Posts Tagged ‘business tips’


Mondays with Mike: 7 Habits Entrepreneurs Should Eradicate

2-9 bad entrep habits  smallI’ve started, run, grown, and sold businesses long enough to know how much we can learn from the unsuccessful habits of entrepreneurs who don’t make it.  By seeing the recipe for failure, we learn much about success.  Here are seven destructive entrepreneurial habits you should watch out for.

  1. Playing the victim, rather than the victor.  If you’re constantly whining “why me?” and focusing on all the bad things that are out of your control, you’re unlikely to be the sort of take-charge, positive person who flourishes as an entrepreneur.  You question should instead be “why not me?”
  2. Favoring ideas over action.  You’re far better off having a mediocre idea and putting in hard work to see it through than you are with a brilliant idea and no work ethic.  Inspiration is the spark, but perspiration is the day-to-day practice of putting your nose to the grindstone and getting things done.  You can’t feed your family on your brilliant ideas alone.  You have to be willing to work.
  3. Raising money, rather than making money.  Many small businesses need occasional infusions of cash, whether it’s for expansion or improvements.  The danger, though, is in spending more of your time chasing down investors than you spend wooing customers.  Revenue is the lifeblood of a company.  Focus on increasing your sales, and you’ll need less investor support.
  4. Relying on your backup plan.  It’s very seldom that you see great things achieved without risk.  If you’re constantly hedging your bets, tinkering with your arrangements in case your new venture flops, then you’re not really all in.  Commit to making your business succeed, rather than spending your energy planning for your failure.
  5. Hiring quickly and firing slowly.  Good employees are worth their weight in gold, and bad employees can cost you far more than you’d ever imagined.  If I could impress entrepreneurs with one single tip in terms of recruiting talent, it would be to slow the process down.  Take your time, hire staff that’s a good fit your company’s climate and values, and if an employee turns out to be a poor fit, then cut that employee out.  You can’t afford to let bad apples spoil a good bunch of employees.
  6. Failing to identify your target market.  If you don’t know who you’re selling to, your efforts in marketing, collecting feedback, and making changes will be seriously inhibited.  Successful entrepreneurs can clearly articulate who their ideal users are, and they frequently cater to a particular niche in a market.
  7. Doing minimum wage work.  I can’t tell you how often I see brilliant entrepreneurs doing unskilled work in their companies.  If you’re spending your time doing work you could hire someone to knock out for $10 an hour, you’re not doing your business any favors.  Your time and your talent are more valuable than that.  Put your energy toward the stuff you can’t hire people to do for you.  Grow your business.  Attract new clients.  Leave the simple tasks for someone else.

Some of the smartest entrepreneurs I know are the ones who see and avoid the obstacles that have tripped up their colleagues.  Success isn’t just about learning what to do; it’s also about learning what you should avoid.


The Customer Service Speed Trap

2-6 stop watch smallI finding myself carrying on quite often about the need to speed up customer service and the customer experience, because customer expectations for speed of service have become so frenzied. This is thanks to mobile and amazon.com and Starbucks, and is a phenomenon that’s even more intense among the important millennial generation of customers. (Born 1980-2000, Millennials are the biggest generation in history. And they've never known a world without a smartphone.)

But there's a speed trap here, so to speak, and I want to encourage you to be aware of it: In most business contexts you should be equally leery of sacrificing the customer's experience due to some enforced speed march. What you will find–and what you should emulate– is how the companies most cognizant of time are also the ones who allow time for lingering, for connection. Which is the approach you should take as well.

Take Starbucks, since they are such a paragon of consistent timeliness. Even though Starbucks spends a lot of time measuring and improving how well they match their customers’ speed expectations—delivering a custom (truly from scratch) beverage in a matter of minutes—they don’t let the need for speed suck the life out of the Starbucks experience.

In fact, they go in the other direction: They want the world to linger with them over coffee. Everything is designed to facilitate this lingering, which puts them right on track to please the millennial generation (as well as the rest of us). In spite of their penchant for mobile and online socializing, customers today also yearn for face-to-face interaction and collaboration—from their peers and, often, from your more empathetic employees. All of which takes time and the allowance of time.  

Customers today want the stupid, transactional stuff to take less time, less of their time. They want to wave their phones and have their purchase paid for, but they want the meaningful parts of the customer experience to take more time, or at least better time.

Think about Apple, specifically the Apple Stores: When you're face to face with the genius, you want the breathing room to state your problem, to understand the solution. No rush, thank you very much, now that I've driven across town to meet with you. But you do want to be able to pre-schedule that meeting, and you do want to be able to pay and leave without a lick of paperwork or delay.  Getting this dance just right is the sign of a master approach to respecting the customers' time, and it can be a real competitive advantage. 


What You Can Learn from the Businesses in Mumbai’s Dharavi Slum

2-5 Dharavi Mumbai smallIn January, I had the opportunity to visit India. One of the most eye opening parts of the trip was the half day I spent at the Dharavi slum that was made famous by the movie, “Slumdog Millionaire”. It sits in the middle of Mumbai, the financial capital of India and is the second largest slum in Asia. Dharavi is only one square mile, but is home to over 1M people. The density of the slum grew over the last 100 years because of the expulsion of factories and residents from Mumbai and the rural poor migrating to the city. 

This slum is big business. Dharavi has an active economy with approximately 10,000 household enterprises that mainly employ residents. Being so densely populated, many of them sleep and work in the same place. Dharavi exports buffalo leather, fabric and pottery products around the world. The total “reported” annual revenue of all the small businesses in the slum is estimated at over $665M per year. Most people I talked to believe it is actually over a billion dollars per year.

There is a lot that American entrepreneurs can learn from these business owners. They include:

  1. Find a niche by doing what others won’t. A lot of the work done in the slum is what others in the rest of Mumbai do not want to do. There is a big business of recycling all types of plastics and metals. These need to be sorted by hand which is labor intensive. Many materials also need to be dried manually in the sun afterward. Lesson: What can your business do that customers need, but other people don’t want to do? Go do that at a profit.
  2. Always be testing (ABT). There are no long term business plans written here. People simply find a job that needs to be done and start doing it. Alternatively, they set up shop outside their home or the one restroom that serves 1,000 people daily and see what people buy. If their product or service does not sell well, they adjust the next day. Lesson: Prototyping and testing are an important part of growing any business until you find want your customer will buy over a long period of time.
  3. The highest price is what people actually pay. There is a tremendous amount of competition in Dharavi since there are so many people. They still focus on the value a product or service brings. For example, there is always a “tourist” price which is the highest since they are willing to pay more than anyone living inside the slum. Lesson: Find customers that value your products the most so you can sell at a top price for maximum profit.
  4. Relationships still matter. It’s not only about price, but who you know and have trusted to work with in the past. In Dharavi, historical ties, religion and geographic location within the slum play an important role in the supplier and customer relationships. Lesson: Everywhere in the world, people do business with who they know, like, and trust. Think about the actual basis of your relationships with your suppliers and customers. If it’s not based on trust, then it is more fragile than you think.

What have you learned about business traveling outside the U.S.?


Marketing 101: 5 Key Marketing Terms to Know

2-4 Mktg 101 smallWhen you start a business, it is extremely important to have a marketing plan. A marketing plan is essential in helping you develop an understanding of what actions you can take to bring success. When people look at statistics about small businesses and see that only about half of all small businesses make it to their fifth birthday, it can be daunting to jump into such cold waters.

However, if you take the steps to prepare for entrepreneurship, you have given yourself a boost over the hurdles that plague the small business owners who become just another statistic. Your marketing plan establishes how and to whom you promote your product or service. Before your write your marketing plan, let’s review some crucial marketing terms to help you have a clear idea of what this approach entails.

1. Marketing

The term marketing encompasses a large range of behaviors undertaken by businesses to communicate their brand message with their customers. In a nutshell, marketing presents products or services in ways that make them desirable. Your advertising, website, social media profiles, and newsletter are all part of your marketing efforts, and are the efforts you undertake to persuade potential customers to become paying customers. Marketing uses both emotional and rational appeals to attract customers and encompasses a wide variety of actions and components. Creativity in your marketing is vital, and the returns can be enormous.

2. Market Research

The term market research may seem overly dry or academic, but it is extremely important. In short, market research tells you who is your customer and why they could buy form you. It also can tell you how many potential customers exist for your market. You may think that everyone will want what you offer, but your market research will tell how likely that scenario is.

For example, the cost of your product may eliminate much of the potential market, or your product may be too specialized to attract enough customers to support your costs. It is important to not just examine the current market, but look ahead to the long-term as technological or cultural changes might transform the market. Good market research gives you solid ground on which to begin your endeavor.

3. Advertising

Advertising is another broad category of marketing focused on bringing attention to a product or service in order to create a sale or build awareness. Product placement in movies is a form of paid advertising, as are pay-per-click ads online. Branding is a key component of advertising. You can use advertising to build brand awareness via media, such as a placing a Facebook ad. Your market research will tell you where, how, and when you should be advertising.

4. Sales

The culmination of all your efforts is sales — that moment when you have convinced your audience to take action and bring out that plastic to make a purchase. Sales is the goal where your marketing, market research, and advertising all lead. Sales activities include direct marketing, selling (including in person, via the Internet, phone, or networking) and trade shows. Any action that results in an exchange of goods or services for money or an equivalent is a sale. How much you sell and when you sell all factor into your bottom line.

5. Profit

Profit is how you measure your success in purely economic terms. It is the amount of money you’ve made after you deduct all your costs of doing business, such as direct and indirect expenditures. Pricing directly impacts your profit! A completed business plan gives you insight in how your specific profit model works. Remember, if you are prepared from the outset, you have strengthened your chances of success in the future.

Understanding these key terms and applying them in your marketing plan ensures that you have a solid plan for what you are selling, how you will sell it, and to whom you will sell. Marketing is the umbrella under which you will execute your marketing research, plan your advertising, make your sales, and calculate your profit. Social media — and media in general — is the means by which you take your message to you audience, but a tight marketing plan is meant to guide your messaging and help you identify the best channels for it.


Nextiva Tuesday Tip: How to Personalize Your Customer Service

2-3 personalized customer service small2015 has barely begun, but already personalization has emerged as one of the hottest buzzwords in customer service this year. How can you take advantage of this trend and make your customer service more personal?

Of course, small businesses have always had an edge in that their smaller size inherently makes them more personal. But today, with huge companies using automation to personalize the customer service experience (how ironic, right?), your small business needs a combination of the human touch and automated systems to stay ahead of the pack.

Here are some suggestions for how customer service reps can personalize their interactions with customers:

  • Human touch: Always find out and use the customer’s name, whether addressing him or her over the phone, in an online chat or by email. People love to hear their own names—it makes them feel “heard.”
  • Automated system: Give customer service reps access to appropriate tools, such as customer relationship management (CRM) software, so they can quickly review a customer’s history with your business. For example, being able to see order history and details of the most recent order placed enables ecommerce sales reps to dive right into solving problems (“I see that your order placed two weeks ago still hasn’t shipped. Let’s see how I can expedite that for you…”) without the customer having to provide a lengthy explanation.
  • Human touch: Humanize reps by using their names in communications and conversations. Getting a response from Tracy.Wilson@yourcompany.com in response to an email complaint feels much more personal than getting an email from customerservice@yourcompany.com. It also makes customers feel someone is taking ownership of their issue.
  • Automated system: Have reps input details of their interactions into your customer service or CRM system. This enables new reps to pick up where the original rep left off if the customer is “handed off” or has to re-contact the company later on.
  • Human touch: If possible, have the same rep deal with an issue from beginning to end. If not, humanize the handoff, too. Don’t just transfer the customer to another rep and hang up; instead, say something like “Mrs. Smith, I have Joe from Accounting on the line, and he is going to help you resolve this billing issue,” or CC the new rep on an email to the customer so that the two get introduced.

As you can see, a few simple steps can make the difference between treating customers like cogs and treating them personally. 


Mondays with Mike: How To Fall In Love With Your Business All Over Again

Candy heartsIn a lot of ways running a business is like a marriage.  There are similar stages:  apprehension – when you’re not sure it’ll work out; infatuation – when you can’t get enough of the relationship; and resignation – when you realize that every business, just like every marriage requires hard work.  While there’s no avoiding the hard work, falling in love with your business again can help you sustain the energy that being a successful entrepreneur requires.  Here’s how to do it:

  1. Get back to your purpose.  Remember why you started your company in the first place.  Were you working to fulfill a need?   Did you see something you wanted to change in your industry?  Had you identified a way you could improve your community?  Let’s face it:  it’s easier to work for someone else and earn a consistent paycheck than it is to start your own business.  You did it for a reason, and you need to keep that reason in mind.
  2. Reconnect with your core values.  When we’re working in harmony with our core values, we feel good.  When we’re working against them, we feel tired, frustrated, and wrung out.  Simply making sure your company is working in support of the things that matter most to you can help you rededicate yourself to your business.  Identifying your core values can also help you ensure the staff you hire is in alignment with your mission.
  3. Focus on more than the money.  A Princeton University study has confirmed what we’ve been told our entire lives.  Money doesn’t buy happiness.  Specifically, the study found that once basic needs can be met – which they determined is at around the $75K income mark – additional money did not result in additional happiness, at least not in and of itself.  What did make people more happy was doing things they valued with that money.  Whether it’s charitable work or using funds to spend more time with your family, remember that your bank balance alone isn’t a measure of your happiness. 
  4. Make the world a better place.  One of the most rewarding aspects of entrepreneurship is the ability to effect change in your community.  When you have to slog through the hard work of running your business, knowing your work makes your community better can help sustain your efforts, help make it feel worthwhile.
  5. Realize your importance to your employees.  Not only does your company support your family and your community, but it also sustains the families of your staff.  Seeing the very real effects of the business you started and realizing how many people depend on your dream gives you concrete reasons to keep going.  We thrive on being needed, and entrepreneurs fuel our economy and support countless families.

Just like a marriage, running your own business doesn’t stop with the honeymoon.  It’s great to enjoy the first flush of starting a new project, but sooner or later, you must settle in and get down to the hard work of sustaining and growing that business.  Adjusting your perspective and getting back in touch with all the important reasons you had for striking out on your own can get you through the tough times.  


7 Keys to a Successful Barter Arrangement

1-30 Business Bartering smallCash flow is always an issue for entrepreneurs. It often seems to go out more quickly than it comes in.  So, how can you get creative with your finances?  Part of it boils down to using other currencies- aside from just money- to help you run and grow your business.  In fact, your products and services have great value that you can “spend” through barter arrangements.

Done correctly, you can use barter partnerships (shall we call them “barnterships”?) to meet your company’s needs without an excessive cash outlay, while building great relationships in the process. However, without proper preparation, you can also lose your shirt in a deal or even face unexpected tax bills.

Here are seven basics that you need to know before entering into your next barter agreement.

1. Pick the Right Partner

Make sure that your “bartner”- aka your barter partner- has a good reputation and shares your overall values. This means seeking out past business associates with whom you have a good relationship or seeking recommendations from others you trust. If you expect to barter regularly, consider joining a barter group that verifies or rates participants, or even a barter exchange that intervenes in negotiations.

2. Establish a Fair Exchange

Even in barter arrangements, the dollar remains the core standard of value, so both parties need to set (and agree to) a firm dollar value for the goods and services they’re exchanging.

Then, make sure that you establish an equal-value trade, such as a medical office entering into an agreement with a law firm: four free medical checkups in exchange for four free contract reviews, with a value of $1,000 for each party.

Think twice before entering into an arrangement that exchanges goods or services of dissimilar value or type. If your beauty salon tries to exchange free haircuts with a law firm, you may find yourself cutting the same head of hair until long after it turns grey in order for the exchange to equal out. 

Also, stay clear of lopsided arrangements that seem to benefit you. You don’t want the other party to do a lousy job or feel like they are being taken advantage of- that can impact the quality of the trade and the relationship.

3. Start Small

Successful marriages commonly begin with a first date over dinner before moving on to more … uh … interesting activities. Keep your first barter with a new partner like first date – small and low-risk.

This is not the time to bet the farm. Even if you both have honorable intentions, things can go south, often due to different contract language interpretations or lack of follow through. Until you know that you can really work with and trust this partner, keep it small.  Start with a small exchange and build upon that over time if it works out.

4. Put it in Writing

The idea of bartering typically brings to mind a hand shake over the fence. A hand shake is technically a legal contract, but try proving it in court. A barter agreement is just as complex as a cash-based arrangement. You need to identify every possible detail, write it all down and sign on the dotted line.

Document every detail thoroughly. And if you create a product or service collaboratively (such as working together to create an email list), specify what happens at the end of your agreement. If your barter partner takes full ownership and you can no longer use it after a defined time period, perhaps you should agree to supply fewer names than your partner.

5. Establish Clear End Dates

Your agreement may last for a week, a month or longer, but not forever. It absolutely needs a defined end date. Even if you enter into the identical arrangement many times in the future, it’s best to create a new contract each time. If your first agreement worked well, creating the next one will be a simple matter. But, if you discovered that some provisions didn’t work as expected, you can tweak the next version the next time.

6. Communicate Frequently

Don’t wait until the final deadline date to find out how things are going. Define key milestones with your partner and check in on those dates to ensure that you’re both on track and maintaining appropriate quality levels.

Naturally, when unexpected issues arise, don’t wait for a milestone date to speak up. A setback on one side can affect the other side. Plus, an informed partner may have a solution to fix the issue.

7. Educate Yourself on Tax Consequences

As long as you trade goods or services with a cash value, the taxing bodies generally want their share. So, do not enter into a barter agreement before checking with your accountant.

At the very least, the IRS typically requires that you report barter arrangements on your tax forms. If you exchange like goods or services, however, you gain and lose valuable assets. So, you may not need to pay excessive (or any) additional taxes if you properly track both sides of equal-value exchanges. But, the IRS valuation rules can be complex. It’s worth repeating that the advice of a knowledgeable accountant is essential.

Using your know-how as a currency can be a big boost to your business, but take it one step at a time and do your homework upfront so that you reap the full benefits and minimize the risks.


Can You Beat the Marshmallow Challenge?

1-30 marshmallow challenge smallHow can twenty sticks of spaghetti, a yard of tape, a yard of string, and one marshmallow help build a stronger team?

The Marshmallow Challenge has become a popular exercise in which small groups are asked to build the “tallest free-standing structure” out of the materials provided. The teams have eighteen minutes to complete this task including the entire marshmallow on top. It’s a fun and instructive exercise that allows teams to experience simple lessons in collaboration, innovation and creativity.

The challenge has been conducted with business school graduates, CEOs, architects, engineers, and even kindergarteners. There have been surprising findings for which groups perform most successfully. Surprisingly, recent business school graduates are among the worst performers and kindergarteners often excel at this challenge. The children don’t spend time fighting to be the leader of the group. Instead, they just start playing and in the process begin prototyping. Business school grads spend most of the time talking, planning and building, which means they don’t have much time to change the design when it finally comes time to put the marshmallow on top which is usually too heavy for the structure that was built.

The teambuilding lessons from this challenge include:

Always test assumptions through prototyping: Participants think that marshmallows are light and will be easily supported, but when teams start building the structure, it suddenly tips it over. Only through realizing that every idea has value and then prototyping various solutions can the teams find out what works.

Don’t focus on being the tallest. When the instruction is given that the tallest will win, teams assume that height will win the contest. As a result, they wrongly focus on how high they can build the structure instead of the stability its base. Many times, companies try to grow too fast before they have a solid business.

Use what is available. Development of every product has limitations and teams can only use what they have and not get resources they want to build something better. In business, there is never unlimited resources or the perfect environment to grow.

Use only what is needed. There are some things that are given in the exercise that do not need to be used like the string. Teams have to figure out what is useful and what needs to be discarded in developing any solutions.

Give up perfection. Teams start out dreaming about building an elegant structure like the Eiffel Tower. They have to give up this idea of perfection and build something (even if it is ugly) that works that can be “good enough” to win.

If you’re looking for a fun way to kick start a meeting or get a team into a creative frame of mind, try running a marshmallow challenge of your own. Is your team up to it?


6 Lighting Tips for Your Small Business

1-29 Lighting for Biz smallSelecting lighting for your store can be complicated. However, good lighting is one of the most important aspects of highlighting your product and making it pop. An in-depth guide to selecting lighting for your store is beyond the scope of this article, but here are 6 quick tips gathered from retail lighting professionals that should prove very helpful along the way.

 

1. Buy LED Bulbs By the Batch

LED bulbs have come along way in the last several years. Their energy-efficiency, long-life, and consistently improving color quality are leading more and more business owners to switch to LED’s. Despite all this progress, there can still be variations in color temperature and tone between batches of LED’s, even if they are technically the same product.

 

Because of these small variations, it is important to buy all your LED bulbs at once, by the batch. This ensures a consistent color temperature and tone from bulb-to-bulb and therefore throughout your store.

 

2. Do Not Burn Your Customers

According to Fit Small Business, “it is very important to make sure that the heat from your lights will not make customers uncomfortable.” Be aware of this and select your bulbs accordingly. Incandescent bulbs are the warmest, LED’s are the coolest, and florescent bulbs are somewhere in-between.

 

3. Be Sensitive to Color Temperature and CRI (Color Rendering Index Rating)

Each individual bulb has a natural tone to the light it produces. This is known as a bulb’s color temperature and is measured in kelvins. Lower-end kelvin ratings (1-2700) generally mean a warmer and softer light. Mid-range ratings (4000-4500) produce truer colors and a more natural light. High kelvin ratings (5000 and above) mimic a day-white light and are generally used in areas that need really focused and bright task lighting.

 

The CRI (Color Rendering Index Rating) is basically a measurement concerning light and true product color. The higher an index rating a bulb has, the truer your item color will be under that light.

 

4. Factor In Replacement and Energy Cost

Everybody factors in upfront bulb cost when they purchase bulbs. However, there are other cost considerations as well.

 

You need to include energy cost (cost of electrical usage/yr) and replacement cost ([annual hours of use divided by hours of bulb life] x cost per bulb) in your calculations as well. This will give you a more accurate picture of what you can expect to spend on lighting per year with each bulb type.

 

5. Use Dimmer Switches

Dimmer switches allow you to control the light level of your bulbs. This does several things:

 

  1. It allows you to adjust your lighting needs to fit your store atmosphere – If you have areas of your store that need different lighting needs, dimmer switches are an easy solution that does not require custom tailoring each bulb to each store space.

  2. It can save quite a bit on energy costs – If you are working in the store after-hours, you probably do not need the same level of light as a customer would. So, you can just turn down the dimmer switches and save electricity while still providing enough light to stock inventory or whatever you need to do.

  3.  

If you do decide to go with dimmer switches, just make sure the bulbs you get are dimmable as well. A small detail but one that can be immensely frustrating if forgotten.

 

6. Spend Your Money On Accent and Task Lighting

As great as it would be to have endless resources to spend on store lighting, this is generally not the case for the average business owner. But this raises the question, where should costs be cut?

 

Although the real answer is going to be store specific, it is generally agreed that you want to spend your money on Accent and Task lighting. Accent lighting highlights your product, which is why your store exists in the first place, to sell product. Your task lighting ensures that your employees have enough light to keep the store running and perform necessary tasks.

 

If you are going to cut costs, cut out a decorative chandelier or get some cheaper general lighting. Although important, it is much easier to cut corners in these two categories without too significant a loss in overall store lighting quality. However, if you skimp on your accent and task lighting, your customers will know it.




 
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