Archive for the ‘Homework’ Category

5 Exceptional Lessons from Avalon
December 18, 2007

Jackie Victor and her partner had no business experience and weren’t bakers, but they formed the right relationship with the earth, the community, and their employees and have now been successful for over 10 years. Though, they have learned several lessons along the way. They learned to do your homework, start small, have a value based business, provide something exceptional, and think outside of the box and be bold.

Lesson One: Do your homework.

For Jackie and her partner, this meant to write a business plan. “The clearer your intentions, the clearer your outcomes,” she says. Setting goals helps guide your business.

Lesson Two: Start small.

Build as you see demand, and not before. Jackie and her partner paid themselves since day one, but only modestly in the beginning.   They always follow their gut.

Lesson Three: Create a value based business.

Jackie highly recommends “The Purple Cow.” Not only is it a great book, but a very popular strategy. This is about viral marketing. Find the people known as “sneezers.” These are the people that “sneeze” wonderful words about your business to others. They actively spread the word. First you must create a core of devoted followers that share your values. Jackie personally prefers Detroit customers. She says they are the best; second to none.

Lesson Four: Provide something exceptional.

People believe people that talk about your business more than they believe you or a paid advertisement. Find out who your “sneezers” are and provide exceptional products and services. Then keep reinventing the cow. Keep doing exceptional things. “Exceptional Detroit businesses don’t go out of business,” she says.

Lesson Five: Think outside of the box and be bold.

Think outside your familiar areas. Move to unexplored territory. Be brave. Set your values high and value them. Also, the press is far more important than paid advertising. It is “earned media.” By doing exceptional things you can earn the media.

These are the 5 lessons that Jackie and her partner learned along their 10 year journey at Avalon.  Jackie believes that if you truly keep these lessons close to the heart that you will have a flourishing business… especially in Detroit.

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Canine To Five
November 21, 2007

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Liz Blondy says starting Canine To Five was the best thing that she has ever done. She didn’t enjoy working for someone else and she didn’t feel that she had enough self discipline to work from home. She began visiting doggy day cares, researching the industry, volunteering, and she even researched everything to know about dogs. Since she didn’t have the initial investment for a franchise and didn’t want to have marketing guidelines and facility layouts to follow, she created Canine To Five.

One of the most difficult things Blondy has had to deal with was employees. Her one regret is not having become more familar with employment law. “With employees you must cover your butt every step of the way,” she says. Blondy has even began having her employees sign non-compete clauses. However, while surviving many difficulties, Blondy has managed to grow her business to over 10 employees.

Another thing she has learned along the way is that you don’t have to take every opportunity. Although they may all seem appealing and increase revenue, you must stay focused. Decide what will be most profitable and what will coincide with your core business. It’s much more important to have one or two strong, main revenue streams that are clear to the customer than to dilute your business with many weak ones. One mustn’t lose focus.

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The Purrfect Entrepreneur
November 18, 2007

Entrepreneurs view the unmet needs of consumers as opportunities, not problems. And that is the reason why Robert Mazur has been awarded an immense amount of recognition and grants recently. Mazur noticed that his grandmother was having difficulty opening her medication bottles, so he began searching for a solution. And that is how the Purrfect Opener was created. Mazur took advantage of his background in engineering and many other resources including local colleges. He soon created designs, met with consultants, created rough prototypes, and surveyed consumers. He also attended trade shows and talked to many people in the industry. In addition, he took plenty of safeguards with a patent and trademark. And with much dedication and the help of his brother, he introduced The Purrfect Opener in 2005.

Now in order for Mazur to meet his expectation of becoming a leader of “Healthcare Brands for Independent Living,” he needs to focus on getting his product in front of the people who want it. Mazur advices being the leader in whatever it is that you do. He says it will in turn motivate you and give you the edge needed. “Even if it’s for your product in a 30 mile radius, always try to be number one,” he says. “Always keep moving and improving and you will meet your goal.” Mazur is currently building distribution channels through Meijer and QVC, and hopefully with his passion and dedication to learn and grow, he will soon be the leader.

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No Need To Re-Invent The Wheel
October 18, 2007

Lisa Toenniges is a classic example of how you don’t have to recreate the wheel. Toenniges is the CEO of Innovative Learning Group, a company that provides custom training to large companies. Toenniges took an existing company that had just sunk, and helped it to resurface. She brought to the table her passion, dedication, and expertise in the field. She applied her past leadership experience from high school teams. Toenniges turned the company around in a matter of months. Within 2 months, the company was profitable. She expects that Innovative Learning Group will be a $3 million company by the end of the year. But most importantly, her vision for the company is to grow steadily and profitably.

Lisa Toenniges realized that the secret is that people really want that personal touch. So she does everything she can to provide her customers with that. She understands her customers’ fiscal year, finds out what they foresee coming, and understands how they are budgeting. She uses this information to get in on their planning process. She attempts to foresee their next set of needs. She is always ahead of the game. She takes her customers to lunch and out for drinks, hosts picnics, and stays in touch through friendly emails. She even “gumps” the company language, making what they do for their customers particularly easy for them to understand. Customers say that working with Innovative Learning Group is like working with their friends.

Shopping Made Easier
October 13, 2007

Have you ever wished that you could shop through a virtual aisle at Target? Have you daydreamed about having a device that could follow your every glance and a handle that you could push forward for a video to simulate your progress down the aisle? Well you must wait no longer. Kimberly-Clark has developed this exact tool. Kimberly-Clark designed these virtual shopping aisles to “better understand consumer behavior and make the testing of new products faster, more convenient, and more precise.”

This tool has many uses. For example, it can be used in presentations to executives in bids to win shelf space. Don Quigley, Kimberly-Clark’s president of consumer sales and customer development, used a another great example: “What if you just spent a lot of money on a package’s shade of red but it doesn’t look good in their store?” he asked. “This is where you can spot that before you ship a single case of product.”

It also allows researchers and designers to receive quick results on new products without having to stage real-life tests in the early stages of development. It’s a great way to test ideas faster, cheaper, and better. It allows you to do the research somewhere other than an actual test market which avoids tipping off competitors early in the development process.

I think it’s a fantastic idea and will be a great way to get products on the shelves. However, my concern is that there will soon be no stores for consumers to visit. I foresee only large warehouses with employees that do the shopping for you once you put everything in your virtual cart. And consumers will then pick up their bags from a small pick-up area.

I’m afraid I won’t be able to flip a box over for nutritional ingredients, shake the Pringles to find the container with the fewest broken chips, or shuffle to the back of the shelf to find the freshest milk. What happened to the nice old ladies that reminded me of my grandmother that would offer wonderful smelling samples at the end of the aisles? It began with the adandonment of samples and I’m afraid it won’t end with anything short of the complete elimination of shopping all together.

It will more difficult to try new things from a virtual aisle. And what happens to the kids that are used to riding on the end of the cart and grabbing every package of junk food they can when Mom isn’t looking? Although this technology can bring a lot to the table to contribute to more efficient research, I’m afraid that this will bring us one step closer to a technology catastrophe.

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.                                          The Wall Street Journal

.                                   Make-up Blog from Wednesday

“Wealth Phenomenon”
October 12, 2007

Dan Gilbert was in class last week and brought up an interesting subject. We had a long discussion about the “wealth phenomenon” as he calls it. So how is wealth created? Dan actually used a great example.

Pretend James has $10,000 and Antonella has no money, but paints a picture. If James buys that painting from Antonella for $10,000, there is now $20,000 of wealth between the two. James has a $10,000 painting and Antonella has $10,000. In this scenario, $10,000 of wealth was created. What a phenomenon.

The 25th Anniversary issue in Forbes of the “400 Richest People in America” further captivated my interest on the subject. Dan Gilbert was mysteriously one of the 57 that got knocked from this list. Next to his name says “Richer than last year, but can’t keep up.” If Dan Gilbert was #384 with a net worth of $900 million in 2006, how did he get booted from the list a year later with a net worth of over $1.2 billion? The answer is, “one billion dollars is no longer enough.” In order to make it on the Forbes 400 list this year, one’s net worth must be $1.3 billion. So if you’re wondering how the net worth of this list miraculously rose $290 billion from last year, it’s a wealth phenomenon.

It really is amazing when you think about it. These billionaires created their own wealth. William Pulte created wealth from building homes. For example, he would take $150,000 in materials and $150,000 in labor and build a home that would sell for $600,000. He doubled the wealth.

In 1982, the minimum to get on the list was less than $500 million and the total wealth was $200 billion. Today, the minimum to get on the list is $1.3 billion and the total wealth is $1.5 trillion.

In the same respect though, wealth also disappears. For example, the value of my investment property has decreased about $100,000 in a year’s time. There are 26 properties within the subdivision that have each decreased the same amount. On this block alone, $2.6 million worth of wealth has simply disappeared. The disappearance of wealth is just as amazing to me as the creation.

Not only does this wealth magically appear and vanish, but it constantly shifts. Oil and manufacturing fortunes ruled the first Forbes 400 list 25 years ago. These days “Wall Street is King.” More than one-quarter of the fortunes on this year’s Forbes 400 are from finance and investments. Nearly half of the 45 new members made their fortunes in hedge funds and private equity.

Where will tomorrow’s wealth be?

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.                                                       The Forbes 400

.                                      Make-up Blog from Monday’s Class

Do The Right Thing: Money or Ethics?
October 12, 2007

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The Chairman and CEO of Countrywide Financial, Angelo Mozilo, is currently being investigated for insider trading. He has cashed in $138 million in stock options and switched his trading plans multiple times as the mortgage company tumbled. He began a stock sale plan in October 2006 in a manner designed to protect him against accusations of insider trading. But Mozilo raised the number of shares that could be sold on two different occasions. The first time was in December 2006. Shares were over $40 and he almost doubled the shares he was able to sell per month. He did the same thing in February when they hit a high of $45.03. Mozilo sold 4.9 million Countrywide shares right before the market fell apart. Since then, shares in Countrywide have fallen to less than $19, and the company announced that second-quarter profits had declined by 33%.

Although we are still unsure that the timing of these sales and the changes to his trading plans were a mere coincidence, there have been many thoughts. According to Thom F. Carroll, a financial planner, “If a guy is changing his plan around so often in a short period, I would think that would send up a red flag. I wouldn’t allow my clients to do it.” However, Sandy Samuels, Countrywide’s chief legal officer, said “The trading plans were put into place in consultation with Mr. Mozilo’s financial adviser, without regard to any non-public or market information.”

The question whether it was illegal insider trading or if it was in fact “in accordance with company policy” has yet to be answered. However, it is clear that Mozilo did not “do the right thing.” Mozilo sold millions of shares right before Countrywide’s stock plunged.

Ironically, Barron’s listed Mozilo as one of the 30 most respected CEOs in the world for the past three years. Mozilo is very well respected and has won many awards. So, why would such a wealthy and well established man unethically, and borderline illegally, risk it all?

I think Mozilo’s choice to manipulate his trading plans to cash in just as the housing crisis was escalating and Countrywide’s stock was dropping was a mistake in itself. He lost all credibility and has brought a lot of negative publicity to the company. This will hurt both him and the company drastically.

The company recently said it will eliminate as many as 12,000 jobs in the coming months and its stock is down more than 50 percent from February. But, I think the most detrimental part will be Mozilo facing the unethical decisions he made. He simply can’t take these decisions back. When the sub-prime market does recover, his decisions won’t be forgotten. I believe Countrywide can recover, but Mozilo’s decisions will haunt him for a lifetime.

.                                                 The Times Online

.                                 Make-up Blog From Tuesday’s Class

Hangin’ by a String
September 26, 2007

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I’ve heard it from Dan Gilbert, Magic Johnson, Dave Bing, and many more: Customer service is a must. Everyone says how important it is, but Mike Himes can vouch that customer service is the only thing that has kept his business from going under.

Between the very steep discounts from big box stores and the music downloading over the Internet, small record stores have been struggling to stay open for years. It is continuously becoming more and more difficult. According to the research group Almighty Institute of Music Retail, over 2700 record stores have closed since 2003. According to an article in the Detroit Free Press last month, over 70% of music sales now take place in big box stores such as Wal-Mart and Best Buy, which have a much more limited selection. Himes has used this information to focus on some of the best practices he have recently learned about. Himes has acknowledged the brutal facts and applied his energy toward getting to know his customers, offering excellent customer service, and re-framing his target market.

First Himes really stayed close to his business, noticing certain purchasing trends between his two stores. His Ferndale locations attracts Detroit techno fans, meanwhile his Roseville location attracts the rap and hip hop lovers. So, as Dave Bing suggests, Himes gives the customers what they want, so they don’t go elsewhere. Himes says he looks beyond what he can’t control and focuses his attention on who comes into his stores. And as we learned, it’s a lot easier to retain your current customers than to attract new ones.

Once he gets his customers in the store, he always provides an experience with great customer service. “We do the song and dance and treat people the best we can,” he said. He went on to talk about how you won’t get that over the Internet or in Wal-Mart. He personally makes sure his customers leave happy.

And finally, Himes restructured his target market. His target market, once being the average music lover, is now the “super fan.” The super fan is someone that still loves music in its physical sense. These serious music fans “want to own everything, even the hard-to-find music that chain and big box stores don’t carry.”

Himes realized that his market was quickly being introduced to more appealing options. So focusing on customer service and the appropriate target market may have been the wisest decision that he could have made. Himes now not only offers music, but he offers a great experience. He has also realized that the Internet is soaring, and in turn expanded its web presence, now offering a web based store. Himes in now looking for a smaller location, due to his drop in sales, however he is still hangin’ by a string.

. . . . Replacing the guest speaker from September 25, 2007 . . . .

. . . . . . . . . . Source: Oakland Business Review . . . . . . . . . .

“Budda Bing!”
September 21, 2007

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Dave Bing, a former Detroit Piston, was named one of NBA’s 50 Greatest Players of all time.  But his career didn’t stop there.  He went on to become a successful businessman and the founder of the Bing Group (http://www.binggroup.com/).  The Detroit area manufacturing company supplies automotive parts to suppliers.  The Bing Group is a “certified Detroit-based minority business enterprise dedicated to uplifting the community.”

Bing was born in Washington D.C. and it wasn’t until his days in the NBA that he was introduced to the city of Detroit.  Initially, Bing had the same pessimistic view of the city as did many others that weren’t from the area.  But it didn’t take long for Bing to call Detroit “home.”  Bing quickly established a passion for the city and wanted to be a part of the revitalization of Detroit.

Bing was also introduced to a world of business knowledge during his days as an athlete.    He learned the importance of teamwork.  He learned how to maximize his skills and integrate his teammates’ skills.  He knew to appreciate the skills his teammates brought to the table.  He was taught to surround himself with the skill level that he didn’t have.  Just as he needed a “center” on his sports team, he needed a “financial officer” on his business team.  “You can never forget how important your teammates are,” emphasized Bing.

In addition to surrounding yourself with the right people, Bing feels strongly about several other best practices.  Bing strongly suggests developing a business plan in the beginning.  However, he doesn’t believe in a 5 year business plan because things change so quickly.    He also believes in the importance in mentorship.  Mentors provide a person with a lot of insight and guidance.  A person must also have good contacts.  “Getting to know people with money is very key,” says Bing.  But the most important thing is people skills.  You must have employees that can get along.  Plus, people do business with people.  Every teammate must have people skills in order to excel. 

Bing believes that if you apply these business concepts and find an opportunity, you must jump in with both feet.  “Never be afraid to fail.  Your dreams and visions are achievable, so go after them,” he says.  “Entrepreneurs can shine during times of transition,” says Bing.  And this is our time to shine in Detroit.  

John Ferchill
September 16, 2007

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John Ferchill, CEO of The Ferchill Group, shared some of his wisdom with us last week. People that know John Ferchill say he’s tough, delivers on his word, and gets things done. He built his entire company on loyalty and is very proud of that fact.

Ferchill has had a phenomenal success at finding niches. For example, Ferchill knew that people wanted nice, expensive housing within his niche, downtown Detroit. There was a high demand, but low supply. So Ferchill built 65 condos downtown for a sale price of $500,000 each. He sold 40 of the 65 in a matter of hours during the first day. Not only is this absolutely amazing, but Ferchill’s company managed to do this quality business with a team of 9 people.

Ferchill and his staff are relentless for finishing jobs on time and on budget. One thing I find fascinating is that his company does no marketing. He has created such a strong reputation for himself through his excellent business practices that he hasn’t had the need for marketing. He either finds his customers or they find him, mostly through word of mouth. Through following his niche and practicing effective business techniques, Ferchill has had only one failure out of his 75 projects and it was due to the market.

Ferchill’s one piece of advice to budding entrepreneurs is to “live up to your word and always be straightforward.” Ferchill definitely “eats his own dog food.” He tells it how it is. “Everyone may not like me,” he says, “but they will certainly have respect for me and want to do business with me.” In Ferchill’s eyes, clients are far more important than friends.

“People only want to be associated with people that are successful.” And therefore, people want to associate themselves with John Ferchill.

 

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