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.

Do you treat your clients like Tiffany customers?

No matter how good your company is, sooner or later you’re going to mess something up. You won’t mean to, but you’ll do something that upsets a client. Maybe you’ll miss a deadline, maybe costs will come in higher than you estimated, maybe one of your employees will unintentionally offend a client with a stupid joke. The question is not whether or not something will go wrong in a client relationship. Something always goes wrong.

The real question is: what do you DO when something goes wrong? A trusted business advisor once told me that it’s always a good strategy to overreact to a mistake. Don’t assume that just because the client says it’s no big deal that it’s no big deal.

Here’s a great example of the right sort of overreaction from the little blue box of high-end retail: Tiffany. A friend’s husband ordered her a necklace from the Tiffany website as a Christmas present. He selected a shipping method that would get it there by Christmas Eve. For reasons that may or may not have been Tiffany’s fault, the necklace didn’t arrive on time. They assured him it would arrive the following week.

But in the meantime, they overnighted — for Saturday delivery, no less — a complimentary gift card for $100. I don’t care who you are, a hundred dollars for free makes an impact. It’s a heck of an apology. My friend says she’d never really been a big fan of Tiffany before, but now she’s a true believer. Her husband, who had planned to have another jeweler knock off a celebration ring Tiffany makes to save a little money, now feels it’s imperative that he buy that ring from Tiffany, regardless of cost. His takeaway: “I know Tiffany will do it right.”

Of course, the reverse happens often enough. There’s a dime store in Atlanta that has been here for about three generations. It’s a well-loved institution. They’ve built their reputation one happy customer at a time, year after year after year. It’s the kind of place where parents take their kids for a ride on the same mechanical horse they rode as children. A ride on the horse still costs a dime.

One day I watched a cashier eradicate all those decades of goodwill, at least for the one customer she was serving. This guy handed her a clapping monkey he wanted to buy. You know the one, with the striped trousers and the brass cymbals. The price tag on the monkey said one price. The register rang it up at a higher price. The customer said he wanted to pay the price on the price tag. The cashier said, well, I can’t sell it to you for that, because the register says it’s supposed to cost such and such. They went around and around and around until finally the customer said, you know, I’ve been shopping here for years, but now I’m not coming back again. What’s more, he promised to tell all his friends what happened with the clapping monkey. And he walked out — monkeyless and not happy about it.

Wouldn’t it have been worth the few bucks difference in price to keep a long-time customer happy? I like to think that if the owner had been there, he would have apologized profusely to the customer. And then given him the clapping monkey for free.

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.”

Small Business Strategies: Starting a workplace wellness program might be easier than you think

Meditation room at Tribe

What can you do in the new year to improve employee morale and productivity without spending a ton of money? Easy answer: start some level of wellness program in your office. If you’ve ever considered doing something like that, this might be the perfect time.

Wellness programs allow you to give employees something they find meaningful without handing out big pay raises. Many small companies froze salary increases last year. In others, employees watched people in their company lose their jobs, and were understandably meek about pushing for their own salary reviews. But don’t think that means they’re not thinking about what they give the company for what they get. A workplace wellness program can be a very good way to let employees know you value their contributions.

Of course, it’s also the beginning of a new year. The perfect time for fresh starts, healthy new habits and lifestyle improvements. Your employees are probably already thinking about what they can do in 2010 to be healthier. A wellness program can help support them in their individual goals. It’s also a powerful way to bring new energy into the workplace.

How do you do it? You don’t have to build a company gym or pay for an on-site spa chef (although you could). Think in terms of providing flexibility (time) or resources (access). You can pick one element of wellness, like fitness or stress management or healthy eating and focus your program around that area. Or you can put together a small smorgasbord of wellness offerings. Here are a few examples:

• Allow employees extra time for lunch two or three days a week so they can fit in a walk or a run. At Tribe, we tell employees they can put up to three hours a week on their time sheets for exercise during the workday. We’ve found that whenever someone manages to fit in a workout or  yoga class during the day, they’re likely to come back to the office with a good idea or solution for something they’re working on. If nothing else, their energy level is higher that when they left.

• Use one of those empty offices for a meditation room. Move the desk out and put a small couch or a comfortable armchair in there instead. Or just put out a few yoga mats or some big floor pillows.  Add a few meditation CDs and a CD player, and you’re good to go. If employees feel comfortable spending 20 minutes meditating in the middle of the day, alone or with a coworker, that can go a long way towards reducing stress levels.

• Put a bowl of fresh fruit in the break room, and stock it weekly. When employees hit that pre-lunch or mid-afternoon slump, being able to skip the vending machine and grab an apple or banana instead can be a highly appreciated perk. Supporting wellness in the office can actually come down to some very simple (and inexpensive) changes.

The biggest thing employees are looking for in a wellness program is a way for the workplace to support them in living a good life. As a business owner, you do that by providing meaningful work and fair compensation. But lately, many companies have been asking employees to work harder without the hope of a big, fat salary increase. Especially in this economic environment, one of the best things you can do for your employees is to provide the flexibility and resources for them to take care of their own health.

How a tough year for your business in 2009 might mean a fantastic 2010

I can’t believe I’m saying this, but 2009 was actually a great year at Tribe. And I’m thinking it might have been at your company too.

Of course, we did lose our largest client, due to the slump in the housing market. We had to lay off a few talented, hardworking people that we’d hire again in a heartbeat. We cut back on some perks, like having a fresh flower in everyone’s office each Monday and providing free takeout for lunch five days a week. We froze salaries for most of the year. We gave a somewhat smaller holiday bonus than usual.

On the other hand, we’ll enter 2010 ready to compete on a much higher level than ever before. We’ve used this slow year to reinvent, and to move into some new territory. We’ve expanded our internal communications practice area to incorporate social media and engagement tools. We’ve created some interesting initiatives in new media, for both consumer audiences and employee ones. We’ve developed expertise in some key research areas, like the widely varying perspectives of Gen Y, Gen X and Boomer employees in the workplace, and recession spending by affluent couples. We’ve dabbled in creating our own content and products, like our “Start Your Own Company” card deck and iPhone application.

Other small business owners I’ve talked with seem to have done their own share of reinventing. This year has been about accepting that the recession is real, having time to reflect on what works and what doesn’t about our companies, and exploring some new areas we might not have had time to spend time on before.

Everyone’s talking about how companies are stronger for trimming expenses and figuring out bow to do more with less. Thinking small is a good exercise.

But an even better way to think is how we could get bigger. Ways we could expand to serve other types of clients than we have in the past. How we could fill some new need that’s not being met. What we could do next that would make us wake up excited about getting in to the office.

Nature moves in cycles, and business does too. New moon to full moon. High tide to low. Winter to spring. 2009 has been a good year for sending our roots deeper and in new directions. Soon, hopefully beginning in 2010, certainly in the next few years, our economic downturn will swing back in the other direction. The economy will grow, our clients will grow, our companies will grow. The quiet reinvention so many small businesses have done in 2009 will position us well to reap all the benefits of the next boom time.

Can you cut your payroll and still keep employees happy?

Most small businesses have already done some belt tightening this year. We’ve trimmed dead wood, become a more lean machine, and every other metaphor you can apply to spending less money. Still, when we see our final projections of where our year-end financials will end up, we might  wonder if we should cut a little more.

Sylvia Ann Hewlett, founder of the Center for Work-Life Policy, wrote in the New York Times this weekend about a creative approach to cutting costs by trading employees money for time. She cites the example of KMPG, the giant accounting firm, and their solution to cutting payroll costs without losing star talent. They presented 11,000 employees with a Chinese menu of choices: work a four-day week and take a 20% pay reduction; take a short sabbatical while earning 30 percent of their base salary; both of those options; or neither of those options, retaining their regular salary for their standard work week. Over 80% of them chose one of the flex options.

Hewlett points out that because KPMG positioned these options as “a strategic response to the downturn, rather than a ‘benefit’ for working mothers, it has gone some distance to legitimizing flex time. Taking this option has become an honored choice — a way to save jobs. As a result, overloaded men as well as overloaded women have felt free to vary their schedules.”

I’ve seen one small company try a flawed version of this plan with disastrous results. Faced with the need to reduce payroll and loathe to eliminate jobs, the business owner asked everyone in the company to take a 15 percent pay cut, assuring them that she was taking the same reduction in salary. She hoped they would see this as a good way to help all their coworkers keep their jobs.

It didn’t work that way. Morale plummeted and some of her best talent jumped ship. Months later, when she was able to reinstate full salaries, she didn’t score any points with her staff because the damage was already done.

The crucial elements of cutting payroll while retaining employees are 1) giving them something back, i.e. time, in exchange for giving up some of their salary, and 2) giving them the choice of making that trade or not. Asking employees to help suck up your losses by getting paid less for the same work week is only going to hurt the company in the long run.

The thing about being an entrepreneur is that you have the potential to make a lot of money in good years. You also have the potential to lose money in the bad ones. We all willingly take that risk, but it’s not fair to expect our employees to share in the down side. On the other hand, in 2010 or 2011, when we see year-end projections that show us closing the year with gobs of money, we’ll benefit nicely from the upside of that risk-reward ratio.

Small Business Wisdom: How To Ruin Years Of Effort With One Dumb Mistake

This is how you can make years of progress toward a goal and then ruin your chances with one stupid mistake. We completely blew a meeting yesterday with a prospective client. The client’s assistant had sent us typed directions for several possible routes to their office, but no one at Tribe had stopped to read them very carefully. An hour or so before the meeting, we briefly discussed as a group which set of directions we should take and decided on one. Then my business partner and I set out for the meeting, an ample 45 minutes ahead of time.

The route we chose was the wrong one. Instead of the 20 or 3o minutes the trip should have taken, we drove around our elbow and through four counties (I’m serious), all the while following our typed directions. At five minutes before our meeting was scheduled, we were still whipping along some distant suburban highway and trying to come to terms with the fact that we were going to be late. We had GPS, we had our iPhone Map application and we had the office on the phone. All three assured us we were heading in the right direction, but we had a long way to go.

We apologized profusely and the prospective client was very gracious about it. But it’s a tough first impression to overcome. We were also rattled in the meeting and I’m sure we were not anywhere near the top of our game. The client turned out to be someone we enjoyed immensely. She was smart and energetic and funny and we would probably love working with her, but I’d be very surprised if we ever landed any of her business. And that’s completely our fault.

Our dumb mistake has much larger repercussions than one meeting. The drive back to our office (taking another of the listed routes on the assistant’s sheet) took less than 20 minutes. The crew back at Tribe understood that we’d shot ourselves in the foot with that meeting, but I don’t think they truly realized that we’d blown much more than one hour of a prospect’s time.

The effort it took to land that meeting began years ago. That prospective client works for a large Atlanta company which has been on our hit list since 2004 . For five years, my business partner has been reaching out to them with mailings and promotional pieces and emails and phone calls.

Over a year ago, in August of 2008, I finally connected on LinkedIn with Jo Ann, the then-marketing director of the company. Six months ago, Jo Ann left the company to start her own business and emailed to see if I’d like to get together for lunch or a glass of wine. Three weeks later, we finally met for lunch. She asked some advice on running her own company; In return, she kindly offered to set up an introduction with Leigh, the marketing director who took her place at her old company. Several weeks later, the introduction was made. It took my business partner a month after that to get Leigh to agree to a meeting. The meeting we had with her yesterday.

So there was a long road to that meeting yesterday, and I don’t mean the one we were following through four different counties. What we blew wasn’t one meeting. It was the years of effort to create a long series of very tiny movements toward that meeting.

Moral of the story: There’s so much a small business can’t control about whether a client hires us or not. Let’s control the ones we can. For instance, check out your directions ahead of time.

 

Sustainable Startup: Worthwhile Wine From South Africa

Tom Lynch’s new company really began on a father-daughter trip. He and his 13-year-old Miranda were planning a trip to South Africa, and decided they should spend a week of their time there doing something to help. They ended up in Nzinga, a remote village of mud huts, where Miranda read books to the children and helped out in the school while her dad was put to work planting potatoes and working in the communal garden.

On the trip home, Miranda told her father they couldn’t just leave and do nothing else. She wanted to keep working to help this village. Tom agreed to help her launch a non-profit, which Miranda named Isopho, a Zulu word for “gift” and the children’s nickname for Miranda. While they were sitting there waiting for the plane, Tom searched for available URLs and registered Isopho.org then and there.

Eventually, Tom began to feel a disconnect between his work with Isopho on nights and weekends and his daytime job as a VP of Strategy & Planning for a large digital agency. Doing more of the same each day at work felt insufficient, in light of the challenges he’d accepted in Nzinga. When the company began to consider layoffs, he suggested a mutually beneficial exit agreement for himself so that he could spend more time on Isopho.

He also began thinking about starting a company that might be a better complement to Isopho. On one trip to South Africa, he stayed an extra few weeks to visit an extensive list of wineries he had culled from an even larger list.  His first requirement was that the vineyard consistently win awards for great wine. And the second was that it contribute to sustainability in some major ways. Despite its unfortunate history, the South African wine industry is now one of the most progressive in the world.

The result is Tom’s new company, Worthwhile Wines, which will import 261 sustainable wines from 21 different South African Vineyards. Although the history of winemaking in South Africa is oppressive at best, the vineyards Tom selected are doing things like putting a third of the land in the names of the Black workers, providing school and decent housing for the families working there, developing ways to use fewer pesticides, using organic grapes and employing Blacks in management roles.

Most of us would choose a sustainable product over a similar one that’s not sustainable. But few of us want to go to much trouble to figure that out. Choosing a bottle imported by WorthWhile Wines will be a quick and easy way for consumers to know they’re a) getting a good wine, that B) is from a vineyard that ‘s doing good.

Worthwhile Wines will also be a way Tom Lynch can a) run a good business that b) does some good in the world.

The Weird Resumes That Lead To Successful Entrepreneurs

Marilou (in white) hurdles toward her future startup

The path to entrepreneurship often covers exactly the right ground, in ways we could never predict. Interests and experience that seem to be unrelated eventually turn out to be precisely the preparation a specific new venture requires.

Marilou McFarlane, for example, has recently launched Vivo Girls Sports, an online community for athletic girls aged 13-22. If she had known when she was a kid that this was the company she’d start at age 48, she could not have plotted a more useful resume of stepping stones to this moment.

Sure, Marilou played sports as a girl. Soccer and track and tennis and more. She also grew up around college sports, since her father, Jim Heavner, announced many of the Tarheel games for WCHL,  the radio station he started in Chapel Hill. (Being the daughter of an entrepreneur also helps pave the way for starting your own gig later.) After college, she worked for Turner, back when Ted still owned it all, so that gave her some good experience in media, as well as a chance to work for another entrepreneur who thinks big. Later, in San Francisco, she was a media rep for KCBS for many years, before she started her own company, McFarlane Marketing. She had two daughters, both athletic, and was involved in season after season of their sports. For two years, she served as president of their soccer league, a full-time volunteer position she handled while continuing to build her marketing company. She also started an offshoot of  her marketing company that targeted colleges specifically. And now her oldest daughter, Kelly, will be playing for the Tarheels in Chapel Hill starting next year — on their very impressive women’s soccer team.

Marilou knows sports and she knows marketing. She understands teenagers and college students. She has a deep affinity for the issues that girls in those age brackets are facing. She’s savvy to the incredible buying power of this group and its appeal to marketers. And she’s not afraid to start something  new.

Starting a company is not just a way to make a living. Sometimes it’s how we reconcile and integrate everything we are.

The Cliff Notes of Social Media for Old Folks: Webinar One

This afternoon, we sat on the couch in my office and took about six or seven small business owners through an overview of what social media can do for them. My business partner Jennifer and I were presenting to a creative director, a literary agent, a strategic marketing person, a sales rep, an account planner, an expert on world poverty and an accupuncturist — all of whom were sitting in their own offices in front of their own computers.

Social Media for Old Folks is our five-part Webinar, covering everything from blogging to linking to friending to tweeting. We’re not social media experts, by any means, but we have learned a great deal about using social media in the last year or so. We’ve also discovered that we’re quite passionate about sharing that knowledge with others.

If you’re in a business that involves sharing what we call Odd Knowledge, social media is the most powerful way out there to build your business. Whether you’re a financial advisor or a large animal vet or an event planner or a Pilates trainer — or a world poverty expert or accupuncturist — you offer an expertise in a specific niche.

If your business depends on clients trusting you to be the one with the right answers, then social media is a powerful way to establish that trust. It’s also a place for you to share your unique perspective on your particular field of expertise.

Here are a few highlights from our Webinar today:

1. Social media can connect you with the whole world — but make it feel like you’re doing business in a small town. Despite the fact that it depends on technology, it can be an extremely human and personal form of contact.

2. The two most important things social media can do for your business are to A) promote your expertise and B) build your connections (which can become a following). This creates a beautiful dynamic: Instead of you always reaching out for new customers, you’ll find them seeking you out instead.

3. The model we recommend is this: a blog to showcase your expertise and social networks to drive traffic to that blog. Your blog is your content; the social networks are ways to start conversations about that content.

4. Your website and your blog are two different things. The website is your company talking, and is a destination for background information and evergreen materials. Your blog is you talking, is more fluid because it’s updated more often, and gives you a venue to share your expertise in a narrow niche, usually more narrow than your actual business. We recommend keeping your website and your blog separate, although each would include links to the other.

Next week we cover Facebook in more depth, and in the following weeks we’ll talk about LinkedIn, Twitter, and how to develop your own blog. If you’re interested in  more details, you could go to the Seminars page on the Starter Cards site.