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A Day at Entrepreneurs Law School

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Sometimes it may be easy to recognize what a successful person looks like because of the fancy car, expensive clothes or the big house or houses.  But, what does a future Successful person look like?

Last weekend I was asked to speak at the Entrepreneur Law School at Florida Gulf Coast University .  I spoke along with an attorney to a standing room only crowd of small business owners in Southwest Florida.  These small business owners paid $100 to attend the day long event that focused on legal matters that affect the Entrepreneur.

The Legal Side Of Buying And Selling Your Business

Our hour presentation  focused on the Legal Considerations in Buying and selling a Business.  The basic premise is that there are many considerations that an Entrepreneur  who is contemplating buying or selling a business needs to consider before beginning the process .  The Entrepreneur Law School is the product of  Florida Gulf Coast University, Lugert College of business.  Essentially the day long event had attorneys speaking on subjects such as :

  • The Entrepreneur Checklist
  • Common Pitfalls of Contracts
  • Business Formation and Taxes
  • Business Entity Selection
  • Protecting Intellectual properties
  • Legal Considerations in Buying or Selling a Business

and a dozen other hour long legal issues as it relates to Entrepreneurs were presented.  While I was there to present information for the attendees related to the legal aspects of buying and selling a business, I found myself as viewing this as a learning experience for me  as well. I think I saw many future successful business owners in the crowd.

I was very impressed with the fact that the small business owner located in our area that is generally battling difficult economic conditions would pay good money and take almost 8 hours out of their Saturday to further educate themselves.  Firstly, most small business owners are working so much during the week that sometimes the weekend is the only recluse that can be found.  Secondly, money is tight, and expenses are looked at not just once but twice.  But these attendees considered the investment in educating themselves to be money well spent.

Buying/Selling A Business - Attorney

Photo (c) zc-law.com

The presentation the attorney (Attny Donna Flammang who specializes in Business Acquisition and Sales) , and I conducted was to a full room and essentially we ran out of chairs.  I found it both interesting and exciting that most attendees chose to attend our presentation over others that were conducted concurrently.  Attorney Flammang started the presentation by stating the importance to consider the selling of your business the day you start your business, or more specifically the day you choose the type of entity when starting your business.

The Importance Of using An Attorney When Buying/Selling A Business

Should you always use an attorney when starting or buying a business was discussed.  Letter of Intent, Due Diligence, and how to prepare your business for sale was also discussed by both Attorny Flammang and I.  We fielded many questions from the audience  and as can happen we ran way short on time- the hour was not sufficient.  After closing comments we were both approached by many with additional questions.  And again I found myself surprised by the energy and makeup of the attendees.  I found myself talking with a husband and wife team that has owned their own bicycle related business for 20 years and were seeking further education!

Most Entrepreneurs have a voracious appetite for gaining knowledge and learning new things.  But one may wonder- how long does that appetite for knowledge linger?  Here was a couple that have a successful business for 20 years and could be sitting at home relaxing in front of the TV, instead they are paying $200 to attend a day long event covering legal aspects of running a business- which some can find as not that exciting.  I personally find legal issue and accounting issues to be very interesting almost to the point that it makes me wonder about myself.   Many would rather not bother with either of these components of a small business.  These business owners embraced these challenging topics.

As I looked out into the audience, I felt I was looking at Successful people in the making.  I know there is no real guarantee formula to success, but the people that would spend both their time and money to gain legal knowledge to further their business in difficult times like these sounds like a good formula for success to me.

Small Business Owner/Entrepreneur Experts Wanted

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What is an expert? Are you an expert? Do you call yourself an expert? Do your customers refer to you as an expert? Undoubtedly, it provides value to be viewed as an expert in a certain field or line of work. Is aspiring to attain such status a worthy goal, or is attaining such status really just a byproduct of ones efforts towards larger, bigger picture goals?

My current business is helping people and business in the process of buying and selling businesses. My perspective or “area of difference” is from the perspective of a small business owner that has personally bought many businesses over a 20 year period to add to my existing business . The interesting component of what I do in helping people buy and sell businesses is that most people only buy or sell a business once in their life once, most never do at all. So when someone is looking to buy a business or sell a business and only do it once, it can be accurately stated that that person cannot be an expert in that process. Maybe when buying a business or selling a business one should seek advise or help from an expert- but that is not what this article is about.

The Definition Of Entrepreneur Expert

My opinion is that the term expert is a widely used term and its use has only been growing as the internet is reaching further through social networks and into our daily lives. Maybe the term is getting over-used and “watered down.” We all get on Google, search, and run into experts everyday suggesting, telling, guiding so many of our everyday actions and even views, or way of thinking. Personally, while trying to further educate myself on internet marketing, or internet business opportunities, or gaining greater website traffic, I consistently find the following guidance by experts in the field.

“Establish yourself as an expert and provide feedback, advise, opinions on the various

Business Experts

Photo (c) bm2b.ca

forums, user groups, etc. to increase your Internet visibility and viability.” It is kind of intimated that gaining the expert status is relatively easy. I personally think the goal of aspiring entrepreneur is to achieve the status of expert or having expertise in a selected field – but the real goal is to have that “tag” or description of you applied by others. – Undoubtedly it carries so much more impact and value when applied by others.

But beyond the impact stop and do the math. If you think of yourself as an expert – 1 person thinks of you as an expert. Now if 100 people think of you as an expert and they tell their 10 friends that comfortably refer and think of you as an expert, you have 1000 people thinking of you as an expert. From that fact, goods things may happen on your way to bigger goals.

Entrepreneurs and small business owners very often perform similar or the same function within your field of choice over and over does that make you an expert? You very well may be an expert in performing that task or service. Again the goal I believe is to have others apply the term expert to your business efforts.

The one common element among the people I associate with and think of as “experts”, is the fact that I never hear them refer to themselves as experts. Actually, I find myself referring to them as very knowledgeable or accomplished people, as I find it difficult to apply this lofty term to most any professional. Again, part of me says expert is a term that should rarely need to be stated in the first person.

Calling Yourself A Business Expert

I was intimately involved with starting, running, and growing a non-internet related business for 20 years and interacted consistently with testing labs, lawyers, equipment manufacturers, regulators, inspectors, trade associations, and educators within the industry. Did I consider myself an expert? I never felt I was. But maybe I was.

Please find what Wikipedia says about the term EXPERT.

An expert is someone widely recognized as a reliable of technique or skill whose faculty for judging or deciding rightly, justly, or wisely is accorded authority and status by their peer or the public in a specific well-distinguished domain. An expert, more generally, is a person with extensive knowledge or ability based on research, experience, or occupation and in a particular area of study. Experts have a prolonged or intense experience through practice and education in a particular field.

What are you calling yourself? What are others referring to you as? Do you display a unique expertise in you field? Is that expertise recognized by those around you?

I think aspiring to be the best in your field, continuously seeking education, and always looking for means to self improvement is the road to success. For some that road may be longer than for others. But remember in lieu of reaching “expert” status, you can be pretty damn good at what you do, and for your customers or target market that may be just what they are really looking for.

How to Fuel Your Business Sales Growth – Organic vs. Acquisition

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Sales Growth. Every business needs sales growth. When the company bottom line is lacking and cash flow is deficient a business owner may pour thru his/hers monthly financials or spreadsheets reviewing line entries to find out where the business is and to find any glaring problems. Most often this analysis results with the same outcome. INCREASE SALES or DECREASE EXPENSES.

I, and many other business owners, recognize that reducing expenses is always a good thing, and during an economic downturn such as the one we are presently experiencing it is more than necessary. But my experience is that you can only reduce expenses so much. It helps your situation month after month to attempt to reduce your expenses to improve your bottom line, (and is a great business discipline), yet at some point you get to the place that you cant really reduce expenses much more, YOU NEED TO GROW SALES.

Types Of Business Grow

Sales growth also occurs across many different efforts, but these different efforts can be simplified to categorize sales growth as:

  1. Internal Sales Growth (or referred to as organic growth)
  2. Growth thru Acquisition

Companies may tend to use just one of the above means, or both of them. In my last business our sales growth came thru a combination of both internal growth and growth thru acquisition. Both means have advantages and potential disadvantages. But both should be considered. The longevity of the business may also dictate what means to utilize for sales growth. Speaking from personal experience of growing and running a business for 20 years here are a few of my findings.

In the early years annualized sales growth of high double digits and or low triple digits was very attainable thru internal growth. But as your sales grows and your year over year comparisons are based on higher sales numbers attaining the higher sales growth figures became more difficult. So acquisitions helped support our internal growth efforts. Efforts for internal growth never stopped, they just got supplemented with strategic acquisitions. Recognize that acquisitions that are synergistic in nature can have some tremendous results on your bottom line.

A poorly performed acquisition can also have the opposite result and can be very costly to the business. Where do you look for potential acquisitions? Competitors are always the first best place to keep your eyes open to. Below are some of the pros, cons associated with growth thru acquisition and thru organic efforts.

Business Growth

Photo (c) punchcopy.com

Sales Growth Thru Acquisition and Organic Efforts

Pros/Cons – When acquisitions are truely synergistic the effect on your bottom line can be significant. Even when considering the acquisition cost of money consider the following. If you sell Yellow Widgets and your sales are $10,000 a month – you may have the monthly cost of business to sell those widgets including a building, a telephone, insurance, advertising, company car, receptionist, etc -cost totalling $6,000 per month. You decide to buy a local competitor that sells Red Widgets and his sales are $7,000 per month. He also has similar cost of business- you may find that you may increase your sales now to $17,000 and you no longer need his building, phone, company car, and receptionist. Even considering the cost of money for acquisition- you probably have increased your bottom line virtually overnight. So immediate sales increase is a plus – But consider:

  • Handling/managing a big bump in sales “overnight” can be a daunting task and business can be lost in transition and may need to be factored into the acquisition decision analysis.
  • The customers of the “other” company are used to doing things in a different way. Your way may be an improved way, but the difference may be detrimental in the eyes of some acquired customers.
  • Financing the acquisition can be difficult- Financing thru the Seller is usually easiest, and being they are in the business- they can better understand and see where the money is coming from and the likelihood of payment.
  • Acquisition can grow sales at a much higher more immediate rate. You gain the benefit to the bottom line “today”.
  • In current economic times Acquisitions may be had at more favorable multiples of earnings.
  • Organic growth – the customer is “brought along” with your company philosophy, approach ,and methods and have a certain “comfort factor” with this approach.
  • Organic growth rates may decline as the maturity of the business grows.
  • Organic growth adds to the stability of the company. If acquisitions are not available the company can rely on own internal efforts and have control of those efforts.

Acquisitions for most businesses should be considered. Organic growth can be more “slow and steady”, but “slow and steady” with a surge here and there can be a beneficial company business model towards fueling business Sales Growth.

“I have Not Failed I’ve just found 10,000 ways that won’t work” – Thomas Edison

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My family and I lived near Fort Myers Florida for 11 years – Thomas Edison and Henry Ford had vacation homes right next to each other  in the  Fort Myers Florida.

Thomas Edison Business Mindset

Many stories and quotes are attributed to these successful men. The above quote – “I have not failed. Ive found 10,000 ways that wont work” – To me addresses the trials and tribulations of a small business owner or entrepreneur. Failure in start ups happens. It can happen again and again, and will happen. Failure doesn’t get dealt with as a defeat, rather is viewed as a setback. Many failures turn into policy and/or procedure to avoid similar future problems. If you buy a business you can have a pretty good feel on what to expect assuming you’ve performed adequate due diligence.

Thomas EdisonIve been part of many discussion revolving around starting up a company and how many years to either break even or make a profit. Some people say it is one year others say 2 years, others 3-5 years. For every business reaching this milestone of “break even” or “profit” is different. The measuring stick used and the timeline expected should be considered. Arbitrary goals and time frames should not be set. There are many unknowns in a start up. You can only do so much due diligence on something that has yet to happen – “You dont know what you dont know”- this quote may or may not be from Thomas Edison,- but applies.

I think that many people have a certain entrepreneur spirit within. Only a certain percentage act on that spirit. And the successful ones I believe are the ones that are successful at understanding failures will happen, and are resilient enough to accept the many failures that will come your way. Failing 100’s and or 1000’s of times and then coming up with the light bulb is a prophecy most any small business owner / entrepreneur would accept.


Free AK-47 with Purchase

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How to win new business

What would you do to get a new customer or some more business?   While vacationing with my family in South Carolina, I drove by this sign that stated “FREE AK-47 WITH PURCHASE”.

I kind of view it as an interesting marketing effort. It certainly can increase the visibility of this company among all the other similar businesses along this somewhat rural, lake area street. I am not sure of the details or what exactly this tractor and boat shop was offering. It made me consider the various methods and or limits we all go to, to gain business. I work with people that are interested in buying or selling a business, but recognize that all businesses need new business. I’ve hear it said “If you are not growing you are dying”, I’m not so sure it is that black and white but subscribe to the concept.

Today’s business climate encourages cost cutting measures. It is fairly easy to cut marketing/sales expenses, as these cost very often are not “fixed cost”, and can be readily modified or reduced if needed. Maintaining marketing sales effort now in preparation for a recovery is a sound approach. Ultimately gaining the attention of prospects or potential customers is one of the more critical parts of a marketing effort.

It`s All In The Marekting

This Tractor/Boat shop through no real additional cost certainly grabbed my attention. (And I am not in the market for a boat a tractor or an AK-47.) While I pulled off the road and into the parking lot to take a picture of this sign, I saw no customers coming out of this place of business with a tractor and AK-47 over their shoulder. But, I do believe the effort and uniqueness of this sign did and will help bring more potential customers into the store.

Marketing efforts can be fairly inexpensive, and sitting back, stopping marketing efforts and waiting for recovery can prove to be very expensive as well.

Today’s business climate encourages cost cutting measures. It is fairly easy to cut marketing/sales expenses, as these cost very often are not “fixed cost”, and can be readily modified or reduced if needed. Maintaining marketing sales effort now in preparation for a recovery is a sound approach. Ultimately gaining the attention of prospects or potential customers is one of the more critical parts of a marketing effort.