When you think of Chris Columbus chances are his business capabilities and qualities do not come to mind.  But, in his time he displayed attributes of an entrepreneur consumed by his dream of success.

Born a commoner in Genoa, Italy, he was exposed to the merchant traders of Venice and other Italian cites that sailed out of the Mediterrean through the treacherous water around the Cape of Good Hope.  Their travels took them to Asia where they traded goods for silks, precious gems and spices.  These voyages were long, treacherous and quite dangerous.  The voyages that succeeded made their ship captains and investors wealthy.

During the medieval period, it was generally accepted that the earth was flat.  By the renaissance age and the time of Columbus, most people accepted that the earth was in fact round.  Although some merchants felt they could get to Asia by sailing west, it was an unknown for them.  How far was it?  How long would it take?  What if the earth really was flat?  What beastly sea creatures would be in the way?

Columbus had the vision and courage to want to try it.  But, he had no money, no title and no standing.  He set out to accomplish what any modern day entrepreneur would do.  He wrote a business plan.  He tried to figure out how many men he would need, how much would be needed for provisions, how many ships would be needed.  And, what would it cost?  He also projected the value of the goods he could bring back from Asia.  He projected potential profit.

Obtaining initial funding from private investors, he used connections to pitch his plan to King Henry VII of England and King John II of Portugal.  He also sought an audience with Ferdinand and Isabella of Spain.  Portugal turned him down.  England took too long to respond.  Securing an audience with Spanish royalty, he made his presentation.  Although impressed they were not enthused by the idea.  But, Isabella and Ferdinand eventually funded the venture hoping to increase their influence throughout Europe.

Ferdinand and Isabella were not fools.  For four long years they did their due diligence, before agreeing to fund the trip.  This brought in other private investors.  So far Columbus had managed to create and sell his vision of a successful venture and obtain the funding he needed.

The execution of the plan was less than successful due to faulty assumptions.  When Columbus arrived in the Bahamas and moved to Hispaniola, he thought he had succeeded.  Apparently, he also had a faulty GPS.  He was sure he had reached Asia and spent several months trying to find trading ports. Not finding any, he did what any good business person would do….. he modified his business plan.

Finding no spices and silks, he left the PInta behind with about 40 men, loaded the one ship he had left with some goods and some Indians and headed for Spain.  The Pinta was also headed for Spain.  The men left behind did not want to stay in the “new world”.  After 4 voyages to the Americas, Columbus’ voyages served to secure the Spanish realm as a colonizer of the new world.  Columbus died shortly after his last voyage.

Over 500 hundred years later, Columbus has a holiday in his honor.  What other business person can claim that honor??  Will it be Bill Gates, Steve Jobs or maybe Warren Buffet?  Doubtful.

Over the past several years, I have had the opportunity to analyze a number of business plans from entrepreneurs and start up corporations seeking funding. I have seen great ideas, some feasible business plans and some not.  Some are ahead of the times and others outdated.  A few select ones I have invested in (none in Nigeria!), but virtually all I have not invested in for any number of reasons.

What I have come to realize is that the companies that I started and were successful would not have a chance of success in today’s world.  But what I also have learned is that the principles on which I founded my companies are more viable than ever today.  Reflection on past successes and the lessons learned can be applied to success in the present.  Never mind the future, for it may never come.

The companies I founded over my career have been businesses that provided valuable information or low cost marketing alternatives to its clients.  One that would never survive today is Atlantic Marketing Group.  It started in 1984 as a print marketing company with a series of Town Almanacs and Directories in Maine. We segregated small Maine communities and promoted the businesses in the town to the local market.

Competing against local newspapers (cable TV was pretty much non- existent, although I was in negotiations to buy one back then), we added a twist.  In each annual almanac we included local telephone listings along with a series of articles about the community.  The cover of each publication was an original artwork by a local artist, hand chosen by our art director, a former art director for Vogue Magazine with an eye for flair and good taste.

We mailed our almanacs free to each household in the community.  Every resident had access to all the pertinent information in the community, plus its businesses.  It was very successful leading to the purchase of Smile magazine and marketing of medical newsletters to a number of medical professions internationally.

The idea behind the company was to provide low cost, targeted marketing opportunities to companies that wanted and needed to reach the marketplace with their products and services.

When I founded this company, computer technology was in its infancy.  Through computer technology we were able to use the same article over and over by merely inserting a different medical professional name.  This dramatically reduced the cost of producing publications.  I am pretty sure no one before me had done this.

This company could not succeed today.  Why?  Very simply, it is printed medium and print cannot survive profitably today.  Is this idea still good?  Maybe.  With social media marketing and email marketing each company can now reach their market very efficiently. I have seen some business plans that come close to replicating this model in our internet intensive world.

I have copies of all the publications in my library and thumb through them occasionally thinking my timing was incredibly uncanny.

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I had a wonderful opportunity to attend the 79th annual crafts fair presented by the League of NH Craftsman who are celebrating their 80th year in existence.  The League is a non-profit guild type association of juried artisans across many different crafts. It is one of the oldest associations of its kind in the U.S.  Only residents of New Hampshire or of a bordering town in the states of Massachusetts, Maine or Vermont may be members.

Applications for membership are considered by a committee and a jury of peers.  Artisans submit and present their work to the jury.  Applicants explain their process of creating and how they develop their ideas into a final work of art.  The jury can either accept, reject or give advice to the applicant on how to create a better artwork for future consideration.

That kind of day!

The association promotes its members in several retail outlets throughout New Hampshire as well as producing the annual fair.  The fair has been held at Mt. Sunapee Resort at the base of Mt. Sunapee since the 1960s in picturesque western NH, near the shores of Lake Sunapee.  It is an idyllic location to browse through the booths of New Hampshire’s most skilled craftspeople.

Overlooking the grounds

This year the fair has over 350 exhibits, 1300 educational demonstrations and a crafts tent for young crafters.  Virtually all media are represented including blown glass, stained glass, painters, photographers, wood carvers and wood crafters, chainsaw artists, fabric artists including stitchery and surface pattern design.  Others include leather crafters, blacksmiths, metal sculpters, polymer clay artists, metal artists, basket weavers and more.  The artists, most of whom manage their own booths, range in age from their 20s to seasoned craftsfolk in their 60s and 70s.  Everyone I spoke with was more than eager to talk about their designs, their products and the business of artistry.  It is clear to me that these artisans are the some of the best at what they do.  I have attended other craft fairs but I marvel at the consistency, quality and imagination of these folks.

The fair runs daily through August 12 this year. If you have a chance, attend.  You’ll be glad you did!

For more information, visit their website

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This post has been previously published

One of the most insidious and invasive of all management “tools” is the formal performance review.  Many employees are forced to write their own self reviews only to have their managers totally ignore them and write their own reviews for the colleague.  Reviews only serve to justify management malpractice.  How stupid and what a waste of time for everyone.  How did these things evolve?  Let’s look at history to get a perspective.

In 44 BC, Brutus was an opposing politician to Julius Caesar and his ways of ruling the Empire.  Each year, Brutus would write up his accomplishments and present them to Caesar along with his goals for the coming year.  Each year, Caesar would acknowledge Brutus’ performance and point out his failures.  Additionally, he would set Brutus’ goals for the coming year and dismiss Brutus’ desired goals.  The reviews always took place on March 15.

After numerous years of being berated, Brutus showed up for his performance review only to hear Caesar complain about Brutus’ underperformance, again!  Brutus snapped and pulled out his dagger and ran Caesar through.  To this, Caesar responded, “Et tu, Brutus?”  Apparently, Caesar had been giving poor performance reviews for quite some time.  Beware the Ides of March.

Fast forward to medieval England and the reign of King Arthur.  Sitting at the round table, his royal highness and his knights would discuss the performance of the serfs of the realm.  How much did they produce?  Could they be squeezed for better performance? Who were the top producers?  Who produced the least amount?  At the end of the discussion the knights set forth to deliver the performance reviews to the tax collectors of the realm.

The tax collectors took the reviews and set out to talk to the serfs.  The top producing serfs were told they were producing greatly and the king was proud of their work.  Then, they were told they would need to produce more in the following year and that their contribution in taxes to his highness were to double.  The middle producers were told they needed to increase production or face losing the right to produce.  Those serfs on the lower end of the scale were hung.  Thus, modern day stack ranking was implemented.
We move forward to the late 1800’s, the industrial revolution and the great mills of the era.  Meet Ichabod Ellis, a notorious factory master.  His henchmen prowled the factory floors, ever alert for slackers.  Everything was tracked, time in, time out, amount of time taken for breaks and hourly, daily and weekly production.  Nothing was left untracked.  Icky would poor over the records and note any abnormalities in the data.  Low performers were summoned to his office where they were given immediate feedback and sent off to perform better or else.  Continued poor performance would lead to job loss.  And, thus daily performance reviews led to management by fear and intimidation.

We move to modern day practice.  Enlightened management has realized that each of these methods alone does not work.  So, they have cobbled together a system of performance reviews where the employee believes they have say in their reviews and goals.  Instead, management arbitrarily raises production goals, reduces or maintains pay and tries to convince the employee it is being done for the employee’s benefit while continuing to manage by fear and intimidation.

If this is the way you operate your company, it is time to change before your staff pulls out their daggers and leaves your company.  Unfortunately for you, your best producers will leave first since they will have the most options.  Fortunately, you have the power to change the way you operate.  Eliminate this non-productive practice today.

Over the past few weeks my workload has increased which is a very good thing. Unfortunately, due to that increase I most likely will be unable to post new blogs for a little while. I thoroughly enjoy sharing with you my experiences and answering your questions. I anticipate this will be very short term before I will have the opportunity to renew my posts.

However, it is very important that I devote my time to my work and my clients. I will catch you all in just a few weeks.

Thanks for your referrals and support!

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Last week, I wrote about considering a franchise and deciding to forgo buying one. I started a similar business without the support of a franchise operation.  It was a decision I made after researching the pros and cons of a franchise and what advantages a franchise would give me.  For many people buying a franchise is the better decision.

If you are looking to go into business for yourself, you can buy a franchise for almost any type of business.  Hotels, restaurants, dollar stores, business services and fitness centers all offer the chance to buy into a tried and proven business opportunity.  You can buy an existing franchise from either the current owner or direct from the franchisor.

What are the advantages of going with a franchise?  Let’s take a look at some of the reasons a franchise may make sense for you.

• Established Business Plan – When you buy a franchise, you are buying an established proven business idea.  The franchisor has a proven method of operation and proven products or services.
• Minimize Risk – You want to make a profit and maintain a business that will grow and expand.  Far fewer franchises fail in business than other business startups.  Studies have shown that 90% of franchises are in business after 5 years as opposed to a 90% failure rate of non-franchised businesses.
• Name Recognition – A big reason to purchase a franchise.  When you open for business, you expect marketing support from the franchisor.  Many people in your market area will recognize your business because they have been exposed to the business name or products.  A new startup lacks that recognition.
• Support – Most franchise operations have an owners association.  You have an opportunity to ask questions of experienced franchisees if you run into issues that the parent company cannot resolve.  Chances are good that any issue you confront has been solved by either the parent company or another franchisee.  You do not have this support network in your own business.
• Financing – Many franchisors have relationships with banks or other lenders to finance a portion of the franchise fee and working capital.  As long as you have good credit, some assets and have taken the company’s business plan and modified it to your circumstances, you may be able to qualify for funding.  A non-franchised startup can have difficulty establishing funding to operate.

If you do not experience founding a new business, a franchise can save missteps in your startup.  If you have the desire to be in business for yourself, but not by yourself, consider a franchise.

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One area of business that I seldom write about is the franchise.  That is mainly because I have never franchised or bought a franchise, always preferring to build my businesses.  But, for many people buying a franchise increases their shot at success.  There are many good reasons to purchase a franchise.  The odds for succeeding with a franchise far exceed those of starting your own business from scratch.

You need only to look at McDonalds as one of the most visible and successful franchising machines.  From the McDonald brothers small stand to Ray Kroc’s vision and drive to bringing McDonalds worldwide.  It has all been driven by the franchise element of business.  Virtually every major hotel chain is a franchise operation.  Food chains like Subway (the most popular franchise) depend on franchising.  Watch most national ads on TV and you are looking at franchise operations.

Why are they successful?  They may not necessarily have the best products, but they have some of the best marketing.  I don’t mean best as in quality, but as in you see them everywhere…. TV, radio, billboards, everywhere.  Their messages are generally irrelevant except to pull on your emotions and to get you to remember their name.

A number of years ago, I looked at buying a franchise.  I liked the business model of the franchisor and paid a visit to their headquarters.  I was shown around and met all the people who would support me in my business.  I learned how they would support me and I learned what they expected from me.  It was all a very impressive sales pitch.  Afterwards, I met or spoke with several franchisees.  They were, of course, quite successful.

It was a wonderful story.  One price included everything to set up a turnkey operation with full support.  There was the business plan, the equipment, the mentoring, and help in determining location.  It all seemed so great.

As I reviewed with my attorney and accountant, I started to realize that even with all the support, I was the one putting up the money, making all the sales, hiring all the people I needed to make it work.  I would be paying for a name, a business plan and little else.  I would also need to pay a royalty and marketing money to the parent company.  I would be held accountable to their rules.  RULES?

I hated rules and still do.  Rules were and are stifling to creativity and success.  I would not be able to add products or modify my sales plan nor do anything the way I might think it ought to be done. I looked at the amount of money I would spend for a franchise and development and sales costs and decided I would make this happen without paying franchise and royalty fees.

And so, after researching the market, I opened my business, Voice Mail USA.  We sold voice mail services and systems before companies knew what voice mail was. This would start a revolution in not only telecommunications but communication as a whole.  I added a franchise no no in reselling long-distance and 800 services.  I would not have been able to do that under the franchise agreement I would have had to sign.  The reselling of LD services led me to another business which I founded after Voice Mail USA was sold.  But that is a post for another day.

I also added wholesale channels with agreements with telecom equipment dealers to resell my services.  I would not have been able to do that wither as I would have been confined to a territory under the franchise agreement.

There are many good reasons to buy a franchise and I will cover that in my next post.

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A few days ago I received an email from a reader looking to start a business and wanting some input from me.  Mostly, I ignore those emails, but something about her approach and attitude led me to call her.  It was an interesting conversation.

She is a young, middle level manager of an important department in a mid size company.  She makes very good money and seems (in my opinion) to have a great future ahead of her.  She is smart, confident, driven and moving up the corporate ladder quite quickly.  She also has a good idea for her business (again, my opinion).

As we talked about many things (I like far ranging, open conversations to gauge a person’s personality, skills and motivation), I became intrigued about her business.   On the surface, she has a great idea, the drive and smarts to start and grow a successful business.  So, I drilled deeper.

“Why, I asked, do you want to start a business when you have a successful business career?”  I expected to hear some of the usual well rehearsed answers.  And, I did.  She has seen the business problem she wants to solve many times and knows how to solve it.  She has talented people she will enlist as her first employees.  She has thoroughly thought it out. She has done her projections and secured some of the funding she needs to start up.

As we continued talking, I heard more pre-rehearsed answers, so I changed my questions.  I asked her about her current management position and her company.  The more she spoke, it became clear to me she is looking for a way to escape her job. She wants to get out of the daily stress of long hours, little recognition and low job satisfaction, not uncommon reasons for people to want to make changes.

I listened as she said, “I am tired of having bosses tell me what to do.  It is time to be independent and do things as I want.”  For a moment, I was silent.  I simply said to her “There is no one that does not have a boss.”

I showed her that as a business owner/founder she would have more bosses than she ever thought imaginable.  Each customer or potential customer is a boss.  Her bank/angel or VC will be her boss.  Each vendor she works with will be her boss.  Her employees will be her boss.  To be successful, she will need to be able to please all of them most, if not, all of the time.

As she listened to me preach she began to see that we are all accountable to others.  We “Gotta Serve Somebody.”  I sent her this link http://www.bobdylan.com/songs/gotta-serve-somebody and haven’t heard from her since.  I suppose she may be rethinking her motivation.

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After a couple hours of working at resolving some tricky business problems, I ran into a mental roadblock.  My brain refused to do its usual work of looking at a problem from several angles, assessing information and coming to a conclusion.  Reaching that point I decided to stop working.  Just shut it down and do anything else.

As I cleared my mind of the clutter, I aimlessly wandered around the house, flipped on the TV and scanned through several channels.   I sat back in my chair and relaxed. I started to think about what I would write in my post this week.  Determining what topic to choose, I hit the bane of writers – writer’s block.  My brain seemed to weave through any number of things – chores to be completed, people I needed to call, but no ideas on a topic for the post.

So what happened?  As my mind was unwinding from the days stress and numerous decisions made, it began to solve some of the earlier problems I was unable to resolve.  Suddenly, potential solutions were abundant.  I jotted down notes and set them aside.

Then, a stranger thing happened.  An idea for a new business popped into my head. The magical light bulb switched on.  I wasn’t looking for a new idea.  It seemed to create itself.   My mind raced through various ways to make this business real.  The less I thought about it, the faster and quicker ideas and scenarios developed.   I wrote everything down and a semblance of a business plan began to develop. Nothing concrete, only tasks and research to be commenced.  It was the equivalent of doing a mind dump, no idea was irrelevant. About an hour later, the ideas stopped and so did I.

Just as quickly as it started, it stopped.  As my brain started to reengage, I realized the experience would make pretty good post.

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Reviewed By Wayne Mates

This paperback is part of a series of business books recently published by Harvard Business Review, one of the most revered publishers in the country for business. As such, I looked forward to some insight into business that I hadn’t read before.

The book is composed of 9 articles covering a variety of topics. Each article mixes theory and the practicality of real world examples. As you would expect from the professors of Harvard, the articles are well thought out and provide solid business school fundamentals. Some also draw in their real business experiences to add color. There is nothing like having experienced and done it to add validity to your teaching.

Articles delve into what resources you need to start up and questions you need to answer (and what the correct answers are) if you are to be a success.

There are three articles on when to relinquish the CEO role and hire a professional CEO. This article points out that Steve Jobs, Bill Gates and Michael Dell are the exceptions; that it takes an extraordinary person to both found and lead a company into market dominance. You may remember Apple forced out Steve Jobs and replaced him with a professional CEO. That didn’t work out too well for them.

Since there are a number of authors, the quality of the articles can vary from very well written and researched to marginally effective. Most are excellent and will cause you to pause and ask yourself some hard questions about what you are doing and why. Pondering the answers will give you valuable insight into your company, your senior managers and staff. Coming up with the right answers will determine how far you can take your fledging company.

This is an excellent book for those who are anticipating founding a business as well as those who have little experience and may be searching for answers. I highly recommend this book.

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