What does a new business owner do first?

Dive off!
Creative Commons License photo credit: Sebastian Mary

Recently I received an email from a reader who said my blog made them feel like they had come in during the middle of a movie.

Why? Because they’re at the startup stage in their business, while many of my posts focus on existing businesses.

Fair enough. Let’s talk about startups.

The overwhelming load at startup can freeze you in your tracks. You’re just starting to learn how to market (usually). You may need to know where to find less-expensive supplies, how to introduce your product to customers and how to price what you make/do.

Best of all, you’re trying to figure out how to do all of this on a limited budget without feeling like your investment is as fickle as a bet at the horse races.

It’s a tall climb. It feels like there’s so much you’re supposed to do before you start and the list gets longer on opening day.

What Nike would say

The key is to start.

People freeze in pre-launch because they’re worried about everything being perfect…which frequently breaks your focus on starting. You may have heard this described as “perfect is the enemy of good” (or “of done”).

Don’t you need business cards first? Or a fancy color brochure? Or a sign? No, no and maybe. Where a home-based manufacturing or service business is concerned, the answers are likely no, no and no.

Permits: You need to take care of whatever permits, licensing and tax registration requirements exist in your state/community/neighborhood. Not optional.

Business cards, stationery, brochures, etc: I still don’t have a business card. I just haven’t gotten around to it. In my business, people who meet me almost always know or have heard of me – and that’s intentional. I make it super easy to find and contact me, yet I haven’t met many of my clients face to face. If you sell what you make on the internet, you might not meet your customers except at a trade show (trade show prep is another post). You may absolutely need a business card – but it shouldn’t stop you from opening the doors.

Is it an attractive model?

You might be just starting to figure out how to price your products and services. Typically, people in a new business start as low as possible, thinking that’s their “in”. Price should never be your only competitive edge. One edge, sure. Only edge? Never.

Setting a price depends on your business model. If your business model doesn’t makes sense financially on day one, it might never make sense.

Start by determining your fixed and variable costs. Fixed means “expenses incurred even if you don’t sell a thing”. Variable means “expenses that change as sales volume changes”. Of course, you’ll want to have some money left for your salary, taxes, utilities, marketing, support/service, and profit margin.

This requires knowing your numbers. Knowing what every supply costs, knowing how much time processes take so that you know your labor costs, whether you or someone else is performing that labor. Use a yellow pad, spreadsheet, whatever. Don’t get tied up by the mechanism. Start.

Note: Profit is not salary. More on that another day.

Don’t forget the locals

Everyone looks on the net for quality supplies at low prices, but don’t forget the locals. You might be surprised to find that you don’t need to pay always-rising shipping costs (because “free shipping” isn’t free) to buy beeswax from three states over because there’s a beekeeper in your community who can deliver it *today*.

You might have to buy online at first, but never stop talking to customers and friends about your supply needs. Find online communities of people who make similar products or serve similar customers. For handmade goods, the communities at Etsy.com are good and there are others out there in every niche. People in these communities are surprisingly helpful and will tell you things a website/catalog wouldn’t ever mention.

Feed your mind

No matter how insane my schedule, my daily ToDo list includes a page from Peter Drucker’s and John Maxwell’s daily readers. They’re a great centering read to start my day. Don’t underestimate the value of this.

Next in this series, identifying who’s just right for your porridge.

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Out of Stock

Quais de Seine, Paris
Creative Commons License photo credit: Zigar

When your store is out of stock on an item…what does your staff do and say?

When I was out of state not long ago, I looked around for a pair of light hikers for everyday wear. I knew exactly what I wanted right down to the model name.

I visited a locally owned store, but they didn’t have my size in stock. A few days later, I visited a box store. They had the shoe on the wall (which is never my size), but they didn’t have any others. They didn’t even have the match to the one on the wall.

As I got into the car in the box store parking lot, I called the locally owned store again just in case they had some new arrivals. Nope.

They offered to order a pair for me, but I told them I was visiting from elsewhere and wouldn’t be around when they arrived.

At this point, they had choices:  Focus on the sale, focus on the customer or try harder.

What’s your focus?

If your sales people are trained to focus on the sale, they might say “Nope, we don’t have any” and be disappointed that they didn’t get a sale. If that’s the end of the conversation, your customer might go elsewhere – losing the sale and the customer.

If your sales people are trained to focus on the customer, they might say “Nope, we don’t have any. Have you looked at (competitor number one) or (competitor number two)? They both carry that brand.”

If your sales people are trained to focus on keeping your customers happy, they might say ”Nope, we don’t have any. If you come by and let us fit you in a similar shoe in that brand, I can order that model in your size and have it shipped to you. If it doesn’t fit like you want, we’ll take care of you until you’re happy or we’ll give your money back.”

What they did was refer me to two of their competitors (one was the store whose parking lot I was in). The second one had my size in stock, so 20 minutes later, I had my shoes and was heading for the in-laws place.

The “try harder” choice might not have been what I wanted, but I wasn’t given a choice. Keep in mind that you can always fall back from the “try harder” position if the customer isn’t interested in or cannot use that kind of help.

The important thing

You might think that the locally owned retailer lost a sale, but that isn’t as important as keeping the customer over the long term.

While I wasn’t able to buy the shoes from the place I wanted, they were able to help me find them.

They could’ve run me off quickly by saying “We don’t have that size.”

They didn’t do that. I suspect their handling of the call was the result of training driven by a management decision.

I wasn’t a familiar voice calling them on the phone. While I’ve bought from their store on and off for 20 years, they don’t know that because they keep paper sales tickets. I’m not there often enough to be a familiar face / voice and had not been in their town for two years.

Yet they treated me like someone they want to come back.

Do you treat your customers that way? Do your online competitors?

Competition from tomorrow?

Sometimes business owners complain about online competition.

Yet online stores can rarely provide instant gratification. It’s difficult for them to help you buy something you need today for a meal, event, dinner, date, meeting or presentation happening later today.

They can rarely deliver the kind of service a local, customer-focused business can offer.

Online often gets a foothold when local service and/or selection are poor and focused on the wrong thing. Even with online pricing, a product isn’t delivered until tomorrow.

When you aren’t competing strongly against tomorrow, you really aren’t even competing against today.

Focus on helping them get what they want and need. Whether they are local or remote, customers just want to be well taken care of and get what they came for.

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Your customers are already trained to share. Help them.

Have you noticed what happens when you add an item to your Amazon wish list?

Three tabs appear on the right side of the “We just added this to your wish list page”.

This tab is ready-made for a Facebook post with just one click. There’s a link to the book, a brief summary of the book and a 1 click button to share your wish.

This tab is ready-made for a tweet with one click.

It even makes note that a link to your wish list item will be part of the tweet and because 140 characters is always on the mind of Twitter users, it notes that the link’s characters are part of the characters-remaining count shown at the right side of the tweet box.

This tab makes it as easy as possible to share about your wish list item via email.

Forget Amazon…what about you?

Your customers are already trained to share both the good and the bad.

Facebook, Twitter, Amazon and many others have made it fashionable, normal, if not part of our culture. Even if you don’t participate in the sharing, your customers do.

How are you giving your customer easy ways to share what they want, what they love, what they dislike, what they’d do different – with you and with those important to them?

 

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SOPA / PIPA: Business on a Rope


You may not have heard much about SOPA and its counterpart in the U.S. Senate, PIPA.

SOPA (Stop Online Piracy Act) and PIPA (Protect Intellectual Property Act) have a noble and necessary cause behind them: To protect the intellectual property created by U.S. citizens and businesses.

What is “Intellectual Property”?  Movies, music, photos, books, stories, blog posts, computer software, patented processes, engineered work, designs and so on.

No doubt you are aware that there are people and businesses, both inside and outside the U.S., who copy other people’s creations and sell them in authorized outlets. You may know someone who uses an illegal copy of software or a copy of some music that they got from a friend.

If you know someone who is in the software, music, photography or movie business (a short list), or is an author, you’re probably aware that they are tired of having their stuff stolen, particularly when it is resold by criminals.

Anyone in these businesses who has studied the problem knows that there are benefits to having your stuff copied. These benefits can be tough to trace, but they are there. Those benefits usually end when your stuff is copied and then resold without your knowledge/involvement.

As a writer, a software company owner and photographer, I’m painfully aware of the potential and the reality of these kinds of losses.

Time to speak out

It’s rare that I get into political topics here but I think it’s important that small business owners are aware of SOPA/PIPA and the consequences that exist even for non-technical businesses. I’d kept mostly silent about this legislation so far because it seemed so obvious.

Then I found out that most of the SOPA/PIPA attention focused on my state’s Congressional people was coming from out of state. I noticed nothing in the state’s news outlets on the topic. That silence comes across in Washington as tacit approval from the masses.

When you first hear about the proposed legislation, you think “Sure, that makes sense.”

Unfortunately, this legislation is poorly-designed and is clouded by an overbearing amount of influence from the entertainment business. It attempts to fix a problem that needs to be fixed, yet most members of Congress really don’t understand what they are attempting to control and clearly have not thought through the unintended consequences.

One look at CSPAN hearings or their transcripts are enough to make that painfully clear.

It reminds me of the CPSIA situation.

CPSIA was a knee-jerk reaction to thousands of recalls of Chinese goods during the prior Christmas season and was rubber-stamped quickly without enough due diligence on the impact it would have on small businesses – particularly home-based manufacturers. The testing costs seemed tiny to a Mattel or a Lego, but when pushed down to a family making a living from handmade goods – they were crushing blows. Within two years, home-based businesses all over the country were forced to close because they couldn’t absorb the unscalable costs to small business that Congress never bothered to consider.

Mattel and the rest…got off with self-policing their compliance, despite being the same businesses whose actions provoked the law in the first place.

Much like CPSIA, SOPA/PIPA has the potential to hurt local businesses through the same kind of unintended consequences.

No help from the locals

The more I look around for SOPA / PIPA coverage in the local or state-level media and related comments from my state’s Congressional folks, the more the vacuum told me that something had to be said at the local level. The lack of outcry from the state’s business community makes it clear that it’s off the radar.

It doesn’t surprise me at all that the national press has barely, if not begrudgingly covered it. Here in Montana, there’s been almost no mention of it in the major state-wide press outlets.

SOPA/PIPA are aimed at stopping online piracy. While the law is aimed at protecting many businesses, it was created and driven through committee by the entertainment industry.

The language and methods used in the bill sound like something out of a World War II movie about jackbooted thugs who kick down doors more so than about little things like due process. The law also takes a xenophobic view of the Internet, as if the U.S. has carte blanche to filter and control it on our behalf as if we were Syria, Iran or China.

Anyone can put you at risk – intentionally

Worse than that, these bills do a poor job of actually addressing the problem. Pirates will dance around them as currently written because the methods they use ALREADY ignore much of what SOPA / PIPA use as a means of punishment: losing control of your domain name routing.

Yes, there have been recent modifications in the bill’s language that strike the domain name routing from the House version of the bill, but it only takes a moment to put them back.

Your competition can put you in violation of SOPA/PIPA simply by posting copyrighted material as a comment on your blog, or by linking to a site that uses copyrighted material illegally. Yes, just linking. I know. It sounds as ridiculous as those bogus emails that claim Microsoft is going to send you $50 if you’ll just open that link.

But…it’s dead serious.

Defending yourself isn’t possible until after your site is taken down by your web host, even if that site is what’s fueling your employee and revenue growth.

I wonder how long that reversal will take. And if the reversal gets appealed? What small business owner has the time, patience and money to deal with stuff like this? Very few of them.

If someone doesn’t like something that a local paper says, they can put that paper in the bullseye by linking to pirate sites in the comment section of their site. But you don’t see papers across the state standing up to oppose this law. Wonder why? Follow the money.

Silence from DC so far

Here in Montana, none of our Congressional representation have taken an official public position on SOPA/PIPA so far. The feeling I get from those who have spoken with Washington is “seems like a well-intentioned law so what’s the big deal?”

I think I’ve already touched on that.

You may not be fond of technology. You may be less fond of politicians. I think you’ll be even less fond of the unintended consequences of SOPA/PIPA.

You can learn more about the legislation here and here. There are alternative proposals out there. Don’t depend on my opinion. Make your own and tell your Congressional representation how you feel about this legislation.

UPDATE:This Mashable piece nails the machinery behind the bill.
UPDATE:This TEDx talk from Clay Shirky does a wonderful job of explaining SOPA and the issues behind it.

Thanks to Khan Academy for the video at the top of the post. Excellent job.

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Stop Chasing Rabbits: A Productivity/Focus “Secret”

everybody loves them bunnies
Creative Commons License photo credit: notsogoodphotography

I don’t spend a lot of time writing about “the hows” of staying focused, but I do remind you now and then about the reasons that make focus so important.

For example, I closed the post A Thousand Dollars an Hour with “The goal? To do more of the right work. The work that advances your business in massive steps.”

I hope everyone can relate to that.

There’s nothing wrong with what I might call “leisure reading”, but I suggest setting aside time for it rather than doing it during time planned for work.

One thing that really helps me is to avoid “chasing rabbits”.

Have you ever seen a dog chase a rabbit? Rabbits are incredibly elusive because of their ability to quickly change direction when running at high speed. What makes them so elusive: A body designed to make radical direction changes without losing much speed.

The dog might end up running half a mile or more within a football field and might never catch the rabbit. An overhead view of the path of a rabbit eluding a predator looks like the crayon scribbles of a two-year old. It goes everywhere, randomly… just like your afternoon spent doing random browsing.

Chasing links

Your productivity suffers the same thing on the web.

It starts like this: Someone sends you a link via email, Twitter or Facebook. You follow it, it leads to another page, which leads to another and the next thing you know, the afternoon is gone and you can’t begin to remember what you did for the last three hours.

If you have the discipline to open the link in a browser tab and then not read it, you might end up with 20-30-40 browser tabs open. Not only does that slow your machine / browser down, but it’s a buffet of ready-to-serve distractions just waiting to suck you in.

Some folks might bookmark the links to get them out of their face (and out of mind so they can get back to work), but I’ve found that people rarely read the stuff they bookmarked.

Bookmarking misses the mark

Bookmarking works because you don’t have to worry about the tragic loss of that critical link that you know you need to read (a dash of sarcasm?).

For me, traditional bookmarking wasn’t effective, even via Delicious. Too much clutter? Too many clicks? Not in my face to remind me I had reading queued up? I don’t know.

What I do know is that Instapaper has, for the last few years, been the #1 “secret” tool that keeps me focused during the day.

Links come at you all day long. Click one, start reading and the next thing you know, the afternoon is gone.

Instapaper to the rescue

I don’t know why the subtle differences between Instapaper and simple bookmarks are enough to make this so much more productive for me, but they are.

Maybe it’s because I know those links will be in Instapaper when I’m in reading mode. Maybe it’s because I can archive with 2 clicks and instantly move to the next article. Maybe it’s because the queue of reading is kept in sync from my laptop to my desktop to my iPad and iPhone. Maybe the ease and speed of the Read Later bookmarklet does it.

I suspect the marriage of those things is what makes it work for me. I noticed a significant difference once I started using the free Instapaper Read Later bookmarklet. For me, it was the real key to quickly eliminating the tempting distractions without losing important reads.

If you have a Kindle, this page shows how to make Instapaper links automatically go to your Kindle.

I hope this helps you do more of the important, valuable work…all without missing out on XKCD.

PS: I’ve added a Read Later link to the bottom of posts, if you can’t use the bookmarklet for some reason.

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