Everything an Entrepreneur Needs to Start a Successful Company—or Not

The following post is modified from a paper I wrote for a graduate-level course in business management. I'm posting it because it is directly relevant to the business of writing.

           If the world were a perfect place, entrepreneurs could take their wonderful ideas, turn them over to honest business professionals, and reap huge profits while pursuing the work they love. However, the world is not a perfect place, and business professionals are not always honest. Even ethical arrangements among honest parties sometimes fall short of expectations due to improper planning and lack of funding. As Schermerhorn (2013) points out, businesses go through three life-cycle stages—birth, breakthrough, and maturity; each stage generates its own challenges which can undermine chances for success. Having an initial business plan, being able to locate sources of funding, and establishing both short-term and long-term plans can help new companies stay on track; more, they can ensure the entrepreneur keeps her most valuable asset: control.

What the Heck Is a Business Plan, Anyway? 

            A business plan is defined by Schermerhorn (2013) as a document which describes the direction and financing of a new business. For some creative people—and what entrepreneur isn’t creative?—writing such a document can be akin to giving birth to Rosemary’s baby. However, if entrepreneurs want to avoid their companies turning into a devilish offspring over which they have little or no control, such as the namesake in the 1968 horror film, Rosemary’s Baby, a business plan can make sure there are no unexpected surprises. Drafting a business plan helps entrepreneurs study the market for their products, determine the sort of products and services the company will sell, and even forecast the types of employees needed to run the company (Schermerhorn, 2013).

            Business plans do not even have to be formally written down, unless one seeks funding from banks or other lending institutions. David Riordan, owner of OOP! an arts and crafts supply store in Providence, RI, said he formally creates only a budget while he and his wife discuss everything else (“Do You Have,” 2003). Even so, a business plan can be very specific in defining goals such as numbers of transactions, volume of business, and expected income (Huseman, 2014). With such clear goals in mind, entrepreneurs can know what they expect the business to accomplish and anticipate how hard they will have to work to meet those goals.

            Depending on the business, entrepreneurs might need to precede writing a business plan by conducting a feasibility study. Such a study helps the entrepreneur decide if a project is even worth pursuing (Hofstrand & Holz-Clause, 2013).  It can also help entrepreneurs narrow the focus of the business, understand how to position their products, and gauge the risks involved in starting the business (Hofstrand & Holz-Clause, 2013). There is no point in proceeding with a business plan if no market for the product or adequate sources of financing can be found.

Financing--How to Get Money for Your Project

            Financing is a major part of setting up and running a business. Schermerhorn (2013) lists several sources of financing available to entrepreneurs, such as debt and equity financing, venture capitalists, and crowd funding. The last of these, popularized by Internet firms such as Kickstarter, Inc., enables entrepreneurs to raise money by offering “backers” free goods and services in lieu of equity. One author, for example, has rewarded her backers who contribute small sums of money with downloadable “Epub” copies of her book and a mention of support on her website (Ellyn, 2012). Such arrangements have several advantages. They are relatively easy to set up. They can encourage many people to contribute small amounts of money for no other reward than “warm fuzzies” (“Feel-Good Crowd Funding,” 2014). They also help entrepreneurs raise money without having to go into debt or give up equity in their companies (“Feel-Good Crowd Funding,” 2014).

            Long- and short-term plans must also be considered by entrepreneurs. As with the initial start-up business plan, it may seem counterintuitive to guess where the business may be in one, five, or ten years; however, such a plan, if flexible, can be an asset to entrepreneurs. Thompson Lange, owner of Landscapes Carmel, a furniture store in California, had a three-year plan for his business to earn $1.5 million; however, he anticipated that a sluggish market might push that goal back to five years (“Do You Have,” 2003). Lange also envisioned having a second store as part of his five-year plan (“Do You Have,” 2003). Another entrepreneur, Patti Renner, used her long-range plans as a “learning tool” and enjoyed adjusting it to help her general merchandise business grow (“Do You Have,” 2003).

Don't Shoot Me--I'm Just the Comic Book Writer

            Whatever business an entrepreneur seeks to establish—sole proprietorship, partnership, corporation, or LLC—one of the main concerns is control. A vivid example of what not to do can be found in the story of James Shooter, former editor-in-chief (1978-87) of Marvel Comics. Shooter went on to launch Voyager Communications, Inc., with two partners in 1989 (Berman, 1993). By the early 1990s, Voyager’s Valiant imprint had successfully launched several new comic book titles. But when conflicts of interest rose—in the forms of dating, marriage, and nepotism—Shooter found himself outvoted and ultimately ousted from the company into which he had poured his creative energies (Berman, 1993).

            Shooter likely had all of these things—a business plan, financing, and short- and long-term goals; his two partners, after all, were an entertainment lawyer and a veteran publisher, while Shooter himself had been involved in the comics industry as a writer and editor since the age of 13 (Berman, 1993).  However, such experience did not prevent one of the partners from dating a partner in the venture capitalist firm backing the company. Shooter later allowed that he should have walked away at that point; instead, he guided the company until it started to turn a profit—at which point he was forced out by his remaining partner’s new brother-in-law (Berman, 1993). Voyager became a successful company, but it did no good for the creative entrepreneur who launched it.

No Guarantees--But Plan Ahead Anyway

            The lesson from Shooter’s story is that even if an entrepreneur does everything right, things can still go wrong. However, proper planning can minimize the chances of entrepreneurs losing control of the company or at least be aware of “red flags” which signal a shift away from the company’s business and ethical goals. Writing a business plan, exploring suitable financing options, and establishing long- and short-term goals can help entrepreneurs retain control of their enterprises.

References

Berman. P. (1993, June 21). How not to start a company. Forbes, 151 (13), 54-55. Retrieved from Business Source Complete database.

Do you have a long-term business plan? (2003, December). Gifts & Decorative Accessories, 104 (12), 328. Retrieved from Business Source Complete database.

Ellyn, R. (2012). Hot flashes of life. Kickstarter. Retrieved from https://www.kickstarter.com/projects/1886729316/hot-flashes-of-life/posts

Feel-good crowd funding (2014, February). Kiplinger’s Personal Finance, 68 (2), 26. Retrieved from Business Source Complete database.

Hofstrand, D., & Holtz-Clause, M. (2013). What is a feasibility study? Iowa State University. Retrieved from http://www.extension.iastate.edu/agdm/wholefarm/html/c5-65.html

Huseman, J. (2014, September). Origination News, 23 (11), 1. Retrieved from Business Source Complete database.

Schermerhorn, J.S., Jr. (2013). Management (12^th ed.). Hoboken, NJ: John Wiley & Sons, Inc.

How to Sell Your Books: Four Takeways from BOWS

The third annual Business of Writing-Success conference was a smashing success for the 42 attendees at the Nelson-Atkins Museum of Art on October 11, 2014. 

One of the best features of BOWS is that it reaches out to presenters whom people wouldn’t normally associate with writing. After all, what does a voice coach or a sales trainer have to do with writing a book?

Quite a lot, as it turned out.

Each presenter provided something unique and valuable for writers who want to sell the books they have worked so hard to write. For example:

Takeaway #1: The Importance of the 30-Second Speech

Dan Compo, an actor and voice coach, lectured on the importance of creating a 30-second speech to present to anybody who wants to know what we do as writers. The 30-second speech answers four questions, Compo said: 

• What is your name? 
• What is your profession? 
• What have you recently done? 
• Where are you going?

But delivering a 30-second speech is not easy. “We seek authenticity in your performance,” Compo said of anyone who might be listening to the speech. “Being authentic is really difficult.”

Compo quoted famed acting coach Charles Conrad, who said, “Get the attention away from yourself. Focus on your listener, not on you.”

Takeaway #2: Setting Goals

Robin Wayne Bailey, best-selling author (he refuses to limit himself to the label of science fiction writer) of Frost and the Dragonkin trilogy, discussed the importance of having goals in writing. 

His goal, he said, is one every writer can identify with: to make money. “I’m not here to create art. I’ll let the public be the judge of that,” Bailey said. “I have to make you keep turning the page.”

Bailey said he has three goals for writers: 

• Write every day. 
• Finish everything you write. 
• Submit for publication everything you finish. 

He allowed that he may put aside a project for a while, but he always comes back to it. "I generally have five or six projects going at once," he said.

Although he acknowledged the importance of social media, Bailey cautioned writers not to get too caught up in promoting themselves. His rule is that if he spends one hour on the Web promoting his work, he must spend an hour doing what he calls “real writing.” 

“You must have product to sell,” he said.

Takeway # 3: Build a Following BEFORE You Write a Book

Deb Clem-Buckert, a parenting blogger who was a regular blogging contributor for The Kansas City Star, discussed the importance of building a brand and a following before searching for a book deal. 

“I was  very calculated in how I built my brand,” she said of her blog, which includes personal stories as well as recipes. Her blog reaches out to women who have similar experiences in parenting, yet Clem-Buckert established her own niche, since her child is a teenager. Other similar blogs, she said, are written by the parents of toddlers.

Clem-Buckert emphasized the importance of social media for writers. “You have to have the followers before you write the book,” she said.

Takeaway # 4: Learn to Sell Like a Used Car Salesman

Michael DeLong, an award-winning sales trainer, presented on one of the most unusual topics: how to sell your books like a used car salesman. “You’ve got to know how you appear to other people,” said DeLong, who recommended that authors videotape themselves before giving a pitch. 

He also said authors should get to know something about the person or publisher to whom they are pitching their books. “You know what the publisher can do for you,” he said, “but what can you do for them?”

However, DeLong also cautioned writers about being overconfident or cocky. “Don’t have on your mind the answer to the question before they ask it,” he advised.

  

That was just in the morning session. Four more presenters gave takeaways in the afternoon. If there is interest, I will present more in a future post. Meanwhile, start planning now to attend the next BOWS in 2015 so you can take away your own gold nuggets.

Why Writing Your Book is Not Enough (and What You Can Do About It)

The third annual Business of Writing - Success Workshop will be held this Saturday, October 11, from 10:30 a.m. to 3:30 p.m. at the Nelson-Atkins Museum of Art in Kansas City, MO.

The first BOWS inspired me to write one of my most successful posts on this blog, How to Succeed in the Business of Writing if you DON'T Live in the Kansas City Area. (It was a follow-up to another post with the rather bombastic title How to Succeed in the Business of Writing.)  In the follow-up post, I wrote about some of the wonderful pieces of advice I received from presenters at the first workshop.

That post quickly became my most visited post on the site, and, though it's since been eclipsed by other posts, it remains in my Top Five--a pretty impressive feat for a two-year-old post.

Such interest tells me that readers truly care about what it takes to succeed in the business of writing. As most of us probably know, it's not enough to write a wonderful book. You have to sell it. You have to understand concepts such as marketing and branding. You have to use social media to your advantage as an author. And you have to make nice with bookstore owners so they will carry your book.

BOWS has turned out to be a goldmine of advice from professionals of every stripe--publishers, lawyers, social media experts, and the like. BOWS isn't a workshop for writing--it's about what to do after you've written that book. If you don't possess this knowledge, the work you've poured your soul into will gather dust on your shelf (or on your hard drive) until it is thrown out by your survivors (or erased from your computer) after you die.

Don't let that happen to your story.

If you're in the Kansas City area on Saturday, come to BOWS. You'll be glad you did.

More information can be found here.

Who Was In My Weird Dream the Other Night

Over on the Legion World message board, one of the recurring threads is "Who the heck was in your weird dream last night?" People often post funny or bizarre dreams. The thread prompted me to post the following dream, which I had the morning after Robin Williams' apparent suicide.

I dreamed I ran into two guys I knew during my freshman year in high school.

I hung out with Randy and Jim between classes. I had known Randy since kindergarten and met Jim through Randy. They were both in ROTC; neither Rodney (the fourth guy who occasionally hung out with us) nor I were.

In high school, I had a lot of problems. I was the kid everyone picked on, or so it seemed. It got so bad that I stopped going to school. My mother (bless her) persuaded the school to send a teacher to our house (we lived only a block away) to drop off and collect my assignments. That's how I passed. The next year, I went to a different school.

Because I was taught (as was my mother) to be ashamed of any personal problems I was having, I never told Randy, Jim, or Rodney what was happening. I just disappeared from their lives. I was actually afraid of running into them in the town where we lived in case I'd have to explain what happened.

I saw Randy and Jim separately a couple of times afterwards. Randy worked in a local restaurant. Jim dated the sister of one of my brother's friends. Neither ever asked me what had happened. I didn't know whether to be relieved or disappointed.

In the dream, I was walking through a cobblestone path when someone called to me. It was Randy. He looked the same as he did then, with the same bowl-shaped haircut. Jim came and joined us; he looked older, with grey hair. I got a chance to explain to them what I wrote above, about what I was going through and why I disappeared from school. Both told me they didn't know I was being picked on and were hurt by my disappearance; I had no idea.

In the wake of Robin Williams' apparent suicide, it's easy to forget, when we are in pain, that we are not alone. One of the worst lies the world tells us is that no one will understand and that our friends will judge us if we admit our weaknesses. Such lies keep us from intimacy, keep us from the truth, and ultimately keep us from ourselves.

I last saw these guys around 1978, just about the time Williams was ascending to stardom in Mork & Mindy. It's amazing to think that Williams' life and mine are intertwined and that there may be some sort of spiritual cause and effect: his death may have inspired my dream in some way. In doing so, it unearthed a lot of buried feelings and thoughts.

There is nothing good about suicide. But one thing we human beings do is take the worst and grow something positive from it. Williams' death prompted at least one Facebook friend to admit that she had once tried to commit suicide. There has been an outpouring of grief and understanding from others (and, admittedly, the odd wacko theorist). This sort of openness is helpful and healing. It helps us make sense of who we are.

Thanks, Robin, for sharing your life and your amazing talent with us. And thank you, Randy, Jim, and Rodney, for being my friends, wherever you are.

Some Thoughts on Fame: Fleeting and Otherwise

Rushton Moreve and John Russell Morgan were the same person.

Who is Moreve/Morgan, you ask, and why should you care?

Unless you’re a fan of classic rock, the names mean nothing to you and there’s no particular reason why they should. Moreve had his brief moment of fame 46 years ago and then faded into obscurity. Today his legacy, such as it is, remains two-fold: creating the bass line which led to the writing of a psychedelic rock classic and the strange notion, perpetuated by rock encyclopedias, that he was two people.

For the record, Moreve was the original bassist of Steppenwolf—the leather-and-rock band best known for “Born to Be Wild.” He is also listed as co-writer of their other enduring hit, “Magic Carpet Ride,” for which he created that seminal bass line. He appears on the first two albums, Steppenwolf and The Second, both released in 1968, and then was fired from the band. 

According to VH1’s Behind the Music TV special, Moreve became convinced that the state of California, where the group was based, would suffer a massive earthquake and fall into the Pacific Ocean. He refused to return to California for a television appearance with the group and was sacked.

History, of course, has proved his dire prediction wrong: California survived, but Moreve’s promising career did not. He died in a motorcycle accident in 1981, at age 32.

As far as the name confusion goes, Wikipedia (which, we all know, can’t always be trusted except that sometimes it can) says John Russell Morgan was his real name. Why he changed it, I’m not sure. It could be that Steppenwolf’s other famous John—lead singer John Kay—did not want to confuse fans by having more than one John in the band. (Kay had earlier persuaded keyboard player John Goadsby to change his name to the more memorable Goldy McJohn).  

The real question is why do rock encyclopedias such as The Illustrated Encyclopedia of Rock (first edition, 1977) and VH1’s Music First Rock Stars Encyclopedia (1999) perpetuate the myth that Moreve and Morgan were two different people? Both claim that Morgan replaced Moreve.

(His actual replacement was Nick St. Nicholas, but that’s another strange story.)

So, why does any of this matter?

I think of Moreve and other obscure rock 'n' rollers from time to time when I think of what it means to be a writer and how becoming famous is all tied up into this idea that you can create something (a book, a screenplay, a poem, or a hit song) and part of you becomes immortal. Every time “Magic Carpet Ride” is played in a movie such as Apollo 13 or on commercials such as Miller Genuine Draft, a bit of Moreve lives on.

And one imagines that some compensation makes its way to Moreve’s survivors every time the song appears. Commercial creativity: the gift that keeps on giving.

But Moreve’s story also reminds me that fame is double-edged. It tosses its celebrities of the moment into the air and then slices them in two like a colorful scarf discarded by a carnival swordsman. To be sure, famous people sometimes make stupid mistakes—such as missing a gig because of an unfounded belief in earthquakes. But, more often than not, fame runs its course. The heroes of today must struggle harder and harder to compete for relevancy with the heroes of tomorrow.

(And, in some ways, Steppenwolf’s post-Moreve career typifies this struggle. Although the group recorded several albums in the late ‘60s and early ‘70s, its popularity waned following the heady success of “Born to Be Wild” and “Magic Carpet Ride.” Today, Kay leads his own version of Steppenwolf without any other original members.)

Another point of view is that it’s better to have some fame—if fame is what you want—than none at all. To accomplish what you set out to do—publish a book or place a song on the charts—is a phenomenal achievement that comparatively few can match. It may not be true immortality, but it is something you can look back on with pride and say, “I did that.” 

And, decades later, you may find yourself mentioned in someone else's book, TV special, or blog.

Just make sure they know you're the same person.