws so that entrepreneurs can critically identify potential problems in their own business and work to address them.

The first factor is related to the market, and includes adoption, benefits, market size and route to market. The most common challenge facing a new venture is getting customers in the target market to be aware of the product or service and subsequently to purchase it. This is often based on whether the product or service meets a real need in the market “pain” or is just something that is nice to have “vitamin”.

The second factor, particularly for technology entrepreneurs is changing the concept of product or service features to benefits, and having real customers involved in specifying exactly what benefits they expect from the solution. On many occasions I note that the product is “feature rich” and thus too expensive, or  it doesn’t address the identified problem.  Having a customer involved in the development process can go a long way to addressing this.

The third factor is related to potential market size. Given that most ventures require some initial investment and will incur a level of fixed costs to stay in business, the entrepreneur must show that the market is large enough for forecast sales levels to be both realistic and enable the company to make a profit. This issue is particularly important when the company is looking for third party investment.

Finally, many entrepreneurs underestimate the challenges of getting their product to market. In some cases, the challenges can be overwhelming, for example, launching a new medical device. In many cases it is not cost-effective to launch you own sales organization and distributors are either hard to attract or their sales people already have a variety of well- known products to sell. Understanding and planning for these challenges are the key ingredients for success.

Tomorrow, I discuss technology issues, mangement and cash flow.

I would be happy to answer any questions on fatal flaws or send you a copy of my recent paper in Journal of Business Venturing on the subject amaxwell@innovationcentre.ca.

Andy is currently working at the Canadian Innovation Centre and pursuing a Ph.D. in the area of new venture creation at the University of Waterloo. In his spare time, he enjoys teaching technology entrepreneurship at UTM and the University of Waterloo.

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StephenBy Stephen Rhodes

Innovation is something new or a new way of doing something old. It can involve changes in thinking or approaches, new products or new processes and often is revolutionary in scope. It needs to move us beyond the pale, metaphorically speaking.

Innovation depends on putting invention into practice, making a silk purse out of a sow’s ear and taking it to market where value is created for a customer. An idea may lead to an invention, but it isn’t an innovation until it is commercialized. The benefit is to improve productivity, create jobs, and prosperity, improve our quality of life and along the way create wealth in a economy.

InventionAs a country our investment in innovation creates a competitive advantage. Canada has no shortage of good ideas; but we fall short with the support needed to transform inventions into innovations. We have a long  list of innovations in agriculture, mining,  forestry and fisheries. And there is acrylics, basketball, the Canadarm, the electron microscope, five-pin bowling, goalie mask, insulin, jolly jumper, kerosene, pablum, paint roller, rollerskate, snowblower, telephone and the zipper. Oh, we also invented Superman.

But with our natural resources in great demand around the world, it seems easier and more profitable to invest in resource development. While the prospect of triple-digit oil prices will clearly fuel Canada’s post-recession economy for a while, long-term sustainability will always be an issue.

A Conference Board of Canada report card in 2008 says we are well supplied with good universities, engineering schools, teaching hospitals, and technical institutes. We produce science that is well respected around the world. But, with some exceptions, Canada does not take the steps that other countries take to ensure that science is successfully commercialized and used as a source of advantage for innovative companies seeking global market share.

The Board places Canada 13th in the world in its report card. In short, it says Canada needs to move away from short-term job protection policies that consume important resources and instead support  long-term innovation.

What do you think?

Stephen Rhodes is President of The Marketing PAD, a full service strategic communications and marketing company. Read Blogpad or visit  The Marketing Pad online.

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By FredFredHausmann-Portrait Hausmann

PART 2

Yesterday, I talked about why you should care about making a  SR&ED claim as a business owner. A qualifying project is eligible to receive from the government about 68 cents on every dollar spent.

SR&ED or the Scientific Research and Experimental Development tax program is one of the most lucrative funding programs for businesses offered by the Canadian government.

Here are a few examples of things that have successfully qualified for the SR&ED tax credit that you might not have thought of:
•    Printing companies that acquire new printing equipment where they try to push the equipment beyond its intended use.
•    Manufacturers that purchase machinery where they have to a modify that equipment in a non-standard way
•    Having a product work with another product where those two products were not designed to do this.
•    Using a new version of a program or tool where problems arise that you try to work around.
•    Software development where you are building something new or you are using a new tool set for the development.
•    You are building a web site where there are some new and cool features being developed that are not commonly available.

Once again, even the above examples are not clear cut and depend on the specific circumstances and technological fact pattern in order to make a final determination on eligibility. To make a determination you really need to work with someone who specializes in helping companies with their SR&ED claims. In addition, working with someone is the best way to ensure you are maximizing the dollar you are getting in your claim.

Fred Hausmann is the founder and senior managing director at the FRED Group Inc. a business development and specialty tax service whose mandate is to source, secure and support your business through the maze of government funding options. Specialties include SR&ED and other tax refund/credit programs. Visit FRED Group’s website or contact Fred at  email fhausmann@FREDgroup.ca

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