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Prep for CNBC’s The Big Idea

Written by: Rich Sloan August 21st, 2008
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I’ve been appearing here and there on The Big Idea with Donny recently. Thought you might get a kick out of how the show comes together and the role of so-called experts (yours truly included) who are invited on the show.

Below are the emailed questions I received from the producers in advance of my most recent appearance. They take this and turn it into what’s called a “rundown”, which is essentially an outline of the show with talking points, many of which end up on the teleprompter. I figured the process, as well as the actual advice, might be illuminating for you. Enjoy!
—

Financial:

What are the biggest financial mistakes that SBOs make?

·         Not prioritizing the spending

·         Not keeping track of available cash this month and in the months and year ahead

·         Forgetting that it’s easier to raise money when you don’t need it

·         Buying new instead of “used”.

·         Ignoring what I call the “2X Factor” which makes the point that things usually take twice as long and cost twice as much than you expect

·         Buying too much inventory or spending too much on advertising without testing out what works best

·         Not paying attention to building business credit

·         Accumulating “fixed costs” instead of “variable costs” which are far more flexible to changing status of the business

·         Receiving investment and not ensuring that there’s a unified plan and timeframe. This is called, “alignment of interests,” and is critical to create.

 

What resources are there for people when they are in a hole?

·         there are consultants who will help you build up your credit, personal and business

·         utilize an accountant. Don’t just check in at tax time – make it a quarterly check-in.

·         PR firms are helpful in managing any external-facing issues

 

Should they use their credit cards?

·         Credit cards are a last-resort solution to financial problems. More often than not, they simply dig a deeper hole for you.

Should they go to a bank for a loan?

·         Going to the bank for a loan BEFORE crises occur is always smarter.

Where do you turn when you can’t get a loan?

·         Your rich uncle

Friends and family? Pitfalls / pros?

·         Friends and family are a great way to go as long as you treat any loan or investment professionally and set expectations and communicate regularly and thoroughly about status of their investment

 

FYI, one of the most common laments we hear on our radio show is, “how do I get a loan if I don’t have good credit?” That’s a huge impediment and reality out there…

 

 

Legal:

What are the biggest legal pitfalls that SBOs fall into?

·         Not being protected or insulated from a lawsuit – this is easily achievable by moving from “sole proprietorship” to “LLC” or “S Corp.”

·         Ideas are copied by someone else b/c the ideas, known as “intellectual property” weren’t protected or enforced properly.

·         Non-compete clauses are not entered into with a partner or key employee at the time of engagement and when they depart they use their experience with you to become a competitor. They can poach clients/customers, too.

·         Not having people sign a Confidentiality Agreement whenever possible

·         Making representations that are too grand and unrealistic with investors, which can lead to shareholder hostility and worse

 

How important is an attorney to a small business?

·         Very. That’s why attorneys are so damn wealthy – they’re needed!

 

If a SBO finds themselves in a legal matter are there any resources they can go to for help?

·         Attorney is first stop. If no attorney, call around people who you trust and ask for a referral.

·         Internet is valuable but can be hit/miss in terms of reliable information

·         If a legal issue arises, I recommend making that your leading priority until you’re certain that it’s not a significant threat. Left untended to, a legal situation can drown you. This is one area where you always want to be extremely vigilant.

 

Insurance

What are the biggest insurance mistakes SBOs make?

·         Not getting coverage, especially basic liability coverage

·         For investors, it’s effective to indicate to them that you’ll have “Key Man” insurance. Helps them manage their “downside” in the event that you’re incapacitated.

·         Not getting coverage for a home-based business b/c you assume your homeowner’s insurance covers all your stuff.

·         Skimping on healthcare coverage. When a medical situation arises, don’t let it eat your finances. As pricey as it is, it’s better to bear the burden of healthcare costs over a longhaul than it is to get slammed all at once.

 

What is the bare minimum that a SBO needs?

·         Healthcare

·         Liability coverage

·         Short-term/long-term disability

 

Natural Disaster

Obviously, these are unforeseen, but how can SBOs prepare for them?

·         Have an emergency procedure in place for you, your team and customers who may be present/impacted.

·         Establish communication and rendez vous points

·         Sounds crazy, but each year thousands of people get blind-sided. You always think, it happens to other people, not me… but alas…

 

What resources are there for disasters?

·         www.Ready.gov – they provide both business and personal disaster planning advice and materials

 

Management / Employee

What are the biggest management / employee problems?

·         Most employee problems result from poor selection and management

·         Theft of intellectual property

·         Sharing of proprietary information

·         Stealing

·         Working under influence of drugs

·         Employee-employee discord

 

How do you handle a major employee crisis?

·         If there’s mutiny on the bounty or one bad apple, individual meetings complemented with group meetings are effective. Anytime something goes awry, it can be a great learning opportunity for everyone else as long as embarrassment is avoided.

·         If the employee has an emergency (is that what you mean?!), treat them like a family member.

 

Tags: , , , Posted in Accounting and Financial Management, Business Ethics, Business Failure, Business Insurance, Business Partners, Business Planning, Business Taxes, Business Travel, Employees, Finance, Getting Organized, Healthcare & Insurance, Home Office, Home-Based Business, Legal, Manufacture a Product, Protect an Idea, Public Relations (PR), Running a Business, Security, Strategies & Smarts, Writing a Business Plan
Next: Point-Of-Sale: The “Do It Now” Theory

Comments

  1. kim babjak     Says:
    August 21st, 2008 at 3:35 pm

    WOW! you talked about all of that with DD?…..YOU ROCK!

  2. Sam Carpenter     Says:
    August 21st, 2008 at 4:19 pm

    This is awesome, Rich! Congratulations on your successes.

  3. Consignment Pal Business Directory     Says:
    August 21st, 2008 at 6:41 pm

    Rich,

    Unbelievable opportunity for you and viewers! Thanks for telling us about the game plan to pull the show together.

    I’ve seen you guys at eBay Live.

    Linda

  4. Chuck     Says:
    August 21st, 2008 at 8:09 pm

    Good hit with Donny. I suspect you already have an agency. Should you need marketing or public relations advice, visit marketingPRnetwork.com…and just give me a call.

  5. Rich     Says:
    August 21st, 2008 at 10:43 pm

    thanks for the feedback, folks! they’ve aired the show twice in the past week so they must be pretty happy with the end product. i really enjoyed working with Mel Robbins as an “expert” on the show. and Donny’s always amazing. working with him you really get a sense of how high his standards are and how genuine he is about providing help. i’ll keep you in the loop as things like this unfold…

  6. Tony Gallina     Says:
    August 23rd, 2008 at 10:20 pm

    We were on DD as well - short video on our site!! I just wanted to pass my story along to you and hope it interests and entertains others. Thanks! Tony

    Make Green By Going Green.
    I had to write this article to let other entrepreneurs know what exciting possibilities there are out there in this new ‘Green” world. If you haven’t been paying attention there is a world wide phenomenon going on that is called Green or Eco-friendly. If you are not steering your business that way or if you are not looking to get into this green business juggernaut you are missing out on a huge pay day and/or a long time rewarding business experience.
    Not only will you help reduce your own carbon foot print but you will attract more customers because people are looking for eco friendly businesses. By going green, my business in just over one year, went from $7,000 per month to $75,000 per month. I went from 30 customers to well over 300 customers with more climbing on the green wagon every day.
    I have even been approached to franchise my concept all over the world. Going green apparently rewards you with more green.

    It is truly amazing how my life has changed this past year. I got involved with starting an eco-friendly cleaning company and as a result of going green I have watched in awe as my revenue grows month after month. It has not only changed my life financially but it has positively impacted the health and lives of thousands of people as well. I went into this business, not having a lot of money to invest, but wanting to do something that was good for the environment as well as good for the planet and other people. I know that cleaning homes and businesses with non hazardous chemicals will help add years to the lives of our customers, their children and pets, our workers and help heal the environment too.
    The Green Mop (my business) afforded me the opportunity to move from a cramped apartment, where I also ran the business, to a beautiful new 4700 square foot home that last year was priced at $1.1 million (got it for $800,000 in this current market environment). I also bought a brand new SUV Hybrid with cash and I see no end in sight for the growth and expansion of my eco-friendly green enterprise.
    What I did you can do too by steering your existing or new business in a green direction.
    I have seen the proof that if you do right for people, the environment, and yourself by focusing on being good stewards of the earth, the floodgates of green prosperity will open up to you.

    So, lesson your foot print, enrich the lives of others, steer your business green and watch your prosperity grow.

    Brought to you by:

    The Green Mop, Inc
    Tony Gallina, President
    http://www.thegreenmop.com
    (703) 508-8082

  7. Artur Melentin     Says:
    August 26th, 2008 at 12:13 am

    After opening a small boutique marketing firm are we faced with a challenge hiring the right talent. We have been working in the industry for almost 6 years and have clear idea of what we expect from the potential employers. After interviewing numerous candidates we either have people requesting salaries far above the industry averages or inexperienced applicants. How do we attract talented employees while minimizing the perceived risk associated with joining a start-up?

  8. Clarence Middleton     Says:
    August 28th, 2008 at 5:27 pm

    Wow, Great Post. You covered a MBA in small business in less then 2000 words. Keep up the good work.

  9. Camie     Says:
    August 29th, 2008 at 10:27 am

    Thanks for all this great info Rich! How wonderful for you! How did you get on the show? That would be a helpful column for your next go around. Did you respond to one of the producer emails or did you contact them directly or did they approach you.

    Thanks and…

    Have an “uplifting” day,
    Camie

  10. Eileen Weilbacher     Says:
    August 29th, 2008 at 12:27 pm

    Hi Rich,

    Excellent! We love learning about this and you put it so succinctly! Thank you! I look forward to reading more of your words of wisdom.

    Keep the positive energy flying!

    Be Active, Be Healthy & Happy!

    Eileen

  11. Betsy Mendel     Says:
    August 29th, 2008 at 3:28 pm

    Hi Jeff and Rich,
    Love you site. Very informative.
    I recently started a business with a friend, Rachel Layne (who is actually from West Bloomfield, MI—small world if you know her, eh!?)
    Please check out our site at http://www.awareables.com. As you know, it is lots of hard work involved in a start-up company. We’ve gotten an overwhelming response to our product. We would love to get on Donny Deutsch…any advice on how to do accomplish that.
    Thanks for your great site! Look forward to hearing from you.
    BetsyMendel
    a w a r e a b l e s
    Inspirational Outfitter
    Call Me 310.980.1477
    Email Me email@awareables.com
    Shop With Me http://www.awareables.com
    MySpace http://www.myspace.com/awareables
    Facebook//Betsy Mendel

    “Tenacity is a virtue”….Randy Pausch (The Last Lecture)

  12. Valerie White     Says:
    August 29th, 2008 at 4:27 pm

    Rich,

    Thanks for sharing all your insights into the DD Show. I’ve been watching the show for years. I’m hooked! I always look forward to when you are on it. The knowledge and experience from experts shared on the show is priceless! Everyone out there, if your not watching The Big Idea, your making your biggest business mistake ever. It’s free and nice to know that Donny and his experts like you “got our backs”. Thanks for all you do here and on the show.

    Valerie

    Don’t Float Without Your…Can-panion!

    http://www.can-coctions.com

  13. M.C. Nygard     Says:
    August 29th, 2008 at 6:25 pm

    Fantastic article. I like the one about buying “used” instead of new. I’ll add that when Small Business Owners buy something used on eBay, they should make sure to get cash back for their purchases.

    Regards,
    M.C. Nygard
    http://www.cashbackatebay.com/

    P.S. I make money when other people shop eBay and you should too. Every entrepreneur should think about residual income and this is just another excellent BIG IDEA to get your thoughts running. Other passive income opportunities include royalties from such things as eBooks and affiliate income opportunites through Clickbank and the like. Happy moneyday to you.

  14. Peggy Bentley     Says:
    August 29th, 2008 at 6:41 pm

    Rich, Great article. I SO WANT TO BE ON BIG IDEA. But you covered some really important things like insurance and protecting personal assets that I have not done yet.

    I sell most of my screens through Ebay. . . the website has brought in inquiries and a few sales.

    This is such a great and “green” product because it is made of Recycled paper.

    So thanks for the insight. . . Yes, I could use a Mentor!!!

    Peggy Bentley
    Memphis, TN - yes, Graceland
    Creator of PrivateSpacers.com

  15. Rich Sloan     Says:
    August 29th, 2008 at 6:59 pm

    So many comments - WHERE DO I START?!

    Tony, what an INSPIRATION! would love to have you contribute some green content to supplement our green business advice already at StartupNation. My profile within the StartupNation community (free to join, if you haven’t) is “Rich”. send me a private message with details.

    Artur, check out this article on Hiring Good Employees at our site:
    http://www.startupnation.com/articles/1157/1/AT_Why-Do-Background-Screening.asp

    Clarence, thanks.

    Camie, i will do a blog posting on how i got on The Big Idea. Great idea.

    Eileen, RIGHT BACK AT YOU!

    Betsy, as i said to Camie, look for a blog post next week. you, too, Peggy!

    Valerie, sounds like Donnie’s got a raving fan! I’ll let him know.

    ONWARD everyone, ONWARD!

  16. Great post!     Says:
    August 29th, 2008 at 7:20 pm

    Great job Rich. Thanks for once again hitting a home run and sharing it with us. I attended the Vision to Venture conference and also enjoyed hearing you speak there. You are a National Treasure!

  17. The Big Idea     Says:
    August 29th, 2008 at 7:39 pm

    I was on The Big Idea twice (webcam segment). I spoke to Donny and Padma (from Top Chef). It is a great show.Thanks for sharing your experience!!! Have you had much response??
    GOD Bless!

  18. Valerie White     Says:
    August 29th, 2008 at 9:35 pm

    Rich,

    Correct me if I’m wrong, but I remember on one show someone asked “When you should start taking money out of the business for yourselves?” I think you said to start putting 1% of your profits away each month and let it build up. I brought that up at our next business meeting and everyone thought I was a genius, until I said that I heard it on the DD show. We’ve been doing it ever since. Great Advice for everyone to know.

    Valerie

  19. Dan Auito     Says:
    August 29th, 2008 at 11:50 pm

    Outstanding, over the top and very comprehensive advice Rich, thanks for posting it up, Donny rocks and so do you. Nice work. Keep it coming. :~)

  20. Jenny Clough     Says:
    August 30th, 2008 at 10:17 am

    Rich,

    Great advice. My favorite, “treat them like a family member,” shows what a wonderful, sincere guy you really are. Thanks!

    Jenny

  21. Rich Sloan     Says:
    August 31st, 2008 at 9:47 am

    Hi Rich

    I cannot tell you how much we enjoy your appearances on The Big Idea. The information is invaluable… keep it coming!!!

    We’re all waiting for your next Big Idea!!!

    DeeDee

  22. linda     Says:
    August 31st, 2008 at 11:06 am

    Hi Rich,
    You are giving great helpful advice so please help me understand what I am doing wrong. I have a patent pending child safety shirt. I have a website lindaslark.com that shows the product, explains the product and allows you to purchase the product and yet, not many sales. My local newpaper wrote an article on the product and also it has been seen on Fox Philadelphia News. Everyone who sees my shirts think that they are a great idea, they are to help reunite the children who get lost daily at amusement parks, shopping malls,sporting events,zoos,school trips,airports etc. My shirts keep the information and only the information that you want known in a secure pocket. With cell phones today that is all the information that you need written on the plastic coated card that comes with each shirt. The shirts are another alternative for children who wear bracelets,tatoos and ID cards around their neck with their information. Please google Lindaslark to see the news articles. Any information that you can offer to me would be appreciated.

    Thank you so much,
    Linda

  23. David Kirby     Says:
    September 2nd, 2008 at 8:51 am

    Dear Rich, Thanks for the great info. Can you advise me how to get on the Big Idea Show. My brush is on Ebay ,, but that does not get the attention that T.V. gets. I believe I would sell millions with the right publicity. How do I get Madison Ave. marketing without money?? Is there a no money down plan that works with marketing, and could you explain various techniques?? Thanks David. see also http://www.crapperzapper.net.

  24. Annica Westphal     Says:
    September 2nd, 2008 at 11:07 am

    Rich,

    Thanks for sharing. I am the producer and co-host for Results Radio Show.

    Tony Darrick Baker, CEO of Xeal and Results Radio Show host, and I would like to invite you to be our guest on Results Radio Show hosted on 1170am KFAQ Tulsa.

    Our show is aired on Sundays from Noon to 1pm. We have about 4,000 listeners each week in the Northeastern Oklahoma area. All of our interviews are on ResultsRadioShow.com and those podcasts are also on i-tunes.

    You would be a great fit for the show and we’d love to have you as our guest.

    Please respond and let us know if you are interested in being interviewed for the show.

    Thank you. We look forward to hearing from you.

  25. Karen Campbell     Says:
    October 18th, 2008 at 9:31 pm

    Hi Rich,

    Congratulations on your successful appearances on DD’s show. I’ve been asked to speak on the show via phone interview on Monday Oct 20th. I emailed the producer after the Jim Cramer interview. I wanted to let Donny know that it is not ok to let Jim Cramer rant on about putting our dreams on hold and moving in with relatives while we work in jobs we don’t like to get us through the credit crunch. I returned to Sarasota on Thursday after 11 days in the UK and I was horrified to hear Mr. Cramers advice. The credit crunch is worldwide and it was very interesting to see how the British are dealing with their situation. Lots of spirit and absolutely no talk of giving up. When the world leaders talk of countries working together, it dawned on me that if we just changed the word country to business, the advice is just as relevant for us small business owners. OK, my rant over. Any advice for me for Monday? I would love to actually appear on the show and hope the phone interview leads to a personal appearance. P.S. My business is a unique word of mouth marketing program that we are in the process of franchising nationally.