Tag Archives: business decisions

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.

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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

directionsThis 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.

 

Hell Yes to work-life balance, from Judy Martin

img2judy_martin_photoI’ve just discovered Judy Martin, who seems like a kindred spirit in the area of work-life balance. She’s also an Emmy award-winning journalist with 2o years of broadcast news under her belt. You may have seen or heard her on Marketplace Report, National Public Radio, CNBC Business Radio, The World Vision Report or News 12 TV Networks. She now writes and speaks about the merging of the working and living experience. HellYesBookCoverSmall

Judy posted a great review yesterday (follows below) of my “Hell Yes” book in her blog at Work Life Nation: 

Work Life Balance: If it’s not a hell yes, it’s a hell no

“Just say no.” The phrase is arguably one of the most sacred with regard to the eternal quest for work life balance. Now Elizabeth Cogswell Baskin, CEO and creative director of ad agency Tribe Inc., takes the phrase a tad deeper in her book, Hell Yes: Two Little Words for a Simpler, Happier Life

Hell Yes is a simple book. It’s shy of a hundred pages, but filled with richly written phrases that directly drive home the premise of the book:  cut to the chase of what truly matters in any given choice. If it’s not a hell yes, it’s a hell no. The book offers a haiku-like take on more conscious steps in the decision making process of daily life, at home and at work.

The wisdom is not necessarily anything you haven’t heard before, but it’s the delivery that catches ones eye and heart. You could pick this book up over and over again for some thought provoking contemplative exercises. I’d like to slip it onto the desk of a few news producers I know. 

Baskin asks this question throughout the book, “Is it a hell yes?” Her responses cover everything from ego, to time management, to food choices and project decisions. As she says, ” This one simple question serves as the sharpest razor, swiftly and completely cutting away anything in the gray area.”

In our changing times, every decision, especially with regard to career and work can have numerous implications down the road. We are constantly faced with change and challenges. Baskin has experience in that area. She is well versed in transition and reinvention as a branding specialist with a cache of national and global clients like UPS, Coca-Cola Enterprises, Chick-fil-A and Porsche. 

What I particularly like about the book is Baksin’s brevity.  In our sensory overloaded society,  it’s refreshing to be able to just pick up a book, hit any page – and get a shot of know-how, to make the day go a little easier. It should be required reading for anyone trying to merge ones work life journey in a more positive way.

Small Business Strategies: The power of a vacation

Flip flopsWhen you own your own company, it can be very difficult to tear yourself away from the business for any stretch of days long enough to be considered a vacation. But taking a vacation is one of the most responsible things you can do for your company.

This is very tough for us Type A types to believe. We get so wrapped up in the urgency of the day-to-day workings of the company, and sometimes even in our own self-importance. It’s hard to believe the business wouldn’t immediately run adrift the second we take our hand off the tiller. 

When my first agency hit its one-year mark, my business partner and I contemplated a spa trip, both to celebrate the success of our first year and to plan for the next. We just could not imagine being out of the office for the five days the trip would take. We broached the subject with our first employee, who was by that point handling many details that neither of us were much good at anyway. When we asked if she thought that she and our skeleton crew could possibly manage without us that long, she burst out laughing. “I think we can handle it,” Rebecca said drily and turned on her heel to get back to work. 

The thing about getting away from the business for a number of days is that it pulls you out of the mire of details and deadlines. It breaks that ant trail of list making perpetually marching in your head. And eventually, not right away, but when your mind begins to calm, you will find clarity. This is where the power of the vacation lies.

With the distance of time and geography, you provide the space for big ideas to appear. The perspective you gain from stepping back from the business allows you to see both issues and opportunities you hadn’t had time to notice before.

Of course, this clarity doesn’t come right away. For me, at least, my mind churns as busily as ever for the first few days of a vacation. I sit on the beach thinking of things I need to make sure people back at the office remember to do, or hike in the desert hills with accounting numbers banging around in my head. But eventually, the salt water or the desert air do their trick. 

Most of the really smart business ideas I’ve ever had occurred to me on vacation, in a moment of stillness toward the end of the trip. I was staring out at the ocean in the early days of Tribe when I realized I could never make the income I wanted with only my own billable hours, at least not without working many more hours a week than I wanted. A few weeks after that vacation, I had six or eight freelancers working on client projects, and I was billing all their hours with a nice markup. Jennifer and I were sitting at the pool towards the end of one of our Arizona trips when we realized it was time for Tribe to get real office space, to collect all our home-office people in one location. That decision was huge to Tribe’s ability to grow, and to serve our Fortune 500 clients who were becoming increasingly less tolerant of trying to track us down in our virtual world. I was sitting on the beach on a family vacation a few months later when I realized it made a whole lot more sense to get a loan from our bank for the office build-out instead of trying to pay that out of cash flow. That decision gave us financial flexibility that made all the difference one tough slow summer. 

The hard part is trusting that it will happen. As the days of vacation trail behind me, I almost always think it’s not working. I somehow expect that my mind will immediately stop its usual racket the minute I’m out of the office. It takes time. It takes hikes in the mountains or runs on the beach, it takes long nights of good sleep and leisurely afternoon naps, it takes reading a few books, having some good meals, sitting on the porch for cocktails with people I love. 

Then suddenly, the big picture or the new idea or the instant clarity floats up out of nowhere. Often, it’s something that is so clearly the right thing, it later seems obvious. You just never saw it before. And likely would never have seen it, if you hadn’t taken the time to slow down for a few days.

Therein likes the power of vacation.

Small Business Strategies: Dealing with tough economic times

guy leaping cliffsThey say desperate times call for desperate measures, but there’s no reason to panic. My recommendation to business owners worried about the economy is to adjust to current conditions as needed, but without losing sight of the long term. This recession won’t last forever. The first goal is to make sure your company is still standing when the tide turns, and the second is to be prepared for rapid growth when it does. Here are a few lessons I’ve learned over the years, in most cases the hard way.

1. Don’t postpone layoffs. If you know you’re going to have to lose people, do it sooner rather than later. The only difference is that if you do it earlier, you stop the leak in your payroll expenses that much more quickly and you can probably afford to offer better severance packages. If you’ve lost a big client due to the recession, cut your staff immediately. That makes it much easier for them to connect losing their jobs with the company losing that business, and not because they weren’t performing.

2. This is a good time to prune dead wood. Ask yourself if there’s anyone on your staff you would not hire today, knowing their work habits, abilities, attitude and suitability for where your company is now. If there is, you might want to gently release them. If you’re afraid they couldn’t find work elsewhere, maybe you ought to give them a little more credit. You’d be surprised how often business owners offer a huge severance out of guilt, only to find their former employee gainfully employed almost immediately. Yes, even in this economy. 

 3: When business is slow, do something. Anything. In my experience, it doesn’t really matter what you do to stir up new business, as long as you’re putting some energy into it. Pick up the phone to call a few prospects or brainstorm some new way to market your company or just take someone to lunch. Somehow the sheer force of that activity shifts something somewhere out there and suddenly the phone starts to ring with business. Often not with the people you’ve been calling or wining and dining but from someone completely out of the blue.

4: Say no to clients who aren’t right for you. One of the hardest things for business owners to do is to turn down a paying customer. Especially when times are tough. But it’s crucial to building the business you want. Decide what sort of clients are a good fit for your company and then be ruthless about turning away the ones who aren’t. Refer them to some other company who would love to have them and it becomes a win for everyone. 

 5: If no one ever balks at your prices, you’re not charging enough. Unless you’re trying to be the next Sam Walton, the low price leader is not a prize you want. Set your fees reasonably for the value you provide and then expect some people to tell you they’re too high. The ballpark number I use is that one out of 10 prospects will think we’re too expensive. We’d rather work with the other nine.

6: Use the lean times to do less visible work. Slow times are the perfect time to add a new expertise to your service offerings, to research a new part of the industry, to learn something you don’t have time for when you’re busy — like social media, for instance. Take a cue from nature. In the winter, when the sun doesn’t shine and the wind blows cold, the roots are down there underground doing their thing. Then when spring arrives, the plants are ready to burst out with vibrant green leaves and beautiful flowers. That abundant growth could be just around the corner. 


Small Business Strategies: Six tips for making better decisions

traffic arrowsIf it’s not a Hell Yes, then it’s a Hell No. When you adopt the Hell Yes principle, you’ll find it an effective and efficient way to make business decisions quickly. Next time you’re faced with a choice to make for your company, or need to set priorities to get things done, ask yourself one simple question: Is it a Hell Yes? If not, then let your answer be Hell No. This question acts as a razor to cut away everything in the gray area – and allows you quick access to your intuition.

1.    Identify your big Hell Yes for the day. What’s the one most important thing you need to do today? It could be something you’ve just had in the back of your mind, like the nagging thought that you should check in with a client who hasn’t seemed pleased lately. Or maybe you’ve had an idea for a way to increase sales, but haven’t yet taken the time to sit down and develop your thoughts. Make that task a Hell Yes, and get it out of the way as early in the day as possible.

 2.    No one knows your business like you know your business. It’s great to have a trusted team of advisors, like your banker, your lawyer, your CPA or even other business owners you trust. But when it gets right down to it, nobody understands a company like the person who’s running it every day. Take others’ input, but in the end you have to trust your own gut. Only you will know what constitutes a true Hell Yes for your company.

 3.    Say Hell No to high maintenance clients Even in this economy, there are times when it’s good business to say no to certain customers. If you have a strong feeling that a client is going to be unprofitable, slow to pay, or just not a good match for your company, summon up a polite thanks but no thanks. It will leave you more time and energy to pursue the client who would be a real Hell Yes.

 4.    Don’t hire someone who isn’t a Hell Yes In a small business, every employee is a huge investment. Sometimes a job candidate looks good on paper but doesn’t feel like the right fit. Other times, you might find someone with the qualities that make you know in your heart that this is someone you want on board, even if their resume doesn’t show all the experience you’d like. 

 5.    Turn on a dime when you discover a Hell Yes

One of the biggest advantages of owning a small business is that you can make a decision in the morning and implement it by afternoon, without going through all the necessary approvals and consensus building of the typical corporate environment. If a new direction suddenly strikes you as a Hell Yes, pursue it right now, with everything you’ve got.

 6.    Feeling energized is a sign of an approaching Hell Yes. Pay attention to how a business opportunity or potential project makes you feel. If you feel excited and energized, that’s a Hell Yes. If you have to struggle to make yourself get going, something’s probably off. You might want to say Hell No to that one, and create room for something that makes you say Hell Yes.