Mission #2-3 Establishing Your Own Network

Objectives:

• To identify potential personal and business mentors.
• To appreciate that you will meet all kinds of people on the road to success.
• To treat everyone with respect. To ask. Be quiet and listen.
• To consider the real estate requirements of your business.

Background:

As you read the stories in this course, and look for common threads, you will find that the success of the characters is often attributable in part to their association with mentors.

Mentors are people experienced in life and business and who are willing to keep you pointed in the right direction with pragmatic advice based on their experiences.

There are two types of mentors that you should cultivate: personal and business.

Personal mentors can be: your friends, colleagues, relatives, clergy persons, coaches, neighbors, social workers or even parole officers. These are people who genuinely and unselfishly want to see you succeed. They may like you in particular or they may simply be good people who would help anyone. Either way, these mentors are people to whom you can turn with personal problems and moral dilemmas.

"How can I diplomatically fire my worthless brother-in-law?"

"How should I handle an employee-in-crisis who may be dipping into the till?"

"How can I explain to my spouse that I have to work every weekend?"

Mentors are the veterans. They have been there and done that. There are many good role models in the armed services and who are martial arts masters. Whom do you admire? Whose opinion do you respect?

You would think that having a few mentors on your side would be a no-brainer. Then why isn't mentoring isn't more common? It could be ego, or laziness or stupidity. Here are three small business owners who probably won't succeed.

1. Arnold is arrogant.

Arnold's Truly Magnificent Floor Company

"Hey, yeah, I've been refinishin' floors for six months. I know how to do it. That idiot that I was workin' for could sand floors but he didn't know the first thing about business. He took seven steps to refinish a floor. Ha, I can do just as good a job in four steps. I'll do twice the business and make twice the money in half the time that he did. And, he thinks that I'm goin' to work for $9.00 an hour. Yeah, right."

2. Ed is lazy.

Ed's Dog Walking Service

"I think there's this guy over in Sutton that walks sixty dogs a day but Sutton is thirty miles from here. And, I could talk to Margaret Blum. She's the dog walker to the stars and makes mucho bucks but why would she bother talking to me? I can't afford to waste time listening to other people boast about their successes. I need to find customers now. I'll start writing an ad for the newspaper next week."

3. Ashley isn't too bright.

Ashley's Dating Service

"Gee, like I want to start a dating service using Facebook. Oh, really, have a lot of people already done that? Well, my service is going to be getting people together at year round costume dance parties."

As an Action Principles^® Champion, you are a tough, thoughtful, spiritual person of action. This means:

Don't be arrogant.

Be quiet and listen. You'll be surprised at how much you'll learn. But don't waste people's time either. Be prepared for your mentor interviews. Know what specific questions you want answered or what specific actions you want the mentor to take on your behalf.

Don't be lazy.

You've got to go out into the real world and make things happen. How many people in the past have already succeeded doing what you now want to do? What examples and standards do they set? What can you copy or modify?

Don't be stupid.

The resources are there for you to tap. Why stumble around in the dark when there are umpteen people out there with flashlights, beacons, candles, floodlights and lanterns willing to show you the cleared path? These are people who know exactly what you should do to succeed because they've either done it themselves or they have been watching it being done by many people for many decades.

How do you find mentors?

The average person knows about 250 other people on a first name basis. And, one contact that you make will lead to another contact, which will lead to a third contact, and the process continues.

This is called networking.

You know the guy who knows the guy who knows the guy. You start to fill up your contact management software program with the names of people who can help your business to succeed. You may be working in sole proprietorship but, with mentors, you really aren't alone, you have your mentors as your staff of experts.

If you are having trouble finding mentors, you might want to re-evaluate your business plan. If you can't find anyone who knows anything about skunk farming, there may be a reason for that. If you can't find anyone who thinks that selling pantyhose with the shoes attached is a good idea, there may be a reason for that also.

The more mainstream your business concept, the more likely you will be to find mentors and eventual success. And, there are many reasons for that.

To be successful in business, you can't live your life stuck on transmit. Life is a two way street. In working with mentors you should be constantly mindful of their needs. The goals of your mentors may be purely altruistic. That is, that they give to you unselfishly and seek nothing in return. However, more realistically, it may be possible for you to give something significant back to them.

Story:

The Lopez Goff Gallery

Ana's new business needs a name and that part is easy. Since the majority of art galleries take the names of their owners, Ana names her gallery The Ana Lopez Gallery. For a working address and phone number, she uses her apartment address and home phone. The home phone is equipped with voice mail.

Some art galleries are run as "at-home" operations with the art displayed on the walls of the home serving as the gallery walls. To separate home and business hours, work at home gallery owners usually add the legend, "By Appointment Only," to their advertisements and business cards. In other words, the at-home galleries are not open to the public except by appointment.

Through her six-month part-time planning process, Ana will use this at-home strategy. The local jiffy printing shop offers a "business starter" package of 500 printed business cards, 100 letterhead stationery and envelopes for $229.00. Since image is very important to her type of business, Ana opts to upgrade from the basic business starter package to a high-grade paper and card stock and raised print engraving. A friend, a graphic designer, creates a logo for her gallery which is used on all the printed materials.

In three days, with the stationery and the Dali print back from Sandy Bernstein, the Ana Lopez Gallery, "By Appointment Only," is ready to start business. She has a business shell from which to operate.

Ana secures a domain name for her gallery. She builds a WordPress website. She is also thinking about selling on Ebay, starting an Apple iTunes Podcast, a Facebook and YouTube page and other social media ways to reach clients.

However, before she can leave the security of her museum job, she needs inventory, art to sell, and a gallery, a real place from which to merchandise the art. Also, she needs a focus.

Who will be her clients?

What will they want to buy?

What price range will they be able to afford?

What can the gallery do to attract these clients?

Ana decides her target should be the middle market, comprising the largest number of serious art buyers. The middle market buyers would include: yuppies (Young Urban Professionals) who view art as "in" and want to be "in" with the "in" crowd; art students and other artists willing to sacrifice to own quality art; beginning collectors in their thirties and forties who have met success and for whom art is an investment to diversify from other investments; corporate customers, office building and restaurant owners who want quality art to enhance environments but don't want to spend the world for the privilege, and interior decorators who design and buy for the wealthy, and who often expect commissions on both ends.

The middle market is there and the niche is there. The focus for Ana will be to present a prestige image with affordable prices. There is a gap to be filled. At one end, are the prestige galleries selling the paintings of the old masters and the paintings of the contemporary "name" artists. And, at the other end, are the poster stores, museum shops and online discoutners selling uninspiring and unoriginal reproductions.

The price range for the middle market Ana judges to be between $200 and $10,000, with the bulk of the sales inventory to be priced from $400 to $2,000. That's affordable original art. Within these price guidelines, Ana will be able to sell limited edition graphics done by contemporary "name" artists; paintings done by "soon to be name" artists and almost all of the work of almost every living sculptor, craftsperson, and photographer.

In her free time, Ana hops on her laptop and starts researching and emailing. She emails art wholesaling companies; large galleries representing "name" artists; artists' agents, ateliers and, in some cases, directly to artists. The focus question of the email is simple,

"How can the Ana Lopez Gallery represent your artist(s), at what price and under what terms?"

Within two weeks, Ana's Blackberry and home mailbox are stuffed with the daily offerings. Here are the prices.

Here as a dealer is what you pay. Here, as a dealer, is the suggested retail price, the client's price. Here are the volume discounts. Here are the terms.

And, Sandy Bernstein was right. Very often the suggested retail price was 50%, 100% or 500% above the dealer's price.

Ana's eyes opened to possibilities as she read.

Buying wholesale art by mail wasn't that different from ordering from any mail order or online catalog:

"Please fill in the form below and, specifying the edition, tell us how many original signed prints by Dali, Warhol, Nevelson, Hockney, Stella, Rauchenberg, Lichtenstein, Miró, you want. Call for availability and prices on Picasso, Chagall, Johns, Calder, O'Keeffe. If we don't have it, let us help you find it."

Picasso at 50% off! But, of course, to dealers only, dealers like Ana with a website and letterhead stationery. Art, it appeared, was much more a free trade commodity, than Ana had ever dreamed it to be.

And the terms ... Send 20% payment with your order with the balance to be within 90 days of receipt. A 10% handling and restocking charge will be levied against all returned orders. All adjustments handled promptly.

Ana reasoned, for example, that she could order a dealer's priced $1,500 Calder limited edition graphic that would retail for $4,000 and if the print didn't sell in three months, she could return it and owe only $150. In effect, she could rent the art she wanted to sell. The risk factor, or rental fee, was just 10%.

Now, this was business.

How do the most successful people in your industry work and profit? They are exceptional. Can you do what they are doing? Why not you?

Ana speculated that if she sold just one Calder print a month, she'd almost match her museum salary, less expenses, of course. This was exciting.

Ana called Sandy Bernstein and asked for a day-off luncheon meeting.

Sandy was as ever, well, Sandy,

"On your salary, darling, you'll probably have us lunching on fast food. Since we'll be talking business and maybe a little gossip, why don't you allow me and the I.R.S. to get us a table at Chez Marques? The Marques' soufflés will probably see me to an early grave but my will is weak."

Sandy continued,

"And, my dear, I want to know everything about the Raoul Divant show that the museum is planning. As I'm sure you know, I represented Divant, cared for the boy as I would a son and, then, without so much as a thank you, he left me for the Kittsberg Gallery. I felt quite the fool. I tell you, my dear, you won't miss me at the Divant show. I intend quite a performance of my own. Sandy at his backbiting best. You're a solider. You know that there is a price to pay in this life for treason."

After a delicious two-hour meal and two hours of listening to Sandy's nefarious plans for revenge at the museum's Divant showing, Ana was finally able to turn the conversation to gallery operations. She briefed Sandy on her research and progress to date.

Ana seemed to be living up to Sandy's expectations,

"Yes, yes, my dear, you seem to be on the right track. But, you can't expect to seriously consider yourself an art dealer with a single owned Dali and a rented Calder. How will you finance your adventure? Where will your gallery be located? How will you pay the rent? No, no, my dear, you have much work left to do. And to whom have you spoken regarding showings, may I ask?"

Ana answered, "Well, I spoke with Audrey Klein. She was part of a group showing at the museum last year and..."

Sandy immediately interrupted at hearing this name,

"Forget Klein. She is not an artist. What she was, was a twinkle in the eye of Simon Ross, your 20th Century Art curator."

"But, Sandy..."

Sandy raised his hand to stop her,

"But, nothing. I said Klein is not an artist. Maybe she'd make a satisfactory artist's model, but, an artist herself, she is not. Ms. Klein totally flopped at your show and has been totally forgotten by the arts community except, perhaps, by you. Now, go on, and forget Ms. Klein. You will never sell a Klein. I will never sell a Klein. No one will ever sell a Klein. This is ridiculous. Go on, who else?"

Ana added two more names, "David Buckley and Robert Shearson."

Again, Sandy could be counted upon for a quick appraisal,

"Shearson is nothing. Buckley may have promise if someone can get him into rehab and keep him sober."

Ana wanted to protest, "Sandy, how can you dismiss these people so quickly. I..."

Sandy calmly explained as if to a poor naive know-nothing,

"I, my dear girl, am a salesman. As crude as that may be and as cold as the world is, I must sell, sell, sell. There is no room for sentimentality in the art world. I display and promote art that sells. I nurture and support artists who sell. Sometimes I succeed and sometimes a parasite like Divant ..."

"Sandy!"

Sandy feigned an apology,

"Yes, Divant is my obsession. Forgive me. What about Lucas Maron? Or, Dana Simms? Talk to them. Maron has talent but he is an egomaniac and our personalities clash. Perhaps, you can work with him. Dana Simms is a marvel, a wonderful girl with wonderful promise but unproductive. I represented Dana for three years and in that time she produced just 12 salable works. I was supporting her - the bills - I had to drop her. Now she's making dolls or some such nonsense. Get her back to the easel and you'll sell everything she paints. Now there are two good names."

As you conduct your preliminary business research, you will all types of people. Some may be odd. However, they may be odd and sincere and knowledgeable and helpful. Be respectful. Ask your questions and, then, be quiet and listen for the answers. Socrates would be proud as you ask your follow-up question. Education is self-education.

For the next month, whenever possible, Ana was either on the phone with real estate agents, at agent's offices, or touring potential gallery sites. She learned. To be on Sturgess Avenue, the city's premiere gallery street, would cost at least $35 a square foot which meant that even for a very small gallery of 1,000 square feet, the rent would be $35,000 a year plus utilities, plus common area charges, plus taxes, plus...

On the East Bank, prospects were almost as grim. The rents started at $15 a foot with short-term leases and high annual escalations of the rent the norm. Sandy was right. In the shoe district, rents began at an affordable $6.00 a square foot but, again, problems. The smallest available spaces in the shoe district were 5,000 square feet and up, mostly up, which again, because of the amount of space which Ana would have to commit to, would put annual rent in the $30,000 plus range.

To compound the problem of finding gallery space, Ana was also informed by several real estate brokers, that even if she found suitable space, the building owners might require three or more months rent in advance since Ana's was a new business. In other words, she might need $10,000 or more as upfront rent.

Concurrent with her search for space, Ana was pursuing artists to represent, starting with Sandy's two picks, Lucas Maron and Dana Simms.

As advertised, Lucas Maron was difficult. He would only consider solo shows in galleries where, at least for the run of his show, all other art was put to storage. Needless to say Maron had few showings. But, at least, Ana had the ground rules for a Maron showing.

Dana Simms had given up painting for doll making. However, Simms viewed her works as sculpture. And, yes, she would be very interested in having her doll sculptures shown.

In addition, Ana contacted eight other "to be discovered" artists who had had museum showings over the previous three years and, on a tentative basis, had negotiated contacts with each. Four of the artists referred her to agents, two seemed mildly interested and two, Alex Fern and Deborah Paget, genuinely interested.

Ana is using all of her contacts to support her new enterprise. Who do you know who will help and support your entrepreneurial goals? Think of all possible connections in your network: family, friends, teachers, co-workers, neighbors, fellow alumna, groups, associations... Think. Make a list. There is no reason to be embarrassed or shy, ask for help and ideas. Do your contacts have contacts? Find the movers and shakers and people of influence who can become your links to success?

Operational Limitations:

• Leasing commercial real estate is expensive. Be sure you know what you'll need in terms or size, amenities and location.
• An important component of the Master Success System will be your real estate investments. Early in the System, you may be in a position to buy real estate housing for your business. You'd be a landlord with a great tenant - your business. For this reason, you might be hesitant to sign a long-term lease with another landlord.
• On your success journey, you will meet many different types of people. Some may initially seem odd and turn our to be very helpful. Others will present themselves as helpful and nice and later prove themselves to be divisive and self-serving.

Seeds for thought:

• Why are mentors important?
• What are the two types of mentors?
• Where can you find personal mentors?
• Where can you find business mentors?
• Why don't many small business owners use mentors?
• How can mentors help you feel that you aren't working alone?

Jargon:

Blackberry - a hand held wireless device from RIM [Research In Motion] used to make calls, check and send email, act as a personal organizer, etc.

Catch 22 - Whatever you do, it won't work.

Dealer - a person who buys and resells a manufacturer's products.

Deep pockets - Someone who has the ability to pay.

Dog and pony show - A fancy formal presentation.

Flip side - an opposing view.

Heads-up - Important information that you need to know and you should react to immediately.

Hot Spot - Places were you can wireless connect to the Internet.

Manufacturer's rep - salesperson hired to promote a company's products.

Power breakfast/lunch - An important meeting at a restaurant.

Shell - A hollow framework or outline for a business.

Terms - conditions and arrangements specified in a contract.

WiFi - Short for wireless fidelity. Many airports, hotels, and other services offer public access to WiFi networks so people can log onto the Internet and receive emails on the move.

Question and Answers

What do you mean by the "spirit of entrepreneurship"?

The secrets of success aren't secret. We know what they are. They are persistence, and determination, and hard work, and having objectives and goals, and making plans and keeping to the plans, all the while maintaining a positive mental attitude. The spirit of entrepreneurship is this spirit of success. You will move forward. Sometimes you will stumble. You will get up and try again.

Entrepreneurship may be a new word, but the hows of success have been with us throughout humankind. There were successful businesses in Ancient Greece and Rome and in medieval England. There are successful businesses today in Russia and China and Chile. All of these businesses were and are successful for the same reasons: persistence, determination, planning, customer service, etc.

What are the characteristics of a successful entrepreneur?

A successful entrepreneur is someone who has a lot of energy, enjoys trying new activities, likes to work with people, is not easily discouraged, is well organized, likes to take charge, and has a positive mental attitude.

As a successful entrepreneur, you will be interested in the lives of other successful entrepreneurs. Read your business biographies and you will see plenty of examples of the above success characteristics. When you're through reading about Rockefeller and Carnegie and Vanderbilt and Ford and Trump and Gates and Branson and Walton, you can start on the political biographies, and you'll see the same characteristics in Churchill and Lincoln and Kennedy and Napoleon.

Never stop reading and learning and questioning.

Is it better to buy an existing business or start from scratch?

In doing your research, you will explore both possibilities. You may be able to find an existing business with an existing customer base at a fraction of what it would cost you to start from scratch. If you are a plumber and can buy the customer list and goodwill of a retiring plumber, go for it. If you want to open a pie shop and can buy all of the equipment at a depreciated price from a pie shop that is closing, go for it.

Even if you do start from scratch, you should continue to look at the for-sale opportunities that may exist in your industry. You may find expansion possibilities. There are almost always good opportunities present for knowledgeable buyers willing to put in the study time to find them and the confidence to make offers and negotiate. It all boils down to doing your research and then being a person of action prepared to act based on that research.

Action Plan:

• Make list of potential business and personal mentors. Who will share your enthusiasm for your venture? As you begin to build your networks, who can be of valuable assistance when you begin to implement your plans?
• Living or deceased, who are or were the national and international leaders in your industry? What can you learn more about them from books, blogs, magazine articles, websites, videos, etc.?
• Who are your fictional heroes from movies and literature? What styles and attitudes can you learn from them?

Support:

• E-Business Advisor
• Fast Company
• From Red Herring - The Business of Technology
• Wired Magazine

Inspirational Insights: