Friday, February 25, 2005

How to cut costs

It’s nine months old, but I just found a great resource from the always hungry folks at Entrepreneur magazine. The story is “50 Ways to Save Money in Your Business”, and it’s chock full of practical, useful ways to cut costs now.

I wish it had gone as far as “100 Ways”, and gotten a little more creative, but there are still some nifty ideas (and good reminders) throughout.

I like these two in particular:

“40. Form a buying alliance. Join with another business or a trade association for bulk purchasing discounts.”

“50. Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote a competitor's lower price, a supplier or vendor will often match that price to win your business.”

Read the whole thing at http://www.entrepreneur.com/article/0,4621,316002,00.html#

Wednesday, February 23, 2005

"Your online solution to business problems"

I’m working on a couple of pretty big projects right now (including helping out with a big fundraiser at my daughter’s school), so please forgive my less than stellar posting rate.

Let me compensate by pointing you to a fascinating “quasi-blog” I helped set up a few years ago at PROFIT Magazine, and which is still going strong. “Peer to Peer” was the quasi-techy name we gave to a newsletter feature in which we invited subscribers to ask for help from each other regarding common business questions. The readers were very generous and consistently offer useful, road-tested advice based on their own business experience.

Now Peer to Peer features a growing resource of more than 50 questions and answers, covering subjects as diverse as how to see eye-to-eye with your ad agency, motivating employees with bonuses, getting an increase in your credit line, and how to sell your business.

Check out the archive at http://www.profitguide.com/enewsletters/peer_to_peer/
There’s nothing else like it in the Dominion.

PS: If you want to subscribe to PROFIT’s weekly e-newsletter (which is really quite useful), visit http://www.profitguide.com/enewsletters/

No charge.

Friday, February 18, 2005

The No. 1 problem in entrepreneurship

A few weeks ago, I met a former banker who now is working on a startup entrepreneurial venture that promises to provide a lot of benefits to a disadvantaged community in society. (Sorry to be so vague, but I want to preserve his privacy here.) Anyway, I was touched by what he was trying to do. When I learned he was having trouble coming up with a name for his business and nailing down his marketing model, naturally I offered to help. (For free. Sigh.)

He took me up on my offer, and we met this week for a working lunch. To my surprise, he didn’t want to talk about the business he had told me about two weeks before. Now he had another idea – a related concept, but much bigger. He wanted to improve the lives of everyone in this socioeconomic group. His new business plan included marketing, distribution, R&D and manufacturing. And there would be a special reward program for customers that would seal the business’s reputation as socially responsible.

The plan was breathtaking. But it was grounded in vapor. My friend is one person, bereft of cash, working alone. He has a personal need to start generating funds soon. Because of family considerations, he can only work 8 hours a day – he just can’t pull the 20-hour shifts that so many startup entrepreneurs know and love.

His plan was totally impractical. Not only that, but his first instinct was to start working on the (highly peripheral) social-responsibility initiative he had in mind.

I have written before in PROFIT magazine about the need to focus and prioritize. Entrepreneurs are practically defined by their limited resources and time. To succeed, you must ruthlessly strip away all the stuff you wish you could do, and focus on the highest, best thing you can do: the service your best market wants most; the products with the quickest payback.

You can add bells and whistles later. But in the beginning, with your livelihood and your confidence on the line, you have to focus on the key activity (or, okay, maybe just a few activities) that has the best chance of getting you to the point where you can actually plan for an expansive future. You have to be successful first.

I tried to explain all this to my friend. I thought he understood. Then, towards the end or our meeting, as I discussed a marketing idea, he asked whether I was referring to his first business model or the second one. I said I thought the first one was dead. No, he said; he wants to do both. At the same time.

Here’s my dilemma. I hate to say anything is impossible. After meeting so many successful entrepreneurs who have launched successful businesses in defiance of the best advice of everyone around them, I will never, ever say, “It can’t be done.” But there is such a thing as limiting your risk. And focusing on one miracle at a time is the best way to start.

Wednesday, February 16, 2005

No Hockey? Who Cares?

Here’s an entrepreneurial success story for you. How did the sadsack Toronto Argonauts turn themselves around and become winners not only on the football field, but at the box office as well?

Keith Pelley, the Argos’ president and CEO, has quite a story to tell: about the importance of putting passion in your work; trust; vision; thanking your employees; and building a brand called Friday Night Football.

Pelley spoke recently to a Toronto group called Future Leaders, and they were kind enough to post a précis of his talk here. http://www.futureleaders.ca/newsfeb705.htm#argos Check it out.

Reports like these – frontline despatches from Canadian business leaders – are sadly scarce. Canada has many great examples of leadership to offer, but their stories are rarely chronicled. (Journalists would rather write about the celebrity CEOS who mess up rather than the genuine business heroes who actually create value and jobs [and wealth for people other than themselves].) But don’t get me started on that.

ARRRR-GOSSSSSS!

Tuesday, February 15, 2005

Seven Questions to Ask Existing Clients

I just finished a column for one of my magazine clients, and I had no room to include any of the cool questions I found in the following list. So you get to see them instead!

The list comes from Canadian entrepreneur and consultant Kent Dinning, whose self-published book, Questions for Success, offers entrepreneurs a graduate course on business-building based on the key questions that other entrepreneurs commonly ask themselves . Dinning sent me an e-mail recently with some of his favorite questions, and I reprint some of them here (you can find more on his website, at http://www.businessresultsgroup.com/).

7 Powerful Questions to Ask Existing Customers
We should never assume we know what our customers are thinking, says Dinning. “Successful business people ask their customers questions to ensure their actions are successful… Consider giving customers a free incentive to answer these questions.”

1. What two questions did you ask yourself before deciding to deal with us?
2. What is the main reason you deal with us? Are there other reasons?
3. Specifically, how do you judge how well our product or service is working?
4. What one thing could we do to serve you better?
5. What, specifically, do you need to feel confident in recommending us to others?
6. What would cause you to stop dealing with us?
7. If we were servicing you beyond expectation, what would be happening?

Personally, I believe that successful business people are those who ask the best questions. Which of these should you be asking in your business?

Thursday, February 10, 2005

Why Small Business Rocks

Today I delivered a speech to the annual conference of the Economic Developers Council of Ontario. They’re the people who try to attract new business to Ontario cities. Increasingly, however, they are spending more time helping local businesses grow.

Which is a new spin on the old business adage that it’s a lot cheaper to get more business from your existing customers than to try to find and attract new customers.

In my presentation, I talked about the changing role of small business, and why I think it is going to become even more significant in North America in coming years.

Here’s part of that speech.

“…As they say, small business is big business. And I think it’s going to get even bigger.

Back in the 1950s and 1960s, small business looked as old and outdated as the Edsel. Big new companies, based on new management sciences and concepts of command and control that helped win the Second World War, were emerging to push out smaller manufacturers and mom and pop businesses all over North America. Parents who grew up in the Great Depression urged their baby boomer kids to work for Canadian National and Procter & Gamble and Eaton’s and Simpsons.

Then reality intruded. The twin recessions of the early 1980s and 1990s proved that big businesses were having just as much trouble keeping up with changing markets as the smaller firms they’d supplanted. More demanding consumers gained an appetite for foods not produced by megafirms, and shopped in boutiques that understood their customers better than department stores. Suddenly, innovation was as important as economy of scale, and entrepreneurs were back in business – filling specialty needs faster than big companies could even identify them.

Then came the technology revolution, which put the power of desktop publishing, computer-controlled design and manufacturing, financial controls and instantaneous electronic communication into the hands of individuals. Suddenly, knowledge counted for more than size and market clout – and any Future Shop customer could enjoy more advanced technology than most employees in big companies. And don’t forget the cellphone, which enable single individuals to be on top of things and in charge in a way that wasn’t possible before.

Today, entrepreneurs are generally credited with being more creative than big business, more sensitive to opportunities, and more willing to gamble on new ideas. Today, small business is a primary source of innovation and R&D to big business. Look at the way IBM, Microsoft, Nortel, eBay, and most of the packaged goods manufacturers in North America hungrily stalk small business for acquisition opportunities. Canadian Tire bought Mark’s Work Wearhouse, Ralph Lauren bought Club Monaco; Estee Lauder bought MAC Cosmetics; Wendy’s bought Tim Horton’s.

By and large, big business has settled into a new role as the owners of assets, counting on small business to do the hard work of creating new ideas and market-testing them. Then big business buys out the entrepreneur. Which is great, because the entrepreneurs get well paid, and as soon as their non-compete clauses expire they are free to jump back into the market and work their magic all over again.”

Do you agree? Disagree? Leave a comment.

Wednesday, February 09, 2005

What stops you from raising your rates?

I belong to an entrepreneur forum that meets once a month in downtown Toronto. We are all self-employed entrepreneurs, mainly consultants, who share ideas on self-development and business-building, and try to hold each other accountable for setting and achieving objectives. My program is affiliated with TEC Canada, The Executive Committee
http://www.tec-canada.com/

It’s a great system, and I suggest every entrepreneur try to find a similar group.

At our meeting this week, three members reported on a project entitled: “What’s stopping you from raising your fees?” They came up with amazing data that indicates most consultants could charge more – if they had the confidence and market awareness to do it.

They quoted one U.S. survey that asked clients whether they would pay their consultants more money if they asked, and almost all of them said Yes. They added, however, that they were not likely ever to volunteer that information to their consultants.

Marketing consultant Michael Hepworth (http://www.results-exchange.com/ ) then shared the results of a survey he conducted recently among Canadian companies. Name three things that prevent you from raising your fees, he asked. The results were thus:

Sense of my own value 26%
Competitor pricing 23%
Perceived value of services in the marketplace 14%
Protecting an existing client relationship 12%
Ability to truly communicate our value 6%
Client wants a low bid 5%
The economy 1%

The findings? What stops us from raising fees is rarely the client, and almost never the condition of the economy, but our own ignorance and fear – or what Hepworth called “head trash.”

Food for thought on a cold winter’s day.

No Doubt?

No time to post today, so we’ll dip into the Quote Collection.
The following quotation rings true in almost all aspects of life, but I think it applies to entrepreneurship most of all.

"If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts, he shall end in certainties."
Francis Bacon, Advancement of Learning

Sunday, February 06, 2005

“Never underestimate the importance of other people in your success”

Today I enjoyed reading interviews with various MBA graduates in the latest alumni magazine from the University of Toronto's Rotman business school (which is one of the better business schools and one of the better alumni magazines).

Although MBAs are degrees of great complexity and controversy, I was struck by the simplicity of the grads’ comments when asked the most important skill required for their job. Here are some of their answers:

VP international marketing: “Collaboration.”

Director of Advertising Development: “I must be able to influence people to collaborate.”

President, country manager: “Active two-way communication; the ability to bring together a number of diverse views.”

Information Technology co-ordinator: “Strong communication skills… as an administrator in a foreign country, it is doubly important to ensure that what you are saying/hearing is not misunderstood or altered by cultural/language perception filters.”

Finally, I liked what one guy had to say when asked for his “words of wisdom:” “Never underestimate the importance of other people in your success.”

Clearly, not all MBAs are the prima donnas that conventional wisdom makes them out to be. Some of them actually get it.

Friday, February 04, 2005

How to tell people what you do

Last week I attended a full-day seminar on “Customer-Centric Communications: How to talk so people listen.” The presenter was Michel Neray, a talented communicator/speaker/coach based in Toronto.

There was too much good stuff to blog about, but I was especially impressed by his approach to the age-old question of “positioning statements.” This is a huge business challenge: almost every business person has trouble coming up with a line or two that expresses exactly what he or she does.

Michel’s approach is simple. He focuses less on your introduction than on what you say next. His idea: don’t talk about what you do. Ask your prospect or customer about their problems. Your whole point is to be able to follow that by saying, “That’s what I do.”

Example:
Prospect: “So what do you do?
You: “Well, tell me, when you’re looking to hire good people, do you have any problem finding good candidates?”
Prospect: “Are you kidding? Do you have any idea how hard it is today to find people who are prepared to work? It takes way too much time and it’s driving me crazy.”
You: “Well, that’s what I do. I help employers find the quality employees they need, in much less time than they’re taking now…”

And you take it from there. It’s purposeful, it’s easy, it’s brilliant.

You can read Michel Neray’s free articles and other material at http://www.essentialmessage.com

Thursday, February 03, 2005

Had by an Ad!

In order to study the true blog experience, I signed up yesterday for AdSense – a Google service which puts real live ads on my little Blog. I hope this won’t offend anyone – this is an entrepreneurial blog, after all!

AdSense puts ads on my website for free; the advertisers pay only if someone actually clicks on their ad. (And there were dire warnings when I signed up about what they’ll do to me should I attempt to click on the ads on my own site, in an effort to earn the penny or whatever that that might be worth).

Right now, the ads appear in a very ugly space, way down at the bottom of this blog, which means no one will likely ever see them anyway, so I will put off buying the Porsche for a while.

Why am I writing about this? Because of how spooky this process is. When I scrolled down the page tonight to view my Site Meter (which lets you check your site traffic), I noticed that all the ads were about Star Trek products. Obviously, that’s because the very next post below (my most recent post) was about the cancellation of Star Trek: Enterprise, which was announced today. In some scarily efficient super-computer way, AdSense notices what I write and serves up ads based on the copy I post!

The mind boggles. What if I write about the pharmaceutical industry? What kind of ads will they serve up if I discuss plastic surgery, or food additives, or dating? What if I mentioned one of those smarmy “get-rich-on-the-Internet” gurus, such as Cor – no, I won’t mention his name. Not till I check with my lawyer.

I may cancel AdSense if it continues to take me out of context and turn my words of wisdom into promotional sales copy for ridiculously marginal products. But for now, it’s all part of the learning experience.

Star Trek Lives!

My friend Geoff sent me this link today as his way of letting me know that Star Trek: Enterprise has been cancelled. Dead. Kaput. Self-destructed.

http://news.bbc.co.uk/2/hi/entertainment/4231873.stm

I have always thought of Star Trek as a very entrepreneurial notion – and not just because of the name of the ship. You’d be surprised how many entrepreneurs I have met who have identified with the show over the years, especially the scripts that dealt with leadership.

Economics in Star Trek was laughable (sure, send a $100-billion starship with a crew of 800 to transport one ambassador to a conference), but the shows dealt with decision-making, consequences, innovation, and thinking out of the box. CSI: Pittsburgh will not make up for this loss.

To commemorate this decision, here is a Star Trek story I wrote years ago for PROFIT Magazine.

Everything I know about business I could have learned from Star Trek
By Rick Spence
There's a show on TV - on prime-time and in infinite re-runs - about a small team of co-workers that career around the universe in very entrepreneurial fashion. Although they do report to head office (it's called "Earth"), they pretty much make their own decisions. And like most entrepreneurs, they have learned that they maximize their self-interest when they help others.
Maybe that's why they called their starship "Enterprise."
If you have never watched Star Trek, here are 10 deep-space business lessons that could save you shelling out $30,000 for an MBA:

1. Always obey the Prime Directive - except when it's in the way
2. Logic is never enough
3. Very few conflicts can be settled with a phaser
4. Anyone can do Warp 9. But they can't keep it up very long
5. No matter how advanced we think we are, there's always someone who's faster, stronger and smarter
6. The unidentified crewman always gets killed
7. Engineering can always get things done sooner than they say they can
8. Never judge anyone by their ears
9. "Boldly" is the only way to go
10. Being captain is the best job there is.


Pirates in Pinstripes

I read the news today, oh boy…
Here are the standout headlines in the Toronto Star business section today (Feb. 3).

“Scotiabank caught up in Royal Group mess”
“Nortel sues trio over bonus pay”
“Regulators move against fund company”
“Disciplinary hearing highly critical of top insurance salesman”
“Ex-CEOs retain officer in telecom firm’s towers … staff still handle their calls”
“Deal on WorldCom director payments ends” (it was the first deal where directors agreed to take financial responsibility for their own ineptitude)
“Grasso pay totaled $190 million” “Assistant got $240,000” “Spitzer seeks recovery of funds”

You don’t have to know the details behind each of these stories. Just the common thread: the sheer greed of seasoned professionals who should have known better.

I find this frustrating, because I believe business is a force for good. It enables thousands of people whom you and I have never met to spend inordinate amounts of time developing products and services they think we want and need. And we get to choose whether they were right or wrong. It’s a system that encourages you to go out and start any business if you think you can do better than the people out there now. It’s a system that thrives on freedom and runs on trust.

When capitalism goes bad, it’s often some small greedy entrepreneur who chooses a short-term payoff over a long-term relationship: the cab driver who takes the longer route; the fly-by-night retailer who will be gone before you find out the product you bought doesn’t work.

But as headlines like today's show, it is the greedy senior executives at the top of the heap who cause the most damage. Their need for more money, MORE, MORE!!!, made them devise or accept bad deals that essentially stole money from customers, shareholders and employees.

It’s tragic. Not only do these offenders rip off people who need the money more than they do; they give business a bad name. They force all businesses to accept more regulation and more bureaucratic procedures in a vain attempt to prevent such outrages from happening again. The red tape involved in Sarbanes-Oxley legislation alone will cost U.S. companies more than a BILLION dollar a year!

No one can stop these pinstriped pirates in advance. But here’s what business people can do: they must shun the greedy pigs. They must let the offending executives at WorldCom, Royal Group, Hollinger, Enron, Nortel, Tyco, and so on, know that they have betrayed a trust.

They have dishonored the world of business. And they must never be accepted among polite company again.

Wednesday, February 02, 2005

Necessity and Imagination

I had a great meeting with my longest-serving client yesterday. We have been working together writing articles to promote his business for many years. Long ago, we began to worry we would run out of topics; how could his business generate enough new ideas to keep us going?

Yet again, however, we proved to be the Energizer Bunnies of Ghostwriterdom. We came up with three good stories, and at least four new story ideas to pursue. It’s a testament to the power of imagination and commercial necessity combined.

As I face the daunting prospect of filling space on this brand new blog, I take heart from this experience. There will always be new topics. Just as there will always be opportunities.

Necessity and imagination are the heart of all entrepreneurship.

Ask, and You Shall Succeed

As you may know, I write a regular column on entrepreneurial affairs for PROFIT Magazine: Your Guide to Business Success.

Here’s a link to one of my most popular columns, from last November: "Ask, and you shall succeed." As the deck says, What's one of the most valuable but underused business tools? The question!

http://www.profitguide.com/magazine/article.jsp?content=20041101_144205_4588

(If you have time to kill, you can even follow the links to some of my other columns. )

If you have any cool "breakthrough" questions of your own, why not share by leaving a comment here?




This is what the column looks like on paper. Don't try to read it here. Use the URL above. Posted by Hello

Tuesday, February 01, 2005

Blogging for Business - Boom or Bust?

I've been trying to figure out for some time whether or not blogging will become a significant business tool.

Blogging is cheap, it's personal, it's interactive, it's immediate. There's an intimacy and honesty to blogging - so far - that you don't find in most business communications. It is superb at connecting people of like minds and opinions. But will it tie business closer to its customers?

I think it can - but it has to be done exceedingly well, and that’s the stumbling block. To communicate consistently in a compelling, warm and strategic manner is asking a lot of any business person – especially the busy CEOs who are being urged to take personal responsibility for their own blogs.

Which, to my mind, creates a clear and sustainable advantage to any CEO who does like to write, who enjoys communicating both personal and corporate messages, and who is capable of doing it for more than three weeks before losing interest. Obviously, I don’t think there are a lot of people like this out there.

Still, here's a contrary opinion. Susan Solomon has a story called “Attention, CEOs: It's Time to Blog,” at the always useful MarketingProfs site, http://www.marketingprofs.com/5/solomon1.asp. (Be warned: link may be time-limited.)

Solomon, a communications prof in California, makes three interesting points. First, corporate governance rules are promoting “transparency” in corporations today: what’s more transparent than a company official writing every day?

Second, she says, blogging supports businesses’ other current obsession: “branding.” “A blog provides a daily (or weekly, if more doable) report of a company's activities. It's an opportunity to demonstrate how the brand is regularly "lived out" by the organization's leaders.”

And finally, blogging can mean a lot to one of your most neglected customer groups: your own employees. “Internal audiences also want to hear from the top brass,” says Solomon. “In some organizations, the only instances when employees hear from their chiefs are during the holidays (the cheery ‘here's your gift certificate for a turkey’ note) and when cutbacks are looming (the dreaded ‘these are challenging times’ letter). A blog lets employees know what's happening in their organization and helps manage messaging, sometimes usurping the all-powerful grapevine.”

I hope she’s right. In my experience, though, businesses that can communicate consistently, honestly and interestingly are rare.

And raising employee or customer expectations unduly may be worse than doing nothing at all.

But what do you think?



Rolling, Rolling, Rolling

If you know how Blogrolling works, you'll know what to do with this.
And maybe you'd be so kind as to explain it to me.

Blogroll Me!

Today I become the 30 millionth blogger

Today I become the 30 millionth blogger on the Web (more or less).

I will be posting here occasionally to share some of my adventures and learnings in my new career as a totally self-employed entrepreneur. It's fun, scary at times, challenging and difficult to explain.
If you follow along, I will try to post some entrepreneurial wisdom from time to time. I like to think of business as a team sport.

To inaugurate this column, here's a Time Tip I received today in an e-newsletter from time management guru Harold Taylor. If you read between the lines, it will tell you why having a home office (or at least an office door you can close) is the best solution to workplace stress.

QUICK NAPS INCREASE PRODUCTIVITY
According to Matthew Edlund, in his book, The Body Clock Advantage, short naps of 10 minutes seem to do the most for promoting alertness at work, especially in the mid-afternoon

For more Taylor Time Tips, go to
http://www.taylorontime.com/timetips/050131.html

He's also got a good article on Managing your E-Mail, at
http://www.taylorontime.com/timetips/050131-art.html

Thanks for reading! I look forward to your comments and questions. Or just say Hi.

All the best.

Rick





Rick in the home office Posted by Hello