One can get anything if he is willing to help enough others get what they want. — Zig Ziglar

There is a trend in business that is starting to emerge that focuses more on doing good than maximizing profit. This trend is a long time coming and appears to be a direct result of the success of capitalism and the huge amount of wealth, burden, depletion and opportunity that it’s reaped on the earth.

The Goodness Business Model (GBM) is nothing new. Companies like Tom’s of Maine, The Virgin Group, Bob’s Red Mill, Dr. Bronner’s Soaps and The Body Shop have all tried and mostly lived GBM in one form or another for decades.

The sea change that is occurring is that these companies have been in the minority and now consumers, citizens and entrepreneurs are now starting to realize that goodness needs to be an integral part of all businesses — not just on the fringe.

The reason for this is simple — our present business models and methods are not sustainable.

• They cannot sustain our natural resources

• They are not solving our social problems

• They are not being good stewards of the earth

What is The Goodness Business Model

Recently, I have read two books about GBM. They did not call it GBM but the ideas are certainly in line with what GBM is.

One was first published in 1993 while the other was just published in 2011 (December to be exact). Both The Soul of a Business by Tom Chappell (of Tom’s of Maine) and Screw Business As Usual by Richard Branson (of the Virgin Group) basically says the same thing — doing good is the only business model that can simultaneously sustain the earth, attempt to fix the worlds problems and provide long term profit for a company.

The interesting thing about these two books is that both authors come to their conclusions from totally different places.

Tom Chappell found his at divinity school and that forever shaped his view of our roll on earth and how God plays a role in everything we do. His idea of goodness started with reading I and Thou by Martin Buber a Jewish philosopher (a wonderful summary is here).

I-Thou is what made Tom realize that our relationships need to be more of an encounter instead of an experience (which is the I-It model). This is a profound concept because it gives meaning and depth to others and things instead of just an experience where we collect data, analyze it, classify it and theorize about it. This modality is the foundation of how goodness works — by opening ourselves to more encounters we see the likeness of ourselves in the world and that makes us want to do more good.

Richard Branson’s journey to goodness does not seem to be a single event or epiphany but rather a process that was engrained in him at an early age. It seems to stem from his family life and the struggles they went through. These struggles instilled in him to always be focused on giving everyone a “fair go”.

One thing is clear is that Richard’s concept of goodness matches nicely to Tom’s in that they both believe that both profit and good are not orthogonal concepts but rather essential for a company to have.

Richard calls his GBM concept Capitalism 24902. It’s chief tenant is simple:

Each and every single business person has the responsibility to take care of the people and planet that makes up our global village, all 24,902 circumferential miles of it. — Capitalism 24902

It’s a powerful idea that meshes nicely with Tom’s of Maine’s Last Statement of Belief’s which reads:

WE BELIEVE that our company can be financially successful while behaving in a socially responsible and environmentally sensitive manner. — Tom’s of Maine Statement of Beliefs

Both of these statements incapsulate The Goodness Business Model.

Doing Good Is Harder Than You Think

The ideals in both these books may seem hard to achieve if not impossible to some business people. In fact, it’s not the fact that it’s hard to be good — it’s the fact that business people are not taught those business ideals.

Recall from business school (those that went) that the main objective of any business is to Maximize Shareholder Wealth.

That’s it. That’s all.

Generations and generations of MBA’s got sucked into that and it’s now making our world worst — from the global financial crisis, the harm we do everyday to our plant and the countless billions of people in poverty. We need to change that mindset to one where goodness plays a key role in business. This is not a new concept.

In the early 1970’s, Corporate Social Responsibility (CSR) coined the term stakeholder and that movement talked about Maximizing Stakeholder Value which essentially meant to consider all the stakeholders of your business (e.g. Those with direct interactions both positive and negative).

Critics of CSR say that it’s just “window-dressing or an attempt to pre-empt the role of government as a watchdog over powerful multinational corporations.” It can certainly seem that way but I think that’s where goodness trumps CSR.

Doing Good Leads to Goodness

Corporate Social Responsibility is important but insufficient since it only addresses the company and not every worker, manager, investor, supplier or customer. That’s where the Goodness Business Model is much more powerful — by adhering to the I-Thou model and knowing that all 24,092 circumferential miles of earth are what you need to encounter, help and protect everyday.

By doing good by all those people, you can achieve goodness.

This is a high ideal but arguably the only way that we can hope to maintain our standards of living (in the developed countries) and to raise up the rest of the world.

Goodness Analytics

Many of you might be wondering how to judge goodness. Clearly, there must be some sort of metric or analytic that shows how much good a company did or can do.

Metrics for goodness can be hard to come by but some to consider include:

• Carbon footprint of your organization

• Waste recycled or diverted from landfills

• Involvement with local charities which includes time, talent and treasure

• Customer feedback on why they buy your product and it’s impact on them

• Amount of sustainable materials used

• Treatment of labor at home and at your sub-contractors anywhere in the world

• Employee engagement, sense of accomplishment and morale

These are only a few of the many metrics that a company can and should track.

One thing about goodness is that the results of being good take time to peculate. For example, at Tom’s of Maine, it took about three years for their mission (which defines their goals for goodness) to be internalized by their employees, management and suppliers. So be patient with goodness — it will pay off.

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The Case For The Goodness Business Model originally appeared on The Daily MBA on January 2, 2012.

A Guest Post by Nadia Jones

In just a few years, environmentally conscious business practices went from being an innovative marketing tactic to a standard business requirement in most all influential and major business industries. For this reason, the rise in environmentally focused business education programs should come as no surprise. With eco-conscious initiatives ruling the business world, employees with an educational background in sustainability are highly coveted.

Several universities and colleges across the country have business school programs that now incorporate aspects of sustainable and environmental education. These programs provide business students with the essential knowledge they need to enter a high power position among major businesses and companies throughout the world, as well as knowledge on environmental issues and practices important within the corporate world today and in the future. A traditional MBA program requires coursework primarily focused on finance, management, economic theory, and business ethics. Sustainable MBA programs include all these same core subjects, as well as a focus on managing for environmental and social sustainability.

In just the past decade, “sustainability” has become such a buzzword that it seems to have lost some of its meaningfulness. Sustainability doesn’t just mean “green” as many advertisements and articles would have it seem. It does not merely suggest recycling things and being less wasteful (though those are certainly two sustainable actions). Sustainability, in the manner that it is most often used today, means a capacity to endure—a long-term commitment to the maintenance of environmental, economic, and social dimensions of our existence and our resources on Earth.

Sustainability from an MBA perspective incorporates each of these focuses—environmental, economic, and social—into the business and corporate world. MBA students in such programs will explore how industry can reduce its contribution to the shortage of oil and other natural resources, its impact on habitat and species loss, its role in global warming, and its position in overpopulation and poverty. Each of these natural, economic, and social hardships is intrinsically involved with the business world. In this way, MBA programs setting their sights directly on these issues should be seen as a huge step forward for our planet and our society.

But what does this mean for MBA students in such sustainability programs? The future is promising for students entering educational programs focused on environmental initiatives and sustainability. More and more, today’s boom areas of business are looking for young employees who are educated on and enthusiastic about sustainable issues in business. For this reason, an MBA with an environmental focus may be more valuable than a traditional MBA in today’s job market. Sustainability is something that we as a society need to put the ultimate value on. One of the most effective ways to put more emphasis on sustainability and the environment is to incorporate these values into our educational system. Sustainability MBAs are a glimpse at what the future “traditional” MBA will look like.

Though the general belief is that green means expensive, sustainable business can actually be quite profitable for businesses once put into full swing. Aside from being the socially responsible thing to do as a business leader, sustainable business tactics can actually save a company money. For many businesses part of their sustainability plan is wasting fewer resources. Less waste of material and resources means smaller overall cost to run the business. Another aspect of sustainability is using less energy to run your business. Just as with wasting fewer materials, using less energy can save a business a significant amount of money. Though “going green” has become much more than merely a marketing strategy, it is nonetheless a great marketing point.

The leaders of today want to work for a green business and consumers today want to support a green business. In this way, profits will almost always increase when consumers and employees see that a business is forward thinking and socially responsible. Whether profits increase with sustainable business policies or not (and they likely will), sustainable business just makes clear sense. Business and industry is the only entity strong enough and large enough to truly influence the green revolution.

In Summary

1. Sustainability is no longer merely a buzzword and marketing tactic.

2. Sustainability means a capacity to endure. It is a long-term commitment to the maintenance of environmental, economic, and social dimensions of our existence and our resources on Earth.

3. Sustainable degrees have become viable assets to one’s education and resume.

4. Sustainable MBA programs specifically have become one of the most desired advanced degrees available in industry.

5. In time, Sustainability MBAs will become the “traditional” MBA.

6. The movers and shakers and consumers of today require and expect green values in business and education.

7. Sustainable business methods increase sales, reduce costs, and improve profit.

Author Bio:

This is a guest post by Nadia Jones who blogs at online college about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 @ gmail.com.

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Business Schools Need Sustainability originally appeared on The Daily MBA on October 10, 2011.

A Guest Post by Christine Kane

You’ve been thinking about starting a business, but with the economy the way is it, do you really stand a chance? Are the risks too high? Is there too much at stake? What’s holding you back? Here are five good reasons that you should start your business today.

1. Unemployed/Underemployed – In all likelihood, you’re either unemployed or underemployed right now. Underemployed means that you are overqualified for your job and/or you’re not working the hours you need. Either way, you have time on your hands, so don’t waste the opportunity. Use your free time to be your own boss and start a business.

2. Cheap Labor – With the job market the way it is, cheap labor abounds. People will work for peanuts when they’re desperate, and, as a new business owner, you can offer other incentives, like a high position in the company. Keep looking and you’ll eventually find someone who’s reasonable and talented. Speaking of talent…

3. Talent – Along with that cheap labor comes talent. Tap into your professional and social networks or take a look around your community. All those hard-working, well-educated, talented people are out there, just waiting for your call. You’re choosing exactly what you want and you’re free to weed out the rejects. It’s never been a better time to hire.

4. Taxes – Ah, the tax break. Even if you work from home, the government will help you out. You can write off deductions for a home-office; including business expenses such as supplies, telephone, Internet and marketing materials- even a new computer. The Small Business Jobs Act, which was signed into law on September 27, 2010, also brought other tax breaks and incentives for small business.

5. Going up –It can only go up from here. When you start at the lowest, and still manage a livable income, you know things can only get better. What better way to now if your company will survive a crisis than to start it in one? The history behind the idea is sound; many of the Fortune 500 companies today were started during an economic depression. Somethings people can’t, or won’t, do without. Find out what it is and you’ve got it made.

There you have it: five reasons to get started today. You’ll never find a better time to be an employer, rather than an employee. If you plan well, find your niche, and work hard you will succeed. But you’ll never know what you can do if you don’t try. It’s better to get started now rather than plan for years and have nothing real to show for it. So, get cracking.

Author Bio

This Guest post is by Christine Kane, a graduate of Communication and Journalism. She enjoys writing about a wide-variety of subjects including internet providers in my area for different blogs. She can be reached via email at: Christi.Kane00 @ gmail.com

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5 Reasons to Start Your Business Now originally appeared on The Daily MBA on October 3, 2011.

I love polls. Maybe it’s the data geek in me but I just love looking at the results of a well done poll or survey. Polls and surveys can provide a wealth of information that can help guild decision makers on policy, product features and whether or not to improve a roadway. The challenges with surveys lies in their construction and response rate. Once you have figured out those two critical pieces, the rest is pure data bliss (see below for the first Daily MBA survey. Results will be posted once it’s closed).

The Power of Polls

Polls are a powerful tool simply because they can gage the mood, interests or preferences of your target market or group. There is no better way (other than what they buy or sign up for) to figure out what a group of people prefer. Critical to a good poll or survey is how the questions are constructed, it’s length and who responds. A poorly constructed poll will give misleading information. A long survey will have a low response rate (in general) and if you get the wrong people to respond, your data will be skewed. All of these issues can be mitigated if you just follow some simple rules for great surveys.

The Basics of Good Polls and Surveys

A good poll will give you critical information about your target group. This data is invaluable when setting a policy or figuring out what marketing message works. Constructing an accurate and relevant survey requires that the survey or poll author know the objectives, what information is needed to make the decision and understands the target respondents. A survey that asks questions that respondents will struggle to answer will not produce relevant or even consistent data. Good polls encourage respondents to answer and get them to answer by respecting their time. Consider the following tips when building your poll or survey:

• Know the objectives: The reason for the poll is critical to understand and agree on. Write down on a piece of paper the poll’s objectives and always refer to the objectives as you construct it.

• Survey length: Most people find it hard to fill out a lengthy survey unless they are getting paid. It’s best to keep the time to fill out under 5 minutes.

• Write simple, clear questions: The simpler the question, the better. Making a question complex or adding layers to a question will just confuse people. Each question should be focused on a clear subject and response.

• Understand the respondent: Getting into the head of your respondents will make it a lot easier for them to complete the survey. It’s best to write down a brief description of your respondents (right below the objectives) and always keep them in mind.

• Correlation data: Try and add questions that can be correlated to other polls or generally accepted data (such as Census data or similar survey data). This will give your poll more creditability.

• Consistent look and feel: Keep the font, spacing, colors, tone and style the same throughout the survey. Keep the prose simple, clear and absent of jargon.

• Question flow: Questions should build upon each other and be self contained if possible (e.g. Not refer to another question on a different page). It’s also helps the flow to introduce the survey and thank people for taking it.

• Pick the right question type: Question type (see below) is vital to both data analysis and people’s willingness to respond. Spend time considering the proper type of question for maximum benefit.

If you keep these simple tips in mind, you will be able to create surveys and polls that will give you great data and allow you to make better decisions.

Selecting Question Types:

There are several different types of questions one can ask in a survey or poll. Typically, polls are more of a yes/no or which do you preferrer (like a presidential candidate) than a survey or questionaire were there may be multiple choice or please rank questions. The following list of question types will guild you toward understanding how they might fit into your overall polling or survey strategy:

• Yes/No: This is the most basic type of question that generally has the highest response rate. For example, the question will ask if you agree or disagree with a statement like Do you like chocolate?

• Open ended: The respondent can fill it whatever they want (like a comment). These are harder to analyze and most respondents don’t answer them since it takes more time to think and compose a sentence.

• Multiple choice: Multiple choice is probably the second most common since it gives a list of choices (like food, candy or candidates) and asks respondents to pick one.

• Rank choice: Ranking questions take a little more time and effort to answer. They are really good at getting to what preferences respondents really care about.

• Matrix & Rating: Matrix questions have several categories or properties of something (like a car) and respondents are asked to rate what they think. Typically, these questions are used to determine what a customer perceives as the most important feature of something.

The above set of questions make up over 95% of all polls and survey’s you will create or encounter. There are other factors that can go into selecting a question like the logical flow of the survey. For example, you may want people to answer a set of questions if they answered yes or no to a previous question. This survey logic can be complex and takes a little more effort and practice to get right. For our discussion, we will simple avoid survey logic and focus on linear surveys.

The Perils of Poorly Done Polls

A survey with poorly constructed questions, a horrible format or one that is too long will produce poor results. It’s important that your survey be well constructed and avoid the following pitfalls:

• Avoid loaded questions: Loaded questions imply the preferred answer within them. For example: How horrible is the parking situation? That’s pretty loaded compared to: How do you feel about the parking situation?

• One topic, one question: Never mix topics within a question. That will just confuse respondents. For example, How horrible is the parking and what should be done about it? Those should be separate questions.

• Keep the question length manageable: Each question should be simple and short. The more you have to explain the question, the lower the response rate. Strive for a simple, one sentence question.

• Be consistent with matrix and ranked order: If you have several ranked order questions or matrix questions, keep the same headers or rankings. Not doing so will probably confuse respondents.

• Avoid jargon: If you must use jargon, define it. Some abbreviations or slang words may mean different things to different people.

• Keep consistent definitions: Avoid changing the definitions of items or switching context of a word. Remember that simple is better. You want your respondents to think about the answer not the question.

• Make the survey the right length: Most people are busy and will not spend 20 minutes responding to a survey. So, keep them crisp and short. There are occasions (like formal research) where respondents get paid to fill them out. In that case, strive to make your survey or questionnaire gather as much data as you can while still respecting peoples time.

• Avoid the double negative: Double negatives confuse people and are just poor design. Always rewrite a double negative statement to make it crystal clear what is being asked.

Following these simple tips will make your survey or poll much more effective and meaningful. Remember that the whole point of polling is to gather data to make informed decisions. Just remember that the proverbial garbage in, garbage out is especially true for polls and surveys.

Polls are Powerful if Done Right

The main take away from conducting polls and surveys is that the quality of your collected data is directly proportional to the quality of your survey. A poorly constructed survey will naturally give you poor data. Remember that the next time you develop a poll or survey. If you just remember that simple fact then all of your polls and surveys will produce high quality data.

An Example Survey

Now it’s time to take a survey since that is the best way to demonstrate how survey’s work. So, I created the first Daily MBA Reader Survey using Survey Monkey. The survey will take you less than 5 minutes to complete and I would really appreciate you filling it out. Once I get everyone’s response, I will then do the data analysis and share it with you in another post. As you do the survey, keep in mind what we discussed and see how close I got to the perfect survey.

References

• Purdue Online Writing Lab: Creating Good Interview and Survey Questions

• Survey Systems: Survey Design

• Richard A. Krueger “Tips for Designing a survey questionnaire”

• Post on Sample Size and Error Calculator from Creative Survey Systems

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The Power and Perils of Polling originally appeared on The Daily MBA on March 14, 2011.

2011 is upon us and to start the new year (and decade) off right, I decided to package up my Daily MBA series into a free eBook. This eBook has all 22 topics covered plus three new topics: public relations, starting a business and a business startup checklist.

You can download it here. Feel free to forward it on to a new entrepreneur you may know that wants to make 2011 the year they finally start their own business.

Wishing you a happy and successful 2011

Jarie Bolander, Blogger, The Daily MBA

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Free eBook: Business Basics for Entrepreneurs originally appeared on The Daily MBA on January 3, 2011.

A Guest Post by Dee Barizo

If you want to step into the entrepreneurship pool, a low risk way of doing so is starting a side business on the internet. Online businesses are great because of the low overhead. All you really need is an internet connection and $10 for a domain name. You don’t have to deal with the hassle of stocking physical goods because there are powerful business models that don’t require product inventory. For example, many people earn a full time income selling products as an affiliate or selling information products that they created.

Another reason to try out the online marketplace is you can stay small and run a one person shop. There’s no need to hire staff. Later on, if the business goes well, you have the option of scaling it by hiring from a global pool of workers. You can hire the best and brightest from around the world.

Also, you can sell to buyers all over the world. In comparison, a local business usually only attracts buyers in the same geographic area. Finally, you can set your own hours and work at home.

My advice is to create a site based on your interests so you will enjoy the process whether or not the business succeeds. Even if the business fails, you will learn a lot from the experience and you can use what you learned in the future to try again.

Building the Business

Start with the end in mind by considering how you will make money. More specifically, think of the products you will be selling. This seems like common sense but many so-called experts are still recommending an advertising based model. This model can still work but you usually need a ton of traffic to make a decent income. And driving a lot of traffic is very difficult.

On the other hand, if you are selling actual products to consumers instead of ads, you don’t need as much traffic. You can sell services but I tend to stay away from that model because client work can often be “feast or famine.” Not to mention, clients can be a pain to deal with and it can be hard to scale a service based business.

Also, by considering monetization first, you can skip some of your interests because they are not very lucrative due to the amount of competition and difficulty in monetization. For example, sports writing is a tough industry to break into because of all the sports bloggers and aspiring sportswriters out there. Plus, there are common products you can sell in the industry.

Once you’ve figured out the products you’re selling, you need to think about how you’re going to build an audience. I say audience instead of traffic because an audience implies repeat visitors. Sure, you can just focus on raw traffic but it takes much more resources to gain a new customer than to get an existing customer to buy more products. Therefore, you don’t want to attract visitors that visit just one time. Instead, you want visitors that bookmark your site and come back on a regular basis.

Healthy online businesses have a loyal audience. In fact, for the best businesses, their audience would probably be better characterized as fans. Their fans not only buy products but also provide free marketing by talking about the business to their friends and family.

How do you build this kind of audience? The main method I recommend is producing great content. I like this method because it is cheap and offers a great long term return.

The internet is very accessible. It doesn’t take much to setup a commercial website but that also means you will have a lot of competition. To stand out from the competition, you should produce a lot of great content related to your industry. This content attracts visitors. Many of them will support your site by spending money, because they have gotten great value from your content. Even the ones who do not buy anything may pass on your content to a friend who may become a customer.

Since you’re interested in the industry, creating great content should not be a problem. You should have a lot to say about it. And even if you don’t, you can learn about the industry and then simply share what you learn.

Examples of Businesses From My Experience

Gaming Blog (magicgameplan.com)

I ran this site as just a hobby blog about strategy tips for the popular collectible card game, Magic The Gathering. I never considered monetizing it but the audience grew much bigger than I expected. Therefore, I looked for a way to make money.

I discovered that eBay had an affiliate program and had a very active market for Magic The Gathering cards. I applied to the affiliate program and was accepted. I started linking to eBay in my posts and after a couple of months, the site now makes a part time income.

Online Degree Site (thebestdegrees.org)

I had a friend who wanted to start a site with me about online degrees. I’ve always been interested in higher education ever since my college days when I earned a bachelor’s degree in accounting.

I did some research on the industry and found it was experiencing rapid growth and many online schools were paying top dollar for leads. So, we setup the site and I did a lot of research to find out the main issues in the niche. Then, based on what I learned, I created useful articles to build an audience.

In the less than a year, the site is earning a full time income.

Construction Inspection Test Prep

Currently, I’m coaching a friend who wants to setup a construction inspection test prep business. As a construction inspector, he was able to greatly increase his wage rate by passing a couple inspection tests.

He’s creating a training program to help other inspectors pass those tests. He plans on building an audience by sharing his opinion on different issues within the industry including how to make yourself indispensable. He will also share his story of how he got into the industry.

Your Turn

If I’ve peaked your interest in running an online business based on your interests, the first step to is to make a list of the things you’re interested in.

Next, see if there is a lot of money being spent in related industries. If there is, think of specific ways to earn some of that money. Two effective monetization strategies are joining affiliate programs and creating your own product.

Then, start brainstorming article topics that will attract an audience to visit your site on a regular basis.

Once you’ve done these things, you have a great foundation for an online business that will be both enjoyable to run and have a strong chance of succeeding.

Good luck! Let me know if you have any questions in the comments below.

This is a guest post from Dee Barizo. He’s been working online for the last three years as an affiliate marketer and search engine consultant. His latest online business is The Best Degrees, which has a list of top online schools based on cost and quality.

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Creating an Online Business Based on Your Interests originally appeared on The Daily MBA on December 13, 2010.

A Guest Post by Brian Jenkins

Mini MBA programs are increasingly popular. They give busy entrepreneurs a strong foundation in current business theory and practice. These programs are taken by individuals who want to acquire some business administration skills in order to start their own businesses.

Mini MBA programs typically include elective courses and workshops. Most of the programs are provided in 10 week sessions and cost substantially less than a standard MBA program. They can be tailored to meet the needs of any student. Some schools even allow students to create their program from “a la carte” segments.

People should know the mini MBA is NOT equivalent to an MBA. They’re actually continuing education courses. Students typically receive continuing education credit for the courses, however some schools let students earn credit hours towards a degree program. Also, some schools don’t require MBA mini program applicants to have a business degree, nor do they require any admissions tests.

Major Subjects Covered

The programs provide a condensed overview of important subjects and concepts. Mini MBA programs cover subjects such as management, accounting, human resources, finance, corporate strategy, economics, general business administration, and marketing.

Categories of Supplemental Subjects

Students can sometimes choose to take segments of courses in accounting, capital markets, global markets, business ethics, capital budgeting, human resources, business law, tools of analysis, executive decision making, corporate culture, and leadership. For example, a student can choose to study only the cost/benefit analysis segment of a complete course in accounting.

Specialized Mini MBA Programs

Some colleges and universities offer mini MBAs in finance essentials, strategic health-care management, strategic marketing, biopharma innovation, biopharma entrepreneurship, and other subjects.

Here’s a list of some things to consider before selecting an online mini MBA program:

• Asynchronous online programs: Allow students to attend online classes whenever they want. Asynchronous online programs provide a lot of flexibility. These programs may be the preferred choice of busy entrepreneurs and small business owners.
• Synchronous online programs: Require students to attend classes at specific times to interact with their instructor and other students. Interacting on a real-time basis with instructors and other students makes online students feel as though they’re part of a learning community.
• Self-paced versus scheduled: Self-paced programs allow students to complete courses at their own convenience. Scheduled online programs have a specific timeline with scheduled exams, assignments, and completion dates.
• Faculty: Is the online mini MBA program taught by the instructors who teach the standard on-campus MBA program? Do the instructors provide individualized attention?
• Accreditation: Has the school been provided accreditation by an agency which has been approved by the United States Department of Education or the Council for Higher Education?

Mini MBA programs include a condensed overview of important subjects and concepts and include a variety of electives. Entrepreneurs can enhance their knowledge and skills through a mini MBA program. If you’re a busy entrepreneur, this program might be right up your alley.

Brian Jenkins writes about MBA programs, among other college degree programs, for BrainTrack.

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What Entrepreneurs Should Know About Mini MBA Programs originally appeared on The Daily MBA on November 29, 2010.

It takes a tremendous amount of discipline, luck and skill to move your great idea off the whiteboard and into a viable company. Ideas are plentiful and the discipline to weed out your bad ones will leave many a promising idea on the trash heap. This culling effort can take many forms but the best way is to systematically develop your ideas until they either take off or fall by the wayside. To achieve this, examine the following steps for getting your idea off the whiteboard and formed into a real company:

Step 1: Idea Formation and Refinement

Hardly a day goes by that someone, somewhere has the next big idea. Entrepreneurs, inventors, students and housewife’s generate lots and lots of “great” ideas. These ideas can be the nexus of the next big thing if these ideas can be take from the raw and into a cohesive, actionable plan. To achieve this, you can apply the following method:

1. Brainstorm for 15 minutes about descriptive words for your idea: Write down as many words as you can. Don’t filter or erase anything. After 15 minutes, sort the words and phases into like groups. This will form the basis of the next step.

2. Explain the idea in a paragraph: Now that you have a list of descriptive words, it’s time to formulate them into a simple paragraph that captures the essence of your idea. Try and keep this as short and descriptive as possible.

3. Write a paragraph on the pain that the idea cures: Customers buy products or services to solve some sort of issue. Capturing this issue into concrete words will help you craft a better product.

4. Describe the necessary technologies to create the idea: Creation of your idea will most likely take some sort of technology. These technologies may exist or need to be created. Knowing this will allow you to plan your product development which tells you how much money you may need.

5. Research who else might do something similar: Competitors are important to understand. Your competitors product offerings will affect how you define your product. Any investor will obviously ask you who your competitors are and how you plan on winning against them. Be cautious if you are going after a market opportunity that has no competitors. This usually means that it’s not a viable market.

Idea formation and refinement is an iterative process that will make your concept more vivid. During the process, you will start to think about how your concept works and will interact with the world. Most ideas will never make it past this stage but that’s okay. Invention and entrepreneurship will have a lot starts and stops. Just remember to stick with it because one day, one of your ideas will launch a company.

Step 2: Vet Your Idea

Every entrepreneur thinks her idea is going to change the world. This optimism fuels the drive to see her concept become reality. If this was enough, then your done. Unfortunately, raw optimism is not enough to get your idea off the ground. You need to convince others to share your passion for the concept.

It’s best to vet your idea with people who are respectful and honest. Getting honest feedback is critical to the formation of a solid idea. Diluting yourself by only seeking positive feedback will only lead to wasted time and money. You really need an honest, constructive evaluation of your concept before you waste your time and money on it.

Step 3: Write a Business Narrative

Most inventors have great ideas but they usually fail to understand the business aspects of how that idea will make money. The best way to work through this is to start with a Business Narrative. People love a good story and the business narrative is meant to clearly and simply explain your business concept so that your audience can get excited about it. This narrative also forms the basis of all your other plans.

Step 4: Prepare Your Pitch

Your pitch should flow off your lips effortlessly. The pitch needs to be short and to the point. It’s whole job is to get you the next meeting. Think of it as your mini-business plan. Your pitch will evolve (as with everything you do), so practice it as much as you can.

Step 5: Assemble Your Executive Summary

The first thing a potential investor will want to see is your Executive Summary. This one to two page document is solely meant to get you the pitch meeting. Both the pitch and executive summary need to be tightly coupled so that what the executive summary promises the pitch delivers.

Step 6: Formulate Your Financial Models

Critical to any business is to figure out how it will make money. This is done by building financial models. There are a couple of models that you business will need. One is a Cash Budget that determines how much money it will take to realize your vision. The second is a Sales Model which is used to model your sales process. The important thing to remember about a model is to document your assumptions and be open to changing it. As with everything you do, your models will change as you gain more insights into your business.

Step 7: Define Your Minimal Viable Product (MVP)

The MVP is an essential element of your overall plan. It’s the minimum product offering that you can put in a customers hands that gives you the maximum amount of learning with the least amount of effort (taken from the link above). It’s critical because the sooner you can get to market, the sooner you can learn what works and the sooner you can get revenue. MVP’s are not quick and dirty products. Rather, they are learning vehicles that need to be well thought out in order to be effective.

Step 8: Protect Your Intellectual Property

The first seven steps are meant to weed out most of your ideas. I know, it seems like a lot of work but being systematic about idea generation and vetting will produce better ideas. Once you have a vetted idea, you now need to protect it. There are various ways to protect your Intellectual Property but the most common is to File a Patent.Intellectual property is one of the items a potential investor will want to know about.

Step 9: Build A Demo Or The MVP

Investors like to touch and feel products. The best way for them to do this is to see a demo or interact with your MVP. The scale and breath of your demo or MVP will entirely depend on your business. If you have a software company, then building an MVP is a lot easier than if you have a hardware company that needs to build physical products (like a chip or system). The power of the demo is the fact that you created something. This tells potential investors that you have the ability to define a vision and execute it.

Step 10: Go Raise or Make Some Money

Once you have a demo or an MVP, it’s now time to go raise money or start to selling. The MVP route is used to gain customer traction. This means that you are attracting lots and lots of customers to your product. Most investors will want to see this traction since that is once step closer to breaking even. If you just have a demo, then you need to convince a potential investor that the demo can be turned into a real product.

Step 11: Build Your Product or Work on the Next Revision

Traction in the marketplace is a essential ingredient for a successful company. If your MVP is gaining traction, then you need get going on the next revision that incorporates the majority of the MVP learning. If you raised money, then it’s time to rapidly build your MVP so you can get into the market. The most powerful validation of any idea is when a customer actually pays you for it. This is true even if you give something away for free since your true customers are not who sign up but rather the advertise that pay you for access to your community.

Step 12: Get to Break Even

A successful company needs to make money. The sooner you start making money, the better. Any plan you come up with needs to have a Break Even Analysis done to ensure that your business model is sound and that you have raised enough money to get you there. Breaking even is one of the most exciting points in a company because it means that you are on your way to becoming an ongoing concern (i.e. A profitable company).

Step 13: Scale for Growth

Growing a business is far different than starting one. The challenges mainly revolve around systems and procedures that allow for growth while still delivering to customers. To scale for growth requires more of a focus on product refinement than product invention. This does not mean you stop inventing but it does mean that the invention steps tend to be more incremental rather than disruptive (although, you still need some disruptive ideas since those will fuel future growth).

One critical thing to remember about scaling is that the people who helped build your company may not be the people that can scale it. This can be a tremendous source of conflict with founders who have built the company from the ground up. Mitigating this requires honest dialog as to how the company will scale and who can actually do the job.

Fail Quick

Throughout this whole process, it’s best to focus on incremental learning that validates your assumptions, products, strategies or customers quickly. Failing quickly and moving on is far better than failing slowly where you cannot adjust your strategy. One other important consideration is not to be too in love with your idea. Building a company goes through so many zigs and zags that it can make you nauseous. Being tied to a particular strategy or product definition will just bog you down when tough decisions needs to be made. The path from whiteboard to company is exciting, stressful, chaotic and rewarding if you embrace this zigs and zags and learn to roll with them.

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From Whiteboard to Company originally appeared on The Daily MBA on May 17, 2010.

See if this sounds familiar: A couple buddies come up with this super cool idea to completely dominate the SaaS market for tools that help companies save billions by monetizing their social media reach . These buddies know the technology, have the contacts and VC’s want to pour money into this “change the world” company. Sounds like a pretty good deal. Something that anyone would want to jump at and they probably will. The problems you will face getting this great new venture off the ground will be many and the first one will be the distribution of founders equity. What I mean by founders equity is the founders stock in a C-corp. The same techniques can apply to LLC’s but for simplicity, let’s focus on a C-corp

This will probably be the first uncomfortable meeting you and your co-founders will have. To help reduce your anxiety, let’s take a look at a some scenarios that you might find yourself in so that when this topic comes up, at least you have a starting point.

Scenario #1: The Golden Three

In this scenario, you ideally have three co-founders. One is the CEO that has experience starting and raising money. Number two is the technology guy who has a track record for building really cool stuff. The third is the marketing guy who knows anyone and everyone in your target market. These are the golden three that will start and build your new company into what will become the next “insert your favorite successful company here.” In this scenario, the distribution of founders equity is pretty easy — each person gets a third. The reasoning is that each will play a critical role in the success of the venture and without them, the venture would fall flat. Now, I am sure there is some debate about whether two or three founders is the ideal number. There are plenty of successful examples for both. Just keep in mind that you need those skills and your foundering team needs to have them.

Tip: When the golden three are present and contributing, equity should be distributed equally.

Scenario #2: Money Bags

Unfortunately, we live in a world where it takes a certain amount of money to get stuff done. Startups are no different. The first permeation on our ideal scenario is the founder with a ton of money. To be honest, this is a mixed blessing. On the one had, you need the money. Actually, you really need the money. On the other hand, a founder with a lot of money will want more control and will tend to dominate the decision making process. This is why it’s best to not have a founder with a huge dollar stake in the business. I know, the temptation is huge to take the money but the cost of this money is more than the equity you give up. You see, gentle reader, this money will control the business more than it should. The co-founder that has a huge financial stake will make bad decisions for the business since what might be good for the company may not be good for an investor. Case in point, when an exit strategy presents itself, the co-founder with the huge equity stake will probably revert to investor getting a return mode than executive that wants to build a company. Granted you might have a founder that puts in a little more than the rest but that’s unavoidable and manageable.

Tip: Beware the co-founder with a potential huge financial stake in the business.

Scenario #3: Connected

Have you ever seen a Rolodex? Back in the day, your “manhood” as a mover and shaker was directly proportional to the size of your Rolodex. Today, it would be the number of connections you have on LinkedIn. Someone that’s well connected will have tons and tons of contacts. These contacts are a potential source of customer leads and/or money. Read that last line again. These contacts are a potential source of customer leads and/or money. It’s great that a potential founder might have a huge list of people they can call to get business. Does this mean they should get more equity? Maybe but that’s a big maybe. Contacts are only good if you can convert them to something tangible. If they can do that, then it’s worth it. In terms of the split, it would be fair and related to the contribution.

Tip: Setup some realistic goals that can prove the power of their connections.

Scenario #4: Wunderkin

Some hotshot techie dude , who either invented the Internet, C++ or Python or all three, has this great idea for his next new invention. The only problem, he has no clue about business or the market or how to raise money but the idea is uber cool and can “sell itself”, he tells you. Sure. Are you also interested in a bridge? It turns out that it’s actually hard to sell stuff and raise money. The idea or technology is only the beginning of a long and painful assent to a real company. Now, the idea is important and if your Wunderkin actually built the silly thing or has a bunch of patents on it, then he deserves a little more equity. If it’s just an idea, then that’s just like a contact that’s not converted. Ideas do change over time and once you get a bunch of smart people working on a problem, that great idea will have morphed into something completely different.

Tip: Sweat equity requires some sweat. Ideas are great but something tangle is far better and should be rewarded.

Scenario #5: Delivered The Goods

Sometimes you get a founder that actually built something, got some sales and now needs to take it to the next level. These founders will have a huge vested interest in retaining more control then the “new guys.” This is just human nature, so don’t take it personal. The best way to handle this is to clearly state what everyone brings to the table. If the IP or product is really going to be part of the venture, then it makes a lot of sense to give that founder more. The problem will be in how much the IP or product is really worth. Those discussions can be contentious since human nature being what it is will mix some ego into the negotiations. Resist going down that path.

Tip: Take a hard look at contributed IP or products. Do a detailed evaluation on what it’s worth and agree with your fellow founders on how much equity you will give up for it.

Scenario #6: Hangers On

It’s also inevitable that your new whiz bang idea will attract people who think they can help you and really can’t. Or even worst, the people who could help but are either too distracted, too busy or just too lazy to step up. These hangers on will make splitting equity a challenge since they will expect far more than they actually contributed. The best way to deal with this is to gather up your real contributing founders and chat about how to handle your hangers on. A unified front will make the arguments on why they want more equity end quickly. You do need to be cautious since the “forgotten” founder problem can give you a major headache in the future. So, unless they really did nothing, you should give them a little something just to hedge your bets on future claims.

Tip: Get your real contributors together and discuss how to fairly deal with hangers on.

Scenario #7: The Mashup

Take all of the above scenarios, stick them in a blender and then hit liquify. The resulting mush will probably resemble your situation more than anything else. Every situation is different and having a formula or method that works for everyone will be hard to achieve. In general, you need analyze the situation from both a business and fairness perspective. Doing this will make the process a little less crazy and a lot more productive. In addition, there are a couple more guidelines that seem to work well. These include:

1. Founders agreement: Writing down the deal between founders is a great way to avoid the challenges of equity distribution. If you have triggers or vesting rules, put those in as well. Everyone should know what they are getting into.

2. Don’t incorporate right away: One problem with starting a company is that you really don’t know if it will work out. You also don’t know if these new founders will actually do what they say. That’s why it’s important to get your team to put in a little work up front to achieve some sort of milestone together. This way, you can vet the founders while getting something done.

3. Be fair and transparent: Treating everyone fairly is important. Part of being fair is to be as transparent as you can about how performance will be evaluated and equity distributed. If the goals are clear and the decisions are transparent, then things should go fine.

4. Sweat Equity to Founders Stock Conversion: Most founders choose to convert all that sweat equity into stock via some conversation factor. Whatever that factor is, make sure that it’s consistent and that the hour tracking is agreed upon. It usually better to do it based on some tangible work product rather than total hours spent since some people are slower than others. A good rule of thumb is to have everyones rate (dollars per hour) be the same and then have some sort of percent conversion after all the hours are added up. Better yet, setup milestones that earn certain equity percentages. Either way, make sure you write it down.

Founding a company is fun. Splitting the equity can be a nightmare. Take the time to think about each founders contributions and take a step back to really deal with what is fair and equitable. In the end, dealing with dividing your founders equity up front and transparently will set up your new venture up for success.

Additional Resources

• Neat tool on how to distribute equity.

• Venture Hacks Article on How to Fire a Founder

This post was inspired by the questions under the equity tag over at Answers OnStartUps

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How to Divide up Founders Equity originally appeared on The Daily MBA on February 13, 2010.

Talking Points

• R&D is an endurance event — it’s not a sprint

• Pace is important. A sense of urgency gets things done. A sense of panic burns people out

• Every company should have some R&D — even the mom and pop corner shop

• Without a constant stream of new ideas, you business will slowly decay

• Invention takes time. There will be many missteps, delays and frustrations

• Always think about different ways to solve the same problem.

• Crossover products are great sources of innovation

• R&D projects always conserve the trinity: Features, Schedule and Budget

Discussion

Most companies think they don’t need an R&D effort. They would be wrong. All companies, no matter the size, need some sort of forward looking group (or person) to figure out the next big trend or innovation. Even the mom and pop corner shop needs someone to think about the future. Maybe it’s not reinventing the corner store but there are plenty of new trends that merit some form of R&D.

Forward Looking and Thinking

Research is a forward looking endeavor. There may not be any tangible results immediately since research can lead you down many dead ends. The trick with research is to align your research group to the strategic direction of an industry or your company. Focusing them on your high level goals will allow alignment to your overall, long term corporate goals.

Discipline Pays Off

The discipline required, both technically and organizationally, to pull off effective research can be challenging during tough times. This is largely due to the long term nature of research and it’s delayed bottom line impact. Lots of companies downsize their research efforts when times are tough. This is precisely the wrong thing to do. A downturn is the perfect time to invest in innovative since once the downturn is over, you will be ready. Prudence is clearly required to assess the overall health of the company and how a research program will effect the bottom line. More often than not, companies cut their research budgets too severely and are not ready to exploit an upturn.

Innovation Pipeline

Without a constant stream of products and services, a company will slowly decay into obscurity. Just look at the Dow Jones Industrial Average 100 years ago. There is only one company that is still on the list today — General Electric. Being stagnate and “resting on your laurels” is a sure path to destruction. That’s why it’s important to have an innovation pipeline that feeds your company with products. The steps are not hard but the discipline can be difficult to impossible to sustain. There are a couple of things you can do to ensure that your innovation pipeline stays full. For example:

• Have A Patent Process: Making innovation part of your culture starts with having a process to generate ideas and patents. Patents are one way to see how your R&D pipeline is filling up.

• Encourage Education: Learning new things as well as staying current with industry trends is vital to a proper R&D program. Educating your employees not only makes them better but it makes your company more competitive.

• Cross Train Disciplines: Lots of innovation comes from crossover products or services. Having an engineer go meet a customer will provide a wealth of insight that almost always leads to some new feature or function.

• Reward Failure: I know, this sounds odd but failure is an integral part of R&D. Without failure, you don’t know the boundary of your knowledge. It obvious that you can’t constantly fail but celebrating the occasional failure shows your employees that it’s OK to take a chance.

• Set Aside Creative Time: Innovative ideas can happen while you work but to truly innovate, time must be set aside to think of the big ideas and tinker. Allow your employees to tinker in the lab, even if it’s a personal side project.

• Have Innovation Deliverables: No R&D group can just work and produce nothing. That’s a waste of time. The whole point of R&D is to develop products that the company can sell. So, have some deliverables and goals for your R&D group. Challenge them to file patents, launch products or present papers.

In The End, It’s About Making Products

In the end, R&D is about making products to sell. If you don’t convert your R&D dollars to sales, you are not doing a good job at R&D. The amount of money you spend on R&D will depend on your company. Don’t assume just because you are an established or non-high-tech company that R&D is not important New products and services are the engine of growth for a company. Staving the engine of its needed innovation fuel will make your companies growth sputter to a stop.

Things To Ponder

1. Research a public company that is know for their R&D efforts. Look up how much they spend on R&D. Compare that to their competitor. Write a paragraph or two about how R&D helps/hinders each company.

2. Go to the United States Patent and Trademark Site. Look up your companies patents. How many do they have? Look up your competitors. How many do they have? What are the technologies that your competitors are patenting that you are not?

3. For your company, figure out how long it takes from innovation to product. Go ask your CTO or VP of R&D to explain the process to take an idea to a product. Write a couple of paragraphs about what you have found.

4. Think of some major product or innovation failure. Why did it fail? Where there any aspects of the innovation that are still being used?

5. Come up with a couple of cross over innovations by combining two different products or services. Don’t limit yourself to practical or even something marketable. Just combine different things to see what you can come up with.

Exploring Further

• Wikipedia R&D definition

• Business Strategy and Innovation blog

• United States Patent Office site

• Interesting blog article on measuring your innovation pipeline

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Topic #15: Research And Development originally appeared on The Daily MBA on February 3, 2010.