Small Business Strategy: The Power of Reflection

It’s amazing what you can get done getting still. Most small business owners, myself included, spend most of their days moving as fast as possible, getting things done, checking things off the list. But the most important work happens faster when we stop.

Once a year, my business partner and I go to Arizona for several days to think about the business. We take a thick workbook filled with questions about every aspect of the business, from our business development strategy, to how we define our company brand, to how we think each employee is doing.

For the first few days, it may look like we’re not doing much that’s productive. We go on hikes, have massages, take yoga classes, take naps. This year, Arizona had an unexpected cold snap and we spent a lot of time in our rooms sitting by the fire.

Then, ideas begin to surface. New-found clarity pulls everything into focus. Suddenly, we see business opportunities that we hadn’t noticed before. We notice things we need to change that we’d been moving too fast to see.

These annual trips are where we set our vision for the company. There are all sorts of important milestones in our company’s growth that can be traced back to an idea we had during Shiatsu or sitting by the pool on our Arizona retreats. If we hadn’t done these trips consistently through the years, there are plenty of times we would have veered off course and not caught it.

The trick is taking the time, even when you think you don’t have it. Or when you think the company can’t afford for you to spend money going away somewhere to loll around.

Our trips are definitely expensive, but I’d say they’re one of the most important items in our annual budget. My business partner and I were talking yesterday, after our most recent Arizona trip, about how we could have spent that same amount of money on an executive coach for the year, or joining a CEO roundtable group, or any other sort of professional development that most business people would find a reasonable investment.

But for my money, the best bet is giving yourself a chance to sit still until you begin to see where you need to go next.

Ride the wave of love for startups — and existing small companies

If you’re an entrepreneur — or are thinking about becoming one — take advantage of the prevailing national pride in small business. America has always had a love affair with the Mom and Pop Main Street shop, but now, more than ever, the country is depending on entrepreneurs of every ilk to play a large role in our economic growth.

During the dark days of this recession, small business owners everywhere watched the big banks and car companies in the news and joked, “Where’s my bailout?” If it’s lonely at the top, it’s especially desolate at the top of a small business, where entrepreneurs have struggled alone with all kinds of tough decisions, from whether to lay off valued employees to if it might be time to file for bankruptcy. Plenty of small companies have folded, but many more are still standing.

These business owners, and the new entrepreneurs joining their ranks, are poised to become the national heroes of the American economy. For one thing, they provide half the jobs in the country and create up to 80% of all new jobs. Lawmakers and business reporters are now pulling out all the classic metaphors, like small business being “the backbone of the economy” and “the engine driving our economic recovery.”

If you own a small business and survived 2009, or if you started a business last year, you deserve some high praise. No doubt it required sharp business acumen, not to mention bravery, to pull that off. The people around you, in your company, your community and even your country, appreciate what you’ve done to help keep your employees working and your vendors in business. People with income can spend, which creates more income, and more spending, and eventually, the economy will be thriving again.

This is what I’d like to see. I’d like to be sitting on a plane sometime soon and have the airline attendant stand up and grab her microphone to say, “Ladies and gentleman, we have some small business owners on board with us today. Let’s give them all a round of applause to thank them for their part in stimulating the American economy.”

The Romance Of A Startup

There’s nothing like the excitement of starting your own business. Most entrepreneurs have a certain nostalgia about the early days when their companies were only a few steps beyond those initial notes on a legal pad — or a cocktail napkin.

When I launched my first ad agency, we really did start with a cocktail napkin. My business partner and I were teaching classes one evening a week at an ad school, and afterwards we’d meet up the street for a glass of wine. We would plot and plan and scribble thoughts on paper napkins, as we discussed our vision for the agency we would eventually call Match. Before we decided on a name, we practiced at the same bar with their cloth napkin rolls, wrapped around knifes and forks. We’d pick up that napkin roll and hold it to our ear saying, “Hello, thanks for calling Albert & Baskin.” No, that sounds like an ice cream store. “Hello, thanks for calling Magnet.” Okay, maybe. Until we finally tried, “Hello, thanks for calling Match,” and decided that was the one.

Our first office was two rooms in a renovated plow factory. We would spend the days pitching business and going to see clients, and then about 5 or 6 the phones would simmer down and we’d start doing the creative work for whatever deadlines we were trying to meet. I’ll never forget how it felt to be there working late, with the glow of lamplight on the dusty red brick walls and the rumble of trains moving past our open windows, almost close enough to reach out and touch. We’d have good music on the stereo and our dogs at our feet and after awhile we’d start to have some good ideas. It was heady stuff.

At first, we couldn’t afford much furniture and most of what we had was hand-me-down. Our desk was a borrowed dining room table we shared, facing each other across our laptops. We splurged on a pair of new swiveling desk chairs at the Office Depot, but hadn’t yet sprung for any rugs, so the chairs would slowly roll away on the warped old hardwood floors if you didn’t keep a good grip with your feet. One late night I was sitting cross-legged in my chair, writing on a pad of paper in my lap. I heard my partner B.A. talking to me, but she sounded far away. When I looked up, I realized I had rolled downhill all the way across the room. After that, we got some rugs, and they also helped with the noise of the trains which was so loud it was beginning to make our teeth rattle around in our heads.

Eventually, our little startup was employing ten or 12 people and working with an impressive list of clients. We grew out of our two rooms and knocked down walls to expand into three connected studio spaces. We bought furniture and returned the desks and tables and other pieces we’d begged and borrowed in the beginning. We put in a sophisticated phone system. We started a 401(k) plan. In short, we became a real business. Our startup worked.

But I wouldn’t trade anything for those early days. There’s nothing like the feeling of making something out of thin air. One day, Match was a stack of cocktail napkins covered in Sharpie. Then suddenly, there was a company that didn’t exist before, doing good work for clients, supporting a number of people in doing work they love, and giving other would-be entrepreneurs the confidence that they could do it too.

Several years later, a woman I’d worked with a decade before asked me to lunch to discuss the company she was about to launch. Over our Caesar salads she said, “I told my business partner, how hard could it be? If Elizabeth and B.A. can do it, anyone can!”

The Black Bass Lesson: How hard is it for potential customers to find you?

Recently, we were invited to a friend’s surprise party at the Black Bass Inn in Pennsylvania, and decided to fly up just for the night. The Black Bass turns out to be a charming inn built several decades before the Revolutionary War, but making a reservation wasn’t easy. In fact, it was so hard to find their phone number, I wondered if maybe they had banned telephones as a nod to historic accuracy.

The invitation instructed us to visit http://www.blackbassinn.com, which actually takes you to a porn site called the Boob Tube (with a logo composed of two hot pink cartoon breasts). Okay, that’s funny, but not much help. There are plenty of reviews of the the hotel and its restaurants on various travel and dining sites, but they don’t give a phone number.

Then I started noticing mentions online of people asking if anyone else had the inn’s new phone number. Apparently, the old number was assigned to another customer in the interim between the former owner’s death and the new owner’s re-opening of the inn.

Finally, I went the old-fashioned route and called directory assistance. I had been putting that off, because I wasn’t sure if the hotel was in New Hope or Lumberville, or where in Pennsylvania either of those towns might be. But fortunately that didn’t stump AT&T for long, and soon I was on the phone with a lovely woman at the inn who helped me book what sounds like a pretty fantastic room with exposed stone walls and a view of the Delaware River.

I mentioned to her my experience with the website, which was apparently the first she’d heard of that. She actually guffawed when she pulled up http://www.blackbassinn.com and saw the boobies. Turns out the inn’s real website is at http://www.blackbasshotel.com. Who knew?

Here’s some advice I took myself: Take a few minutes and pretend you’re a potential customer looking for your company online. Try a few variations on your company name — like the Inn and Hotel example. Hopefully, your website and phone and even address are easy to find. But if not, it would be good to know where those potential customers are ending up. Especially if it’s somewhere as colorful as the BoobTube.

5 tips: What do you do when one client represents most of your business?

This is the curse and the blessing for an entrepreneur lucky enough to land a big client. That one large client can take your company to a whole new level, increasing your billings dramatically. You’re able to hire more people, upgrade a few things, maybe even expand.

It’s fantastic. And also terrifying. What if you should lose that client? Entrepreneurs with a disproportionate share of their income stream coming from one source often lose sleep at night worrying about what would happen to the company if something happened to that client. 

If one client represents the largest slice of your business, here are five tips that might help you worry less:

1. Market yourself to other large clients. This one is the first and most obvious. The best way to even out the business would be to add at least one other large client, which could be easier now that you can brag about that first big client.  The ideal scenario is that your largest client become a smaller percentage of your overall billings, while increasing the total of those billings. First though, make sure your company has handled any growing pains of taking on that first large client.

2. Create other revenue streams. Can you add another service line or product so you have something else to sell?  If your core business is accounting services for professional companies, like law firms or architects, you might develop some seminars on AR collections, or managing banking relationships. Or maybe you could offer training in Quickbooks or some other accounting software to help companies too small to afford your services handle their own accounting needs in-house.

3. Ramp up just enough. Yes, a large client may require you to add to your staff, company fleet, office space or IT capabilities. But don’t get carried away. Clients come and clients go. Explore ways to stretch the capacity you already have, before you significantly increase your operating budget. 

4. Have a plan for scaling down quickly. This is like having a fire evacuation plan for your family. You hope you never have to use it, but it’s a good idea to have it in place. Outline a plan for how you would reduce expenses quickly if your largest client were to walk. You might think through who you would have to lay off, whether you could handle a salary decrease yourself, if you could sublet some of your space. If you were to lose your biggest client, you’d want to minimize the impact by streamlining your spending quickly.

5. Trust that you could survive the blow. This is the most important one of all. Although you can nurture that client relationship and do the best job you can for them, there all kinds of reasons beyond your control that could  result in the loss of that account. Don’t worry too much about it. If it happened, you’d deal with it. Some entrepreneurs even report that losing their largest client was actually a blessing in disguise.

Small Business Strategies: How many hours should you work?

First things first. Don’t buy into that myth that all entrepreneurs have to work 24/7 to make a go of it. I mean, you can if you want. But I know a whole lot of successful business owners who never did.

On the other hand, Timothy Ferriss may underestimate what it takes for most people. His bestselling “4-Hour Workweek” suggests that you should be able to join what he calls the new rich with less than an hour’s effort a day.

For most of us, the right-sized workweek lies somewhere in between. I’m a fan of the high tide-low tide approach. I can handle the occasional high water mark of long days for a week or two or three at a time. But only if those stretches are broken by weeks of lighter work loads and shorter hours. The more tired I get, the longer the recovery period to get me back at the top of my game. 

You have to consider what it costs the company for you to work long hours. I’m not talking about dollars so much as what it costs in terms of your ability to lead. If you work too hard for too long, you’ll find yourself depleted and exhausted. Wouldn’t it be better for the company to have you refreshed and energized? Does your company’s success depend on the hours you work or the quality of your ideas, relationships and vision?

However, running your own business requires some effort. You can’t expect your company to flourish if you don’t give it the time it needs. Up to a certain point, working hard and being intensely engaged in my work gives me even more energy. But after a few long weeks, I find myself spending more time being reactive to situations and less time proactively planning. If a workweek includes a long day or two of business travel, I know I won’t be my sharpest the next morning. The law of diminishing returns sets in, and I eventually realize I need to back off so I can come back fresh and renewed. Like the tides, it’s a cycle, and develops its own rhythm.

The trick is to recognize that thin line between working too hard and not working hard enough. Only you can know where you hit your stride and where your performance begins to deteriorate. In most cases, it’s not about the hours you put in; it’s about the caliber of work that comes out.

What does it mean to run a life-sized business?

A life-sized business is a company that supports the life you want. A company that requires you to make lots of compromises in the way you live your life is not.

I’ve done it both ways, and can say both have their benefits. When I started my first ad agency, I was fine with letting my life play second fiddle to my business. I was younger, and could pull those 60-hour weeks without too much wear and tear. I didn’t have kids. My parents were healthy and didn’t need any help from their daughters. My husband was very focussed on his career, too. We didn’t even have a dog. I loved those years. I enjoyed the adrenaline of building a successful company from nothing, and being consumed by work I loved.

But after my son was born, I began wanting a different sort of life. I wanted to be around for him. I wanted to see sunlight more often. I wanted to feel healthier. I wanted to be more relaxed. So when I started Tribe, it was with the very clear intent that this business would fit in around my life, instead of vice versa. 

Every entrepreneur’s definition of a life-sized business will be different. For most people, in most stages of their lives, it means a business that supports their life balance. It means giving you the sort of flexibility you wouldn’t have working for somebody else. It means having control over your time. It might mean being more involved with your kids. It might mean being able to train for an Ironman, take daily yoga classes or compete in ALTA tennis. It might mean running a sustainable company that gives back to the world. Or it might mean just being able to work with your dog at your feet, instead of leaving him home alone all day.

A life-sized business can also include financial benefits. There’s no reason a business has to be difficult for you to make a lot of money. Besides paying you a good salary, the company can also provide you with all sorts of perks, paid pre-tax dollars. You  might want to lease yourself a nice car for business. Or hold your management meetings in a beautiful resort. Or have a healthy lunch brought in every day. I’ve done all those things at Tribe. 

Other entrepreneurs care more about the pace than the perks. A public relations firm owner I know turns away some clients, just because she doesn’t want to get big enough to service them. She likes the way her company runs just fine if  she goes for coffee with her husband in the mornings instead of rushing into work, or takes Friday afternoons off to ride horses.

It also helps if your company is profitable. You can’t lounge around living a life of leisure if you’re not making the income to support it. That’s not to say you have to work long hours to be successful, although sometimes that’s what it takes. What you have to do is offer something of value to people who can pay for it, and to sell enough of it to make money.

But the best part of a life-sized businesses is loving what you do. If you wake up excited about your day, whether it’s a workday or a weekend, then you’ve got a business that works for your life.

Small Business Strategies: Managing employee performance — with a criticism sandwich

If you’re a boss, you have to occasionally give some negative feedback to employees. But plenty of people react to criticism defensively, and either begin offering excuses or get so upset they shut down completely. So how do you say it so they can hear? 

I’ve found one of the best ways is to offer a criticism sandwich. First, you talk about something they’re doing well. Then you offer the criticism. And finally, you top it off with another compliment. 

This sandwich approach is based on the assumption that you hired this employee for a reason and that he or she offers many strengths. The criticism is regarding only one small part of your employee’s performance, and is not by any means your entire experience of this person’s work. Often the very thing you’re criticizing is in fact the flip side of a strength. Perhaps this employee is not so good at catching details. But the flip side is that he or she shows a strong ability to see the big picture. 

So you might first talk about this strength, and how valuable it is to the company. Then, calmly and unemotionally, discuss the issue you need the employee to correct, such as a growing tendency to let errors in the work slip past. Finish up by once again praising this employee’s strengths and your confidence that he or she can overcome this one issue. 

Everything you say must be true, however. If you praise your employees for things you don’t believe they’re really much good at, you’ll undermine their ability to trust your feedback, whether negative or positive.

Some will also catch on to your technique. I once told a friend about the criticism sandwich, which he then used successfully with many employees. Until one woman stopped at the door to his office after such a discussion and said, “You know,  you say f**** you nicer than anybody I’ve ever known.”

Small Business Strategies: Let Gen Y be your guide in social media

It’s easy for a small business owner to be a little freaked out about social media. We know it’s out there, we are starting to understand that it’s probably here to stay, and we have no idea how to get in the swim of that raging river rushing past. How are you supposed to figure it all out when you’re also busy running your company?

Get a Gen Y employee to show you the territory.  If  you don’t have a Gen Y employee handy, enlist a young relative to help. These Millennial kids grew up with computers and assimilate technology faster than we Boomers can figure out how to microwave popcorn. Social media, for them, is a natural extension of being online and has quickly become a huge part of how they operate in the world.

Don’t be shy about admitting  you need their help.  If you’re over 35 or so, they already assume you don’t know what you’re doing, at least in this area. They’ve grown up programming VCRs for their moms and adjusting ring tones on their dad’s cell phones, so it’s natural to them to assume the role of technological expert.

Be open to the beauties of social media. Instead of  huffing and puffing about it being too complicated, look for ways it can improve your business and your life. Can it help you build stronger relationships with your clients? Provide introductions to potential customers? Reconnect with old friends? (Yes,yes and yes, it can.)

Start small. Don’t try to take on every social network at once. Maybe begin with LinkedIn or Facebook. Have your Gen Y guide help you set up your account, your profile and a few connections, and then sit back and watch for a week or so until you start to get a feel for how other people use that network.

Enjoy learning something new. As adults, we have few opportunities to truly stretch our intellect. I’ve heard more than one social media expert admit that getting up to speed on this stuff provided an intense period of intellectual challenge. But you can quickly learn enough to begin using social networks with confidence, and may even want to explore some social marketing ideas for your company. Before long, you’ll find yourself trying to teach other people how to do it.

Small Business Strategies: Simple Feng Shui for your office

Maybe it will increase your financial success and maybe it will just make your office a more pleasant place to work, but a little Feng Shui certainly can’t hurt. At Tribe, we hired a Feng Shui expert to help with our new office when we were in the middle of its design. She nixed a few things I’d planned, like putting the accountant in a tiny office with no windows and cool blue paint in the lobby and common areas. (We made the windowless office a meditation room instead and chose a warm adobe clay color of the lobby walls.) I can’t say if it’s had an impact on Tribe’s success, but I know that when I’m there, I generally feel both relaxed and productive.

Here a few things you can do to add a little Feng Shui to your workplace, whether you work at home or in office space:

1. Make sure your desk is positioned for power. That means you don’t want your back to the door or a hallway. You should be able to see people coming, so that symbolically, you can’t be attacked unawares. You also don’t want your back to a window, which is too exposed and doesn’t offer strong backing behind you.

2. Activate your wealth corner: The far left corner, as viewed from the entrance to your office, is considered your area of wealth, symbolically. Put something green and growing there, like a tall potted plant, or maybe wind chimes, to create movement. Same goes for the far left corner of your desk. Place something there that means financial success to you. In that corner on my desk at home, I keep a paperweight that used to sit on the desk of a friend of mine, who not only enjoyed great wealth, but also used her financial resources to benefit many people. 

3. Activate your helpful friends: The near right corner of your desk, and of your office, symbolizes helpful friends. That’s a great corner of your desk for the phone. If cords and phone jacks make that problematic, try your Rolodex or your Blackberry or a stack of business cards for key contacts. 

4. Choose the power seat in meetings: For a client presentation or any meeting where you’ll want as much power as possible, choose a seat about midway along the side of the conference table, facing the door. Many people assume the head of the table is the power spot, but trust me, the middle of the table puts you in a more powerful position. 

5. Get rid of the clutter: This one is perhaps less interesting than the preceding tips, but it’s hugely important. Do whatever you have to do to keep your surfaces clear of clutter, especially old, inactive clutter. If you’ve got stacks of paper on your credenza for a project you’re actively working on, that’s one thing. Piles of old mail or unread reports or other inactive clutter are surprisingly draining. Get rid of them, and you’ll feel a surge of new energy.