Marketing

I’m constantly amazed in talking with business owners who are struggling to either grow the business, or just stay above water, that they do so little marketing. To them it seems like an unimportant activity that can be put off until they have some time to devote to it (which is never). Yet they complain that their sales are not at the level they want them to be.

I spoke with an older business owner whose sales had dropped dramatically during the past few years. He told me that sales always came from relationships he had built. He was over 80 years old and most of his contacts were by now retired or deceased. When I asked him about marketing, he said it was a waste of time and money. He had tried marketing about twenty years ago, and gave up on it after doing a single mailing of 200 postcards which garned only 4 replies (which, by most standards is an average mailing response). He said he would never try that again.

A more typical story is a business owner so engrossed in the day-to-day issues of the business that he or she does not take the time needed to form a marketing strategy. Their businesses run in cycles of fat and lean. When business is slim they go out and pound on doors to solicit new business. As soon as the business comes in the once again ignore any sales or marketing-realted activities.

How much smarter they would be, and how much more profitable their businesses would be, if they were to take the time to put together a strategy, develop a marketing plan, and execute the plan. They would develop a much more consistent revenue stream, and might even avoid cycles of hiring and layoffs perpetuated by up and down sales.

Networking

Thus far I have received three new invitations to networking events this week – on top of the regular announcements from organizations whose events I have attended in the past. Which got me to thinking about networking.

As a business person always searching to expand my sphere of influence, I regard networking events as important venues for introduction to people I have not met, and renew relationships with people I have. For a year or two I attending almost every event I was made aware of, and finally came to the realization that I could easily put my real career in peril as I pursued a job as a full-time networker. This led me to significantly cut back on, and become more selective of, the network events I attend. I also strive to derive greater benefit from the few that I do go to.

Some things I have learned about networking that I think are worth passing on are:

1. Do network – it’s the best way of getting to know potential colleagues, suppliers, and customers.

2. Carefully choose the networking events you attend. Go to those events that are most apt to attract the people you need to meet.

3. Go to each event with a goal. It might be to meet a specific person. It might be to reconnect with certain people. It might be to meet a specific number of new people with whom you will arrange follow-up meetings.

4. Follow-up with each and every person you recieved a card from with a phone call, a handwritten note, or an e-mail. If you believe that you want to establish a relationship with a person you met, setup a meeting.

5. Keep in touch with people in your network. Call them. Meet them for coffee. Send them newsletters.

6. Introduce people in your network you believe should meet. I often send an e-mail to two people introducing them to each other and include full contact information for each.

7. Manage your time, balancing all of your business activities including networking.

President Obama and small business

I was once again impressed with President Obama’s clear thinking and oratory power as I listened last night to his talk to congress and the world. He was realistic and clear about the depth of our national and global problems, yet optimistic and hopeful about an economic recovery. While he does have an ambitious agenda, he also has the energy and support to carry out much of his program.

The president did brush briefly on the plight of small businesses and apparently his proposed assistance to them is to reduce taxes. This may help some of the larger “small businesses” who will be able to plow more of their retained earnings into capital and human investment, but will have a negligible, if any, effect on most small businesses. As I wrote in an earlier post, the government appears to be somewhat blinded to the needs of the majority of small businesses – those with fewer than 20 employees. I will restate that the administration and congress need to develop programs to encourage entrepreneurship and assist the very small businesses with financial resources and training to enable them to grow, employ, and survive. I again recommend and support a council or round-table discussion about very small business issues with the administration.

Happiness

Jill Hamburg Coplan has an article in the February/March 2009 SmallBiz magazine about happiness. She says, “A decade of research suggests that happiness at work – defined as pleasure, engagement, and a sense of meaning – can improve revenue, profitability, staff retention, customer loyalty, and workplace safety”. She suggests that doing what they are best at bring people the most joy, and that the most successful companies are ones whose employees get to do what they do best every day.

I’m no psychologist, but her thesis makes perfect sense to me, and my observation of hundreds of small businesses over the years anecdotally confirms this in my own mind. Good managers, who are happy in what they do, tend to understand the interests and strengths of their employees and place them in positions that can best use those strengths. These managers have a sense of not only how to manage their people, but tend to make their workplaces cleaner, neater, brighter, and better to work in. People, while working hard, are obviously enjoying themselves. People tend to have fun not only individually but in their reactions to other employees, customers, and vendors. The benefits of people enjoying themselves at their place of employment (where they spend almost a quarter of their live) is obvious. The business benefits through greater productivity, less turnover, higher profits, and better good-will in the community may be less obvious. But it’s a win situation all around.

But fun has to start at the top. If the business owner is dour and doesn’t enjoy his or her job, no one else will either. Such owners need to examine their own interest, skills, and goals, and restructure their lives and businesses so they can find joy and have fun. They and their businesses will be better for it.

Should small businesses use consultants?

CEOs of large corporations have a wealth of resources and expertise that small business owners can only dream about. Yet, even the largest corporations regularly retain the services on advisors and consultant in almost any and every discipline.

The small business owner has little to rely on but his or her own wits, experience, and expertise, yet is often reluctant to bring in outside assistance. The reasons for resistance to consultative help are primarily ego, lack of knowing what resources might be available, and percieved cost.

Most small businesses could derive great benefit from calling upon outside expertise. By retaining an outside adviser the owner can often learn how to be more efficient, manage better, and develop a more profitable and productive business. An adviser can help the owner understand what he or she doesn’t know and either provide training to fill in the gaps, provide hands-on help, or suggest staffing changes to round out corporate expertise. Often a business owner benefits simply by having an objective party to run ideas across, or just vent the inevitable frustrations of running a business. Most important, by soliciting advice, and taking the advice, the owner may be able to perpetuate a business that otherwise might fail.

It is admittedly hard for an owner to put ego aside, as the strength of the person is what got the business started and built it to where it is today. But the smart owner recognizes that he or she does not, and can not, have all the answers.

Cost is an obvious consideration as most small businesses have a tight budget. But the fees for a consultant need to be placed in the context of an investment in growth and future profitability. Before engaging a consultant an owner needs to know exactly what the charges will be and what to expect from the consultant. The owner needs to feel totally confident that the consultant has the business’s interest at heart, and needs to have a good raport and comfort level with the consultant. Most importantly, the business owner must have an open mind and be willing to try new ideas proposed by the consultant.

The IRS is not a bank

Consulting with a client recently I learned that he owes the IRS over $30,000 in back payroll taxes plus penalties plus interest and is attempting to work out a payment plan with the IRS. This, unfortunately, is not an unusual scenario.

It is easy and tempting for a business experiencing cash-flow problems to defer making the required monthly or quarterly deposits of income and FICA tax withheld from employee paychecks. This is a terrible trap to fall into, because, as the withheld taxes are held in trust, the company has a fiduciary responsibility to deposit the money on the timetable stipulated by the IRS. Failure to do so can rack up significant penalties and interest. The IRS can go after the business and/or the owner or others responsible for failing to make the deposits.

The IRS is not a bank, and business owners with cash-flow problems need to find ways of raising cash, increasing sales, or reducing costs rather than not making timely tax deposits.

Networking

I find networking  to be a dreadful yet necessary part of business life. Spending an evening in a room full of strangers is not my preferred social experience, yet spending an evening in a room full of strangers is one of the quickest and best ways to expand my sphere of contacts and start relationships that can blossom.

These feelings, I know, are not unique to me. Here are some networking tips I have picked up that have helped me, and maybe they will be of use to you.

• Before attending an event, set a goal for yourself. I sometimes will have an objective to meet three new people who will agree on having a follow-up meeting.
• Take lots of business cards with you.
• Prepare an elevator speech you can recite with enthusiasm in 30 seconds or less.
• Wear a name tag that stands out. Often an event will supply a name tag but your name is so small that a person has to be on top of you to read it, or blank name tags are provided with markers for self-made tags. A better idea is to have your own designed name tag that clearly tells who you are.
• Wear the name tag on the right side. The tendency among us right-handed folks is to pin the tag on the left lapel. The problem is that when shaking hands the name tag is not in the sight line of the person you have just met. Pinning the tag to the right lapel puts it directly in the sight line.
• Be early to the event so you can help welcome people as they come in.
• Don’t spend much time with folks you already know unless you are introducing someone to them or they are introducing someone to you. You already know them, and your goal is to reach out to new people.
• Hang around the food table to meet people, but don’t fill your hands with food and drink so you are free to shake hands.
• Find someone standing alone – break the ice by commenting on the event.
• Introduce yourself and show interest in the other person. Get him or her talking. Learn as much as you can about the person, and eventually you’ll get your chance to give your elevator speech and talk about yourself. If there is sufficient common ground, exchange business cards and suggest a follow-up meeting.
• When you find common interest between two people you have met, introduce them to each other.
• After a few minutes excuse yourself and find someone else to talk to.

Awarding Innovation

Technology innovation is alive and well in northern Ohio! NorTech, a regional technology advocacy group, has just announced the winners of it’s 2009 NorTech Innovation awards, highlighting innovations from area entrepreneurs, businesses, universities, and non-profit groups. NorTech has been hosting the awards since 2000. According to Crain’s Cleveland Business, this year ten winners were selected from a pool of 40 applications.

The winning innovations related to bio-fuel production, solar energy, metallurgy, and health and bio sciences. While some awards went to large organizations like NASA and the Cleveland Clinic, several were granted to start-ups which promise job growth for the area.

I congratulate all of the award winners, and all of the innovators who did not win. May innovation continue and the pool of applications only grow in coming years.

Well-run business

For the past 25 years I have watched a nearby business steadily grow and have always admired and respected the CEO. The small specialty manufacturing company with around 30 employees has such a rich culture and ethic of personal respect, hard work, quality, and service. The office area is neat, open, and tastefully decorated. There is clutter nowhere. The plant is amazingly well lit, organized, and clean. When the current facility was built a few years ago every employee had input into the design and layout resulting in an efficient facility.

There is a deep sense of caring for each employee. I asked the CEO about this. He had earlier in his life worked for someone who treated employees so dreadfully and decided that if he ever had a business he would make sure all employees were properly cared for. But his treatment of employees is more than a reaction to a bad experience – he is a truly moral, caring, and compassionate man whose business reflects his strong values.

Yes, here is a well-run profitable business where employees are well taken care of and motivated by carrots, not sticks.

Delegating

Yesterday I was talking with the overstressed CEO of a small organization who ends up doing herself what she should be delegating to others. She said it takes her more time to describe what needs to be done, how to to it , and follow-up, that it takes her to do the job herself. Yet she is overwhelmed with the work that is on her plate. The inability to delegate is a handicap common to so very many business owners, and significantly limits growth and financial success, as there is only so much one person can do in a day.

Part of the problem is ego, thinking that no one else can do the job as well or efficiently. Part of the problem is trust, thinking that employees will not be conscientious and responsible in doing the assignment. Part of the problem is not wanting to give up control.

If you see yourself overworked because you are not effectively delegating, here are some things to try.

1. For every task you are confronted with, ask yourself if it is absolutely necessary to do it yourself, or whether someone else could do it. There are probably few tasks that positively absolutely need to be done by you.

2. Explain what needs to be done, and how you might approach the job if you were to do it. But here is the important thing: don’t dictate how the job should be performed – the only thing that matters is that the end result meets your expectations. You might be pleasantly surprised by the creativity and ideas that the person will have in his or her approach to the job.

3. Make sure the person has access to all needed tools and information.

4. Give the person a deadline for completing the task, and hold the person accountable for meeting the deadline.

5. Tell the person you are available if questions arise. But, don’t look over their shoulder. Once the task has been delegated, move on to other things and don’t give it another thought until the deadline.

6. If something goes wrong and the job doesn’t get done right, together with the employee analyze what happened so that the next task goes better.

The more often you delegate using these techniques, the easier delegation will become, and the less stress you will feel.