Ugghhh! Bookkeeping. It is often one of the most neglected elements of business for entrepreneurs. It isn’t sexy. It isn’t fun. Calculating income and outgo. Projecting quarterly taxes estimates. Reporting. Entrepreneurs want to be out there doing. Fixing. Selling.
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Over the past several years, with his juggernaut Tedx Talk Start With Why and best-selling book of the same title, Simon Sinek has popularized a concept first introduced by Stephen Covey in The 7 Habits of Highly Effective People. Although the concept of “beginning with the end in mind” was first applied by Covey to the habits that highly effective people develop, and then later by Sinek to how leaders inspire action, this concept is vital to every entrepreneur.
“Why?” Informs Everything for the Entreprepreneur
Entrepreneurs solve problems. Whether he is a small business owner or a VC-funded entrepreneur seeking to grow and scale a business, understanding the “why” is essential to entrepreneurial success.
The why–or the purpose–drives (or should drive) all strategic decisions for the entrepreneur. As Covey pointed out, the person who has his or her eye firmly focused on the larger why is positioned for success. The entrepreneur who thoroughly understands his “why” and can articulate it clearly is able to inspire others to join his cause, to take action, and to build something that is greater than the sum of the parts.
How to Find the “Why?”
Many entrepreneurs understand the why instinctively. Solving a problem is an impulse for the entrepreneur. He often “just knows” that it needs to be done. And many entrepreneurs are driven, focused and passionate by nature, so they may be able to influence and recruit talent, employees and investors to join them without fully exploring the why. But what does the entrepreneur who understands the power of the “why?” but does not yet have it clearly articulated do?
1. Identify the Problem That is Being Solved
Take the time to clearly identify the problem you are solving. No matter how complex the solution is that you imagine, distill the problem you are solving into one simple sentence. “Our company solves X (problem)”
2. Add The Target Market
You have identified the problem you solve. Now identify who you solve it for. “Our company solves X (problem) for Y (person/group of people).”
3. The “Five Why’s” Exercise
Startup guru, Ash Maurya developed the Lean Canvas as a way for entrepreneurs to easily articulate their basic business model. In the process of filling out a Lean Canvas, Maurya introduces an exercise to help the entrepreneur truly uncover the fundamental problem he solves. It is a simple exercise, but one that takes a little work. Once you identify the problem you believe you are solving, you begin to ask “Why is that a problem?” Once you have an answer to that question, you take that answer and ask the question again (up to five times). Pushing through the simple, obvious answers to this exercise uncovers the deep problem that an entrepreneur is really solving. Once you uncover the problem that is an emotional pain point for your target market, then you are equipped to connect in a meaningful way that will ultimately drive sales and profitability.
Last week on the blog, we talked about how to think like a great innovator. But what if you are not an innovator? What if you are stuck going with the flow? How do you break free? Try these helpful hints and incorporate them slowly into different areas of your life and watch your results shift.
“Herd mentality” or groupthink can be defined as “a pattern of thought characterized by self-deception, forced manufacture of consent, and conformity to group values and ethics” (Merriam Webster)
By this definition, we can identify three powerful strategies to avoid the herd mentality at work or in life.
Know Thyself
Avoid self-deception. Ralph Waldo Emerson said it well. “Whatever games are played with us, we must play no games with ourselves.” Benjamin Franklin said it even more succinctly. “Observe all men; thy self most.”
Self-awareness is a vital component to your ability to go against the flow. If you want to change the status quo, you must become a master of yourself. The greatest knowledge a person can gain is the knowledge of the lies one tells one’s self. It is not the conscious shading of the truth that causes most damage but the unconscious untruths. Surround yourself with and value those who help illuminate your blind spots. Dig them up. Hunt them down. And uncover them. Learn to tell yourself the absolute and brutal truth at all times.
Recognize Manufactured Consent
Have you heard the expression, “he’s preaching to the choir”? That is manufacture of consent. Manufactured consent is “the practice of controlling or manipulating the norms, values etc. held by an audience by controlling what they are exposed to in the media.” (dictionarycentral.com)
Combat this obstacle by seeking out a variety of information sources. News or information sources that challenge your fundamental perspectives of an issue are particularly valuable. When you confront your own biases and beliefs with information that opposes them, you become stronger. Your ideas become more clear. You communicate your opinions and perspective more concisely and effectively.
Ask “Why?”
One of the most powerful questions you can ask (yourself, or anyone else) is “why?” Dedicate yourself to the task of uncovering underlying motivations for your opinions, beliefs, and actions. When your “why” comes into alignment with your core values, you become powerful. Clarity allows you to step out of the herd. When you have a clear understanding of what motivates you, you are free to choose your own path.
Self-awareness, diverse information sources and an ability to align personal and professional values with driving motivations and a sense of purpose are all keys to defeating the herd mentality. Practice these skills and you soon find yourself rising above the rest.
Innovation has become a ubiquitous term in the realm of entrepreneurism. So what does innovation really mean and how can an entrepreneur leverage the power of innovation to solve problems and create a profitable business? Work to incorporate these strategies into your own creative development to improve the level of innovation within your organization.
According to Merriam Webster, innovation is “the introduction of something new. A new idea, method, or device.” By this definition, much of the innovation that receives greatest promotion and coverage in the media and in our society is simply clever imitations or iterations of products or services already on the market.
So what does it take to truly innovate? Wayne Gretzky, one of the greatest hockey players of all time is purported to have said, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” In the same way, a good entrepreneur creates value where the trends in the market are. A great innovator sees the trends and creates solutions where the trends are going to be.
A great innovator is the person who recognizes the trends in the market, but recognizes that the greatest opportunity lies at the point in the future where the trends are leading. A true innovator instinctively goes against the flow because he recognizes where the flow is going and creates a strategy to move there more quickly and more creatively.
If you are not a natural innovator, that is okay. All human beings are creative. And all of us can harvest that creativity. If you want to become a better innovator, first of all you must become an observer. Next, you must ask questions. Finally, seek out different opinions?
Be smart. Surround yourself with intelligent people you trust and respect who think differently than you do. If you are a creative mind, find some analytical colleagues. If you are an MBA, hang with some MFA’s (Master of Fine Arts).
People of differing socioeconomic, cultural and religious backgrounds have different worldviews. They recognize different problems. They seek to solve these problems in different ways. This is where true innovation happens.
In his little-known play, Back to Methuselah, George Bernard Shaw wrote, “You see things; and you say ‘Why?’ But I dream things that never were; and I say ‘Why not?’”
At the end of the day, the true innovator develops the vision to dream of things that “never were.” The great innovator has the confidence to not only ask, “why not?” but to take action to prove whether those things are possible. And when he finds that what was never dreamed of is, in fact, possible, our world changes. Those types of innovations are written language. The printing press. The cotton gin. The steam engine. They shape the foundations of our society and it is transformed by them.
Across the country, millions of entrepreneurs are gearing up for the new year, finding ways to be better, faster, stronger, and make 2017 “their” year. While there’s surefire way to tell who will succeed and who will fail, there are a few companies we can see making huge strides over the next 12 months. Here are the startups we think are on the brink of greatness in 2017.
Slack has been taking the tech world by storm since it was founded in 2013, and is poised to explode over the next year. Originally created to be an internal program for tech company Tiny Speck, Slack makes communication among groups and teams much more streamlined by creating a chat room in which users can also share files and collaborate on projects.
This startup is “Radically Rethinking Access to Space” by sending balloons up into the stratosphere to take photos and collect data more efficiently and economically than any other company on the market. The company is also exploring stratosphere tourism, where they will take people on the edge of space.
Cybersecurity is an increasing important and profitable market, and Exabeam is capitalizing on this opportunity through its security product that tracks human behavior on subscribing networks and identifies people who are attempting to sabotage or hack it. In addition to preventing cyber attacks, it can also work forensically to discover who hacked into a network and how they did it after an attack has been conducted.
Nonprofits and charitable organizations often struggle with attaining the business operating system necessary to efficiently achieve their important goal of helping people and communities. Classy remedies this problem through an accessible, high-level fundraising platform.
What startups do think we’ll see expontential growth from in 2017? Let us know on Facebook @ArkansasCapitalCorporation or Twitter @ArkCapitalCorp.
The final weeks of December are upon us, and we at Arkansas Capital can’t help but look back on the past year and be thankful for all the excitement, success and advancement of Arkansas entrepreneurship brought by 2016. While we couldn’t possibly list all of the highlights that took place this year, we’re sharing a few of the most memorable below.
David’s Burgers is widely-known in central Arkansas for its freshly-pattied, Grade A beef burgers, creamy shakes and endless amount of hot French fries. When they needed support from Arkansas Capital to open their Maumelle location, we jumped on the chance to work with this outstanding establishment.
Uncle T’s Deli-Market has been serving delicious sandwiches, freshly cut deli meats and cheeses, as well as common grocery items, in the same location on Martin Luther King Drive for almost 40 years. A respected and loved establishment in their Little Rock community, Uncle T’s Deli-Market is an ideal Arkansas Capital client, and we were thrilled to help them open their upcoming Conway location. Be on the lookout for their grand opening in January!
Shared Services Center is one of the largest employers in the Fort Smith area, as well as one of the fastest growing. When we were approached to help expand this outstanding company, we were thrilled to help them improve and extend their space to accommodate new employees.
We at Arkansas Capital love supporting our clients and celebrating those who have made sacrifices to protect the freedoms we enjoy in the United States of America – and we particularly enjoy combining the two. For Veteran’s Day 2016, we hosted an event at Flyway Brewing (one of our outstanding clients) where we bought all veterans a free beer, as well as a beer for civilians that made a donation to Veterans Villages of America. More than $700 was raised to support local veterans in need that night, and fun was had by all in attendance!
Heartland Renaissance Fund, LLC, – and Arkansas Capital CDE – was awarded a $65 million allocation in New Markets Tax Credits, the second-largest amount ever awarded to Heartland. These funds will help increase investment in businesses and economic activities in low income and underserved communities throughout Arkansas. Learn more about the allocation here.
December is National Write a Business Plan Month, and while this month of holiday gatherings and indulgent food may seem like an odd time to write a business plan, it actually provides a much better opportunity to prepare your business for 2017 than the typical January scramble. You want to be able to hit the ground running New Years Day, not be starting from square one. December will also likely bring fewer requests from clients, vendors, employees and partners, allowing you to focus on your business plan without interruptions.
We already covered the steps to building your original business plan here, but did you know you should also carve out time at the end of each year to review your business plan and make necessary tweaks as well? Before you reach for the old plan though, take the following actions to evaluate your company’s current situation and identify new opportunities.
Make note of who your customers are, what demographic seems to be your “bread-and-butter,” which unexpected demographics you’ve picked up, and what value your company seems to bring to their lives. Also, search for customer reviews on your social media channels, Google and review sites. Record the qualities people seem to most appreciate about your business and which they could do without.
Like you, your employees are on the front lines of your business, and are intimately familiar with your company and its products or services. Unlike you though, they are likely more aware of issues within your business or with your product that you may be blind to. Tap into this wealth of information by having honest discussions with a few of your trusted employees, or pass out a survey around your office.
If you’ve had any wins this year that you didn’t expect, identify them and think about what caused them to occur. Maybe you picked up a new expected customer base, or one of your services was significantly more successful than anticipated.
When crafting an initial business plan, every entrepreneur has one aspect of the company that should be a breeze, but for whatever reason just doesn’t seem to be coming together. Make note of what that is for your company, and why you think you’re having trouble with it.
In today’s fast-paced world, even the most even-keel industries change and go through different trends year to year. Record what those are for your industry, and try to identify new opportunities and problems you can solve within them.
Once you’ve taken these steps, you’re ready to revisit your business plan. Armed with the knowledge you have from the above research, you’ll be able to map out a strong course of action for 2017.
Arkansas Capital is proud to announce that its CDE, Heartland Renaissance Fund, LLC, has been awarded a $65 million allocation in New Markets Tax Credits to foster investment in businesses and economic activities in low income and underserved communities throughout Arkansas. This allocation is the second-largest amount Heartland has ever been awarded. To learn more about this momentous occasion, we enlisted Christa Clark, Vice President of Heartland Renaissance Fund, to answer a few questions about the allocation, and give some insight on what how this money will change Arkansas communities for the better.
A: New Market allocations are awarded by the Dept. of Treasury’s Community Development Institutions Funds in a competitive process each year. Heartland staff spends several weeks completing the application and analyzing the impacts from our prior investments when submitting the application. The applications are reviewed by third parties and by U.S. Treasury staff and scored. Historically, only about 28% of applicants are awarded allocation in a given year in this highly competitive process. We are always honored when we are selected, as there are always over 200 other CDEs in the applicant pool with us. We are especially thrilled this year that this is our fifth award of allocation.
A: Heartland focuses almost exclusively on investing in Arkansas’ low-income communities throughout the state. We focus on areas that are underserved by traditional financing sources and direct our investments in the projects that have the most community and economic impacts to that area. As with prior allocations, Heartland will make investments statewide with at least half of its transactions in rural areas.
A: That is one of the benefits of a flexible lending product like New Markets Tax Credits – we can use the funds to finance a variety of projects. We have financed a wide range of projects with New Markets, everything from educational facilities to non-profits and large rural manufacturing. We will continue to focus on our three core areas of education, health care, and economic development projects throughout the state.
A: It is hard to narrow that down to one. We have so many projects that I have been blessed to work with that are improving their communities. There was one manufacturing project that we worked several months to bring to financial closing that was located in a town in the Arkansas Delta with very high unemployment and had several large employers that had closed down in recent years. When the project was about to open, I was doing a site visit and the company brought in BBQ and we ate with the newly hired plant workers in the cafeteria. The plant manager stood and thanked me, and explained how grateful they all were that they had jobs again and were able to provide for their families.
A: There have been so many benefits to underserved areas from our investments. Our New Markets financing was used to build a state-of-the-art life skills and work training facility for disabled adults in northwest Arkansas. We have seen hundreds of first generation students attend college for the first time. There has been thousands of quality jobs created in Arkansas’ manufacturing sector that are located in some of the most economically disadvantaged areas throughout the state. Our investments have enabled environmentally-sustainable products to be produced here in Arkansas and have revitalized Main Streets transforming once shuttered properties into vibrant city centers.We continue to see positive impacts for years after we close a transaction as these investments serve as catalysts for economic growth in these communities.
Oftentimes, because of its proximity to Thanksgiving, Veteran’s Day gets slightly overshadowed by families planning their travels, choosing the turkey, and wrapping up work projects for the holidays. But not at Arkansas Capital! We wanted to create a small event where people stop for a minute, take a breath, drink a beer, and remember our veterans. To celebrate those who have selflessly served our country, we gathered together friends, family, and strangers to meet at Flyway Brewing. The plan was to buy each veteran that walked through the door a beer as a small token of our appreciated for his or her service. But we thought why stop there? For those who haven’t served, we decided to buy them a beer, too – on one condition. They made a donation to Veteran Villages of America – a non-profit that connects veterans in need with housing and jobs.
We were excited about the turnout, the connections that were made, and the money that was donated. Over the event’s three hour duration, more that $700 was raised. 100 percent of that will go toward helping local veterans in need of financial, emotional and mental support – (watch this video to learn more about what they do).
We enjoyed watching veterans and civilians, Flyway regulars and first-timers, all coming together to celebrate those who have served our country. Thanks to Flyway Brewing and Veterans Villages of America for participating in “This One’s On Us,” and making this event a good time for all!
While the word “millennials” often carries a negative connotation associated with social media addicts and the “Me” generation, they are actually proving quite the opposite in the small business world. A recent survey released by Sage, a global software company, states millennials – more than any other generation – desire control over their schedule, are socially conscious of those in need, and have a fierce commitment to the happiness of employees they will manage.
According to Sage, 65 percent of this generation want to start at least one business in the near future, no matter the outcome of the global economy.
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Get to know Becka Webb, HRF Vice President, as she gives us a peak into her life at work and at home. We are thrilled to have Becka on the team. She gives her all every day of the week and contributes greatly to the success of Arkansas Capital and its clients.
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One of the growing trends in alternative lending for 2016 is transparency, especially concerning loan opportunities for female entrepreneurs. Are loan offices giving women the chance to start and grow a small business? Information on the topic varies depending on the source, but we’re seeing a positive outcome here in Arkansas. What we do know is how successful women can be in growing the economy when given the chance.
