Do Entrepreneurs Need Good Luck?

We once heard a mathematics professor state, "The parameters of luck are unknown to us." In other words, luck can't be explained by any specific factor; it's a matter of chance. We thought the statement made a lot of sense, but we were intrigued by the notion that what we call "luck" could be explained by a set of variables or elements that had not yet been studied. So we carried out our own research.

We spoke with people who thought their lives had been blessed by good fortune to try and figure out what factors they had in common. After four years of research, we could clearly identify a list of five principles for good luck.

What our research revealed can be summarized in a single simple sentence: In business, we make our own good luck.

What do these creators of good luck have in common? How can entrepreneurs make their own good luck as they’re making their businesses successful? The principles are summarized below:

1. Responsibility
Business owners who feel that they have had good luck also feel responsible for their own actions. When things go wrong or the outcome of any given situation is other than intended, they never point the finger of blame at external factors or other individuals. Instead, they look to themselves and ask, "What have I done for this to occur?" Then they act accordingly to solve the problem.

2. Learning from Mistakes
Creators of good luck don't see a mistake as a failure. Instead, a mistake is an opportunity for learning. Thomas Edison is the classic example. More than 1,000 attempts to invent the first long-lasting electric light bulb led to bulbs that only stayed lit for a few minutes. One of Edison's colleagues asked him, "Mr. Edison, don't you feel you are a failure?" Lacking any sense of vanity, he answered, "Not at all. Now, I definitely know more than a thousand ways how NOT to make a light bulb."

Sure enough, just a few days later, he turned his inspiration into a practical concept. By the way, the very first light bulb was invented by Sir Joseph Wilson Swan, who demonstrated the theoretical concept but gave up trying to develop a practical application after only three attempts. By contrast, Edison made his own good luck and designed a working light bulb.

3. Perseverance
Creators of good luck don't give up or postpone. When a problem or situation arises, they act immediately to either solve it without delay, delegate, or forget about it.

These business people don't carry a list of "things to do" in their brain. Instead, they resolve problems and situations as quickly as possible. This enables their energy to be fully focused on their work and avoid conscious or unconscious distractions, which only generate inefficiency.

4. Confidence
The most powerful principle is often the most overlooked. Confidence is divided into two parts: confidence in yourself and confidence in others.

Confidence in yourself is essential, and those who create their own good luck have high degrees of assertiveness and self-esteem. They keep to their purpose, persevere, and work to create the conditions that ultimately help them achieve success. Also, they are great visualizers. They use their imaginations -- specifically, their visualizing techniques -- to form mental images of their goals.

Closely linked to assertiveness and self-esteem is trust in others and respect for them, seeing other people as major sources of opportunity. This doesn't mean that one must be naive and trust just anyone. Instead, it speaks to the trait of seeing others as sources of opportunity for achievement.

Without confidence there is no way to "give yourself" to the situation. If there is no intimacy -- if it is ruled out by paranoia or rampant suspicion, for example -- there can be no opening up to others. Hence, there can be no room for dialogue or for the genuine and sincere exchange of opinions. Without this, any initiative proceeds more slowly until, eventually, it simply withers and dies.

5. Cooperation
Synergy is key. Trust in others leads to solid a network of work colleagues and friends, which, in turn, provides more resources to carry out projects than if they were managed alone. Think cooperation rather than competitiveness. At the most basic level, any project or undertaking takes place in the context of the broader group, and everyone should have the chance to emerge a winner.

As we have seen, whether or not one can create good luck basically depends on an attitude towards oneself, towards others, and towards life. It is also tied to the perception that the individual is much more of a cause than an effect. And above all, to the realization that one must make oneself the creator of the conditions that foster success and the achievement of specific, visualized goals.

We think of luck -- the sort that wins lotteries -- as random. It can be favorable or not, but it is always occasional, brief, and impermanent. We have found that of the people who have won big sweepstakes prizes, many lose everything they gained, typically within four years to seven years of hitting the jackpot. Furthermore, their personal relationships with family, friends, and colleagues often suffer.

On the other hand, since those who create their own good luck owe success only to themselves and their own initiatives, not just to a random roll of the dice, they are acutely aware of the origins of their good fortune. Moreover, having seen it work before, they know how to repeat it.

The problem is that we often seem to forget old principles based on common sense, which basically say that we must work, be aware of our actions, and take responsibility for correcting them when the need arises. The person who grasps that wisdom is lucky indeed.

Resource : http://entrepreneurs.about.com

How to Make a Powerful First Impression

Learn the art of presence and small talk from communications experts who swear you can do it even if you don't think you can.

If it's true that time is money, then it's small wonder business owners find they can never truly clock out. Wherever they go and whomever they meet, entrepreneurs are walking billboards for their companies.

In a tough economy, where advertising budgets are cut to the bone, that kind of person-to-person marketing is more important than ever. But if you're a billboard, how can you be sure you're communicating the right message? How do you get people to notice you without offending, boring or confusing them?

Body language
Lillian Bjorseth, a communications consultant and author of Breakthrough Networking, says people decide many things about you within 10 seconds of seeing you--usually before you even open your mouth. That's why entrepreneurs should always be conscious of their aura, she says.

"The aura is the area around you that you create by what you wear, how you act, how you look," she says. "It all goes together to make one impression. You could wear a very expensive suit, but if you stand slumped over with your head down, you won't give a confident aura."

Though every person's aura is complex and unique, Bjorseth says entrepreneurs can focus on a few simple, non-verbal priorities to appear confident and in control. First, don't slip into a room "all smiles." Instead, "claim your space" in the room by planting your feet six inches to eight inches apart, one slightly ahead of the other--a stance that will make you feel grounded and confident.

After you've established eye contact, Bjorseth says a smile will create an upbeat, positive environment. Maintain eye contact 85 percent of the time during a conversation, she recommends. Doing so will make you seem trustworthy and it will demonstrate that you're interested in what the other person has to say.

To avoid a fumbling introduction, Bjorseth says every entrepreneur should have in mind a "verbal business card"--a quick, 30-word summary of who you are and what you can do. Focus on benefits for the other person rather than job titles or even company names, she recommends. "You want to make sure people remember you as opposed to others who do the same thing you do."

Conversation
When it's time to move beyond the handshake stage, simple conversational skills are the key to a successful first meeting, says Rosalie Maggio, bestselling author of How to Say It and The Art of Talking to Anyone.

"Prepare in advance, then just try to forget yourself," she says. "Being too self-conscious is the quickest way to shoot yourself in the foot. Remember that it's about the other person--that's the best possible way to make a positive first impression."

To help shift focus to the other person, Maggio says a bit of small talk is appropriate in almost every setting. When meeting someone new, the conversation should resemble a tennis match, with each participant taking a quick swing before sending it back to the other person. Too many Americans confuse their sports metaphors treating a conversation "more like golf, where you just keep hitting your own ball over and over again . . . If you've talked for more than a minute, it's too long."

From formal pitches to impromptu meetings at a trade show, no two conversations will ever be the same. But Maggio says one element is critical no matter what the setting: the ability to show appreciation.

"In every conversation, include at least one appreciative remark," she says. Praise the other person's business acumen, charity work, or even her taste in shoes. As long as the appreciation is brief, sincere, and specific, the feeling will be remembered long after the words are forgotten."

Voice
Beyond body language and conversational skills, the actual tone of your voice is an important part of the impression you create, says Sandra McKnight, owner of Voice Power Studios in Santa Fe, N.M.

"In face-to-face conversation, the other person first sees you, then hears the tone of your voice, and only then listens to your words. It can create a negative impression very easily if you're not in control of the way you speak."

Entrepreneurs who speak in monotone will be perceived as uninspiring, while those who speak too quietly will come across as uncertain. But the most common problem, McKnight says, is speed-talking, which dilutes the message and makes the speaker sound anxious.

"Bright people have a tendency to talk fast because their minds move fast," she says. "But it's not about data dumping. It's about communicating so that you're understood."

To ensure that you're speaking at the right pace, McKnight suggests reading aloud from a book for 60 seconds. When time is up, go back and count the words in the selection you just read. The ideal speaking pace, she says, is about 145 words per minute--but don't forget that you probably speak even faster than you read.

The keys to creating a positive first impression aren't secrets that are hidden away and accessible only through visits to an oracle or a high-priced seminar. Body language, conversation and voice are three of the most important aspects of a first impression. The bad news is too many people think they lack skill in these areas. The good news is that most anyone can practice each of them and master their first impression.

Resource : http://www.entrepreneur.com

Success Story Henry Ford

Henry Ford
Founder of
Ford Motor Co.
Founded: 1903

“I will build a motor car for the great multitude…it will be so low in price that no man will be unable to own one.”—Henry Ford



Henry Ford was nearly 40 when he founded Ford Motor Co. in 1903. At the time, “horseless carriages” were expensive toys available only to a wealthy few. Yet in just four decades, Ford’s innovative vision of mass production would not only produce the first reliable, affordable “automobile for the masses,” but would also spark a modern industrial revolution.

Ford’s fascination with gasoline-powered automobiles began in Detroit, where he worked as chief engineer for the Edison Illuminating Co. The automobile offered the promise of a bright new future…a future Ford wanted to part of. So in 1891, Ford began devoting his spare time to building what he called the “Quadricycle”—a crude contraption that consisted of two bicycles placed side by side, powered by a gasoline engine. After working on the Quadricycle for nearly a decade, Ford took Detroit lumber tycoon William H. Murphy for a ride in his hand-built automobile. By the time the ride was over, they were in business.

The Detroit Automobile Company opened in 1899 with Ford as superintendent in charge of production. But the venture only lasted a year. Ford could build a car, but he couldn’t build them fast enough to keep the company afloat. Undaunted, Ford hatched a new plan—to build a racer. Ford saw racing as a way to spread the word about his cars and his name. Through the notoriety generated by his racing success, Ford attracted the attention of the backers he needed to start Ford Motor Co. in June 1903.

Ford set up shop in a converted wagon factory, hired workers, then designed and produced the Model A, the first of which he sold to a Chicago dentist in July 1903. By 1904, more than 500 Model A’s had been sold.

While most other automakers were building luxury-laden automobiles for the wealthy, Ford had a different vision. His dream was to create an automobile that everyone could afford. The Model T made this dream a reality. Simpler, more reliable and cheaper to build than the Model A, the Model T—nicknamed the “Tin Lizzie”—went on sale in 1908 and was so successful within just a few months that Ford had to announce that the company couldn’t accept any more orders—the factory was already swamped. Ford had succeeded in making an automobile for the masses, but only to create a new challenge…how to build up production to satisfy demand. His solution? The moving assembly line.


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* Henry Ford
* Henry Ford Continued
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* The Getaway Car Of Choice

Henry Ford
Founder of
Ford Motor Co.
Founded: 1903

“I will build a motor car for the great multitude…it will be so low in price that no man will be unable to own one.”—Henry Ford



Henry Ford was nearly 40 when he founded Ford Motor Co. in 1903. At the time, “horseless carriages” were expensive toys available only to a wealthy few. Yet in just four decades, Ford’s innovative vision of mass production would not only produce the first reliable, affordable “automobile for the masses,” but would also spark a modern industrial revolution.

Ford’s fascination with gasoline-powered automobiles began in Detroit, where he worked as chief engineer for the Edison Illuminating Co. The automobile offered the promise of a bright new future…a future Ford wanted to part of. So in 1891, Ford began devoting his spare time to building what he called the “Quadricycle”—a crude contraption that consisted of two bicycles placed side by side, powered by a gasoline engine. After working on the Quadricycle for nearly a decade, Ford took Detroit lumber tycoon William H. Murphy for a ride in his hand-built automobile. By the time the ride was over, they were in business.

The Detroit Automobile Company opened in 1899 with Ford as superintendent in charge of production. But the venture only lasted a year. Ford could build a car, but he couldn’t build them fast enough to keep the company afloat. Undaunted, Ford hatched a new plan—to build a racer. Ford saw racing as a way to spread the word about his cars and his name. Through the notoriety generated by his racing success, Ford attracted the attention of the backers he needed to start Ford Motor Co. in June 1903.

Ford set up shop in a converted wagon factory, hired workers, then designed and produced the Model A, the first of which he sold to a Chicago dentist in July 1903. By 1904, more than 500 Model A’s had been sold.

While most other automakers were building luxury-laden automobiles for the wealthy, Ford had a different vision. His dream was to create an automobile that everyone could afford. The Model T made this dream a reality. Simpler, more reliable and cheaper to build than the Model A, the Model T—nicknamed the “Tin Lizzie”—went on sale in 1908 and was so successful within just a few months that Ford had to announce that the company couldn’t accept any more orders—the factory was already swamped. Ford had succeeded in making an automobile for the masses, but only to create a new challenge…how to build up production to satisfy demand. His solution? The moving assembly line.

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Ford reasoned that if each worker remained in one assigned place and performed one specific task, they could build automobiles more quickly and efficiently. To test his theory, in August 1913, he dragged a chassis by rope and windlass across the floor of his Highland Park plant—and modern mass production was born. At peak efficiency, the old system had spit out a finished Model T in 12 and a half working hours. The new system cut that time by more than half. Ford refined and perfected the system, and within a year it took just 93 minutes to make a car.

Because of the more efficient production, Ford was able to cut hundreds of dollars off the price of his car. Cutting the price enabled Ford to achieve his two aims in life—to bring the pleasures of the automobile to as many people as possible, and to provide a large number of high-paying jobs.

But there was one problem Ford hadn’t foreseen. Doing the same task hour after hour, day after day quickly burned out his work force. The turnover rate became such a problem that the company had to hire close to 1,000 workers for every 100 jobs it hoped to fill. To solve the problem, Ford decided to pay his employees $5 per day—nearly twice the going rate. Workers flocked to Ford’s gates.

His labor problems solved, Ford turned his attention to another matter—the issue of who really controlled Ford Motor Co. Believing they were parasites who continually interfered with his plans, Ford bought out all his stockholders in 1919. Free to lead the company as he chose, Ford explored a number of different ventures. In addition to building tractors and single-passenger planes, Ford also operated an early mail route and the first regularly scheduled passenger flights. Undoubtedly the grandest of Ford’s ventures was The Rouge—a factory that was in itself one giant machine. Built on the Rouge River, the 1,096-acre plant was the largest industry complex of its time. Throughout the 1920s, workers at The Rouge pumped out hundreds of thousands of Model T’s, but the marketplace was changing and Ford began to fall behind the times. Ford had met its first serious competitor—Chevrolet. While Ford had dedicated the past 20 years to producing only one model, Chevrolet had developed a counterstrategy of releasing a new, improved model every year. The counterstrategy worked, and Chevrolet soon surpassed Ford in sales. Chevrolet’s success proved that people wanted style, not just utility.

In this new era, Ford’s “Tin Lizzie” was hopelessly outdated. A change was needed, but it wouldn’t come without cost. In May 1927, Ford laid off thousands of workers while he figured out a way to get back into the marketplace. At the age of 64 he was starting over. With the release of a brand new Model A, Ford came roaring back to life. When the stock market crashed in October 1929, Ford Motor Co. was better off than most of its competitors. Thanks to the success of the new Model A, the company rode out the first two years of the Depression relatively untouched. Henry Ford even raised his workers’ wages while dropping the price of his automobile. But he could only hold out for so long.

In 1931, the Depression caught up with Ford. After three years on the market, Model A sales fell dramatically. Chevrolet, with its new six-cylinder engine, and a new model from Plymouth cut into Ford’s market share. Once again Ford was forced to shut down production and send workers home. What brought the workers back was yet another of Henry Ford’s inspirations—the Ford V-8. This innovative eight-cylinder engine put Ford back on top.

But those who went back to work for Ford found that working conditions had changed. The young, humanistic idealist had become a hardened industrialist who believed the average worker wouldn’t do a day’s work unless he or she was trapped and couldn’t get out of it. To ensure his workers put in a full day’s work, Ford created the Service Department, a foreman and a group of supervisors, many of whom were ex-cons and boxers, who ruled the plant through fear and coercion.

When World War II erupted, the government asked Ford to build the B-24 Liberator Bomber. Ford had suffered a stroke in 1941, and due to his rapidly deteriorating physical and mental health, supervision of the project fell largely to Ford’s only son, Edsel. Optimistic Ford spokespeople predicted that B-24s would roll out of the factory at the rate of one per hour. But by the end of 1942, only 56 planes had been built. Plagued by medical problems of his own, the project and the pressure proved to be too much for Edsel. In May 1943, 50-year-old Edsel Ford died. So at the age of 80, in spite of his clearly diminished capacities, Henry Ford once again took up the reigns of Ford Motor Co.

The news alarmed President Franklin D. Roosevelt. As the nation’s third-largest defense contractor, Ford was a major part of the war effort. Aware of Ford’s increasing mental incompetence, Roosevelt toyed with the idea of bringing in outside managers, or even nationalizing the plant. Instead, in August 1943, the Navy sent Ford’s 26-year-old grandson home in hopes that Henry Ford II could bring order to the chaos that Ford had become. For months Clara Ford tried to convince Henry to step down and let their grandson take over. But Ford held out. Finally, Edsel’s widow, Eleanor, threatened to sell her considerable holdings in the company if her son wasn’t immediately named president. Henry Ford relented, and in September 1945 the crown was passed to Henry Ford II.

After stepping down as president, Ford went into seclusion, appearing only occasionally at company events. The raging fire that him driven him for more than eight decades had died out. On an April evening in 1947, Ford laid his head on his wife’s shoulder and died of a cerebral hemorrhage at the age of 84. Tens of thousands of people lined up to view Henry Ford’s body as it lay in state. Some factories closed, while others shut down for a moment of silence. In all, it’s estimated that several million workers were involved in some kind of demonstration of sympathy for the man who had irrevocably changed their lives and taught America to drive.

Ford Motor Co. was the last major automaker to unionize. Initially, Henry Ford kept his workers from organizing by paying nearly twice the going rate, cutting the workday from 10 hours to eight hours and introducing the five-day workweek. But Ford couldn’t keep the United Autoworkers Union (UAW) out forever. When generosity failed, he turned to intimidation.

Ford formed the Service Department to ensure workers did their jobs and to keep the union out of his factory. Under the direction of Henry Bennett, a notorious figure with underworld connections, this group of ruthless thugs brutally repressed any attempt by UAW to organize Ford workers. In 1937, the Service Department mercilessly beat a group of union organizers attempting to pass out leaflets at the Ford factory. The beating left the union leaders battered, but undaunted. It took another four years of pushing before something broke.

On April 1, 1941, Andy Dewar, a worker in the Rouge River plant’s rolling mill, changed labor history at Ford. After an argument with a foreman over working conditions, Dewar began yelling “Strike! Strike!” The call echoed through the plant, and the entire rolling line walked out.

Ford was preparing to do whatever it took to keep the UAW out of his factory until his wife, Clara, demanded he settle with the union. Clara rarely interfered in Ford’s business dealings, but she was genuinely afraid that the situation would explode into real violence. She threatened to leave Henry if he didn’t end the strike. In May 1941, Ford Motor Co. became a union shop. The agreement led to a new era of labor relations in the automobile industry, as workers turned away from their dependence on Ford’s paternalism and fear of Bennett’s Service Department, and toward the union shop steward and the skills of UAW negotiators.

When Ford Motor Co.’s new V-8 hit the streets in 1932, it was an immediate hit with an American public who craved greater luxury and more power. With a top speed of more than 80 miles per hour, it was the fastest thing on four wheels. Not surprisingly, the speedy roadster quickly became a favorite of Depression-era bank robbers and gangsters.

John Dillinger was so impressed with the V-8’s power that he sent Henry Ford a letter which read, “Hello, old pal. You have a wonderful car. It’s a treat to drive one. Your slogan should be ‘Drive a Ford and watch the other cars fall behind you.’ I can make any other car take a Ford’s dust.”

Clyde Barrow of Bonnie and Clyde fame also felt compelled to compliment Ford on his achievement. “Even if my business hasn’t been strictly legal,” he wrote, “it don’t hurt anything to tell you what a fine car you got in the V-8.” Barrow remained loyal to Ford for the rest of his life. When he and Bonnie were shot to death in 1934, they were riding in a Ford V-8. In 1973, the bullet-riddled car sold at auction for $175,000—more than Hitler’s Mercedes Benz.

Resource: http://www.entrepreneur.com

The Economy, Banking and Fear as Motivation

It was October 2005, and I had just resigned from my position as CFO of a US$250 million bank. I wanted to devote full-time efforts to form a new commercial bank headquartered in the Portland, Oregon, USA metropolitan area. Times were good. As Co-Founder and the largest beneficial shareholder, little did I expect when we opened our doors on 15 December 15 2006 that the country was heading straight toward one of the worst environments this industry has seen in any of our lifetimes.

The current economic environment, including legacy issues from the unprecedented volume and loosening of underwriting standards of residential mortgage loans, is resulting in serious strains on the banking industry. Collateral damage from this is felt in the lack of availability of credit to businesses, both large and small. Are banks simply being conservative? Are they in survival mode? Let’s rewind the clock.

As recent as two years ago, credit losses were at historic lows and margins were favorable. Banks were concerned primarily with profitability, but more importantly, they were constantly pressured to maximize return on equity. The most common means of increasing return on equity was by rapidly expanding the loan portfolio, thereby building high-yielding assets and maximizing leverage on equity capital. This oftentimes meant loosening credit underwriting standards in order to compete with securitizations and other non-bank financing vehicles. By the time the national credit markets began to seize in August 2007, most banks found themselves with highly leveraged balance sheets supported by assets that, in some cases, were not of the quality seen in years past.

What many bankers lost sight of was the importance of equity as a cushion to absorb unforeseen portfolio and operating losses. Because of pressure to maximize return on equity, significantly exceeding regulatory minimum levels wasn’t viewed as an efficient deployment of equity, particularly given how ubiquitous and cheap bank equity capital was in recent years. However, dropping below “well capitalized” status presents unwelcome restrictions on operations, the most crippling of which is lack of access to emergency wholesale funding (i.e., the bank becomes highly vulnerable to a liquidity crisis). Banks that fall below “well capitalized” are uncomfortably close to regulatory receivership or a forced sale to another financial institution.

Of the three regulatory capital ratios, the key ratio banks tend to focus on is “total risk-based capital to risk-weighted assets,” which is a regulatory capital ratio that incorporates the risk profile of the banks asset mix. The minimum for “well capitalized” is 10.0 percent. For the past 15 years, the banking industry has averaged around 12.5 percent. This leaves very little room to absorb the sudden asset write-downs or operating losses experienced over the past year.

Fear is a strong motivator. Bankers are preserving equity capital at any cost, and many are doing what would have been unthinkable until now: deleveraging their balance sheet. I participated in a recent CFO roundtable and all but one bank in attendance were ceasing or drastically reducing lending activity, and in many cases, selling good-quality seasoned loans to “de novo” institutions who are still in growth mode. During the past 45 days, our bank has received multiple requests to purchase loans like this. Almost all are to businesses that would fit the demographics of those in EO, which leads me to believe that credit will not be readily available for small businesses at reasonable levels for at least another year or two.

Despite defensive actions taken by many banks, there is a high likelihood that we have only seen the beginning of a long line of bank failures, and even worse for the economy, the continued inability for many businesses to access credit. What the banking industry needs and what would free up banks to begin prudently lending is the ability to raise equity capital. Unfortunately, bank stock prices are at near historic lows and there is little desire to invest. While I am not a fan of a nationalized banking system, I do think that the most viable alternative now is preferred equity investments by the Treasury in healthy but capital-starved banks. Only then can we expect to see the availability of credit begin its slow march to normalcy.

Yes, we live in interesting times.

Trey Maust, CEO of Lewis and Clark Bank

EO Portland

Resource :http://www.eonetwork.org

Negotiating with Contractors During Tough Times

When times are tough—as they are now—and money is tight, many savvy business owners look to outsource work to contractors. Using a reliable contractor can help you control costs and give you time to focus on marketing and business growth. But outsourcing is effective only if you can get the results you want at the price you want to pay. For that reason, your ability to negotiate good deals with contractors is critical.

Though many business owners feel stressed when faced with major negotiations, the truth is that we're all negotiators. And a lot of us are better negotiators than we think we are. The ability to negotiate kicks in almost as soon as we learn to speak. Think about it: You wanted the cookie. You're mom had the cookie. That's where it all started.

Whether you're a child negotiating with your mother for a cookie or business owner negotiating with a consultant for a project or service, it all boils down to creativity. You learn to look at things from angles that may not be direct. You have to come up with an alternative plan that gets you to the same place by another route.

First, know what you want
I make extensive use of contractors to handle day-to-day business activities, allowing my team to focus on business growth. I've learned that when negotiating with contractors, you need first of all to keep your own interests in mind—after all, getting your work done is why you're hiring a contractor in the first place. Make sure you have a strong understanding of your wants and your needs and the end results you expect the contractor to produce.

Once you're clear about what you want, you can open the negotiations with an initial terms sheet. This piece of paper lays out the results you want, the structure you want, and what you're willing to pay.

Then, figure out what they want
Keeping your own needs firmly in mind, observe and get to know the person you are negotiating with. The more questions you ask and the more answers you get, the better off you are. (Don't confuse negotiation with sales. Sales is often about talking and convincing; negotiation is about listening.)

For instance, suppose you’re talking with a contractor about staffing your booth at a trade show. Their prices have gone way up from previous years, and your offers of modest increases are refused. Finally you talk with the owner and find out she’s trying to shift the business to focus on trade show packages that include staffing, booth set-up, and production of fliers and other handouts—work you’d planned to outsource to other contractors. Suddenly the negotiations are back on track because you’ve can give the contractor an opportunity to demonstrate their new service package at an affordable price.

In a good negotiation, you get what you want. It just might not look like what you'd been looking for.

Negotiating toward a contract
There's no question about it: Good paper makes good friends. As the negotiation proceeds, turn that terms sheet you used at the start of the negotiation into an actual contract. If you are involved in a fairly straightforward deal, you can have a paralegal modify a standard contract template to fit the particular situation. Having the contract drawn up at your end is a negotiation advantage; many contractors don't want to go to the trouble or expense of having a contract drafted and they're anxious to make the sale. This means they're more likely to accept your terms.

Milestones
Be sure to include in your contract agreement significant milestones for the project work. I was reminded of this not too long ago when we failed to establish milestones, and at the completion date discovered that the final product didn't meet our specifications. We ended up having to hire another firm to do the work the way we wanted it, but we lost time and money as a result. If we'd had milestones in the contract, we would have known in a short period of time that the deal was a bad deal.

Good negotiations mean good business
Consulting relations are like personal relationships: Business is easiest when you're engaging in relationships that are easy, productive, and enjoyable. If you notice during the negotiation itself that you're not getting along or that you have to spend your time chasing them, heed the danger signs. If the negotiation is miserable, the project itself is likely to be even worse.

It’s to your advantage to take the lead in keeping the negotiation on track. That means keeping your eye on the end result, while being adaptive and flexible about how you attain that result. In most cases, you’ll find that the negotiation process is an economical and efficient way to get what you want.

Resources: http://www.eonetwork.org/

Succeeding During Tough Times

Why do some businesses fail during tough times while others succeed?

I have searched for the answer to that question since I began my business 16 years ago. In my search for knowledge and professional guidance, I have worked with and learned from hundreds of successful entrepreneurs and top-level executives. The more time I spent getting to know these people, the clearer it became that each of them shared three common characteristics that ultimately defined their success: focus, faith and effort (FFE).

Focus
There is an amazing power in focus. Just think of a laser beam— a narrowly focused beam of light that is so powerful it can cut through steel. Focus in business has similar powers. What do we need to be focused on?

Let’s start with the entrepreneur. Few entrepreneurs have made it big by focusing on multiple industries or products. We all have limited time and limited bandwidth. Dividing your energy among different businesses or different projects greatly reduces your momentum.

Focus on customers. I see this fail all too often in our business when a franchise partner thinks he will get better results trying to market to everyone quickly. I teach our franchise partners to pick an audience, to narrow their focus. Will it be homeowners, property managers, realtors or contractors? Pick one audience and own it.

Faith
Without faith, you are finished before you start. First and foremost, people need to believe in themselves. If you do not believe in yourself, it is certain no one else ever will. You then need to have faith in a vision. Every exceptional, successful leader has a crystal clear vision— whether they are an athlete, an entrepreneur or a politician. Without faith, it becomes much harder to execute with focus and effort.

As a leader, you also need faith in your team. I have met a few entrepreneurs who do nothing but complain about their team. When you have lost faith in your own team, I can guarantee they have lost faith in you.

Effort
This one is easy— good, old-fashioned hard work. It does not matter how focused you are or how much faith you have in yourself, your vision or your team: you will not be successful without putting in consistent effort over time.

We come from a society in which we want instant results, but we cannot buy a short cut on this one. I have a rule that we use to find team members and franchise partners who are strong in the area of effort: We hire motivated people. I do not believe leaders can motivate. They can inspire and empower, but motivation comes from within. I will say it again, hire motivated people.

Success is a very personal thing and means different things to each of us; however, every person I have met who considers himself to be extremely successful is practicing a high level of focus, faith and effort. What you do is important, but I believe how you do it is even more important. The next time you meet someone who you believe is exceptionally successful, take a closer look at his or her approach. I bet that person is making practical use of focus, faith and effort. It works.

Resource :http://www.eonetwork.org

How Great Leaders Thrive in Tough Times

Chester Arthur, who served as President of the United States from 1881 to 1885, will never be regarded as one of America’s great leaders. In fact, many Americans would be hard pressed to identify him as one of our presidents!

Arthur, who served after President Garfield’s assassination, may well have possessed the basic qualities of a great leader. However, the time of his presidency was fairly stable, so he was never called upon to step up. What have I learned from President Garfield and my years of business? It’s simple: tough times breed great leaders.

If you look at many of the famous leaders throughout history, you'll notice they became famous because they navigated through seemingly impossible times. They held the flashlight at the end of the tunnel. Legendary leaders such as Abraham Lincoln, Susan B. Anthony and Franklin Delano Roosevelt come to mind. All historical figures were faced with incredibly complex or catastrophic situations. Instead of cowering in indecision, they reacted boldly and aggressively. They threw conventional wisdom out the window and developed their own playbooks on the spot.

So what does this have to do with entrepreneurs? I’ve discovered that being a good leader is all about being able to rise to the occasion during difficult times. It’s the ability to step up, fight for your employees and prepare for the future. I have been faced with several instances where my flight or fight thinking kicked in, and while it seems very hard to brave the difficulty, it’s important to tackle it head on.

A good example is the recent state of the global economy. A lot of people are talking about recessions, tax increases, falling stocks and other points of importance. What is a business leader to do? The reflexive action is to take a hatchet to the budget, impose layoffs and halt all plans for growth. These steps are relatively easy to take, so leadership skills rarely come into play. And often, I’ve found, they are exactly the wrong things to do.

Great leaders know that only dead fish swim with the current. So they work harder to get through trying times, searching for more creative solutions and inspiring their coworkers to stay engaged. They also take some time to pause and think, because they know that they shouldn't react impulsively. Only after careful consideration and preparation do they act.

How am I trying to live up to this leadership ideal? It’s a mammoth undertaking, but it’s worth it if it means I can keep my staff and company on the path toward continued success. When it comes to something like a struggling economy, here are the steps I take when the going gets tough:

1.
I ask my coworkers to help me look at our expenses and figure out where we can cut. Engaging the staff in this process is crucial. They need to understand that it's a time for sacrifice, and they'll be happy to be part of the process if I let them.

I look for new opportunities that arise from the problems we're facing. For example, new trends or market needs that will rise up because of the hard times.
2.
I enhance customer service to make sure the people who already love what we do don't slip away. It might be hard to find a lot of new business during a recession, for instance, so we need to work even harder to convince our current customers to sit tight.
3.
I do more marketing, not less. Many companies reflexively shut off their advertising efforts during tough times. I'd rather shut off the water supply than my marketing. With fewer customers in the market, we need to fight even harder for those that remain! Plus, if my competitors stop advertising, I'll get more bang for my buck in the ad market. And if the market is less cluttered, our marketing efforts stand a better chance of getting noticed.

All in all, I try not to get depressed about the tough times ahead. No one said running a business would be easy, and things will always get better in time. I try to stay patient, remain excited about my business and view tough times as an opportunity to test my skills as a leader.

Resources :http://www.eonetwork.org