Category Archives: Growing a Business

The 6 Most Expensive Words in Business

Advice, Business Mistakes, Growing a Business, Planning Fundamentals,

I saw this on Twitter yesterday, posted by Meghan Biro:

Remember that the six most expensive words in business are: “We’ve always done it that way.”–Catherine DeVrye

She makes a good point. In my 30+ years in business I’ve seen way too much of “we’ve always done it that way” and I’d like to think (maybe I’m kidding myself) I’ve hated that phrase since the very first time (in 1971) that I encountered it. In accounting and bookkeeping, marketing, product development, it’s widespread. That’s no reason to do anything.

And there’s also an important corollary: just because something didn’t work three years ago is no reason to not try it again.  

Always is almost always a suspect word. Things change.

Relationship Cluelessness Celebration Day

Entrepreneurship, Growing a Business, Starting a Business

What's wrong with this picture? Or maybe I should ask how many different things are wrong with it?

I read about Spouse 2.0 day in the New York Times. No, it's not a joke. The Times says:

To celebrate, founders are asked to buy their significant others a gift, then post to their blogs or Twitter streams about it, using the “Spouse 2.0″ tag. The stories will be collected on the project’s Website.

And it gets even better … the piece quotes one of the founders saying:

… leaving the blackberry outside the bedroom is an option on Spouse 2.0 Day.

Is it just me, or is this hilarious? Show her you really love her by putting it into a 140-character text on Twitter. So does a blog post mean more love than a tweet on Twitter? And don't forget to tag your post with the Spouse 2.0 tag. And maybe even — just an option — turn off the BlackBerry. What a great idea!

And, of course, in this imaginary world of startup geeks, all spouses are wives (look at the font and color), and the wives run the "other" startup, which is presumably the real world, like home and children. No stereotypes here, right? No women running startups, nor husbands running homes and children of course, and no working couples sharing the work and the children. It boggles the mind.

And speaking of stereotypes, where does it say that all Web 2.0 startup people are clueless about everything else? I didn't get that email. It was probably spam.

I knew an emergency room doctor who told me he once treated a man injured on Valentine's Day by having been bashed over the head by his wife with the vacuum cleaner he'd given her as a present. And I once heard a supposed parenting expert advise parents to turn the television sound lower during family dinner. What those two anecdotes have in common with Spouse 2.0 day is called CDD: clue deficit disorder.

If you're tempted even for a split second to take Spouse 2.0 day seriously, then you're suffering from CDD. Wake up.

About Marketing Yourself

Growing a Business, Marketing, Reflections

Marketing yourself requires an abandon that’s hard to get right. Have you ever read the one about "sing like nobody’s listening" or "dance like nobody is watching?" Do you get my point? When I lived in Mexico City, an ex-brother-in-law taught me that the secret to getting the Mexican grito — that’s that whooping shout that goes with certain Mexican songs — right was a total lack of self consciousness. That’s true for marketing yourself.

Oh, he also recommended a good dose of tequila too, but that’s just for that grito analogy, not for marketing yourself.

For Great ROI, Sell More to Existing Customers

Growing a Business

That — the title to this post — might seem obvious, but we forget so easily, as we struggle to grow the business, and especially as we contemplate an economic downturn (free-fall?). The best ROI is selling more per customer to existing customers.

I think I learned this first back 15-20 years ago when I was working a lot with U.S. computer dealers, before the Internet took off, when many of the smaller home-grown resellers were getting squeezed by the growth of the office superstores.

It turned out, as we studied the situation, that they were leaving lots of money on the table, not taking care of existing customers. For example, one of the best promotions I ever saw was a smaller store getting back to all of its customers and offering them memory upgrades and hard disk upgrades as a special sale. It was an instant bottom line boost.

I was reminded of this last week by a post on Seth Godin’s blog, The magic of low-hanging fruit. Here’s a quote:

Simple example: It’s way more profitable to encourage each of your existing customers to spend $3 than it is to get a stranger to spend $300. It’s also more effective to get the 80% of your customer service people that are average to be a little better than it is to get the amazing ones to be better still.

Yes. And, particularly in a recession, it’s really good business.

Reminder: Good Retailing Still Works

Growing a Business, Marketing

We were walking around Granada last week, enjoying some free time, waiting an hour or so for it to be supper time, when we came across a store selling beautifully wrapped and packaged and classified and marketed and displayed chocolates. Here’s an iPhone picture:

And I apologize, it’s not a great picture but it was a bit on the sly since the owner (I can’t image why) was nervous about this strange man taking pictures with his cellphone. I’m not adding name or address or much detail, out of respect for his wishes.

It was a reminder to me about how important design and presentation are in retail sales. You wanted to grab and hold the very well wrapped and categorized packages. The chocolates were segmented very well into types, styles, tastes, and, in a way that seemed to work very well, gift and occasion types.

Well done!

5 Ways to Generate Healthy Change

Growing a Business, Marketing

In a thoughtful post on Duct Tape Marketing today, John Jantsch offers an answer to an important question: "How do I grow my business?" He titles that "The Ultimate Secret to Business Growth."

I talk to business owners every day that want to take their businesses to the next level, but are puzzled as to why its so hard. They push and work and expand and contract only to find themselves right back where they found themselves last year.

This leads him to recommend change.

Change is the ultimate secret to business growth. Actually change isn’t that hard, but we seem wired to find ways to make it so.

It is sort of a paradox in business too. To get to some level of growth, you’ve got to be consistent long enough to develop some positive brand awareness, to move past that level, you’ve got to change what got you there.

The first change that may be necessary for growth is to start looking at change as a positive element of your success.

Which takes him to a list of five recommendations:

    1. Get Uncomfortable on Purpose! – Your wealth, your success, will correspond directly with the size of your mindset. Get in front of an audience and speak, write for an industry publication, start blogging, network with prospects, write personal thank you notes.
    2. Get and Give New Skills – Read everything you put your hands on. Become known in your industry for some specific expertise and show others how to do it. Teaching something is the fastest way to get better at it yourself.
    3. Get Bigger Ideas – Tear your products and services apart. Look for ways to approach an industry problem like no one else can or will. Your ideas don’t have to really be that big as long as they are world altering. Come up with one idea this year that makes someone say you are nuts – and then go do it.
    4. Get Value – No matter what you offer, it can be better. Heap more and more on your products and services, give stuff that no one expected you to give. Add services over and above what was agreed upon. Force people to talk about how incredible you are.
    5. Get What You’re Worth – If you do any of the steps above, you will be more able to do this. Raise your prices. Choose to work with fewer clients at much higher rates. Sell based on value, not on time.

He finishes that piece with a question: "How do you systematically embrace change?"

Two Essentials for Kick-starting a Planning Process

Business Planning, Growing a Business

Last week I met with two smart people looking to kick-start a better planning process for an existing organization. The question at hand was what to do first. My answer was:

  1. First, start  by scheduling plan reviews and course corrections. Figure out who’s participating how and when. Assume this means a 90-minute monthly meeting for the key management team, and a 2-3 hour thrice yearly meeting for upper management and board of directors. Modify that as needed to accommodate the unique characteristics of your organization. Put the meetings on the calendar. 

  2. Second, develop metrics. The planning needs metrics to drive it, so people can track how they’re doing and refer back to the plan as the performance guideline.

Notice that my two key points are not about the plan: not about its content, its format, its framework, or facilitation, or how long it is or isn’t.

These are actually the planning equivalent to the gardening concept of preparing the soil before you plant. Don’t waste seeds if they aren’t going to grow. And, regardless of what will be the content of the plan, eventually, with these two points you work first to make sure, at least as much as you can, that there will be following up so the plan will make a difference.

It’s a reminder to me how much of the success of planning is about the people rather than the plan. People love to work with metrics to show their performance. And people care more about following up on plans when they know that somebody will be reviewing the results.

This Startup Story is 10 Years Old This Week

Business Stories, Growing a Business

This is a true story. It’s about how doing one thing well and sticking with it worked. Over 10 years, the Small Business Advocate radio show has grown from Jim Blasingame’s own certainty, in the beginning, that it was needed and that he could do it, to an established personal brand.

My first experience with Jim Blasingame was at 5:30 in a very cold dark and rainy morning in January of 1998. The Small Business Advocate show was barely two months old. Jim made a radio interview fun, easy, and worth doing.  I decided right then that Jim is a natural interviewer. He’s friendly, he’s smart, he knows his stuff and he knows your stuff, and he knows the world of small business and the people in it.Jimblasingame

So I started regular early morning radio visits. A natural interviewer makes an easy radio session. We always covered topics I cared about, mostly business planning, but also starting a business, growing a business, and working with family members in small business. He invited me to join his group of experts (he calls it brain trust). He also archives a lot of his shows, meaning tons of good content, and also several interviews with me.

Palo Alto Software became a sponsor soon afterwards. I told my marketing people that "this guy" is good, and he works hard, and he’s going to make it. We put our money behind that and decided to sponsor the show. We were the first sponsor, but hardly the most important. As Jim continued to do a good show five days a week and 52 weeks a year, he grew. Fortune Small Business named put him on a short list of the most influential journalists in U.S. small business. The SBA named him journalist of the year. IBM became a sponsor, and several other larger companies followed. Last September the national Association of Small Business Development Centers (ASBDC) asked him to introduce keynote speaker Stephen Covey.

This week Jim celebrates the 10th anniversary of the Small Business Advocate show, and his story and my congratulations belong here at Planning Startups Stories. Jim’s is a great story and a successful startup. He saw a need and he jumped into it. I’ve kept up with him about every month over these 10 years and I know that his steady rise has been a matter of a whole lot of hard work for a long time. Step by step he managed to first break even, then, slowly, build the revenue stream to the point he is now, making a comfortable living for himself and three other employees, and still growing.

Well done!

The Planning Process 10%

Business Planning, Growing a Business, Planning Fundamentals, Planning Process

Picture yourself in front of a group of 20-30 business owners. They are computer or software resellers, dealers of Progress Software, Autodesk, SolidWorks, or a personal computer manufacturer. They are mostly men in their 40s and 50s. Most of them have been in business for themselves for 10-20 years. Most of them have three or more employees, a few have 25, 50, and one or two 100.

If you ask this group how many of them regularly review their business plans and revise them as needed, roughly 10% of them will raise their hands.

You can explore the details in front of the group. The ones who regularly review their business plans will be the stronger and healthier businesses in the group. If they’ve been around for a while, they’ll be the ones with more employees and more market share. If they’re younger and newer companies, they’ll be the ones with more growth.

You want actual data, numbers, and better yet, names? Yeah, me too. I wish I’d done that but it was enough to run full-day planning seminars, each one took a lot of energy, and there just wasn’t enough bandwidth for me to be managing the seminars and populating a database at the same time.

What I will give you, though, is accumulated experience. When I run one of these seminars I can count on my 10% number enough to take the risk of setting myself up in front of the group, at the beginning of the day, with those people as leaders. Throughout the day I can call on them confidently for comments and details and anecdotes, and they’ll have the right kind of useful responses.

These people are my stars. They don’t all plan the same way, they don’t all have the same process, but they do have process. I can count on them. They get it. Timseminarsmalldropshadow

Here’s a concrete example: during part of the seminar I want to illustrate the paradoxes of planning, say "business plans are always wrong." I have my two or three stars in the room and I can be sure of getting a useful response from one of them when I deal with this issue for the group. I’ll ask, "Ralph, Mabel, Mary … what do you say? Why do I say that?" And I’ll get back a response about how they’re wrong because assumptions change, which is why plans need to be kept alive and managed. Or they’ll say something like that.

I don’t like to blithely take risks when I’m in front of a group. This 10% rule, however, has worked consistently for me for years. Now, I realize having a set of numbers to display would be stronger than my anecdotal evidence, but then, so many sets of numbers are flawed anyhow, and give the wrong impression. My people in the seminar aren’t a random sample by any means, so the numbers wouldn’t be statistically valid anyhow.

So who are these people? Starting in the 1980s I did some seminars for Apple Computer dealers in Latin America, and then in the 90s in Japan and Singapore, then HP dealers in different places, then Data General, UNISYS, and more recently for dealers of Autodesk, SolidWorks, and Progress Software.

Does this same 10% apply for other industries? I can’t be sure that my anecdotal data applies; but I’ll bet it does.

— Tim

Put Your Video Pitch Online

Entrepreneurship, Growing a Business, Starting a Business

What do religious conviction and the awareness of liabilities have to do with entrepreneurship? They’re key to being a successful entrepreneur, according to Vinod Khosla, formerly a General Partner at Kleiner Perkins, and founder of Sun Microsystems.

I’ve been browsing through the entrepreneurship channel at vator.tv, a very interesting new site offering a collection of video pitches and a forum for posting your own pitch.

Take a couple of minutes (literally, two minutes) to watch Khosla’s summary of entrepreneurship success, or Bob Grady’s two minutes. Then browse through the video pitches. Vator is running contests for several categories.

Vatortv
 

I’ve been looking forward to a site like this. It was just a matter of time.

— Tim