BUSINESS CASE FOR THE CARING ENTERPRISE COACH

So now I’ve put together the Business Case for the other business I announced back then, called The Caring Enterprise Coach. I’ve been speaking lately with several university professors, and they have all urged me to move ahead with this and put Meeting of Minds on the back burner. I haven’t decided what to do. If you have any thoughts, I’d love to hear them. Here’s the Business Case for CEC:

Entrepreneurs are the Critical Drivers of our Economy…

Large corporations in most Western nations destroy more jobs than they create. They grow by acquiring competing and emerging businesses, and offloading the redundant costs and labour. They grow profitable by doing more with less: by downsizing, outsourcing and offshoring. Governments and public sector enterprises are also downsizing, and ëprivatizingí (selling operations and public assets to the private sector, usually at a low price, and with no requirement that the private buyer retain staff).

As a result, entrepreneurial business is the only sector of the economy that is actually creating jobs, according to the US Census Bureau. Therefore, if unemployment is not to skyrocket, and unless Western governments have a complete change of heart and embrace a guaranteed annual income and other measures to sustain a healthy economy with continually declining employment, entrepreneurial business needs to create new jobs at least equal to the entire growth of the labour force ñ 150,000 people per month in the US, 15,000 people per month in Canada, per Census Bureau statistics. These businesses already employ more than half of all American workers and over 70% of all Canadian workers.

… And They Urgently Need Better Advice and Support

Currently, entrepreneurial businesses fail at an astounding rate ñ 18% of the larger entrepreneurial firms (those with employees) fail each year, and fewer than half survive four years, according to the US SBA. The failure rate for proprietorships (those with no employees) is much higher still.

A contributor to that failure rate is the difficulty in obtaining, and the high cost of, operating capital. The SBA says that over 80% of entrepreneurial businesses use external capital of one kind or another (bank loans, lines of credit, venture capital) and that over half of this is high-risk (unsecured, credit card, or debenture debt), with commensurate high costs (usually 20-40% per annum). The philosophy of governments in recent years has not been to tax-subsidize or provide preferential-rate funding for small enterprises, as compensation for the value they provide in the economy as employers. Instead, support for small business has been largely limited to attempts to lessen their regulatory burden, which hits small business much harder, proportionately, than large corporations.

For many years, the most common reasons for entrepreneurial business failure have been (a) poor management, and (b) running out of operating cash. Fewer than 10% of entrepreneurial failures actually result in bankruptcy, which is an indication of the business acumen and flexibility of many entrepreneurs: They know when to pull the plug before it’s too late.

What is urgently needed, therefore, is:

1. Flexible, customized, timely, inexpensive training in small business formation and management for existing and prospective entrepreneurs (and for all young people before entering the labour force);
2. Individual, knowledgeable coaching and counselling for entrepreneurs to help them with critical business decisions;
3. Financial counsel in the affordable acquisition of operating capital, and the effective management of that capital; and
4. Tools that allow entrepreneurial businesses to tap into people and resources that can help them develop and sell their products and services, and achieve their objectives.

The Caring Enterprise Coach fills this need.

Traditional Sources of Help Aren’t HelpingÖ

Business schools tend to look at, and teach, entrepreneurial business management as if entrepreneurial businesses were just scaled-down versions of large enterprises. They aren’t. The following chart shows just a few of the enormous differences between entrepreneurial businesses and large corporations:

Business education teaches how to manage business units of large, established organizations: organizational structure, organizational behaviour, the hierarchies and politics of size. Most business educators don’t know much about new business formation, or how to manage a business when one person, or a handful of people, must make all the critical business decisions ñ decisions that people moving up the ranks of large corporations don’t have to make for years (if ever) ñ until they reach the C-suites. They also don’t know much about sources, negotiation and management of the types of capital that are critical to business formation and entrepreneurial survival. Going over budget in a large corporation is a career limiting move. Going over budget in an entrepreneurial business is, usually, game over.

Although business schools are now starting to teach about innovation, it’s still through the large company lens: It’s about how to connect the R&D department to customers, how to re-engineer processes and build the search for creative talent into the hiring cycle. It’s not about how to make every one of your small team of people more innovative, in down-and-dirty practical ways.

Consulting firms, and big accountancies, aren’t interested in entrepreneurial clients, so they’re content with business education as it is now, and they’ve developed skills that apply almost exclusively in large corporate environments. So there’s little opportunity to acquire the critical skills of entrepreneurship in business schools or from consulting and financial service advisors, or from their alumni. It’s not surprising that entrepreneurial associations have been so popular ñ only other entrepreneurs really understand the problems and challenges of, and can offer advice to, entrepreneurs.

Ö And Traditional Methods Won’t Work in the New Economy

Our economy is rapidly changing. The old mantra of perpetual growth at any cost is socially dysfunctional ñ wrecking the environment, worsening employment, widening the disparity between rich and poor, worsening labour conditions, under-employing over half the population, lengthening the work day, burning out managers, and turning managers and employees alike into unhappy, overworked, unfulfilled wage slaves.

That economy benefits only the very rich, and it is completely unsustainable even if we wanted it to continue. There is a broad consensus that we need to move quickly to create what Harvard University professor Shoshana Zuboff has called ìThe Support Economyî and what University of Toronto professor Mark Kingwell has called ìThe World We Wantî. We are waking up to the realization that the perpetual growth of population and markets that the old economy demands is not only impossible, it’s suicidal. We are realizing that GNP and the level of the DJI and TSX indices are not evidence of prosperity, but rather of the degree to which we have degraded our environment and mortgaged our children’s future for short term and illusory financial gain.

Even if for some reason we did not want to transition from the old ëgrowth at any costí economy to the new sustainable economy, that transition will inevitably occur in our lifetimes anyway ñ we are running out of the resources ñ cheap energy, water, land, and new markets ñ that have allowed the old economy to continue as long as it has, and global warming and other consequences of the old ëgrowthí economy now threaten our whole civilization, and will require fundamental economic restructuring.

These are the attributes of this new economy that are emerging even today:

This new economy will be fertile ground for entrepreneurial businesses, since they are much more flexible, less resource-dependent, more efficient, more innovative, and less dependent on growth for their continued success.

What’s even more important, the maximization of profit, and growth, have never really been the ultimate purpose for forming most entrepreneurial businesses anyway. Many entrepreneurs leave the ërat raceí because they are not fairly treated, because they hate their work and/or their boss, because they are working too hard, or because they are bored. Many more would walk away and create their own entrepreneurial businesses if they had the self-confidence, skills and training to do so. It is a tragedy that many entrepreneurs have ended up emulating exactly the large corporate model that they despised as an employee, and are just as unhappy, just as unfulfilled, and often more stressed and poorer than before ñ and ironically also hated by their employees.

This is Where We Come In

The Caring Enterprise Coach offers a different model, built on a completely different set of assumptions and drivers ñ the ones that really matter to you ñ and a model that is attuned to the emerging needs of the new sustainable economy, rather than the fruitless, unachievable and destructive goals of the old one. Whether you’re ready to establish a new sustainable enterprise, or to transform your old, unsatisfactory one into an enterprise that finally works, according to your standards of what’s important and what is ësuccessí, the Caring Enterprise Coach can help. We appreciate that entrepreneurial decision-making is a complex act of balancing conflicting objectives ñ personal, family, social, and financial. And when the entrepreneurial venture is a partnership of equals, each with a different set of objectives and needs, the complexity is multiplied, and the counsel of traditional business advisors is generally next to useless.

The Caring Enterprise Coach is a collaborative enterprise of independent consultants, technologists, trainers and retired entrepreneurs. Our members are equal partners, each with unique and specialized skills essential to the delivery of our offerings. We have no hierarchy, no physical assets, no front or back office, no overhead, no bureaucracy, and no employees. Our assets are the shared intellectual assets of our members ñ expertise, skills, experience, networks – and the leading edge tools and technologies that they have developed and contributed for our collective use. We bring agility, economy, efficiency, and, through our powerful independent networks, reach and depth, that no limited, hierarchical, traditionally-trained professional services firm can match.

And we have a unique understanding of the different needs of entrepreneurial businesses, because we are, and have been, entrepreneurs ourselves, and we have substantial experience catering specifically to the needs of entrepreneurial businesses.

We take a completely different approach to providing business advice from that of the big consultancies, or your accountant or tax advisor. We appreciate that you need expert counsel more than big corporations, but have a much smaller budget, so we’re creative in how we provide services to you. We use a mix of three types of solutions to help you:

• Inexpensive training programs that you can take whenever and wherever you like, at your own pace;
• Low-cost, powerful tools, models and templates that help you manage your business and strengthen your business connections; and
• Personal coaching and consultation, using a variety of communications media to minimize travel costs.

Our approach is holistic ñ we help you map out a business strategy for the entire life-cycle of your business, from formation to wind-up or sale, and provide expert advice on managing your business through each stage in this life-cycle, using each of the three types of solutions noted above, and including:

• Developing a Formation Plan for the new business, including a Life-Cycle Transition Plan and assessment of the appropriate Business Model for your enterprise;
• Identifying the critical skills you need in business partners, and helping you identify and attract partners with precisely those skills, people who you would enjoy making a living with;
• Developing a flexible Business and Marketing Plan for your enterprise, including a Capital Plan and Cash Flow Budget (that doesn’t require you to compromise your personal objectives to meet your financial requirements);
• Developing a dynamic Statement of Objectives and Operating Principles that reflects your, and your partnersí, objectives for founding your enterprise, and which will guide decision-making as the enterprise evolves;
• Introducing a Networking Program supported by state-of-the-art Social Networking and Collaboration tools, to identify optimal customers, suppliers, business partners and advisors who can help your enterprise achieve its objectives, and work with them effectively and virtually between face-to-face meetings;
• Helping you put together an Advisory Council of qualified and experienced experts to help you with the tough decisions;
• Providing inexpensive online coaching and counselling, on both an as-needed and regularly-scheduled basis, to ensure you and your enterprise partners have all the skills, knowledge and expertise you need to achieve your enterprise’s objectives; and
• Introducing continuous innovation processes and tools to your enterprise that will keep your enterprise’s products, services, processes and technologies current and leading-edge.

We are extremely creative in developing a model for your new or soon-to-be-transformed entrepreneurial business that meets your personal needs and works for you. We don’t use formulaic business creation or business transformation methods. We assume nothing – We start with a blank sheet of paper and listen to your answers to some very fundamental questions, starting with ìWhat is the purpose of your enterprise and what do you personally want to get out of it?î.

As we work through this highly personal, flexible, open-minded review of your needs, you may be surprised at the model for your enterprise that we build together. You may find, for example, that:

• Your enterprise may not need to be incorporated, with all the red tape, regulation and rigidity that usually entails;
• Your enterprise may not need outside capital ñ it is less risky and cheaper to finance your business internally, and although it takes patience and discipline, it increases your autonomy and chances of survival in an economic downturn;
• Your enterprise may not need to have a physical ëofficeí: Customers often prefer meeting at their own premises, and some brand new technologies can make your office ëportableí so you can work from anywhere, and can make virtual meetings much more effective than they used to be ñ the virtual equivalent of face-to-face without the travel cost;
• Your enterprise may not need the traditional, expensive marketing tools ñ brochures, advertisements, business cards etc. ñ new viral (word of mouth) marketing techniques may be much more effective, and less costly;
• Your enterprise may not need the traditional sales paperwork ñ contracts, invoices, purchase orders, statements, timesheets etc. ñ to be able to generate and collect revenue, and keep you and your customers happy; Western business has much to learn from Eastern business about straight-forward, mutual, low-maintenance business transacting ñ what we call the ëCustomer Handshakeí process;
• Your enterprise may not need any employees ñ it may make more sense (and be cheaper) to minimize and contract out the office and administrative tasks of the business, so that you and your partners can focus full time on the real business of the business, the things you do well, with absolutely zero hierarchy and no ëHRí hassles;
• Your enterprise may not even need any customers ñ in some cases, entrepreneurial businesses can offer each other reciprocal benefits so that mutual supply partnerships replace supplier-customer relationships.

This approach is built on the work of Charles Handy, the renowned British management leader and consultant who has, in his later life, devoted himself to advancing the science of entrepreneurial management, especially leading-edge entrepreneurial businesses that he calls existential enterprises, since they are not established for and do not operate strictly to maximize growth and profit. These enterprises have a deeper purpose ñ fulfilling the personal objectives of their owners.

These owners/partners may even agree to a deeper social commitment to each other, as they make a living together that fulfils each partner’s unique and personal purpose: They may choose to accept responsibility for each other’s well-being. In such enterprises, each partner has an equal say, unanimous agreement is required on all key decisions, and to admit a new partner or expel a partner, and each partner brings critical, non-redundant skills to the enterprise. Although such intimate entrepreneurial arrangements are not for everyone, they make for very powerful and rewarding organizations, and they are one of the options that The Caring Enterprise Coach can help you consider, and if appropriate, implement.

We recognize, as many entrepreneurs do, that there’s more to making a living than endlessly growing profits, working too hard and too long, taking constant risks, struggling to satisfy unreasonable creditors, shareholders and customers, and being a wage slave or an employer of wage slaves.

Bottom Line: You Need the Caring Enterprise Coach if:

• You want to set up a new entrepreneurial business, and have no or limited experience in new business formation, OR
• You have an entrepreneurial business, but it’s struggling, not personally fulfilling, or in need of expert advice to enable it to achieve its true potential or objectives

Product & Service Offerings of the Caring Enterprise Coach

• We provide entrepreneurs with holistic new business formation services, business transformation, business diagnostic and business innovation services at a flat, affordable hourly rate ñ and we tell you in advance how many hours each project will require;
• We provide entrepreneurs with periodic and on-demand personalized coaching, training and advice, on a retainer basis, at this same flat hourly rate;
• We provide two modular training programs called Entrepreneurship 101, and Innovation for Entrepreneurs, including live Q&A and one-on-one workshops, in association with several post-secondary educational institutions, that are available in several formats, so they can be taken at your convenience and at your own rate;
• We provide a variety of software tools and templates that can assist in the effective formation and operation of entrepreneurial businesses, at a modest cost and as part of the services noted above, including:
•    New Business Formation Plan
•    Life-Cycle Transition Plan
•    Business Model Selection Template
•    Critical Skills Assessment Workbook
•    Business & Marketing Plan
•    Capital Plan, Sourcing Plan and Cash Flow Budget
•    Statement of Objectives & Operating Principles Template
•    Networking Program
•    Expertise Finder
•    ëSimple Virtual Presenceí Tool
•    Viral Marketing Program Workbook
•    ëCustomer Handshakeí Program Workbook
•    Innovation Amplifier Assessment Tool
•    Personal Balanced Scorecard

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