Month: August 2018

Preface: Alex soared to success, with a business built around solving iPhone problems quickly. His business promises and guarantees to fix customer iPhones in one hour. Just like “Big Brother”, his customers need their phones working too, and they’re willing to pay.

The “Michael Process” – A Case Study (Segment V)

Credit: Donald J. Sauder, CPA, CVA

 Let’s consider for a moment the “Michael Process” on the last frontier of business in the world – Africa. Entrepreneurial endeavors and opportunity abound in Africa. Looking beyond the market shops and newsboys, the Africa of 2018 needs every industry as it develops, e.g. food, technology, apparel, etc.

The next generation of business leaders on the continent will also adhere to the “Michael Process” just like their older siblings, and will have the opportunity to support a deeper purpose, as they continue to  learn from them how to create vibrant entrepreneurial ventures. As the continent emerges from a “wild west” marketplace, it will present huge business opportunities for those entrepreneurs who have both the patience and perseverance. Here’s two African entrepreneurs who are following the “Michael Process” today, towards respectable and fantastic business success.

“Working long hours from his dorm room, he has built his business into a chain of eight stores in South Africa, employing 85 people.”

Alex Fourie is driven and ambitious. Having endeavored sincerely on several business ventures that never reached the runway as a college student, he is soaring with iFix. When he was told his trusty iPhone could not be repaired, his creative mind lead him to browse onto uTube to discover a solution. After watching some helpful videos, followed up with his successful repair of his iPhone snafu, he quickly advertised his expertise in the local newspaper.

“This level of problem solving and entrepreneurial ambition lead Alex to be featured in Forbes Magazine in 2014 as “one of the 30 Most Promising Young Entrepreneurs in Africa.”

Working long hours from his dorm room, he has built his business into a chain of eight stores in South Africa, employing 85 people. His entrepreneurial success is built around solving iPhone problems quickly. His business promises and guarantees eash customers iPhones fixed in one hour. His customers need their phones working, just like everyone else, and they’re willing to pay. This level of problem solving and entrepreneurial ambition lead Alex to be featured in Forbes Magazine in 2014 as “one of the 30 Most Promising Young Entrepreneurs in Africa.”

Since that time Alex has launched RiCharge, a packaged mobile phone accessories and charging devices manufacturer, selling products in 12 countries. His next plan is develop a solar powered charger for the mobile phone industry.

Alex, a passionate entrepreneur, followed his on path, lifted with a successful definition of a problem, i.e. keeping his customer connected to the works with their iPhones, and the effective solution, i.e. one-hour iPhone repairs.

“All within six years, Anna had a fortuitous opportunity with her successful venture – a business contract for 100 pigs per week. When she endorsed that deal, is was worth north of $2.5m US dollars.”

Starting in 2004, Anna Phosa invested $100 in her business, an agricultural pig farm venture in Soweto, South Africa. Her business started adhering to the “Michael Process” with purchases of four pigs, after a close friend guided her decision towards pig farming. [The UN Food and Agricultural Organization estimates the annual growth rate of meat consumption on the continent to surpass every other region of the globe. It is estimated to increase 145% in the next decades.]

Within a few years, Pick ‘n Pay, a South African supermarket, say similar to US based Food Lion, contacted her to supply 10 pigs per week for their local store. Then, with successful supply chain service, that contract soon increased to 20 pigs per week. All within six years, Anna had a fortuitous opportunity with her successful venture – a business contract for 100 pigs per week. When she endorsed the 100 deal, is was worth north of $2.5m US dollars.

Although Anna didn’t have the land for the 100 pigs per week contract, as an experienced entrepreneur she obtained a loan from ABSA Bank and USAID, to acquire 350 hectares with 4,000 pigs. With 20 employees to manage today, Anna is certainly flourishing, supplying the developing continent  with the proteins of bacon and pork chops.

As Africa’s fast rising middle-class adopts a Western works eating habit, Anna happily and effectively applies the “Michel Process” supplying food for the developing continents menu.

Preface: The day Ray Kroc watched the “Michael Process” at a level unparalleled in all his years of visiting customers as a salesman, (two industrious restaurant entrepreneurs from New Hampshire, who thought they could strike it big in California,) he could see plainly his “Michael Process” opportunity too.

The “Michael Process” – A Case Study (Segment IV)

Credit: Donald J. Sauder, CPA, CVA

Simple, effective and powerful, now for an analysis case study of the three step “Michael Process” A) passion for a marketplace, B) a concisely defined problem(s) the marketplace needs (re)solved, and C) providing an effective solution to the marketplace problem(s) defined in step B.

Ray Kroc watched the “Michael Process” firsthand in 1954. In preparation for his big day, he also invested decades of effort and work before he became an entrepreneur. As a fifty-two year old milk shake machine salesmen, Ray was performing his duties earning a fading yet comfortable $12,000 a year working as a Multimixer salesman, in an industry heading towards obsolesces from heavy competition.

“That evening Ray Kroc, a connoisseur of restaurant kitchens, saw the business potential…… he felt the McDonald brother’s business model was uniquely designed to succeed beyond their wildest dreams”.

One month he took a business trip to meet his biggest clients. One of those clients was a restaurant in San Bernardino, CA, that needed 8 Prince Castle Multimixers to churn out 40 milkshakes at a time. As Ray stood looking at his client Richard and Maurice McDonald’s restaurant, with lines of customers waiting to order from the low priced nine item menu, with the two golden arches lighting up the night sky, he envisioned the future career possibilities. As he watched “Michael Process” lifting those two local entrepreneurs, his saw opportunity to apply the process too.

That evening Ray Kroc, a connoisseur of restaurant kitchens, saw the business potential. When compared to all the market data he had on the restaurant industry from his real-time experience as a salesman, he felt the McDonald brother’s business model was uniquely designed to succeed beyond their wildest dreams. But the McDonald brothers were not interested. The next day, endeavoring with his top sales persuasion, he finally negotiated to sell McDonald franchises for a 1.4% of sales, and payback payment to the brothers of 0.5%. He told the brothers if the venture failed, he had no place to go.

Within four years, Kroc sold 79 restaurant franchises. The restaurants franchises developed quickly just like Kroc had envisioned when he saw the golden arches. Yet when they surpassed $75,000,000 in sale volume, McDonald’s net income was less than $170,000 – for the entire first 6 years. With his business idea under duress, Kroc granted 30% of the business to his key officers. In addition, he transferred a 22% stake of stock to insurance companies for a $1,500,000 loan to keep the doors open.

“Thanks to Harry Sonneborn, Kroc’s idea is now a global business. Sonneborn advised Kroc he profit from leasing or buying potential franchise locations, and then leasing to then selling the franchises for those locations.”

Soon Kroc was additionally stressed about the McDonald brother’s willingness to meet his expectations in the business, he rightly realized he need to buy them out. He knew well that “Kroc” burgers would flame out quick. Acting on his business acumen, he quickly took a high-risk loan for $2,700,000 to solve that problem.

At that time, all that kept him going was his adherence to the “Michael Process.” Deep in debt and no profits in sight, his passion for the industry, along with a purposeful solution of providing fast-food to a hungry America, lifted him to continue with the work. Thanks to Harry Sonneborn, Kroc’s idea is now a global business. Sonneborn advised Kroc he profit from leasing or buying potential franchise locations, and then leasing to then selling the franchises for those locations. With Sonneborn’s guidance, the business stabilized and Kroc arduously set to work professionalizing his franchises with a uniform look, feel, and taste from Bangor, Maine to Butte, Montana.

In the thirty years following Kroc’s “summer visit” to Richard and Maurice’s restaurant, Sonneborn’s idea for real estate surpassed a $4.0 billion dollar portfolio valuation. Kroc’s envisioned “Michael Process” with a fast-food opportunity placed him among the titans of American business.

“Likely thousands of customers had visited Richard and Maurice’s restaurant before Kroc. Yet Ray Kroc was the only one to visit, envision, and then act on the brother’s opportunities to succeed beyond their wildest dreams”.

Kroc’s adherence to the “Michael Process” was foremost his passion for restaurant kitchens. He invested thirty years preparing for his business opportunity. In addition, he was very well-aware of the fast-food industry opportunity, i.e. milk shake marketplace, in a developing nation, and the business opportunities with that. He had visited countless of those businesses in his career.

Likely thousands of customers had visited Richard and Maurice’s restaurant before Kroc. Yet Ray Kroc was the only one to visit, envision, and then act on the brother’s opportunities to succeed beyond their wildest dreams.

The day Ray Kroc watched the “Michael Process” at a level unparalleled in all his years of visiting customers, (two industrious entrepreneurs from New Hampshire, who thought they could strike it big in California,) he could see plainly his “Michael Process” opportunity too.

 

 

 

 

The “Michael Process” (Segment III)

Preface:  When strategizing with the “Michael Process” the greater the number of marketplace participants who will benefit from the (re)solution your business provides, the greater the latitude of your entrepreneurial endeavors potential platinum success.

The Concisely Defined Problem(s) the Marketplace Needs (Re)Solved

Credit: Donald J. Sauder, CPA, CVA

 What is the value of a problem solved? Truly, the greater a problem, the greater the value of a (re)solution. Yet more importantly, you need an awareness that there is [a] problem requiring a (re)solution, before the problem can be (re)solved.

That is the “Michel Process” purpose, to encourage (increased) business value creation through a simple process of concisely analyzing and understanding an industry problem, and then effectively (re)solving the problem with a business motive.

“Two business examples: Grocery stores help solve the universal problem of hunger, generally; and residential construction companies help solve the continuing problem of living with changing weather conditions, etc”.

That is how entrepreneurs succeed — when marketplace problems that are clearly defined, analyzed, and understood as applicable business value drivers, are (re)solved, in an industry (marketplace) thee entrepreneur is passionate to serve, with a business purpose. Two business examples: Grocery stores help solve the universal problem of hunger, generally; and residential construction companies help solve the continuing problem of living with changing weather conditions, etc.

One of the most significant and historical globally documented problems solved, according to Biblical records, involved Noah and his family’s construction of the Ark. Supposedly tsunami rains had never occurred prior to the Flood. The “Michael Process” applied to the Ark exemplified as a business, (was Noah an entrepreneur), involved a solution to a future problem, e.g. build an Ark, the problem was clearly defined, e.g. a flood, for a marketplace. Like the MasterCard ads say, the Ark was “Priceless” …..and for everything else, there is a MasterCard.

So, what business problem was being resolved with a construction project encompassing such a large ship in middle of a wheat field say? If nothing else, your [business] opportunities today are now possible. For purposes of Noah’s investment of time and resources into the project, it was likely most eccentric, certainly. If Noah hadn’t acted proactively on his belief of a potential developing problem, with the [eccentric] creation of a solution, the globes history may well have ended Millenniums ago?

“Noah prepared a business like solution to a problem, that had not yet occurred, and at the time in history, a problem that held zero historic precedent”.

Now, that example may be a little far from some entrepreneurial endeavors.

1. First point is, Noah prepared a business like solution to a problem, that had not yet occurred, and at the time in history, a problem that held zero historic precedent, i.e. how many shekels do you think that project required, and employees?
2. Secondly, from an entrepreneurial standpoint, what was the marketplace value of the Ark the moment the flood began? What is one day, or one hour, and Noah was the most successful [social entrepreneurial] problem solver of that year? Ok.
3. Third point being, let us be very careful about some entrepreneurial endeavors, because we may not be aware, or understand the logic of what the true purposes are that motivate the entrepreneur.

Like Albert Einstein is quoted saying “If I were given one hour to save the planet, I would spend 59 minutes defining the problem, and one minute resolving it.”

In order for a (re)solution to have a [entrepreneurial] value, there must be a need for the (re)solution. The greater the number of marketplace participants who will benefit from the (re)solution your business provides, the greater the latitude of your entrepreneurial endeavors potential platinum success, (e.g. what is the marketplace latitude for birthday cakes?)

“Every business increases probabilities of vibrant and sustainable success when they are adhering to the “Michael Process.”

Example: Mikayla’s lemonade stand, while a substantial community success, may have certain scalable limits. A). It is not a four seasons business, and B). It likely serves only a certain geographical marketplace constituency. That’s not to say, it cannot be very successfully in its locality. Since Makayla isn’t endeavoring to net $200,000 for her college fund, those certain limits are likely not a problem.

Every business increases probabilities of vibrant and sustainable success when they are adhering to the “Michael Process.” That is purposefully and effectively (re)solving a [need] problem that holds an intrinsic value to a marketplace, that is well understood, with a platinum passion for the industry.

Your businesses connection(s) (i.e. education, partners, consultants, advisors) to harness the necessary platinum resources to concisely define, analyze and understand a problem(s), and then (re)solve the problem(s) effectively for thee marketplace, are the horsepower that creates, develops, and perpetuates an encouraging entrepreneurial endeavors vibrancy and success. Plainly, that is the heartbeat of the simple, effective, and powerful “Michael Process.”

 

Preface: A passion for the business marketplace in entrepreneurship ultimately creates a golden advantage with navigating an intrinsic vessel from the persistent “heartbeat” to continuously leverage with improved skills and expertise, keep focused, and gain and develop key resources that the competition lacks, or is lethargically skipping.

The “Michael Process” (Segment II)

Credit: Donald J. Sauder, CPA, CVA

A Passion for the Marketplace

Talk with any entrepreneur who has built a business working banker hours, or without adhering to the “Michael Process”– they’re few and far between.

You need to ultimately be passionate about your business marketplace to truly succeed in entrepreneurship with the necessary purposeful ambition and tireless motivation required to persistently invest the necessary hours and effort. This is the effort to initially keep the bills paid, be resilient with business challenges, and then ambitiously and eventually soar through business ceilings. You need a “heartbeat” to play successfully.

A great example of marketplace passion in business is the history of Milton Hershey — fired from an apprenticeship, continued on to incorporate three candy business startups that all unfortunately became defunct; then persisted passionately onto “sweet” success with the Lancaster Carmel Company. After earning enough to retire with LCC, he sold the venture, and invested the proceeds to incorporate the Hershey Company.

“Throughout all the trials and tribulations, entrepreneurs reward themselves internally by realizing that they’re on a mission for the greater good” – John Rampton.

“For those uninitiated, entrepreneurs are not in it for the money. While there have been some icons who have made more cash than most of us we’ll dream of, think Bill Gates or Steve Jobs, the reality is that most entrepreneurs work an insane amount of hours for little or nothing. Why would they put themselves through this? Because they are driven to either solve a problem or make [it] easier.

Throughout all the trials and tribulations, entrepreneurs reward themselves internally by realizing that they’re on a mission for the greater good. No matter how bad it gets, it’s their passion that motivates them between paydays and during all the times when everyone else tells them to quit”. Excerpt from 5 Personality Traits of an Entrepreneur, contributed from columnist John Rampton.

How Important Is Passion When Starting A Business –  contributed from columnist Ken Sundheim, provides a second perspective on the vibrancy of marketplace passion in entrepreneurship.

“….. I personally don’t know anyone who wakes up every day for their job with a compelling enthusiasm. After all, work is work. Some days are good and passion comes naturally. Others are tiring.

Moreover, use of the word gives people who are not experienced in their career or who are down on their luck the thought that because they don’t love every day, their chances are zero.

You can be passionate about painting, but if you don’t have the resiliency, curiosity, appreciation for what skill and opportunities you have and ability to control your inner monologue, that passion quickly turns into frustration.

Therefore, being “passionate” and successful are mutually exclusive. Passion alone doesn’t put food on the table.

Where you direct passion is more important. For instance, if you are passionate about improving your skills, and about acquiring the emotional reasoning to keep your chin up during the downs, then you have a shot at loving your job, because winning is fun.

Passion fuels resilience and provides you with the ambition to learn and strive to become more competent at what you do. Most importantly than anything else, it affords you the ability to focus.

In anything, focus allows you to achieve complex tasks. When you can achieve complex tasks, you:

1. Become more indispensable as an employee.
2. Become more respected around the office.
3. Become able to negotiate higher pay for your services.

zShops sound familiar? An online auction site, zShops was one of Jeff Bezos’ early endeavors towards entrepreneurship. A real-time entrepreneurial genius, Mr. Bezos was purposefully passionately about his marketplace; and today we now have the Amazon Marketplace.

“Entrepreneurs who adhere to the “Michael Process” are more likely to own businesses that are less susceptible to market and economic pressures, more respected in the community, and can sell products or services at premium prices in the marketplace”.

A passion for the marketplace with the “Michael Process” revolves around an deep intrinsic interest and motivation ; that keeps you (and your business) inspired at work day after day, month after month, and year after year. When you talk to entrepreneurs who have achieved great entrepreneurial accomplishments, you will discover the importance of a business passion, (the uniqueness of people, and people versus computers) “the heartbeat” they have for what they do. And then, you too, will understand value of the concept in step A of the “Michael Process.”

Entrepreneurs who adhere to the “Michael Process” are more likely to own businesses that are less susceptible to market and economic pressures, more respected in the community, and can sell products or services at premium prices in the marketplace. Why? Because their passion for the marketplace creates a real-time advantage from the  persistent “heartbeat” to continuously improve skills and expertise, keep focused, and gain and develop key resources that other competing businesses lack, or are lethargically skipping.