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Martha Rogers and Bill Lewis weren't born with business smarts. You might say they grew into them.
On the surface, it would be difficult to find two business owners less alike. Rogers, who holds a doctorate in communications from the University of Tennessee, is co-founder of a business that in just seven years has grown from the germ of a good idea into marketing's latest big thing. She and partner Don Peppers ¡ª they share billing as the Peppers and Rogers Group ¡ª have parlayed their expertise in customer relationship management into an international publishing and consulting empire that today employs 300 people in 15 offices.
Founded in 1994, the firm saw sales double in each of the following five years, earning it a spot on the Inc. 500 roster for 1999. Last year, the partners exchanged a piece of their action for the venture capital needed to grow even more rapidly.
Without it, Rogers says, "We would have missed an opportunity."
Lewis has been preoccupied with growth, too, but in a decidedly different way.
The holder of a high school diploma that, by his own admission, wasn't worth much, Lewis operates a body shop in rural tidewater Virginia. He has spent the past 21 years watching his business expand organically ¡ª when circumstances demanded and finances permitted.
Even though he wanted to stay small, Lewis discovered that his business needed to grow enough to meet the volume demands of his marketplace. And it has, from two repair jobs a week to 15, from a monthly expenditure for paint and parts of $1,500 to an outlay of $110,000.
Still, it was only last winter that Lewis relocated his operation away from his home, to a more accessible spot on one of the main highways traversing Virginia's Northern Neck. The move was undertaken primarily to put Lewis in a better position to sell the business when he retires.
"I wish I had moved the shop down here 10 years ago," he says. "I think we could have been a whole lot bigger than what we are. I really do."
What you need to succeed: passion, knowledge and some business savvy
Rogers and Lewis couldn't have businesses that differ more from each other, at least on the surface. But as owners, they share some core abilities.
Each has parlayed personal knowledge, and the passion it inspires, into a viable business. In Rogers' case, it was a vision of what the interactive revolution would mean to customer marketing; in Lewis', the ability to take a crumpled piece of metal and make it look showroom-new.
And each has faced the fact that knowledge and passion alone aren't enough to make a business succeed.
In that regard, Rogers and Lewis are like millions of Americans who possess knowledge or a talent ¡ª willingness, even ¡ª that other people find indispensable. These are the doctors, lawyers, accountants, consultant, hairdressers, pet sitters and, yes, auto-body workers who make their living selling a service.
At some point, each of them likely has discovered that being a good service provider does not necessarily make you a good business owner. You might be an expert at what you do, but a naif when it comes to managing and marketing your business.
"Typically," says Harold Dubrowsky, a partner in the Chicago-based accounting firm of Grant Thornton, "companies get founded by people who are technicians. They have an expertise and they grow because they have something of value."
Then, employees are added, overhead increases and the firm reaches a point where it has to be managed. That's when many entrepreneurs in the services "hit some sort of wall and can't get beyond it," Dubrowsky says.
How do you get better at running your business?
Often, the hurdle has to do with the entrepreneur's role as a manager. Says Dubrowsky: "Owners need to learn to work in the business part of the time and on the business part of the time."
That's easier said than done, of course. Many business owners find they need help along the path to operational competence.
Hire a partner who's got the expertise you need
Rogers and Peppers found their help in the person of Bob Dorf, a seasoned entrepreneur who had successfully started, run and sold his own firm before joining the Peppers and Rogers Group as president. Dorf was brought on as a full-fledged partner, Rogers says, because she and Peppers wanted the business to be run by someone "with skin in the game."
In retrospect, it's difficult to imagine the arrangement functioning more smoothly.
Much in demand as speakers after the success of their 1993 book, "," Rogers and Peppers increasingly fielded inquiries about their consulting services, which early on were nonexistent. It became Dorf's job to follow up on leads collected in the field and to create the consulting infrastructure needed to pursue and service them.
On strategic decisions, the three partners consulted as equals. In this vein, Rogers describes as invaluable the business principles and practices she gleaned early in her academic career. (A communications professor on the business faculty of Bowling Green State University, she essentially self-administered the school's MBA curriculum so as to be on an equal footing with students.)
Rogers' advice to non-business types attempting to exploit the market for their expertise quickly and fully: Find a partner who knows business inside and out, get an MBA or, better yet, do both.
Or, pull yourself up by the bootstraps
Business owners like Lewis, who court growth warily if at all, are not likely to court knowledgeable partners.
Admittedly overwhelmed by many of the back-office requirements of running a business, Lewis did rely on his wife to keep his books and manage cash flow. "When she told me I had enough money to buy another piece of equipment, I would buy it," he says.
When he needed to computerize his estimating process to protect his status as a "preferred shop" of half a dozen or so insurance companies, he relied on his daughter, then in high school, to set up the system. Three years ago, he hired a full-time employee to keep the books and deal with the computer, freeing Lewis to spend most of his time on the shop floor.
Faced with his biggest decision yet ¡ª whether to relocate the business away from his home ¡ª Lewis was able to fall back on an informal network of experts: the bankers, lawyers and accountants he counts among his clients. When they confirmed what his instincts told him, the move was on.
Use management consulting services
Lewis concedes that a consultant might have helped him steer his business more efficiently, but "that would have cost money."
Indeed, it would have. Dubrowsky estimates that Grant Thornton's management consulting clients typically spend $50,000 to $100,000 with the firm over a couple of years.
Dubrowsky, who works out of the company's office in Southfield, Mich., consults with a variety of small and mid-size businesses, including several professional services firms, which, he says, "are the least professionally managed."
With most clients, the consultant uses financial modeling to project the firm's growth and then devises a strategic plan in keeping with the numbers. He identifies "data-collection management" as a key factor in business success, but also as an area where many service providers are woefully deficient.
"It's everything," Dubrowsky says. "It's what they don't do well but what they must do well" in order to know how effectively the business is operating.
Dubrowsky acknowledges that consulting advice is no panacea; like any medicine, it must be taken to be effective.
"The day-to-day behavioral changes are the great problem they have," he says. "It's very difficult for firms to survive the limits imposed by more professional managers."
Grant Thornton, along with second-tier national firms such as BDO Seidman, focus their consulting businesses on the middle market of firms with annual revenue in the $5 million to $25 million range, though Dubrowsky says he would not turn away smaller clients with potential for growth.
Top-tier accounting firms ¡ª the so-called "giant five" ¡ª that have gotten out of the small and mid-market consulting business, but that still maintain regionally based consultancies, are another option for small service providers. The best bet, however, would be to assess business needs and then seek advisors and consultants who match those needs precisely. For tips and advice on choosing business advisers, read this story.
And don't forget the Internet
Entrepreneurs for whom cost is a major concern should look, if possible, to a professional association for advice. Some examples:
The American Bar Association has a standing section on practice management that makes presentations at ABA meetings, publishes books, magazines and pamphlets on the subject and makes attorney-mentors available to members who need help. And many apparently do.
Dixie Lee Peterson, the Illinois attorney who heads the practice management section, says it's a safe assumption that most fledgling attorneys emerge from law school "knowing virtually nothing about business."
The purpose of the section, she adds, is to show ABA members "how to adapt technology to a practice and how to compete in a very intense market." In keeping with the emphasis on technology, the section makes much of its information available at no cost in its corner of the ABA's Web site.
Both the American Medical Association and the American Institute of Certified Public Accountants use the Internet as the chief conduit for conveying practice-management information to members. Medical professionals will find information in the Practice Tools section of the main AMA site; the AICPA offers a Firm Practice Management site.
Also to be found on the Internet are plenty of sites offering more generic advice on starting and running small businesses. Two of the better known ¡ª and, arguably, more reliable ¡ª are provided by the U.S. Small Business Administration and by a network of local chambers of commerce in association with the U.S. Chamber.
The SBA's Small Business Classroom also includes a link to the agency's Service Corps of Retired Executives, which offers one-to-one mentoring. Chamberbiz.com's Bizcenter makes available a variety of online resources.
There are myriad other sites devoted to small-business subjects, many purporting to provide take-it-to-the-bank tips and toolkits for entrepreneurs. It's important to remember that if the source of the information is unknown, so is its value.
As Martha Rogers says: "The advice is free. It's following the advice that can be expensive".
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