We will be expanding all types of areas that entrepreneurs deal with and provide some sage advice from real world experiences that would benefit your small business. We would love to hear from you on what topics or issues you would like to hear discussed over the coming weeks and months.

You can find the new series at http://growsmartbusiness.com/series/rules-for-entrepreneurs/

We will still be providing you great and innovative content here at Solutions Are Power and Grow Smart Business. Have a few minutes? Please check out http://womengrowbusiness.com , http://www.mysolutionspot.com and http://linktogether.com.

Back then they were a tedious chore because I really wished I had a corporate credit card but that was only available to the executives. However, I never noticed how those expenses added up because they weren’t mine and they were usually billed back to the client.

Then I launched my first business.

Eyes Wide Shut

I started my own business and my eyes were wide open – shut to the realities of how quickly things add up. I thought I was being conservative and budget conscious but I was still doing lots of business lunches, buying lunch for the team a few times a week, paying for drinks on Friday because I thought I was the “cool boss”. We sponsored various events at small levels because we were more concerned with seeing our logo out there than actually demanding that there be some type of measurable return. Very soon the $50 here, $50 there, $100 for this sponsorship, $250 for that sponsorship and lots of $75 for happy hour rounds started to really add up and we were spending $2000-4000 a month for non-sensical things but it didn’t stop until the party was over and we burned out.

Burn Rate? More like “Burn Out Rate”

You might have heard of the term “burn rate” during investment conversations and discovered that it is the amount spent on a monthly basis that you burn through and includes fixed and estimated variable expenses. The purpose of knowing this number for investors is to understand how much money you would burn based on the level of growth as you scale up to reach certain revenue/customer milestones. This concept can be applied to any business regardless of whether you get outside investment because it will be readily apparent in a cash flow statement when you would run out of money based on current operations if you are spending more than you earn. When I started the business, I had a fair amount of savings stocked away and as I ramped up and felt that I need to quickly scale to “run with the bulls” so I felt I was spending money to make money. Really I was just spending money. Clients would sign with me regardless if I took them to a coffee house or a fancy steak house.

These little expenses felt like paper cuts that all together were causing the company to bleed out and be on the verge of death. Things had to change.

5 Ways to Avoid the $100 Business Expense “Paper Cut Bleed Out”

Paper cuts are unexpected and happen in the worst places. The shallow ones sting and bleed a little bit. The deep ones bleed a lot more than you think. If you had 100 or 1000 of them happen at once, you could actually bleed out and die. I apologize for the morbid description but there is no better analogy than a paper cut.

We realized that since we were like most companies that did not have investors, our high burn rate was leading us down the path of burning out. We decided at that moment that we must first get our expenses under control then evaluate or correlate expenses to things that helped our business grow. We came up with five simple ways to make things work:

1.) Know your burn rate

2.) Question the expense before you spend it

3.) Budget for recurring expense amounts each month and keep it in check

4.) Find cheaper alternatives to off site meetings – If you meet a client off site, coffee is much cheaper than a meal and really cheaper than rounds of cocktails

5.) Get your employees to think creatively and reward them with saving the company money – if they can save $500 for you, give them $50 extra

How Have You Prevented Burn Rate “Burn Out”?

These five ways seem like no-brainers but you would be surprised how hard it is to actually admit you have a problem and understand the depth of it in order to make the change.

Wikipedia defines Founderitis as “the unhealthy condition that afflicts many companies whose founders maintain a stranglehold on organizational leadership. While many companies owe their success — and in fact their very existence — to their founders, those same individuals can create chaos that ultimately leads to the organization’s collapse. The challenge to founding CEOs and boards of directors is to take steps to change conflict and chaos into opportunities for growth.”

Founders, because they are not detail-oriented and are driven by their exclusive devotion to mission, often disdain management tasks. At some point, staff members begin to complain to the CEO or perhaps even directly to the board, calling for more systems to be established. Founders, comments Linnell, may “see all such challenges as malicious or wrongheaded or an abysmal waste of time in the face of the real (mission) work of the organization. This can lead to all-out battles between the champions of mission and the champions of systems.

While this may not be a disease that makes you sick, you sure can feel stressed and nauseous working for someone with this “affliction”. Unfortunately, I was someone who used to have this problem in a bad way. Over time I have learned that hiring people smarter than you and getting the hell out of their way is usually the best way to build a company. More on that topic in a future “Rules for Entrepreneurs”.

Symptoms of a Larger Disease that can Kill Your Company

Founder’s syndrome manifests in numerous ways. The Center for Association Leadership has an excellent list of the symptoms. The leader who suffers from founderitis exhibits these types of behaviors:

• Gives short shrift to planning activities, staff meetings, and administrative policies;
• Is reluctant to relinquish strategies and procedures that worked in the past, although circumstances may dictate new approaches;
• Neglects to institute new systems, even though the board has formally requested them;
• Seeks and accepts little input from others in making decisions;
• Sees all challenges as hostile and drives away staff and board members perceived as disloyal; and
• Refuses to delegate authority.

Treat the Personality not the Problem

Managing through a fit of founderitis requires a tricky mixture of growth opportunities, board involvement, and a firm delivery method. In the mean time, here are a few things you MUST do to beginning shed the affliction of Founderitis from infecting your company:

• Respect the need for planning activities, staff meetings, and administrative policies;
• Realize that as the company grows circumstances may dictate new approaches;
• Institute new systems with approval of your board;
• Seeks and accepts input from others in making decisions;
• Delegate, Delegate, Delegate
• Accept the fact that you can’t do everything themselves and you need to bring on people whose strengths complement your own.
• Separation of your identity and goals from your role as a founder.
• Accept that the organization’s success no longer depends solely on your creativity and decisions but instead requires the input of partners who are equally or perhaps more skilled than you.
• Dance around the room to let things loose
• Shift responsibilities to worthy successors and trust them to fail and succeed.

Don’t worry if you can’t over come this there is a simple solution. Get your board to hire a professional CEO and take a long vacation.

Do you have Founderitis and not even know it?

Do you see yourself in these words? Have an errie feeling that you might be like this or working in an environment where you engender Founderitis?

First, read this article again and see how many symptoms you may have already. If you notice some, ask those around you if you fit this profile. Tell them it is ok to tell you if you do and be very honest. If you are a classic case of Founderitis then go back one section in this post and follow the instructions on beginning to let go. This is not something that will happen over night. It took you all your life to build up these habits and it can take just that long to work them out of your system.

Photo Source: iStockPhoto

I wanted to take the opportunity to thank Shashi Bellamkonda, our Social Media Swami, and the man responsible for launching this social media “road trip” and evangelizing both internally and externally to people growing it into the award-winning social media destination for small businesses on the Internet.

In typical TV Show fashion we are going to take a look at the last 500 posts and highlight all those who have contributed in our version of “flashbacks” while sparing you from the cheesy music and soft camera lense fades. We will then look forward about our refined mission, our expanding team and what you should expect from us for the next 500 posts.

So let’s turn on the way back machine and begin….

Best of Shashi Bellamkonda – “The Swami”

Who doesn’t know the Swami? Or in the case of the picture to the left, the Cowboy. He got that hat at SXSW and he now has two names. He has been the driving force with helping Network Solutions dive into the social media pool. Under his leadership we have grown into a family of blogs covering numerous small business related topics. Our presence on twitter as @netsolcares has helped transform our reputation management program so much that he won the 2008 Excellence in New Communications Award.

Here are some of his best posts from the last year:

10 Reasons to Use Facebook for Business

How Small Businesses Can Use Social Media

How I became a Social Media Swami at Network Solutions

Aesops Fables and Corporate Blogs

A Hard Sell? Social Media and Your Boss – Part 2 Becoming an Expert

Best of Connie Bensen – “Queen of Community”

Connie joined the team in July as the first community manager and wrote tons of great stuff until her departure in October. She has moved on to work with other companies to help build their communities. Her presence is missed but we still have her awesome content.

Here are a few of her greatest hits:

Building Your Business Online Series (6 Parts)

Building Your Brand Series (5 Parts)

10 Reasons to Choose Network Solutions to Register Your Domain Name

Use Social Networking to Grow Your Small Business

Does Your Business Need a Community?

Best of Steve Fisher – “Part Pinky, Part Brain”

I joined the team back in June as a writer to add content to this growing blog. Prior to that I was writing VentureFiles for about four years which focused on small business and raising funding from the entrepreneur’s perspective.

In November I “leveled up” and became the Social Media and Community Manager under the guidance and mentorship of “The Swami”. Over that time we have increased the size of our team, launched new blogs, brought in tons of guest contributors and done Social Media training courses for groups here at Network Solutions. I have had some great experiences meeting extremely talented small business owners and have had the opportunity to interview many great entrepreneurs. Most are customers of Network Solutions and it is always great to reach out to those who might become customers in the future.

Here are my favorite posts over the last year:

The Business Plan Series (15 Parts)

The Marketing Plan Series (15 Parts)

Rules for Entrepreneurs – Rule #1: Make Sure Your Business Card Doesn’t Get Thrown Out

Getting Productive in 2009 – Spending a Year with GTD

Thoughts on Coworking: What is it and is it for you?

Best of Jill Foster – “Our Most Passionate Blogger”

Not to be confused with the character on Young and the Restless, Jill signed on in November to contribute as a writer to Solutions Are Power and a few months ago we launched a new blog in our growing family of blogs. This blog focused on Women Entrepreneurs Growing their Businesses is appropriately called Women Grow Business. She has written awesome content on both Solutions Are Power and Women Grow Business.

Here is some her best stuff from Solutions Are Power:

Web 2.0 in mostly plain English: a workshop take down

Obama’s White House: forecasts & challenges for digital America

Ego surfs and action plans: your roadmap to transparency

Best of Joe Loong – “King of the Subject Line”

Joe knows how to write a catchy subject line. So much that most of his posts stay in the top read posts. You might call that search engine bait but we call it good content. Joe joined around the same time as Jill and has written some really informative and timely stories as well as providing great coverage of our local events.

Here are a few of his golden “SEO bait” posts:

Fake Your Way to Being a Social Media Expert: Strategies for Keeping Up

Stupid Link Tricks: A Daisy Chain of URL Shorteners

5 Stories of Twittering Gone Bad

Using Bacon and Social Media to Promote Your Business

How to Write Catchy, Clicky Blog Headlines

Looking to the Future

As we begin our journey writing our next 500 posts, we have two new bloggers that will be gracing our pages in the next week. They are Ken Yeung and Michael Dougherty.

Ken Yeung – “Mr. Everywhere”

Ken is someone I have known for about three years and while he was here in DC he was always the guy with a camera taking really awesome photos that showed up on his Flickr feed. I saw him at almost every event and I called him “Mr. Everywhere”. Now that he is living in San Francisco, I consider him our new West Coast blogger and correspondent. Most importantly he is a great writer and brings a new perspective along with new topics that this blog has been looking to expand into for a while.

He has a great marketing background and will be writing about online marketing, and because he is on the west coast, covering events in that region to expand beyond the many DC events you have read about.

Michael Dougherty – “Wicked Java”

Mike AKA “WickedJava” is a long time entrepreneur, marketing expert and social media guru. He has worked on the marketing agency side as well as in corporate marketing departments for large and small firms. His perspective for small business owners on navigating the online and offline worlds of branding, print, web design and social media has been a missing element here and one frequently requested by readers.

In his other life, Mike is also a budding film Director and accomplished screenwriter. In the interest of full disclosure, we are both co-founders of a non-profit film production company called Big Damn Fan Films that is about to begin principal photography on Browncoats:Redemption, a project that is based on the Firefly/Serenity universe created by Joss Whedon. The project will raise money for five select charities and will be released in Fall of 2010.

Our experiences using Social Media and Marketing might be a topic of discussion once in a while but only in the interest of lessons learned that we can pass on to our small business/future entrepreneur readership.

We are excited to have these two new team members on board and the future is looking extremely bright.

The Future Looks Bright

Thanks for coming to the blog, being a regular reader and growing with us. If you found us for the first time with this post, please subscribe because we are only getting started. We are committed to bringing you relevant, informative and CCC content we hope helps you grow your business. We are partners with you in this journey and if there is any topic you want to hear about, please let us know in the comments.

See you at post #1000…

Original Post:

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and get nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cash flow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and lets you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

- Have six months of payroll for that person in the bank on top of your salary

- Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

Update, One Year Later:

When I read that post I reflect on the mistakes of past and having had a business through the dot com bust and subsequent recession. Granted, it was not as deep or as long as this one, but the word that comes to mind is, balance. And while it holds true that you need to pay yourself first before you keep growing, the original post was written with the tone of growth and not reduction which may be more likely these days.

When you are growing you are tempted to throw caution to the wind and sacrifice your pay in order to hire that extra person that keeps the idea factory turning out wonderful widgets. When times are good and the sales are going upward, your risk threshold increases. When times are tight, you might feel like you are holding on with your fingertips to a 5,000 overhang below you and no way to see up over the ledge. In these cases, it is natural for people have a tendency to pull WAY back into their shells and not hire when they know they need to or lay people off in order to stay cash positive. In this case, you might sacrifice your entire salary to keep people on board. While this might sound noble, I have done this and it usually ends badly.

This is where the word “balance” comes in.

You can only go so far to reduce staff and pile tasks up on people that are probably already overworked, but cutting down too much can keep you from potentially delivering to clients in the end making things worse. Look to reduce costs in other ways, like office services you may not critically need, or ask if people would volunteer (including you) to take a 5% pay cut so we can keep everyone and deliver at the level of quality clients have come to expect so we can keep our clients happy and ride out this recession together.

Now, I am a sucker for great design and great branding. To me it sets you apart from the tiny businesses that don’t invest in a good branding package from the beginning. Granted, there are many companies that are totally word of mouth and don’t really need it in their particular business so a basic card will do just fine.

However, there are many professions where people will judge you, knowingly or unknowingly, by your presentation and your business card, along with your attire and attitude will convey this to potential clients. Some great business card designs and other inspirational designs, many of which don’t meet the test in the original Business Card FAIL post, are useful in the right situation.

So I have to take back adjust much of what I wrote in the “Business Card FAIL” post and approach this from a different angle.

So here is some updated advice to ensure your business card doesn’t get thrown out:

1.) Tell me what you do. Quickly.

I like this from the original post:

“Business cards are supposed to have the usual information – name, address, e-mail, title, phone, company name. To make some real impact, you should use the space on the front of the card to have a single statement below your company name that is your main marketing message. For example “Next Generation in Sales Software” let’s me know you are innovative, provide sales software and are a tech company. Simple.

You can also use the back of the card for this too but don’t jam it full of sentences or a big paragraph. 2-3 sentences at most and it should build on the marketing message you have on the front. You can also use the back for the marketing message itself to change it up a bit.”

I have a friend that uses the traditional back of his business card. He hands it to them with the back facing up. Very smart and very memorable.

2.) Don’t jam your web site onto your business card

Ever been on a date and the person tries to tell you their whole life story in between breadsticks and dessert? Same thing. This is in the same vein as number one but I had to say it again.

3.) You can be cool, but be relevant to your audience

In my original post I really bashed cards that went outside the box and I really should take that back. Nothing bores me more than getting a Times New Roman 12 point font business card and although they are probably very competent and very nice, they don’t stick in my mind when I might need them or want to recommend them.

What I really didn’t get into last time was the most important – Know your audience. People will expect a certain thing from you and if you push the envelope just a little bit it will work beautifully. If you go to far they will think you are trying to hard and throw your card out.

4.) If you use funky materials, have a purpose

I love great looking cards and there are some really creative ways to use a business card. My original post really judged a bad business card if I couldn’t write on it. Now some business cards are just really out there, but I have seen cards that fit the business and the approach really well. My dad, who has been in business for 32 years runs an engineering firm and their cards use the same materials (mylar) they use to create the master drawings for blueprints. Very cool and unique.

5.) Your LaserJet does not count as a professional printer

For those of us that remember dot-matrix printers and doing our term papers with them it really couldn’t compare to the LaserJet that your parents had at the office that was all sorts of sexy. If you were able to get them to print it out for you at work (if you didn’t wait until the night before) it looked awesome and might give you a couple of extra points for a good grade. Same thing here. Now everyone has color a LaserJet and thinks they are a print shop. Not so fast dude.

This is where professional printers are worth their weight in gold and will make your beautiful design look fantastic on the right card stock. Think about it. You spent a lot of money on a logo and an design and you print it yourself? I don’t think so.

6.) Make sure it works on a card scanner

If you get alot of business cards these days, you probably use a business card scanner or your assistant does. For many people, if it can’t scan they will toss it instead of typing everything in manually. This is the risk you will run using the more funky and edgy types of cards. Hence, you are warned.

7.) And for goodness sake, get a domain name and a PROPER email address

I like this too from the original post:

“Nothing says “amateur” than using a Yahoo/Hotmail/AOL/Gmail e-mail address as your main address. I mean come on, a domain name and hosted e-mail account is not expensive these days. The biggest perpetrators are usually those trying to be “consultants” but have a day job and this is their side thing or they are just starting out and haven’t talked to one person about marketing.”

With all the new laid off workers going freelance and doing the consulting thing, this an excellent way to show that you are in it to win and build a business. I do make an exception if it is your personal business card and your are using it to find a job. Still there, I would recommend that you get your own domain and put your CV up there and market yourself in the same way.

We want to hear about your bad business card experiences

Since there are so many bad business cards out there I couldn’t capture the sum of things that you my reader have probably seen. Please use the comments as your place to be funny, trash bad business cards and most of all call people out on their bad business card protocol.

So I thought about what I might call it and ironically I came up with the name for this new series in 2009 as “Rules for Entrepreneurs”.

So if you don’t like the term “rules”, think of these as “lessons learned” or “suggested guidelines” that might make you avoid some of the mistakes that I made as an entrepreneur.

And boy did I make my share of mistakes as an entrepreneur. It will be 10 years for me next June as an entrepreneur and I have learned many things the hard way. For every entrepreneur, there is a passion to create something from nothing and see through on a vision that most people don’t believe in, can’t see or just want to kill because they can’t do it themselves.

Still this, umm.. stubbornness or what we will call “determination”, puts us at odds in listening to lots of people who think they know everything and what is best for you. I don’t know what is best for you but if you can see patterns or recognize things that you are doing that might be putting you on the road to mistake city, I ask you to take notice.

This series is for all the entrepreneurs out there that will read some of these rules or lessons and say “I remember doing the same thing” and if they are lucky, they will say “good advice, I am gonna avoid that”. It will cover things like hiring too fast, what not to do with your business card, what your web site should really be saying and managing expenses the right way to name a few.

I will be writing this series here and cross-posting over on our sister site, MySolutionSpot.com. I will be writing the core series in a rapid fire set of posts over the next few weeks and once a month there will be an evaluation of putting this kind of plan into practice and tuning it along the way. In this manner, I hope to engage all of our readers out there to contribute their lessons learned and advice on building a successful marketing plan.

I hope to hear from all of you on rules you have created and lessons you have learned so that all of us might learn something new that might be costly in the future.