Entrepreneurs Handbook II

Foreword

Do
you want to learn how to create significant value for yourself and your family
in an enterprise that you own and control—value that can provide you the
freedom and security to realize your lifetime goals? Then read this Handbook to
learn how to bootstrap yourself to success in the 21st Century.

This
Handbook is directed toward the great majority of businesses and startups that
are not VC-funded. Instead they are bootstrapped by their Founders through the
many clever ways that entrepreneurs have learned over the years to extract
value from revenue streams and other opportunities around them. The
Entrepreneurs Handbook also shows intrapreneurs, artpreneurs, CEOs, CTOs,
product managers, Executive Directors and others how to adopt and implement the
entrepreneur’s skill set in their work lives and embed it within their
organizations. They will learn how to be more efficient and effective when
launching new products and services whether they are for-profit enterprises or
charities, NGOs and not-for-profits.

The
handbook takes you on a voyage to create the most compelling business models
for the 21st century. We are going to look deep into the past at business
models from decades past, as well as show you new models that may amaze you.
You will learn how it is possible to reverse out much of your work, to create
mass customization in products and services, turn products into services and
vice versa, engage in negative cost selling, negative cost marketing and much
more.

…

Entrepreneurs Handbook II is
available from https://www.brucemfirestone.com/eh-ii

Free preview of first two chapters
of Entrepreneurs Handbook II, https://www.brucemfirestone.com/wp-content/uploads/2013/03/entrepreneurs-handbook-2013-edited-first-two-chapters-withCovers.pdf

Here
are some of the images you will see in the Handbook–

…

What
is the number one reason people decide to become entrepreneurs? A) To make more
money? B) To be their own boss? C) Because they can’t get any other type of
work? D) To work fewer hours or have greater flexibility in their schedule? E)
Because they believe they can create more interesting work for themselves than
others can create for them? Most often, the answer turns out to be E).

Entrepreneurs
believe in themselves; they have confidence that they can create insanely great
new products and services and, in the process, create new enterprises that will
outlast them. They are driven to put their creative energies to optimal use.

Being
a successful entrepreneur allows them to exercise greater control over their
own destiny, both professional and financial. Many people think that having a
JOB is more secure but entrepreneurs, intrapreneurs and artpreneurs believe
that real security comes from the skills, knowledge, training, creativity and
experience they possess and they know that anyone can be laid off from any JOB
at any time.

One
of my former colleagues from the GOC (Government of Canada) was laid off in the
recession of the mid-1990s from what he perceived to be a secure position—doing
post project reviews to measure if GOC programs had, in fact, delivered what
was promised to Parliament. He had a PhD in anthropology and 27 years
experience doing post project reviews.

He
asked me, ‘What do I do now? I still have teenagers to put through university
and my 18 months severance won’t last me and my family much longer than… well,
18 months?’

I
suggested that he buy an existing business, preferably a franchise, because he
wasn’t really cut out for the life of an entrepreneur, per se, and his options,
in his 50s at the time, seemed limited to me. He declined. ‘I am going to type
up my CV and send it out!’

Six
months later, de nada. Not a single interview from over 500 submitted CVs. Not
even a phone call or email. Absolutely nothing. The private sector was not
apparently crying out for PhDs in African Anthropology or a 56 year old with
loads of experience doing Government reports, most of which never saw the light
of day.

He
came back to me for advice. ‘Buy a franchise,’ I advised again.

‘Which
one?’

‘I
don’t know. Let’s look around.’

Eventually,
we found him a sandwich shop that was losing $3,000 a month. It was a franchise
with a terrific brand in a good location but terrible management and ownership.
Usually those two things go together. To me, it spelled opportunity. To Bill
(not his real name) and his other advisors (basically lawyer, banker and accountant),
it was something to stay away from.

But
after some persuading, he bought the place for $65,000*—of which he had to put
down 50% in cash while the Seller took back financing for the balance to be
paid off over the next four years without interest. Bill had to pay monthly
principal and interest but there were no payments during the first six months
during which his entire efforts were directed towards turning the business
around.

(*
Typical restaurants of the type were selling for anywhere from $145,000 to
$350,000 in that period so he got a good deal, assuming he could turn the
business around. Buying any type of business to lose money or as a ‘tax write
off’ is always a bad idea.)

Seller
financing is an example of bootstrap capitalization. There is no bank involved,
no angel investor and, obviously, no VC (Venture Capital) funding either. Bill
also has no partners*. The financing is, in effect, being derived from the
business itself and, if Bill can turn around the operation, he will, in fact,
have paid just $32,500 of his own out-of-pocket in cash to own it—the balance
is in effect being paid from the revenue streams of the business itself. A
friendly seller or a desperate one is part of this equation.

(*
There are still two chairs in Heaven waiting for the first two partners to get
there and still like each other. If it wasn’t possible for the two McCain
brothers (Harrison and Wallace) to make it (they had a falling out over
succession after decades of being co-CEOs of the McCain Empire) then you and your
partner probably can’t do it either. So why have one in the first place?)

Next
we worked on Bill’s marketing program which basically consisted of simple
‘Dollar Off’ coupons. He printed a gazillion of these (remember, this was in
the time before Groupon et al) and he did two things with them—a) he got
permission from a neighboring national retailer to place these under
windshields of parked cars from 10 am to 11 am each day (he also promised to
come back every evening and remove any coupons thrown away in the parking lot
plus he gave the national retailer franchise owner a tonne of coupons to give
to his employees as part of their incentive program) and b) he created heaping
platters of freshly cut sandwiches. With these he would visit offices (around 11
am) within ten kilometers of his store. Just as people were getting kind of
hungry, there would be Bill with a giant platter of sandwiches and still more
Dollar Off coupons.

He
has an open, trustable face and in his franchise’s uniform, he somehow managed
to finagle his way past security at most local tech companies—all they did was
waive him past security to ‘deliver’ his sandwiches. He never asked for
permission. Bill is one in a long line of entrepreneurs who would rather ask
for forgiveness than beg for permission.
He would then run back to his store and watch customers line up…

He
not only does his own marketing but also hires and fires, does staff training
himself, runs his own accounting software, is big in catering and loves what he
does. As long as he keeps a good relationship with the master franchisor, no
one will ever tap him on the shoulder again and tell him he is too old or not
wanted or both.

He
owns two shops now and has no plans for any more. His first year (with his
first shop), he netted $30,000 (down from his GOC salary of around $110,000),
his second year, he made $90k, his third, $120k and, with two shops, he now
regularly makes more than $150k. This is his cash (after paying everything
including income taxes) or as my wife likes to call it, ‘IGA money’, money you
can touch, feel and spend. He told me recently (he’s now in his late 60s), ‘I
never thought I would earn this kind of money and I never thought I would be as
happy as I am now. I’m gonna do this forever or until I drop, whichever comes
first.’

This
simple example has a few lessons:

1.
Entrepreneurship is not necessarily riskier than having a JOB.
2. Mentored businesses tend to be more successful than those without a support
network.
3. But you need the right mentor—not necessarily a lawyer, banker or an
accountant who are not really entrepreneurs anyway.
4. You need to be able to sell to be a successful entrepreneur.
5. Marketing and sales are not the same function and, any time you see someone
with the title ‘VP, Marketing and Sales’, you are looking at someone who
doesn’t know what they are doing.
6. As CEO, Founder, President, Executive Director, Entrepreneur, you can not
delegate or outsource core competencies like marketing, sales, finance,
cashflow management, banking, accounting, business modeling and HR even if you
don’t like one or more of those functions.
7. You can often find financing sources in the deal itself. This is part of
bootstrapping yourself to success.
8. Buy low, sell high or, put another way, buy when everyone else is selling,
sell when everyone else is buying, buy what no one else is buying and sell what
no one else is selling. Have the courage of your convictions.
9. Remember, entrepreneurs would rather ask for forgiveness than beg for
permission.
In this Handbook, you will go on a voyage to create the most compelling
business models for the 21st Century. We are going to look deep into the past
(as far back as the beginning of trading economies circa 10,000 B.C.) as well
as show you models from the past decade and the new one we are currently in
that may amaze you—ones that generate cash on three sides (not only getting
cash from customers but from suppliers and marketers too).

You
will learn how it is now possible to reverse out much of your work, to create
mass customization in products and services, turn products into services and
vice versa, engage in negative cost selling and negative cost marketing and
much more.

“You
can think your way to wealth a lot faster than you can work your way there,”
Prof Bruce.

…

Who
should Read Entrepreneurs Handbook II?

Entrepreneurs/CEOs/CTOs/Product
Managers—Get the business model right, so the harder you work, the more money
you make; find out why Apple’s Steve Jobs and IBM’s Sam Palmisano spent nearly
40% of their time on business models instead of individual products or
services.

Artpreneurs/Artists/Designers/Architects/Novelists—Get
rich while you are still alive.

Intrapreneurs/Engineers/Technologists/CFOs/COOs/HR—Learn
and adopt the entrepreneur’s skill set so that your next product/service launch
is ultra successful and the next promotion is yours.

Executive
Directors/Managing Directors—Adopt a model that makes your
not-for-profit/charity/NGO both efficient and effective.

…

Testimonials

Here
are a few testimonials for Bruce M Firestone–

“By
the way, I had a nice chat with some of your students at this morning’s
breakfast… they simply said you were the best prof they have had since coming
to Carleton four years ago. I am sure it is a shared belief by many of your
other students,” Luc Lalonde.

“It
has come to my attention that your teaching evaluation results for the Winter
2003-04 term were higher than the department average… I wish to thank you for
all your hard work and dedication to the student and to the School. It is much
appreciated. I look forward to many more years of excellence,” Vinod Kumar,
Director, Sprott School of Business.

“Thank
you again for joining me in the classroom to discuss business models and a
number of topics that were ‘right on target’ for the interests of our MSc
students… I would also like you to know that I believe you are remarkable
individual and huge asset to Telfer. The many contributions that you make to
student learning are likely not recognized enough. Thank you for continuing to
motivate students, advise faculty and provide entrepreneurial leadership,”
Barbara J. Orser, Deloitte Chair in the Management of Growth Enterprises,
Telfer School of Management, University of Ottawa.

“Bruce
Firestone hardly needs an introduction, let alone a recommendation, but it
doesn’t mean he doesn’t deserve one. Anyone who spends a couple of minutes with
him will be captivated by his speaking abilities combined with his in-depth
knowledge in real estate, entrepreneurship among other topics. What is so admirable
about Bruce is that when he decides to take on a challenge, he immerses himself
in it and doesn’t give up until he masters it. Anything from personal to
professional accomplishments he puts 110% in. Although he considers himself
semi-retired, he gives back more to the community than many others who are
dedicated full time to that cause. It’s a pleasure to work alongside Bruce on
many initiatives—personal, professional and charitable and I look forward to
continuing to helping him in his ongoing efforts to make a difference in this
world,” Brent Mondoux, CEO at N-VisionIT Interactive @betterwebsites.

“Being
involved with Exploriem.org and its incubator program has allowed my business
to grow. In particular, working with Professor Bruce Firestone, as my mentor,
has helped me find opportunities, develop advanced business models and plan and
execute the first year of my business. This was especially true at the early
startup stage where the technology was just being developed and as we moved
towards testing. As a result, we turned an early stage venture into a company
that delivers real value,” Craig Schoen.

“Professor,
I wanted to let you know that the Elevator Pitch competition and your Business
Model Competition were a big part of what inspired me to actually go out and
start Incogna.com. Otherwise, I’d probably have just ‘gotten a JOB’ when I
graduated. But this is way more fun!” Kris Woodbeck, (Engineering Graduate, U
of O), Founder, Incogna.com.

“You
definitely deserve a great evaluation for that entrepreneurship course, Prof
Bruce. Of all the business courses I took at Carleton, yours definitely
prepared me the most for life in the real world. I’m currently working at an
advertising/direct marketing agency in Toronto
with a real entrepreneurial bent and am brainstorming with some friends to
start up our own business later on down the road. Never again will I look at a
great JOB as the final goal–I eventually hope to have my own ad agency–but it’s
going to take some learning. Your course wasn’t just a series of lessons, but
more of an overall paradigm shift. Many many thanks,” Sean MacPhedran.

“Your
class this summer has been excellent; it has really cleared up the black hole
side of architecture for me. The class connects designing for people with
getting cities built in a way that gives us more of an entire look of
architecture, rather than just an understanding of buildings and spaces. I find
that this course gives us opportunity and courage to learn what’s out there.
Thank you so much,” Joseph Adrian Sauvé.

“Approximately
a year and a half ago I walked into class not knowing what to expect. I didn’t
know anybody. All I knew is that I wanted to find out if I had any
entrepreneurship in my blood. I feel privileged to have met two
professors/mentors like you and Professor John Callahan. I’ve grown a lot; I
learned to let my mind free of any preconceived concepts… So thank you for
instilling that entrepreneurial fire inside of me and I hope I will be able to
benefit from your mentorship for years to come,” Mihnea Galeteanu.

@ProfBruce
@Quantum_Entity