Go somewhere else

Sadness
Creative Commons License photo credit: WTL photos

The only way some businesses will learn that they cannot continue to take you for granted is by taking your money elsewhere and letting them know that you did so.

Sometimes the attitude will be “Good riddance, we didn’t want that demanding/pain in the butt customer anyhow”. What they may or may not learn is that a small percentage of people will repeatedly take being treated poorly.

They may learn nothing at all. However, if you don’t do this, you have no one but yourself to blame for the poor service you receive.

This include the businesses that serve your business.

And…it includes the people *you* serve.

Look at your service in the mirror. Make sure you like what you see. Make sure it’s the kind of service you’d want to receive.

Starting A New Business: Part 5 – Infrastructure

Infrastructure is one of those things you don’t necessarily think about as a new business owner.

Thing is, strong infrastructure often turns out to be the competitive edge that no one (other than you) notices.

Your clientele notices “stuff”:

  • You’re always on top of things and that you rarely, if ever, have to say “oh, that fell in a crack.”
  • Your staff knows where orders, parts and service people are, when they’ll be show up and what, if anything, is holding them up.
  • Your staff is proactive more often than not.
  • You don’t lose checks, invoices, legal forms and other marginally important paperwork (yes, that was sarcasm).
  • Their priorities never seem to get lost in yours.
  • You rarely (if ever) miss a deadline – particularly one that would embarrass or damage their business.

In other words, they notice when you really have your act together. Not only do they notice, but they remember, tell others and keep coming back.

The price of worry

Infrastructure is what helps you keep from worrying about “stuff” every single day.

Every moment you spend fretting about “stuff”, chasing down minutiae, emailing to ask for status reports is time focused on things that you shouldn’t even have to think about.

When you have infrastructure in place that takes these things off your mind, your mind is free to do more important thinking. More valuable thinking about things (and on a level) that transforms what you do.

Something as simple as an automated website backup process that sends your content to an offsite backup location is one less menial task and one less brain-sucking thing to keep in the back of your mind.

Do-It-Yourself?

Entrepreneurs are often DIY kinds of folks because we want something slightly better than the norm. It’s why we build solutions.

It also means we spend time on things we have no business doing. Either we aren’t any good at it, or we don’t have time to get (much less stay) current in that activity. It might be computers, your network, plumbing, human resources, benefits or event management.

Frequently these things involve some combination of legal, insurance, finance and taxes. Not the kind of “stuff” you want to mess up.

Little things that can destroy a day…or a week

If I lose electricity, I lose water because our well requires a pump. Meanwhile, my computers will be up for another hour or so thanks to uninterruptible power supplies (UPS), giving me time to backup, shutdown my systems cleanly and leave if I need to keep working.

Few people backup enough, for example. If lightning from one of the thunderstorms that visit your coastline almost every day destroys your computer, you get to buy a new computer and waste a day setting it up. If your customer and order data isn’t backed up, you’ll spend even more time re-entering your customer/order data – if you have it on paper somewhere. So much for those orders you needed to ship tomorrow.

I do all my client work in VMs (VM = virtual machine). I backup the VMs I use to a portable external drive. I backup to it regularly and test it often to make sure it works. Regularly does not mean annually – it means weekly, worst case. The work I do for clients is backed up constantly.

This means I can run out the door with nothing but that external drive, go to a local store, buy a computer, download VMWare and be working again without losing a thing, inside an hour – anywhere. Allowing the failure of a $500 desktop computer to kill your business is just foolish.

Your business might not be as portable as mine, and that’s ok. The takeaway, no matter what you do, is “Protect your ability to continue to do business productively”.

The back of your mind is full

The back of your mind is full enough already. Let it focus on serious work that only you can do and let experts take care of the important stuff outside of your expertise. The same goes for your staff. That back of the mind stuff is what infrastructure does so well.

Think long-term and strategically about infrastructure investments – and then invest as soon as you can.

Your customer’s lowest low. Washed away.

In the case of Portland Oregon’s Plaza Dry Cleaners, a picture really is worth 1000 words.

I’m guessing Plaza owner Steve Young knows at least one thing that’s on his customers’ minds – particularly those who might not be able to afford his service at a time when they most need it.

Imagine the loyalty this builds in someone who is dealing with the fear, humiliation and anything else that goes with being unemployed. It’s such a kind act for people in his neighborhood.

Are you entering the conversation already going on in your customers’ minds? Steve did.

Outstanding.

News story from the Oregonian

Visiting Portland? Live there? Get your stuff cleaned at Plaza

Plaza Dry Cleaners
909 NW Everett
Portland OR 97209
(503)241-5417

Starting A New Business : Part 4 – Profit is not Salary

Treating profit as salary is a common error for new businesses.

It’s unusual for new owners to start by thinking their business through to the “end game” or to its ideal place.

While some plan with an exit strategy in mind, there’s more to business than “do something, grow fast, get bought by Google”.

What happens if you don’t get bought by Google, WalMart or whoever? You’re stuck with the business you designed. Or worse, the one you didn’t.

Design the ideal

It’s far more desirable and strategic to figure out what your ideal business should look like before you start than it is to randomly arrive in your business’ future and realize that it isn’t at all what you planned to build. Much less that it’s not what you really wanted to do.

Hopefully it’s obvious that it’ll be hard to redesign your business two, five or ten years down the road. While it can be done, it won’t be as easy or inexpensive as designing it upfront.

If you design the ideal business, you have a lot better chance of getting there faster (or at least more efficiently) because your decisions have a built-in filter: “Does this decision move us closer to our ideal or not?”

Yes, almost every business owner has turned away from their ideal temporarily because of a job, contract or customer that was low-hanging fruit: A deal they accepted because the revenue was enticing enough to pull them in the wrong direction and distract them from their ideal – even though they knew better.

You’ll be far less tempted by these things when that built-in filter is there from day one.

Working for, Working on

If you seriously ask yourself “What would my business look like, act like, do, sell, etc when it’s exactly how want it to be?”, you’ll find yourself thinking about important things that go way beyond that widget you just have to sell.

One of the really important questions that should come out of that is “When my business is in its ideal state, how much time do I personally want to work there, either as an employee or owner?” The difference is simple: most employees work for a business, but owners should work mostly on their business.

Few think about that when doing budget projections at startup. What often ends up happening is that you create a job for yourself because your business can’t survive without you.

If you started this business to get away from a job, replace the income from a job that you’ve lost or to earn your freedom – do you really want to design and take on another one?

Job or business?

It’s a job if it’d fall apart, fail to generate revenue and/or tick off customers because you stepped away for an afternoon, day, week or month.

A business shouldn’t need you working every minute of every work day to generate revenue. That’s what brings us back to talking about your business model and why I insisted that profit is not salary.

Profit is what an owner/investor receives. Salary is what an employee receives. Today that might seem like a meaningless difference.

As your business grows, you’ll reach a point where you have to hire someone because you can’t get it all done. That may seem like a fantasy today, but if you do enough things right – it could end up more like a nightmare. Planning now is what makes the difference.

Be an investor

If both profit and salary are built into your business model, you’ll be prepared to hire someone to take on the work you can’t get done or no longer want to do.

While you’ll have to give up your “worker salary” when that happens, the “management” salary should still be there. When you delegate the work to someone else, you don’t want your business to be designed (much less required) to stop paying you – and that includes the day you decide to hire a manager to replace you.

Look at it from a buyer’s perspective. They want to invest in a profit producing business, not a job.

To that end, YOU are the first investor in that business. Design with that in mind.

Starting A New Business : Part 3 – Marketing

Chester 2
Creative Commons License photo credit: Yatmandu

Good marketing doesn’t need to lie.

If you have to lie to sell your stuff, either your stuff isn’t worth buying or you aren’t worth buying it from.

Harsh words? Not if you want to stay in the business you’re about to start.

These days, buyers are empowered by the information made available to them by other buyers. I don’t have to list all the websites with ratings, reviews and so on. You already know them – they’re the sites where lies are documented (along with the good stuff).

Remember how easy (and perhaps even pleasant) it is to do business with someone you trust?

When it’s clear that you can trust the person on the other side of the table, the other end of the phone conversation, behind the register or on that website, it gives you the freedom to choose the best product or service. Building that trust is part of the job of good marketing.

Think about it. What store drives you crazy? Now consider the one that you love. The differences between them might be minor but they are significant enough that you’d never choose the drives-you-crazy store. Which one is easier to sell?

Remember the source

Consider when a business says something like this: “We’re the leading vendor of (some random product) in the valley.” The leading or A leading? Leading how? Without proof, you’re not so likely to believe an ad that makes that claim unless it includes some plausible evidence.

Now consider when several of their customers tell you that a business is the only place to go for certain items and then *justify that assertion with a glowing description of their experiences*.

The difference between those two claims? Proof that comes from a trusted party – what I usually call “testimonials”.

Standout execution that meets or exceeds what your marketing promised are what seals the relationship and generates the word of mouth proof you want.

Standout

People are conditioned to receive poorly-targeted, poorly-timed marketing delivering the wrong message because they see so much of those things.

While they may not realize that they’re subjected to poor marketing, they’ll react more predictably to efforts that are well-timed and targeted. That alone usually stands out from everyone else in your market.

Good marketing is trackable. It delivers a message that fits the recipient and where possible, their situation. It’s designed to deliver the right message to the right person at the right time. It communicates the reason why people should do business with you rather than everyone else in your market.

Your marketing needs to answer your “reason why” question: “Why should you do business with us instead of everyone else?”

Fedex uses “When it absolutely, positively has to be there overnight.” Clear, concise, has obvious value to the right customer and they back it up with quality. Your core concept, in conjunction with your focus on your ideal customer(s), has to be just as obvious and backed up similarly.

Look at the recent pitch from the JCPenney retail chain, which you could paraphrase as “Good pricing every day without gimmicky sales.” Frequent sales and coupons sent out every week devalue your goods and condition people to buy only when there’s a sale or a coupon. These practices subconsciously teach your clientele that you product isn’t worth full price.

Promotions provide a reason why, but they don’t necessarily discount/devalue what you sell.

Good marketing is planned, not random. It provokes an action: What do you want the customer/prospect to do next? Visit a website? Make a call? Come into your store? Test drive?

On target

Many of the questions from Starting a New Business : Part 2 are critical considerations for your marketing.

For example, I asked you to consider the question “Are you familiar enough with your prospective ideal customer to enter their market?”

It’s a pretty important question. Who is your ideal customers? There might be several core groups. Go back over those questions from last week and figure out who they are. Describe them in detail. That will help you know how, when and where to speak to them as well as what they need to know in order to make a buying decision.

Good marketing doesn’t need to lie.

Starting a New Business: Part 2 – Are you ready?

selliner_see
Creative Commons License photo credit: elbfoto

Last time we talked briefly about things to consider in the early going of the business you just started.

We talked a little about the product/service, but focused mostly on some basics about licenses/permits and getting supplies with a little taste of business model talk.

The reality is that we shouldn’t have talked about most of that stuff, but we had to start with that conversation because it’s the type of thing new business owners expect to hear.

You might be thinking “I’ve already got a product, I’ve already got a business (even if it’s only a few days old) and I need to know what to do to start. NOW. RIGHT NOW. So help, already…”

Problem is, that’s not the best place to start if you want to build something lasting.

Fake left, go right

Sorry for rushing ahead last time, but I wanted to get you into analysis mode just a little bit before we moved ahead (or back) to this step.

We did talk briefly about the business model and I hope that provoked you a little. Ideally, it made you think that you might not have all the info you need to work out the details of your model. Those of you who thought hard about it probably wondered if you didn’t have a lot more work to do.

You do.

Before you order those business cards, buy those supplies, determine your costs and set your prices…you need to research your market.

This means far more than doing a keyword check to see how many Google searches there are for “gold plated harmonica” (if that’s your business), much less finding out if GoldPlatedHarmonica.com is available and at what level the competition is already delivering these items. Those things are just part of the process.

Questions, questions

How much do you really know about the market you’re entering? Assuming the market isn’t brand new, have you researched industry product, service, supply and performance trends? What do they indicate as areas of opportunity? Areas to avoid? What are the emerging product/service trends in this market?

Are you familiar enough with your prospective ideal customer to enter their market? Or will you stand out in the wrong way and alienate your business from them?

Who buys gold plated harmonicas? Where do they live? What kind of stores do they purchase music supplies in? What else do they buy at the same time? How many are sold per year? Where are they purchased – online, in stores or both? How many are purchased annually? Are their peaks and valleys in purchasing habits? Are there peaks and valleys in supply? Are there legislative, import or similar issues that you must deal with at startup or on a one-time basis? Are there any liability concerns for the product and its use?

How many do they buy over their lifetime as a purchaser of gold-plated harmonicas? Is there a progression of better and better purchases? Is there the possibility of referrals by your existing customers to others who favor gold-plated harmonicas? Are there opportunities to render service, deliver purchases or offer training classes?

At what age do people start upgrading to gold-plated harmonicas? At what age do they stop purchasing? How do people decide to be in the market for gold-plated harmonicas? What do they buy in the year or two prior to moving up to a gold-plated one? Where can you buy replacement parts? Is there a repair market or do people replace them? Is there a scrap market? (they are gold-plated, after all)

Who dominates the market today? Why do they dominate the market? What will you do to set yourself apart from them? Is it possible to partner with them?

These questions come into play when writing a marketing plan but many of them also have bearing on your business model / business plan.

Are you asking enough of the right questions? Are you doing the research necessary to assure that your business plan / model make sense given the market of available buyers?

These questions are not intended to scare you out of a market. Quite the contrary, they are intended to make your entry strong enough to keep you there.

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.

A Letter from Georgia

We almost didn’t open it, thinking it was junk mail.

Why would the University of Georgia send us mail way out here in Montana?

We aren’t alumni. Our kids don’t go there, nor do we have prospective students considering the school.

The letter was addressed to “The Riffey Family” (printed, not hand-addressed), which may have subconsciously given it a chance it normally wouldn’t have received.

The postage applied was pre-sorted metering like that from a postage machine. Result: It looked like any other junk mail with the exception of the “family” thing.

The letter made it home from the Post Office only because I thought it might be something related to my wife’s doctoral studies, even though she had never mentioned UGA to me.

Blondie

Months ago, we had to put Blondie (our 11 year old Golden Retriever mix) to sleep.

She was suffering from painful arthritis and surgery to repair tendons hadn’t helped her escape a life that had become much like walking on broken glass. Our oldest son came home for the weekend because he wanted to be with her. They hadn’t even charged us for the euthanasia, probably because we’d spent so much on Blondie’s care with them.

The letter was about Blondie. It came from the development (fundraising) office at the University of Georgia Veterinary School.

A letter that almost didn’t make it home. A letter that almost didn’t get opened.

A letter said that our vet, Dr. Mark Lawson from Glacier Animal Hospital, had made a donation to the vet school in Blondie’s memory.

Think hard about your mail

Imagine if we hadn’t known that our vet had made that donation…all because the envelope carrying that notification letter looked “too junky”.

Think hard about your mail.

It does no good to spend time and money sending mail if it never makes it home from the post office. It isn’t just about paper costs, printing, postage costs and the speed of slapping on pre-printed labels.

Everything ON the envelope requires thought because someone, somewhere HAS to decide to open it…and if they don’t, you just wasted time, money and an opportunity. Perhaps more.

Everything IN the envelope requires thought. You might have one shot to make an impression and/or provoke an action.

If you don’t send mail to people, keep in mind that the same considerations apply to anything else you put in front of customers and prospects. If it looks like junk, it might get treated that way.

P.S.

Would you take your dogs anywhere else? What a nice gesture. Wow.

A Thousand Dollars an Hour

One of my mentors describes a person or activity that wastes your time as a “time vampire”.

This might be someone who repeatedly interrupts you for information they could easily find on their own – in other words, they’re really making a social call.

It might be you checking CNN or Facebook.

Interruptions often happen because the interrupter hasn’t been trained to find what you’re giving them – that’d be your responsibility.

Sometimes these inquiries are valuable because of the resulting discussion, but the interruption is often costly because it pulls you out of the zone – a hyper-productive period of work.

That work thing

Even “Work” can be a time vampire.

How do you decide what to delegate, outsource or (gasp) what not to do at all?

We’ve talked at length about how to evaluate this with your staff, including automation and what to retain as a manual task – because it’s important enough that you’d never want to outsource or automate it (like most customer service tasks).

One thing we haven’t really talked in detail about is deciding what YOU do.

At the top of your list: things that no one else can do. Yes, I mean those things that no one literally has the ability to do except you.

Driving, Chipping and Putting

In a professional golfer’s work world, only the golfer can hit the ball. Almost everything else except for promotional talks and photos can be delegated. On the golf course (or the practice range/green), work gets done by the golfer that cannot be delegated. It might be 1000 dollar an hour work, maybe more, depending on the golfer.

While it’s obvious, that’s what I want you to consider: What work of yours is the equal of the pro golfer’s professional-grade driving, chipping and putting?

A Grand an Hour

If the golf thing doesn’t work for you: What work do you do that easily provides 1000 dollar an hour value to your business?

If the 1000 dollar an hour figure bothers you (I hope it doesn’t), try $500 or even $250. It’s possible that the work you do at this level is work that a client never sees, such as big picture planning (mission/vision/strategic stuff) work. Strategic planning and that sort of thing that drives your company for the next three to five years. Decision making at the highest level should be in this pile.

If you do this kind of work for clients (as I do), you probably know what it’s worth to them. Is this work that you can’t possibly delegate? Write that work down on your list.

You can categorize this work however you like (“Class A work”, “CEO work”, “Meat and potatoes”, etc). The idea is to remind yourself that this very high-value work that you can’t delegate is more important to your business than any other work. If it *can* be delegated, then it don’t put it on this list. That doesn’t mean it isn’t important, it just isn’t the MOST important.

One floor down

Once you’ve put everything you can think of on this super-important, cannot-be-delegated list, consider the work that is a level below that.

If this vision helps, consider the work that  gets done on the floor one flight of stairs below your CEO suite (which might just be your corner of the basement, bear with me).

This work is still very important, but the gap in value per hour provided to your company (no, not to your clients) vs. that on the level we just discussed might be substantial. That doesn’t make it unimportant, just less important than the earlier list.

Perhaps you do weekly group webinars online or some other form of group sales or lead generation (that’s marketing-speak for “doing the things that attract and find new prospects”). Creating the conceptual design of a new product or service. Creating new strategic partnerships with other vendors might also be on this list. Training your staff to do important tasks that you do now is probably on this list since it gives you more time to do “CEO level” work.

It’s possible to delegate this work, but it’s still valuable enough to the company that you feel it is worth your time to do it.

The goal? To do more of the right work. The work that advances your business in massive steps.