"Trust everyone, but cut the cards." ~Finley Peter Dunne
There is an ongoing story in our local paper about a bookkeeper who allegedly stole over $500 thousand from an organization. When the authorities began investigating the matter, they found that this bookkeeper had been convicted of stealing funds from her former employer. In fact, when she was hired, she was serving her jail time at night while she worked during the day.
Obviously, this organization failed to do any due diligence to verify her background. And while this oversight was bad in and of itself, the real problem here was management's complete trust in this employee.
This employee was able to write checks and make the park's books look great since she was the one who reconciled the bank statements. In our consulting work we run into this often, and I warn every entrepreneur against it. I tell owners that the checks need to be returned to them, and they need to look over them to verify that there has been no impropriety.
Why did all this happen? I believe that as people, we want to trust others and see them in the best light possible. If we looked at every person we know with a suspicious eye, life would not be any fun. Our fundamental belief is that people are basically good, which is a philosophy that I certainly subscribe to.
But while we need to see the good in everyone, particularly employees, we need rules and procedures in place to ensure that dishonesty is caught and punished. Just making staff aware that you are checking on their honesty is frequently enough to prevent theft.
So often, businesses that install video cameras near their cash registers and back doors are surprised to see the incidence of theft decrease. After all, most theft in a business occurs internally. Removing the temptation to steal is the best means of eliminating theft.
While you need to trust your staff, never trust blindly. Have procedures in place to guarantee their honesty. As bad as it may sound, this is the most effective way to deter theft.
Now go out and make sure you have policies and procedures that eliminate the temptation to steal. And never completely trust any staff member, no matter how long they have worked for you.
You can do this!
Tuesday, May 18, 2010
Tuesday, May 11, 2010
Should the government intervene in how businesses price their goods?
"Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."
~Adam Smith
For the last 10 years, I have been aware of the additional regulations and restrictions that our government has put on small businesses. It has troubled me both because of the cost as well as because of the way it limits a business’ ability to compete effectively.
In 1776, Adam Smith, who is considered the father of economics, wrote the classic book entitled The Wealth of Nations. In this book, Adam Smith argues that if left unfettered, businesses will compete to provide the maximum value at the minimum cost to consumers. He called this the “invisible hand of competition.”
The “invisible hand” is the force of competition that ensures goods are delivered at a fair and reasonable price. After all, if one firm charges $10 for a product, and another firm charges $8, it is only logical that customers will go to the $8 vendor until the more expensive firm lowers its price.
When I had to read this classic text in graduate school, I had no idea that it was written the same year that our country earned its independence. Obviously, Adam Smith understood the role of competition, as did our founding fathers.
With only certain exceptions (e.g. regulated utilities), when the government tries to influence the price of products delivered to consumers, it tends to destroy the way our free markets operate. And free markets, of course, are the basis of capitalism.
What really caused me to blow my gasket was Spirit Airline’s announcement that they would begin assessing a $45 charge for carry-on luggage. I was actually not upset that Spirit wanted to do this. In fact, being a frequent traveler who has been hit in the head with flying luggage too many times to count, I would like to see a decrease carry-on luggage. Additionally, I have seen how often the TSA line slows significantly – or even stops completely – because someone with carry-on luggage did not know the rules about liquids or some such issue.
I, myself, always check my bags so that I do not have to deal with the hassle of TSA or force-fitting the luggage into the overhead bin. Of course, what I like or do not like is really immaterial. I just had to vent a bit here as this is one of my pet peeves.
What does trouble me about the luggage charge is that the government is saying that Spirit should not implement this fee and is looking for ways to legislatively stop them from doing so. In my opinion, the government should stop meddling in this issue as well as in so many others. Unless there is collusion or price-fixing, Adam Smith’s invisible hand of competition will control how successful Spirit will be with this carry-on luggage charge.
Ordinarily, one of two things can be expected to occur as a result of this new pricing strategy. The first possible outcome is that customers will stop flying Spirit, making it necessary to repeal the charge. The second is that customers will be willing to pay this price for a whole variety of reasons – lower total prices, for instance. The bottom line is that businesses operate best when that invisible hand of competition is permitted to function as it forces them to operate in a manner that ensures customers are receiving the highest value.
Too often, entrepreneurs tend to sit back and let governmental regulations hamper their operations. However, there are many ways to become active in limiting the number of these regulations. Chambers of commerce and lobbying organizations for each individual industry are just a couple options. Additionally, running for office is a great but difficult way to influence the government’s ability to impact businesses.
You can do this!
~Adam Smith
For the last 10 years, I have been aware of the additional regulations and restrictions that our government has put on small businesses. It has troubled me both because of the cost as well as because of the way it limits a business’ ability to compete effectively.
In 1776, Adam Smith, who is considered the father of economics, wrote the classic book entitled The Wealth of Nations. In this book, Adam Smith argues that if left unfettered, businesses will compete to provide the maximum value at the minimum cost to consumers. He called this the “invisible hand of competition.”
The “invisible hand” is the force of competition that ensures goods are delivered at a fair and reasonable price. After all, if one firm charges $10 for a product, and another firm charges $8, it is only logical that customers will go to the $8 vendor until the more expensive firm lowers its price.
When I had to read this classic text in graduate school, I had no idea that it was written the same year that our country earned its independence. Obviously, Adam Smith understood the role of competition, as did our founding fathers.
With only certain exceptions (e.g. regulated utilities), when the government tries to influence the price of products delivered to consumers, it tends to destroy the way our free markets operate. And free markets, of course, are the basis of capitalism.
What really caused me to blow my gasket was Spirit Airline’s announcement that they would begin assessing a $45 charge for carry-on luggage. I was actually not upset that Spirit wanted to do this. In fact, being a frequent traveler who has been hit in the head with flying luggage too many times to count, I would like to see a decrease carry-on luggage. Additionally, I have seen how often the TSA line slows significantly – or even stops completely – because someone with carry-on luggage did not know the rules about liquids or some such issue.
I, myself, always check my bags so that I do not have to deal with the hassle of TSA or force-fitting the luggage into the overhead bin. Of course, what I like or do not like is really immaterial. I just had to vent a bit here as this is one of my pet peeves.
What does trouble me about the luggage charge is that the government is saying that Spirit should not implement this fee and is looking for ways to legislatively stop them from doing so. In my opinion, the government should stop meddling in this issue as well as in so many others. Unless there is collusion or price-fixing, Adam Smith’s invisible hand of competition will control how successful Spirit will be with this carry-on luggage charge.
Ordinarily, one of two things can be expected to occur as a result of this new pricing strategy. The first possible outcome is that customers will stop flying Spirit, making it necessary to repeal the charge. The second is that customers will be willing to pay this price for a whole variety of reasons – lower total prices, for instance. The bottom line is that businesses operate best when that invisible hand of competition is permitted to function as it forces them to operate in a manner that ensures customers are receiving the highest value.
Too often, entrepreneurs tend to sit back and let governmental regulations hamper their operations. However, there are many ways to become active in limiting the number of these regulations. Chambers of commerce and lobbying organizations for each individual industry are just a couple options. Additionally, running for office is a great but difficult way to influence the government’s ability to impact businesses.
You can do this!
Monday, May 3, 2010
Managing Generation Y
Hire the best. Pay them fairly. Communicate frequently. Provide challenges and rewards. Believe in them. Get out of their way, and they''ll knock your socks off. ~Mary Ann Allison
In so many businesses, the preponderance of staff now comes from Generation Y. Also known as the Millennials, Generation Y consists of those staff members that were born after 1980 and were the children of the Baby Boomers.
Over the next seven years, 50 percent of our workforce will retire, and the largest number of college grads will enter the labor force. What this means is that more and more members of Generation Y will be entering the workplace, and every manager must understand how to motivate and manage this group.
In order to understand this generation you have to first understand how they were brought up. They were raised in an environment where parents did all they could to give their children almost everything they ever wanted. Their parents went out of their way to make sure that their ego and self worth never took a battering. Most of their emotional and material needs were met unquestionably.
I have talked to so many managers and entrepreneurs that just do not know how to manage this generation as they are so vastly different from the Baby Boomers. These managers just do not get what motivates and retains Gen Y’s. Obviously, if you want to be a great manager and leader, then you must understand what makes this generation tick.
First, this generation wants to feel as if they are doing something that is worthwhile and of value. They will not just follow orders blindly, but must be shown how what is being asked of them fits into the larger picture. If you ask them to get new training, it is imperative that you explain how this training will be of value to them as well as to the company.
When asking this generation to work on a project, you cannot just tell them how to do it. If you tell them step by step how to do something, they will rebel and leave your employ. Instead, it is best to just let them know what outcome you want. For example, you would not tell one of your Generation Y staff how to modify part of your website. Rather, you would tell them what you want the final product to look like and let them make it happen. Micro-managing this generation will not work. You just have to let them figure out a way to get the job done.
Making the workplace fun is so important to this generation. They fully understand that they spend more time at work than they do at home, and as a result, they almost demand that their workplace is a fun one.
The best types of fun are things that are not planned, such as taking a break and having ice cream brought in. One entrepreneur that we work with holds a Nerf basketball shot competition and gives away cash. Another manager comes to each staff meeting dressed in a different costume.
When I had an office (I now am semi-retired), I had a marshmallow gun that I had acquired from a company we were assisting. I used to go out of my office and shoot staff just to break up work, and I can promise you that they loved it when I started shooting. I was just worried about what was going to happen when they found out where they could buy these guns!
Loyalty is not one of Gen Y’s greatest attributes as they are much more concerned with their work life experiences and will move without much motivation. After receiving his MBA, my son went to work with Hewett Associates in Atlanta. He stayed there four months before he went to work with Home Depot. He did not see any problem with changing jobs that quickly, nor did Home Depot have a problem hiring him knowing that he only stayed four months on his last job. The real reason he left was bad management. He just did not feel challenged.
You really have to challenge this generation as they have such a low tolerance for doing repetitive work. Their attention span is very short, and I would imagine that this is from all of the multi-tasking that they have done all of their lives. As a great manager, you must find work that will constantly challenge this generation, or they will leave.
Throughout their early lives, Gen Y’s were constantly coached in everything from sports to music. As a result, they just expect to be mentored. While they are very independent, they are still looking for a great coach. It is so important to have coaches for these Gen Y’s.
Managing Generation Y is different, but if you really understand what motivates them, it is easy to draw so much value from them.
Now make sure that you have a plan and strategy for managing Generation Y, and that this plan and strategy are shared throughout the organization.
You can do this!
In so many businesses, the preponderance of staff now comes from Generation Y. Also known as the Millennials, Generation Y consists of those staff members that were born after 1980 and were the children of the Baby Boomers.
Over the next seven years, 50 percent of our workforce will retire, and the largest number of college grads will enter the labor force. What this means is that more and more members of Generation Y will be entering the workplace, and every manager must understand how to motivate and manage this group.
In order to understand this generation you have to first understand how they were brought up. They were raised in an environment where parents did all they could to give their children almost everything they ever wanted. Their parents went out of their way to make sure that their ego and self worth never took a battering. Most of their emotional and material needs were met unquestionably.
I have talked to so many managers and entrepreneurs that just do not know how to manage this generation as they are so vastly different from the Baby Boomers. These managers just do not get what motivates and retains Gen Y’s. Obviously, if you want to be a great manager and leader, then you must understand what makes this generation tick.
First, this generation wants to feel as if they are doing something that is worthwhile and of value. They will not just follow orders blindly, but must be shown how what is being asked of them fits into the larger picture. If you ask them to get new training, it is imperative that you explain how this training will be of value to them as well as to the company.
When asking this generation to work on a project, you cannot just tell them how to do it. If you tell them step by step how to do something, they will rebel and leave your employ. Instead, it is best to just let them know what outcome you want. For example, you would not tell one of your Generation Y staff how to modify part of your website. Rather, you would tell them what you want the final product to look like and let them make it happen. Micro-managing this generation will not work. You just have to let them figure out a way to get the job done.
Making the workplace fun is so important to this generation. They fully understand that they spend more time at work than they do at home, and as a result, they almost demand that their workplace is a fun one.
The best types of fun are things that are not planned, such as taking a break and having ice cream brought in. One entrepreneur that we work with holds a Nerf basketball shot competition and gives away cash. Another manager comes to each staff meeting dressed in a different costume.
When I had an office (I now am semi-retired), I had a marshmallow gun that I had acquired from a company we were assisting. I used to go out of my office and shoot staff just to break up work, and I can promise you that they loved it when I started shooting. I was just worried about what was going to happen when they found out where they could buy these guns!
Loyalty is not one of Gen Y’s greatest attributes as they are much more concerned with their work life experiences and will move without much motivation. After receiving his MBA, my son went to work with Hewett Associates in Atlanta. He stayed there four months before he went to work with Home Depot. He did not see any problem with changing jobs that quickly, nor did Home Depot have a problem hiring him knowing that he only stayed four months on his last job. The real reason he left was bad management. He just did not feel challenged.
You really have to challenge this generation as they have such a low tolerance for doing repetitive work. Their attention span is very short, and I would imagine that this is from all of the multi-tasking that they have done all of their lives. As a great manager, you must find work that will constantly challenge this generation, or they will leave.
Throughout their early lives, Gen Y’s were constantly coached in everything from sports to music. As a result, they just expect to be mentored. While they are very independent, they are still looking for a great coach. It is so important to have coaches for these Gen Y’s.
Managing Generation Y is different, but if you really understand what motivates them, it is easy to draw so much value from them.
Now make sure that you have a plan and strategy for managing Generation Y, and that this plan and strategy are shared throughout the organization.
You can do this!
Sunday, April 25, 2010
Common Problems in Small Business
It is not by muscle, speed, or physical dexterity that great things are achieved, but by reflection, force of character, and judgment.
~Marcus Tullius Cicero
Every once in a while you need to sit back and reflect on life to see if there are any trends or experiences that you or others can learn from. The Jim Moran Institute recently celebrated its 15th anniversary, and I was reflecting on the common problems that entrepreneurial clients (over 3,000) have had over the years. By far, the number one problem that entrepreneurs have dealt with is the selection of accountants.
Too often, entrepreneurs continue to use the same accountant, not realizing that the services offered can vary so tremendously from one accountant to another. In addition, so many entrepreneurs feel intimated by accountants, and they are just not comfortable asking cogent questions. However, you must have an accountant on hand to spot trends and advise you on ways to improve your profits.
Having an accountant that only does your taxes at the end of the year is just not adequate. Entrepreneurs must hire an accountant that will look at their financial statements each month and give them advice on how to perform better.
The second common problem is that entrepreneurs do not have a coach or mentor. Empirical studies have repeatedly shown that entrepreneurs who have mentors are so much more successful in terms of their business’ performance than entrepreneurs who do not have coaches.
So many entrepreneurs do not ask for help from a mentor or coach because they think that to do so would be a sign of weakness. However, in reality, asking for help is a sign of strength and courage. There is no way any entrepreneur could ever know everything about their business, and having a coach or mentor can help them navigate the rough waters without slipping out of the boat.
The third area where almost every business struggles is staffing, both in terms of hiring the wrong employees and holding back when it comes to letting questionable staff go. In order to have a great organization, you must have great people working for you – people with character, people skills and motivation. Where these qualities are concerned, you just cannot make exceptions as they are not skills you can teach.
In terms of letting people go, it is always tough. I like to say that the day you have to let someone go is both the worst day and the best day of your life. Having a bad employee is like cancer in that it just keeps growing if left unchecked, and letting these problem employees go frees you and your organization up so much. If you have a bad employee, the sooner you let them go, the better, both for your organization as well as for your ability to manage it.
Now go out and make sure that you have addressed your accounting issues, have a mentor and have a great staff.
You can do this!
Click Here to View the Article Webp
~Marcus Tullius Cicero
Every once in a while you need to sit back and reflect on life to see if there are any trends or experiences that you or others can learn from. The Jim Moran Institute recently celebrated its 15th anniversary, and I was reflecting on the common problems that entrepreneurial clients (over 3,000) have had over the years. By far, the number one problem that entrepreneurs have dealt with is the selection of accountants.
Too often, entrepreneurs continue to use the same accountant, not realizing that the services offered can vary so tremendously from one accountant to another. In addition, so many entrepreneurs feel intimated by accountants, and they are just not comfortable asking cogent questions. However, you must have an accountant on hand to spot trends and advise you on ways to improve your profits.
Having an accountant that only does your taxes at the end of the year is just not adequate. Entrepreneurs must hire an accountant that will look at their financial statements each month and give them advice on how to perform better.
The second common problem is that entrepreneurs do not have a coach or mentor. Empirical studies have repeatedly shown that entrepreneurs who have mentors are so much more successful in terms of their business’ performance than entrepreneurs who do not have coaches.
So many entrepreneurs do not ask for help from a mentor or coach because they think that to do so would be a sign of weakness. However, in reality, asking for help is a sign of strength and courage. There is no way any entrepreneur could ever know everything about their business, and having a coach or mentor can help them navigate the rough waters without slipping out of the boat.
The third area where almost every business struggles is staffing, both in terms of hiring the wrong employees and holding back when it comes to letting questionable staff go. In order to have a great organization, you must have great people working for you – people with character, people skills and motivation. Where these qualities are concerned, you just cannot make exceptions as they are not skills you can teach.
In terms of letting people go, it is always tough. I like to say that the day you have to let someone go is both the worst day and the best day of your life. Having a bad employee is like cancer in that it just keeps growing if left unchecked, and letting these problem employees go frees you and your organization up so much. If you have a bad employee, the sooner you let them go, the better, both for your organization as well as for your ability to manage it.
Now go out and make sure that you have addressed your accounting issues, have a mentor and have a great staff.
You can do this!
Click Here to View the Article Webp
Monday, April 19, 2010
A Driving Process for Success: The Governor’s Sterling Award
When we are motivated by goals that have deep meaning, by dreams that need completion, by pure love that needs expressing, then we truly live life.
~Greg Anderson
Two years ago, I was lucky enough to be invited by Fringe Benefits Management Company’s President and Florida Sterling Council Board Member Lorraine Strickland to attend the ceremony for the Governor’s Sterling Award in Orlando. Prior to that time, I had heard about the Sterling Award, but I did not know exactly what it did or how it operated. What I remember most about the ceremony was the absolute glee that was apparent on the faces of the staff of the winning companies. That more than made up for having to wear a tux, which is not my favorite thing to do, at all.
The Governor’s Sterling Award is presented to both governmental agencies and private businesses, and for each winner, it seemed as if the entire staff was on the stage to receive the award. I have never seen a happier group than the recipients of this very prestigious honor.
The Sterling Award is to the state of Florida what the Malcolm Baldridge National Quality Award is to the entire nation. Both programs seek to improve the overall performance and bottom line of each organization (whether for profit or not-for-profit) through process improvement.
The Sterling process evaluates each applicant’s effectiveness in seven areas: leadership, strategic planning, customer focus, measurement and analysis, employee focus, process management, and of course, results. Clearly, this award understands how important processes and process improvement are to making organizations successful. They have a very well-thought-out but demanding path for achieving this award, and outside examiners are brought in to evaluate each firm.
To me, whether an organization wins or not, merely going through this very effective application process is the real value as it brings about some very significant changes. I sit on the boards of two organizations that are going up for the Sterling Award, and I have seen first-hand how simply starting the application process has triggered changes in both staff motivation and process improvement.
Leading up to the Sterling Award ceremony, they hold their annual conference, which helps to educate and train staff on how they can achieve this prestigious award. But more importantly, it demonstrates how to become a more efficient and effective organization. Their 2010 conference will be held June 2-4 in Orlando, and they will cover topics such as “How to Avoid the Four Human Ailments: Pitfalls that Hold Us Back” and “Leadership…Let’s Keep it Real.” It is an extremely informative conference, and I will be attending.
I was so impressed with the entire process that I, along with several others, finally nagged John Pieno, the executive director of the Florida Sterling Council, into developing a Sterling process for small businesses. Called the Small Business Blueprint, this is a series of workshops that brings the guts of the Sterling Award to small firms, and many small business owners have shared with me how valuable this training has been for them.
Whether you are a large business, small business, government entity or a non-profit, Sterling has something for your organization. You can get so much more information about this organization at their web site, floridasterling.com.
You can do this!
~Greg Anderson
Two years ago, I was lucky enough to be invited by Fringe Benefits Management Company’s President and Florida Sterling Council Board Member Lorraine Strickland to attend the ceremony for the Governor’s Sterling Award in Orlando. Prior to that time, I had heard about the Sterling Award, but I did not know exactly what it did or how it operated. What I remember most about the ceremony was the absolute glee that was apparent on the faces of the staff of the winning companies. That more than made up for having to wear a tux, which is not my favorite thing to do, at all.
The Governor’s Sterling Award is presented to both governmental agencies and private businesses, and for each winner, it seemed as if the entire staff was on the stage to receive the award. I have never seen a happier group than the recipients of this very prestigious honor.
The Sterling Award is to the state of Florida what the Malcolm Baldridge National Quality Award is to the entire nation. Both programs seek to improve the overall performance and bottom line of each organization (whether for profit or not-for-profit) through process improvement.
The Sterling process evaluates each applicant’s effectiveness in seven areas: leadership, strategic planning, customer focus, measurement and analysis, employee focus, process management, and of course, results. Clearly, this award understands how important processes and process improvement are to making organizations successful. They have a very well-thought-out but demanding path for achieving this award, and outside examiners are brought in to evaluate each firm.
To me, whether an organization wins or not, merely going through this very effective application process is the real value as it brings about some very significant changes. I sit on the boards of two organizations that are going up for the Sterling Award, and I have seen first-hand how simply starting the application process has triggered changes in both staff motivation and process improvement.
Leading up to the Sterling Award ceremony, they hold their annual conference, which helps to educate and train staff on how they can achieve this prestigious award. But more importantly, it demonstrates how to become a more efficient and effective organization. Their 2010 conference will be held June 2-4 in Orlando, and they will cover topics such as “How to Avoid the Four Human Ailments: Pitfalls that Hold Us Back” and “Leadership…Let’s Keep it Real.” It is an extremely informative conference, and I will be attending.
I was so impressed with the entire process that I, along with several others, finally nagged John Pieno, the executive director of the Florida Sterling Council, into developing a Sterling process for small businesses. Called the Small Business Blueprint, this is a series of workshops that brings the guts of the Sterling Award to small firms, and many small business owners have shared with me how valuable this training has been for them.
Whether you are a large business, small business, government entity or a non-profit, Sterling has something for your organization. You can get so much more information about this organization at their web site, floridasterling.com.
You can do this!
Sunday, April 11, 2010
Make sure there is demand for your new product or service
Nobody ever lost money taking a profit.
~Bernard Baruch
Marketing 101 demands that before you introduce a new product or start a business selling a new product, you need to make sure that there is a solid demand for the product. While this sounds so elementary, we continually work with entrepreneurs and inventors that have just forgotten about this basic tenet of good marketing.
We were called in recently to assist an inventor that had developed a new type of dog toy. The toy was fun for dogs but very expensive to produce. They gave me one to try, and I can personally attest that my dogs (3) loved the toy.
This toy was the brainchild of an inventor who really needed a product like this for his dogs. This idea came to fruition after the inventor invested over $100,000 in initial production and development expenses. His teams called JMI because they wanted help with some partner issues. However, as it frequently turns out when people call us for help, the issue they cited was not the critical issue at all.
After much discussion, we were able to ferret out the real problem. Their partner issues paled in comparison to the fact that they were uncertain if the product even had a viable market. They spent all of this money without knowing if there was any real demand for the product. Of course, they asked their friends and relatives what they thought about the product, and of course, they got rave reviews. What they did not do was ask potential customers if they would be willing to buy the product and for what price.
In order to cover the cost of getting these dog toys produced, they would have to charge a very high price, and because they assumed there would be a landslide of demand, they thought they could do that. We very kindly told them that they first needed to find out if there was a real demand for the product. Furthermore, even if the demand was there, we thought that it was way overpriced.
We suggested that they try to sell their current inventory on the Web as well as at various dog events. They could set up a small table and try to sell the blankets at these events before they invested too much more money.
While ensuring that there is a demand for your product seems like such a simple concept, this inventor just got caught up. He fell in love with his first idea, not his best idea. Additionally, he saw this as a way to achieve financial success, and he failed to think carefully through all of the ramifications of ensuring that there was a demand for his product.
Now go out and make sure that there is a viable demand for your new product or business. You can do this through the use of surveys, selling your product to a small market, or asking your existing customers what they think about a new product or service.
You can do this!
~Bernard Baruch
Marketing 101 demands that before you introduce a new product or start a business selling a new product, you need to make sure that there is a solid demand for the product. While this sounds so elementary, we continually work with entrepreneurs and inventors that have just forgotten about this basic tenet of good marketing.
We were called in recently to assist an inventor that had developed a new type of dog toy. The toy was fun for dogs but very expensive to produce. They gave me one to try, and I can personally attest that my dogs (3) loved the toy.
This toy was the brainchild of an inventor who really needed a product like this for his dogs. This idea came to fruition after the inventor invested over $100,000 in initial production and development expenses. His teams called JMI because they wanted help with some partner issues. However, as it frequently turns out when people call us for help, the issue they cited was not the critical issue at all.
After much discussion, we were able to ferret out the real problem. Their partner issues paled in comparison to the fact that they were uncertain if the product even had a viable market. They spent all of this money without knowing if there was any real demand for the product. Of course, they asked their friends and relatives what they thought about the product, and of course, they got rave reviews. What they did not do was ask potential customers if they would be willing to buy the product and for what price.
In order to cover the cost of getting these dog toys produced, they would have to charge a very high price, and because they assumed there would be a landslide of demand, they thought they could do that. We very kindly told them that they first needed to find out if there was a real demand for the product. Furthermore, even if the demand was there, we thought that it was way overpriced.
We suggested that they try to sell their current inventory on the Web as well as at various dog events. They could set up a small table and try to sell the blankets at these events before they invested too much more money.
While ensuring that there is a demand for your product seems like such a simple concept, this inventor just got caught up. He fell in love with his first idea, not his best idea. Additionally, he saw this as a way to achieve financial success, and he failed to think carefully through all of the ramifications of ensuring that there was a demand for his product.
Now go out and make sure that there is a viable demand for your new product or business. You can do this through the use of surveys, selling your product to a small market, or asking your existing customers what they think about a new product or service.
You can do this!
Sunday, April 4, 2010
Why Partnerships are to be Avoided!
Concentration is my motto -- first honesty, then industry, then concentration.
~Andrew Carnegie
One of the hardest problems that we have to deal with is when a partnership turns sour. It really is not a pleasant thing to see as it takes so much time and effort to extricate the partners. Normally, this separation takes 12 to 16 months, and because many lawyers and experts are involved, it is also very expensive.
The number one cause of failed partnerships is that they are formed for the wrong reason. Typically, these alliances are formed when one partner feels that he or she is missing some critical element for running a business. Generally, I find this missing element is either marketing or finance. For example, we had one partnership where the originating partner was a great marketer, but she needed someone to take care of everything else.
Another predominant reason why partnerships fail is theft. I really do not know why this happens so frequently, but my guess would be that one partner feels as if there is an imbalance in the partnership. This perceived imbalance could be, for example, disproportionate hours worked or different competency levels. Or perhaps it happens simply because no one is watching them, and they think they can get away with it.
Whatever the motive, theft destroys partnerships. Trust between partners is critical to keeping the business running, and once that trust is breached, the partnership implodes.
We were helping a business in the healthcare industry. This business was thriving, but the founding owner felt that he did not have the necessary financial skills. He was great at running and marketing the business, but he lacked both the skills and knowledge to effectively manage the entire operation.
As a result, he went into business with a partner that he thought had the skills to handle the finances. Additionally, he thought this new partner would be able to bring in the funds needed to finance a necessary expansion.
After six months, the new partner would never allow the originating partner to see the financials or manage any of the money. Then, while I was meeting one morning with the partners, it came out that none of the credit cards that the new partner was using to finance the business were being pulled down as the firm was very, very profitable.
Something was wrong, and I must have had a very strange look on my face because the originating partner says that moment was his turning point. He realized then and there that theft was probably going on.
It has been so painful for the originating partner to prosecute the partner that he thought would save his business. From hindsight however, he realized that if he had done some due diligence, he would have discovered that his former partner had a history of problems.
After having gone through this mess, the originating partner now realizes that he has the skills and the confidence to run his business that he never had before. While this was clearly a painful experience, there were also some very tangible benefits, and the business is now moving towards a sound financial future.
You are wise to avoid partnerships, but if you must have one, make sure there is a very clear partnership agreement that protects both parties should a problem ever arise.
You can do this!
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~Andrew Carnegie
One of the hardest problems that we have to deal with is when a partnership turns sour. It really is not a pleasant thing to see as it takes so much time and effort to extricate the partners. Normally, this separation takes 12 to 16 months, and because many lawyers and experts are involved, it is also very expensive.
The number one cause of failed partnerships is that they are formed for the wrong reason. Typically, these alliances are formed when one partner feels that he or she is missing some critical element for running a business. Generally, I find this missing element is either marketing or finance. For example, we had one partnership where the originating partner was a great marketer, but she needed someone to take care of everything else.
Another predominant reason why partnerships fail is theft. I really do not know why this happens so frequently, but my guess would be that one partner feels as if there is an imbalance in the partnership. This perceived imbalance could be, for example, disproportionate hours worked or different competency levels. Or perhaps it happens simply because no one is watching them, and they think they can get away with it.
Whatever the motive, theft destroys partnerships. Trust between partners is critical to keeping the business running, and once that trust is breached, the partnership implodes.
We were helping a business in the healthcare industry. This business was thriving, but the founding owner felt that he did not have the necessary financial skills. He was great at running and marketing the business, but he lacked both the skills and knowledge to effectively manage the entire operation.
As a result, he went into business with a partner that he thought had the skills to handle the finances. Additionally, he thought this new partner would be able to bring in the funds needed to finance a necessary expansion.
After six months, the new partner would never allow the originating partner to see the financials or manage any of the money. Then, while I was meeting one morning with the partners, it came out that none of the credit cards that the new partner was using to finance the business were being pulled down as the firm was very, very profitable.
Something was wrong, and I must have had a very strange look on my face because the originating partner says that moment was his turning point. He realized then and there that theft was probably going on.
It has been so painful for the originating partner to prosecute the partner that he thought would save his business. From hindsight however, he realized that if he had done some due diligence, he would have discovered that his former partner had a history of problems.
After having gone through this mess, the originating partner now realizes that he has the skills and the confidence to run his business that he never had before. While this was clearly a painful experience, there were also some very tangible benefits, and the business is now moving towards a sound financial future.
You are wise to avoid partnerships, but if you must have one, make sure there is a very clear partnership agreement that protects both parties should a problem ever arise.
You can do this!
Click Here to View the Article Webpage
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