Sunday, December 25, 2011

The Holidays

"A lovely thing about Christmas is that it's compulsory, like a thunderstorm, and we all go through it together." ~Garrison Keillor

The holiday season is such a great time of year and it is one time when you can go overboard to make your staff feel good about their job and your company.

In many ways, your generosity makes the holiday season for your employees, however, I do not like giving monetary holiday bonuses as they tend to become something the staff learn to expect every year rather than as a genuine gift. I find, however, profit sharing bonuses to be a great option to be given out at this time of the year.

Over the years, I have tried many different things during the holiday season to help spread holiday spirit among my employees. My favorite activity is probably coming together as a staff to provide holiday presents for an impoverished family. After all, this season is really about giving and not receiving, and there is no better way to get in the holiday spirit than to reach out and help others. Every time we make one of these special deliveries, we all feel so good for the next week.

Sometimes at this time of year, I try to give gifts that meet some specific need of my staff. I try to find that thing that will really make a difference in their lives, and in years past, I have given "gifts" of time off and cash bonuses.

I have also given unique presents – gifts that have special meaning to the individual employee. On one occasion, the only thing one of my employees could talk about all year was wanting a karaoke machine for her parties. Guess what she got for Christmas that year! Giving gifts like these requires that you know your staff's needs, which means you have to be observant all year long.

Though most consider the holiday season a great time of year, many people suffer from severe depression, known as Seasonal Affective Disorder. The important thing to note here is that some people have it very rough this time of year. If you notice someone struggling with depression, the best thing to do would be to kindly refer them to a mental health professional.

Now go out and make sure that you and your staff have a wonderful holiday season. Remember, your kindness and generosity help create and propagate holiday spirit in your workplace.

Sending you my sincerest wishes for a wonderful Holiday Season.

Sunday, December 18, 2011

Fairness and the Internet Sales Tax

Amazon supports "an even-handed federal framework for state sales tax collection." ~Paul Misener, Amazon Vice President for Global Public Policy

Generally, I try to steer away from political issues and, for that reason, I do not think I have ever written a column about taxation. However, I have reached my boiling point over the issue of imposing a tax on Internet sales.

Let me begin by saying that I do not like to pay taxes and wish the government could manage our money better. I have never recommended a tax increase before, but I am an advocate for a tax on Internet sales. Now I am not arguing that this is a necessary source of revenue – which it is – but rather, I am suggesting that levying a tax on Internet sales from out-of-state merchants can help level the playing field for small businesses.

Small businesses are the heart and soul of our country – retailers, in particular. Retailers have to compete with Internet companies in so many ways and they just cannot compete effectively if they are working with one hand tied behind their back.

By exempting out-of-state sellers from having to collect sales tax, you are giving these non-resident merchants a six to seven percent cost advantage. Now the government in Florida wants residents to voluntarily send the state taxes earned on Internet sales. You can guess how well that has worked out. Additionally, merchants who reside in Florida still have to pay sales taxes to residents on all goods sold via the Internet.

State governments should impose a tax on Internet sales of non-resident companies. California now collects taxes on large, out-of-state Internet providers and is expected to pull in over $300 million dollars in additional revenues. Seven other states have also closed the loophole and now collect sales tax from all Internet merchants serving their states.

The National Governors Association estimates that states are currently missing out on more than $22 billion each year in potential Internet sales tax revenue. Both the House and Senate have introduced bills to remedy this.

We need to do everything we can to promote small business retailers, especially since they do not have the luxury of being able to hire lobbyists to protect their interests like large retailers can. Imposing a tax on out-of-state Internet merchants will not give local small businesses an advantage but will just allow them to compete on a fairer playing field.

What can you do? Please write your state representatives and senators as well as their U.S. counterparts and request, not that they impose a new tax, but that they level the playing field between Internet businesses and small business retailers. We need small businesses to flourish in order for local economies to do well!

You can do this!

Sunday, December 11, 2011

Making Your Business Unique

"Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even."~
Muhammad Ali

With so many businesses out there providing products and services similar to yours, it is critical to find that element that differentiates your company. In order to be successful, you must be able to stand out in the crowd. It is not always an easy thing to do, but it is immensely important, and each business owner should think about what makes their offering unique.

I recently attended a family function at The Peabody Hotel in Orlando. The hotel is a great property, and the famous Peabody ducks really make it special and unique.

In 1930, upon returning from a hunting trip, the general manager of The Peabody in Memphis had a tad too much to drink and decided to put some live ducks in the fountain of the hotel as a practical joke. It turned out, however, that the guests of the hotel loved the ducks, and they have been there ever since.

The five ducks now make their daily appearance at 11 a.m., arriving on a special elevator to be escorted down a red carpet by the official Duck Master to a John Phillips Sousa march. At 5 p.m., the processional is reversed as the ducks turn in for the night. A crowd of people is always there to observe this daily ritual.

Clearly, the processional of the ducks is unique in and of itself, but The Peabody has truly made the duck theme part of their identity. The theme appears everywhere, from the hotel’s logo to a large mural of three ducks painted on the roof of the hotel. Additionally, the gift shop is brimming with duck paraphernalia, everything from duck doorknockers to duck jewelry.

The ducks are one way The Peabody sets itself apart from countless other hotel franchises. What originally began as a practical joke has now become one of the most memorable elements of the guest experience.

Ben and Jerry’s ice cream is another example of a very unique business. In 1977, Ben Cohen and Jerry Greenfield completed a correspondence course on making ice cream from Penn State and started their first store in Vermont in 1978. To celebrate their first anniversary, they had a free cone day, an event that still occurs to this day. They are, of course, known for their quirky flavors – Chubby Hubby and Late Night Snack, for example. Additionally, they take 7.5 percent of the company’s before-tax profits to support community-oriented projects.

Ritz-Carlton provides another example of uniqueness in a business. The guest experience at a Ritz-Carlton is, by far, one of the best and most unique experiences around. They are known for their superb customer care.

Take some time to consider what makes your business different and think about how you can call attention to that aspect. To get you started, following are just a few examples of how you can highlight your business’ uniqueness:

1. Locally owned for X years.
2. A three-generation family business that has been serving our customers for over 30 years.
3. Providing leading-edge technology to our customers since 2000.
4. The only store located in [an area] that can help you with [your product or service].
5. Have been in the same location for X number of years.
6. The only independent store that provides [a product or service] in [an area].

Now go out and make sure you know what makes your business unique and remember to emphasize that uniqueness in all your customer interactions.
You can do this.

Sunday, December 4, 2011

Dealing with Disruptive Personal Habits of Staff

"One ought to hold on to one''s heart; for if one lets it go, one soon loses control of the head too."~Friedrich Nietzsche

One of the most difficult conversations a manager will ever have with an employee is when they have to address personal habits like hygiene. Many managers think this is too personal to discuss, but you just do not have the luxury of looking the other way. Poor personal hygiene can negatively impact your business by making the environment distasteful, annoying co-workers and even affecting how your customers see your business. Ignoring the problem only rewards the behavior and undermines your credibility as a leader and a manager.

I just recently had to help two entrepreneurs address issues where an employee’s offensive body odor was causing problems for their businesses. In one case, the server/cook’s body odor was affecting the entire restaurant.

Although the whole staff knew about the problem, the employee just did not seem to be aware of it nor did he recognize the effect his hygiene was having on his co-workers and the restaurant patrons. Because the employee was unaware of the problem, the situation required that the manager use a certain amount of sensitivity when initially addressing the situation.

When handling situations like these, it is so important to talk about the behavior and not the person. It is easier for the employee to hear that a behavior must be changed rather than the person has to change. This approach is also much less threatening to the employee.

My suggestion would be to invite the employee to your office and ask them if it is a good time to give them some “feedback.” The employee will probably be anxious about the type of feedback you are about to share, so you will want to start by telling them how valuable they are to the company. Next, the employee needs to hear that you feel very, very uncomfortable giving this type of feedback.

During your discussion, you need to be as direct as possible. Getting straight to the point is critical. Dancing around the topic will just weaken the point that you are trying to make. You might say that their body odor is affecting the business and you feel sad bringing this up to them, but it is very important to them and the business. Do not mention the complaints you have gotten from their colleagues. Sharing that information serves no useful purpose. The employee will be embarrassed already and this would just pile it on unnecessarily.

Before ending the conversation, you need to talk about how changing this behavior will affect the entire organization and what the ramifications will be if they do not change. In some cases, an employee may have a medical condition that causes their body odor, but you should not assume this is the case. If it is within the employee’s control to correct, they should be held accountable for doing so. If the employee says that a medical condition is the cause, however, ADA may dictate how the situation can be handled.

With these types of conversations, it is sometimes helpful to write out your main points and practice making these points in advance of meeting with the employee. Again, this is going to be uncomfortable, but practicing what you are going to say will help make the situation more tolerable.

Now go out and make sure that you have a plan in place so you are prepared in the event you have to address a difficult hygiene problem.

You can do this!

Sunday, November 27, 2011

Making Meetings Work

"Football incorporates the two worst elements of American society: violence punctuated by committee meetings."~George Will

It is important to limit the amount of time you spend attending meetings. The most successful meetings are ones where you need to give or receive critical information or where face-to-face interaction is important. One entrepreneur whom we assist runs from one meeting to another and hardly has time to breathe. When asked the value of all these meetings, his eyes just roll. Here is a very hard-working entrepreneur who just has a case of "meeting mania." By meeting mania I mean a belief that one has to attend a series of never-ending and usually, very unproductive meetings.

Before you schedule a meeting, make sure that one is really needed. An update or status meeting can generally be done with email. A worthwhile meeting must have an interactive component; otherwise, an email or memo will suffice.

There are four rules for planning great meetings. First, insure that there is a great reason to have a meeting in the first place. Meetings have a way of defying death and, once started, are hard to extinguish. So if you must have a meeting, make sure there is a darn good reason for it. Do not have a meeting just to have a meeting.

The second rule is to insure that there is a detailed agenda. An agenda keeps you on task and makes clear what subjects will be covered. The agenda should be mailed to participants ahead of time and it should clearly state what the participants need to bring to the meeting. Too often I see folks show up for meetings expecting to be spoon-fed. It is much better to get people to do some homework on the agenda items before they come to the meeting. Preparation ahead of time goes a long way toward insuring an effective and efficient meeting where people feel they have accomplished something worthwhile.

Setting up time limits for the meeting is the third rule. State the starting and ending time for each meeting on the agenda and stick to those times. I always include the following meeting rule on the agenda: "The time available, however much there is, will be filled with discussion on the agenda". A one-hour meeting frequently is much more effective than a three-hour meeting as participants know they must get through in a timely fashion.

The final rule is to make sure that the person in charge of the meeting can keep the group on task and also has the skills needed to deal with the thorny interpersonal issues that arise. Frequently, when someone in a meeting feels threatened, he or she closes down. The meeting leader must be able to recognize this and tactfully bring this person back into the conversation.

Meetings can be major time wasters. Summarized are the four simple rules to help plan and conduct worthwhile meetings:
Have a good reason to schedule a meeting.
Make sure there is a well-defined agenda.
Set time limits for the meeting.
Select a leader who will keep the group on task and is sensitive to the needs of each member.
If you follow these rules, your meetings will be shorter, more valuable, and possibly more fun. You can overcome meeting mania and save a lot of time in the process.

You can do this!

Sunday, November 20, 2011

Letting Staff Know Their Authority

"Every man should keep a fair-sized cemetery in which to bury the faults of his friends."~Henry Ward Beecher

One of the most important things for a decision maker is to know the limits of his or her authority. That is, when they have to come to you or their supervisor for approval before a final decision can be made—as with expenditures, staffing decisions or disciplinary actions, for example. Unless you clearly specify these limits, you can not expect them to know what they are.

Knowing how much authority they have to make decisions is critical to a manager’s ability to do their job efficiently. You just do not want your staff coming to you for permission on every decision. This is such a terrible waste of time for both you and the employee.

I was working with a very successful technology business and had been meeting with the managers to evaluate the effectiveness of the staff. During one of these discussions, a new senior manager started talking about the trouble he had been having with a problem employee.

When I asked the manager why he did not do anything about the employee, he said he just did not have the authority. As a side note, he also commented that he did not have the authority to make any decisions about spending money either. I asked him how he knew this and he said he was never told that he could make these or any other decisions.

As I probed further into the situation, the manager said he had never initiated a conversation about authority with the owner because he did not have the courage to broach the subject. He did say, though, that he hoped the owner would tell him soon what his decision parameters were.

I wish I could say this was an isolated example, but I see situations like these on a regular basis. In these cases, I believe the entrepreneurs or managers are hesitant to give their staff any authority because they do not know if they can trust them to make good decisions.

The problem with this mindset is that employees can be coached in their decision-making, but if they are never given the opportunity, they will never learn how to make good decisions. In the event a lower-level manager has been given decision-making authority, received coaching and you still can not trust their judgment, it may be time to consider that the employee is no longer serving the needs of the company.

Now go out and make sure your employees clearly understand the extent of their authority. The sooner you convey this information, the better. Obviously, these parameters will change as the employee becomes more experienced and proves again and again that you can trust their decisions.

You can do this!

Sunday, November 13, 2011

Sell Value Not Cost

"Customer needs have an unsettling way of not staying satisfied for very long."~Karl Albrecht

There is no question that sales are the heart and soul of a business. This is not to say that you should ignore profits, which are absolutely essential, but you will not have profits unless you produce revenue.

Part of my job is to refer clients of ours to other businesses that may be able to help them. We do not receive any commission or benefit for making the referral other than the knowledge that doing so will likely help both businesses.

Several clients were in need of web services, and I had worked previously with a very savvy web designer. He has many years experience in the business and is especially skilled at search engine optimization. The prices he charges are also very reasonable, so I thought he would be great for these clients.

I made the referrals, and in each case, the web designer prepared an estimate complete with a portfolio of his past work. After some time though, he had not heard back from any of them. With his blessing, I wrote a few of these potential customers to find out why they had not followed up with him.

When I heard back, every one of them said that they could not afford his services, though none of them said specifically that he was too expensive. They all said his quality was great and his fees were very reasonable but that they could not afford what he was offering.

After we had a chance to go through these responses, the reason he had not gotten any of these jobs became clear. He was only selling the cost, not the value or the benefits of his services. The customers were seeing his services only as a cost that offered very little improvement over what they already had.

The web designer had incorrectly assumed that potential customers already recognize the value of an improved website. We are now working with him to help develop a pitch that showcases this value. Instead of highlighting costs, his new sales approach will focus on the benefits of a new website to the customer’s business, including improved sales.

Now go out and make sure all your sales materials highlight the value your product or service brings. You can do this a number of ways. The key is conveying that value clearly and succinctly. One possibility is to quantify for the customer how your product or service can improve their bottom line. If it helps them increase sales by 1 percent, for example, that is so many more dollars going to their bottom line that will reduce the cost. Additionally, sometimes you can clearly show that by spending this money on a project you will incur significant cost savings. The point is that you must communicate value not costs.

You can do this.

Sunday, November 6, 2011

Crisis in Employment is Coming

"Treat employees like partners, and they act like partners."~Fred A. Allen

Eventually we will emerge from this sluggish economy, I promise. We will see growth again, and when the economy does begin to turn around, retaining your workforce will become absolutely vital to your business. According to MetLife’s recent study of employee benefit trends, businesses need to return to a focus on employee satisfaction.

When the economy slipped into recession, many workers were laid off, and those that remained were left to pick up the slack. While corporate profits have soared, employee satisfaction has tanked as workloads increased and morale plummeted. The MetLife study revealed that 33 percent of the workers surveyed expected to have a new job in the next 12 months. It seems these workers would have left right then if they could have, but they stayed put only because they knew there were very few jobs out there.

The MetLife study also revealed that, in 2010, the percentage of employees who said they felt loyal to the company was 44 percent as compared to 62 percent in 2008. Despite the dramatic decline, employers have not seemed to recognize this change. The study showed that 54 percent of employers believe their employees feel a strong sense of loyalty. Even more concerning is that only 22 percent of these employers said employee retention was their number one priority.

Turnover is costly and the loss of employees is going to be a severe problem, but employers who start taking steps now can minimize turnover and its damaging effects. First and foremost, employers must make employee retention a high priority for the company. Profits are super, but your staff is your lifeblood and you need to hold on to them.

Second, an employee morale survey can provide great insight into how you can help improve job satisfaction. The key here is that the survey should be conducted by a neutral, outside party. The staff will feel more comfortable responding this way, and you will get honest answers, which of course, is the outcome you want.

A third step would be to use your survey results to develop a plan for improving employee moral in the coming year. Using the survey results, you can establish a benchmark for measuring improvement over time. Benchmarks can also help you determine how much effort you will need to commit in order to reach the desired amount of improvement.

An employee appreciation program makes a great addition to your plan for improving morale, and it is easy to implement. Basically, managers should just go out of their way to show their appreciation for their employees. Taking the staff for granted can not be tolerated.

To help provide insight into what your staff needs and wants, establish an employee committee. You could not ask for a better resource, and the committee members can provide recommendations and share ideas about what would make your staff more satisfied in their jobs. Sure, the subject of salary might come up, but awarding salary increases is a whole lot cheaper than training a new worker.

Whatever employee retention tactics you choose to implement, it is important that you adjust your strategy to fit the different generations. Gen Y (born after 1980) responds to random acts of appreciation and wants to know that the company they work for has a social conscience. Baby Boomers, on the other hand, just need you to reassure them that they are secure in their job until they are ready to retire.

Now go out and make employee satisfaction a high priority at your company and commit to developing a plan to improve it.

You can do this.

Sunday, October 30, 2011

Remembering Something about the Customer!

"Worry about being better; bigger will take care of itself. Think one customer at a time and take care of each one the best way you can."~Gary Comer

I really enjoy running, especially with my black lab Sophie. I have competed in a number of 5K races and am now working up to a 10K race. While my finish times are not great, I usually do pretty well among my age group.

About two months ago, while in Ft. Lauderdale, I went into a running store called Runner’s Depot. I was looking for a new pair of running shoes, and this store happened to be very close to my hotel.

The salesman at Runner’s Depot convinced me to buy a pair of Newtons, a new type of running shoe that encourages you to lean forward as you run so you land on the balls of your feet rather than your heels. This form of running, which is sometimes referred to as “Chi Running,” is great because it takes the load off my joints, especially my knees.

On my last trip to Ft. Lauderdale, I did not take my Newtons. I only had room in my luggage for one pair of shoes, and I had to pick a pair that could be used for both running and walking around.

During this trip, I stopped in the Runner’s Depot to buy a case that would allow me to carry my iPhone and listen to music while I run. When I walked into the store, the salesman – the same one who sold me the Newtons – said he saw me jogging over the 17th Street Bridge and asked me if there was a problem with the shoes. Newtons come in a very distinctive and recognizable color, and he had noticed that I was not wearing them.

As you can imagine, I felt great that months later this salesman remembered me and had noticed me running over the bridge. His consideration and concern made me a customer for life.

The point of this story is to demonstrate how establishing a personal relationship with your customers can dramatically impact the way they feel about your business. By asking about the shoes, the salesman was, in effect, telling me that he cared about me and wanted me to be the best I could. It did not take much effort for the salesman to notice me, but it made a super impression on me.

The secret here is having your employees recall some personal detail about your customers when they come back. There are many computer programs designed to help you store this information and access it easily at a later date.

Now go out and observe your staff and see how they are greeting your customers. The more personal they can make the interaction, the better. Training is very important and can be helpful in teaching your employees how to make this happen.

You can do this!

Sunday, October 23, 2011

Do Not Get Stuck in Running Your Business

"Fear less, hope more; eat less, chew more; whine less breathe more; talk less, say more; hate less, love more; and all good things are yours." ~Swedish Proverb

Growing a business, even in today’s economy, requires change and an ability to adapt, particularly where behaviors are concerned. You just cannot continue to operate the way you have in the past and expect to take the company to the next level.

Running a mature and dynamic operation requires a different set of skills than starting a business, and many entrepreneurs find it tough to adjust. As businesses grow, they typically get stuck at two levels: around 10 or 15 employees and around 75 employees. At both of these sticking points, it becomes necessary to introduce a new management environment with a new set of systems and procedures. The entrepreneur must let go of how he or she managed in the past – making every decision, for instance – and adopt a much more hands-off management style.

We were helping an entrepreneur in the travel technology business. The firm had been in operation for just over eight years. Sales were around one million dollars, but flat.

Since day one, the owner had been the firm’s only real salesman. This arrangement may have worked at the beginning, but as the firm grew, the owner inherited more and more responsibilities, including managing his 12 employees. He spent almost all of his time working in the business rather than working on the business. With sales efforts falling off, the company was suffering.

When I encouraged him to bring in an assistant who could help with the operational details or hire a new sales person, he just could not do it. Bringing in someone new would mean he would have to let go of his old behaviors, relinquish management of the minutia and focus on the tasks that would help the business expand.

We had many, many discussions with this entrepreneur to show him how his behaviors were keeping the company from achieving its full potential, but convincing him was tough. He had seen his behaviors work well when he started the company and was sure they were working still.

In light of the entrepreneur’s resistance, we finally just had him try making small adjustments to his management style – delegating more and the like. He was more tolerant of these small changes, and after seeing the success he was having, he was more willing to try our other suggestions. Little by little, the entrepreneur implemented all the necessary changes and his company is now doing much better.

Now go out and see if your behaviors are limiting your company’s growth. If they are, consider making the changes that will help take your operation to the next level.

You can do this!

Sunday, October 16, 2011

Marketing Research for your Business

"Circumstances may cause interruptions and delays, but never lose sight of your goal. Prepare yourself in every way you can by increasing your knowledge and adding to your experience, so that you can make the most of opportunity when it occurs."
~Mario Andretti

Opening a business or expanding a product line is a big step, but so many people base this decision on their belief that there is demand or on affirmations from their friends and relatives that it is a great idea. However, your feelings or those of friends and relatives are not sufficient measures of future demand.

We were helping a very nice couple who wanted to start a pet store. The couple, who had many pets of their own, thought they would be well suited to operate a business like this, and their friends and relatives had encouraged them to move forward out of a desire to be supportive.

Despite their passion, we advised them against starting the business based on market conditions, but the couple decided to give it a shot anyway. Unfortunately, the business lasted only two years before the couple had to file for both personal and business bankruptcy.

About a year after the business closed, I ran into the couple at a restaurant and they wanted to talk. Their only real regret, they said, was that they did not do enough research on market demand in their area. In hindsight, it was clear that the market was already saturated with pet stores.

Collecting market data before moving forward with a new business venture or product line is so important. Generally speaking, doing your due diligence will decrease your chances of making wrong decisions based on insufficient information.

Marketing research comes with a price tag, but the expenditure will prove worthwhile in the end. Knowing the demand for your product or service allows you to accurately assess the viability of a business and limit your risk of failure.

When starting a business, most people generate a proforma income statement and rely on this statement to tell them whether the business will be successful. The impediment here is that the proforma income statement is driven by a sales forecast. If the forecast is not prepared correctly using valid data, the income statement will be inaccurate and viability can not be assured.

The best way to get the hard data necessary to generate an accurate sales forecast is by employing a marketing research firm. Information is such a valuable commodity when faced with these decisions and you need to make sure that you hire the best help you can afford.

There are many methodologies for obtaining actual demand information for a new product or service, but three key approaches are considered standard in the marketing research industry. The first of these is phone surveys of potential customers. A second method is the focus group, which typically produces high-quality results. With focus groups, you identify small groups of potential customers to participate in in-depth product analyses. The third standard method is conducting a survey of potential customers via mail or email.

Now before you undertake a new business venture or introduce a new product or service, make sure you use information obtained through marketing research so you are better able to ascertain future demand.

You can do this.

Sunday, October 9, 2011

Twitter for your Business

There is a proliferation of neat new technologies businesses can use to communicate with their customers. As these numbers continue to grow, the problem becomes determining which technology to embrace. Twitter is one that has great potential to benefit businesses, particularly if their customer base is under 40 years of age.

When I was first introduced to Twitter, my initial impression was that everyone was making a big deal about nothing. In time however, I have come to see the value in it. This technology really can be effective and for most businesses, is worth a closer look.

For those who have not delved into this technology yet, Twitter allows users to post very short messages – less than 140 characters – called “tweets.” Tweets are also occasionally called “microblogs.”

On average, Twitter’s more than 200 million users generate 200 million tweets and 1.6 billion search inquires daily, and the number of users continues to grow exponentially. Businesses with a presence on Twitter can use the technology to maintain a dialog with their existing customers while accessing vast numbers of potential new customers at the same time.

A large furniture chain provides an example of a company that has had significant success on Twitter. The firm, who targets younger markets with their products, increased their sales by using Twitter to reach new potential customers. They invited 50 or so people with large Twitter followings to visit the store and tweet scripted messages to their followers. The firm kept track of how many times each tweet was passed on and rewarded the person that produced the most retweets. As a result of this effort, the company saw large numbers of new customers visiting the store.

I see a lot of companies using Twitter to promote themselves or drive people to their websites. In my opinion though, this is a far less effective method since people are looking for much more personal messages on Twitter. Tweets such as, “Come to Joe’s for great hot dogs,” just do not resonate in this medium. Personally, if I get too many of these self-serving tweets, I just stop following the company altogether so I do not hear from them anymore.

A far more valuable way to use Twitter is to listen in on what people are saying about your company or products. This can provide great insight into what your customers want and need. It can also be an early warning system clueing you in to potential problems so you can react before issues escalate. You can search for tweets about your company at!/search-home.

Yet another effective use of Twitter is to invite feedback from your customers. Getting a dialog going about your company promotes your brand while providing valuable information about how you can improve your products and services.

Chris Brogan is one of the leading experts on Twitter. For entrepreneurs looking to venture into the world of Twitter and use it to its fullest advantage, Chris’ tweets can be very helpful. Follow him at!/chrisbrogan.

Twitter is a great communication tool and it has a lot of potential for businesses who use it effectively. Del, Starbucks, Comcast and Best Buy are just a few examples of companies using Twitter very successfully, and you can check them out for some ideas and best practices. However, as with any new marketing venture, it is important that you consider how Twitter will fit into your company’s overall strategy. Twitter should not be a stand-alone effort. Your strategy should be to incorporate Twitter into a well-rounded, balanced marketing plan.

Now go out and see if Twitter is a viable option for your business. It may require that you spend some time researching how to use this tool effectively, but it will be well worth it in the end.

You can do this!

Sunday, October 2, 2011

Protecting Your Business From Identity Fraud

"We can't solve problems by using the same kind of thinking we used when we created them.”~Albert Einstein

Managing staff is an entrepreneur’s most critical function. Some would argue that finances are more important, but I would suggest that if you do not have a great staff in place to get things done, your company will have little value.

Entrepreneurs frequently must deal with the issue of problem employees. A problem employee is not necessarily someone who is not productive. In fact, lately we have seen very good employees become problem employees.

For those wondering how it is possible that a good employee could become a problem, the answer is simple. An employee could be getting so much done but alienating the rest of the staff in the process.

Case in point, an employee at a high tech company was always able to get so much accomplished and, from that perspective, was a great member of the team. He consistently met his numbers and, at one point, was bringing in more revenue than many of his colleagues.

Despite his productivity however, all of his colleagues had lost respect for him because he had a very abusive management style. He went out of his way to tell his team how inferior they were, and in the rare occasions when he praised them, he would always follow it with a criticism. Of course, he thought he was being so clever that his fellow employees would not see how he was putting them down. On the contrary though, they saw right through this, and the morale of the team was deteriorating quickly. One by one, he began losing all the talented members of his team.

Despite the fact that the rest of the staff was constantly complaining about this individual, management refused to do anything about it. They were afraid he would leave and feared the business would suffer tremendously if he did.

When discontent reached a fever pitch however, management did finally agree to bring in an outside business coach for the problem employee. As it turned out though, all that did was give the employee more ammunition to say his coach said he was right and everyone else was wrong.

Obviously, this was a problem that had been festering for a long time. Management just chose to turn a blind eye to the situation and keep holding to the flawed hope that the issue would resolve itself.

Eventually, the high turnover and low morale started showing up in the numbers, and when business started dropping significantly, management finally had to acknowledge the problem. When three employees threatened to file a harassment suit, which would have cost the firm so much to defend, they were forced to take action.

In hopes of finding a resolution to this situation, the company brought in outside consultants. Their recommendation was to either let the problem employee go or move him to a place where he had absolutely no contact with the rest of the staff. They were also adamant that each manager should receive training in recognizing and responding to workplace harassment. It was also necessary that they work to ensure the channels of communications were open between employees and managers. As it was, staff was given the opportunity to express their concerns, but management was not listening to what they were saying. They just were not taking the complaints seriously enough.

After closely monitoring the situation for a period of time, the firm finally made the difficult decision to let the problem employee go. Though they initially feared that production would decrease, productivity actually improved since the rest of the staff now felt free to do their jobs.

Now go out and make sure you are not ignoring the problems an employee is causing just because they happen to be productive. The sooner you deal with this, the better.

You can do this.

Sunday, September 25, 2011

Protecting Your Business From Identity Fraud

"To build may have to be the slow and laborious task of years. To destroy can be the thoughtless act of a single day." ~Sir Winston Churchill

So many business owners think that identity fraud only happens with individuals. Unfortunately, this is just not the case. The incidence of identity fraud involving businesses is increasing, and to complicate matters even further, state laws against stealing an individual’s identity are much more rigorous than those against stealing a business’s.

I see identity theft occur most often with businesses when employees are given a company credit card. It is so easy for a thief to get your card number and use it to make unauthorized purchases. This is why it is so critical that you go over your credit card statements regularly to ensure there are no fraudulent charges. Obviously, you do not want to leave that responsibility with the cardholder as it would be too easy to hide any abuse. It is always a good idea to have some checks and balances in place.

Where identity theft is concerned, prevention is key. One essential piece of avoiding theft and misuse of your information is changing your passwords every 45 to 90 days. You should always make sure the passwords you choose are complex by using a phrase to remember them. Changing passwords often can be a pain, but it is so important to protecting your financial information against unauthorized access.

Another good rule of thumb is to never send any identifying information at your bank’s request. There are numerous scams out there that do a very good job of disguising themselves as your financial institution. No matter how valid they seem, you must always verify with your bank that the information is legitimate.

Be so careful about how you use your wireless network. If your network is not protected, your information can be stolen so easily. You should never transfer sensitive information on a wireless or any other network without encrypting it first.

Free public wireless networks are one of the biggest potential dangers. Should a staff member use one of these public networks to either send or receive sensitive data, it could leave your company open to identity theft. This can happen so easily since most of these wireless hubs have no security. Before you can access them, you have to sign off that you understand the risks of using the network and agree not to hold the provider responsible in the event of a breach.

As an additional layer of protection, business owners should establish a call-back procedure with their financial institution. The bank will call the account owner to verify the transaction before any transfers are made, especially in the case of wires.

Another important practice is always shredding documents that contain your financial information. It is so easy for thieves to go through the trash and find your financial records. For me, shredding is kind of therapeutic. I like to hear that shredder going because I know that no one else will be able to access these documents. You should make sure you have a shredding policy in place, and it is not a bad idea to start moving toward a policy that prohibits hard copies of these records.

Another easy, but effective practice is turning off your PCs when you leave at night. Many businesses leave their machines on, which gives a hacker a lot of time to run password-breaking programs against their financial applications.

Finally, make sure that your virus checker and firewall are up to date and that all downloaded documents are checked for viruses or any other malware.

Now go and make sure you have a policy in place to ensure your business identity remains secure. These steps are absolutely critical if you want your business to continue to operate safely without falling victim to identity theft.

You can do this.

Sunday, September 18, 2011

Not Saying No is So Important for Customer Service

"Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong." ~Donald Porter, V.P. British Airways

Customer service is so important to each and every business. If the service is great, your customers will keep coming back. If it is poor, they simply will not.

One important thing to remember is that the quality of the customer service you provide is not judged by you or your company. It is entirely about the customer’s perception. You must do everything in your power to ensure that the service rendered matches up with what the customer desires.

There probably is no better way to kill a service experience than using the word “no.” Sometimes “no” is disguised in phrases such as, “against company policy,” “we just cannot do that,” or “that is not permissible.”

Disguised or otherwise, “no” words destroy your business’ relationship with its customers because they stop the conversation and leave the customer with no choice but to walk out upset, vowing never to come back. Taking choice away from your customers is the death knell for repeat business.

If a customer comes in wanting to return an item and the clerk says the only way to accept the return is with a receipt, which the customer does not have, they will leave the store unhappy and probably not return. While intended to protect the business, this tightly framed return policy creates service experiences that customers perceive as negative and undermines the business’ ability to generate repeat sales.

Ironically, so many companies implement these rigid policies to keep from being taken advantage of to the detriment of their business. These “no” policies repel good, even great, customers who have simply lost their receipts. Where generating repeat business is a priority, a policy that undermines your ability to be successful is just not good business.

I recently bought a shirt at a store, and once I got it home, I found that it did not fit. Of course, when I went to return it, I had lost the receipt indicating how I had paid for it. Obviously, the store did not want to give me cash, but they offered me store credit instead.

The store credit alternative was absolutely fine with me. The key piece to note here is that the clerk did not say the store could not accept my return because of company policy. Rather, the clerk said they were delighted to accept my return and give me store credit to use on a future purchase of my choice.

Another person walked into a store and wanted to make an offer for an item rather than pay the printed price. The clerk told the customer that he could not take anything below the listed price. Ultimately, that may have been the appropriate response, but saying “no” should have been the absolute last resort.

The clerk could have been trained to explain the item’s value, what comparable prices are, and encourage the customer to pay retail. If that approach failed, the clerk should have been instructed to call in a manager.

I am certainly not saying that you should take less than retail if a customer comes in one day with a similar request. Rather, I am suggesting that the response should avoid using the word “no.” “No” stops all dialogue, and you want to keep the conversation with your customers going.

Now go out and make sure that your staff is trained to avoid using “no” and all its variations. The benefits will be huge and the cost minimal.

You can do this!

Sunday, September 11, 2011

Capacity Is So Important When Considering Expansion

"The first requisite for success is the ability to apply your physical and mental energies to one problem incessantly without growing weary." ~Thomas Alva Edison

In today’s economy, so many businesses are looking into new markets and new products as a means of maintaining sales and profits. I have seen many businesses expand outside their geographical market or offer an entirely new product to their existing customer base.

While expansion is great, you must make sure that you have the capacity to deliver the new services or products. This may seem like a simple concept, but in reality, it is a very involved process.

We are working with a medical services business that wanted to expand their services to children. The market had very little competition and a very high profit potential, so on the surface, it appeared to be a wonderful opportunity.

Once we dove into the details, however, we discovered that the service could only be provided two hours of every business day because of school. With such a limited window of time, the firm would need a high volume of part-time help, which they were unable to find. Obviously, once this information came to light, they abandoned the proposition and began evaluating other areas where support resources were more readily available.

Another firm we are assisting wanted to begin offering a new product to its existing customer base. It was a product their customers needed and something they could easily provide.

Preliminary research showed their clients really liked the product and thought it was reasonably priced. Upon further research, we found that the firm’s sales would increase by $300,000 once they added the new product. So far, everything sounded great, and the firm was chomping at the bit to move forward.

However, the expansion did have some serious problems that we did not see when we were initially considering the proposal. First, in order to expand by $300,000, the firm’s accounts payable would have to increase by $50,000, and they would have to pay the manufacturer for the products before it could have them available for sale. Secondly, once they made a sale, it would be nearly 30 days before they would be able to collect payment from the customer.

The firm needed almost $100,000 to build up their inventory and support the accounts receivable increase. This was a problem for the firm since they were not going to be able to raise the equity, and financial institutions were not going to approve a loan. The firm quickly realized that, while the expansion seemed viable initially, the scheme just would not be feasible in implementation.

Each and every business needs to go out and look for expansion possibilities, but with any venture, you must make sure you have the capacity and resources necessary to ensure it will be viable and profitable.

You can do this!

Sunday, September 4, 2011

Small Things You Can Do To Be A Better Manager!

"The productivity of work is not the responsibility of the worker but of the manager." ~Peter Drucker

Being a manager is tough, and every manager can use all the help they can get in this area. As is often the case, it is the little things that make the biggest difference in how your staff responds to you.

Effective communication with your staff is such a tenuous process and you want to make sure there are no obstructions. When talking with your employees, it is important that you do not sit behind your desk. A desk is a gigantic barrier that is both intimidating and nearly impossible to overcome.

A much better policy when communicating with staff is to come out from behind your desk and sit in chairs in front of it. By doing so, you remove the barrier between you so you can communicate without obstruction. It is a subtle gesture, but it goes a long way to improving your staff interactions. Some managers will have a table that they hold meetings around apart from their desk but I just like to sit face to face without any furniture in the way.

Another small adjustment to the way you communicate can help you become a better manager. Instead of just saying, “Jane, I would like to talk to you tomorrow at 10,” you should say, “Jane, can I talk to you at 10 about the status of project x?” Reason being, when you do not share the purpose of the meeting, the natural tendency of your staff is to assume it will be bad news, causing unnecessary anxiety.

That has certainly been my personal experience. In all my years in the workforce, meetings without a known agenda always caused me grief. I kept trying to figure out what my boss wanted to talk about, and I usually assumed I had screwed up in some way.

Just a simple statement about the meeting purpose alleviates the employee’s apprehension and makes a big difference in how they approach the meeting. In the short term, you will probably have a more productive meeting, and in the long term, you will strengthen your relationship with them.

I realize, however, there are times that you may not want to share the purpose of the meeting—if you have to let someone go, for instance. For great managers, these exceptions are limited in number.

The final relatively small thing you can do to improve your management skills and foster trust among your staff is to ask them regularly what you can do to be a better manager. Whether your staff responds to this or not—they most likely will not—asking the question tells them that you care about their concerns and are open to their suggestions.

I can personally attest to how effective this practice can be. When I have asked my staff, I rarely received any suggestions, but they frequently talked with their colleagues about how impressed they were with my sincerity and how they appreciated my asking for their input.

Now go out and look for the little things you can do to make you a better manager. Not talking to staff across a desk, sharing the purpose of meetings and asking how you can be a better manager are just a few simple ways to get started.

You can do this!

Sunday, August 28, 2011

Good Managers Show Empathy and Firmness.

"Understand that most problems are a good sign. Problems indicate that progress is being made, wheels are turning, you are moving toward your goals. Beware when you have no problems. Then you've really got a problem...Problems are like landmarks of progress." ~Scott Alexander

Dealing with staff is one of the most difficult things a manager must do. A great manager must have both empathy and firmness. One without the other just will not cut it.

We've been helping a hard-working office manager who had tremendous empathy — so much in fact, that she always tried to find homes for stray animals that wandered into her yard.

Many of this manager's staff continually came in late — always for a good reason, she thought. The staff took her overabundant empathy as weakness and never accepted any of her rulings. They would always come back with an excuse, which she would always buy.

We discovered that her lack of firmness was caused by doubts she had about her ability to lead. As we helped her build her confidence, she became much more comfortable being firm. Amazingly, the staff really seemed to like her transformation as well. They preferred her firmness, since now they knew exactly what was expected of them.

Another manager brought his military background with him to the office, managing his staff like a sergeant in the Army. There was never an exception to the rules, and he had a serious lack of empathy. In fact, he thought empathy was a weakness, and it was a trait he despised in his fellow managers.

If an employee was one minute late, they got a severe tongue lashing in front of the entire staff. Employees hated him, and those who stayed only did so because they needed the job.

In the military, a soldier must follow commands no matter what the situation; but in civilian life, it is not like that. We had to get this manager to see that there is more than one way to manage, and his way was not working.

To show him how his behavior was affecting his staff, we had him listen to interviews with several of them. We had him shadow other managers so he could see how smoothly their departments operated with just a bit of empathy and flexibility.

This very strict manager had to be reacquainted with a feeling that had been forced out of him in the military. We developed several role-play scenarios where he had to show empathy and we evaluated how he did. Through this process he learned what empathy really meant and felt like. His staff could see the subtle changes in him, and their behavior improved, too.

Now go out and make sure that you manage with a balance of both firmness and empathy.

You can do this!

Sunday, August 21, 2011

Mistakes, A Wonderful Teaching Tool

“We made too many wrong mistakes.” ~Yogi Berra

Think for a second about which you learn the most from, success or failure.

In my life, though my successes have been great, I have learned the most from my failures, which incidentally are many. I would venture to guess most people would say the same.

As human beings, it is natural to enjoy success, but these good feelings are fleeting. Mistakes, on the other hand, have a much bigger impact. Their effects tend to stay with us much longer.

A person's success can be five times bigger than their error, but odds are they will remember the error and forget the success. Using this knowledge, we can help our staff overcome their mistakes in a positive way.

Too often, I hear managers and entrepreneurs talking about how they wish their staff would not make mistakes because errors decrease productivity. This may be true, but mistakes also create coaching opportunities, which are invaluable. This was the approach an accounts receivable manager took when one of the clerks misplaced some checks.

Instead of reacting negatively, the manager used the situation as a coaching opportunity. She and the clerk discussed what had happened, the consequences of the error to the business and how the clerk could avoid having it happen again. In doing so, the manager transformed what could have been an extremely demoralizing situation into a very positive experience.

While the clerk felt bad about her mistake, she came through it feeling like her manager was really trying to help her improve.

Many years ago I was working as an outside plant engineer in Tampa. An outside plant engineer designs the cable layout for the telephone company and makes a multitude of decisions to ensure necessary communications. Determining cable size and pole location are just a couple examples.

On one design, I completely underestimated the size of the cable and specified a 200 pair cable when it should have been a 600 pair cable.

Just before the supplies were purchased for the job — which would have cost millions of dollars — my boss caught my error. He chewed me up one side and down the other without stopping for even a second to talk about how this error occurred or how it could be avoided in the future. He thought yelling at me would stop me from making the same mistake again.

He was partially right, I guess. My reaction to this situation was to begin asking for his OK on every decision that could have a major impact. No doubt, this was a nuisance for him, but it kept me out of hot water.

His bullying had a couple of detrimental effects. One, it killed any desire in me to be innovative and original in my thinking. My only concern now was staying out of trouble. And two, it ultimately pushed me to leave the company and start working toward my MBA.

The truth is mistakes are inevitable. You can use them either to tear the employee down or help create a positive learning experience, which is the key to being a great manager and leader.

Now go out and make sure that you approach your staff's mistakes as opportunities to coach them into becoming the best employees they can be.

You can do this!

Sunday, August 14, 2011

The Three Keys to Starting a Successful Business

“Only passions, great passions can elevate the soul to great things.” ~Denis Diderot

I give many speeches every year, and in each one I always include time for questions. By far, the most frequently asked question is what attributes are needed to be successful as an entrepreneur.

After observing more than 3,000 entrepreneurs, I can tell you there are three simple keys to success: passion, purpose and knowledge. Most folks have two of these down, but you really need all three if you are going to be successful.

Passion is the burning force that keeps you going no matter what happens. Many of the entrepreneurs we deal with have cash-flow crises, but they just do not quit. Somehow they find a way to make payroll or pay that bill. Instead of getting discouraged, they just make a commitment to never end up in that situation again.

Entrepreneurs who lack passion are almost guaranteed to fail. I have seen many aspiring business owners start a company because they either got laid off or could not find a job. This is a recipe for certain disaster, because not having another option does not provide the pure and unbridled passion that you must have to be successful.

Passion alone, however, is not sufficient. You must also have purpose to be successful, because purpose is the force that focuses your passion on a specific activity or industry.

Too often, people tell me they want to start a restaurant because they are good cooks. Being passionate about being a great cook is OK, but it is the combination of passion with purpose — serving clients and making money, for instance — that makes for success.

The third piece of the entrepreneur's formula is knowledge. I cannot overstate the importance of knowledge, because this is how you are able to avoid costly mistakes.

There are three critical knowledge areas entrepreneurs must master. First, you must have a great understanding of marketing and feel comfortable promoting yourself and your business. After all, there is no better salesperson for your company than you.

The second is finance. You absolutely must be able to interpret your financial statements and have a clear understanding of the financial ramifications of your decisions.

The third and final element is knowing how to manage people effectively. All businesses need people, and being able to manage those people is a requisite to success. Knowledge takes passion and purpose and transforms that light into a laser beam for your business.

Before you start a business, make sure you have the three attributes that are vital to success: passion, purpose and knowledge. If you are unsure if you have these components, you probably do not, in which case, I would advise you to wait. If, on the other hand, you are sure, now is the time to move ahead.

You can do this!

Sunday, August 7, 2011

Beware of Industry Shifts

“Any change, even a change for the better, is always accompanied by drawbacks and discomforts.” ~Arnold Bennett

The only thing that is truly constant is change. Some entrepreneurs make the incorrect assumption that they can resist change by working harder, but the truth is that if we do not adapt, our business will pay a high price.

In most cases, change in an industry is caused by technology. Take, for example, the complete demise of camera shops and the closing of the Borders franchise. The advent of digital cameras made the services provided by camera stores obsolete, and e-readers are replacing paper books delivering a blow to traditional bookstores. On a related note, with electronic communication becoming the norm, quick-service copy shops are also seeing falling sales.

The emergence of new product delivery methods can cause disruption in an industry as well. A perfect example of this is the frozen yogurt franchise. For a long time, frozen yogurt was served to the customer by a clerk behind a counter and payment was accepted by another clerk located at the other end of the counter. New yogurt stores are now completely self-serve with only one clerk to man the register.

Consider also how much education has changed. We are moving quickly to online classes as a cheaper and more effective alternative to traditional methods of learning.

With all these examples, the important thing to note is that whatever the cause of the change, industry disruptions will always occur. No matter how much we wish they would not, disruptions like these are the rule rather than the exception.

So, we know these disruptions are going to happen, but how do we anticipate them? I think the answer to this question is twofold. First, you must continuously monitor your sales and make sure that you have an early warning system in place to alert you of any significant changes.

Because many changes happen relatively slowly, you will typically have plenty of time to adjust your business. The key is being aware of them and giving yourself the opportunity to respond.

In monitoring your sales, it is important to know that a decline does not necessarily mean an industry shift is occurring. It could just indicate increased competition or lower prices. Whenever you see a change in sales, it is critical that you determine what caused it.

Whatever the cause, declining sales should be vigorously investigated. Are they falling because the firm is inefficient, because there is more competition or because a structural change has taken place? Obviously, we cannot take action to fix sales until the cause of the decline is understood. If, in fact, the cause is an industry shift, the next task is to figure out what other markets you might be able to effectively enter.

The second piece of anticipating change is watching the health of your industry and listening to what others are saying about it. The more you know about what other people are saying and doing, the better off you will be. You should still be cautious though as the “experts” often completely miss the structural changes.

Now go out and make sure that you have a plan in place to recognize falling sales and identify the cause of the decline. If it was caused by a permanent change in your industry, you will need to find other avenues in order to remain competitive.

You can do this.

Sunday, July 31, 2011

Measure What You Expect!!

“Common sense is the collection of prejudices acquired by age eighteen.” ~Albert Einstein

Being an effective leader requires that you measure your expectations, otherwise there will be no way of evaluating your success or that of your business. In addition, things that are not measured typically get relegated to a low priority by staff. Finally, if you are not measuring all aspects of your business, you can make grievous errors in your decision-making, which can be so costly.

One way to measure outcomes or expectations is by using profit centers. Identifying profit centers helps you evaluate how effective each part of your organization is.

We were helping an aircraft servicing company develop a strategic plan. During these planning sessions, we discovered that 50 percent of the firm’s profits came from airplane sales, yet they had no one assigned to this activity full time.
When they saw the hard numbers, they redistributed their personnel to better support their sales efforts. Once they had employees devoted to selling, their sales soared. If they had profit centers or some other method of measurement in place, they could have acted on this much earlier.

For another example, a service company was struggling with sales that were falling at a rate of 15 percent a year. They just did not know how to stop the red ink from flowing. Part of the problem was that they had gotten so used to business coming to them they just did not know how to respond when this changed.

During a strategic planning session with the staff, it became apparent that they were drowning in red ink. Sessions also showed that they were currently devoting less than 1 percent of their total revenue to sales. Once they were able to see how the lack of support for their sales efforts was sinking their business, they decided to implement a very aggressive sales program.

One caveat with measurement is that you must make sure you are measuring the right thing. Quantifying operations is so important, but they must be tied to the mission of the organization. For instance, one firm spent so much time trying to quantify its bad debts that they missed the important fact that bad debts would naturally increase as their sales did. By focusing only on minimizing bad debts, they were greatly restricting sales by making credit standards too tight.

The Florida Sterling Council, with which I serve as a member of the board, offers great training on measurement and process improvement. I encourage you to look into these resources.

Now go out and make sure that you are measuring as much as you can without getting too deep in the details. The more you measure the effectiveness of activities congruent with your mission, the more successful your organization will be.

You can do this.

Monday, July 25, 2011

Fast Tracking Your Staff

Fast Tracking Your Staff

“The future belongs to those who prepare for it!”
~Jim Moran~

As an entrepreneur, one of your most important tasks is planning for the future of your business. Most know that marketing, new products, finance and growth are important components of this task, but many overlook the most critical element: staff.

Your staff will not just wake up one day with the skills they need for the new position you want them to hold. Having your staff appropriately trained and ready to go when you need them is so important for the future of your business.

I was meeting with the very successful CEO of a business that had about 100 employees. When I asked him how he was going to acquire the staff he needed to lead his company in the next 10 years, he recognized it was a valid question but did not have a very good answer. He had never taken the time to think about what the business would need in terms of staffing and skills.

To nurture future leaders, some businesses identify staff members they feel have potential and put them on a fast-track program. These employees rotate through many different assignments and are intensely mentored to ensure they will be ready to assume greater responsibility down the road. Every year, they meet with the CEO to discuss their progress.

Another very successful method is to assign employees a senior staff member who can mentor and advise them throughout their entire career. The mentor is responsible for ensuring their mentee has the training they need, both from a knowledge perspective and a technology standpoint. Additional training is also provided with input from both the mentor and the mentee.

As part of the program, participants are given assignments that force them out of their comfort zone and expose them to other areas of the company. For instance, if the person is in the finance department, they spend time in marketing to give them a more complete understanding of the firm.

Many entrepreneurs are reluctant to implement fast-track programs because they fear it will show favoritism and alienate the staff members not selected. While this is true, it is still important to identify and train the employees that are capable of managing your business in the future. Without a fast-track program, you will not have the necessary staff in place and your business will not be ready to reach the next level.

Now go out and evaluate the skill sets your company will need for the next five to 10 years and do an honest assessment of your staff. If you do not have the requisite staff in place (most firms will not), consider implementing a fast-track program to groom your company’s future leaders.

You can do this.

Sunday, July 17, 2011

Pricing for Profits

“It is the superfluous things for which men sweat.”
~Seneca the Elder~

One of the most difficult tasks an entrepreneur has is pricing their products. Pricing is one of those things that requires experience and experimentation. Set prices too high, and revenues fall. Set them too low, and though revenues increase, profits plummet.

I was at a large flea market in South Florida one early Sunday morning and was carefully watching the vendors at the various booths. Every so often, a customer would come in, look at a product and make an offer below the listed price. Certain vendors would turn down the offer outright, and the customer would walk away. Some other vendors, however, took a different approach to selling the same type of product. These vendors would answer the low-ball price with a counteroffer, which typically led to a deal.

The first set of vendors clearly thought they were preserving their margin by not negotiating on price, where the other set of vendors was willing to give up some margin in order to make the sale. In both cases, there was very little chance of repeat business.

The lesson here is that if you are selling a homogeneous product with little chance of repeat business, anything you can negotiate above your cost is gravy. Obviously, you want to get as much as you can without losing the customer.
We were helping a neat lady who owns a catering business that has not been doing well financially. When we started talking about pricing, she said she takes her food cost and doubles it to determine the price she will charge for a given event. However, most restaurants want food costs to be under 30 percent of the price charged. This entrepreneur was charging $200 for an event that cost her $100 in food when, according to industry standards, she should have been charging more than $300.

Once I gave her the formula to determine the appropriate price (food cost times 3.2), her revenue fell by about 10 percent, but her profits rose out of the red and she made more money than ever before in a six-month period.

There are three general pricing methods. With the first, you take all of your costs and add an amount for overhead and profits to determine price. I call this the “cost plus” approach. A second method is to evaluate what your competitors are charging and set your price accordingly. A third method is to consider perceived value, which is the value your customers assign to your products and services.

As a general rule, you want your prices to be neither the highest in the market nor the lowest. Just higher than the average price for a similar product is probably a good place to be as consumers typically see a higher price as an indicator of greater value.

Clearly, your objective is to land on a price that is fair for your customers but also capable of earning you the maximum possible profit. Finding this optimal figure takes constant tinkering and continual monitoring.

Now go out and make sure your prices are appropriate and that you are monitoring them constantly to ensure they remain at the optimal level for your business.

You can do this.

Sunday, July 10, 2011

Really thanking your customers!!!

“No one ever attains very eminent success by simply doing what is required of him; it is the amount and excellence of what is over and above the required that determines the greatness of ultimate distinction.” ~Charles Francis Adams

Showing your customers you appreciate them goes a long way to instilling loyalty, yet so few businesses make this extra effort. Just look at it from the customer’s perspective. If all you ever see or hear from a company is a bill, you are not going to feel a particularly strong sense of endearment to that company.

Some business owners think an occasional e-mail to clients is adequate, especially if it is sent by one of their staff members. However, I strongly recommend that you, the owner, personally call and thank your clients.

A sporting goods store in Georgia sold all kinds of athletic equipment, from footballs to running shoes. One day, a woman stopped in and bought a single can of tennis balls. That night, the store owner called the woman personally to tell her how much he appreciated her purchase.

About two weeks later, the store received an order from the local university’s athletic program that more than doubled their total sales for the year. Come to find out, the lady that bought the can of tennis balls was the wife of the university athletic director. She had been so impressed by the owner’s phone call that she convinced her husband to use the store to supply all the university’s athletic equipment. I think anyone would agree this result was well worth the few moments the owner spent on the phone with this client.

Another firm we were working with followed this policy and saw a 30 percent increase in sales just from making these calls. The owner, who at first was very resistant to the calls, adopted this process as part of his daily routine after he saw how much fun they were and how his customers responded.

Keep in mind that a voicemail will not suffice. You really need to keep on trying until you are able to talk to the customer in person. It does not have to be a long conversation. All you really need to say is, “I really appreciate your business and I just wanted to call to say thank you very much.” This one little gesture will give you such a competitive advantage, as very few other business owners take time to make these calls.

Now go out and make sure you adopt the practice of calling your customers each day to thank them for their patronage. Once you get into the routine, you will see the results reflected in your bottom line.

You can do this.

Sunday, July 3, 2011

The Importance of Eye Contact

“I feel that in-person contact with people is the most important thing in comedy. While I'm up on stage, I can actually put myself into the audience and adjust my pace and tuning to them. I can get into their heads through their ears and through their eyes. Only through this total communication can I really achieve what I'm trying to do.” ~Bill Cosby~

Making eye contact with the person you are talking to is so important. It does not matter if the person is an employee, a customer or some other acquaintance. You are constantly being evaluated by your sincere eye contact.

I was at a seminar recently where the speaker, who conducts customer surveys, shared that people’s evaluations of salesmen were greatly enhanced when the salesmen made eye contact. The more eye contact they made, the more professional they were perceived.

Being interested in empirical analysis, I decided to run my own test and went out of my way to make sincere eye contact with the next 10 people I talked to. I quickly learned that, while eye contact is so important, it can easily be overdone.
When I made too much eye contact—in effect, stared—or appeared to be too aggressive, the person would turn away or disengage. However, if I made genuine eye contact, the person seemed to open up like a flower bud and a strong connection was made.

When I made soft but deep eye contact, people just seemed to melt and open up with amazing warmth. You could actually watch their eyes, and if they became dilated, you knew they were genuinely and deeply engaged in our conversation.
On the other hand, if I did not make eye contact or allowed my eyes to wander, the person I was talking to would never really engage. I could almost feel them drifting off. These general reactions were true of everyone, regardless of who they were.

I was in a drug store getting a prescription refilled, and we were having trouble getting the insurance company to agree to pay for the prescription. While discussing the issue with the clerk, I made sincere eye contact with her, and she went from just tolerating me to becoming my advocate with the insurance company. It was so amazing to me that this one small thing could make such an abrupt and powerful change in her behavior towards me. I went from being just another customer to someone she had a deep connection with.

That same day, I went out of my way to make quality eye contact with a cashier at the grocery store. At first, she was uncomfortable with the eye contact and she kept looking away, but as I persisted, you could see her barriers going down. She started returning the eye contact and then began to smile, which was a dramatic change from her initial mood.

What these exercises clearly illustrated is that eye contact does matter in a significant way.

Like most things, having great eye contact takes practice. The more I went out of my way to have eye contact with the people I encountered, the easier and more effective it became. I gave a seminar recently, and as the group worked in pairs to improve their eye contact, you could actually see and feel the relationships deepening.

Now go out and do two things. First, make sure that your sales force has great eye contact with their customers. Second, develop and practice great eye contact techniques in your interactions.

You can do this.

Sunday, June 26, 2011

QR Codes

“Our Age of Anxiety is, in great part, the result of trying to do today's jobs with yesterday's tools.” ~Marshall McLuhan~

When new technology comes out, you have to make a very careful assessment of whether it is appropriate for your business or not. Additionally, you must ask yourself if this is a passing fad or will it change the way we use technology. Here is one of those new technologies that, I believe will change the way you are currently using this type of technology.

Quick Reference codes are a new trend in software technology that will have wide applications in business. Most commonly referred to as “QR codes,” they were developed in Japan more than 10 years ago and are widely used there, but are just now catching on here. While a normal one-dimensional barcode can only contain 20 characters, a QR code can handle thousands. Their value is that they can quickly and easily transmit information through a smart phone.

Though QR codes are just beginning to see widespread use, now is the time to start considering how you can implement this technology so you can be ahead of the curve rather than behind. So far, the most common use is directing a customer to your website, but QR codes can also be used to promote discounts and new products, and even as business cards. If you go to you can see what QR codes look like and read about the many ways the technology can be applied, including temporary tattoos.

Creating a QR code is quick and painless and there is no learning time required. Even I was able to do it! Using sites such as ScanLife and Kaywa, all you have to do is enter your website information, and your QR code is generated in seconds. You can then copy and store the code for future use.

To read the QR code, you need a scanner app. iPhone, BlackBerry and Android all offer a number of options. The i-nigma and RedLaser apps for iPhone are both free and allow you to take a picture of the code with your phone. The photo is converted into the appropriate action (visit a website, for example).

Likify is a neat service that uses QR codes to help generate “Likes” for your Facebook page. Users who scan your Likify QR code are directed to a page where they can tap the “Like” button. Find more information at QR codes are great, and they will be even greater with time. However, it will take a while before adoption is complete, so when considering using QR codes, you will want to make sure you have the right audience. Customers who are into sophisticated technology will be the ones most likely to accept and utilize QR codes right now. You may also find that a certain amount of education will be necessary to teach customers how to use them.

Now go out and find out if QR codes can benefit your business.

You can do this.

Sunday, June 19, 2011

Criteria-the Heart of Decision-Making

“Nothing is more difficult, and therefore more precious, than to be able to decide.” ~Napoleon Bonaparte

There is no question that the ability to make good decisions is at the heart of a successful business. For entrepreneurs, especially those with small businesses, the cost of making mistakes is extremely high.
In one case, a firm selected the wrong vendor to supply a critical part and nearly went out of business when the supplier could not deliver. A second firm paid a high price when their software vendor delivered the software over a year late.

In a third example, a firm’s board of directors was considering what benefits to provide the CEO. The board made a tragic error by selecting the wrong provider and watched the CEO’s morale nosedive as his benefits shrank.

In each of these cases and many more, the entrepreneurs did not take the time to develop criteria to guide their decisions.

When making decisions, it is easy to go with a gut feeling. However, gut feelings do not require analytical ability or consideration of any objective criteria. As such, they can quickly lead you astray.

A firm was considering hiring a bookkeeper, which is such a critical function for every business. As they sorted through the resumes that had been submitted, they also looked at the applicant’s picture. This is not bad if one of your criteria is that the candidate be good-looking. However, if it is not one of your job requirements, including that as part of the initial screening could end up leading you down the path toward a wrong decision at a very high cost.

In order to make great decisions, you must determine the criteria ahead of time and apply these requirements to your decision-making process. For example, if you are going to hire a bookkeeper, your criteria might be that applicants have five years of experience, availability to work overtime, and knowledge of your specific bookkeeping software.

However, just identifying your criteria is not enough. You must also weight them according to their importance. For example, experience could be weighted at 60 percent, availability to work overtime could be 10 percent and knowledge of the bookkeeping software could be 30 percent. Weighting the criteria can be really helpful when ranking the candidates or alternatives.

An entrepreneur was evaluating possible locations for his new restaurant. His initial criteria were the traffic count, parking area and neighborhood demographics. On the initial pass, prior to applying weights, the entrepreneur selected one location based on these criteria. Once the entrepreneur applied weights to the criteria, however, the first location was tossed in favor of a second location that better met the owner’s requirements.

I guarantee that if you take this approach, you will make much better decisions. Now go out and fine tune your decision-making process by identifying criteria and weighting them according to importance.

You can do this!

Sunday, June 12, 2011

Your Beliefs

“If you don't change your beliefs, your life will be like this forever. Is that good news?” ~Dr. Robert Anthony

All of us have a set of beliefs that guides us through this life we live. These beliefs might be something like “theft is bad” or “with hard work I can achieve anything.” There are, unfortunately, a bunch of beliefs that we do not even realize we have, and these unconscious beliefs tend to shape our behavior. If we are responding to events around us without recognizing the forces that are driving us, it is a recipe for disaster.

We were helping one woman who was struggling with her restaurant. Her husband had just lost his job, and she had to keep the restaurant going as it was now their only source of income to care for their ill son. There was just no other viable alternative.

After working with her for months, I could see that she was a business owner who really wanted to be successful, but she just could not put the pieces together no matter how hard I coached her. In my last conversation with her, I tried to get her to see that in order to make a decent income, she would have to go out and sell her catering services. While we both knew this was her best alternative, she just could not break free to put the plan into practice.

As I was talking to her about this paradox—wanting something to happen but being unable to make it happen—she finally admitted the reason she did not go out and sell more is because she was afraid her staff would think less of her if she was not in the restaurant cooking. I replied, “So you are letting the feelings of your staff determine whether you succeed or not?” A light seemed to go on as she came to the realization that this belief—a belief she had not even known she had—was destroying her business and her life.

As she left our meeting, I could tell she was walking lighter because the burden of that belief had been lifted by exposure. While it is too early to tell how successful she will be, at the very least, she has the opportunity to succeed now that she no longer has an unknown anchor dragging her under.

Another entrepreneur has been struggling for more than five years with flat sales and very little forward progress. When I got to talking with this entrepreneur, he discovered that he had an unknown belief that he did not deserve to be successful. On the outside, he has the appearance of someone who is very aggressive and successful, but his belief is keeping him from truly realizing his potential.

In most cases, beliefs form because they served us well at some point in our lives. However, as circumstances change, some beliefs become obsolete and no longer serve us at all. A great way to ascertain whether an unconscious belief is holding you back is to ask a family member or close friend—someone who can be very candid with you. Typically, once these beliefs are recognized, they dissipate and no longer affect behavior.

No go out and make sure that you and your business are not being held back by a belief that is no longer valid.

You can do this.

Sunday, June 5, 2011

Knowing When to Change Your Business Model

No matter how far you have gone on a wrong road, turn back.” ~Proverb

Being realistic about what is possible and, more importantly, what is impossible, is absolutely critical when running a business. There come times in most entrepreneurs’ lives when they will not be able to accomplish the task they have set their sights on. Recognizing this is not a sign of weakness, but a sign of strength. Being realistic about what is achievable is so important as it keeps you from wasting energy trying to move an immovable wall.

We were helping a very neat couple who was working so hard to make their business successful. After four years of laboring, the business had stalled at $1 million in sales. They were struggling since they had not been taking much money out for themselves in the hopes that the business would gradually improve and they could recoup some of the dollars they had invested. But no matter what they did, their sales remained flat. They came to us for help improving their sales efforts and a number of other areas of the business. They figured if we improved some of these other areas, sales would follow.

Trying to help them was so frustrating for me. These clients did everything I asked and had good results in every area except for sales. They were just working so hard without much to show for it. With clients that are both good people and hard workers, it is very frustrating to watch them give it their all and still fall short of the results we all are hoping for.

Finally, exasperated with the lack of results, we had one of those serious and life-altering conversations about whether the cause was something they were or were not doing or market conditions. We all agreed that the market was fully saturated and there was very little they could do now to improve sales.

Once they understood that it was impossible to gain market share effectively – there was just nowhere to go – we began discussions about other services they could potentially offer to differentiate themselves from their competitors. They determined they could add three or four additional products and services to their mix to revive their business. I really believe that with some time and energy, they will be able to grow their business by concentrating on these additional areas.

Another firm we were assisting was having a tough time staying competitive in the Tallahassee market. The State was spending less and less, which was significantly impacting the firm’s sales. I tried over and over to help this entrepreneur realize that he was swimming upstream and that no amount of hard work would ever change that. I am very concerned about this business as the entrepreneur has yet to recognize that in order to survive, he must change.

Now go out and make sure that you are competing in markets where your business can grow and increase profitability. If your sales – either overall or of a specific product or service – stall for longer than two years, you need to consider how you can expand into other markets. Working harder is not always the answer.

You can do this!

Sunday, May 29, 2011

Your Physical Facilities Are Part of Your Business

Some people see the cup as half empty. Some people see the cup as half full. I see the cup as too large.” ~George Carlin

First impressions are so important, and entrepreneurs need to remember that a business’ first impression is made by its physical appearance. If you bring a potential client to your facilities and it looks as if you have not made any improvements in 30 years, they are not going to be inclined to work with you.

We were working with a very successful business that had high sales levels and was growing incredibly fast. The business operated predominantly online, and as it grew, they never took the time to step back and evaluate the physical appearance of their operation as a customer would. They just never had the inclination to invest in keeping their premises up.

On one occasion, a large customer stopped in and, after seeing the condition of the facility, refused to order anything from them again. The customer just could not believe it was a quality operation based on the way they kept their building and facilities. The business owner was shocked by this occurrence. Until this incident, he did not recognize they had a problem.

Another business we were assisting was operating out of their home office in an effort to keep their brick and mortar investment at a minimum. Normally, this was not a problem as they were able to meet customers at various coffee shops. However, a client showed up unexpectedly one day at the home and, after seeing their physical facilities, concluded it was no longer a viable business.

A third business had a nice location, but their warehouse was a disorganized disaster. When a couple of customers got a look at the warehouse behind the counters, they wanted to stop doing business with the firm.
Finally, a business was located in such a bad area of the city that many prospective customers refused to go there. In the interests of keeping their costs at a minimum, the firm had chosen a terrible location, forgetting about how important first impressions are. This business had so much potential, as they had a product that many customers desired, but the location was so bad it made a terrible first impression and significantly affected their sales.

For many entrepreneurs, it is difficult to judge their own business objectively. Frequently, they operate in the same environment for so long they just lose the ability to see their business without bias. One way to get an impartial assessment is to ask an outsider to come in and evaluate your firm’s first impression. In many cases, I have seen these outsiders give great advice at little to no cost.

Now go out and make sure that your business is making the best first impression possible.

You can do this.

Sunday, May 22, 2011

Asking The Right Questions.

““A sudden bold and unexpected question doth many times surprise a man and lay him open.” ~ Francis Bacon

I was helping two wonderful ladies who own their own public relations and marketing firm. They had been working together for more than seven years, but they only had less than $100,000 in revenues last year.

They had taken other part-time jobs to make ends meet, but otherwise, they did not seem to be overly concerned with the lack of adequate revenue. In fact, when I asked them about it during numerous conversations, they just said over and over again that they did not know what to do and had basically given up.

When I probed further and asked why they did not have enough clients, they blamed the customers, they blamed the economy, but they never took any responsibility themselves. They just expected some miracle to give them great revenues and profits, which of course, did not work out.

Their situation was so surprising to me. These ladies help other firms with their marketing but had clearly forgotten how to apply these skills to their own business.

I asked another question that made them more receptive to our discussions. I asked them, “If you were called in as a marketing consultant for a firm that had the track record that you have, what would you do?” This one question allowed them to clearly see the big hole they had dug for themselves and forced them to look at their situation with a different set of eyes.

They knew they needed to do something to reenergize their business, and they are now spending one day a week on marketing efforts. They have started calling on former customers and are exploring alternative markets that might work for their business.

Did I fix the problem? No. I just asked the right question allowing them to see their situation from a different vantage point and recognize what needed to be done.

It was far more beneficial for them to figure out the problem on their own instead of having me just tell them. If I would have just given them the answer, they would not have owned the solution, which is so important.

In all my 40+ years of teaching at various universities, I have always used the Socratic method with my students. The key to this method is asking the right questions to allow the students to figure out the solution to a real life problem for themselves. Just giving someone an answer is quick, but it does not instill any real sense of ownership of the solution.

So how does an entrepreneur realistically apply this concept to their business? When a staff member comes to you with a problem, benignly guide them by asking the questions that will reveal the best solution. Following are a few examples of these types of questions:

• If you were to do it over again, what would you do differently?
• What are the ramifications if we do not do this project?
• If you were called in as an outside consultant, what would you recommend?

Now go out and make sure that you are helping your staff figure out the solutions to their problems by asking probing questions. While initially this is a slow process, in the long run, it has so many benefits.

You can do this!