Section 2: The Entrepreneurial Life
Part 3: Intrapreneurs
If you are the owner of the business, your actions will directly affect your profit. If you are an employee, then you may be recognized for your initiative and rewarded with a financial bonus, a salary increase, or even a promotion. This will be dependent on the character of your employer. If you are doubtful about the likelihood of your employer to reward you, you have two options:
1.) You can suggest the change anyway as a way to help the company.
2.) You can approach your employer and inform him/her that you have an idea that will increase the profits of the company but you want a guarantee that if your idea is used and is successful, then you will financially benefit. If your employer agrees, then it is a good idea to have him sign an agreement which binds him to his word.
Successful business owners aren’t necessarily good people. Picture this scenario: you suggest an idea and the boss says he’ll give you 10% of revenue that comes from that idea. Your idea happens to be wildly successful and makes the company $10,000,000. Do you think your boss is going to want to write you a check for $1,000,000? Unfortunately, he’ll likely find any excuse to not pay you. He may not even acknowledge the fact that without your idea, he’d still have made $9,000,000 more. If you had a signed agreement, it would be much easier to hold him to his agreement.
A more painless and risk-free way to approach your employer is to position your idea like this: “I have an idea that I believe will help the company. I’d be willing to test the idea on my own time and/or use my own money. If the idea proves successful, I think you will see the value to the company and you’ll want to implement it. However, I would like your guarantee that the company will give me 10% of revenues from this initiative.”
If the boss says, “Yes”, then you say, “I’ll give you a general overview. Please stop me if you are already considering this idea.” You share your idea in very general terms. Then you ask, “Is this something you are currently considering?” If the boss says “No”, then you pull out a written statement that you have previously prepared and you say, “Here’s a brief statement simply acknowledging that you aren’t currently considering this idea and that you will agree to our terms; sign here.”
Only after you get the boss’s signature do you share the full idea. If you share the idea first, he could easily say, “I’ve already thought of that and we were planning to implement it soon.”
On a special note, it’s important for you to have done your homework long before you present the idea. You will have prepared a very thorough business plan. You will understand completely the financial impact on the company. That way you will know if your suggested 10% is too high or too low. If the profit margin on your idea is only 12%, then it’s unlikely you’ll get 10% of revenues. But you might get 3%.
Also note that your idea could be simply a method of marketing. At a seminar I gave once in Kenya, the Chief Operating Officer from the country’s number one Internet service provider was in attendance, looking for ways to
increase revenues in a certain division of their company. As part of my seminar, I offered “hot seats” where I would bring up any volunteer and show him how to make more money in his company on the spot. Yes, I was putting my reputation on the line, but I had developed a very good framework that allowed me to be systematically creative.
As I offered one idea, I said, “Would this be easy to implement?” He said, “Yes”.
I then asked, “How many more customers per month do you think it would bring you?”
He said, “Conservatively, about 100.”
“And how much will each customer pay you per month?” I asked. He said, “About $100”.
I concluded, “If you get 100 new customers per month, you’ll have 1,200 at the end of the year. With each paying you $100/month, that’s $120,000/month in revenue. That’s a $1.4 million dollar a year idea!
If you had an idea that would impact your company in this way, what do you think you should be paid for it? If you only asked for $5/month/customer, you would create an additional income stream of $6,000/month (1,200 customers x $5).
If you’re an entrepreneur at heart but you think you would prefer to work in a larger company, you can still be an intrapreneur. Keep your eyes open and you’ll see opportunity around every corner.