Have a problem in your business? Eric Holtzclaw can solve it. Whether it’s a marketing misstep or an operational impasse, this award-winning speaker and coach finds it, fixes it, and sets you free to do what you do best. We were glad to speak with Eric about the biggest challenges startups and entrepreneurs face, and why business owners need to be prepared to make the tough, yet necessary changes in order to achieve success.
Eric V. Holtzclaw has founded multiple successful startups, including one of the first profitable Internet enterprises and a company that appeared on the Inc. 5000 List three years in a row. He shares his entrepreneurial knowledge as a regular contributor to Inc. Magazine. Eric also answers business startup and growth questions as host of the daily radio show, The Eric Holtzclaw Show on biz1190 AM (Atlanta area or stream online here).
With all the value he provides to startups and entrepreneurs, Eric is a perfect contributor to the Prophets of Profit. Click here to listen to the entire conversation.
Finding the Gaps in Your Business
When a business contacts Eric, it’s because it’s failing, and they’re hiring Eric to uncover the problem. To understand a company, you need to understand the founder, Eric says. Before he sits down to fully assess a client, he learns about the founder’s background — for it will surely explain any gaps he finds in the company during his assessment.
A company’s books tells you the story of what’s going on in the company. In his many years of working with businesses, he sees that few people do finances well — they’re running out of money or not reconciling their accounts; maybe the company has good revenue, but thin margins. Quickbooks is a great tool that provides excellent reports, but many business owners don’t know which reports are important or how to read the ones they do pull. Eric can identify 5-7 reports for each business he works with, and can teach the business owner how to use and stay on top of them.
A common theme Brian and Scott find among entrepreneurs is that they try to do everything themselves instead of sticking to what they do best. They have a hard time giving things up, especially on the finance side.
Eric agrees that business owners should be working on their business, not in their business. Eric strongly advises to outsource accounting by becoming strategic partners with that person or group. Money is essential to a business, and you need checks and balances in place to ensure that there are no fraud or misappropriation of funds. A misstep on the books will have a significant impact on the company. Even if you’re good at accounting, there are better things you should be concentrating on that are focused on your customer.
Do Something Today to Make Tomorrow Better
According to Eric, the number one failure amongst entrepreneurs is that they “assume pricing.” They set prices for their products or services without fully understanding why. Maybe they’re copying their competitor, but they haven’t determined if that price is covering their costs. They’re not taking into account all the different aspects of the pricing. While a startup business doesn’t need to cover costs off the bat, there needs to be plan in place in order for the business to survive.
Eric digs deep into his clients’ books to learn about them and how he can help them become a better business. He puts himself at their desk and explains to them the issues and what he would do if he were them. They can then hire him to help them execute the plans or they can do it themselves. If the client isn’t ready to take any of Eric’s suggestions at that moment, then it’s likely not a good fit in the long term for them to continue working together. Eric is there because there is a problem. His clients need to be willing to do something today to help themselves make tomorrow better.
Millennials Reshaping How We Do Business
Millennials are having a large impact on how we buy and sell things — the biggest impact of any generation since the Baby Boomers. Eric finds that Millennials want to be treated as partners. They want to be part of the decision making. If they don’t understand an aspect of their business, they don’t want to just hire someone to do it — they want to be taught how to do it.
Brian and Scott can see this difference in the makeup of Millennials’ companies as well. The investors of a Millennial-owned company are very involved — it’s very collaboratively set up. This partnership is critical because all stakeholders are protecting the company since they all have a vested interest in the company.
Gain an Investor, Gain a Boss
We had a question from a listener about how to ensure the financial investors of a disruptive startup are in-line with the values of the company.
You must be choosy when deciding on an investor. Eric insists that you must keep one very important thing in mind before taking someone’s money. They need to get it. You can even see in the hit show, Shark Tank, that money-seeking companies go in there looking to target specific investors based on what they know about them. Certain investors get certain things; other investors don’t. Eric says that in most pitch events, the investors in the room are asking themselves why they want to say “no.” You want the investor who understands — and is excited about — the disruption you’re about to bring to market.
You also must remember that one investor with just 1% ownership of the company can have a huge impact on an impending deal. When you take money, you’re essentially gaining a boss. Before seeking an investor, really ask yourself, “Do I need the money? Can I earn it by selling to a customer? Can I build it another way? Will this investor bring any added value to my company besides funds?”
Entrepreneurs are often so focused on the company’s money, the closer they get to that money, the more tolerant they are of warning signs from ill-fitting investors. Eric warns against this behavior — investors not aligned with your company’s values and goals do not bode well with the company long-term.
How Does a Stressed-Out Entrepreneur Grow and Market the Business?
A second question came from our audience: From the perspective of a stressed-out entrepreneur, how do you find the time for business development and social media?
Eric explains that business development is mostly networking. He recommends going to a networking event at least once a week. Pick one you like. Don’t go if you’re not going to make good connections. You’ll have to sacrifice certain aspects of your life. You’ll have to give up some personal time. You won’t see your friends and family as much.
When it comes to social media, Eric does not allow it to consume his life. Eric uses “gap time” to stay on top of his social media — waiting for a meeting to start, sitting in front of the TV with a show he’s passively paying attention to. Use social media to network and develop your business. Don’t get lost in it, though.
Your time is valuable. Think of your business as something you’ll want to eventually sell. Make it something that someone can buy. It needs to operate like a smooth machine without you. Eric didn’t have to show up to the business he sold in 2012. That’s why he sold it. He wanted a new challenge. At a certain time, as the business owners, you should be focusing on developing business.
How to Craft a Board of Directors
Brian and Scott asked Eric what quality skill sets should business owners look for when putting a board of directors together. Eric’s board of directors is pretty informal, he tells us. He has someone he calls his “dark shadow,” who thinks every idea he has is a bad one. He has a “yes guy,” who thinks every idea he has is a good one. His wife is on the board because she knows him best and knows what will impact him and how. And he has an inside person and an outside person—people who know the ins and outs of the given business. He meets each board member one-on-one rather than all together. He doesn’t want them to sway each other’s ideas and thoughts. He takes all of their feedback to make his own informed decisions.
Listen to our entire conversation with Eric Holtzclaw here.
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Co-founders & Managing Partners