There’s lots of talk about starting a business, but that’s just the beginning. True entrepreneurs have an idea a minute, and they could put one of those ideas in motion by tomorrow morning. The trick is not launching—but growing—the business, and knowing when to exit if your business dream probably won’t come true.
Entrepreneurs are inherently dreamers, and they need advisers who offer hard core reality checks. If you’re running a small business—or even a solo consulting venture—groups like Ladies Who Launch can be the support and perspective you need.
Managing Director of Ladies Who Launch Connecticut, Kathy McShane (photo on right) learned many entrepreneurial lessons in the 20 years she ran a small, successful marketing firm known as The Kendrew Group. She had stellar clients–such as HBO, Showtime, JP Morgan Chase, MasterCard and Visa. Recognizing Kendrew’s small business savvy, the firm received the “Small Business Award of Honor” from the National Business and Disability Council. Kathy received both the CBS News Radio “Small Business Hero” Award for innovation in the workplace and an Outstanding Woman of The Year Award from the Connecticut Chapter of the National Association of Women Business Owners.
With all of these credentials, endless ideas and a very pragmatic approach, I knew that Kathy is the one to ask about entrepreneurial trends, mistakes and warning signals.
Q. Through Ladies Who Launch, you’re helping women start and grow their entrepreneurial ventures. A business can be a retail store or a hedge fund and everything in between—but do you see that certain kinds of businesses are more popular among women?
A. I find most women are interested in fashion, beauty products/services, coaching and motivational services (books, tapes, speaking, and self-help).
Q. Where are you seeing the most growth—and success–among women-owned businesses? Certain industries, niches, services, products?
A. The greatest growth is coming from women developing products/services geared toward the women’s market, particularly the 45+ market. Female entrepreneurs seem to realize the tremendous buying power of this segment. It also appears that they feel comfortable working in this space…they have great insight into why women buy certain brands.
Q. What percentage of the women in your network start businesses that are actually solo, “independent contractor” consulting ventures?
A. It’s actually a small percentage of my base.
Q. Are these solo ventures—where you are essentially selling just your individual consulting services—a much less complicated way to be an entrepreneur?
A. This depends very much on the personality of the person and their growth plans. I find people who just want to “do their own thing” and “not be bothered with others” are good candidates for a solopreneur venture. However, this does limit your growth opportunities. In order to grow, the company will need additional resources. When I started Kendrew, I wanted very much to be a solopreneur. I had just left the corporate world and didn’t want to deal with politics. I soon felt very lonely, missed the stimulation of others, was worried about remaining current and was limited in the number of projects I could work on at any given time. While I was actually working on the projects, I could not continue business development activity. It was not a good place for me. Every entrepreneur must first know themselves and their values and then build their business around this insight.
Q. Whether a business is one person or a small company selling widgets, in this economy it can be hard to generate significant revenue. Do you find that you often have to advise women about when they should pull the plug and move in another career direction?
A. Every entrepreneur I work with has a different definition of “significant revenue”. However, the key to success is defining a personal goal and developing a time line to achieve the goal. I have worked with a number of women who should have pulled the plug a while ago. I’m very open about having this discussion. I do explore the idea of strategic relationships, bringing on a business partner, aligning with a larger, more successful company–even the possibility of someone else running the company.
Q. How do you help women determine whether slow business growth is due to the current economy or the shortcomings of their own ventures?
A. Most business owners invest a great deal from a financial and emotional point of view. I work with them to take a step back and look at the company clinically. Take a look at the numbers because numbers tell the truth. Look at the expenses of the business. Take a look at the product/service: is there really a market for it in the current environment? Interview existing customers and former customers. If there is a business partner, is that person pulling their weight? Do they still have the same vision, goals and drive that they did when the business was started? Do they find themselves trying to keep the dream alive by using personal credit cards, lines of credit or home equity loans to keep the doors open? Are they able to get a paycheck?
Q. Do you feel that many entrepreneurs hang on to a business longer than they should?
A. Yes, a business is very much like a difficult long-term relationship, a bad marriage or an awful job. Although it’s a bad situation, many people can’t walk away. This is always very emotional, particularly when working with women. Women tend to look at a business that is not doing well as a reflection of themselves. They often believe that any failure–losing staff or a business partner or a large client—is their fault. They are “embarrassed” by failure. Most successful entrepreneurs don’t look at these situations as a failure but instead as lessons learned they can then use to move ahead. They know they must look at the situation clearly and objectively and make whatever changes are necessary. Sometimes the necessary change is to walk away and move to a new chapter. These are the entrepreneurs who are able to draw the line between themselves and their businesses.
Q. All businesses take time to mature and grow—and experts say you often have to wait at least five years to turn a significant profit—so you don’t want to give up too soon. What are the telltale signs that your business does not have a bright future—even if you haven’t been at it that long?
A. Five years is not the magic timing for everyone. There are a number of telltale signs that may surface earlier. Successful entrepreneurs always look for—and face– these signposts. All business owners must set their own timeframe and a profitability goal. When it doesn’t look like you’ll reach that goal in the allotted time, you have to ask yourself hard questions: Are the losses in my business increasing? After I pay my bills do I have any profitability? Has the industry changed significantly since I started? Is there still a real need for the product/service? Can I change the business model to reach my goals? Am I facing new—and more powerful—competitors? Do I have the right staff to keep moving toward my goals? Does reaching my goals require 24/7 work? And most important of all…do I still love I’m doing?
Q. When businesses fail, do you hear a lot of the same “coulda, woulda, shouldas”? What are some of the major mistakes that entrepreneurs learn too late?
A. Generally, I don’t hear this. Once the business owner realizes that they can’t make the business profitable AND they are not a failure to close it, few look back except to remember the lessons they have learned.
Many do, however, make the mistake of being idealistic. They want to keep the dream alive regardless of the outcome. They believe that their persistence will pay off. They do not realize that persistence should be put into the “right” idea.
I also find entrepreneurs don’t always look for and ask for advice. Many solopreneurs allow themselves to become isolated. They don’t join, for example, a Mastermind group where they will be held accountable for getting things done or go to targeted networking events.
Entrepreneurs also make a mistake when they “cheap” out. They tend to hire people or suppliers based upon pricing. This can be very dangerous. Many have difficulty pricing their products properly or tend to barter services. Bartering is rarely a good idea.
They often reject feedback from their customers, suppliers and colleagues–great resources when they are trying to improve their companies. I find as companies grow the founders still think they have the only finger on the pulse of the market. Oftentimes they don’t. They need to let go of some control and let new employees do their magic.
Q. You must be hearing a lot of great business ideas, and you’re a successful entrepreneur yourself. I know that true entrepreneurs always have a long list of possible businesses dancing in their heads. If you had to start three businesses by tomorrow morning, what general products or services would be your focus?
A. Wonderful question!! I’ve learned to be very careful in this area since I tend to have a lot of ideas all the time. However, since you asked…I’d like to develop a product called “RealPreneur.” This is a software product/model that determines if one is likely to be successful as an entrepreneur and give advice based upon their profiles on how best to succeed or perhaps not move ahead. I’d also like to do a TV show where a panel of people give advice to aspiring entrepreneurs–similar to Shark Tank, but more focused on giving advice. Today’s third idea would be to to start an entrepreneur school where people can come to a boot camp and be given the insights and tools they need to move ahead–or not. Instructors would be experts in a certain field and would guide the students through the most important elements of starting a successful business. Of course, the students would have already taken the RealPreneur assessment (back to idea #1!). –KAS
Knowing Kathy’s talent and energy, one of those ideas will someday be a reality. In the meantime, for more “Vitamin C” or business owner Confidence, join her Ladies Who Launch group to get Kathy’s great wisdom and the insights of many other great entrepreneurs who can help your business germinate, grow, prosper—or close to make way for your next chapter. Visit Kathy’s web site to learn about membership, workshops, coaching and special events. Contact Kathy personally at email@example.com or 203-803-9591.
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