Archive for the ‘small business’ Category

Common Traits of Successful Small Business Leaders

October 15, 2016

While four out of five start-ups fail within five years, successful entrepreneurs often have common traits or habits.

Our company, Information Strategies, Inc., recently asked more than 100 presidents, experts, and advisors to contribute to our new book, RECALCULATING.  Among the things we asked were their thoughts on what were the traits they found most common to their success.

The results surprised some when they heard them, but after reflection seem logical.

Among them were:

  • Passion and commitment
  • Understanding the importance of customer service
  • Attention to the bottom-line
  • Choosing the right employees and partners
  • Ability to bounce back from adversity
  • Balancing work/life commitment

Let’s examine each in turn.

Passion and Commitment: This was the most cited factor in their success quotient.  From JD Powers to Marcus Lemonis almost all contributors felt it was most important to successful leadership.  Without these two ingredients, any effort to lead a successful operation falls flat.  Without passion and commitment and the ability to communicate this to staff, customers and partners, little can be accomplished especially in a company’s first years.

Customer Service: Despite the headlong rush into online media, companies still need to establish trust between buyer and seller.  As John Sculley said: “Customer focused marketing is one of key factors in small business success.  Consumers talk, listen to, search out and ultimately comment to others.  Small business leaders must also have a curious and open mind focused on the customer.  To be truly successful.”

Attention to the Bottom-Line: A majority of failing businesses do so because they do not focus on finances.  Mike Kotsis CEO, GPS for Small Business argues “no issue is more important than the one so many entrepreneurs and business owners fall short of mastering, that of being focused.”  He and others feel many entrepreneurs do not realize the importance of insuring there is enough monies in hand to keep the company going.

Choosing the Right People: Marcus Lemonis put it simply. “Hire the right people who are smarter than you and can balance whatever weak points you may have.”  Almost all leaders said they did not succeed without the help of committed employees.  The right partners are a positive reflection and extension of your business; they can further your success.

Overcoming Adversity: Many of our respondents agreed with Winston Churchill’s  who said his success came after a series of failures.  Adversity hits all companies in one form or another.  How the organization and especially its leaders deal with those setbacks is a key factor in long term viability.  As many people say: “When life deals you lemons, make lemonade.”

Balancing Life/Work: Perhaps the most difficult factor affecting small business leaders and employees is stress.  Many entrepreneurial leaders are committed 24/7 to their businesses.  As a result, they also put added pressure on their staffs.  One of the key elements of success is learning to balance work/life experiences.  This was the conclusion of most of our contributors.

Readers can learn more about these and other aspects of leading a small business in our new book, RECALCULATING, 97+ Experts On Driving Small Business Growth. It is available from Amazon, Barnes & Noble or wherever good books are sold.

 

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Flex, Remote Workers — Should Your Business Be Using Them

July 17, 2016

When JetBlue Airways Corporation first launched, many if not most of its reservation personnel operated from their own homes.

This highly successful approach reduced start-up costs and worked until more centralized operations were installed as it grew much larger.

For years the typical worker sat at a desk under the watchful eyes of a manager. But much like Jet Blue’s initial workforce, tomorrow’s employee may be miles away working in their home and/or not the standard Monday through Friday 9 am to 5 pm schedule.

While the jury is still out as to the overall effectiveness from such an approach, there are compelling reasons companies are considering flex and/or remote workers.

  • Bigger, more diverse pool of talent for a larger geographic area to choose from
  • No need to relocate employee
  • Less time commuting leads to fuller work days
  • Happier workers, reduces attrition and enhances quality of work
  • Accommodating a worker’s schedule nurtures loyalty and increase productivity
  • May not have to pay benefits, if not full-time jobs
  • Provides ability to adapt to seasonal, cyclical, and growth needs of the business
  • Workers spend more time working, less time commuting
  • Save money: real estate, parking, capital to run the business, etc.

Employees benefit in some of the following ways:

  • Flexible schedule: not everyone is productive during the same time of day, this allows them to work the hours they prefer and/or what fits their lifestyle
  • Saving money: commuting expenses, out-of-home meals, work wardrobe, child- and/or elder-care
  • Feel more in control of work life
  • Way to keep working while balancing other commitments
  • Less exposure to others’ illnesses and sick days off
  • Fewer days off for personal reasons such as errands, deliveries, appointments
  • Fewer office politics to deal with
  • Limiting in-person contact causes employees to make the most of their time on conference calls and in meetings
  • Inspiration to others seeking work

No matter how one feels about these matters, some clear trends are emerging that should be considered by leaders of all sizes.  They include:

  • Job sharing and telecommuting is on the rise
  • At-home employees continue to rise
  • Most organizations are not monitoring their ROI when it comes to flexible work
  • Moving full-time positions to non-full-time workers (contingent workers)
  • Online communities developing to support these types of workers
  • Millennials are the largest generation in the work force; they prefer to telecommute ad flexible work options
  • Flexible work positively impacts health, providing more time to exercise

Mitigating against these trends are:

  • Not all employees adjust well to remote or flexible work
  • It is harder to mentor and train remote and flexible workers
  • Company culture may weaken because personal relationships and contact between staff members is limited
  • Harder to schedule in-person meetings with a group
  • Communication becomes primarily digital, losing the body language communication can lead to communication being strained and miss-communications via email and text
  • Workers may feel more isolated
  • People who tend to overwork may struggle with work/life balance if working at home
  • Need for worker to have at-home dedicated work space suitable for their personal productivity
  • Technological issues are more detrimental and can isolate remote employees
  • Workers’ comp and other liability issues can be associate with remote work
  • Remote work can also be a way to avoid third-party child- or elder-care costs, causing less productivity
  • Lack of interactive feedback may lead to less creative ideas and brainstorming

 

Company leaders should consider all of these factors when thinking about future employment practices for their organizations.

There may be different answers for different companies. Find the best answer for your company.

What’s In A Personal Company Name? A Lot Of Goodwill, Value

February 13, 2016

Another American business name icon is going by the boards.

The venerable publishing company McGraw-Hill will cease to exist this spring.

After its next board meeting the company will be known as Standard & Poor’s.

For almost a century McGraw-Hill publishing was noted for providing information across a broad spectrum of industrial sectors.

Its name bespoke of integrity and honesty. Not the least for its rating services under the Standard & Poor’s name, known to most of us as S&P.

All of the publishing units, including Business Week and Aviation Week are gone.

S&P is under siege for its role in the financial meltdown.

McGraw-Hill is the latest of many companies in today’s world abandoning their founders’ name for different titles.

A recent analyst done by Information Strategies, Inc. (ISI) revealed this is a growing trend.

But there are lessons to be learned by small- and medium-size businesses from this trend. In a famous speech Harold McGraw Jr. once estimated his name on the door was worth ten dollars of the firm’s stock price.

So too is a person’s name on the company worth money. They include:

  1. It meant something to consumers that someone stood behind the company’s offerings.
  2. A personal name forged a bond between seller and buyer.
  3. In today’s world it is easier to get a unique internet domain name.
  4. Adding a son or daughter meant longevity.
  5. Going world-wide eliminated any offensive connotation in other languages.
  6. Your company appears affordable.
  7. Makes your company transparent and personal; available to respond to your client’s needs.
  8. Can be memorable: if people can remember your business name, they can remember you name and vice-versa.

Choosing a personal name can jump start a company in any sector.

Bear this in mind when choosing a name for your company.

Small- and Medium-Business Employee Healthcare Insurance: Yes Or No

September 11, 2015

Shock waves are hitting a majority of smaller businesses receiving notices about the premiums due for employee healthcare insurance policies in 2016.
The new rates exceed 20% for many enterprises based on surveys done by Information Strategies, Inc. and other organizations.
An average 23% increases were reported in ISI’s survey of 233 randomly selected businesses under 50 employees. Other soundings surfaced similar increases ranging from 19% to 24%. One respondent reported a 49% increase.
Many companies are pondering alternatives such as providing stipends in lieu of benefits, increasing deductibles, reducing coverage to the minimums required by the Accountable Care Act (ACA), or doing away with any coverage.
For companies with under 50 employees, this last alternative does not involve government sanctions.
Organizations with 100 or more employees have weighty penalties for abandoning employee healthcare insurance.
Perhaps hardest hit are enterprises with 51-99 employees who are seeing massive increases in healthcare insurance premiums.
During the past two years, companies have held down premium costs by shifting the burden to employees either through higher deductibles, increasing the percentage paid by employees, or trimming benefits.
Most of these savings have been wrung out and there are few other alternatives.
While last year, only 6% of respondents said they were considering eliminating healthcare insurance benefits (believed important for employee recruiting and retention), in 2015 the number more than doubled to 13% in ISI’s survey and two other surveys reviewed.
Here are two ways small businesses can attack the cost hurdle.
The first involves a government program offering subsidies to smaller enterprises. This program is complicated and less than 100,000 companies have attempted to use it. The program is called the Small Business Healthcare Options.
The second involves setting up a private exchange enabling employees to purchase individual policies and obtain government subsidies under the ACA.
It has been reported that such programs can save companies significant dollars while providing individually tailored healthcare insurance. To learn more about this approach small business leaders can go to HealthMarkets.com.
If you know of other alternatives, please share them.
No matter what course of action is taken for 2016, small- and medium-businesses can expect 2017 premium rates will be higher.

Warning Signals Abound; Are Small Business Leaders Listening?

May 22, 2015

When Staples opened its first store, stationary establishments were amongst the most profitable retail operations in America.

Within 15 years they were losing money and have almost disappeared from most shopping areas.

For those owners who did not heed the warnings blared at them by their fellow owners and trade press at the time they lost everything.

It is no different in today’s rapidly changing world.

As consumers and business purchasers change their buying habits, many small-and medium-size businesses are getting left behind.

Therefore it is important that even the most successful small business leader should take lessons from birds.

A recent study of wild birds found that different species learn the warning calls of other forest creatures.

Moreover, they learn what the calls mean and if the predator can be targeting them.

The landscape is evolving quickly and even the most mundane small business will be affected.

There are many venues preaching the need for change.

They are the distant drumbeats warning of danger to profits that can’t be ignored.

However, for many managers buried in day-to-day activities these warning signals are not being heard.

Only when the threat of a new technology approach becomes immediate is action taken.

By then it may be too late.

Warning calls are all about us, it is important to hear, heed them.

In business there is a need to be familiar not only with one’s industry and competitors but other sectors.

Then too, economic, social, and financial trends also affect any small businesses.

When the economy shrinks, some small businesses are affected to a greater extent than others.

Likewise, as the economy expands, some small businesses are negatively impacted.

For an individual small business the first warnings signs come when customers stop reordering; phone calls are ignored; products are returned; store traffic slows; etc.

When this happens, it is important to listen to:

* Customers

* Suppliers

* Employees

* Other industry participants

* Trade press

* Family/friends

What is heard may shock, but it is the key to learning.

Today, small business leaders need to learn quickly or get left behind.

Keys To Small Business Success

April 25, 2015

Keep innovating, choose good staff and watch cash flow are the three most repeated keys to success gleaned over the years from successful entrepreneurs.

Consistently, when successful entrepreneurs and business executives are asked to tell small business leaders what they consider most important three traits these are cited most often.

For instance, John Sculley, the former Apple CEO, even wrote a book arguing small business leaders must constantly strive to stay innovative.

“Don’t become comfortable in your niche. There are always people coming up with new ways of doing what a company is based on,” he said in a recent interview on our Small Business Digest radio program.

Likewise, Jim Fowler, who created and sold Sawbuck to Salesforce for more than $1 billion thought focusing on finding the right people was important along with managing cash.

Other successful entrepreneurs almost always mention cash management as the cornerstone of success.

Despite this constant mention of these three key components, small leaders often ignore them.

They focus on the product and/or immediate sales. Which they rightly should. But even the most successful small business can be destroyed if they are not aware of how innovation from other entrepreneurs can damage their enterprise.

One reason is this revolution in technology is making innovation possible for very little cost.

In today’s world, technology allows start-ups to focus on the product/service with much of the infrastructure easily obtainable and managed.

Given that much of infrastructure management is now in the clouds, small business leaders should stay focused on innovation.

It is not enough to have a successful product/service, he or she needs be aware of what, where, and how their company could be in danger.

Here are some way of keeping ahead of the curve:

  • Listen to what customers are saying
  • Talk to buyers who are no longer buying
  • Stay abreast of technological changes that may affect the company
  • Review pricing, marketing, sales strategies at least once-a-year
  • Hear when staff report on potential clouds/issues
  • Take a break from day-to-day routines and ask what is happening outside the company
  • Put aside monies for possible lean years Invite in others with ideas for the company to share them

The world always changes but right now it is evolving at an unbelievable pace and small business leaders should not be content with the status quo.

Share with us what you are doing to succeed in your business.

Small Businesses Need To Utilize Their Best Advantage, Personal Relationships

March 29, 2015

Most small businesses grow through their personal relationships.

Despite being closer to their customers/clients small businesses often fail to use this advantage effectively.

At the same time and unhappily, more and more in the Internet age they are sacrificing their ability to apply the personal touch.

Everyone agrees it is critical to be on the web, have social media contact, market effectively online, and devote resources to all things electronic.

However, it is equally as important to maintain an individual relationship with current and potential customers/clients.

A small business can easily identify if it is truly touching its audience by asking three simple questions.

  1. When was the last time a staff member orally spoke with a current/potential purchaser?
  2. When was the last time a current/potential customer was asked his or her needs?
  3. When was a problem brought to the company’s attention and resolved personally?

Let’s discuss each of these questions individually.

People still like to talk to someone: Much of today’s businesses (B2B, consumer) is transacted on the Internet.  But the Internet is really a barrier to true communication because it prevents direct interaction and those interactions skew negative without tone and body language. A sales pitch can be made over the Internet but if the customer says “no” the only recourse is another online exchange.

There is a sales adage: “The sale begins when the customer says no.” Personal interaction elicits the reasons for declining and allows these objections to be overcome. An existing customer has already proven his or her interest in the company’s offering. Talking with them can lead to additional sale, maintaining the relationship, or a word of mouth endorsement.

People always have needs but are seldom asked what they are: A call asking them simple questions such as: How do you like our product or service? What does it not provide for you? What other needs are not being fulfilled? All can reinforce the relationship and provide valuable feedback. The key reason for doing this exercise is reinforce the personal side of doing business. Smaller companies can implement this process better than larger counterparts given their finite customer list and ability to deploy staff members who have already dealt with customers, in many cases.  Regardless of your business size, test with a few familiar customers first and then work your way from your largest to smallest customers.

Small businesses have more flexibility in solving problems: People hate hearing their problems need to be resolved by higher authorities. Often small businesses solve problems on the spot because of shorter management levels: Making the customer happier by quickly addressing issues whether it is in their favor or not usually means they remain loyal. Problems should be looked on as opportunities to interact with a disgruntled purchaser. Verbal communications often surfaces other issues and sometimes gems of knowledge.

The Internet is an important media but so is oral communication. Don’t lose touch with the customer. They are the lifeblood of the company.  Get in touch with your current customers today.

Are You Running On Empty?

February 9, 2015

Many small business leaders started the new year with a burst of renewed energy and purpose.

As the economy has recovered, there is strong evidence this year’s activities have been particularly active. And it is borne out this year by some respected surveys.

But the downside of this is that these efforts can negatively affect management later in the year.

While a year of activity is not long, it can be exhausting, especially after five years of difficult struggles.

Therefore it important that senior managers pace themselves.

Let’s look at the broader picture.

Two studies conducted by Information Strategies, Inc., done 10 years apart, found small businesses:

* Tend to hire most in the first and fourth quarters.

* Start new campaigns, products, equipment purchasing, IT upgrades in the first quarter.

* Ignore, put off solving minor problems that become big situations later in the year.

Like their corporate brethren, in the first months of the year small business management is involved as new staff is added, marketing campaigns debuted, equipment purchased as well as other activities initiated.

These efforts are all to the good but there are reasons to pace new activities.

The most important reason may be that small business leaders get too busy and wear themselves out, according to experts.

In the rush to be proactive early in the year the following happens:

* Vital issues are sometimes not addressed properly;

* Management is distracted; and

* Problems are overlooked; and

* Most importantly, managers quickly become overworked.

This trend also sometimes lead to poor follow-through which affect the entire organization.

These include:

* Staff can’t absorb all the changes.

* Not all of the crucial elements are in place.

* Management has not spent enough time evaluating needs, applicants, etc.

* The desire “to just do something” takes hold within the organization.

Because management is a long-distance race, small business leaders should pace themselves.

Unfortunately, many small business leaders don’t.

One key element necessary to smart pacing is to carve out a work/life plan.

Experts in this area see as a tell-tale when coaching small business leaders.

One recent survey by leading travel card found that 93% of small business leaders had no set plans to vacation in 2015. The most frequent answer given “when there is a lull time for the company.” This compares with 51% of corporate managers have vacation periods already set.

Another example is the antidotal evidence of coaches that more admitted management mistakes are made in the fourth quarter than at any other time.

The lesson to be learned: small business managers need to look at the entire year and learn it is a marathon and not just a day-to-day race.

Many Pluses For Small Businesses In 2015

January 10, 2015

Unlike the previous five year turns, 2015 promises significant pluses for small businesses.
Perhaps the most important is reduced energy costs. With oil trading at half the cost just six months ago two trends are already apparent.
While the energy component varies by industrial sector, economists expect a significant energy cost savings for most enterprises. Information Strategies, Inc. (ISI) estimates an average 7% cost reduction for most small businesses in all sectors.
The second trend comes from lower fuel costs for consumers. Economists predict the average American family will save $430 in the first six months of 2015. These savings will most likely be spent on non-basic items in the form of consumer goods and personal services which are purchased although smaller enterprises.
Adding to the plus side of year, interest rates are expected to remain low while the ability to borrow is expanding for small businesses. Increasingly, alternative lending sources for small businesses are coming online and ISI predicts this year will see a 15% gain in market share for these lenders. Large banks are expected to increase their lending to small businesses but not reach pre-recession levels in 2015.
Contributing to the brightening picture are signs of returning consumer confidence in the future which usually results in increased spending. However. this is not expected to have a significant impact until later in the year. Next year’s holiday shopping may be the most robust in six years.
As cloud services and smarter use of the Internet drive down costs and expands their sales opportunities, small businesses are expected to further benefit from the online revolution. This trend could fundamentally change how even the smallest enterprise conducts day-to-day operations.
At the least, it means average organizational management costs will decline in 2015 adding to profits.
After seven years of federal gridlock and despite media fears, Washington may at last be focusing on some of the key issues facing smaller enterprises. Legislation to ease some of the more egregious regulatory and tax impediments for small businesses may be addressed in the new Congress.
The average cost of regulatory compliance has gone up each of last five years. The coming year may see a decline in these costs.
In particular, some of the tax uncertainty for small business owners may be eased, if Republicans fulfill their post-election promises.
Finally, new business start-ups are expected to increase over 2014, which bodes well for the B2B marketplace, a prime driver for many smaller businesses.
There are clouds on the horizon but trends seem to be in place for a good year for small businesses.

Creative Ways Of Adding To Your Small Business’s Marketing Efforts

October 17, 2014

Adding A Company-Wide Approach To Grow Your Enterprise

In today’s difficult economic world, small business leaders can’t ignore the importance of a unified, integrated marketing effort that goes beyond direct sales and media efforts

While smaller enterprises are aligning their traditional marketing efforts, they often ignore every day company communications as channels to added sales, profits.

Encouraging employees to repeat the company mantra; act as brand ambassadors; identifying new communication channels; and building a unified persona will drive added sales.

At Information Strategies, Inc. (ISI) our surveys and reader feedback indicate a majority of small businesses concentrate on insuring the “look” and “feel” of online and offline marketing are complementary.

In these efforts the logo, type, message, and response mechanisms are often in sync and carefully match their targeted audiences.

Once they have aligned these efforts, we found many small businesses think of their marketing efforts as “totally integrated”. In short, they assume their marketing begins and ends with their online and offline efforts.

That is really not true!

An effective branding effort just starts there. By not extending the sales effort to other parts of the company that touches the public they are wasting precious resources and opportunities that can add to the profit picture.

Here are some ways of making these resources be part of the marketing solution:

  1. Customer service: Every day, employees are communicating with current or potential customers. In instance after instance, smaller enterprises who have turn these workers into an auxiliary sales force. To do this companies who have implemented training programs designed to make them aware of their role in the sales effort, What’s more, they have seen dramatic profit increases.
    Small businesses in particular can benefit from this approach because studies have shown their employees are more committed to the company’s immediate and long term success than counterparts in large corporations. Therefore, they are more willing to speak highly of the company and its offerings to the customers they interact with. Highlighting the need for this effort often falls on willing ears. Consider implementing some form of program to encourage these efforts. The results may astonish management.
  2. Bills and other forms of communication: Many small companies ignore the potential marketing inherent in the bills they send out. Credit card companies, banks, department stores include promotional materials in their monthly statements. Why can’t a small business do the same? Announce a forthcoming sale, new product, coupon in every bill. Once a year have a letter from the president about the state of the company and how appreciative it is of the customer’s business.
    Offer an incentive for referrals as well. By carefully weighing the package being sent to customers, there should be no additional mailing costs. Smaller companies who have taken this suggestion to heart have seen improved sales.
    Another often neglected sell channel is the company’s business card. Use it creatively to tell more about the company’s offerings.
  3. Be creative: We often run into unusual ways of gaining new customers. One local dry cleaner bought space on pizza boxes used by three local pizzerias. They were pleasantly surprised by the number of tomato sauce stained coupons they redeemed. To spur this creativity review every day interactions of a personal and/or business nature. The channels to reach potential new or departed customers will appear.

Social media is becoming more and more prevalent as a marketing tool. Take advantage of it but also remember it is as two-edge sword. Read negative comments carefully. They will tell management more than they might want to know. However, it will give it a gauge on how successfully its message is getting heard.

Above all, do not be satisfied with the marketing effort unless it includes the whole company’s efforts to sell and communicate with your customer.