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Investing Your Gifts in Others

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Amid the hustle and bustle of the holiday season, many people lose sight of the fact that Jesus was the ultimate gift from God for all humanity. Our lives would be hopeless and purposeless if God had not given us the precious gift of His son. And just as the three wise men came to worship and present gifts to Jesus, entrepreneurs should be ready to do the same with their time, talents, and resources. You do that by sharing yourself with others. Jesus said, “If you have given of yourselves unto the least of these, you have done it unto me” (Matthew 25:40).

It is a universal truth that we reap what we sow. So, for entrepreneurs who aspire to succeed in their business and personal lives, you should be at the front of the line in terms of enthusiastically sowing your talents into others’ lives, especially the next generation. This will position you to receive incredibly abundant returns, including some that might not be measured in financial terms. Nevertheless, when your have the perspective that giving precedes getting, you will understand that the benefits you receive will be much greater than just a contract or deal.

What will help you to do this successfully is recommitting your focus to making this season revolve around appreciating God for what He has done for you and with a sense of gratitude investing yourself into others’ lives. The return on your investment will be great, far beyond what you could ever imagine. As it relates to the investment of your gifts:

1) Ask God how you can maximize your gifts, talents, relationships, and resources to have a positive impact on the people around you, especially our youth.

2) Ask Him to show you how to position your business to contribute to specific solutions and remedies for challenges and problems in your community.

My prayer is that God would richly bless you and your family during this time. I hope that you are able to connect with your family and loved ones and experience the warmth of enriching relationships that reinforce God’s love for you. As you feel His love embracing you, pour yourself into someone else’s life. You won’t regret it, your business will prosper, and better yet your Father will be please with you.

Best wishes during this Christmas season.

Merry Christmas and Happy New Year,
Paul Wilson



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Leveraging Strategic Relationships - Pt. 2

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Continued from Part 1...

It's very easy to say that more strategic partnerships are needed for small businesses; however, it's much harder to make it happen for various reasons. One of the most obvious reasons is that there has to be two willing partners to make a deal. Also, there must be financial incentives on both sides that would make such a deal attractive for the near term and the future. Nevertheless, where there's a will there's a way.

Below are three different strategies in the form of decision rules that small businesses can use to assess whether or not they should consider strategically partnering with another company in order to grow their businesses. These decision rules are crucial, because of the potential negative impact that a bad decision can have on a small business.

Decision rules for:

1) Strategic alliance or Collaborative partnership. Companies should only form alliances that are highly selective, focusing on particular value chain activities and on obtaining a particular competitive advantage garnered from the combination of resources and capabilities that it and its allies possess that give it an edge over rivals. This approach is best used when two or more companies choose to work together very closely, but without going as far as a joint venture, merger, or acquisition.

2) Merger or Acquisition. Use when alliances don’t go far enough in providing a company with access to the needed resources and capabilities required to gain a competitive advantage over its strongest rivals now and in the future. A company should only merge or acquire another company whose strengths will complement or enhance its own, not one who has the same weaknesses.

3) Vertical integration. Vertical integration should only be considered if the integration will strengthen the firm’s competitive position by producing sufficient cost savings to justify the extra investment, add materially to a company’s technological and competitive strengths, or truly help differentiate the company’s product offering. Furthermore, the company first should evaluate thoroughly whether or not they have the expertise to integrate the operations of the vertically integrated company into its own before making this type of decision to broaden its strategic focus.

Partnering with another company can be very risky, so due diligence is the key. Before you as a business owner decide to go this route as an option for business growth and expansion, you have to make sure that you do a thorough analysis of the other company’s financials, strengths and weaknesses, operations and management style, reputation, and their company values and culture among other things. This relationship will be like a marriage, so the personnel of the two businesses better get along well or else you’re just asking for trouble. Make sure that during your “dating” process you learn all that you can before jumping into the relationship. The more time you spend on the front end in the due diligence and planning process, the less time you will spend on the back end trying to resolve problems and issues that could have been avoided.

Strategic relationships can be very lucrative as a growth strategy, but they can also be very damaging. Just make sure that if you are pursuing this path for your business to “measure twice and cut once.” You don’t want your business to be ruined by a bad relationship. Happy dating!


References
Thompson, A.A., Jr., Strickland, A.J., III & Gamble, J. E. (2005). Crafting and Executing Strategy; The Quest for Competitive Advantage, Concepts and Cases (14th ed). New York, NY: McGraw-Hill/Irwin.


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Leveraging Strategic Relationships - Pt. 1

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Often because small businesses have a shortage of capital and capacity, they struggle to compete against their larger competitors. Yet despite their uses in almost every sector of business, strategic alliances, including mergers and acquisitions, have not been pursued aggressively enough as viable options for growth. As large corporations continue the trend of reducing their suppliers and looking for companies that can handle larger, more diversified tasks, smaller companies must consider a broader range of alternatives to grow more quickly. New ideas and solutions related to growth and expansion must be developed and embraced by these companies if they want to be competitive.

Much of the responsibility to make this concept a reality rests with the small business owners. In order to position themselves for larger deals, smaller skilled companies that lack capacity must leverage their strengths with one another to create bigger, faster, stronger enterprises that are more capable of handling complex, multi-million dollar sourcing deals. This will require more forward thinking entrepreneurs who are willing to engage in these strategic relationships with the potential of having to relinquish some control. The big picture must take on a greater meaning. Everybody might not be able to be the head honcho. However, if two companies can come together to create a stronger single enterprise, allowing them to win larger, more lucrative contracts, then that is more important than each individual company remaining separate and fighting over scraps.

Corporations also have a significant role to play in this type of growth strategy. For them to have a meaningful impact within their small business and diverse supply bases requires bold, courageous action and strategic resources, including human capital and management assistance. There needs to exist an incubator-type atmosphere that will provide these companies the support and guidance needed to make these kinds of business relationships successful. Nobody benefits if these arrangements fail. This kind of action also requires proactive, forward thinking corporate visionaries who are willing to make long-term commitments that may not pay immediate dividends, but will eventually result in substantial benefits to both the company and their suppliers.

With the right amount of focused attention, however, mergers and acquisitions can become viable options for many corporations who are looking to grow their diverse supply base as well as develop new sourcing solutions that add overall value. This not only demonstrates good corporate citizenship on the part of the corporations, it helps to establish new sources of ideas, innovation, and inspiration.

Return here soon for Part 2.


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What really is empowerment?

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Empowerment is defined by the dictionary as:


  1. To invest with power, especially legal power or official authority. See Synonyms at authorize.
  2. To equip or supply with an ability; enable: “Computers... empower students to become intellectual explorers” (Edward B. Fiske).

I realize that the word empowerment often is overused and misused. Therefore, I have redefined what empowerment means so that there is no confusion or misconceptions about how I use this word. Empowerment should be viewed as a process with a strategic intent or expected result rather than just as a single action. Actually, it involves several steps to enable a person to reach a particular goal. The key steps in the empowerment process should include motivating people, providing them with valuable knowledge and information, training them in relevant areas, exposing them to situations through which their new knowledge can be applied, and creating an overall atmosphere that removes barriers and establishes opportunities for success. The end result is that progress is achieved through the enhancement or improvement of the person and/or situation.

How does this relate to entrepreneurship and business development? Socio-economic factors are significant drivers influencing negative situations that exist within many minority communities, including crime, poverty, homelessness, teen pregnancy, disease, and lack of education, among other things. These environments can only be enhanced or improved as the people within these environments are empowered to do so. One of the key ways to make this happen is through entrepreneurship and business development.

Community transformation is fueled by economic development. Helping people grow and establish businesses is an effective tool to help to economically empower people to improve their standard of living and the communities in which they live. Of course economic empowerment does not happen just because we want it to. A strategic plan must be crafted and implemented, involving all parties that are relevant to this discussion, including corporations, minority business advocacy organizations, governmental agencies, current and aspiring small business owners, and a community’s citizens. Each of these entities has a vital role to play in this economic development and community transformation strategy.

Working together gives us the opportunity to create viable partnerships that can develop practical solutions, resulting in tangible benefits for those in our communities. Together, we can create more opportunities to empower more people.




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Inner City Entrepreneurs

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Although a lot can be inferred, not much is known about inner city entrepreneurs in terms of their business practices, motivations, skills, knowledge base, etc. Boston University, along with the Kauffman Foundation, has published a report entitled, "Building Ventures and Expanding Community Ties: The Case of InnerCity Entrepreneurs." According to the authors, the purpose of this study of 29 inner city entrepreneurs was to "explore how well current theories about entrepreneurs and firm growth are supported when applied to minority and female-run entrepreneurial ventures inside urban settings."

The results of their study are very interesting.

Excerpt:
This study shows the relative importance of individual, firm and community factors in driving the growth of inner-city enterprises. We find that the entrepreneur’s involvement in the community is tied to his or her values, motives and strategic actions. In these ways, community involvement has an impact on the growth of the venture. These insights highlight the gap in our thinking about economically and socially driven ventures. Most of the ICE entrepreneurs do not fit the classic profiles of “traditional” businessmen and women who are primarily, perhaps even exclusively, focused on the bottom line or social entrepreneurs who use good business practices explicitly to do more social good. Their ventures are best described as “hybrids” or “business-and-community ventures” in that they reflect both the entrepreneur’s need to focus on the bottom line and the socially-minded activist‘s desire to make the community better.


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Using the knowledge gained from this research, we should be able to develop and implement programs that help promote more business-minded social entrepreneurs in urban communities. These individuals have a love for inner cities, because they often live there, and they are committed to making them better for all people. It seems reasonable to me that they should be equipped with the tools and capital to do just that. With the right type of mentoring and business development resources, they can be more effective than a lot of other programs that are supposed to be in place to revitalize inner city communities that are falling short. It's time to start investing resources where there can be a good chance of a return, socially and financially, and stop throwing money at programs that are no longer working.

Full article. Enjoy!


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