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How to Define Success

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Success is one of those words that gets thrown around a lot. People say they want to be successful when they grow up. You might hear comments that a surgery or procedure was successful. The idea of success is an essential aspect of life so the act of defining success should be common practice.

When I begin working with a client to develop a strategic plan, it always starts with defining success. Typically, new entrepreneurs struggle with this process because they approach it from the wrong direction. I will come back to this point.

According to Merriam-Webster, success is defined as a “favorable or desired outcome.” Great, problem solved—end of the blog.

Okay, maybe not.

A favorable or desired outcome makes sense. But the heart of the question is, what exactly is the desired outcome? The answer IS, and should be, different for everyone.

Think back to the ideas of success at the beginning of the blog – what does it mean to be a successful grownup? For one person, success might mean living in a moderate house and having the freedom to stay home with the kids. Another person might define success as having all the newest gadgets and climbing the corporate ladder. Neither answer is necessarily wrong.

I said earlier that many new entrepreneurs usually approach this from the wrong direction. It’s pretty standard for people to think about success in terms of other people. It’s a classic case of “keeping up with the Joneses.”

Some answers I see regularly are:

• Success equals LOTS of money.
• Success equals EXPLOSIVE growth.
• Success equals fame, popularity, millions of followers on social media.

The reality is that it doesn’t matter how Merriam-Webster, the world, or anyone else defines success (the desired outcome). It only matters how you define it.

So, where do you start when it comes to identifying your desired outcome? When I work with clients, I have exercises to pinpoint their values and what truly matters to them.

Let’s take me, for example. I value my faith, family, strong character, hard work, building something from nothing, and helping others with honesty and integrity. And it’s not just the act of helping others. I value helping others in a way that demonstrates that I care about them, their business, and their success.

After 14 years, I believe I have achieved my desired outcome. I have the freedom to spend time with my family and work in a profession where I get to help aspiring entrepreneurs every day. This is a path I want to continue.

While my desired outcome may resonate with others, it doesn’t mean that they will want precisely the same desired result, and that’s okay. Success is all about finding your desired outcome and the path for you to reach it.

Take the time to identify your values and what is truly important. Once you’ve done that, you are well on your way to defining what success means to you and how that fits in with your overall strategic plan.

If you are feeling overwhelmed with this process, that’s okay. I would love to help you work through this progression. Feel free to shoot me an email at kent@kentgustafson.com if you’d like some help or just want to talk. My desired outcome is helping you define yours.

Identify Your Competitive Advantage

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When you start a business, it’s likely because it’s something you are passionate about. That’s fantastic. And then you get to the point where you start working on building your dream business. One of the essential things to identify in this stage is your competitive advantage.

When I first start working with a client, I love to ask them this question: “What sets your product or service apart from your competitors?” While the responses typically vary, the reality is that few truly know what sets them apart from the crowd.

Typically, the responses I see are:

• We are really knowledgeable.
• We have extensive experience.
• We have the most competitive price.
• We offer excellent customer service (my personal favorite)

These are not what sets you apart from your competitor. And, likely, these are also the same things your competitors are saying about their services. If you think about it, these are really qualifications and, in most cases, they are widely considered the bare minimum industry standards.

Would you choose to work with someone who isn’t knowledgeable? Or doesn’t have experience? Probably not. Would you choose someone who isn’t priced competitively or doesn’t offer excellent customer service? I doubt it.

The other thing to remember about customer service is that everyone claims they have great customer service. Not everyone does, but everyone says they do.

More importantly, the reality is that all of these things reflect your product or service as a commodity. It is not in your best interest to allow the market to commoditize your business.

The question you should really be asking is, “What is your competitive advantage?” In other words, what is it that makes you unique? What is it about your product or service that makes it significantly better than your top competitor? What is it that makes your prospective customer’s decision to choose you a no-brainer?

Unfortunately, many don’t think about it in these terms.

Here’s an example to help you. Imagine being a book editor. Now imagine that you are a book editor who is an actual speed-reader. Could you set yourself apart from your competitors if you could tell your prospective client that you can work through the material twice as fast as the average book editor, which would save the client both time and money?

In my opinion, that would be a pretty clear competitive advantage for a book editor.

So how do you go about discovering your competitive advantage? The process doesn’t have to be as challenging as you may think, but it does require analytic thought and real self-evaluation.

The first thing you’ll need to do is look at your strengths closely to determine whether they can be marketed in a manner that creates separation between you and your competitors. You need to be willing to brag about yourself a bit and let others brag about you too. If you are struggling with this, ask your trusted friends and family. Ask them what skills and strengths do you have? And then determine if these can be used as a competitive advantage.

If you are still struggling or want some help going through this process, or just want to talk, shoot me an email at kent@kentgustafson.com. I’d love to help you figure out your competitive advantage and strategic plan to market that.

Biggest Lessons Learned Starting A Business

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If you’ve read any of my previous blogs, you’ll know many moving parts go into starting a business. Many new entrepreneurs are not prepared for the business world. I started thinking about all of this when I was recently asked the question, “What are the biggest lessons you learned when you started your business?”

I chuckled to myself and thought, “How much time do you have?”

When I started my business, I thought I was extremely prepared. I did my homework, I had a plan, and I felt confident. While I was prepared in some respects, I quickly learned that I was incredibly unprepared in other areas.

People make 5 common mistakes when starting a business – lack of start-up capital, improper business structure, no strategic plan, underestimating their risk, and failure to manage the business properly. Knowing about the most common business pitfalls can help you avoid them, which is what we all want and why you’re probably so interested in the lessons I’ve learned.

The reality is you don’t know what you don’t know. This has been true of every business owner I’ve worked with over the years, and it was certainly true of me too. Because I want others to learn from my mistakes, I’m going to tell you all the juicy details of my failures. And some of the biggest lessons I learned when I started my business.

When I was a new entrepreneur, like many, I made a lot of rookie mistakes. The first mistake was thinking that I was pretty smart and pretty well prepared to launch a business. Let me tell you; it was a hard dose of reality when I realized I wasn’t quite as smart as I thought I was and certainly not as prepared either.

This is one of the reasons I stress an excellent strategic plan. I know from experience. You see, the strategic plan I had was filled with holes, and I was too blinded by the idea of success to see them. I had hitched my wagon to a business development strategy and sales funnel that fell apart, FAST, and I had no backup plan. This is a place no one wants to be in!

I realized that not only did I need to be better at sales and marketing, but I also needed a more well-rounded strategy that included multiple sales pipelines.

More importantly, I realized that it was unwise to place too much trust in others. While it’s noble to believe in others’ basic good, the reality is that not everyone is your friend who only wants to see you succeed. Some are just the opposite, and you need to be aware of that as an entrepreneur.

Many have asked if I would ever change any of these things that I went through, and the simple answer is NO. These were invaluable lessons. I can look back 14 years later and realize how much I had gained because of those struggles and how much I can help others because of what I went through.

I learned to believe in myself and trust in what I could do to help other business owners be successful. I learned how to value myself and the skillsets I brought to the table and share that with others in a confident manner.

I learned how to evaluate others better and build a quality circle of trust with the right resources who could help me and help my clients as well. I learned that when you can become a GO-TO person for those you serve, your value skyrockets.

I learned that hard work and hustle on their own aren’t enough. You have to combine a strong work ethic with a profitable business model and strategic decision making.

Most importantly, I learned how to use my experiences to help others avoid the same pitfalls and mistakes to be in a better position to be successful. I realized that mistakes could destroy you or develop you and train you to be better. It all depends on how you learn from your mistakes.

Finally, I learned that if you have a dream and you are committed to it, you can achieve it with the right amount of determination and perseverance.

If you have the work ethic, determination, and perseverance but need help with some of the other aspects of starting a business, let me know. I’d love to help you put together a firm foundation so your business can be successful. Shoot me an email at kent@kentgustafson.com.

5 Common Mistakes (When Starting A Business) – Part 2

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It’s relatively common for aspiring entrepreneurs to make mistakes as they start their new business. There are many intricacies in starting a business. The previous blog post talked about the first three of the five common mistakes aspiring entrepreneurs make. Let’s recap.

The first three mistakes are:

• Insufficient Start-Up Capital
• Improper Business Organization
• Failure to Create a Strategic Plan

Knowing and understanding what mistakes to look out for can help aspiring business owners avoid these common pitfalls. We’ll talk about the last two of these common mistakes today.

MISTAKE #4: Underestimating Their Risk

Many people think that if they have insurance, their risk is covered. Not so fast, my friend. Insurance is wonderful and necessary, but it simply isn’t the solution for every possible exposure area.

It’s a common myth that only big corporations get sued. But it’s a myth for a reason. The vast majority of all business litigation involves small businesses.

This is why you must understand the risk involved in your business and have the proper structure in place to cover yourself. If you don’t manage your risk, it will manage you.

MISTAKE #5: Failure to Manage the Business

There’s more to running a business than just being good at your craft or offering a fantastic product or service. If you are unable to keep up with the everyday tasks of running a small business, you will struggle.

Many entrepreneurs lack much needed small business education and experience.

There are many aspects of running a small business, and it’s almost like putting a giant puzzle together. You need to consider the financial and operations aspects of your business.

Don’t overlook the financial aspects such as budgeting and forecasting, revenue generation, cash flow management, invoicing, payables, receivables, accounting and bookkeeping, taxes, etc. Plus, there are operations, including sales, product/service delivery, customer service, scheduling/logistics, inventory control, employee management, etc.

AND you also need to set aside time to work ON the business versus IN the business. This includes marketing, business development, new product/service development, and strategic planning, etc.

You must find the right balance to be successful.

Starting and running a business takes a lot of work. If it were as simple as just having a good idea, the number of failed companies would be lower. The reality is that without proper discipline, focus, execution, and support, many small businesses will fail.

I want to make sure your business is a successful one. I’ve worked with many entrepreneurs to help them in these areas, and I’d be happy to help you as well. If you’d like to have a conversation or enlist my help, please schedule some time with me or shoot me an email at kent@kentgustafson.com.

5 Common Mistakes (When Starting A Business) – Part 1

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There’s a lot that goes into starting a business. It’s not as simple as just having a brilliant idea. Because of the complicated nature of entrepreneurship, there are numerous mistakes aspiring entrepreneurs make when starting a business. But there are five mistakes that are extremely common and equally critical.

Knowing and understanding these mistakes can help aspiring entrepreneurs better avoid some of these common pitfalls. We’ll talk about the first three mistakes today.

 MISTAKE #1: Insufficient Start-Up Capital

Even the best ideas require cash. I know you hear success stories on Shark Tank about “bootstrapping the business with $600.” Still, the reality is that those who achieve success that way are the exception, not the rule.

It’s essential to keep in mind that there will always be more money going out than coming in in the beginning. This is even true with businesses that don’t require a lot of start-up costs.

Many aspiring entrepreneurs underestimate the start-up costs and overestimate how fast they will start making money. With all businesses, you will inevitably have expenses pop up that you never saw coming.

And the worst part of this crummy situation is that when you are cash-strapped, you make poor decisions because all of those decisions are driven by poor cash flow.

 MISTAKE #2: Improper Business Organization

Creating a proper business foundation is vital when starting a new business. I’ve seen this too many times – people take shortcuts with the business set up.

Many aspiring entrepreneurs will take a DIY approach, follow a friend or family member’s advice, or utilize a cheap online filing service. This is relatively common for new business owners because they are trying to cut costs likely because they underestimated start-up costs – see mistake number one.

Typically, they fail to see the importance because they don’t understand it and don’t recognize the importance of protecting themselves. This mistake can be costly for the business owner.

If the business isn’t structured correctly, it can result in added expense, failure to realize tax savings, increased liability, and be problematic for a future exit.

 MISTAKE #3: Failure to Create a Strategic Plan

Creating a strategic plan helps a business prepare for any roadblocks or obstacles that may come in the way. I know if talked about this in other blog posts and videos but it’s worth repeating because it is that important.

So many new businesses fail. When you don’t take the time to identify your definition of success, acknowledge the hurdles to achieving your goals, and create a strategy to overcome them, you will struggle.

If success is the ultimate destination, you must have a roadmap to get you there.

I’ll let you sit on these first three small business pitfalls. My goal as a small business consultant is to help you avoid these common mistakes. It takes a lot of balance and requires discipline, focus, execution, and support. If you have any questions or would like to discuss how I can help you build a successful business, please reach out to me today at kent@kentgustafson.com.  

Business Structure

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There’s more to a business structure than just deciding between an LLC, Sole Proprietorship, or S-Corporation. The type of business you pick is part of building a firm foundation. Your business’s structure expands upon that.

An LLC stands for Limited Liability Company and helps provide liability protection for you as a business owner. A Sole Proprietor is someone who owns an unincorporated business by themselves. And S-Corps are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders.

The type of business you are is essential since it directly impacts your tax status, how you manage income, and how your business is ultimately governed.

But there is more to consider, like liability protection. Does it make sense for you to form a holding company to create additional separation between you and your business?

You should also consider whether your business structured in a manner that allows you complete autonomy? And if it is structured in a way that offers you the maximum amount of liability protection as well as proper mechanisms for your exit strategy?

Have you considered the future of your business? Even if you can’t imagine ever selling your business, it is still vital to structure your company so that you can transition the ownership seamlessly. You might be thinking – I’m supposed to have an exit strategy? The answer is YES, you are, but that is a conversation for another day.

All of these are essential questions that you need to consider when you are starting your business.

Understanding the nuances between corporations and LLCs, multiple tax options, and different governance structures is overwhelming for many aspiring entrepreneurs. New business owners simply want to operate their business, sell their product or service, and make their customers happy.

I get it, and there is nothing wrong with that. It’s a familiar and reasonable feeling.

But there are certain advantages and disadvantages to each of the different business structures. It is in your best interest to understand this and put yourself in the best possible position for success.

Throughout my career, I’ve been privileged to work with many entrepreneurs to help them understand the benefits of a proper business structure. If this is something that has you feeling overwhelmed, I’d love to help you as well. Reach out to me today to schedule a conversation and see how I can help you create a structure that fits your specific business. Please shoot me an email at kent@kentgustafson.com.

Business Operations

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Imagine being at the circus and see someone juggle 10 different balls at the same time. Usually, they make it look effortless. But when you try to juggle even 3 balls at one time, you have issues. Now, think about a time when you started a project with a lot of moving parts? Was it a struggle to keep it all organized and consistent? Or did it overwhelm you?

Starting a business is a lot like juggling or working on a project with many moving parts – only it’s typically bigger and usually more stressful.

When someone starts a business, there tend to be many risks. This can cause stress—because, for most people, starting a business requires them to put their life savings and their family’s future on the line.

It’s only natural that you want to do everything in your power to succeed. That’s why you’ve put together a strategic plan and created a financial and marketing strategy. But you still need to have an operational plan.

An excellent operational plan includes detailed procedures for every aspect of your business, including:

• Your sales process
• Managing workflow
• Product/service delivery
• Customer service and retention
• Managing inventory
• Processing accounts payable
• Managing receivables
• Employee hiring and onboarding

This is certainly not an exhaustive list, but I think you get the point.

By creating processes and procedures for all of these critical aspects of your business, you will ensure consistency in your daily operations. This will allow you to run your business efficiently, effectively, and with maximum profitability, kind of like the person at the circus juggling all the balls effortlessly. You, too, can effortlessly manage all your tasks and create a seamless transaction for your ideal clients.

Creating policies and procedures can feel overwhelming or even scary, but it doesn’t have to be. It starts little by little. In the beginning, you’ll want to keep it simple and not worry about “style points.”

If you aren’t sure where to start or would like some help, I’d be happy to sit down with you and help you get started. I’ve had the pleasure of working with thousands of entrepreneurs to help them establish an operation’s manual. If you’d like to learn more or schedule some time with me, please don’t hesitate to shoot me an email at kent@kentgustafson.com.

Do You Have A Financial Compass?

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Create a Marketing Blueprint

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What’s Your Plan?

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