Small Business Minute #71 – The One Thing

The One Thing-Money

In the movie City Slickers, Jack Palance’s character Curly and Billy Crystal’s character Mitch are riding along having a bonding moment, when Curly turns to Mitch and asks,

Curly: Do you know what the secret to life is?
Mitch: No What?
Curly : This! (As he holds up one finger)
Mitch: Your finger?
Curly: One thing. Just one thing. You stick to that and everything else don’t mean (expletive).
Mitch: That’s great, but what’s the one thing?
Curly: That’s what you gotta figure out

I’m always reminded of that scene whenever I ask my clients “What’s the number one thing every business needs in order to succeed?” Inevitably, I get a number of different answers that include reputation, a good product, good customer service, great staff, hard work and so on. Quite frankly they’re all wonderful valid answers and easily qualify within the top 5 items, but not what I consider the most important item. However, every once in a while, I get the answer I’m looking for, and that answer is, money!

Try doing anything without money

Money pays the rent, the staff, the new pc’s, product or service development, etc. It’s what keeps the lights on. Money affords you the opportunity to create great products or services. Money allows you to provide great customer service. Money allows you to provide a great work environment. Don’t believe me? Try doing anything in your business without money.

Generating profitable revenue, getting paid and controlling expenses are the key elements to getting money. Do enough of these you’re your bank account grows. I know this sounds pretty simplistic to many, but unfortunately, countless owners don’t get it. What I typical come across are owners spending their time on non-revenue generating activities. Although they’re busy, these activities are just a waste of time and are usually a substitute for doing the things that they should be doing, but don’t like doing, such as a prospecting, follow up calls or networking.

The thing is, the longer they put off doing the important stuff, the longer they’ll struggle. What they fail to realize is that they only have to do these uncomfortable tasks until such time as they can afford to hire someone else to do them. Therefore, it’s in their best interest to focus as much of their attention on generating as much profitable revenue as possible.

Other reasons for building a healthy bank balance is to avoid stress. Running a small business is full of stress and an opportunity to minimize the any of it, is welcomed. Having a healthy bank balance means not stressing over making payroll or paying your suppliers. Having money in your account means being able to take a regular paycheque.

Weather any storm

One of the biggest benefits to having money in the account, is being able to weather any form of revenue drought. Over the course of the 17 years I owned the Marketing Resource Group, we would inevitably have one month of the year where revenues would go to zero. Not just slow down, but really go to zero!

When it first happened, I remember getting very concerned wondering what the heck was going on. Had our service model run its course? Had our clients found another supplier? Had they found an alternative solution? It’s the kind of thing that could really ruin your day, week or month and keep you up at nights.

The first time it occurred was in January, I justified it by saying our clients are just a slow getting back into the swing of things following the Christmas holidays. The next year, it happened again, but this time in March. Once again, I was stressing over it. However, when revenue recovered the following month, I chalked it up to Spring Break distracting my clients. Year over year in continued to happen, but strangely never the same month. Fortunately, as time went on, it became a non event and I just accepted the fact that we would lose a month of revenue every year.

Maintain discipline

The upside of this, is that those quiet months would give us almost four weeks in which to get caught up on a ton of housekeeping activities that we couldn’t get done the rest of the year. Eventually, we actually, planned these activities for our down month. All this to say, that this is another luxury of having money in the account. We didn’t panic, or should I say I didn’t panic anymore. We didn’t rush out and change our strategy or desperately take on any old piece of business just to generate some cash. And we didn’t lay off anyone. We just kept doing what we had always done. We maintained our discipline in targeting those clients we wanted to do business with and with full confidence that the business would return to normal. You can’t do that when your account is empty.

I do recognize, that having money tempts us to get little careless and spend it on “nice to have, versus need to have” items. But those temptations are easier and less stressful to deal with, than having no money.

Curly might be right, that as individuals we each must find our own “one thing” but when it comes to owning a business, there is only one thing, and that’s money!

You may also enjoy Pricing For Profit

Copyright © Greg Weatherdon 2018

Sign up above to receive email notification of the latest update to this blog.

Get More Life Out Of Your Business

Posted in Business, Finance, Podcast | Tagged , , , , , , , , , , , , , | Leave a comment

SBM #70 – My Kodak Moment

SBM#70 My Kodak Moment

In its heyday, the Kodak company, used the following tag line in their advertising: “Make it a Kodak Moment!” This phrase was used when taking a picture of someone at a particular moment that will never be forgotten. It even made its way into everyday use to highlight anything good or embarrassing that happened to an individual, even when it wasn’t captured on film.

I’m sure we’ve all experienced our fair share of Kodak Moments in our lives, so I want to share one of mine that will be forever burned into my memory. It was an expensive sales lesson about being overly confident, that I’ll never forget.

This event unfolded when I had my first company, The Sales Support Company. As a quick backgrounder, we provided retail merchandising services for the major consumer packaged goods companies, whereby we performed a myriad of services for our clients that ranged from new product introductions to regular sales coverage and even in-store display building.

Camera of choice

This last item, in-store display building usually required us to take a picture of each display as proof of performance. This was a pretty common practice in those days and these photos would ultimately be submitted to the client. Like pretty much everyone in the industry, our camera of choice was Polaroid. It’s ability to produce an instant picture that could be immediately catalogued with all the necessary information made it attractive unlike traditional film which required waiting until the whole roll was used and then developed.

Although we had a pretty impressive roster of clients, most of which were global players, we still wanted more. One such prospect was the Kodak Company, which at the time was one of the worlds largest photographic film companies. When you consider that in those days film was sold in thousands upon thousands of retailers that ranged from the local corner store to department stores. This was an ideal client for our services.

Over a number of years, I had tried multiple times to get an appointment with their senior sales personnel only to be rebuffed. However, over time, we did manage to execute a few small regional projects but certainly not on the scale we had hoped. These small projects had happened only because we had developed a working relationship with the local sales representative. Over time though, the impact of our performance on these small projects began to get noticed at higher levels of the organization.

Perseverance

As luck or perseverance would have it, we were finally invited into the inner sanctum of Kodak’s head office to pitch our services. This was monumental. For the record, Kodak was a very conservative company and for them to even contemplate outsourcing some of their retail sales/merchandising services was enormous opportunity.

I don’t quite remember how many hours I had put in preparing for the presentation, but I do know it was significant. Aside from the general overview of our company, I also prepared summaries of performance with other similar sized organizations as well as a summary of our performance on the numerous small Kodak initiatives. The time spent on this was well worth it, as it could result in a six or seven figure annual contract.

At this point in the company’s evolution, we were no longer trying to prove our concept, as we, along with some competitors, had firmly established the viability of an outsourced sales and merchandising force to the industry players. So, needless to say, I had developed high degree of confidence in our ability to win over Kodak, much as I had with other clients.

As I entered the board room at my scheduled time, I was taken aback to find 10-12 very senior managers sitting around the table. Typically, a presentation of this nature would only involve 3-4 managers at most companies, but apparently Kodak worked differently. Although surprising to see such a gathering, this didn’t really phase me as I had presented our services often enough and was feeling confident and in hindsight possibly a little too relaxed.

I knew all was lost

The presentation unfolded as usual with all major questions and objections handled deftly. As we moved into the Q & A session of the presentation, I was feeling pretty good and possibly a little cocky at this point, as I felt I was winning them over. Questions continued to be asked and I continued to answer them confidently. Then came a perfectly natural and expected question that ultimately derailed any hope we had in ever getting them as a client.

The question was simply, “How would you quantify or authenticate the merchandising activities or display building reported by your field force?” As soon as I heard the question, I knew I had the answer and without missing a beat, I answered it with three little words that before I had finished uttering them, I knew all was lost. What was those three little words? “We take Polaroids!” The silence was deafening.

Whatever goodwill I had generated or convincing argument I had put forth, I was done. Competition in the film category was fierce and Kodak was the leader in those days and just arrogant enough to let you know. So being stupid enough to mention a competitor’s product by name was not one of my brightest moves.

Yes, it was an innocent mistake, as Polaroid was the generic name for any instant developing film much like Kleenex is for facial tissue, but they certainly did not take it that way. I did try to lighten the mood a little but to no avail. It was clearly evident that there was very little chance of regaining any lost ground as the questions dried up and meeting was concluded.

It was like a ground ball trickling through your legs

I’ve never forgotten this Kodak Moment. Being over confident and letting your guard down when so much is on the line, is a rookie mistake. It was a hard learned and expensive lesson much like letting an easy ground ball trickle through your legs that allows the winning run for the other team to make it home.

To make matters worse, was that we had opened their eyes to the potential of outsourcing this area by executing those smaller projects on a local level. The business eventually went to a competitor and the size and scope of the assignment was as I had thought.

From that point on, I always tried to add a small preamble before answering a question like “Being able to quantify the display activity is something we all care about…”. By doing so, it gave my brain a couple of seconds to consider my answer instead of blurting out something stupid like “We take Polaroids!”

Copyright © Greg Weatherdon 2018

Sign up above to receive email notification of the latest update to this blog.

Get More Life Out Of Your Business

Posted in Business, Entrepreneurship, Podcast, Sales | Tagged , , , , , , , , , , , | 1 Comment

SBM #69- They Should Know Better

Communication

A constant refrain that I hear from business owners is “they should know better!” “They” of course being any or all the employees that screwed up. Naturally, when I hear this statement, I just can’t leave it alone and therefore I need to challenge it. At which point the conversation goes something like this,

Client: They should know better
Me: Really, why is that?
Client: It’s their job
Me: Did you tell them?
Client: No, I shouldn’t have to
Me: Why shouldn’t you have to?
Client: Because they’re supposed to be adults
Me: That may be true, but you still need to tell them what you expect
Client: I hired them to do a job. If I have to tell them or show them I don’t need them.
Me: Seriously?

It’s not about micro-managing

I think you get the drift and I’m sure many of us have felt the same way at times. Unfortunately, too many owners wrongly assume that once they hire an individual, that person should automatically know everything there is to know. Granted, they should have all the technical skills required for the job, but that’s only half the battle.

Where many entrepreneurs fail, is in telling their employees what they expect from them on a regular basis. We’re not talking about micro-managing, it’s about providing clarity. It’s about setting expectations or objectives. It’s about letting them know specifics, like when you expect the task to be completed or how many hours you’ve allocated for that project or how you expect them to act in front of customers, or your dress code and on and on. Just because you failed to mention something and then expecting your employees to read your mind, is asking a little much, don’t you think?

The easiest way to fix this is to communicate. Yup, it can be that simple. Communicating is nothing more than telling people what you expect. Because left unsaid, it is usually just asking for trouble. And once it becomes a crisis, emotions usually take over and its no longer just a conversation. By having regular ongoing dialogue between employees and managers, everyone should be on the same page. This can go a long way in minimizing surprises.

Here ya go, get it done!

You see, nobody likes surprises because they usually occur at the wrong time and leave little opportunity to correct the situation. Simple, regular and informal dialogue between managers and employees would avoid many of the problems that arise.

The alternative of course, is to simply assume that once the project was assigned, it would be completed without further communication and it usually goes something like this- “Here ya go, get it done!” The weakness in this strategy usually manifests itself once the client calls to inquire why the project is two weeks behind schedule. Those are always fun conversations. Why is it then, that the only person that knew was the client?

In hindsight, one of my major communication tools was simply wandering around and talking with my staff or watching them do their job. This provided me the opportunity to reinforce what my or our clients expectations were. If I noticed that something was lacking, I would typically bring it to the attention of the project coordinator responsible for the project, for them to rectify. Often in a quick group meeting.

Fortunately, this was a rarity because the coordinators were very good at setting expectations and at helping individuals meet those objectives. In addition, our reporting processes allowed us to monitor our benchmarks in real time. This real time reporting was not designed to “catch” individuals for low productivity, but to identify potential problems in the execution and to take corrective action early on, thereby allowing us to finish on time and on budget with excellent results.

Hoping things will improve rarely works

Because of our ongoing dialogue with the front line employees, coupled with the data, this allowed us to notify the client early on of a potential problem and take corrective action. Although this was never fun to tell a client you’re having a problem, and thankfully was a rarity, it was far better strategy than waiting until the end and hoping things would turn around on their own. It has been my experience that hoping things will improve rarely works and leaves you to make a bunch of lame excuses to a very disappointed client.

Being visible and asking questions is part of being a manager. Equally important to opening the lines of communication, is asking the right questions. These questions should focus on removing roadblocks to productivity and serve as teaching moments.

However, in order for this to work it must be a two way street. Employees need to feel comfortable enough to be able to express their thoughts or know that delivering bad news won’t earn your wrath.

Yes, they should know better, but if you want better communications within your organization, then it’s up to you to create it. Being visible, watching, listening and letting people know what to expect, will go a long way in reducing those nasty surprises that just ruin everybody’s day.

You may also enjoy – Being a leader can be a pain

Copyright © Greg Weatherdon 2018

Sign up above to receive email notification of the latest update to this blog.

Get More Life Out Of Your Business

Posted in Business | Tagged , , , , , , | Leave a comment