Catching up

New posts on this blog have been ascarce this month. But that doesn't mean I haven't been busy. Here are some links to catch you up.

"Seven new ways to lead," from the June issue of PROFIT Magazine. http://www.profitguide.com/article/28400--the-new-way-to-lead

"Vision leads the leader" - a blogpost at PROFITguide
http://www.profitguide.com/blog/rickspence/40288--vision-leads-the-leader

Win anyone's attention attention with three sound-byte steps
 http://www.profitguide.com/blog/rickspence/39737--three-sound-bites-that-win-attention

The growing role of angel investor groups
http://www.profitguide.com/blog/rickspence/37537--canada-s-angel-investor-groups-take-flight

“Businesses that want to improve performance need to improve their performance management"
http://www.profitguide.com/blog/rickspence/35522--managing-employee-performance-is-key-to-outperforming-the-economy

Monitoring your staff performance without making them nervous
http://www.profitguide.com/article/9946--monitoring-staff-performance

Can founders be leaders?
http://www.profitguide.com/article/30678

Counting down till GROW 2011

As summer continues its sunny way south, entrepreneurs in British Columbia have a terrrific conference to look forward to next week: GROW 2011.

It's a comprehensive look at next-generation web companies and innovative business models, with oodles of successful Silicon Valley entrepreneurs and a very creative framework that includes a day of mentoring and an outdoor activity day for serious networking, BC-style.

You can read more about it in my column today in the Financial Post. 

Excerpt:
It has been 10 years since Wikipedia began, and 20 years since Gopher became the first common Web browser. The Internet domain name system was established in 1984, and in 1976 Queen Elizabeth II became the first head of state to send an email – a mere 35 years ago.
Clearly, the Internet isn’t new any more. Yet, as Google Canada recently pointed out, nearly half of Canadian businesses still don’t even have a website.
For more and more, however, the Internet isn’t about mere “websites” any more than the post office is about delivering personal letters. The Internet is transforming businesses and entire industries, turning product and services producers into communications and logistics innovators...

For the rest of the story, click here.

Blogging for billions

Sometime last week, this blog hit another milestone: our 200,000th visitor!

This is exciting because it took us 4.5 years to get to the first 100,000, and just 21 months to double that. And the latest 50,000 came in just 8 months, for an average of more than 6,000 visitors a month, or more than 200 a day.

Pretty good for a blog that never mentions Justin Bieber.

Of course, all this comes against the inevitable background that I've been posting less often on this blog lately. This inspires me to do more, but realistically, you should also follow me on Twitter. That's how business junkies get their news today!

Thank you for your support.

Note to a Young Entrepreneur

A young Canadian entrepreneur starting a video-production company asked me for some advice on finance and "getting the word out."

Here is my response:

"Institutional capital is rare for new service businesses. Friends and family is the usual solution to startup capital in situations like yours.

Your best bet would be to look into the Canada Youth Business Foundation, which offers low-rate loans to entrepreneurs under 35. Better still, each loan comes with a mentor and mentoring process to help guide you along the way.

Marketing yours services is all about measuring the benefit you have created for other people, and communicating that information to more people like them. So it's in two parts:

1. Gather testimonials from all of your satisfied clients - get them to specify how you helped them, how great your service was, how much money you saved them or how you directed them to the best solution, etc. (The more detailed, the better.)

2. Communicate the message of how you help people. Start by identifying your target market and finding the best way to reach them (posters, brochures, ads, e-mail, Google ads, press releases, website?). Then start hammering home the message in a helpful, over-the-top, eyecatching way.

Rinse and Repeat.

Does this help?

Rick

What other advice might you offer?

The Market Research Dilemma

Yesterday I got an inquiry from an entrepreneur I'll call Ruth. She is setting out to start an upscale health-services business in Toronto, and was looking for industry-specific market research to help her pick the best locations to target.

Sadly, her request was too specific for me to offer any immediate help. But I tried to steer her in the right direction with some general advice, which I'm happy to share with you, too. Here's what I told her.

Hi, Ruth. I wish you luck in your venture, but I am afraid I am not an expert in market-research sources for specific industries. I would think, however, that any neighborhood in the city with larger, more expensive homes (e.g., Bayview Village, Rosedale, North Toronto, York Mills, the Kingsway, etc.) would fit your target market, and that information is readily available through the press or the Toronto Real Estate Board.

For specific industry stats, you might consult sources like StatsCan or Scott's Directories. My suggestion is that you call a reference librarian at the Toronto Reference Library and tell them what you are looking for; they are very helpful and can probably point you to sources that you and I have never heard of.

Here are some ideas on sources to get you started: http://torontopubliclibrary.typepad.com/business_personal_finance/market-research-statistics/

And don't forget the potential of doing your own market research. There are lots of cheap ways to gain market intelligence using personal polltakers or online surveys. You could even look for friends or locals who live in target areas and ask them to hold a focus group for you to pick their friends' brains regarding demand for your business idea. Most entrepreneurs skip this step, even though it could save them so much grief (and money!).

Best of luck! Let me know how things go.

Rick

July 1, 2011

Just a note to wish the readers of this blog a Happy Canada Day!

144 years ago, on July 1, 1867, four small, scared, and suspicious British colonies in North America formed a Confederation to provide for more secure trade, defence and economic growth. The fruit of that visionary decision is today’s Canada, a confident, well intentioned nation that stands as a beacon to peace-loving people around the world.

While not as well known or prosperous as our neighbour the United States, Canada shows that national purpose and success can be found by different paths – whether it be violent revolution against a vexatious mother country, or gradual disengagement through diplomacy and good will. Together, Canada and the U.S. are a magnet for goods, ideas and people throughout the globe, and the most successful economic partnership in history.

A salute to all things Canadian. Shut off your Blackberry, bite into a Macintosh apple, enjoy some maple butter, grab a Molson, or finish your painting chores this week with a paint roller – all of them products of Canadian ingenuity and commerce. Have a safe and sunny weekend!

And all best wishes to our U.S. friends and family for a glorious Fourth of July!

This will change the way we use the Internet

The National Post seems to have liked my column this week on ICANN's next-generation domain names. It's promoted three times this morning on the "NP Entrepreneur" home page (see photo).

The story suggestion came from Naseem Javed, corporate-naming expert and founder of ABC Namebank. He's really excited about the new opportunities that will emerge out of the creation of a whole new set of domain names: instead of dot-com, you can have dot-blog, dot-Kodak, dot-Calgary, dot-anythingyouwant.

There are a few catches. One, the regime has yet to be approved by ICANN, the world's top domain decision-maker. (But the betting is it will be approved next week.) Secondly, simply applying for one of these "generic top-level domains" will set you back $200,000 or more.

But as Javed points out, once you own one of these gTLDs, the opportunity to become your own domain-name registrar by selling lower-level URLS to other businesses (music.vancouver, police.vancouver, hockey.vancouver, plateglass.vancouver) could be huge.

As the story says:
"Up for grabs are some of the world's most valuable names and words: dot-hockey, dot-travel, dot-music, dotmontreal, dot-toronto. No suffix (i.e., dot-com, dot-ca) required. This will change the way businesses and people use the Internet; and although ICANN has been planning this change for three years, it's still mainly just the geeks who know about it."
Click here to read the complete story.

The Myth-Busters of Startups

Some interesting myth-busting from the results of a bank survey released today:

One-third (32%) of Canadians who don’t own a business like the idea of being their own boss and one-fifth (20%) are thinking about starting up their own business within five years, according to the most recent RBC Canadian Consumer Outlook.

“Considering 12 per cent of Canadians are currently self-employed, seeing another 20 per cent interested in being their own boss is indeed significant,” said Mike Michell, national director, Small Business, RBC.
When it comes to starting a business, the top two challenges identified by those who don’t own a business are getting enough money to start or expand (28%) and finding clients (14%).

However, existing business owners say different. According to the latest RBC Small Business Survey, 66% of business owners said finding enough clients was a key challenge. Only 15% felt that getting enough money to start or expand their business was a key challenge.

The experience of existing business owners also contradicts the perception of 40% of Canadians who think it takes up to three years for a new business to start making money. In fact, 41% of business owners surveyed said it took less than a year for their business to break even.

Here is RBC's list of top business-building tips, as expressed by its survey of Canadian business owners:

Focus more time on networking – develop alliances, join industry associations, attend as many events and seminars as possible.

Aggressively solicit clients – spend more time marketing your business. Understand the clients’ needs and how your business will meet those needs.

Seek as much help or advice as possible – find a mentor or look to other business owners to draw on their experience.

Develop a comprehensive business plan and review it regularly, especially in growth phases.

Obtain financial advice early in your planning to secure financing in advance.

Know your competition well and research the market.

Best bosses, your next video, perfect pitch and Having It All

Here are some links to a few of the subjects I've been blogging about recently for PROFITguide, the online home of PROFIT Magazine.

Just click on any title to be instantly transported to the story.

* How the best bosses behave

Ten tasks great bosses love to do

* Do's and don’ts of your corporate video

Why and how you need to become more adept at using digital video as a communications and marketing channel.

* Serving up a perfect pitch

Entrepreneur Neil Raj's formula for winning firends and influencing investors

* You too can have it all!

Karen Stewart's eight tips for the next entrepreneurial generation

You’ll find lots of other great resources at www.profitguide.com, including editor Ian Portsmouth’s Business Coach Podcast and Peer-to-Peer, the feature in which real-life entrepreneurs answer each other’s most nagging business questions. Check 'em out.

Deadline looms for Small Biz Big Impact contest

You have just three few days left to enter Scotiabank’s Small Business BIG Impact Challenge.

In partnership with the Canadian Federation of Independent Business, Scotiabank wants to recognize and celebrate the impact small businesses make across Canada. Almost anyone can participate.

Up for grabs is $30,000 in prize money, in three categories.

Employment: For businesses that create jobs and whose employment practices reflect and support their community’s needs.

Products or Services: For businesses that offer innovative products and services, or unique ways of doing business.

Leadership: For business owners who have played a key leadership role in their communities, over and above their role in the business.

One winner in each category will win $10,000, plus media exposure and promotion.

Business owners can enter here by submitting a written response to three questions, and/or, you can upload a video of your business to tell your story.

If you want to recognize a business owner who is making a difference in your community, click here to send them an email and tell them about the Challenge.

To support your local businesses, look them up in the "Gallery", and vote! Public votes will help winners reach the semi-finalist round! Winners will be selected based on a combination of impact to the community, quality of the entry, and number of votes.

Contest entries close on April 30.
Winners will be announced June 1.

For more information click here.

If you have questions, email bigimpactchallenge@scotiabank.com

Finding customers: The Game's Afoot

Reading an old story recently from The Adventures of Sherlock Holmes, I found a unique description of what I call "entrepreneurial inertia."

The story, written more than a century ago, is called "The Adventure of the Engineer’s Thumb." In it, Sir Arthur Conan Doyle tells the sad tale of Victor Hatherley, a hydraulic engineer who recently started his own practice. Mr. Tatherley then got into a spot of trouble; he should have Googled his mysterious new client. Afterwards, he came running to Sherlock Holmes for help. Here's how he starts his explanation:

"Two years ago, having come into affair sum of money through my poor father’s death, I determined to start a business for myself and took professional chambers in Victoria Street.

“I suppose that everyone finds his first independent start in business a dreary experience. To me it has been exceptionally so. During two years I have had three consultations and one small job, and that is absolutely all that my profession has brought me. My gross takings amount to 27 pounds, 10 shillings. Every day, from nine in the morning until four in the afternoon, I waited in my little den, until at last my heart began to sink, and I came to believe that I should never have any practice at all.”

It's no mystery why this man had such a dreary experience. He didn't even try to market his business. He sat around and waited for customers to find him!

Sadly, a lot of business owners still do the same thing; sit around and wait for business to find them.

What about you? What have you done this week to attract new clients and get a "sure lock" on your market?

Searching for Canada’s Fastest-Growing Companies

If you run a fast-growth company, or know someone who does, time is running out.

You have just a week to apply for a listing on the PROFIT 200, Canada's authoritative listing of hyper-growth heroes.

For 23 years, the PROFIT 100 has turned successful entrepreneurs into the heroes of Canadian business. Now you can be one of them!

This year, PROFIT magazine is expanding its ranking of Canada’s Fastest-Growing Companies to recognize 200 of the nation’s most entrepreneurial enterprises. If you qualify for the list, you’ll join such notable alumni as Research in Motion, Globalive Communications and WestJet Airlines.

You’ll enjoy many great benefits as a PROFIT 200 company, including coverage in the June 2011 issue of PROFIT Magazine and online at PROFITguide.com. PROFIT 200 leaders also receive an exclusive invitation to the PROFIT 200 CEO Summit, Canada’s most rewarding conference for entrepreneurial achievers. 

Your PROFIT 200 ranking can also attract new customers, employees and business partners—and lead to higher sales.

The entry deadline is March 31, 2011.

Apply now at http://www.profit200.ca.

For more info, visit http://www.profitguide.com/events

Where I'm Spending My Time

I'm afraid I've been under-serving this blog lately. I even missed celebrating its sixth anniversary, four weeks ago. Yet traffic remains very high, and March 2011 will probably set a record for most visitors in a single month.

Which just shows the power of online content. It keeps working for you even when you’re not working for it.

I will try to blog here more often. But keep in mind that I am also blogging for PROFITguide and the Financial Post (in addition to writing regular columns for both). So if I'm not updating here frequently enough for you, you can always find me there.

And feel free to follow me on Twitter. I've been spending a lot more time on Twitter lately. This free short-messaging service takes the idea of blogging and turbocharges it to match today’s faster pace (and shrinking attention spans). You can follow your favorite people’s blog-like musings in a few minutes, since no single post can be longer than 140 characters, or about 20 to 25 words. Keeping insights so short is a challenge, but it makes the overall learning experience more fun, for writers and readers both.

If you haven't signed up for Twitter, you should do so now. You don't have to “Tweet” if you don't want to. Just follow people you know or admire. It’s a great way to get regular exposure to your favorite writers and thinkers. It’ll open your eyes and mind to new ideas, business news, people, opportunities and events. I liken it to reading people’s minds – you get to see what a whole lot of bright people are thinking about every day.

And keep checking this blog. We're not done yet.

How to Annoy Your Dragons

In February I took part in the opening auditions for the next season of  Dragons' Den. It kicked off more than a month of auditions all across the country. They're now going on, and you can find more details here:
http://www.cbc.ca/dragonsden/audition/

My column for the National Post  summed up my experiences auditioning "pitchers" who want a chance to sell their business ideas to the Dragons on national TV next year. As I wrote, "If you want to make it on Dragons' Den — or impress any kind of real-life investor -- you had better not make the kinds of mistakes I saw during my deputy day."

Here's the short version:

Misunderstanding investors' motives The Dragons, like most venture-capital investors, only want to invest in scalable businesses. If you don't know what that means, you haven't got one.

Not knowing your market How many people will buy your product? When? These are essential calculations, even if they're mainly guesswork.

Never confuse a capitalist Keep your pitch clear and simple.

Not understanding your customers Don't wait to talk to customers till your product or business plan is picture-perfect — make them consultative partners from Day 1.

Being afraid to give up equity A venture investor won't make any money unless you do, too.

Neglecting to tell a coherent story Let investors know (briefly) where your idea or product came from, why this opportunity is huge, and why you're the best partner to pull all this off.

Click here to read the full story.

Puncturing the Low-Price Myth

My column in this week's Financial Post looks at a common myth: that you should never market your business or product based on price alone. Business and consumers alike are looking for more value today than ever: if you can sustain that advantage over time, why wouldn't you promote it?

The column focuses on U.S. entrepreneur Jerry McLaughlin and his company Branders.com – a promotional-products retailer that restructured itself to be the low-price leader in its niche. It has never looked back.

Excerpt: Immediately after reducing its prices across the board,

“the percent of website visitors who made purchases shot up to 65% from 15%. McLaughlin says profits on the additional sales more than made up for the lower profit margins: ‘That means we should have done it anyway, whether it was our long-term strategy or not.’"

You can read the full story here.

Open auditions start Saturday for Dragons' Den!

Here’s a phrase I never thought I’d see: Dragons’ Den, Season 6.

The CBC’s hit business show begins open auditions for the next fall season this Saturday, Feb. 12, at the CBC broadcast centre in Toronto. Aspiring entrepreneurs and inventors are invited to show up between 10 am and 5 pm to demo their products or ideas for a chance to appear on the show and pitch to the Dragons themselves.

The celebrity Dragons are unlikely to be at the audition, so you can expect to meet a corps of steely-eyed Deputy Dragons, one of which will be me. I think this will be my fourth year of interrogating potential pitchers. If you're not prepared, don't expect me to be very nice.

Pitchers are expected to sound smooth and professional, and to be able to answer tough questions like:

• What’s the market for your product?

• Why would anyone buy this?

• What kind of sales have you had so far? (If none, we may ask “Why?”

• How much money would you like from the dragons? What would you use it for?

• How much equity in your business are you prepared to give up in return for this investment?

Did I mention that you only have five minutes? And I usually interrupt people and start asking questions at about the 30-second mark. (Dragons are impatient beasts.)

If you can't make it this Saturday in T.O., the show’s producers are hitting the road to come to you. This year they intend to hit a whopping 36 cities, which is a testament to the success of the show and the entrepreneurial abilities of Canadians.

The roadshow begins Feb. 17 in Victoria and ends March 28 in Yellowknife (how cool is that?). The final audition will be held again in Toronto on April 2. (Some dates may be subject to change.)
Click here for the full schedule: http://www.cbc.ca/dragonsden/audition/

Interested entrepreneurs are asked to apply online at www.cbc.ca/dragonsden. You'll save time by bringing your completed application form to the audition.

Canadians have fallen in love with Dragons' Den. The January 12th special “Second Chance” episode drew a series high of nearly 2.2 million viewers – a higher audience than many U.S. series get, with 10 times the population.

If you love the show, you may be interested in a behind-the-scenes look at how the show started – including how Kevin O’Leary insulted Robert Herjavec the first time they met. Click here for the full story.

And here’s a cool blogpost by show consultant Sean Wise explaining where so many pitchers go wrong.

Hope to see you Saturday!

How to improve your blog

A friend asked me recently to comment on his blogposts. So I checked them out and sent him a few comments. Then I thought, hey, that might make a good blogpost!

In the end, I came up with 5 points. And they are so basic, so easy to understand, that I decided to try to compress them into 140 characters, or about 25 words. So here you are: my first blogpost that was also a single tweet on Twitter.

5 rules to improve your blog:
* Get to the point fast;
* Stay out of the story;
* Focus on readers' needs;
* Protect Brand You;
* Stick to 1 big theme.

Let me know if you'd like me to elaborate on any of these points.

(I wonder what else could be compressed into a single Twitter post...? How about the 10 Commandments:
Top 10: No other gods; no idols; don't say O God!; sleep in Sunday; honor mom & dad; don't kill, steal or lie; nix to adultery; no jealousy.
140 characters. Bingo!)

2 questions on modern marketing

Based on my recent columns on marketing in the National Post, I received a brief email asking me two questions:

1. What percentage of sales should be spent on a marketing budget?

and
2. What are the criteria in choosing a marketing agency? Because everybody promises you everything underneath the sun.

The author didn't tell me anything about his business, so I answered rather generically.

1. I don't think there are any hard and fast rules, but I don't think your marketing budget should generally be more than 5% to 8% of sales revenues. Of course in some industries (movies, soft drinks), it's much more. It basically depends on what you sell, how you sell it, and what kind of margins you get.


2. "Marketing agencies" can be very different things: PR agencies, web marketers, etc. I think the best thing to do is talk to some of the agency's other clients to find out what the agency accomplished for them.

Make sure you inquire about the sort of work that you're interested in buying. For instance, your questions would be very different depending on whether you just wanted a pretty website, or you wanted to boost sales through your website.

Marketing should always have goals and metrics attached. So make sure you find an agency that meets objectives and creates results for its clients.

All the best.
Rick

Best Entrepreneurship Quotes, Week 35

“The problem with first impressions isn’t that they're not important (They are important! They're critical!), but that we have no idea at all when that first impression is going to occur… That’s why authenticity matters.”

Seth Godin, numero uno marketing guru, explains in his 2005 book, All Marketers Are Liars, why authenticity and consistency matter so much to your brand or business.

The customer is not a passive consumer of your marketing; they interpret it the way they want to. Or as Seth says, "The reason authenticity matters is that we don't know which inputs the consumer will use to invent the story he tells himself."

Front & Centre: Canada's Future in a Global Marketplace

My Financial Post columns lately have dealt with an unusually weighty subject: the future of the Canadian economy in a global marketplace.

I have just had too many conversations lately with people who despair of the current economy and think that the way ahead is to return to the high-tariff world of the 1970s, when jobs were steady and black clouds of smoke belched from prosperous, stable factories on the outskirts of town.

There is no going back. Nor should we want to. The global economy may have taken our low-skill manufacturing jobs, and may be gunning for the high-skill jobs next. But it puts us right where we want to be: selling civilization to the rest of the world.

Canadians are in an enviable position to sell the goods and services that can build cities and developing nations: dams, roads, public services, skyscrapers, malls, governance institutions, stock markets, schools, mines, refineries, even (ironically) factories. So many developing nations are ready to splurge on high-quality infrastructure, and who better to sell it to them than us – who have built such a great country at 20 below zero?

Our economic future lies in selling services and high-end products to an emerging class of countries that want these products and can pay for them. We’re not the only people who are trying to sell this stuff – think of Europe and the Americans. But we have unique advantages – a more multicultural society than any in Europe, and a stronger and more respectful “worldview” than the Americans.

Look at the success of companies such as SNC Lavalin, which has become a global powerhouse building superhighways in Britain, ports in Spain, power-management systems in India, Central America and the Balkans, power plants in Algeria, refineries in Venezuela, gas plants in Oman... This is our future.

This opportunity is ours to seize. Or lose.

We need more entrepreneurs. People who see the opportunities in change, not the drawbacks. Skilled people who confident of their abilities and able to build trust with customers in all parts of the world. Instilling these skills and values in Canadians should be Job 1 for our governments and schools.

We can change the world.

You can click here to read my Jan. 3 column, “Prepare for the great global tournament.”

Click here for this week’s follow-up column, “Canada's future lies in knowledge.”