The Entrepreneurial Brain Cramp - for George

The Entrepreneurial Brain Cramp - for George

(Sam just did not get it and I doubt he ever will)

It often saddens me even with many years of successfully coaching and mentoring entrepreneurs to develop profitable small businesses that there are those people that just do not see the paradigm and the need to make the shift and do not aspire to the growth requirements their small businesses demand. Here is a story of two painters, George and Sam. One who really gets it and one who will never get it!

Both frustrated at being at the beck and call of their boss and having work put on their plate’s at the most inconvenient times like Christmas Eve, every Sunday and always having to return early from holidays because of some project or other. Not to mention the remuneration issues – “If I did this for myself I could be earning way more than I am working for this jerk”. All this just pushed the wrong buttons for both George and Sam. Both men had wanted to work for themselves, set their own hours and make a better life for their families

We have heard it before and we will hear it again. Through frustration the entrepreneurial brain cramp occurs. I want to run my own business! I want to be my own boss!

Both George and Sam left their respective jobs and enrolled in a Self Employment Program – and entrepreneurship program.

This would surely change their lives and give them the tools that they required to run their own businesses.

Sam’s Story

Sam successfully completed the course and began the process of building his business. He managed to get work rather quickly and very soon became a very busy person with most weekdays and weekends full to capacity. Sam’s days began very early; around 4:30 am Sam would begin the day getting himself ready to go out to the jobs he was doing. His workmanship and painting talents earned him an excellent reputation and he continued to get business with little or no marketing at all. In fact 99% of his jobs came from happy customers who had recommended his services to their friends. Sam had acquired a white panel van with his company name proudly displayed on the side of the van. He had taken a small loan to purchase those tools that he would need to ensure that he could tackle most painting jobs. He had his wife set up and answering services for him so that calls would not be missed while he was onsite. Diligently Sam would reply to those calls in the evenings after he had returned from the job sites. He would use the time he spent on the road coming home calling potential customers, using his time as effectively as possible.

Long evenings where common place as Sam used his evenings to make out invoices for customers and do his book keeping, quotations and preparation of works orders.

George’s story

The first steps that George took where different from that of Sam. George spent a great deal of time evaluating the market as it related to painting. His aim was to find the segment in the market that provided the best return on investment. Once he had completed his research George began a process of understanding what business he wanted to be in. He understood that he was familiar with the job of painting but also understood that he had never run a business that provided painting services. He needed to understand how this business was going to operate and where his business was going to fit into the painting industry. While Sam was out making money George was completing a business plan that was starting to look very different to that which may have related to Sam’s business.

George carefully built his business plan and it was built around the securing of painting contracts and not the delivery of painting services. He began the long process of writing unsolicited proposals and developing solid contracts as well as building potential client data bases. He spent many hours studying value added contracting and developing systematic quotation methods and computer models. He also engaged in discussions with many possible vendors and learned what products where best suited for which projects.

George finally launched his business after 9 months of developing systems and processes and making the necessary contacts.

You see George wanted to be in the painting industry but he did not want to paint. He realized that his production capacity would be very quickly controlled by the hours he had available in a day versus how many hours it would take to manage several contracts sites on projects that he has tendered on. More hands on the job, more jobs, the more revenue could be generated.

It was some 18 months later that George and Sam met up at a function and they were happy to see each other and to compare notes about their business experiences. Sam took George out to see his new van which really looked great with his company logo and slogan prominently displayed. Sam opened the truck and began to show George all of the latest equipment that he had purchased and how he had modified many pieces of equipment to better suit the job. George was really impressed with Sam’s depth of knowledge on the process and application of product and his commitment to making the job as easy as possible to execute.

Of course turnover was one of those hot subjects that came out of the comparison and Sam was shocked to find out that George’s company was turning over almost $500 000.00 in only 18 months of operation. George explained that in fact he had only been “in business” for nine months and that he had spent the first 9 doing market research. What was there to research asked Sam? You get a painting job you go out and paint and you get a reference and move on. You can perhaps research paint types and equipment, what else was there?

Sam asked George where his truck was and George replied I don’t have a truck, but if you have so many jobs and are turning over half a million you must have several trucks on the road. George began to explain to Sam that he did not have a painting company although he operated in the painting industry. This confused Sam. “How can you be in painting and not be painting”, he said. George explained that he was in the contract business. What he did was determine what contracts where in the market and then he would bid on those contracts, ensuring that he had the expertise such as Sam ready to take on the project. He had secured many painting jobs but had never actually lifted a paint brush to paint.

Sam was stunned, and never seemed to understand what George was doing. What George realized was that in Sam he had found a raw passion for painting and a talent that was committed to delivering client satisfaction. So George asked Sam if he could funnel work his way. They where both delighted to be able to work together.

What made these two companies so different and yet operate in the same industry.

Sam was in the business of painting:

Lets then understand that his capital requirements would be very different to that of George who was clearly in the business of contracting. Their business models would be different, there marketing would be different, their operations would be different and their financial models would also be different.

As an example let’s look at capital equipment to show how different these two companies would be (in the same industry).

Sam:

Truck

Painting equipment

Power washer

Aluminum ladders

Hand tools

George:

Computers

Contracts software

Quoting software

Client prospecting list

CMS

These are just a few things that demonstrate that the two businesses while in the same industry and providing painting services to clients are so very different. Before you begin putting your business plan together it would be a good idea to firstly establish “what business are you in"?

This way you will be able to begin building the business plan that is the most appropriate to the business model that you have chosen.