The 10 Deadly Sins of Antipreneurship: And How to Avoid Them

By Mark Alexander Palmer

The 10 Deadly Sins of Antipreneurship provides business owners and anyone contemplating starting a business with easy-to-understand and refreshing insights into the common pitfalls of business. Reading this book will help you avoid the following 10 Deadly Sins:

1 Not understanding the game
2 Having the wrong personality
3 Having insufficient skills
4 Forgetting to plan ahead
5 Picking the wrong team
6 Not having enough money
7 Not understanding marketing
8 Forgetting your systems
9 Not having an eStrategy
10 Limiting your options

• Language: English
• Publisher: AuthorHouse
• Release date: Nov 27, 2007
• ISBN: 9781467865197

Mark Alexander Palmer

Mark Palmer is a serial entrepreneur, having helped build and sell several award winning businesses. He is currently CEO of eZpZemail.com, a leading safe email solution for children. The 10 Deadly Sins of Antipreneurship draws on over 25 years of his business experience. It is his first book. He currently lives in Nassau, Bahamas.

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© 2007 Mark Alexander Palmer. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 11/26/2007

ISBN: 978-1-4343-4938-5 (sc)

ISBN: 978-1-4678-6519-7 (ebk)

Library of Congress Control Number: 2007909070

Printed in the United States of America

Bloomington, Indiana

Cover design by Guy Tasker of www.2cooldesign.co.za

Contents

PREFACE

Introduction

SIN 1 NOT UNDERSTANDING THE GAME

SIN 2 HAVING THE WRONG PERSONALITY

SIN 3 HAVING INSUFFICIENT SKILLS

SIN 4 FAILING TO PLAN

SIN 5 PICKING THE WRONG TEAM

SIN 6 NOT HAVING ENOUGH MONEY

SIN 7 NOT UNDERSTANDING MARKETING

SIN 8 FORGETTING YOUR SYSTEMS

SIN 9 NOT HAVING AN eSTRATEGY

SIN 10 LIMITING YOUR OPTIONS

POSTSCRIPT

PREFACE

This book is dedicated to my late father Ken, who was instrumental in my business education.

Introduction

In 2003, something dramatic happened that was to change my life forever. It was the day I discovered my business partner was cheating on me. I ended the association and lost $100,000. Little did I know that this act would set the stage for my wife’s cancer and our inevitable divorce.

So, how could such a simple act have such profound consequences? And how could a previously successful entrepreneur such as myself have made such a stupid mistake? The answer lies in this book.

In The 10 Deadly Sins of Antipreneurship, I try to show there is more to business than one would think, and it is often the small things that can lead to catastrophic failure. Take the example of a gentleman I met recently on a trip to the UK. He told me the story about a successful aviation business that he once had. This business was generating him over $500,000 a year and earning him and his family a comfortable living. His job was cleaning the planes. Despite having been in the business for over 20 years, he made the mistake of not renewing his liability insurance. This simple oversight would have a significant effect on his future. Shortly thereafter one of his trucks hit the wing of a plane. Whilst the damage did not concern him at the time, when the repair estimates arrived, the amount exceeded the assets of his business, and he was forced to close down. His life was changed forever. Had he read the Chapter 8.9 Systems For Corporate Issues, and invested more time in creating systems for his business, he would still be in business today.

In my case, I had failed to perform sufficient due diligence on my business partner. Had I checked him out, I would have found out that none of the businesses he managed had made any money. Had I made just one phone call, I would have discovered everything needed to know not to proceed. Had I followed my own advice in the Chapter 5.4 The Trouble With Partners, I might still be married today.

20:20 is always easier in hindsight. Whether you are an existing business owner, or self-employed, or are just starting out, or thinking of starting a business, then this book will help you create your roadmap to success.

Business failure is not as uncommon as you think. Every year thousands of businesses fail. Unfortunately, what the statistics don’t show is the pain this generates below the surface. Business failure has the capacity of destroying your relationships, your wealth, your home, and your respect for yourself.

In my business career to date, I was a sole trader, a partner and a business owner. I helped found an award winning successful marketing business, which we eventually sold to an advertising agency. In ten years this business grew from our bedroom to an office with 35 staff. It was there I learned the lessons of how to build systems so that we could deliver a consistent professional product to our clients. I was chairman of my family office supply business with 150 employees. I also started three Internet businesses, two which failed and one which is still operating today. In my business career, I started more than ten businesses, sold two, made many mistakes and learned along the way. I am able to share this valuable business experience with you in this book today; the simple common sense tested ideas that you can apply to your business and improve it along the way.

So, what is business? The essence of your business is that a customer gives you money because they think that you offer better value than your competitors. Similarly your employees, your suppliers and your professionals work with you for the reason that they get more value out of working for you than for someone else. That value can be simply down to money, or it could be a host of other factors. So the question is, what value are you giving to your customers that will differentiate you?

Creating an entity that consistently gives better value than someone else long term is the difficulty. According to Dunn & Bradstreet data, less than 40% of businesses remain open after six years. And of those that fail 85% fail within the first five years. For some industries, like the restaurant industry, these figures are even worse, as they traditionally have one of the highest failure rates. Home Internet businesses have an even worse record with failure rates estimated to exceed 90%.

The business landscape gets more and more competitive over time. In 1900 there were over 200 car companies, and now there are only three in the US. The same is true for other industries. It will be the same in your industry too one day. The Internet is still a bit like the Klondike Gold Rush, but it too will be consolidated over time by the big players with more money and resources. Paradoxically, at the same time, business is also breaking down into smaller and smaller niches, which will create opportunities for players in those markets.

So with these elements stacked against you, why would you ever want to go into business? One of the best reasons is freedom to do what you want, calling the shots and getting things done your way. However, with this comes responsibility. The buck stops at your door and there is nobody else to blame if things don’t work out. Most successful entrepreneurs have had several failures before they make it, so don’t lose heart if your first or second venture fails. Think of it like riding a bike. Pick yourself up, dust yourself off, learn from your mistakes and get back on your bike.

So, what does it take to make it in business? Quite a lot of things actually. There are ten areas, or ten deadly sins that you need to avoid if you are to be successful. They are as follows:

Sin 1 Not Understanding The Game - Business is a game and it can be an infuriating game. Just like poker, golf, or any other game, if you want to play it, you will need to learn the rules. Business also has a lifecycle, that starts in infancy, moves through adolescence and ends in maturity. Fail to understand this, and you may never make it to adolescence. Business requires three different types of people to come together to run it. Fail to understand this and you will keep hitting your head against the wall. And furthermore, it also has two sets of rules, one for the self-employed and one for the business owner. If you only read one chapter of this book, make sure you read Sin 1 Not Understanding The Game so that you don’t play the game before you master the rules.

Sin 2 Having The Wrong Personality – Your business is ultimately a reflection of you. Whatever you bring to the table, will be your business. So, make sure you bring the right qualities to the table. Not everyone has what it takes to be self-employed, or a business owner. Do you have the capability to work hard? Business is hard work. Anyone who tells you otherwise is deluded. In 25 years of business I have never met a successful business person that did not put in the hours. Do you have the stamina to push through when you have no more energy? Do you have the positive mental attitude to carry you through when all looks bleak? Winston Churchill once defined success as the ability to move from one failure to another with enthusiasm. Are you capable of perseverance, concentration, attention to detail? Do you have the personality that goes the extra mile for your customers? Are you tough and thick skinned to chart your own course? And finally do you have the ability to create a vision for your business that your stakeholders will follow. Turn your business into a cause and you will attract the best people that will want to be part of something different. If this all sounds unfamiliar to you, make sure you read Sin 2 Having The Wrong Personality so that you don’t play the game if you haven’t got what it takes.

Sin 3 Having Insufficient Skills – How well you play the game, will depend on the level of skills you have. If your poker skills are poor, so will be your game. If you don’t develop your muscles, you won’t have the strength to compete. Fail to understand this and you may well find yourself lacking. Can you manage your time properly? Time is money, and squeezing every drop will be key. Do you make decisions easily? How good are you at negotiating? How effective are you at networking? Can you sell? Can you solve problems effectively when they inevitably arise? Can you leverage other people’s knowledge, energy, money, success, failures, ideas and contacts? Are you financially literate? How good are you at managing? Do you have project management skills? Do you know how to outsource well? Have you got leadership skills to help you step up to the plate? Can you communicate effectively through public speaking? These are the skills that you, or members of your team will need to have. If you identify any skill deficiencies from the list above, make sure you read Sin 3 Having Insufficient Skills so that you don’t play the game if you haven’t honed your skills.

Sin 4 Failing To Plan – Unless you are incredibly lucky, if you fail to plan you will plan to fail. If you don’t mind where you are going, then wherever you end up will probably be OK. Would you seriously go on a long sea voyage without a plan, a map and a compass? In business, there are many areas to plan. Do you know how much income you want to make? Do you know what business you want to start, or what market to enter? Do you know who is going to be in your team? Do you know what your core ideology, your Unique Selling Proposition and your culture is going to be? Who is going to be in your mastermind alliance? How much money will you need? What systems are you going to put in place? What is your exit strategy going to be? What will your business and marketing plan look like? If planning is a weakness, make sure you read Sin 4 Failing To Plan so that you don’t play the game if you don’t know where you are going.

Sin 5 Picking The Wrong Team – Your business is a reflection of your people, and if they are disorganized, then the business will also be disorganized. In order for you to improve your business, the people within it must improve first. Fail to understand this and you will spend your time picking up the pieces. Start by picking yourself first. Are you the right person for the job? Is your family on board? Will they support you through thick or thin? Is your partner right for you? Is your management team up to the job? What about your employees? Are your professionals of the caliber to help you get to your objectives? Is your Board of Directors right for you? Have you picked the appropriate investors to back your dream? If team building is your weakness, make sure you read Sin 5 Picking The Wrong Team so that you don’t play the game with the wrong team.

Sin 6 Not Having Enough Money – If you have ever played the famous board game Monopoly, you will know that the game is over when you rum out of money. Money is the lifeblood of your business and without it you cease to exist. Businesses that are undercapitalized from the beginning will find it hard to survive. You need to be focused on husbanding your cash. Fail to understand this and you may find yourself facing angry creditors at the end of the line. Have you got enough money to start your business and keep you going for at least six months? Have you approached your family and friends? Do you know the eight creative fundraising techniques? Have you approached government backed loan schemes? Do you know how to finance your receivables? Have you tried equipment leasing? Do you know the three ways to get equity financing? If money is weak spot, make sure you read Sin 6 Not Having Enough Money so that you don’t play the game without your paycheck.

Sin 7 Not Understanding Marketing – Is your company selling the perfect mousetrap that nobody knows about? Then you need to understand marketing. Without marketing, nobody is going to buy your product. Fail to understand this and you could end up with a warehouse of unsold inventory. Marketing is one of the most important disciplines in business, yet also much misunderstood. Build up your capacity in this area and it will pay you large dividends. Marketing covers a surprisingly diverse area. Do you know who your customer is? Have you analyzed your competition? Do you understand your environment? How clear are you about your product, your price, your image, your positioning and your branding? Do you know the five main marketing tools? Do you understand how sales and marketing interact? If marketing is like a foreign language to you, make sure you read Sin 7 Not Understanding Marketing so that you don’t play the game without any spectators.

Sin 8 Forgetting Your Systems - Not having systems in place is possibly the main reason why many businesses never make it past adolescence. Most people spend their time working IN the business instead of working ON improving the business. When you have your nose to the grindstone, you will inevitably fail to see the wood for the trees. Franchises have perfected the method of documenting processes and creating systems, so that people of limited intelligence can be successful members of the team. Fail to understand the importance of systems and you will stack the odds against your long term survival. Are you aware of the need to implement systems for managing money, managing sales, running an operation, managing customer service, managing employees, managing motivation, managing your product, managing corporate issues, managing production and building scale? If McDonald’s, Starbucks and KFC have these systems in place, shouldn‘t you? If systems are a weak point, make sure you read Sin 8 Forgetting Your Systems to ensure you don’t play the game without a bat, ball and a playing field.

Sin 9 Not Having An eStrategy – If you don’t have an eStrategy for selling your products online, it’s like going into a boxing ring with only one arm. Every year more and more eCommerce is conducted on the web. At the very least you should have a web site to promote yourself to the world. Fail to understand this and it may be bad for your wealth. The Internet is a confusing place. Do you know the common pitfalls? Do you know how to select your market? Do you know the best way to design and implement a website? Do you know how to build traffic on and offline? Do you know the four ways to convert your traffic into sales? Do you know how to get your customer service, technology and legalities right? Do you know how best to create a business plan, marketing plan and how to effectively manage your finances. If the Internet seems like something from the twilight zone, make sure you read Sin 9 Not Having An eStrategy to ensure you don’t miss out on the game in cyber space.

Sin 10 Limiting Your Options – It’s easy to become fixated with a bricks and mortar business. There are other options out there for you to make money. Fail to understand this and you could miss out on several great opportunities. Did you know that direct selling, multi level marketing, selling on eBay and becoming an affiliate are four ways to build a home business. Did you know that you could also acquire a business, or a franchise as a way of starting a new business from scratch without the pains of the birthing process. If you would like to know what else is out there, make sure you read Sin 10 Limiting Your Options to ensure you don’t miss out playing those other games.

I tried to make this book easy for you to navigate between the ten sections. Each chapter is purposely short, so that you can pick up the key elements quickly. If you require further research, then there are many good books out there that cover each chapter in more detail.

It took me two years to write down over 20 years of business experience, and you should be able to gain the benefits in under two weeks for less than the price of a take out meal. I hope this book brings you the insights that you require for your particular situation, and I wish you the best of luck in your entrepreneurial journey.

My dear mother in law once told me that in the first year you look after the business, in the second year the business looks after itself, and in the third year the business starts looking after you. I believe this holds as true today as it did in the past. It will take time and perseverance for you to become an overnight success!

So, what can you do to improve the chances of your business prevailing? Turn the page and find out…….

Why Businesses Fail

If you ever had a business fail on you, you will know how disappointing that can be. Not only can it cost you money and time, it can cost you your self esteem, and possibly your marriage and your wealth. For many, business failure signals the end of their business adventure.

Most entrepreneurs find themselves in this position at least once in their lives. The key is to learn from it and not make the same mistake twice.

Business failure is a fact of life and it can affect businesses of all sizes, although small businesses have a higher risk due to their lack of resources. There are many reasons for business failure. The business graveyard is littered with many examples, some of the more important ones I list below:

1. Failure At The Planning Stage – Remember the adage If you fail to plan, you will plan to fail. Poor planning, or poor market research are reasons often cited for business failure. Choosing the wrong market, the wrong product, the wrong price and the wrong route to market at the wrong time have been at the root of countless business failures. Make sure you take the time to plan, as lack of proper planning will lessen your chances of business success. If you don’t prepare a business plan, or marketing plan, how will you know if there is a demand for your product or service? How will you know what your competition is doing, what their products are, and their pricing strategy? If you don’t understand who your customer is, don’t be surprised when you find you haven’t got any.

2. Failure To Execute – The inability to take sensible, consistent and focused action is probably the biggest reason why businesses fail. Poor management is responsible for most business failure. BSE (Blaming someone else) won’t work here. The buck stops with you and you can’t blame your staff, your partner, your competition, or your market for your failure. The market is like the ocean and it will punish poor sailors and poor equipment. If the key members of your team can’t execute, don’t be surprised if your business doesn’t either.

3. Lack of Money – If you run out of cash, it’s all over bar for the shouting. If you can’t pay your salaries, you have ceased to be in business. If we use the human body as a metaphor for business, then money must be its blood, and preserving it should be your highest priority. Control over your financial system will be key to your success. If you can’t adequately measure your business performance, you shouldn’t be in business. If you don’t have adequate accounting practices in place, you will be driving blind. Many successful businesses have succumbed to overtrading, not to mention rising costs, insufficient capital, shrinking margins, crippling repayment schedules, or over exposure to customers. Make sure you don’t become one of them.

4. Lack Of Business Systems – Visit any poorly run business and you will notice a distinct lack of systems. Just like McDonald’s, Starbucks and KFC, you must strive to get control over your business systems. Your business is like a human body, and that each part of the body represents a system such as sales, marketing, finance, production, product development and administration. Breakdown in one of these areas could lead to a collapse of the system as a whole. Take the time to map your process and document them into a business manual.

5. Poor Marketing – This area has led to more wasted resources and opportunities than virtually any other area. Don’t make the mistake of using the wrong media to communicate the wrong message to the wrong audience at the wrong time. Don’t demonstrate your lack of marketing savvy by equating marketing with advertising. This is a myth perpetuated by advertising media. There are many ways to skin a cat. Follow the lead of innovative businesses such Tommy Hilfiger whose highly unorthodox marketing campaign in the early days encouraged the theft of his goods by gangstas who became the style influencers for others to follow.

6. Change Of Environment – Talk to the manufacturers of long play records, cassette tapes, black and white TVs, paper encyclopedias, and gas guzzling cars, and you will see a demonstration of change of environment in action. The advent of new technology, or simply the change of people’s tastes could render you obsolete. Spend time talking to your customers, and time future casting to help you anticipate changes before they arrive.

Perhaps the best way to avoid business failure is not to start a business at all. If you don’t have the right skills, the right personality, a sound business plan, sufficient funds and potential customers for your products, you are best not getting your toe wet, just yet

Why Entrepreneurs And Education Don’t Mix

Times are a changing. The good old days of our parents are no longer a reality. Job security is increasingly a myth. The days when you would join a company and stay in a job or a career for life no longer exist.

The reality now is that our children will have an average of seven careers throughout their lives. The reality is that big companies come and go. Look at WorldCom, Enron and the like.

When one factors in a recession, or worse still, a depression, where does that leave us? What will happen to US GDP when the baby boomers start retiring? What will happen when the US housing bubble bursts? What will happen when foreigners refuse to continue financing the US Budget deficit? These are realistic scenarios that could affect everyone.

All those years spent in the education system could add up to naught, as there will be less jobs for qualified people. The Great Depression affected Ivy League graduates in the same way as the rest of the population.

One solution is to go back to the time of our Grandparents when the majority of people ran their own mini businesses, small shops, farms and the like.

Unfortunately it won’t be easy, as we will have to unlearn the lessons of our education systems. Why is this? Education systems were developed by the Prussians to develop soldiers and civil servants. Whilst we have moved on in the past 160 years, it seems the education system hasn’t. The simple fact is that the education system is there to produce employees and condition people for a life of job security by asking them to do the following:

1. Make No Mistakes - The education system conditions us that making mistakes is wrong. This is very different from business life where making mistakes is part of the learning process. Entrepreneurs are forced to make many mistakes, often losing their early businesses in the process. The life of business is one of making mistakes, learning from them and moving on.

2. Take No Risks - The education system conditions us to take no risks. Years and years of standard curriculums with little deviation condition us to take no risks. Contrast that with business life, which is all about taking calculated risks on the basis of insufficient information. There is no such thing as a standard curriculum in the life of an entrepreneur.

3. Work Alone - The education system teaches us to work on our own, take exams on our own and study on our own. Contrast this with business life, where collaboration with others is a necessity if you want to move ahead. Where forging partnerships with others, and working in teams is a daily fact of entrepreneurial life.

4. Be Financially Illiterate - The education system fails to teach us financial literacy, which is an essential component of business. Understanding how business numbers work is vitally important for business owners. Contrast this with children leaving school who don’t know how to do simple fractions, percentages, and have never been taught to budget, or balance a check book.

5. Fix Your Weaknesses - The education system spends an inordinate time focusing on fixing our weaknesses, when it really should be focusing on strengthening our strengths. It is no point getting Tiger Woods to improve his cricket skills if his inherent strengths lie in golf. Equally, it is no good making me spend five years learning chemistry if I have absolutely no aptitude for it and if my strength is in English. It is unrealistic to assume that we can be good at something we have no talent for. If I am great a drama, why make me go to gym classes and vice versa. In business it is pointless giving someone sales training if they don’t like people, or public speaking training if they are scared witless at presenting. Unfortunately the education system perpetuates the myth that if only I could improve this area of weakness, I will be successful, when in fact the opposite holds true.

Our future entrepreneurs will need to unlearn the lessons of the education system if they are to be successful. They will need to learn to make mistakes, take risks and work in collaboration with others.

Furthermore, they will need to go back to school to learn to become financially literate, and to learn the skills necessary for business, such as selling skills, negotiation skills, public speaking skills, time management skills and problem solving skills.

One of the biggest business opportunities now is education. The conventional school systems as we know them now, will cease to exist in the future. Governments will be taken out of the equation, as they are the least capable of providing relevant education in these changing times, and more of us will be attending such newly formed institutions as Trump University. The fact that ‘The Donald’, one of the greatest entrepreneurs of all time, is focusing his attention on education, should be a wake-up call to all of us budding entrepreneurs.

The Myth OF Job Security

Look around you and tell me if there is anyone you know who has any job security? Is that Government job secure? What about that job at that big company?

Job security is a myth based on the misconception among employees that they are somehow entitled to employment with a given company or Government forever. In fact, you might be surprised to know there is no such thing as job security, and that employment is no longer an entitlement. Why is this so?

1. Loyalty No Longer Exists - There is a false belief amongst many employees that if they show loyalty to their employer, their employer will be loyal in return. Unfortunately, this is no longer the case. As Dan Pink points out in his enlightened book Free Agent Nation, workers now can only trade talent for opportunity, and not loyalty for security.

2. The World Is Flatter - With the transparency of the Internet many jobs can be outsourced. Nowadays, the person who does the printing for your company can come from next door, from the country next door or the country 1000 miles away. They all now feel as if they are next door. As the New York Times columnist Thomas Friedman recounts when he was growing up his parents used to say to ‘Tom finish your dinner. People in China and India are starving’. He now says to his girls ‘Girls finish your homework. People in India and China are starving for your jobs’. This is no joke to the many people who have been made redundant due to outsourcing.

3. The World Is Becoming More Price Conscious - Purchasing is now often made on price alone, and consumers will flit between Amazon and eBay in a heartbeat. If the company you work for doesn’t pay attention, it could soon be a statistic, and your job with it. The company you work for is only as good as its last transaction.

4. The World Is Becoming More Efficient - To author Ken Greer, it now seems like all the fat has been cut out of business. The relentless quest for efficiency is squeezing some of the fat out of life and with it possibly your job. The private sector and Governments are under pressure to cut costs and trim budgets. The days of ‘jobs for all’ is no longer a certainty even in Japan. Outsourcing and privatization are hallmarks of business today. At some stage it may be your Government department that is going to be privatized.

These factors apply not just to employees but also to those of you who have made the move to self-employment, or business ownership. If you are in the latter two categories, your task will be more difficult, as you will also need to keep an eye on the global factors that quickly can turn our economy from hot to lukewarm to cold.

For example, if you operate in the Hospitality Industry, whose wellbeing is dependent upon travelers from the US, then you need to monitor the oil market, the airline industry, the real estate market, ageing demographics, competing destinations and the state of the US economy. A change in any of these factors could cause your livelihood to be affected, no matter how positive it looks now.

One thing is for certain, that in the business cycle, there will be tough times ahead for some, if not all of us. We haven’t had a major depression for over 70 years. During the last great depression, more than half of middle class people lost their homes. Education didn’t really matter either, as there were many privately educated people standing idly in the streets.

Will the US deficits eventually come to roost? Will conflict in the middle east create more tension and price oil out of the market? Will climatic changes wreak havoc in your area. Will a terrorist attack decimate the stock markets and wipe out your property values? All these factors on their own could be problematic, but combined in some way, they could be catastrophic for your wealth.

Irrespective of those global factors, outsourcing is now a way of life and it is going to affect most jobs in the near future. You must therefore find a way to create value in what you do for others. Vanilla products will gravitate to the place where labor costs are cheapest. Your tax returns will be completed by someone in Rajasthan or Rumania. Dull repetitive tasks can and will be outsourced to those areas where labor is cheap. You can now go on sites like http://www.elance.com and outsource pretty much anything from translation to copywriting, to design, to technology. Prices have never been lower due to transparency. For you to succeed you will need to strive to be different and offer something that others can’t.

Your job will depend on it. The four factors behind the myth of job security therefore apply equally to those entrepreneurs amongst us, and if we are to avoid