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Sunday, July 25, 2010


The Over-Caffeinated Entrepreneur with David J. Dunworth

No matter what type of business idea, concept, plan or strategy one employs in the forward momentum of your venture; you can’t escape these three governing principles. Whether it is in performing surgery on your business planning, running your car sales company, developing the widget or applying rocket science technology to the toaster, there is no escaping the obvious. How do I know? I have the scar tissue to prove it!

I’ve owned more than 30 businesses and consulted to more than 300. What I have learned above all else, is that they share the same three issues. Why, you say? How can I avoid any of these? Simple. The former, because they are universal and undying, the latter, being human, you can’t!

The Issues: The 3 Irrefutable Laws of Entrepreneurship
  1. It Always Takes Longer than you think.
  2. It will always Cost more than you think.
  3. Regardless of planning; One thing Leads to Another.

My Scar Tissue Example

As a contractor and as a customer, I have been a victim of these “Laws”. While serving as a COO of one of the largest contractors in the U.S. I sold our services to a customer that had been planning for 2 years on an entire house remodeling, complete with drawings. The redoing of these drawings were numerous. They did the planning and product selections as to not make changes once construction began. A checklist consisting of 3500 items was used so we wouldn’t miss anything. We were very thorough as we wanted the project to go smoothly, and on budget.

1. The Time

Every start-up, business or project involves planning, execution and review. Asking yourself potential and existing customer’s questions while searching one’s knowledge bank thoroughly will hopefully provide a well thought though plan.

In this example, more than 3500 items were checked, confirmed with the client, agreed to under contract, and yet numerous things were missed, overlooked or taken for granted. Two years of planning on our collective part led us to near disaster and ill feelings. All could have been averted if a few things were double checked.

Time is the great equalizer in the scheme of things. Under the guise of “get in and get out” most contractors want to do a good job in as little time as possible. Time is money, and they are no different from any other enterprise. One of the problems to this equation is that in order to “get” a job, some marketing has to take place. If you are marketing, you are not working, and conversely, if you are working you are not marketing. At least the little guys operate that way; one or two man crews just don’t have the budget for any other method. So what usually happens is the project gets started on time, then a lag occurs, then a spurt of work happens, then another lag, then when you question why nothing has been done in two weeks, more work happens. Projects also take longer for reasons beyond the contractor. The customer is sometimes to blame, because they add, change details and try to be their own General Contractor. The Weather was a minor factor, but most of the time loss was a result of changes.

Scar Tissue Advice: Plan it, re-view the plan; revise the plan; stick to the plan. If in doubt, check the plan.

2. The Cost

Ideas are a dime a dozen. The difference between an idea and a concept is that expenditure must occur. Both money and time are the currencies of business. There is never enough of either. Money is always a concern when developing a new business, expanding operations or working on a project. There are limitations to what we can spend. There is never a bottomless pit of capital, and the most listed cause of business failure is “lack of capital.”

The 'Clients' had a budget and wanted to stick to it. They also had terrific design taste, eloquent ideas and panache for the dramatic. The end result should be tremendous.

Construction on the house finally started. Within a short period of time, the first change order was written. That would continue throughout the project, so much for two years of planning. Some charges were absorbed by the construction company while others were provided at our builder cost. Even with a number of concessions, the cost overruns were significant. The project turned out so well it was featured in a leading remodeler magazine.

We didn’t normally allow clients to do any part of the project, but the clients wanted to contract the pool design and installation to a pool contractor, yet we supervised it. Potential disaster was averted when we insisted that the pool contractor build in a retaining wall to help support the pool along the hill side of the site, and an architectural engineer confirmed our fears about the pool contractor’s in field work. Even though our interference cost them an additional $7500 and there were other challenges, all were pleased.

Scar Tissue Advice: Cost it out. Then seek alternative and less expensive yet comparable items, Cost it once more. Then have someone else cost it. Compare the differences, adjust accordingly.

3. One Thing Leads to Another

No matter the project, this law is most irrefutable. When writing your final draft of your business plan, there is always a clue in there that something else is needed. When strategizing your next marketing campaign, some idea will spark another, until you have an unending list of coordinated and off-target ideas and concepts. A simple word from one of your contemporaries, clients or adversaries, and you are on to another strategy or idea. One thing will always lead to another.

The project was finally complete; the pool didn’t slide down into the pond, the changes were implemented, the tensions relaxed, and the thank you gifts delivered. Ten months of working on a terrific project with absolutely the finest clients a contractor could have asked for, but all was not perfect.

The client made decisions in the field that significantly changed the cost structure of the project. They decided that by changing the bathroom design the lighting would have to change as well. OOOPS! On our part. By changing from asphalt shingles to barrel tile roofing, the complete roof structure would have to be re-engineered and reinforced. OOOPS! on the clients role. There was the time it took to have the special tile made and the numerous other changes would lead to something additional. We spent additional time to measure windows to determine if prescribed or varied sizes were needed. With that decision, the windows were made and installed. At the projects completion the client wished for larger windows, and a change in the furniture layout to accommodate the window sizes would ensue. Columns for the sun porch, once installed, needed resized; no easy or inexpensive task.<

In the end, the client was ecstatic, and loved the house. Their comment, when asked about the home, “Now that I KNOW what I want, I should burn this one down and build it the way we REALLY want it.”

Scar Tissue Advice: Take heed. Plan well. Learn to live with the results.

Moral: There is bound to be modifications in any business venture, idea conversion, plan composing and in reaching the next level of your business. Some of these include setbacks, changes, increased costs, loss of time and additional action steps. It is part of being an entrepreneur. It is just part of life!

For more information, please visit David's TNNWC Bio.

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The Emergence of the Relationship Economy features TNNWC Founder, Adam J. Kovitz as a contributing author and contains some of his early work on The Laws of Relationship Capital. The book is available in hardcopy and e-book formats. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is considered a "must read" for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy, please click the image above.


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