Prashant Patel » Business

Fail miserably by spraying and praying

Prashant — Thu, 24 Jun 2010 02:43:35 +0000

I think spraying and praying has to be one of the worst mistakes new entrepreneurs can make. You know the story… Dale, new business extraordinaire, builds a new widget designed for the real estate industry but soon after sees applications in all sorts of industries ranging from janitorial to precision manufacturing. While it’s always nice for John to think big and outside the box, entrepreneurs trying to serve the masses can easily walk right into failure.

If you can’t keep that ego in check, sorry… you’re screwed

I believe the problem at the core root of things is simply, our ego. Thoughts of financial freedom, living a self-sufficient life, being known, being “the man”, etc. are all are all areas that newbies need to keep in check. You can write up all the business plans you want, have as many advisors around you as possible, but if you can’t keep that ego in check, sorry… you’re screwed.

You need to keep a leash on yourself

What entrepreneurs need to understand is that it’s ok to dream and think of different ways to apply product/service to different industries, but at the same time, you need to keep a leash on yourself. When I have the spare time, I am personally always thinking of new industries that I’d love to be involved with. I have an excel file that I keep these kinds of notes within and when I get close to learning one industry, I move to the next.

Yes, this is a slow approach and in the past 3-4 years, I’ve personally only moved to my second major industry (from automotive to wine). I take things step by step because I have a small business and I don’t have the financial and talent resources to invest into a dedicated R&D team. Not to mention being the sole decision maker at the end of the day means I just want things to run smoothly with as little headache as possible.

Unleash the power of the niche

I think a lot of times new entrepreneurs are scared of developing a product/service around a tightly segmented group because they assume that they will not be successful or get the volume of sales they want. In my honest opinion, that thought process couldn’t be further from the truth. When you tightly focus yourself around a niche or a single vertical, it allows you to fully invest all your resources into developing the best solution possible. You make life much easier when it comes to marketing, PR, and advertising campaigns because you will know specifically the areas you should focus your time and dollars on. You will also have a lot easier of a time building your business and personal brand that you so badly desire.

Do businesses that only do oil changes do poorly? How about those shops which only sell tires/wheels but not do general auto repair? How about specialty gourmet German shops?

Not all industries are built equally

When you focus your business’s resources in a single direction, you have the ability to learn all the quirks, and why things are done a certain way. For example, some online retailers of automotive parts accept credit cards online but don’t allow their payment gateway to automatically charge customer’s credit cards. To the customer, orders may look as they went through but behind the scenes, it’s something different. These etailers use their merchant payment gateways as the first step in fraud prevention and process orders manually. Why? Well unless you observe the industry, and talk to clients, you wouldn’t know that there just happens to be quite a bit of fraud that happens within that particular vertical. Manual processing of high dollar online orders and calling customers to confirm is how businesses within this group save a lot of future headache for a minimal investment of time upfront.

If you were developing an ecommerce solution and wanted to target the automotive industry, pieces of information such as this might be of value but any custom development around this issue may not translate over into other verticals.

The bottom line… divide and conquer

If you truly care about your business and you don’t want to treat it as some kind of money-in-money-out machine, you need to make sure you don’t spread yourself too thin. You want to make sure your business survives for the long haul and your entrepreneurial spirit as well. You need to make sure that you can be there for your clients and customers because you truly care about their success, not because you just want to grab their money and be done with them. The bottom line… divide and conquer. It’s methodological, it reaffirms your success, and at the end of the day, it’s just less headache.

Freelancers are not entrepreneurs

Freelancers are not entrepreneurs

Prashant — Mon, 17 May 2010 06:05:28 +0000

Now, this might be a touchy subject for some of you, but just hear me out before you start firing back. In my opinion, freelancers are NOT entrepreneurs. Well actually, I believe that freelancers are for the most part people who are on their way to entrepreneurship but are still figuring their situation out—a “half entrepreneur” if you will. I’ve polled a few people on this subject a few weeks ago and overwhelmingly it seems like the majority of you disagree. That’s fine by me, but let me explain my thought process.

To me, a freelancer is someone whose income is directly correlated to their work output. In other words, if a freelancer stops working, their income comes to a halt. On the other hand, entrepreneurs build sustainability. They can leave the business, take a nap, go on vacation, and expand their skills while STILL making money in the process. Just looking at this one comparison of freelancers vs. entrepreneurs, who do you think is more likely to be stable in the long run?

I don’t have anything against freelancing, but I think people need to change their mindsets in order to take freelancing to the next level.

Don’t judge me… I was in the freelance game for a little while too and don’t regret it at all. I made many valuable contacts and leveraged my freelancing opportunities to my advantage in order to build out my internet marketing company in Napa. My personal shift has gone from freelance web design & development (a very crowded space) to offering strategic internet marketing services to my local community. These internet marketing services consistently drive tangible results for clients while allowing me the freedom to step away at the same time—an autopilot of sorts. Granted I can’t, and more importantly I won’t walk away forever, I do have freedom. I can work on other projects, seek more clients, and help others while still making money in the process. The best part of my new company is that I get to help other businesses make more money—something that I love doing.

The takeaway: Freelancers generally focus only on the now while entrepreneurs focus on the now, the future, and the next opportunity.

A freelancer who can build a backlog of work is a suitable candidate for entrepreneurial nirvana whereas a freelancer who simply moves from job-to-job may not be.

When I was freelancing, I was really good at converting prospects into clients and building a backlog… whenever possible, I always tried to make sure that I had the next project lined up. That way when I was finished with my current client, I could easily transition to the next with as little downtime as possible. Of course there were times when I had no future projects lined up at all and thus began my personal woes of freelancing—instability.

Stepping back real quick, even when I had active projects as well as a backlog, I still made sure that I was planning for my next personal endeavor. When my work flow trickled to a stop, I simply shifted attention from client work to my own goals which included developing new services, training for new skills, networking, industry analysis, competitor research, etc. The process of making sure that I have new ideas and long term projects is an ongoing cycle and honestly speaking, a guilty pleasure. I always come up with crazy ideas (both crazy good and crazy bad) but I still make sure to write them down in a safe place that I dub my “master plan.” I then visit this list every once in a while to see how I can implement the ideas/projects into my existing lineup or develop a new service/product/company.

The takeaway: In my opinion, freelancing can make you money but it’s far from ideal. Be sure you are constantly working on your long-term “master plan” behind the scenes so you can better yourself, but make life easier for others as well.

In summary, here’s a simple overview of the freelancer vs. entrepreneur mindset

The “naive” Freelancer	The “savvy” Entrepreneur
Tied to the clock and only makes money when they are working.	Builds self sustainable businesses that work to make money around the clock. Money is made while eating, sleeping, snowboarding, etc.
Generally are limited by their skill sets and abilities because they are one person.	Have the ability to leverage fiscal, human, and other resources to their advantage (think outsourcing).
Typically make money by doing physical work.	Can make money by showing others how to solve a problem, increase efficiency, etc and push the actual work off onto someone else—can get paid for their knowledge.
Sometimes are bound by tunnel vision in the sense that they see only the now—the project they are tasked to do.	They can see the now, the future, and how to leverage the long-term to their advantage.
Often times don’t have the ability to choose their clients because they need to just simply put—pay their bills.	Can easily be in the game of having “too much work” and coincidently chose the projects and clientele they want to work with.
Low risk appetite.	High risk appetite (and coincidently understands the concept of high risk—high reward).

I’m not saying there’s a hard-line right and wrong between freelancers and entrepreneurs, but there is definitely is a distinction in the mindset of the two. Further, a freelancer can be just as successful as an entrepreneur. In any regard, focus on doing the best possible work you can for your clients/customers and build creditability within your community.

The bottom line: If you want to build a business that continuously makes money while you sleep, you must change your mind set. Develop a strategy to scale your products, services, and yourself while figuring out how to commoditize your knowledge for the masses.

How to start a business in 30 minutes

Prashant — Sat, 27 Mar 2010 06:23:45 +0000

In a previous post, I discussed why it’s important to set goals when starting a new business. With that post in mind, it’s always nice to occasionally complete those goals ahead of schedule. One of my personal goals was to finish all the paperwork that’s required to setup a business (for a sole proprietorship or partnership anyways) by the end of March, 2010. Instead of waiting until the end of the month and potentially being busy with something else, I said to myself at approx 3:55pm that I should go, file the paperwork and get it done.

The only problem, after looking up what time the Napa Recorder-County Clerk’s office closes, I found out I had less than 30 minutes to get it done if I included my driving time.

While I was on the Recorder’s website, I noticed that since the last time I had filed a DBA/FBN (Doing Business As/Fictitious Business Name) they had now included the form online. I quickly filled out the PDF online (it was a nice touch that it wasn’t just a static scanned document by the way), jammed to downtown Napa dropped off the form and paid the $30 filing fee. I quickly realized the whole thing only took me about ten minutes tops and decided to push forward and drop off the circulation copy of the DBA to the local Napa newspaper. Once I paid my $76 to the newspaper (which took me a whopping five minutes), I walked down the block to the Napa Finance Department, filed out the business license application and spent another $97 to file my application.

At first I told myself, before the end of the week. Then I got down to, whatever I can finish today, great, I’ll have less to do on another day. Turns out that once I got started, I completed all three in thirty minutes! All in all, I spent a little more than $200 to start my new business. Now all that’s left is the waiting game for the newspaper to publish my notice every week to let the public know that I am starting a new business (just in case there is any public opposition, now would be the time that someone could bring it up). The most frustrating part of the process was the different payment options that were accepted. One place said credit cards, $6 fee (so I ended up paying cash), another took my business American Express, and the other took credit cards with no fees but didn’t accept American Express. Oh well, I got it done… now I can focus on more important things!

The takeaway: Set goals, and hit them with all your might. Don’t lollygag and procrastinate by telling yourself you still have time. Move, move, move!

Setting business goals

Prashant — Fri, 26 Mar 2010 05:48:53 +0000

Setting goals is important to not only your personal life, but your business life as well. The thought process is that if you don’t set goals for the business, you won’t be able to achieve what you want on time. Not to mention, it makes tracking your progress more difficult. If you don’t set goals, you might not know what exactly you’ve accomplished over a given period of time, become frustrated at your lack of results, and give up. If you set goals, you will be able to see exactly which milestone you hit, when you hit it, and what your end results were.

But it’s not just as simple as saying, “I want $15,000 a month by the end of the year.” Instead, you have to set SMART (Specific, Measureable, Attainable, Realistic, Time-bound) goals.

Specific

Well defined
Clear to anyone that has a basic knowledge of the project

Measurable

Know if the goal is obtainable and how far away completion is
Know when it has been achieved

Agreed Upon

Agreement with all the stakeholders what the goals should be

Realistic

Within the availability of resources, knowledge and time

Time Based

Enough time to achieve the goal
Not too much time, which can affect project performance

To add to the SMART goals package, you also need to make sure your goals correlate with your personal life in terms of your family, friends, and health. If you’re making a load of money but you alienate yourself from your family, friends, or lose your health, what’s the point? If you aren’t having fun with your life, what’s the point? Money isn’t everything… Always remember the Suze Orman model of, “People first, then money, then things.”

The takeaway: Often times, you are your own worst enemy. Don’t set yourself up for failure. Create a new spreadsheet, write on your calendar, do what you need to do but catalog your SMART goals and note the results of what exactly was accomplished and keep track of how it made you feel.

Source: Project Smart

Yes, I am starting a new business

Prashant — Thu, 25 Mar 2010 03:42:17 +0000

Currently, I’m in the process of starting a new marketing company which will primarily offer internet marketing services locally to Napa businesses and at a future date, the greater Bay Area. I suppose you can call it my fourth company but I’m counting it as #3.5 (since it’s a rebranding due to expanded service offerings of a previous venture).

On the note of the new company, it seems like a few of my friends are curious about the startup process. One of my friends actually just launched his own clothing company after I had walked him through various parts business aspect. Honestly, to me it’s a lot easier to start a business than people make it out to be. BUT, whether or not you have the drive, ambition, and raw talent to run a new company and market your products/services is an entirely different story.

Will your new company be a leader or a follower? If you’re a leader, what are the pros and cons of being a leader? If you’re a follower, what’s your value added proposition and unique selling proposition? See, throwing money around and the paperwork is the easy part. Running a successful business is an entirely different beast.

I think I am going to start a miniseries about how to start a business and I hope it will be an interesting read for other people who are looking to start a business of their own. Stay tuned!