Owning A Business – Part One

Owning a business is relatively easy. Operating a successful, profitable enterprise is an entirely different and more complicated matter.

The easy version is to figure out if you want a sole proprietorship, LLC, S, C, or other corporate designation and get a EIN, then open a bank account. You are now a business owner!

Hanging a shingle does not mean customers can find you.

Hanging a shingle does not mean customers can find you.

That may be what you think, but let’s look at what you don’t know. Most business owners don’t know what they don’t know about owning a business, so let’s scratch the surface with these few things from a long laundry list, in no specific order. Come back for more in part 2.

  • The first question you need to ask is why? Why do you want to own a business? Did you get fired? Believe you can do it better than your employer? Are you setting it up for your children to take over some day, and if that’s your reason, will want it? Do you want to be free from having someone else tell you what to do; and do you understand that consumers will always be your boss? Is this your retirement plan, and will it even make money? Or are you doing this because you believe you have a great product or service to offer people?
  • When you look at a corporate structure, consider if anyone else will be involved in the business. Are there going to be partners? Will they be equals or subordinates? Investors? Family members, including a spouse? How do you want to handle taxes? These are questions you will be asked by the professional who helps you set up the corporate structure, and you are wise to engage a business attorney to assist you with establishing bylaws, if necessary, as well as operating agreements and other legal documentation to protect your assets. Check to see if they are qualified to assist with patents, copyrights, trademarks, and any other intellectual property rights you may want to protect.
  • Do you know what EIN stands for? It’s the Employer Identification Number you need for tax purposes, both for filing your corporate returns and for your customers to report their financial relationship with your business. Engaging a Certified Public Accountant or Enrolled IRS Agent (EA) to assist with your corporate tax obligations, including quarterly payroll, is another wise decision. Your accountant can help make sure your chart of accounts is set up correctly, that you’re operating on either cash or accrual basis, and that your financial reports (cash flow, profit & loss, balance sheet, etc.) are accurate. They know the questions to ask, which is why we strongly encourage engaging professionals to help you.

We haven’t even scratched the surface or discussed branding and marketing and customer relations and location and many other aspects of operating a business, so check back for part two next week.

Brand Your Work – Work Your Brand

Business Viability

If we’ve heard one story about someone wanting to start a restaurant, we’ve heard a dozen. The idea of opening and operating a restaurant most likely stems from a bad experience where someone feels they can do a better job than what they encountered. It could be that there is a belief they’re a good cook, or they have children who suggested mom and dad open a restaurant. In any case, the horror stories are more common than tales of success.

Here’s why, and the reasons apply to more than restaurants.

More than once we’ve heard about the person who wants to take over an existing restaurant that failed and closed. We even heard of one restaurant owner who closed a franchise operation and claimed they would reopen at the same location as a “different” restaurant. Could location have been a factor? Or could hiring a majority of the same employees drive a stake into the new operation?

There have been fast food franchises that have torn down one building and relocated to the other side of the street, simply because the old location was not accessible to customers who wanted to avoid turning left into the restaurant. Location is key.

When it comes to any business, it pays to do some diligence and investigate issues such as traffic flow, residential population, ease of access, and other establishments nearby that are capable of or already bringing potential customers to the location.  If you can do that yourself, great; if not, consider a professionally conducted competitive market analysis or feasibility study. Realize that the cost of acquiring that information could help you avoid moving forward on a project that is destined to fail … and spending much more money in the process.

Besides location, you have to consider your management team, target market segments, value proposition, revenue streams, various cost factors, and key resources, among others. All of these are part of developing a business model.

To go back to restaurants, for example, far too often the owner chooses to employ managers to run the operation in their stead. Unless those managers have a vested interest in the endeavor, they could ruin the business by the way they manage the employees, treat the consumers, and handle inventory and other financial matters. Ever hear stories of managers embezzling funds?

Have you identified the various market segments likely to patronize your business or use your products? What are their buying habits? Do you have a value proposition that resonates with them and is relevant to their needs and wants? Do you know how to reach them with effective advertising that provides a return on your marketing investment? What makes your business different from the other ones that provide the same product or service? It’s one of the first question certain consumers will ask.

Now ask yourself: How much money can I realistically expect to make from this business? On this step, it is critical that you are brutally honest with yourself. Leave your emotional attachment to the idea or suggestion out of the decision making process!

As part of this evaluation, ask yourself the long range question: Why am I doing this?

We are here to help you take the time to think through that question.

Brand Your Work – Work Your Brand


Get the Facts!

One of the most critical elements in making a business decision is having the facts.  Put aside the emotional aspect of starting, buying, expanding, or selling a business.  Consider the logical information that’s available; the business side of the deal.

A recent project involved a competitive market analysis for a client that wanted to expand a high margin portion of its business to a different market segment.  The investment involved millions of dollars, so it made sense to spend a couple thousand to learn if it was a feasible project and whether there was a significant enough volume to warrant the expansion.

Yes, this type of research takes time.  If it’s an emotional decision, the time factor can put undue pressure on getting the facts.  As we have discovered in conducting numerous market research studies, the path to a decisive outcome often takes many diverse turns.  One bit of information may indicate the choice is quite clear, while the next piece of data spins the decision in the opposite direction.  It requires all the facts to provide a clear picture, and that takes time.

In the recent effort, what looked like relevant information turned out to be at least two years old.  While it may still be pertinent, further research is required from additional sources to verify the validity of the information.  Some sources are more reliable than others, so as professionals, we are required to double check and, at times, triple check the resource to determine the accuracy of the data.

As you should assume, the world of business can change quite rapidly.  For instance, we determined that a major international company had a subsidiary that looked promising for the client’s expansion project.  Digging deeper, we learned the subsidiary had been sold to a group of private investors and re-branded under a totally separate corporate umbrella.  Despite the potential for change, the time eventually arrives when a decision needs to be made.

Get the facts, and you have a higher percentage chance at success.  Then, when you’re ready to market your new strategy, you can bring the emotion back into the equation and move forward.

Brand Your Work – Work Your Brand


Take Time

There’s a Moody Blues song with these lyrics:  “Time waits for no one.  No, not even you.”

Moody Blues coverWhile the Moody Blues are an amazing group and the song is wonderful, the line is profound and poignant, especially in this era of smart phones and instant gratification.  Even though the instant gratification term is seldom used any more, the syndrome remains.  We, as human beings, want answers and information right now.  We want to act now and be done with whatever it was we were doing so we can move on to the next project or activity.

Through it all, time does not wait for anything; the clock keeps ticking.

Stop for a minute or two and answer these questions:

1) Did you make any mistakes today because you were trying to move too quickly?

2) Did you ignore an important person in your life because you didn’t have time for them?

3) Has your day been extraordinarily stressful because you can’t seem to get everything done?

If you’ve been honest with yourself and answered “Yes!” to any of these questions, it’s time to slow down a bit and take time to think.

Consider whether you have too many tasks on your “To Do” list and how many of them are simply “crap” you put on the list so you don’t forget to do them.  Checking your E-mail is a good example.  Does it really need to be on the list when you know you’re going to check it several times a day any way?  It’s like putting “Take a Shower” on your “To Do” list.  It’s routine and a task you’re not likely to forget, so why stress yourself out by adding it to the daily tasks?

Here’s the key:  When you make up your list of priorities for the day, take the time to think about what are the top five that MUST get done.  It might only be one or two tasks, and that’s okay.  You will have accomplished your objective if those two to five items are finished by the end of the day.  Think, too, about what’s most important.  It might be taking your son or daughter to a ball game.  Yes, that’s important, even to a busy corporate executive.

Your work will always be there, unless you can delegate it to someone else (remember, you still have ultimate responsibility), but your children grow up and leave the nest before you know it.

Think about what’s most important to you, personally, as well as professionally.  Time with your spouse doing what she or he likes to do.  Time with your children doing whatever.  Time with yourself just thinking, reading, napping, hiking, exercising, enjoying time alone, or listening to the Moody Blues.

Time is not going to wait for you to make up your mind.  The time you took to read this blog is gone, and it’s not coming back.  We hope you found some value in it, and that it was worth the time spent.  If you’d like help managing your time, click on the slogan below and give us a call.

Brand Your Work – Work Your Brand

Missionary Zeal

If you lack passion for your business, it’s time to give some thought to why you’re doing what you’re doing.  Missionary zeal is essential for business owners to ingrain into their company or organization.  It becomes the defining element of their corporate culture, the reason for your existence.

150px-USS_Benfold_DDG-65_CrestThere is an excellent book on leadership by Captain D. Michael Abrashoff called It’s Your Ship and sub-titled Leadership Techniques from the Best Damn Ship in the Navy.  Abrashoff created the best ship in the United States Navy by realizing that the destroyer he commanded, the USS Benfold, was more than “his” vessel.  It belonged to every sailor on board and the standard military protocol of command and control was less than ideal as a management technique.

The captain found that the more every member of the crew knew they had ownership of their ship and that he cared about them and their role on it, the higher the level of performance could be expected from everyone.  His vision was to reinforce that the ship’s mission was combat readiness.  Pure and simple.  That vision was communicated with the expectation that every sailor on board was important to achieving that mission.  It was, without a doubt, their ship!  The fact the USS Benfold became the best damn ship in the Navy proved his approach.

Does that same missionary zeal apply to your organization?

Do your “sailors” feel as though they can help accomplish the mission?  Do they even know what the mission is?  Do they care?  If they don’t, the reason may be that they don’t believe you care about them or what they do.  Do you listen to their suggestions?  Do you implement those recommendations, or sweep them under the rug?

More importantly, do your sailors understand the corporate mission?  Do you, as the business owner or CEO, convey your vision for the company’s success?  If you are unsure or unclear, it may be time to seek professional counsel and re-visit your corporate culture.  It’s okay to embrace change if it is warranted.  Insanity has been defined as continuing to do the same thing and expecting a different result.

Your mission needs to clearly define your reason for existence, cutting through all the verbosity.  Are you in business to provide a service or a product to consumers?  Or to make money?  It should be both, but if you answered “Yes” to only making money, you need an independent third party to help you figure out how to do it.

Brand Your Work – Work Your Brand



Communication: Critical

Communication is critical to business success.

When you look at business plan formulas and study different models, there are two key ingredients woven through every one of them,   One is the reason for existence, or the corporate mission and vision.  Without a mission, success is hard to define and largely a matter of luck.

The second essential that is critical to whatever plan is put together is communication!Communication Diagram

Communication is the thread that is woven into and through the success of any organization.  If it is weak at any level, the message can be lost and the consequences will be seen on the bottom line.  If lines of communication are strong throughout the company, substantial profits can be gained.

Communication starts with the corporate mission.  It should be clear why the company is in business.  This falls on the owner to know the reason for the company’s existence and to communicate that vision throughout the entire organization and to the consuming public.  If the ownership has a hard time defining that vision, imagine the impact that has on everyone else involved with the company.

A consistent message must be communicated within and throughout the company, from management to employees and back as part of the culture.  All levels of the organization must sing the same song.  Managers must be open to suggestions from staff, especially those on the front lines of production or customer service.  Staff, especially those involved in sales, have a direct line of communication with customers, so their voices must be heard.  What they can communicate to the organization as feedback from consumers can mean the difference between long-term profitability and going out of business fire sales.

Everyone is part of the same ship and can make the difference between sinking or sailing.  The owner’s vision also defines his or her leadership style.

The company must communicate clearly with its customers and potential consumers.  If the customer is getting conflicting messages, often generated by word-of-mouth from other consumers, the likelihood of continued sales goes down dramatically.  Consistency is important in the message delivered to the public, but so is the value of consumer perception, whether it matches the company line or diverges.  Despite what business owners may think, people do talk about companies and ask what makes them different.

The key is to facilitate open and honest communication throughout the organization.

Perception vs. Reality

Perception vs. reality in marketing your brand.

With as many blogs as we’ve posted about marketing, it’s puzzling why this is the first time we’ve addressed the topic so basic to marketing.  Does the consumer’s perception of your business match the reality of your company?

Here’s a little test:  Imagine your dream vehicle, the car or truck you’ve always wanted to own and drive.  With that image firmly in mind, see if the picture at the end of this blog matches your ideal.  Does perception match?

You’ve probably heard the phrase:  Marketing is perception.  There’s an element of truth to that because every company and business wants to have top-of-mind awareness for their products and services with the largest consumer base they can capture.

An analogy would be that Cadillac is the top-of-the-line in American automobiles, the “Cadillac” if you will.  Keep in mind it has taken years, lots of advertising dollars, and various trials and tribulations to achieve and maintain that image for General Motors.

You, too, must have that commitment to your brand to ensure its position as the leader among your competitors.

It’s a marketing process wherein you craft the ideal, then work toward matching reality to that perceived image.  Once it’s achieved, the focus shifts to maintaining a sustainable corporate brand identity.

One of the first steps is to assess what perception already exists for your products or brand.  You can engage professional services to perform this analysis or do it yourself with the pain-staking effort of talking to customers and non-customers.  Customers can tell you what they like about your products and services and your company overall.  Non-customers can give you the perspective of individuals who a) may not be aware of your products yet, or b) have an adverse opinion of what your products or services entail.  Either way, you need to know the perception.

Another step, and again, professionals can assist with the process, is to determine how closely the perceptions are to where you want them to be.  Coupled with that is delineating the steps to bring the two more closely into alignment.

Changing perceptions is difficult.  Consumers generally remain loyal to certain products and services, hence brands, they know, like, and trust.  Getting them to change to something else is a challenge, as much as it is to convert customers of a competitor to your brand.



Brand Your Work – Work Your Brand


Customer Service: Tasks or Customers?

The clerk behind the grocery store service counter was running ragged.  There were five customers backed up waiting to take care of business, from purchasing lottery tickets to returning merchandise and from asking about a coupon to getting a price adjustment.

When it was our turn, we made a comment about how busy it appeared to be.  The clerk replied that it had been hectic all day and that the work they’d been assigned “in the back” was not getting done.  At that point, we began the conversation about staffing the “customer service” counter.

We suggested that the reason they were there in the first place was to take care of customers, not whatever the manager assigned as chores or tasks.  There was agreement before a “but” that prompted our response to let the manager know, in no uncertain terms, that the assigned work was not getting done because they were taking care of customers.

If you are a manager or business owner, it is imperative that your employees understand their first priority:  Take care of the customers!  Reports, stocking shelves, team meetings or whatever else is on your agenda of priorities should always take a back seat to taking care of the people who want to move your merchandise and give you money.  Anything less, in our opinion, is poor management.

Consider this example;  You’re shopping in a store and hear the announcement over the  public address system that all “associates” should assemble in the men’s wear section for a team meeting in five minutes.  What’s your perception?

One could be that you have five minutes to get any help before there is no one available to take care of whatever you might need in terms of service.

Two could be that someone is going to get chewed out and made an example of in front of all the other people on shift.

Three could be the manager has a self-inflated ego about what’s important to the company.

A criminal mind might use that meeting to attempt something illegal.

While we realize it is difficult to hold team meetings when a business operates 24 hours a day, they can be conducted prior to a shift change by paying a few minutes of extra time for staff to show up early.  Consider how the workers feel when they have to stop what they’re doing and ignore customers to attend a group get together that may or may not have significance to their performance.

It is far easier to build employee morale through individual attention.  Corrective action is best achieved one-on-one and while praise for exceptional performance is appreciated in a group environment, it is also a boost when provided face-to-face.

Brand Your Work – Work Your Brand


Old School Advertising

Once upon a time, people looked for information about a business in the yellow pages of their local telephone directory.

Yellow PagesIf a business placed an advertisement in that directory, it was wise to be the first company listed under the desired category.  The “old school” method of naming your company, therefore, was to have a title such as All American Plumbing or AAA Heating & Cooling.  The idea was that the consumer would dial your number first because you were first in your category.

In a sense, they were following the #1 immutable law of marketing;  The Law of Leadership.

Fast forward to 2015 and the world of electronic communication.  Searching the phone directory for a business listing has been following the path of the dinosaurs for a number of years, with the end not too far away.  Today it is much faster and more efficient to look for a business using a web browser on a smart phone, laptop, tablet, or similar electronic device.

In many cases, the listing enables the online user to call the business directly from the listing, view the website, or discover the hours of operation among other choices.

So, although the old school theory of using the first letter of the alphabet to lead the way in a business listing is passe, the law of leadership still applies.

If a potential consumer does not know the specific name of your product, business, or company and chooses to search by a generic category such as “plumber” or “Italian restaurant,” it is critical that your business comes up on the first page of search results, preferably leading the way by being first on the page.  Search engines are intuitive enough to know your location, so searching for an Italian restaurant when you’re in Chicago is not likely to return a result for Poughkeepsie, New York.

The bottom line:  You want to be on the first page of search results!  Statistics have shown that 74% of users will not go beyond that first page.  If your business is not there, you are out of the picture, and will wonder why your website isn’t generating the results you expect.

How do you do it?  One way we recommend is to work with a consulting firm with a proven track record.  Just building a web presence is not enough in today’s competitive environment.  You need the right key words and strong page descriptions, but you also need to understand your market segments – not everyone needs what you offer – and provide relevant content that entices your ideal audience members to use your products and become loyal to your brand.

Brand Your Work – Work Your Brand


Online Advertising Pros and Cons

According to recent reports by Chartbeat and Google, only 0.1% or less of banner ads are actually clicked on.  One-tenth of one percent or less!  Couple that with statistics showing that 56.1% of all, repeat all, website ads are not seen and you come to the realization that business owners need to rethink their online marketing strategies.

Roger Yu of USA Today wrote an article recently about how “some notable names in the online publishing business (are) starting to rethink the way they present their content and sell their ads, focusing on the amount of time spent on their content by readers.”  The gist of Yu’s article is that online users want relevant and/or compelling content.

Let’s look at the cons of online advertising first.

Banner, pay-per-click, and similar ads are not likely to produce new clients for your business, despite the number of people viewing the sites where you may advertise.  When you think about it, which is something we encourage people to do, users don’t want to be sold, so the only way someone is going to click on an ad is if they’re tricked into doing so or are supremely interested in what the potential offer is all about.

The site owner will tout viewers and length of stay on the sites you may advertise on, but when you measure the return on your investment, you are likely to find it’s a waste of money.

What you have to do is weigh the new clients you gain against the cost to acquire them.  For example, if you’re spending $600 a month in online advertising and only acquire one new client, the cost of that acquisition is $600.  Is a client worth that to your business?

Technology is changing rapidly.  What that means is consumer buying habits are also changing rapidly.  What you need to increase the likelihood of a sale is the reader’s time and attention.  That’s where the value lies for both the consumer and your brand.

Yu’s article reported that in December 2014, “…Google issued a report that said 56% of ads it serves aren’t ‘viewable,’ a term that suggests ads are too far down on the site or that readers aren’t scrolling down far enough.”

On the plus side, having a web presence for your business that is mobile-enabled is essential in this era of smart phones.  If a consumer can view your website on their phone, touch and call your business with a couple of thumb or finger moves, you have developed an effective online approach to advertising your business.

If you know where your potential customers are likely to be, such as shopping on Amazon.com or searching with Google, and you can afford to advertise your products there, it may be worth the investment.  Try it short-term to see if it generates results.

Brand Your Work – Work Your Brand