The “Cheese” Has Been Moved!

There was a book published a few years ago entitled, “Who Moved My Cheese?” In this book, the author made observations about the employment market and how many who thought their jobs safe were laid off, unawares. The main reason these former employees were finding it rough to obtain rewarding (or any!) new work was that the recruiting and hiring world had changed since their last go around. Small businesses are having  a similar “wake up and smell the coffee” experience with regards to finding customers.Mouse carrying cheese

With the surge in social media and internet based marketing, many small companies are falling behind in their marketing and sales and don’t know how to catch up. Recently, I spent some time with a businessman who had built a business model around websites, online advertising, working the search engine algorithms, and investing his personal time in keeping it all working smoothly, despite being a millionaire. The irony? He was not in a high growth startup, the darling of the media and purported environment where people spend countless hours on such matters. He owns a number of residential facilities for people recovering from substance abuse challenges. Keeping his vacancy rate as low as possible is his primary metric. Though he is in a non-sexy industry niche, he and his team recognize that customer pipeline development begin s with an internet strategy.

The two of us were discussing his strategy and tactics with some others over a meal and the question arose as to what is the role of relationships and “boots on the street” in his model. Together, we explained that target clients are most likely to perform some internet research on your organization before a personal meeting ever occurs. Furthermore, we argued that relationships are being initiated and nurtured over the internet at a quickening pace. We were not saying that the interpersonal meeting away from all things digital was unimportant; what we were explaining was that, in a time compressed world with information at our fingertips, the small business owner must earn the right to have the personal conversation by having a strong online presence.

Some basics to creating that presence:

  1. Your website needs “rich,” updated content — videos, pictures, etc. that you keep current
  2. Making use of Google Local and other local business listing services like Yelp is key – do it!
  3. You should advertise online or simply use social media to drive traffic to your site
  4. Determining what information to share through business social media accounts begins with having a target
  5. Break your customer base down into segments, each of which you can target with messages that resonate
    • You may need additional, mini-websites (called “micro-sites”) for each segment
    • You definitely need wording that is unique to each segment
    • Your social media and/or advertising needs to be a priority!

If you want more and better customers, be purposeful about how you develop new business in a digital world!

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Success Bred From Culture

In a post today for Inc. magazine online, Scott Elser, who is the co-founder of Launchpad Advertising, discussed what he and the founding team consider to be the driving force in the company’s success: culture. Elser described how he and his partner left a big advertising agency to create their own. In typical fashion, they did tons of analysis, planning and revisions. However, by devoting precious time to define the work culture they wanted to have inside the agency, they successfully set the “DNA” for all who joined them in their dream.

The co-founders knew they had to combat the stereotypes of arrogance and poor attitudes that prevail in the industry. Elser writes, “While most people I’ve worked with at agencies are great, there are always a few that bring their own brand of “I am awesome and you are not.” That attitude can set the tone for an entire office. They make things miserable for everyone. We wanted to create something different–an agency that people actually wanted to work at–and started that effort on day one. Long before we had employees, we envisioned a day in the life at the Launchpad of the future. What would the culture be like? How would people feel about working at this agency? What would they say to their friends about the agency? “

Corporate culture diagramWord to the Wise (Founder)

While it is easy to become consumed with any of a number of details during start-up mode, one should not lose sight of the value of a strong company culture. Culture does not just happen; it must be created! Think through what you have enjoyed when working with others in the past and what you desire to avoid. Consider what intangibles create a great place to work versus those that create division, boredom, and low morale.

Launchpad created an objective that is paraphrased by Elser in his blog post as follows:

“Like any job, there are good days and not so good days. But we want to create an agency where each and every person who works there can come to work every day believing that today can be a great day.”

He goes on to offer the following observations:

From this strategic objective was born what has become our primary rule: the Launchpad No Jerks Policy. It’s born of the belief that there are talented people out there who are also nice people, so there’s no reason to hire someone with a negative attitude, huge ego or destructive personality. 

It was a year later we hired our first employee, and we’ve since staffed up to become a 50-plus person shop. From day one our No Jerks Policy has driven every hiring decision we’ve ever made. Even contractors and freelancers are held to this standard. The result is an agency that delivers a great creative product and is great to work at. There’s more collaboration, ideas really can come from anyone and the environment is more “drama free” than any company I’ve ever worked at before. We’re an agency where the owners hold themselves to the same standards as everyone else. 

How about your company–whether it employs 5 or 500, you must consider how many “jerks” are members of your staff. What are the implications to customers/clients, attracting new employees, retaining top performers, and being able to delegate as the business outgrows your ability to manage it all? 

Company culture is the result of best intentions mixed with a long term commitment. 

 

When and Why to Withdraw Money From a Start-up

Working with entrepreneurs all day every day produces a certain fixation with what is most important to their survival. Unfourtunately, what is best for the business may not (in the short run) be what is best for its founders. Constantly, with existing operating businesses, there is the challenge of how much to compensate the owners and be fair about it. With start-ups, the goal is to get to the place that one can get paid at all. 

Recently, I ran across the story of Vinyl Me, Please. This new business is seeking to capitalize on the revived appreciation of vinyl records. While the number of records sold nationally has increased each of the past five years andby over 17% in 2012, the co-founders are trying to realize the benefit of the trend in their own business and wallets. They still are not earning a living from their efforts, though the prospects of doing so are better than at any prior point.

Vinyl recordsJeff Cornwall at Belmont University writes that, “The niche that Vinyl Me, Please fills is to bring new and interesting music to a new generation of vinyl record enthusiasts.  Each month the subscribers to Vinyl Me, Please are sent a brand new, hand-wrapped vinyl album from a relatively undiscovered artist. In addition to the monthly vinyl record, subscribers are assigned a personal music consultant who gets to know their musical tastes and preferences.  Every month the consultant creates a personalized playlist specific to each subscriber. Vinyl Me, Please brings together in one service what today’s young music enthusiasts want.  Their customers love the sound of vinyl, they like to interact on social media with friends about new music to try, and they like the surprise factor they get from services like Pandora.”

As a daily user of Pandora (and demographic that grew up with LPs), I can truly appreciate this business concept. Interesting to every new venture is how to make the most of market trends to create customer experiences that are profitably delivered and fun to pursue. Cornwall observes of the Vinyl Me Please business model that, “although they have identified what their market wants, their model has proven to be a challenge to scale to a large enough size to pay the founders a consistent salary.  They need to grow to at least 700 subscribers to reach this important milestone.”

He goes on to provide an account of his interaction with one of the co-founders, Matt Fiedler, and what he feels needs to occur next in their business development:

“The biggest challenge we face is keeping the personal touch,” says Fiedler.  “We think this is what makes the experience unique to a lot of people and is something we’re going to have to fight through in order to achieve true scalability.  We need to find a way to maintain a personal touch but be able to bring a massive number of customers into the system without it straining the resources of the company.”

They have recognized that it will not be possible to continue to hand wrap the albums as the business grows.  They also are looking at ways to make the personal consulting more efficient.

“We have plans to set up an internal database that allows us to categorize and sort music to create a more efficient process around creating playlists,” explains Fiedler.  “We are also looking at rolling out a playlist-only offering that will help us capture more users and, at the same time, start paying our consultants without dipping into the revenue that comes in from standard, full-membership subscribers.”

This commentary demonstrates the need for business launches to be very iterative, flexible, and responsive. Finding some group who will purchase your product or services is not enough; sustainability comes with staying attuned to original and ensuing target market needs.

 

You Can’t Handle A Business Plan!

In preparing for battle I have always found that plans are useless, but planning is indispensable.

-Dwight D. Eisenhower (Thirty-fourth President of the USA)

 

Eisenhower was a military leader of renown prior to becoming president.  His comment on the value of planning illustrates a key point that many who disdain planning would do well to heed: a plan is not the goal, but rather the exercise of thinking strategically through one’s options given a defined situation and set of resources at one’s disposal.

Serving entrepreneurs and existing business owners, I have seen the outcome of both lack of planning and belief that planning unto itself is a cure-all for potential challenges that may come the way of the enterprise. Tim Berry, author of Three Weeks to Startup, writes that, “If you’re serious about starting your business — even if you don’t have anything down in writing — you’ve already started to plan.” Yet, starting to plan is not the same as writing a business plan.

There are several planning steps that I would recommend prior to writing a business plan:

  1. Refine your idea. Think through how your business model would affect potential customers. Have a preliminary strategy in mind for each segment of your target audience.
  2. Conceptualize a winning strategy. Think through what is already available in terms of direct and indirect competition. Adjust your approach to the market based on what can win consistently.
  3. Create value before your first sale. Test your hypothetical product features and benefits, along with pricing model and go-to-market system. Secure feedback and revise your offering accordingly.

Once you have thought through these three main ideas, you are then ready to evaluate how best to launch a business. Evaluation is the point at which your first business plan should be written. Berry recommends “Your plan is for you first. Don’t make it for anybody else. Do it because it helps you divide and manage big goals into practical steps. Instead of looking at it as a document, think of your business plan as a place on your computer where you collect ideas, useful stories, lists and numbers. It’s a place where you keep track of the market, your milestones, goals and projections.”

Business planI could not agree more wholeheartedly! A plan is not a monument; it is a living, flexible document that needs to be modified on a recurring basis as long as you are in business. Early on, Berry recommends the following key components of planning:

  • Milestones: What’s supposed to happen, when, and who’s responsible.
  • Basic numbers: Simple spreadsheet projections for sales, costs and expenses.
  • Strategy: Strategy is about deciding how to focus a business offering on a key target market. It can start with just bullet points. I’ve seen it done well with pictures. It’s mostly a reminder for you and your team.
  • Cash flow: Because profits don’t guarantee enough cash to pay your bills, you need to manage cash from the beginning. Month by month, account for what you spend and what you deposit — not profit as it appears on the books, but money as it shows in the bank.
  • Review schedule: Set aside time for a plan verses actual review once a month to compare what you planned would happen in your business to what really happened. Be brief and practical.

Regardless of your market niche, whether you have attended a “hack-a-thon,” or who is on your start-up team, take the time to consider each of these components thoughtfully. Incorporating them into a plan that you are committed to revisiting and continuously improving will enhance your chances of launching a successful new business!

 

 

Risk a Mistake; Earn a Valuable Lesson

 

Entrepreneurship is about taking risks. With risk taking comes the chance for failure. Failures, however, need not be a detriment to success. Quite often, they can be the building block. Matthew Turner is currently writing a book called The Successful Mistake: inspiring tips, tricks & tales from 250 successful entrepreneurs. The premise, he writes, is to interview business people and discuss their mistakes and how they turned them around. In a blog post for under30ceo.com, he shared some of the thoughts that will be in the book and a story of struggle from Richard Branson:

Mistake Or Valuable Lesson?

Having interviewed dozens of inspiring individuals I’m beginning to connect some rather important dots. Often the difference between a successful person and everyone else is how they react to adversity.

Bad things happen from time-to-time, and we’re often left with a rather simple decision: Fight or Flight

Yes, that natural instinct of fighting or fleeing comes to mind, and those successful entrepreneurs that build empires are often those that fight…fight…and fight some more. Success is rarely handed on a plate, and I’d like to share (a) Famous Entrepreneur who had to find success the hard way:Mistakes

Richard Branson

In 1971 Richard Branson was just starting to grow Virgin Records, and although things were going rather well, money was tight and tough times lay ahead.

His mistake began when he won a contract to export records to Belgium, and after a few things went wrong, he realised he could avoid certain UK taxes by appearing to export but never actually doing so. His debts would soon be cleared and all would be well, but this little idea was illegal, and as with all illegal matters, the risk is high.

As you can imagine the Tax Man came knocking and Richard Branson spent a night in jail and was forced to pay a rather hefty fine. Yes, the same Richard Branson that so many people idolise (including me).

What Richard learned was that his reputation is his biggest attribute, and no amount of fame or fortune can replace it. He vowed in that jail cell that he would never return, and this mistake helped him build a certain set of values that he’s since lived to. As with most wealthy people he’s no doubt faced occasions where bribes and ‘loopholes’ could have been taken, but he’s learned his lesson from a rather large and potentially devastating mistake. This error in judgement could not only have ended his business, but tainted his entire life.

Mistakes can shape our destiny. As you can see in Branson’s story, there are people who can take the proverbial lemon and turn it into lemonade. Clearly, his experience has shaped his drive to become the dynamo businessman esteemed by many today. Think about your own experience…what have you done that, when it happened, you wished you hadn’t, but in retrospect would not trade the lesson learned for anything?

Moving beyond mistakes in the past, think about your current situation. Does fear of being wrong or making a mistake hold you back in a key decision that you are considering? Are you paralyzed with apprehension about what may go wrong with a pending strategic move? There must be a balance between due diligence and postponing risk taking for fear of failure. We can overcome most failures and become better for the experience. Are you willing to risk it?