Archive for the 'Entrepreneurship' Category

Three important people you want to be close to you

Why do birds suddenly appear
Every time you are near?
Just like me, they long to be
Close to you.

In 1970, the brother/sister act, The Carpenters, took these lyrics and the rest of the song, “Close To You” to the top of the charts. Velvet-voiced Karen sang lead, with brother Richard contributing lyrics and sweet harmony.

Out here on Main Street, small businesses should hum that tune every day to remind themselves about the three most important stakeholders they want to be close to.

Customers
Every business, large and small, longs to be close to its customers. But getting customers to return the favor is the challenge. Time was, when a business was a critical link to certain products and services for customers. Longing to be close to us, customers – and their loyalty – weren’t so illusive. Today, almost everything needed by customers can be purchased within a few miles of your business from competitors that didn’t exist when the Carpenters topped the charts. Throw in the Internet and e-commerce and what isn’t a commodity today?

The good news for Main Street is that small and nimble increasingly trumps big and strong. With few exceptions, we can’t compete with the big guys on price, selection, or brand intimidation. But we can make customers want to be close to us is by scratching an itch the big boxes can’t always reach: customization.

If you want customers to suddenly appear, find out what keeps them up at night. And don’t expect the answer to be a burning need for your product or service. If you deliver a customized solution, customers will long for your business because you added unique value they can use. And here’s the silver bullet of customer longing: Help your customers help their customers.

The other good news is that customization justifies higher margins than off-the-shelf offerings. If it’s truly focused on the customer’s solution, they’ll pay for it and come back for more.

Vendors
Once-upon-a-time, a vendor was a company from which you purchased inventory, raw materials, and operating supplies. Today, if a vendor isn’t longing to be your partner, you’ve got the wrong vendor.

Of course, we’re at once a customer to vendors and a vendor to customers. Consequently, we have to find vendor-partners as well as be one. In these roles, it’s important to understand a concept that has become part of the romance between 21st century vendors and customers: seamless.

In a world of outsourcing as a management strategy, the goal is not merely to reduce in-house staff. If outsourcing is to work, products and services MUST be delivered so seamlessly to us by our vendors, and by us to our customers, that operating efficiencies actually improve.

Small businesses have a greater opportunity today to accomplish the hand-in-glove level of closeness required for seamless delivery. And we can’t deliver seamlessly to customers unless vendors long to be seamlessly close to us.

Employees
Back when the Carpenters were belting out hits, the employer/employee relationship was based largely on the Dominator Management Model, which is to say, not much closeness. Employees longed for the perceived job security and benefits of a paternalistic employer. But in the 21st century, employees are drawn closer to leaders.

Today, employers must be able to show employees that we long for them. The best way to demonstrate our longing is to close the gap between what the company needs and what employees want. This means finding and keeping employees who become stakeholders.

If you want employees to long for you, you have to suddenly appear as a partner longing to support their professional and personal fulfillment. And no one can do this better than small business.

Write this on a rock … Find and keep customers, vendors, and employees who long to be close to you.

Celebrating American independence and entrepreneurship

Seven score and 13 years ago, Abraham Lincoln’s inspired speech at the Gettysburg Cemetery dedication included these words: “…our fathers brought forth on this continent, a new nation, conceived in liberty and dedicated to the proposition that all men are created equal.”

Four score and seven years earlier, one of those fathers, Thomas Jefferson, penned what is arguably the most important secular document in history, the Declaration of Independence, which included this passionate passage:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights that, among these are Life, Liberty, and the pursuit of Happiness.”

Having the spirit, courage, and vision to declare independence at a time when monarchy was the globally accepted model of government was unprecedented. To fight for those principles then, and defending them from within and without in the two centuries since, is impressive.

To be sure, America has had lapses in the delivery of some of these tenets. Indeed, while Lincoln was trying to save his beloved country, he made this judgment: “We made the experiment; and the fruit is before us.”

Even today, America is a work-in-progress. We’re on a journey of understanding that has many stations where new things are learned and past wrongs can be righted. But in terms of contribution to the world, Ronald Reagan’s “shining city upon a hill” has an incomparable record. Warts and all, the United States of America is still a benefactor nation like no other in history, with millions, if not billions of beneficiaries.

Freedom to dream is found in other lands, as is freedom to pursue dreams. But no entrepreneurial soil is more fertile than in America, and it’s because of those who had the conviction to create our founding documents, the will to deliver them, and the courage to defend them.

Life, liberty, and the pursuit of happiness have been essential to millions of American small businesses. If you ask anyone anywhere on the planet where to go to start a business and have the greatest chance to succeed and accrue the fruits of that labor, the answer would be America. Like the Founders, generation after generation of American small business owners have demonstrated courage as they claimed and perpetuated the American dream.

As we celebrate the blessings of another Independence Day in America, let’s hold fast to Lincoln’s closing prayer so beautifully conveyed in his 1st Inaugural Address. That the relationships we have with each other will be “touched by the better angels of our nature.”

Write this on a rock … Happy Independence Day, America.

10 reasons to never be too cool for Old School

You may think you’re too cool for “Old School,” but there’s one thing it produced that you can’t be successful without: the fundamentals. Here are ten essential operating fundamentals that are timelessly, beautifully, definitively, non-negotiably, Old School.

Financial statements: Become an expert at understanding your financial statements. Spend more time with the numbers below the sales line on your operating statement. Non-negotiable.

Budgets: Yuck, right? But operations work best with a track to run on. Creating budgets isn’t hard – sticking to them is. Grow some discipline and get on track.

Cash management: Whether sales are up or down, you must be intimately familiar with your cash picture today, tomorrow, and six months from now. Do not delegate this.

Inventory: This is a euphemism for cash. Inventory that isn’t turning is declining in value and must be converted into cash – ASAP. And if you aren’t practicing Just-In-Time inventory management, do it now.

Vendors: Their success depends on yours. Talk to them about managing inventory, improving margins, lowering freight costs, and new ways to serve customers. Get rid of any vendor that only wants to sell you stuff.

Systems: These are the structured components in your operation which may be outdated and unproductive. Scrutinize employee schedules, delivery routes, opening hours, (your idea here). Nothing is sacred! Nothing.

Customers: Categorize them from the most profitable As, to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs, and let the Ds learn the meaning of self-service. You might even have to fire a few.

Products: Same song, different verse: A-B-C-D. Stock the fast-turning As, keep some of the Bs handy, and only a couple of the Cs. But never let a D spend the night under your roof unless a customer has paid for it.

Add Value: Find out what customers want instead of trying to get them to take what you need to sell. If you don’t add value to your customers’ operations, like your unhelpful vendors, expect to be fired.

Employees: Let them help you find efficiencies and opportunities. Encourage creativity and entrepreneurial thinking. Invest in training. Share your plan and let them help you accomplish it. Empower producers and cut the dead wood.

Bankers: Don’t be a stranger. Good news or bad, an informed banker can help you. But an uninformed banker is a scared banker, and no one ever got any help from a scared banker!
Focus on these Old School fundamentals and success will come and play in the New School backyard.

Write this on a rock … Even if you’re too cool for Old School, you still have to focus on the fundamentals.

Organizational special sauce: an intangible force

“Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.”

You may know this line as the commercial jingle describing the Big Mac that McDonald’s created to compete with the Hardee’s Husky, which came with essentially the same condiments, including Hardee’s own special sauce.

Over the years, the term “special sauce” has been re-deployed beyond the burger wars, from condiment to handy metaphor. Management and organizational commentators, like me, have co-opted the term to identify a level of organizational performance beyond extra effort. Here’s how I’ve observed organizational special sauce in the marketplace.

Organizational special sauce isn’t a strategy or campaign, nor can it be achieved with a slogan or mission statement. No special sauce was ever the child of an algorithm, big data, or other amalgamation of ones and zeros. To the chagrin of Wall Street quants, organizational special sauce is an incalculable, unprojectable, and intangible force. It’s 100% performance leverage produced by a single active ingredient: human beings loving to work together toward something they all believe in.

This leverage kicks in like a turbo after quantifiable, tangible leverage reaches its RPM red line. Every business would like to have organizational special sauce but few ever do, because the elements that foster it are not easy to achieve, including, but not limited to:

  • Hiring the best people, who are then respected and valued.
  • Excellence as a non-negotiable performance standard assumed by all stakeholders.
  • Leaders demonstrate all the aspects that define the word: courage, integrity, morals, ethics, commitment, decisiveness, humanity.
  • People are not interchangeable parts, as if they were modules.
  • Corporate values flow to the organization’s last mile as a minimum expectation.
  • Delegation includes responsibility AND authority.
  • Corrective action first presumes shortfalls result from best efforts, and the first management step is redemption.

Here’s how organizational special sauce manifests:

  • Peerless products and services.
  • Industry-leading employee retention.
  • Prospective employees line up to join the organization.
  • Employees and partners are proud of and claim the organization’s excellent reputation.
  • Ethical actions and integrity manifest as devotion to the unenforceable.
  • Customers become the organization’s best salespeople.
  • Teams work harder than they ever did, while having more fun than they ever had.
  • And the classic marker: quantum leap performance.

You can’t demand, buy, or acquire the intangible leverage of special sauce, you can only foster an environment that gives rise to it. It’s an engagement sweet spot that produces results beyond expectations and projections – quantum leap performance.

Organizational special sauce is possible, but rare in public corporations, because it doesn’t conform to the analytical expectations of the Wall Street 90-day conference call. Our here on Main Street it’s more prevalent, where small business leaders know special sauce comes from the intangible resolve of their valued and respected employees.

Write this on a rock … Contributing to organizational special sauce is one of the hardest and most beautiful things you’ll ever do at work.

Are you looking for answers in the wrong places?

This is a story about three small business owners who had one thing in common: a wise man named Luther. Oh, by the way, Luther is their janitor.

On Mondays, Luther cleans the offices at National Supply Co., Inc. Sometimes he talks with the founder, Mr. Gilbert.

One Monday afternoon Mr. Gilbert said, “Luther, I don’t know how long I can survive.”

“What’s wrong, Mr. G?” Luther asked.

“It’s those big-box competitors,” Mr. Gilbert said. “I’ve looked under every rock for ways to lower our prices and increase advertising, but I just can’t compete with those guys.”

“Maybe you’re looking in the wrong place,” Luther offered.

“What do you mean?” Mr. Gilbert asked.

“Those big competitors will always be with us,” Luther reminded him. “Why don’t you emphasize the value of the human connection and customized service that only a small business like yours can deliver? Those two things alone are worth more than anything the Big Boxes offer.”

On Wednesdays, when Luther cleans the offices at Central Data Corp., he often visits with the owner, Sarah.

“Luther, I always assumed my kids would take over my business, but now it doesn’t look like that’s going to happen,” Sarah lamented one day.

“Why aren’t they interested in the business?” Luther asked.

“I’m stumped, she said. “I’ve shown them the opportunity and how profitable the business can be. What else can I do?”

“Maybe you’re asking them to look in the wrong place,” Luther suggested.

“What do you mean?” Sarah asked.

“Sarah, I’ve noticed how much you love what you do,” said Luther, “even when times were tougher and things weren’t so rosy. From what I’ve seen, being an entrepreneur is as much about nourishing the spirit as growing the bank account. Help them think about that.”

On Fridays, Luther cleans the offices at Westco Dynamics, Inc. Mr. West usually talks with Luther for a few minutes, but he seemed pensive today.

“Luther, my family was so poor that we struggled just to survive,” Mr. West said. “When I left home, I vowed to never be that unhappy again.”

“Mr. West, it sounds like you’ve got something stuck in your craw,” Luther observed.

“Aw, it’s nothing,” Mr. West fibbed. “It’s just that, with all my money and stuff, I still can’t stop looking for ways to make sure I’ll never be poor again.”

“Maybe you’re looking in the wrong place,” said Luther.

“What do you mean?” Mr. West asked.

Then Luther said, “You’ve been motivated by the fear of being poor instead of the joy of creating something from nothing. Try finding happiness in knowing that you provide valuable products and services for your customers, and jobs and income for your employees and their families. Remember, money and stuff only give you options, not happiness.”

Write this on a rock … When you’re looking for answers, make sure you look in the right places.

Four marketplace truths about your customers

Spend time in the marketplace and you’ll have many close encounters of the third kind with the most interesting species in all of nature: the human being. And as we have learned, the nature of humans isn’t much different from other animals: All need to breathe, eat, drink, procreate and survive.

But there is something that clearly sets humans apart from other fauna: sentience. And one of the manifestations of being self-aware is that beyond what humans need, they also want.

Every human who owns an automobile will need to buy new tires. But what they want is to keep the family safe while not spending a Saturday buying tires. So if you’re in the tire business, should you advertise tires, which are commodities that the Big Boxes can sell cheaper than your cost? Or should you develop and market a customer loyalty program that combines peace of mind for your family with pick-up and delivery? How about this tag line:

Let us worry about when you need new tires and get your Saturday back.

Basically the hairless weenies of the family animalia, human beings need shelter, but we want a home. So if you’re a realtor, should you focus on the obligatory list of residential features, or how the physical setting and interior space fit what you’ve learned is your customer’s sense of a home? Try this on:

Mrs. Johnson, countertops can be replaced. What I want to know is how much will you love seeing the sun rising over that ridge as you enjoy your first cup of coffee every morning?

Humans, like thousands of other warm-blooded species, need to eat every day, whether they get to or not. But unlike other animals, only humans want to dine. If you own a fine dining restaurant, do you emphasize the food, or the potential for a lasting memory? Check it out:

Long after you’ve forgotten how wonderful our food is, you’ll still remember that table for two in the corner or the booth next to the fireplace.

Small business success requires understanding these marketplace truths:

1. What customers need are commodities driven by price.

2. The price war is over, and small business lost.

3. What customers want is anywhere from a little bit more to everything.

4. Customers will pay more for what they want – charge them for delivering it.

As a small business success strategy, delivering what customers want or selling commodities they need, is as Mark Twain said, “like the difference between lightning and a lightning bug.”

Write this on a rock … Find out what humans want, deliver it, and charge for it.




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