So perhaps I’m a bit slow catching on to the nuances of social networking on the web. I’ve had a Linked In account for quite some time, I’ve registered on facebook, and began twittering about two weeks ago (already have 75 followers). But I’ve just barely begun to understand the potential of these tools.

Take Linked In. I have 188 connections and (as of yesterday) belong to 4 groups. I had not really understood the potential until a friend recommended registering with additional groups. I was astounded when I realized that there are thousands and thousands of groups. For example, a search using the key words “home business” lists 400 groups. There are 3,610 groups for sales, 806 for manufacturing, and 1452 for insurance. Any given group can have dozens, hundreds, or thousands of members

I guess it’s time to get a bit more aggressive in the social networking world.

Will Limkemann
www.siqualtd.com

Yesterday I had lunch and a chat with John Turner, a human resources and safety consulting expert. From our conversation I learned that many, if not most, small business make serious mistakes in handling human resources issues. Some common mistakes are:

1. Incorrectly classifying as exempt employees who should be paid overtime.

2. Incorrectly using “independent contractors” who are actually employees.

3. Being inconsistent with treatment of employees and application of company policies.

4. Not having an employee manual.

Will Limkemann

How do your customers regard your company?

As a business owner you view your company through rose-colored glasses and probably do not see the scratches and dents in your organization that might turn off potential or existing customers. Leamon Crooms III, of Gurus of Growth, suggests meeting with your 10 least satisfied customers and listen to them and take notes as they tell you what’s broken, what needs to be fixed, and for what they are willing to pay a premium. This can be a tough (for you) exercise, but if you will act on what you learn you can make vast improvements to your business. Leamon also suggests, that for balance, you also meet with 10 of your most satisfied customers three months later. Why later? So you don’t fall back into old habits. Repeat the interviews yearly and notice patterns of improvement.

Will Limkemann
www.siqualtd.com

Business Quiz

Do you have what it takes to be an entrepreneur? Take this quiz.

Will Limkemann

Pricing mistakes to avoid

Here are three pricing mistakes made by many startup (and even mature) companies:

1. Not charging enough. This is often a mistake made by consultants or other folks who sell their personal services. Some people just don’t believe strongly enough in the value of their services that they don’t price them at what they’re worth. Others mistaking think that they need low prices to be competitive. When pricing, always take a realistic view of the value your services or goods provide, and price accordingly. I’ve written before about situations where consultants lost  deals because they under-priced themselves, leading to perceptions of inferior value.

2. Never raising prices. Many people working for wages expect annual pay raises that will at least cover the increase in the cost of living. Yet consultants often set a rate and seldom, or never, consider increasing the rates. Small increases annually will generally be well accepted – make sure you notify existing clients in advance – and will prevent the need to make huge increases at some future date.

2. Negotiating prices. Never, ever, negotiate price. Doing so devalues your product or service in the eyes of the customer. If you give into a customer on price, the customer will wonder a) if the the price was actually too high to begin with, and b) how much lower could the price go with further negotiation. If a customer objects to price, negotiate on features or other deliverables to fit the total cost into the customer’s budget. Always make sure the customer understands your value proposition.

Will Limkemann

www.siquagroup.com

3. Raising

Summer jobs

This promises to be a tough summer for teens and college students to get jobs, which may be leading some into entrepreneurship. See this Wall Street Journal article.

Will Limkemann

Health Care Burden on Small Businesses

An article in today’s Cleveland Plain Dealer revealed the results of a random survey of 300 Ohio small businesses. According to the story, 69% of the businesses offer no health insurance at all, while 77% of the remaining companies are struggling to provide it. Businesses are rightfully concerned about the steep rise in insurance costs from year to year triggered by a combination of the outrageous costs of prescription medication and the ever-continuing costs of hospitalization and doctor care.

It’s no wonder that 73% of the surveyed businesses believe that health-care reform is needed to get the economy back on track. I only hope that congress and the administration can come up with a creative plan that will justly provide health care to all Americans – without further burdening small businesses.

Will Limkemann
Siqua Group Limited

Ethics and the small business

Many of us have been disturbed by the apparent lack of ethics displayed by some leaders of large financial firms during the past few months. Which has led me to wonder about how concerned small businesses can and should be about ethics in their organizations.

Every day we make decisions, large and small, based upon our individual values. To make sure employees align with the values of the owners and leaders of small companies, and to help them do the right thing, businesses should consider creating codes of ethics. Here some things to consider:

1. List your core operating values. Limit the list to ten or fewer to ensure you can remember them, and reflect on them daily. Keep them posted as a reminder to you and your staff. Examples of core operating values held by some organizations are: recommending only the services or products the customer truly needs; honestly informing customers about products you stock; invoicing a customer only for the products and services provided; giving back to the community.

2. Create a policy statement. Define your philosophy on ethical business conduct. Create a statement that includes your operating values and calls for all employees to uphold those values every day in the services they provide for your customers.

3. Train your staff. Review the values you expect your business to embrace. Discuss performance actions that meet those values. Talk about situations that may challenge those values and how to handle them.

4. Evaluate how well your procedures support your values. Do your advertising and business documents reflect your values? Policies should be up front, clear, and concise. Your procedures for hiring and disciplining employees, hiring contractors, and working with suppliers should also reflect your code of ethics.

Once you’ve created a Code of Ethics, you must hold yourself, employees, vendors, and subcontractors accountable. Behaviour upholding company values should be applauded. Behaviour that detracts requires further training, guidance, or disciplinary action. Let your company’s code help you to balance the quest for profit and growth with fair, honest treatment and stellar customer service.

Winds of change: economics of wind power

After reading my blog from 4/16/09, a colleague who consults in the wind energy business informed me that the 75 ton weight I mentioned doesn’t come close to the weight of the 2 to 3 megawatt wind turbines which, he tells me, can weigh up to 1000 tons!

He also expressed concern about failure of major components. Over the lifetime of a wind turbine, maintenance and repair can add about 20% over the initial construction and installation cost. He assured me, however, that improvements are being made to increase the reliability of components such as gear boxed.

Will Limkemann

www.siqualtd.com

Wind of Change: The economics of wind power

Wind is a clean, natural, and inexhaustible power source providing an increasing amount of electricity around the globe. While environmentalists have voiced concerns about the effects of large wind turbines on bird and bat populations, and there have been outcries over the aesthetics of wind farms, the carbon-free power source is having a positive economic impact where the farms are being built, and where turbines are manufactured. But, because of the huge capital investments required, the full potential may not be realized for some time to come.

Like the auto industry, the wind turbine industry is dominated by a handful of major manufacturers, such as GE, which depend upon a myriad of small companies to supply the many parts that go into an electricity-generating wind turbine. From afar, the windmills, which I’m told can weigh up to 75 tons, don’t look that complex, but these huge machines include not only the visible spinning blades but gearboxes, generators, computers, controls, frames and much more. All the pieces and parts need to be made by specialist manufacturers.

Consider, for example, Cardinal Fastener, a Cleveland-area company visited in January by President Obama. Cardinal makes the large nuts and bolts needed to hold together enormous parts. It is but one of dozens of companies that supply GE its competitors.

As important a role as wind power is playing, isn’t it also subject to the same financial pressures felt by most other industries today? It’s not immune. Consider again Cardinal Fastener. Shortly after the president’s visit, Cardinal announced it was laying off 12% of its workforce because orders from traditional large equipment manufacturers, such as Caterpillar, as well as wind turbine manufacturers had slowed. Cardinal later applied for a loan from the State of Ohio which it received early this month and will rehire laid-off workers and add about 20 people to its staff.

With investments of up to $3.5 million needed for each installed wind turbine, access to capital is crucial to new wind farm installations. Yet some economically distressed areas are considering harnessing wind power as a way of creating jobs and increasing the tax base. The Lorain, Ohio, city council just this week announced that it is supporting the erection of a 13 turbine wind farm in Lake Erie just north of the city. To make this project happen, it has applied for a $9.8 million grant from Ohio. The nearby Village of Sheffield Lake earlier announced plans to build a land-based wind farm for which the city has applied for $14 million of federal stimulus money. Many jobs will be created during the construction and installation phase and additional people will be needed to monitor and maintain the wind-powered generators.

If sufficient federal stimulus money and private investment is available the industry should take off. Not only is Cardinal hiring, but the Detroit News recently announced that a new wind turbine assembly plant in the suburb, Novi, will hire 250 people. It said this is one of about two dozen Michigan plants in the wind turbine manufacturing food chain.

A surprising, to me, aspect of the wind economy is its effect on tourism. The conventional wisdom has been that wind farms would be detrimental to tourism. However, a 2007 study done by researchers at the Strom Thurmond Institute of Clemson University suggests that wind-farms actually can draw tourists and predicts that a proposed wind farm off the coast of South Carolina could result in annual revenue of $500,000 from tourism. It stated that the wind farm in Palm Springs California draws about 12,000 tourists each year, and areas of Scotland and Denmark with wind farms have seen up to a 25% increase in tourism.

While the full future economic impact of wind generation is probably yet a bit fuzzy, there’s no doubt of the importance and significance wind power and other renewable energy sources will have. There is a lot of room for growth, as wind-power contributes only one percent of electric energy generated in the United States.