Small Business and Banking

If we had no winter, the spring would not be so pleasant; if we did not sometimes taste of adversity, prosperity would not be so welcome.

~Anne Dudley Bradstreet

Getting a small business loan now is extremely difficult as so many financial institutions – both community and national – are not giving them out at all. If loans are being offered, the requirements are onerous with heavy collateral requirements and a heavy commitment to a down payment.

Our government has done so much to bail out big business and big banks, but little of this has shown up to help small business, which is the lifeblood of our country. We had one firm that had just gotten a contract from the state of Florida to provide workers in the medical field. They had a purchase order obligating them to supply over 100 jobs employment for over nine months, but they needed additional funding to cover the initial payroll, which amounted to about $150 thousand.

The state was going to guarantee payment once the workers were found, but this young firm just could not get the initial financing necessary to sustain them until they got the first payment from the state. The firm had tried almost every bank, but none were willing to loan them funds. They were just unwilling to take the risk required to create jobs that are so vital to our economy.

Our national government is throwing trillions of dollars into the Troubled Assets Relief Program (TARP), stimulus spending and now into health care, but these dollars have been ineffective at reducing the unemployment rate. These dollars are missing the mark because they are bypassing small business, which is the job-generating engine for our economy. If we are to get out of this recession and get people to work, we have to find some way to finance the growth of small business.

For most small businesses, there are, however, several avenues to acquire the funds that are needed to grow and build the infrastructure for the coming recovery. Firstly, look to credit unions as many of these financial institutions have funds available and are now offering small business loans with very attractive rates.

Additionally, the Small Business Administration (SBA) has a great program called the “504” loan program, which furnishes loans to small businesses. SBA “504” loans offer small business owners and manufacturers access to low interest, long-term and fixed-rate financing with only 10 percent down payment requirements for the purchase, construction or renovation of owner-occupied commercial real estate and/or the acquisition of industrial equipment or other fixed assets. “504” loans are delivered exclusively by non-profit Certified Development Companies (CDCs) regulated by the SBA. A firm called Florida First Capital Finance, which has offices throughout Florida, offers these services as well.

Finally, if you need financing, consider raising funds from your friends or relatives, a method that is typically called bootstrap financing. There are so many wealthy investors that love to loan money to small businesses if the deal is right. Obviously, these lenders or “angels” do not carry signs that say, “We have money to loan”; rather, you need to find them by asking your accountant and possibly your banker if they know of any.

While the opportunities for acquiring funds to expand your business are exceedingly limited right now, there are still vehicles available to you to raise money. It takes much more work than it used to, but it can be done! Like most things, raising funds – especially in this market – is tough, but with a plan it can happen.

You can do this!

Lean on your Suppliers

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.
~John Fitzgerald Kennedy

Going through these very difficult economic times, controlling cost is one of the major things that you can do to really help your bottom line. Now is the time to renegotiate everything from rent to cost of goods sold.

So many of your vendors are having such trouble with falling sales that they are now willing to take significant price reductions, but you must ask for them. Your suppliers need to retain you as a customer now more than ever, and they should be willing to do most anything that is reasonable to keep your business.

We were helping a firm that purchased over $5 million a year from its primary suppliers. These suppliers had quickly passed along their cost increases—particularly transportation costs—to this business. Now that sales were falling off, the company needed some relief if it was going to survive.

When asked why they had not requested a price break before, the comment was, “Our purchasing agent just does not feel comfortable in asking for these.” As you can imagine, I went livid and asked the owner if a savings of $1 million (20% of $5 million) was worth asking for.

He finally got the point that now things had changed and that unless he was willing to demand price reductions from his suppliers, he might not be around much longer. He was able to get his purchasing agent to buy in by giving him a percentage of the savings from the cost reductions they secured and by very clearly demonstrating how to ask vendors for price breaks.

At first, the purchasing agent just wanted the vendor to give them a better price. The owner, however, mandated that the purchasing agent start off asking for a 20% price reduction from those suppliers that they knew had nice profit margins and could afford it. Starting with a number established an expectation that was reasonable rather than just asking for any type of price break.

When asking for price reductions, nothing should be off limits. Whether it is consultants’ salaries or office supplies, you must demand price reductions in these market conditions. You must ensure that your company has a cost structure that is workable in today’s economy. Your viability depends on this.

Even if you have signed a contract for service, these should be renegotiated as well. A recent study found that six out of every ten chief information officers are renegotiating existing contractual agreements. When renegotiating, your leverage is that these contracts will have to be renewed in the future, and your willingness to renew is going to be a function of this renegotiation process.

Now go out and initiate a process of renegotiating each and every one of your purchase contracts. This just cannot wait. It must be done as quickly as possible to get the benefits flowing into your company.

You can do this!

See the potential in each of your workers!

Believing in people before they have proved themselves is the key to motivating people to reach their potential.
~John C. Maxwell

I think that one of the biggest mistakes managers make is failing to see the potential in every one of their staff members. It is so easy to form beliefs about your staff only on the basis of their past behavior rather than recognizing the unique potential that each one brings to the workforce each and every day. For example, if a staff member is constantly making mistakes on a certain type of report, many managers would define the employee in terms of those errors rather than seeing their unbridled potential.

Jim Moran, the founder of the Jim Moran Institute, was very successful in the automotive industry. In the years before his death, I had numerous opportunities to spend time with him and observe the way he treated other people. Without exception, he made his staff – and me too – feel great. This was not because he always had kind words for everyone, but rather because those around him really sensed that he saw their real potential. It was like having a sudden gust of wind to buoy you up. He was loved and cherished by so many people because he made them feel good simply by seeing their hidden potential.

So many managers try to coach their employees; however, the tendency is to change the employee’s behavior on a certain task. For example, if I am coaching a staff member, and I am discussing the problems they had in their last report, I am getting bogged down in the details. However, if I can encourage them to see their own potential for greatness, I am coaching to the potential, and the details will get resolved as a result.

As a manager, you can get so much more out of your employees if you can just visualize each one’s inherent potential. Just imagine a baseball manager trying to coach a hitter that has been in a slump and has not had a hit in 10 appearances at bat. The manager could coach the player to go out and practice more, or he could tell the player to be patient and wait until the slump eventually ends. However, a great manager would convey the potential that he knows is within his player and help him to see this as well.

I frequently have to stop and take note of the greatness in all of the support staff around me. If I do not do this, I see them as obstacles, which is not good. I must see the potential of each person that I work with, as that allows me to have a very special relationship with them. As a coach, I need to see their greatness and show them how they can see this greatness as well. For some reason, it is so much easier for an outsider to see the potential in an employee than it is for the employee to see their own.

Now go out and do the best you can to see the potential in each and every one of your staff members.

You can do this!

Text Messaging for your Business

If it keeps up, man will atrophy all his limbs but the push-button finger.
~Frank Lloyd Wright

One of the newer trends out there is the use of text messaging technology in business. Text messaging, which is sometimes referred to as SMS (short message service), allows businesses to instantaneously send brief messages to their customers’ cell phones. Text messaging does not replace other types of advertising; rather, it should be thought of as a tool to use only in certain circumstances. Normally, you would use text messaging when you want a rapid response from your customers, and the message to them must be short and simple.

Many carriers limit the length of your text message, but shooting for somewhere in the vicinity of 150 characters is a good guideline to follow. I frequently receive text messages from Tropical Smoothie, and both Dunkin’ Donuts and McDonald’s have had a great deal of success using this tool in their marketing campaigns.
There are many companies out there that will help you use SMS, and the gold standard is MessageMedia, which boasts more than eight thousand business and government customers. SMS services make text messaging a fairly easy process. Simply provide the cell numbers and the message, and the SMS service will deliver your message to your customers. You can pay per message, but a newer approach involves the use of teaser messages that ask recipients to reply if they want more information. In these cases, some firms only charge for the second message, which shows that the customer has responded.

So many people think that only the younger generations use text messaging, but it is quickly spreading throughout the entire customer base. Younger generations are still using text messaging much more than baby boomers – Nielsen Research found that teens and young adults send an amazing three thousand text messages a month; however, the total usage of text messages has nearly tripled each year with all generations using this application. The latest data I saw showed that there are more than three billion text messages sent every day. Additionally, for most customers, text messages are generally looked at before email messages.

One of the best uses of text messaging that I have seen is by restaurants that send customers the same evening’s drink specials. Text messaging is most valuable when applied to consumer decisions that can be made quickly and do not involve large amounts of money. I would never think a Rolls Royce dealer would send out a text announcing a sale on cars, but McDonald’s offering a half-priced Big Mac via text message would make perfect sense.

When using text messaging, there are a couple of issues to be conscious of. It is vital to get your customers to agree to receive the text message or have an opt-in agreement. Additionally, you should limit the use of this tool to only those cases when you have something of real value to offer your customers.

Now go out and see if text messaging makes sense for your business. If it does, then develop a plan for implementing this very effective tool.

You can do this!

Customer Service Performance Standards

Being on par in terms of price and quality only gets you into the game. Service wins the game.
~Tony Alessandra

So many of the businesses that we assist at the Jim Moran Institute have customer service problems. Many of them are related to a lack of awareness of the issues, but so many more are rooted in the absence of performance standards.

It is great to set a goal of having outstanding customer service, but without a way of measuring or evaluating your staff on their performance, how effective could this goal be? With any goal you must be able to measure your progress and whether you have reached it.

Each element of customer service must have a measurable goal to attest to the progress that is being made. For example, the primary elements in customer service are greeting the customer, responding quickly to their requests, fulfilling their orders in a timely manner and dealing with problems. For each of these elements, you must establish a standard – or even a “gold” standard – to ensure that each employee knows both what is required and how their performance will be measured.

When greeting a customer in a physical location, the performance standard might be that each customer should be greeted with a smile within 30 or 60 seconds of their arrival. Making each customer feel welcome in your business is so important, and putting a time stamp on the greeting ensures that this critical element of customer service occurs without delay.

The second standard relates to how quickly your business responds to customers’ requests. Every business must adopt the standard that all customers receive a call-back within eight business hours of their inquiry. If you ever call me, my voicemail message does not say that I will get back with you as soon as possible (terrible customer service); rather, I say I will return your call within four hours. Customers’ emails must be acted upon within the same eight-hour window.

When a customer places an order, the time it takes to process and fulfill that order must be set and monitored. Here the standard might be that 98 percent of all goods ordered must be shipped within 48 hours. Too often I have ordered something over the internet only to have it delivered a month later with no explanation as to the delay.
The final standard involves dealing with customers’ problems. Here we want the issue to be fixed and dealt with in a prescribed way. Nothing drives a customer crazier than having a problem and being unable to get it fixed. I like to think that every business should be grateful for each customer that comes to them with a problem as this allows the business to identify the issue and then fix it. A standard here might be that each customer complaint should be remedied within 48 hours of receiving notice.

The bottom line is that in order to have outstanding customer service, you must have standards in place that will allow you to measure how you are progressing toward your customer service goals. Now go out and make sure that you have established customer service standards at your business.

You can do this!

The "Ritz" customer service experience.

You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied.

~Jerry Fritz


If you have followed this column for a while, you know that one of my favorite topics is customer service. A business must focus on this in order to be successful.

Recently, I was able to attend a customer service seminar at the Ritz Carlton in Phoenix. This was by far one of the best seminars I have ever attended -- not only because of the topic, but more importantly because we were able to live the customer service experience at the Ritz 24/7. The Ritz makes the customer the top priority for each and every staff member both through the hiring process and continuous training. I learned so much that will be the subject of future columns.

One of the things that is so powerful about the Ritz Carlton is that each employee carries a card that states, “We are ladies and gentlemen serving ladies and gentlemen.” This one simple sentence clearly says that how we interact with our customers should be no different than how we interact with each other. Time after time I witnessed exceptional civility between the employees as they worked together.

Each Ritz employee is so thoroughly trained in customer service that it is almost as though they have radar implants that allow them to anticipate each guest’s needs before they know what they want. At the Ritz, they would never ask a client if they would like an umbrella when they see it is raining. Rather, they would go out and hand them an umbrella. It is a subtle distinction, but it is an important one when trying to anticipate what a customer wants.
One classic story told at the seminar was about a maid who was cleaning a guest’s bathroom when she noticed that all of the toothpaste had been squeezed out of the tube. While the hotel provides house brands for those guests who forget to bring toothpaste with them, this maid went to the drug store across the street to buy the guest’s identical brand. She left the toothpaste with a note on the counter by the sink. This is great customer service!
I think staffing at the Ritz is critical as the staff is ultimately responsible for delivering exceptional customer service. For every open position, the Ritz takes ten applicants and interviews each candidate at least five times before making a job offer. Not only does the Ritz value its existing employees, but it knows that the heart of customer service is getting and keeping a great staff. In fact, turnover at the Ritz is approximately one third of the industry average.

Now go out, evaluate your customer service and make sure it is the best it can be. Customer service does not cost. It pays.

You can do this!

Learning vs. Training

The most important object in Boy Scout training is to educate, not instruct.
~Sir Robert Baden-Powell


One thing that every business needs to work on is upgrading the skills of their staff. This is critical for several reasons. New technologies are constantly emerging, people are promoted or are given new responsibilities, and existing skills need to be reinforced and tweaked.

Most businesses these days talk about training, and many have entire departments dedicated to training their workers. However, I think the emphasis on training is misplaced. Rather, the focus should be on learning, and many larger companies are now changing their training departments to learning departments. While this might just seem like a subtle change in wording, I can tell you that it is much bigger.

With most training programs, the emphasis is on the trainer who disseminates information to participants. It is the trainer’s responsibility to get the material across. Training is simply an event that occurs when staff members attend a training session. Learning, on the other hand, is an internal event. It transfers the responsibility to the participant. It is now up to them to understand and master the material. Between training and learning, the focus shifts from teacher to student.

I am currently giving a seminar to a large financial institution on how to be a great manager. I have told all of the participants that I am not there to train them; but rather, that I am there to facilitate the learning process. The outcome of the seminar rests on them learning the necessary material. It is their responsibility to master the material, and not mine to train them. This is a big shift in orientation, but it is one that is vital in business.

This new philosophy requires that each participant comes into the learning environment with a clear understanding that the responsibility for mastering the material is his or hers and not the instructor’s. In addition, the manager plays a key role in ensuring that the learning is transferred into the employee’s work environment. The manager is responsible for providing the encouragement, tools and support that will enable the employee to successfully apply the new skills and knowledge to his or her day-to-day activities.

Some people might say that the distinction between learning and training is minor, but in my mind it is quite large. It changes the entire way we approach new material. With learning, you begin at a higher motivation point, allowing the students to become active participants in the learning process as opposed to having an instructor force-feed them the material.

Now go out and make sure that your organization is focusing more on learning than training. It is an important shift in emphasis, and it is one that will better serve your organization.

You can do this!

First day of work for a new employee

When we visualize something, we establish a relationship to the thing itself, not to some mere subjective representation of it inside us.
~Medard Boss


Hiring a new employee takes so much work and effort. You have to spend time recruiting and evaluating each candidate and then selecting the right applicant for the job.

It is so important to realize that when a new worker starts, their first day at work is critical. You never get a second chance to make a first impression.

So many entrepreneurs use a new employee’s first day of work to take care of all of the paperwork that is so necessary to the hiring policy. However, this is not the ideal way to start a new employee. Of course the paperwork must be done, but it is probably best to move this task to the second day of work and use the first day to generate the best initial impression that you can.

Here are some things to consider when preparing for that critical first day. Before the new employee reports for his or her first day, there are a couple of things that should be done. First, I think it is so important that the manager who will be supervising the new employee sends a nice handwritten card. Additionally, a day or two before the new employee starts, send an announcement to your entire staff via email or intranet notifying them that this individual will be joining the team. These are both great ways to make the new employee feel welcome even before they set foot on the premises.

It is so important to make a new employee’s first day of work a positive experience. One very simple thing that you can do is welcome the new employee at the door and give them a tour of the facility. Some employers actually lay out a red carpet for new employees. The point here is to ensure that each new employee feels welcome as soon as they hit the front door of your business.

I have seen so many employees arrive for their first day of work to find that they are without a permanent office or that their computers are not yet hooked up. It is vital that the work area and technology be set up and ready to go by the time the new employee starts. Some employers even prepare a gift bag containing a personalized item like a monogrammed coffee cup and some company apparel and leave it on the new employee’s desk.

An employee’s first day should also include a meeting with the CEO and top staff. At this meeting the employee should be made to feel welcome and be given a sense of the company’s purpose and mission.

Now go out and make sure that you have a plan in place to create the best possible first impression for each new employee.

You can do this!

Importance of signs in your business!

A lot of people I know - it drives them crazy when they're watching, to see the people with their signs and waving, but there's something that's very inclusive about it.

~Katie Couric


When you think of advertising, you must remember that signage matters. It is part of the advertising of your business, and it makes a big difference. Signage is another arrow in your quiver that will draw customers into your business.
We were helping a fitness facility/spa increase business on its spa side. The business offered all kinds of physical fitness and beauty treatments such as facials, nails, hair and massage. More than 200 people came in each day for physical training, but the spa was barely breaking even.

Despite the fact that customers had to walk right by the spa in order to get to the fitness facility, not a single one seemed to notice. The signs for the spa services were originally hung parallel with the walkway, and we encouraged the entrepreneur to hang them perpendicular to the walkway instead. This way, potential customers would not have to turn their heads to see the offerings. Now, within a month of adjusting the signage, the spa is making a nice profit, and the owner is pleased with both the increased profits and the improved morale among spa employees.

In this case, just changing the angle of the signs should improve profits by more than $100,000 each year. Physically, this was an easy fix, but it was a difficult change to make because the owners just did not see the problem. They never looked at how the signage appeared to their customers.
An artist was lamenting to me that while his art sales were doing great, his art classes were not. His studio was located in the middle of a round-about in a major city, so there was no shortage of traffic. A tremendous number of cars passed his studio every day, but as you might have guessed, he had absolutely no signage advertising his art classes on his building. Once he put signs out, enrollment in his classes shot straight up.
Now obviously, if your business is not in a location that is visible to your customers, investing in signage makes no sense. However, if you have invested in a great location, you must take advantage of this opportunity to promote your business, subject to the legal limits of the governmental jurisdiction.
Even if you do not have a location that is conducive to outside advertising, signage must be used on the inside to effectively promote your products or services. Just having product on display is not good enough. You need signs to explain in greater detail what the products do or where they are located.
Signage is one of the cheapest forms of advertising, yet it is one of the most effective. The best way to test the effectiveness of your signage is to ask people – not friends or relatives – for feedback on what they think in terms of your signage. Just listen to what they say. Their comments can be so valuable.

Now go out and ensure that you have the best signage that you can both inside and outside your business.

You can do this.

Backups

A business without adequate backups is like the Titanic and its inadequate life rafts happily cruising towards a sad fate.

~T.E Ronneberg
Technology can be so great, and I really do love my tech toys. However, without the proper backup measures, they quickly turn from friend to foe.

I have a new phone, which I love except for last week. I decided (with some help from a computer salesman) that I needed to install new software on my phone that would enable me to wirelessly synchronize the phone with my computers (a Mac and a PC). I thought this was a great idea to ensure that none of my data gets lost before I return to my office.

Last week, while on a trip to South Florida, I installed this new software only to have all of my data (contacts and calendars) disappear into the clouds. This was not good, especially since I was in South Florida doing work. Without the data from my phone, I had no idea where or when my appointments were.

After many calls to the software company and one very strong chastisement from them to me for not having a backup with me (my computer, of course, was back in Tallahassee), there was not really much they could do.

I was able to limp through the week in Fort Lauderdale using only a few four letter words to vent my total frustration. I was, however, petrified to go back to Tallahassee and try to resync my phone for fear that the data in my office might disappear as well.

Before trying to resynchronize my files, I made two CDs with the data in case I lost it again. This time, the backup and data recovery worked out okay, but the whole ordeal made me realize just how important backing up your data is, particularly for business owners.

Whether due to circumstances that are not your fault or cases like mine (I think that I messed up the installation of the software), you will eventually need your backup disc. Even if you do everything right.

It is critical that you back up your files daily and store your data off premises. If you live in Miami, keeping a backup in Fort Lauderdale is not going to do it as a large hurricane in Miami is going to affect Fort Lauderdale as well. There are many companies out there that offer services to electronically back up your data every day, and they are typically located a long distance away.

Not only must you make backups, but you should also know how to restore your system from these backups. I was helping a business, and I was concerned about their backup procedure. I asked the owner to restore the data from the backup to the primary computer system. He was hesitant to do so as he had never done it before, so I got him to make another backup, just in case. He then tried to restore the data from the first backup, and he had a number of problems.
When we got through this ordeal, he thanked me as he would never have tried to restore the data if I had not made him. Now he feels so much more empowered as he not only backs everything up, but he also knows how to restore it.
Like most things, it is frequently useful to get professional help in setting up your backup scenarios and recovery testing. This is money well spent.

Now go out and make sure that you back up your files daily and store your data a safe distance from your office. Additionally, be certain that you can easily restore your system from your backup data.

You can do this.

Making your business theft-resistant

Each time you are honest and conduct yourself with honesty, a success force will drive you toward greater success. Each time you lie, even with a little white lie, there are strong forces pushing you toward failure.
~Joseph Sugarman

In this very slow economy, employee and customer theft is a growing problem. The more your employees and customers are financially squeezed, the greater the probability of theft of funds or assets.

The U.S. Chamber of Commerce estimates that employee theft accounts for somewhere between 20 and 40 billion dollars in business losses. The Chamber also reports that an employee is 15 times more likely to steal than a customer or non-employee, and 75 percent of all employee crime goes unnoticed. In addition, less than 10 percent of the employee base is responsible for over 95 percent of theft. Bottom line, theft represents a significant cost to most firms, but it is one that can be reduced.
The best thing you can do to prevent theft is to make your business theft-resistant. In other words, do everything you can to deter theft rather than dealing with it once it has occurred. Like most things, making your business theft-resistant requires a plan and some research into where your vulnerable points are. However, there are many common areas that most businesses share to work on to make your business as theft-resistant as possible.

One of the best means of theft prevention is installing surveillance cameras anywhere financial transactions take place. Some entrepreneurs are hesitant to take these measures out of concern that employee morale will decline as they no longer feel trusted. While this does frequently happen, it can be easily avoided by telling staff ahead of time what you will be doing and why. Most people seem to understand the importance of a deterrent.

Good background checks and pre-employment screenings are critical when theft-proofing your business. Start with honest employees and combine that element with anti-theft measures. Together, these are the keys to reducing theft.
Frequently, businesses hire applicants that have a blemish on their record (e.g. felony conviction) to give them a second chance. This is a disaster waiting to happen considering that these past issues are just the ones for which the applicant got caught.

Another practice that is so important to preventing theft is ensuring that each employee takes some time off every year. Frequently, employees are able to cover up theft by routinely altering the books. Taking time off would mean getting caught if they tried to do this.

Materials and fuel are vital areas to watch when making your business theft-resistant. Controlling access to both your fuel and credit cards is so important, and staff should be made aware of the fact that you are monitoring these.
Taking inventory on a regular basis (more than once a year) is a great way to prevent theft. I have personally seen so many cases where theft of materials by staff members could have been easily avoided had a simple monitoring system been in place.

Finally, whenever cash is involved, it is always good to have a system of checks and balances. For example, at the end of the day, cash is counted and signed off on by two staff members.

Now go out and develop a plan to make your business as theft-resistant as possible and then implement this plan.

You can do this.

Focusing on Accounts Receivable

Managing your accounts receivable is so critical in today’s economic environment. So many entrepreneurs are having problems with cash flows, that paying late just seems to be becoming more and more pervasive. While you can be empathetic with your customers’ issues, you must insure financial viability of your company. Managing your accounts receivable and being proactive in their collection is the way to insure that you have enough cash to meet your obligations.

In order to measure collections of accounts receivable, there are two standard measures. The first is an “aging schedule” which just lists the amount that is owed within certain time periods. This might say that $100,000 of receivables are less than 30 days old and $200,000 are 30 to 60 days old and $100,000 is over 60 days. With this aging schedule you can see over time how effective your collection effort is.

Another benchmark for measuring collections of accounts receivable is the ratio called, average collection period. This ratio just specifies the number of days of credit sales tied up in accounts receivable. The formula is just accounts receivable divided by credit sales per day. If I have terms of net 30 days and my average collection period is at 45 days then it says that I am not doing an effective collection effort.

Some of the things that you can do to improve collections is to make sure that someone is in charge of this activity. Like most things, if no one is in charge, it tends to slip between the cracks. Additionally, you need to make this a top priority of yours and remind staff how important this is to the business.
Now making collections calls and asking for money is no fun and many folks do not like to do this. However, this must be done and you doing some of these calls sets the right tone for your business.Some firms have moved successfully to the policy that the bill is due upon receipt rather than having terms like net 30 days. This due on receipt really does speed the cash coming in.

Another thing that you need to consider is credit terms to encourage customers to pay early. For example you can offer terms of 1/10 net 30 which means if you pay with 10 days, you can take 1% off the bill but the full amount is due by day 30.
Charging a fee of 1.5% for late payment is another thing that you can do to speed up collections. However, if someone does not have the money to pay, this seems not to have a great impact.

Finally, you need to have a collections policy in place. It should specify what will happen as the lateness of the bill increases. For example a collection policy might state: a. if a bill is 15 days past due then a duplicate invoice with a nice note saying the invoice might have gotten lost. b. if a bill is 30 days past due, then a call is made checking on the status of payment and finally, c. a demand letter goes out and says if payment is not made, the bill will be turned over to a collection attorney and no further goods or services will be provided to the customer.

You can do this!

Can your leadership style be too aggressive?

The basic difference between being assertive and being aggressive is how our words and behavior affect the rights and well being of others.

~Sharon Anthony Bower


When running a company or managing people, you must be aggressive to achieve results, but is it possible to be too aggressive?

We are dealing with a very competent middle-level manager who is both very well-educated and a committed employee. He exceeds at everything his superiors ask of him, and he is 100 percent dedicated to the mission of the organization. He is well-liked but for one unfortunate attribute. Whenever he gets involved in anything, he just takes over, running rough shod over the others in the group and micromanaging it. Consequently, others do not show him any new ideas for fear that he will just take over.

The organization was considering a new training program for entry-level managers. While this manager had recommended a program like this many times before, no one seemed to pay attention. However, another manager had now made the recommendation, and it had reached the planning stages. A committee format was being used, and he was not involved. His presence was not requested, nor were his opinions solicited for fear that he would take over.

Obviously, his feelings were hurt as he felt he could contribute so much to this committee, and he certainly could. However, he just had never learned how to let go and be involved in something without being in charge.

Being a leader is not a 100 percent of the time job. Most leaders vacillate back and forth between being leaders and being followers depending on the conditions. For example, when attending meetings, a leader might simply be a participant rather than the leader; and when talking to staff, a leader might assume the role of a friend. The point is that leadership – and to some extent aggressiveness – is not a role that you want to spend 100 percent of your time in as it tends to alienate colleagues and staff.

Effective leaders are flexible in their style, molding it to fit the task that needs to be accomplished and the people who are involved. At times it is more effective to move people to a conclusion or a position using a persuasive style, as opposed to being directive.

This middle-level manager just never learned how to turn the switch off, and he defined himself with this type of role. While it served him for the majority of his work life, it was clearly not successful as he moved up through the organization. He had a very strong personality type, but if he was going to advance, he was going to have to learn how to turn that switch off and on as appropriate.

We worked with him, eventually getting him to see that it was okay to relinquish control and not be in charge all of the time. We were only able to really get this point across to him after having him do some role plays, recording them so that he could view the videos later. Upon reviewing them, he was quickly able to see how offensive his behaviors could become and how intimidating he could be. Watching himself through the camera lense allowed him to see a part of himself that he had not yet witnessed. It was enough to convince him to change his leadership style.

Now make sure that your aggressiveness is not overdone. One good way to monitor this is through a 360 degree evaluation, in which your superiors, your subordinates and colleagues at the same level evaluate your performance.

You can do this.

Overselling

The reputation of a thousand years may be determined by the conduct of one hour.
~Japanese Proverb

Every business’ objective is to make money by offering a fair value to their customers thereby ensuring that they can continue to operate profitably. However, if a business takes advantage of its customers through overselling, its customers will rightly turn away from the business, which is exactly what should happen in the free market system.

I have three dogs: Sophie and Bella, both black labs, and Hoover, an elderly Shih Tzu appropriately named because he eats anything left on the floor. With all of these dogs, I spend substantial amounts of time in vet offices, and I have been going to one for about 18 months now.

It seems as though every time I go in there for services, their fees increase without explanation. On one visit for example, I went in to get them to sign a document that stated my animals were healthy, and it cost me $30. They have even started to request that each of my animals have semi-annual checkups – a practice even my own physician does not suggest. Even now when I think about this, my blood starts to boil.

In the exam room, the shelves are lined with a ton of products they are promoting. The last time I was in there, I sat down on a bench to wait for the veterinarian, and there on the seat was a flip book trying to sell me on dental cleanings for my dogs. Three months ago they told me that my Shih Tzu needed his teeth cleaned at a cost of $300, and he only has four teeth. Bottom line, I felt that they were grossly overselling their services.

Clearly each and every business needs to sell their products and services, but if you push too hard, you risk alienating your customers. Obviously, this vet practice figured this out as I recently received a form letter from them saying that they were reducing the prices of some types (unspecified) of preventative care.
The line between good selling and overselling is not always clear, but with this vet practice it was not just one thing that made me feel as if I was being taken advantage of. It was the unrelenting and continuous push to purchase some product or service.

I am not sure if the vets at this practice realize how this overselling is being perceived, but it would not be difficult to find out. One good way to do so is simply to ask your customers for their suggestions or improvements. Without customer input, the first time a business will notice that they are overselling is when they start to lose customers.Another way to see if you are overselling is just to put yourself in your customers’ shoes and see how your business looks and feels through their eyes. I really do think if these vets would come out and take a look at what I see, they would easily recognize the magnitude of their overselling.

Now go out and make sure that you are not overselling your customers.

You can do this.

Cannibalization of Existing Sales

The question on long term strategy is not if it is successful, but if you are still alive.
~Ron de Jonge

I was meeting with the owner of a company who sold levels of services priced from $20 to $50. While the price was low, he typically sold 50,000 services a year from a very small location that was almost labor-free. In an effort to increase his customer base, he shifted many of his services into the quieter hours from 8-10 AM and 6-8 PM by lowering the price of the low-end service, setting it at $15 during those time periods. He felt very strongly that this was a great plan since the number of services sold was up but his revenue was down slightly. He also said that a few customers liked this low price so much that they had this service two or three times a week.
Cannibalization is a business concept where you devour your own sales to preserve or increase market share. BlackBerry is a firm that really understands this concept. They continue to roll out new BlackBerries knowing that by offering new products, some of their existing phones are going to suffer losses in sales. However, by offering new products in new markets, they cover the cost of this cannibalization with the new sales and they stop competition from entering the market.
It is vital that you understand that you must run the numbers to determine whether cannibalization or market expansion makes sense. For example, if you are going to offer a new product and you know that you are going to lose 50 percent of your revenue on an existing product line, the new product must be able to generate a return high enough to cover the cannibalization cost.
The one exception to this rule, however, is that sometimes you just have to eat the cost of cannibalization simply to maintain market share. For instance, BlackBerry came out with the Storm, a touch sensitive phone, to compete with the iPhone. They knew that they just could not afford to let Apple keep grabbing up market share, and they were not worried about the cannibalization cost. In this case, maintaining market share and market presence was the goal.
When considering cannibalization, ask yourself whether it is actually necessary. With the service example at the beginning of the column, it turned out that this entrepreneur was not really bringing in more customers by offering the lower price at certain times. Instead, he was just shifting customers to an earlier time for a significant drop in price and margins. Customers would have come in anyway and paid $20 for the service, but for the lower price, it was worth it to them to come in during the specified hours. Bottom line, the reduced price was not serving this entrepreneur at all.
Cannibalization is an important business concept to understand when you are introducing new products or services. You must recognize this as a cost you incur with new product or service offerings. Now go out and make sure you have a way to evaluate this cost in any product line expansion.

You can do this!

Do not focus on too many areas in your business.

The man who succeeds above his fellows is the one who early in life, clearly discerns his object, and towards that object habitually directs his powers. Even genius itself is but fine observation strengthened by fixity of purpose. Every man who observes vigilantly and resolves steadfastly grows unconsciously into genius.
-Edward George Bulwer-Lytton

We are helping an entrepreneur who has been in business for over 15 years, but whose revenues have lately been on a free fall. I asked him to develop a marketing plan, and he had so many problems doing so. It just baffled me that this intelligent, bright man was having so much difficulty writing a marketing plan.

Given the difficulty he was having with the marketing plan, I went back to ground zero and asked him what his mission and vision statements were. Both turned out to be so general that they were of no value. During these conversations, he showed me the company brochure, which listed ten different, unrelated services that his company provided. I then understood why the marketing plan and other core statements were impossible for him to complete. There was no hope of having a focused message or a focused business while providing so many different services.

I asked him how he managed to get involved in all of these different areas, and he said that his clients had asked him to do additional work outside of his core strengths. In response, he went ahead and did these things and developed an expertise. He just thought the more services he offered his clients, the more business he would generate. Unfortunately, he just neglected to consider how trying to do too many things for too many different types of clients would dilute his efforts.

We spent one meeting just discussing which of the areas he was passionate about and which there was a market for. He decided to focus on business coaching. From this, it was easy for him to develop succinct vision and mission statements as well as a very good marketing plan. Once he was able to focus, the rest was simple. Without this focus, everything was just too scattered.

Now there is nothing wrong with having multiple product lines, but having too many will cause you to lose focus. The more you lose focus, the less control you have on your business.

Most entrepreneurs are great at spotting opportunities, and their natural reaction is to go after them as these windows may not be open forever. However, what each and every entrepreneur needs to remember and understand is that each new market thrust leaves less time to manage and run existing product or service lines. So instead of asking what the returns from the expansion are, the question should ask what the returns from the expansion are less the losses brought about by reduced effort on existing products or services.

Now go out and make sure that you have not over-expanded your offerings so that you can stay focused on your core product or service lines.

You can do this!

How to prepare for the ending of the recesssion

The rung of a ladder was never meant to rest upon, but only to hold a man's foot long enough to enable him to put the other somewhat higher.
~Thomas Henry Huxley, Life and Letters of Thomas Huxley

While the economy has not been doing great, there is no question in my mind that signs are pointing towards positive economic growth. The Consumer Confidence Index and the stock market are beginning to show some positive signs. Additionally, the Fed is talking about raising interest rates and other country’s economies are turning around. All of these factors indicate that we are starting to bottom out of this nasty recession.
Like most things, the spoils go to the person or business that prepares for these changes, and we need to start preparing for the uptick in business that is right around the corner. Jim Moran’s (founder of the Jim Moran Institute) favorite quote was, “The future belongs to those who prepare for it!”
One of the things that each business needs to do is revisit its strategic plan. I do a lot of strategic planning for companies, and I have yet to see a business preparing for recovery with a viable plan. These business owners have been occupied coping with this recession for the last 18 months; however now, each and every business should be planning for the turn-around. Bottom line, every business needs have a recovery plan incorporated into their strategic plan.
A recovery plan is the necessary preparation for the increase in demand and revenue that will accompany an economic turn-around. As part of this plan, there are two critical tasks that I think you need to start doing now: investing in technology and acquiring staff.
You have to be able to service your clients very efficiently as we progress, and you must have the IT infrastructure in place before the economic activity really takes off. Now is the time to verify that you have a plan to acquire the technology needed to deal with this increased demand? While you may not be able to afford all of this now, you can put a plan in place to add these necessities as quickly as possible once the funds start rolling in.
From a technology perspective, you should ensure that your server is capable of handling the additional demand, that you have software for customer relationship management (CRM), and that you have enough computers to accommodate a much larger staff. To weather the recession, I have seen many businesses reduce their IT expenditures by cutting back on adequate backups and current versions of new software. Now is the time to think about the areas that you have cut back and figure out how you are going to bring them up to speed, if not right away, sometime in the near future.
The second critical part of your recovery plan is the addition of staff, be it now or in the near future. Currently, potential employees are readily available and are willing to work at very reasonable rates. If you wait to hire staff until you need them – a recipe for disaster – your customer service is going to suffer. Hiring later will also mean paying a much higher price for new staff members, not to mention that the quality is not going to be as good as it is now.
With any staffing increase, training is a necessity. During the recession, you may have slowed training activities, but as you hire on new employees, you will need to ensure that these programs are put back in action.
Now go out and make sure you have a recovery plan in place that incorporates additions to both technology and human resources.
You can do this!

.

Is multi-tasking over rated?

“A hidden energy crisis threatens our world. Society throws people into chronic physical, emotional, and spiritual depletion. Multi-tasking lets us manage a deluge of very real duties, but it also jeopardizes the now.”
Judith Orloff



So many times I see multi-tasking listed among job requirements. Generation Y (roughly those born after 1980) prides itself on its ability to multi-task. How many times have you driven down the highway talking on the phone or even worse, texting?

This has always bothered me. I tend to want to want to multi-task all the time too, and yes, I have sent text messages while driving. I am not particularly proud of this, but in those moments, it seemed that it saved me time and made me more efficient. However, lately I have noticed that the more I multi-task, the less fulfilled and more stressed I feel.

There have been many research studies on this subject, and the classic example was done by Rubinstein, Evans and Meyer in 2001. They did an empirical study comparing how long it took to solve various types of problems (e.g., math problems) when participants switched from one task to another. They then compared this to the time that elapsed when participants stayed on one task until completion.

They found that multi-tasking was just not as efficient as doing one job until completion, the reason being that each time they moved from task to task, they had to catch up to where they left off. Interruptions and multi-tasking have a similar effect in that before you can resume the task, your mind has to return to where you left off, and this takes time.

Additionally, the study found that people who multi-task could lose 40 percent of their time. Although less time was lost when people multi-tasked between familiar things like driving and talking on the phone, the time escalated when they had to multi-task between complex problems.

I tried an experiment, and for one day, I did not allow myself to multi-task no matter how much I wanted to take that call or check my emails while I was driving. Later in the day, I pulled over (I spend most of my days in my car) and responded to my phone calls and then my emails.

At the beginning of the day, I felt very frustrated as I thought I was falling behind. However, as the day went on, I started to feel less stress, and a sense of peace just seemed to envelope me. On top of this, I was able to accomplish all I needed, and it even seemed as if I was able to get more done than I would have while multi-tasking.

This little experiment has confirmed for me that multi-tasking has a high cost both in terms of stress and productivity. From now on, I am going to minimize how much multi-tasking that I do. I know now that, for me, it is not efficient and it makes me feel like “crap.”

Now go out and try a day without multi-tasking. See how you feel and how much you have accomplished. If this one day is successful, then try to apply it to your every day. While clearly some degree of multi-tasking is always going to be necessary, the more you reduce it, the better and more productive your life will become.

You can do this!

Tweaking your website!

You ask about the important things to keep in mind: same as ever, with a task-based twist: what are the users trying to accomplish, what does the business need them to successfully accomplish, and what will the technology allow? If you can balance these three forces, you'll have a solid product.
-Christina Wodtke



There is no question that each and every business needs a website, but to get the most out of it, the site has to be periodically re-evaluated – annually at the very least, but quarterly is best. The web is changing so fast, and it is critical that websites be thought of as dynamic entities that must be changed and tweaked, rather than static elements.

Some neat eye tracking studies have shown that most people scan a page in an “F” shape pattern. They typically move their eyes horizontally across the upper part of the page and then move down a little bit and do another horizontal sweep. The last eye movement is a vertical scan down the left-hand column of the page.

Take a look at www.apple.com or www.attwireless.com for examples of website that take advantage of this “F” shape pattern. Both sites have great menu pull-downs across the top of the page as well on the left vertical column.

Probably the best website feature that is being used more and more lately is built-in video. HSN and QVC post the video of the product’s airing right next to the product description.

One of the things that each website designer must remember is that most people just skim websites and do not look for sentences but for critical words. Too much narrative is the kiss of death for a website. Viewers will not stay at your site. People do not want to spend their time and energy reading prose on websites. After all, how many times have we all selected “accept” to legal disclaimers without having a clue what we have accepted? Apple and AT&T Wireless have built their sites with this in mind. Go back and look at their sites, and you will have a hard time finding a complete sentence on their opening pages.

If you have to have narrative on your website, the best rule of thumb is to cut the wording by half. Use half as many words in each paragraph as you would use in conventional writing. For example, AT&T Wireless explains unlimited texting by simply saying, “Your Apple iPhone changed everything. Why limit yourself now? Text as much as you want- no overage, no worries.” They keep it simple and to the point.

Some of the things that you can do to improve the user-friendliness of your website are highlighting words that you want to call attention to and using hypertext links directing viewers to other parts of your site. Both AT&T and Apple make great use of these hypertext links. Because of these links, they are able to keep their homepages very clean while still giving the user access to so much information.

Now go out and make sure you have an effective website and plan to re-evaluate it every quarter.

You can do this!

Problem Employees!

"Without a compelling cause, our employees are just putting in time. Their minds might be engaged, but their hearts are not."
-Lee J. Colan, 7 Moments that Define Excellent Leaders

Problem employees are an unavoidable part of the working world. We all have had to work for, work with or supervise a difficult employee. Although in many cases you inherit the problem worker, he or she is still your responsibility. It is so glib to say, “Let’s just get rid of the problem worker.” This is an unreasonable solution for many reasons.

I do not think that there is a clear definition of a problem employee. What is clear, however, is that these employees tend to affect the morale of the entire organization and make your life very difficult. Too often, the implicit assumption is that a replacement worker must be better; however, this is frequently not the case.

How would a manager make a decision on a piece of equipment that was causing a maintenance headache? Well before it was replaced, I guarantee you that a thorough analysis of the problem would be conducted, and possible alternatives for fixing the problem(s) would be evaluated. It is just good business to make sure that the problem cannot be corrected before a new asset is purchased. Yet, this same type of analysis is not done on employees who are having difficulties.

So many times I see employers letting staff go simply because they did not give the manager what they wanted. However, when I go back to the staff member and ask if they understood what was expected of them, the majority says, “No.” In these instances, management never attempted to work with them to see if it was possible to overcome the problem.

I think so many times the cost of replacing a worker is either unrealized or is perceived as small and inconsequential. There is no question in my mind that if you fully account for all of the time involved in hiring a replacement (i.e.: time spent advertising to find a new employee, interviewing candidates and training a new hire) and numerous other indirect expenses, the cost of replacing a worker amounts to at least 100 percent of the annual salary.

If the cost to replace a worker is so high, why do so many firms keep on doing this over and over? I think the answer is that many managers lack the skill set to deal with problematic employees or behaviors. For example, if you have a worker that has been coming in late to work, and you are disappointed because you believe you have made the company policy clear to everyone, maybe the issue is that you are not connecting with the employee, being clear about the expectations or there is something going on in their personal life that is influencing their behavior.

Changing behavior is especially difficult if it has been tolerated for a period of time. However, working to overcome an employee’s problem rather than seeking to hire a new worker will often pay off in the long run.

In looking to overcome behavioral issues, consider the root cause of the problem. For example, is there something in the company culture that is contributing to the problem behavior? In the case of the late employee, maybe you are being inconsistent about enforcing company policies. Are some people allowed to come in late due to personal circumstances that are not explained to the other employees? Are you holding people accountable, or do you let things slide?

Once you have determined the reason behind the behavior, there are many things that you can do to turn the situation around. Firstly, provide specific guidelines and processes to help clarify expectations. Secondly, ensure open communication with managers and employees to help resolve minor issues before they become serious problems.

A third possibility is the use of incentives, rewards and recognition as ways of reinforcing the change you are looking for. I have seen some managers simply start acknowledging positive changes in behaviors, and that has been the key to effecting the change. For example, with the habitually late worker, offer a kind word about the improvement the employee is showing by successfully arriving on time three days out of five.

The bottom line is that an employee’s problematic behavior should not necessarily mean termination. Rather, it should be thought of as an opportunity to turn this employee into a great employee.

You can do this!

Junior Achievement

One of the things that each entrepreneur has a duty to do, is to spread the word as to why entrepreneurship is such a wonderful and rewarding occupation. So many times at FSU I have seen students wonder into my office and see so surprised that there is a major in entrepreneurship. They simply did not realize that this field existed.

For last seven years at the Jim Moran Institute, we have provided the resources and volunteers to bring Junior Achievement into the high schools of Leon County, Florida. Junior Achievement is a wonderful national and international(?) organization that provides the support necessary for providing the entrepreneurship education in the school systems.

I would go every year to the end of the school year luncheon of JA and here the volunteers(other entrepreneurs)talk about how much they have gained from the experience and then the teachers would talk about how much the kids learn from volunteers. I was so impressed by this each year and was constantly running into students who thanked us for bringing JA to their school and how much they learned about business.

About a year ago, Florida Commerce Credit Union gave us some extra money to hire a coordinator of Junior Achievement(Wanda Brafford). However, they wanted JA to be taught in the elementary schools of Leon County.

After we sent out a request to just 4 elementary schools, we had over 50 teachers who wanted the program in their classroom. I was surprised by the response and we were short of volunteer teachers so the entire team at Florida Commerce Credit Union and JMI jumped into teaching these classes.

I just finished teaching Mrs. Whitaker’s 5th grade class at Gilchrist Elementary the Junior Achievement curriculm. I was so impressed as the kids were smart and very attentive and really got the notion of what an entrepreneur did and how important they are to both the community as well as nationally and internationally.

One of the last exercises we did was to hand out cards to each child in the class all standing in a circle with a country of origin for some part of manufacturing a car shown on the card. As I called out the product, the student said where the product was from and then passed a string to the next person. As we did this, it became evident of the large web they had made from the string showing the interconnectedness of our world.

I thourghly enjoyed this experience as it showed me that Junior Achievement is very effective at teaching entrepreneurship and that children are never to young to learn about it. However, we need your help.

If you would like to volunteer and are an entrepreneur, please write Wanda Brafford at wbrafford@fsu.edu for more information. There is no pay for this service but knowing that you are helping to educate students about the importance and revelance of entrepreneurship.

You can do this.

MVP Lounge
To my customer:
I may not have the answer, but I'll find it.
I may not have the time, but I'll make it.
I may not be the biggest, but I'll be the most committed to your success.

-Anon.

One of the things that is so important is to reward loyalty of your existing and best customers to make sure that they feel appreciated. There are many ways to do this and the question is not so much how to do this but to make sure that you are doing something to insure your best customers feel really great about your business. Legacy Toyota in Tallahassee demonstrated this concept vividly to me the last time I was there to get my car serviced.
They recently had significantly expanded and built a beautiful new facility across the street from where they were currently located. As part of this new facility, customers could wait in a very pleasant area near the showroom with plenty to drink and free snacks as well. It was comfortable place to wait with one large TV.
However, the owner of Legacy, Les Akers, wanted to reward his loyal customers who bought cars from him and to make them feel important. He came up with the idea of having an MVP Club for customers who had bought cars(either new or used) from his dealership. A significant part of this club is the MVP lounge where there are computer terminals with access to the internet and very comfortable chairs plus two large flat screen TVs. Also, there are better drinks and snacks here. Additionally, by being a member of this MVP Club, you receive discounts on services and parts and a whole of host of other benefits.


While Legacy’s MVP lounge costs money to stock and maintain, the customers appreciate the special care they get from the staff that support the lounge and their comfort. I talked to the three or four customers who were waiting for their cars while I was, and they were all so thankful for the special treatment. They all said that this lounge made the decision for their next car very easy to make. They all said they felt pampered by the exclusivity of the room and the additional benefits they received there.

While this MVP club is one way to reward loyal customers there are numerous other ones from frequent buyer cards, to customer parties, to seats at various sporting events. The point is that you always want to give great customer service to each employee but to your best and loyal customers, you want to make them feel like MVP’s.

Now go out and make sure you have a plan in place to make your best and most loyal customers feel rewarded for continuing to business with you.

You can do this!

YouTube for additional advertising

An education isn't how much you have committed to memory, or even how much you know. It's being able to differentiate between what you know and what you don't."
-Anatole France

With every business looking for effective ways to advertise, you have to spend your money wisely. I have seen more people waste advertising dollars than any other expense dollars. I think the reason for this is that, unlike other types of expenses, it is hard to quantify the results of advertising.

Lately, I have seen many businesses using YouTube as a way of driving customers to their web sites. This is especially true for products or services that need to be seen and require some education or information for their use.

One such product is the Toyota Prius. I am interested in getting a new Prius. Compared to my older model, the new model has so many neat features, from a lane assist option that warns you if you drift out of your traffic lane to a solar panel that keeps the car cool when it is parked in the sun.

While I can see pictures or read about these features, going to YouTube and seeing them in a video is so much more effective for me. I was really able to get an understanding of what each feature is and what the associated benefits and limitations are. The videos on YouTube helped me decide which features to have on my new Prius once I decide to get one. Of course, I really would like to have one!

Another example is a relatively new Tallahassee business called Talon Training Group. They specialize in weapons training (which is excellent, and I have attended) for both law enforcement officers and the average citizen, as well as selling related products such as holsters and magazines. The business is owned and run by law enforcement officers, so they do not have much time or money for advertising campaigns. As an alternative, they have joined the numerous other companies that are using YouTube to raise their visibility.

You can view one of Talon’s videos at http://www.youtube.com/watch?v=yvg23-qUFKA or just by typing “talontraininggroup” into the search box at YouTube. While their videos are not super slick – not very slick at all – they convey information in a very clear and honest fashion.

Their videos, like so many other good ones, are primarily educational and secondarily sales-oriented. This is just good marketing. You want to educate potential consumers so as to build trust and encourage them to visit your web site.

In order to be effective there are several rules of thumb to remember when creating your video. Firstly, it must not feel like a commercial. If it feels like an ad, people will not walk, but run from your video.

Secondly, because the sell has to be soft, a call to action will not work very well. The best thing you can do is show your web site. The goal is to get the user so excited about your product that their next stop is your web site.

Thirdly, the video needs to be short. Three minutes seems to be the ideal length. If the video is much longer than this, people will lose interest and move on.

Finally, the video must be both educational and engaging. Having 40 years of experience as a professor, I can tell you that education without some type of entertainment is not very successful.

Now go out and see if YouTube might be an effective way for you to advertise your products to potential customers.

You can do this!

Any change, any loss, does not make us victims. Others can shake you, surprise you, disappoint you, but they can't prevent you from acting, from taking the situation you're presented with and moving on. No matter where you are in life, no matter what your situation, you can always do something. You always have a choice, and the choice can be power.
-Blaine Lee, The Power Principle

Occasionally, we deal with an entrepreneur whose story is so surreal that it is hard to believe it is true. This column is about one such situation.

A very good entrepreneur had a small equity partner who operated a portion of the business located in another city. As the entrepreneur could not travel, this minority share owner was not managed very much outside of his ability to make money, which he did on a continual basis. However, as the entrepreneur discovered, there were recurrent problems with how the small equity partner managed the office, from unnecessarily low pay to ethical issues.

This shareholder, who actually owned less than five percent of the company, thought of himself as a partner rather than as an employee who happened to own stock. I remember one conversation I had with him about this, and he had a hard time accepting the fact that he was not a partner, but only a small equity owner and an employee.

If you are thinking that this person had a giant ego, you are 100 percent correct. This person did have a giant ego, but he also had a skill set that the company needed. While he was a pain to deal with, he did bring some valuable things to the table, including a proficiency in bringing in business and generating revenue.

Despite these skills, several fundamental flaws kept creeping up. Among them, of course, was his ego. In addition, he had some personal financial issues that kept him asking for more and more money until he was – and I am not exaggerating here – being paid more than five times that of a comparable employee. He covered his sizeable salary by paying his staff low and generating lots of revenue so that the office looked like it was doing well.

In order to find out exactly what was going on, the entrepreneur finally made a trip to this office. Upon arrival, the entrepreneur noticed that the office manager, who used two monitors, had rear view mirrors mounted to each one. Remember, this is a true story!

When asked why she had rear view mirrors on her monitors she replied that she had them so the small equity owner could not sneak up on her when he came in. When pressed further she said that he micromanaged everything and that the whole staff would find other jobs if they could.

Letting the minority partner go was a very tough decision for the entrepreneur as he knew that he would have trouble finding another person with the necessary skill set. However, the entrepreneur discovered that the minority partner was looking for a job with a competitor – despite his non-compete agreement – at about the same time that all this was going on. Following this discovery, the entrepreneur finally let the employee go.

When I asked the entrepreneur how he tolerated this individual for so long, he shook his head and said, “I thought I no choice until I was pushed into a corner and left with no other option but to let him go.”

No employee should ever be considered irreplaceable. Now go out and make sure that you do not allow a situation to develop where employees have to put rear view mirrors on their computers.

You can do this!