Archive for the ‘Mondays with Mike’ Category


Mondays with Mike: Do This BEFORE You Hire An Employee

Most entrepreneurs start out as the sole employee of their company.  There are benefits to this setup – you know exactly who forgot to clean out the coffee maker, and you’ll never forget a staff birthday.  But eventually, if you want to grow your business, you know that you’ll have to hire someone to work for you.  You want to accomplish more, and you need additional staff to make that happen.

Don’t underestimate the importance of this decision.  It’s estimated that the cost of acquiring, hiring, and training a new employee is around 15% of their annual salary.  That’s a hefty chunk of change, which means that you need to invest it wisely.  One thing that I’ve discovered is that you can dramatically improve the odds of your first hire being a successful one if you prepare properly.  Here’s how you do it:

  1. Evaluate the work you do.  Now you may think that you already know what position you want to hire for, but humor me here.  When you’re finished with this step, you’ll thank me.  You need to take a step back from the work you do every day and look at all of the roles you’re filling – sales, customer service, accounting, technical support, collections, etc.  The list may be longer than you realize!  Then you create an organizational chart, give each position a title, and arrange it on the chart based on who reports to whom.  Post this chart on the wall, and as you go through the next week, jot down the tasks that you perform under each of the positions.
  2. Define the position you’re hiring for.  Take a look at your chart after the week has elapsed and decide which of the roles is the best one to delegate to another person.  You’re not quite ready to hire yet, but you are already prepared with a list of the tasks that your future employee will be charged with.
  3. ???????????Make it concrete.  So if you’ve decided that you’re going to hire someone to handle your accounting and billing, you need to get their physical workspace set up.  You get a desk, computer, chair, adding machine … basically everything that they’ll need to do the job, and you start performing all of the new position’s tasks in the new workspace.  By physically moving to the new desk, you’ll ensure that everything the position requires is handy.  By the time you’re finally ready to hire, you’ll be ready to train your new employee (because you’ve listed all of the tasks) and you’ll already have had the chance to troubleshoot the new workspace.

Systematization is the key to efficiency, and by taking the time to analyze and systematize the new position that you want to fill, you’re setting yourself and your new employee up for success.  Employees who feel like their bosses are competent and organized will be more likely to emulate those qualities and stick around for the long haul.

  


Mondays with Mike: Why You Should Ignore Your Business Plan

Several years ago, I attended a seminar at MIT.  It was geared toward entrepreneurs, and I was in illustrious company – I was in the audience along with the founders of Burt’s Bees, TicketCity, and 1-800-GOT-JUNK, among others.  The speaker – a venture capitalist – asked everyone to stand up.  Then he asked those of us who’d used outside financing to start our business to sit down.  Not a single person did!  Finally, he asked us to sit down if we’d actually followed our business plan to guide our decisions.  Again, not a soul sat down.

Now don’t get me wrong, many of us had developed and written specific business plans, which isn’t necessarily a bad idea, especially if you’re trying to get financing from a bank.  But what’s so telling is that once these plans were written, they were largely useless to us – the entrepreneurs.  Why is that?

  1. Irrelevant Financials.  Let’s face it, if I could accurately predict exactly where my business will be in the future, I’d probably be sitting in the Cayman Islands, trading stock and making millions.  The fact of the matter is that our company’s revenue and expenses can vary because of significant factors we have no way of predicting.  Now that’s not to say that you shouldn’t make an attempt to follow a budget (a completely different animal,) but I am saying that you can’t necessarily rely on the figures that fill out your business plan.
  2. Your Dream Team.  A portion of your business plan is devoted to the people who plan to help you along your way to brilliant success.  Here’s the trouble:  not a single member of your dream team matters as much as you do.  You’re all in; they’re not.  I’m not discounting the importance of having a great management team or looking for sage advisors.  What I’m saying is that relying too heavily on your supporters can be your downfall.
  3. Defining Your Niche.   Finding your niche is key to the success of your business, but the problem is that truly finding that niche – your ideal customer – often relies on real-world selling, rather than trying to predict the future.  If you pigeon-hole yourself too early, you can waste a lot of resources trying to appeal to a market that might not be best for you.  You’re much better off letting that organic niche create itself, rather than chasing an idea just because it’s what your business plan predicts.

The exercise of creating a business plan can be extraordinarily useful in terms of helping you crystallize and articulate your vision, but it’s a mistake to let a document meant to start a business turn into a manual that you continue to use even after it’s outdated.  Entrepreneurship relies on innovation and a willingness to capitalize on opportunity, even if – or especially if – that opportunity didn’t exist when you started the business.  Don’t let yourself or the growth of your company be limited by your business plan. 

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Mondays with Mike: The Blend Strategy – Building Innovative Businesses

The difference between entrepreneurs and “normal” people is that normal folks may actually believe that it’s all been done before, that the good ideas are already taken.  Entrepreneurs know different.  We entrepreneurs believe that there’s always a fresh approach to a field or a product that can be profitable if it’s launched the right way.

One of the most effective ways to put a fresh spin on a business is by combining, or blending aspects of two different businesses.  Whether it’s as simple as combining peanut butter and jelly together in one jar, or as complex as blending drive-thru fast food service with the wedding industry to create Las Vegas’s drive-thru wedding chapels, creatively fusing two industries can give you an edge and set you apart from all of your competitors.

I’ve found two clever ways that entrepreneurs have used blending to create profitable ventures, and I’m sure there are more!

  1. Shared spaces.  Okay, this concept isn’t classic blending, but it certainly employs elements of the strategy.   The key concept of shared spaces is to place your business in proximity to other businesses so that you get a crack at their existing customers. Here’s how it works.  Grocery shoppers hit the in-store Starbucks for a $5 cup of coffee to sip while they shop.  Grocery shoppers also handle all of their banking needs at the in-store bank at the front of the grocery store.  From February to April, you can even have your taxes done in the grocery store!  My favorite example of shared spaces, though, is the Lowe’s Stocksy_txp7fd1b2b2qB5000_Small_39017hardware store near my house.  There’s a guy with a hot dog stand just as you head out of the exit, after you purchase your light fixtures, bird seed, and drywall.  He’s there 365 days a year – in fact, you can smell the sauerkraut before you get to the door.  It’s genius.  He sells more hot dogs than you could imagine – whether it’s to hungry contractors near lunchtime, or to hungry kiddos helping their parents shop for weekend projects.  Shared spaces can be a great way to get your business started.  The bonus is that your new small business lends added value to the existing store as well!
  2. Duplicating an existing method of delivery.  The Vegas drive-thru chapel fits this technique, as do drive-thru banks, pharmacies, dry cleaners, and – my personal fave – drive-thru liquor stores.  Seeing a model of service delivery that works in one business and adapting it to another can be a goldmine.  Think about Ebay – they found a way to combine online product sales with the concept of an auction, complete with all the excitement of worrying about being outbid.  Their marketplace blended online sales with garage sales and added an auctioneer.  Look around you at your local businesses and see if there’s a unique delivery method that you can adapt to suit your vision.

Entrepreneurs are some of the best out-of-the-box thinkers around, and I’m constantly amazed by the innovative blends that smart business owners develop and market to become great success stories.


Mondays with Mike: What Sunsets Can Teach You About Sales

imagesI’m going to tell you a story that never happened.  A man and a woman didn’t stand and watch a sunset and exclaim, “That’s the ugliest sunset I’ve ever seen!”

Think about it.  Have you ever heard someone complain about how unattractive a particular sunset is?  The fact of the matter, though, is that some sunsets have to be better than others, right?  They’re not all created equal, but there’s something about their nature that only makes us remark on them when they’re beautiful. 

Wow.  Think about that.  If you could infuse some of that positive power into the products or services that you sell, you’d have a much easier time marketing your business.  So what is it about sunsets that makes them so powerful, something that we typically only comment on in order to praise it?

Not sure?  Here’s the answer:  it’s scarcity.  Scarcity?  You may be thinking that sunsets happen nearly every day.  They can’t possibly be considered scarce.  But scarcity is the reason we prize these daily, ever-shifting light displays.  We know they’ll only last for a few moments, and then they’re gone.  We know that we have to savor them while they last because there will never be another exactly the same. 

That’s the kind of scarcity you want to cultivate for your business.  Here’s how you do it:

  1. Limit Access.  Reserve certain products – or unique bundles of products – only for your best clients.  If you create a special club of sorts, whose members get access to products other clients don’t, then they’ll see more value in those products.  They’ll feel special and will be predisposed to find their exclusive offers to be valuable.
  2. Create Beauty in your Business.  If you display your special offering for a limited time only, then consumers will be more apt to snap it up right away.  Limited time offers give customers a sense of urgency for the purchase, and a sense of relief when they receive their exclusive product.  Showing the special benefits that your customers with exclusive access receive makes other customers want that privilege as well.  Whether it’s a section of your website, or a special area of a retail store, find a way to showcase your special offers.
  3. Raise your Prices.  We value that for which we spend more money.  If you create an exclusive, limited time offer for your customers, then they’ll be willing to part with more money in order to secure your special deal.  Pack in tons of added value, and it’s a win for everyone.  They key here isn’t just to slap a higher price tag on the same old product.  You must create an authentically more valuable offer, and your customers won’t be able to resist it.

The ultimate marketing win is when you can get consumers so excited about your product or service that they start to market it for you.  We see this happen all the time on Facebook.  People “share” books they’ve bought on Amazon or “share” the outrageously expensive eyeshadow palette they just bought from Sephora.  Why do websites prompt shoppers to “share” their purchases?  Because we see value in the things our friends buy.  Use the sunset effect in your marketing, and you’ll start to see excited customers sharing the news about your brand.


Mondays with Mike: Words To Strive For – Stellar Customer Service

Most of the entrepreneurs who read my articles and my blog aren’t necessarily famous in their fields.  Most of us aren’t considered industry experts, and we don’t have the Wall Street Journal calling us for our opinions on current business events.  If there’s one way in which we can excel, though, and I mean really stand out from our peers, it’s in our customer service.  You may not be able to service all the customers, but you can service the happiest customers. 

All of my employees who have customer contact are armed with the following four phrases that encapsulate our attitude as a company committed to delivering stellar customer service … every time.

  1. ??????????????????????????????????????????????????????“I don’t know, but here’s what I’ll do.”  It’s unrealistic to expect every member of your company to have the answer to every possible question or the solution to every problem.  What is reasonable is to require that they commit to finding that answer and following up with the customer.  Train your staff to clearly communicate their plan: “I’m going to get that answer for you and call you back by 2pm,” or “I will do some research and let you know before noon tomorrow.”  When customers understand that your staff takes their needs seriously, and that your staff will follow up on time, every time, you’re setting yourself up as a leader in customer service.
  2. “I am very sorry.”  When a customer’s unhappy because your company has failed to meet their reasonable expectations, they want you to own up to your mistakes.   Acknowledging that customers are right (when they really are) helps to defuse potentially angry clients and gets your staff started in the direction of resolving the complaint.  One caveat:  save the apologies for when you’ve genuinely made a mistake.  We’ve all dealt with clients who are impossible to please, and apologies for not having met wildly unrealistic expectations don’t accomplish anything productive.
  3. “Yes.”  “Yes” is the magic word that consumers want to hear more than any other, and your customer service reps should strive to say it as often as they reasonably can.  Now you’re going to have to empower your reps with a little discretionary power, but imagine how this scenario plays out.  A customer comes in displeased with their carryout food order from the night before.  Your cashier offers them a free sandwich to replace the one they didn’t care for, and they walk out impressed with your company’s handling of their complaint.  If your cashier has to fetch a manager, the customer seethes, perhaps causes a scene, and still walks out with a free sandwich that it cost you two employees to handle in addition to the potential fallout from an unhappy customer in your restaurant.  If you can reasonably accommodate a customer’s wishes, then do it right away!
  4. “Is there anything else I can do for you?”  Whether you’re wrapping up on the phone or in person, using this phrase accomplishes two goals:  it lets you ensure that your customer is satisfied, and it also lets the customer have the pleasure of having the last word.  Whether they leave after telling you that they’re completely satisfied or they give you one more opportunity to meet their needs, you’ve won with this phrase.

The key to superior customer service is authentically caring about your clients’ satisfaction.  Training yourself and your staff to use these phrases creates a climate in which serving customers is the highest priority.


Mondays with Mike: Sure-Fire Techniques For Cutting Costs

Every entrepreneur knows that minimizing expenses is essential to maximizing profit, but we don’t always know how to go about cutting costs – especially for big ticket items.  The longer I’m in business, the more I realize that paying full price for something is rarely necessary.  Here’s my list of tactics to avoid spending more than you have to:

  1. Buy generic.  Whether you’re talking about antibiotics or office equipment, insisting on a brand name will nearly always cost you more.  Shopping based on reviews, rather than name recognition will get you better quality for a better price.
  2. Borrow.  Look around your office, and I guarantee you’ll find a piece of equipment that you don’t use very often.  Whether it’s a box truck that you use twice a year, or whether it’s a fancy printer/scanner/copier that you only use to do your quarterly newsletters, examine your purchases and find someone to lend you the big-ticket items that you only need infrequently.
  3. Lease.  For seriously big-ticket expenses, especially those that you only plan to keep for a short while, or will incur significant maintenance charges, you should consider whether a lease is a good option.  If you must have a late model car, but you don’t need to put lots of miles on it, then a lease may be ideal.  Large office equipment can be cheaper to lease than purchase as well.
  4. ??????????????????????????????????????????Be patient.  We often don’t realize it, but a lot of purchases are made because of emotional, rather than practical reasons.  If you force yourself to sleep on a decision, you’re taking emotions out of the equation, and you’ll find that you frequently choose not to buy after all.  Make yourself wait, and you’ll inevitably save money.
  5. Barter.  Trading your unique skill set for talents you don’t possess is one of the best ways to save money – and strengthen community ties as well.  Trading your pizza shop’s delicious fare for business card printing services can benefit everyone involved with very little outlay of cash.  While you used to be limited to your immediate community to make bartering practical, there are now websites like TradeAway and BarterOnly that facilitate trading using sitewide credits so that you don’t have to find someone who needs exactly what you have to offer in order to get what you’re looking for.
  6. Buy used.  Products start depreciating as soon as you purchase them, and finding lightly used alternatives can save you a boatload.  If you’re savvy, you can often even find products that are still under warranty, and you may even find ones that are sold with an extended warranty that protects your investment. 
  7. Share.  Whether it’s infrequently used equipment or facilities like break rooms in your office space, if you look hard enough, you’ll find that you and other businesses are spending far more than you should on things you don’t use very often.  Working with folks in close proximity and finding the ways in which you’ve duplicated purchases can clue you in to options for making more efficient use of items you can share.  Think about negotiating a lease at a lower rate for shared restrooms on your floor, rather than several individual ones, or sharing a microwave or refrigerator with your neighbors in the office building.

I’ve always admired entrepreneurs who find innovative ways to spend less, and I constantly strive to be a better penny pincher when I can.  I don’t advocate cutting corners or sacrificing quality where it matters, but I do suggest taking a look at your business and identifying areas where you’re spending more than you have to.


Mondays with Mike: Secret Weapons – Contractors You Can’t Live Without

Mad_Men_season_5_cast_photoThe traditional office, staffed with full-time employees with full-time benefits is a relic from Mad Men days.  Most of us have to move quickly and operate on razor-thin margins that make it impossible to afford a complement of workers waiting for something to do.  It’s become far more feasible and profitable to assemble a team of contractors – specialists in their niches – who are on call, command high rates for their expertise, and appreciate the flexibility of working when they want to. 

What’s essential is that you assemble your contractors ahead of time – locate, vet, and create a relationship before you need them for big projects so you don’t have to scramble last minute.  Here are the people you should look for:

  1. Web Designer – There’s really no good excuse for a lousy website.  Most people will encounter your company on the web, and you want to put your best foot forward.  Finding a web designer who designs your site and stays on call to give you the ability to adapt your website to particular client needs or conditions is key. 
  2. Web Administrator – As more of us move our businesses online, it’s impossible to overstate the importance of web security and web reliability.  This position is perhaps the most important contractor you’ll hire, because they’ll literally have the keys to your online kingdom.  When there’s a problem with your system, you want immediate availability from your administrator.
  3. Core Competency – Find extra local talent in your field and keep them ready for when you have big jobs that require you to be able to scale up rapidly.  Whether you’re a chef who needs catering staff for special events or you’re an accountant who needs additional help at tax time, doing the legwork ahead of time can give you a competitive edge when it comes to winning new clients in a clutch situation.
  4. Writer – We may not want to own up to it, but most of us aren’t great writers.  As important as our written messages are, it’s worth locating a skilled wordsmith to polish our prose.  Weigh your options:  you could spend all day working on a company newsletter (and hope no one catches the grammatical mistakes,) or you can call your professional writer, share the details, and get to work doing what you do best while your writer pens a perfect account of what’s current in your company.
  5. Translator – If you don’t need one now, odds are very good that you will before long.  The broadening global marketplace means that if you’re not working with clients in other countries, then you’re probably missing opportunities.  Identify the languages that are most likely to be relevant in your field and line up translators before you start losing jobs because you’re not fluent in Mandarin or Spanish.
  6. Administrative Assistant – This position is your key, backup, catch-all.  Whether you need timely follow-up on a new marketing campaign, or whether your full-time admin needs help handling the seasonal rush in your field, it’s wise to find a good admin to be at the ready.

So where do you find these folks?  You’ll be shocked at how many resources are out there.  Freelance websites like Elance and ODesk connect you with contractors all over the world in a variety of niches, and community-based sites like Craigslist or Patch can connect you with local talent.  The keys to successfully working with contractors are these:  first, get them lined up and vetted – with a small project to start – before you have a critical need for their services.   Second, always pay them promptly and treat them like gold.  You want that contractor to always be happy to get your call and eager to get to work on your next project. 


Mondays with Mike: Productivity Killers – Apps You Should Prohibit in the Office

I don’t consider myself a dictator, but I do operate on the principle that no one cares about my company as much as I do.  I keep up on current research, and I’ve experimented with ways to boost my own productivity, and one thing is certain:  there are applications that have NO business in your workplace.  Assuming that you don’t run your office in order to entertain your employees, here are some apps that you absolutely must banish from the office:

  1. social-mediaSocial Media.  Facebook., Twitter, Instagram, Tumblr … not a single one of these apps belongs in your office (with the possible exception of the staff who handles social media for your company.)  They’re colossal time-suckers, and in addition to offering your staff games, quizzes, and celebrity news to occupy their work time, these platforms also offer a window into your office that you can’t control.  Do you want your competitors knowing that your customer service reps have the highest Candy Crush scores in the industry?  These apps – used on company time – provide absolutely zero benefit to your business.
  2. Media Players.  While it’s technically possible to come up with a legitimate business reason you might need YouTube, Netflix, Amazon Prime, or Google Play on your computers, the odds are much greater that these apps will be used to divert your staff’s attention from their work.  Don’t make it harder than it already is for your staff to stay focused.  Have your IT folks block these apps from your company computers.
  3. Addictive Games.  The aforementioned Candy Crush, as well as Angry Birds, Words with Friends, the notorious Flappy Bird – all of these games are expressly designed to keep us playing longer than we’d planned.  While we all need breaks in order to stay productive, it’s much better to stand up, walk around, and get a change of scenery, rather than wasting half an hour trying to match up candies on a smartphone.  Games like these do not belong in the office.  ßSee the period?
  4. Illegal Sites.  It should go without saying, but prohibiting your staff from accessing pornography and gambling sites from the computers you own is just common sense.  Not only are these sites productivity slayers, but they also often contain illegal material that you could be prosecuted for.  Head these problems off before they start.
  5. Interoffice Chat and Text.  Now you may balk at this one, but I’ve found that almost never have these apps made my staff more productive.  You not only run the risk of your message not being conveyed as clearly as it could be by simply walking down the hall and delivering it in person, but you also wind up with off topic material that distracts your employees from their work.  An icon that chimes each time a new message comes in is a distraction that requires recovery and refocusing time to overcome.  Just eliminate it altogether.

Employee satisfaction is hugely important to me and other successful entrepreneurs who know that keeping good people on staff is cost effective.  What I’ve learned, though, is that while you may ruffle a few feathers by banning Facebook in the office, it’s always worth it.  If you’re serious about pushing your staff to produce work they’re proud of, you’ll be able to create that culture by banishing unwanted distractions.    


Mondays with Mike: Secret Short Cuts – Legal Aid

What’s the difference between a bad lawyer and a good lawyer?  A bad lawyer can drag a case out for years.  A good lawyer can make it last even longer.

All kidding aside, legal fees aren’t necessarily the first thing entrepreneurs think of when they’re adding up the costs of doing business.  As litigious as society is, though, you’re foolish if you don’t engage an attorney to ensure that you’re legit and covered in case of legal action.  Don’t have the $350/hour lying around to consult a lawyer?  Keep reading.

Here’s my secret for low (or no) cost legal aid.  Head to a local university and talk to the head of the legal department.  Offer your business up for use by students (under the professors’ supervision, of course) as a real-life example.  Your business and its legal needs become coursework for up-and-coming attorneys.  There aren’t many situations in business that are truly win-win, but this is one of them.  Students benefit from concrete experience, rather than boring hypotheticals, and you get your legal work done for free.  Professors love it; students benefit; you save big bucks.

????????????????????????????????????????????????Rather than trying to do it yourself with old legal documents that you dug up online (and which might be completely outdated,) you’re going to get cutting edge, custom work.  Students can draw up your incorporation paperwork, make sure your legal disclaimers are airtight, draft your employment contracts, and basically ensure that you’re covered and are in a position to head off most legal problems that could arise.

You’ll literally get thousands of dollars of work for free, and I strongly recommend thanking the classes who work on your case with pizza or coffee from time to time.

One final benefit from offering your business up to a college department is that you get a preview of the talent that’s emerging from your local universities.  In fact, one of the times that I approached the head of the legal department at my local college, the professor recommended that I work with his best student who was about to graduate.  The student prepared my contract, and the process served as a great extended interview.  I hired him after he graduated, and he ended up being one of my most valuable employees.

Now think a little bit bigger…let’s see how this little secret can work in other areas as well.  Are there marketing students in your area?  Students of web design, graphic design?  Think about all of the exciting, creative work you can cash in on while at the same time providing local students with exciting, valuable real-life experience – experience that they can use to get an edge on the fierce competition they’ll face once they’re out looking for work.  Don’t pass up a chance to get a great deal on the services your business requires, while fostering closer ties to your community and helping better prepare the workforce of the future.




 
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