Entrepreneur of the Week, Part I: The Return of Aaron Fish

Nearing the age of 70, award-winning Montreal entrepreneur Aaron Fish sold his lock-making company, Unican, in early 2001. But fate decided that seven years of retirement was enough. A year ago, Fish bought back the east-end Montreal factory where Unican first began.

And now, by working closely with his staff to lower costs and increase efficiency, Fish has returned that plant to profitability and is creating a new model for manufacturing in the 21st century.

Times had been tough for Unican since its $880-million sale to Swiss-based Kaba Holdings. Capital Industries Ltd., the lock and furniture-handle factory from which Unican sprang, employed 683 employees in 2001; by last year the staff had fallen below 200. The problem, as you might guess: fierce overseas competition.

Last November, according to journalist Marianne Ackerman, writing in the Montreal Gazette, Fish spurned his wife's advice and bought back that part of the company. "I bought it on Wednesday,” Fish boasts, “and by Monday morning we were in the black!"

It didn't come easy. Fish cut out the management fees paid to Kaba, and outsourced costly accounting and legal services to small local firms. He also cut a deal with his staff : if they agreed to a freeze of their pension plans, they would get 25% of future pre-tax profits. According to Ackerman, sales started growing almost immediately.

"Manufacturing is not dead in Canada," says Fish. "What we have to do is put our heads together with employees and find ways to compete, look for new markets and new ways of doing things."

Half of Capital's business is in metal furniture parts such as door handles. The rest involves components for locks and electronics. "We are not the most efficient operation around," says Fish. "If you need 50,000 of something, go to China. But if you want 10,000 and assured delivery, call us."

With rising labour rates in China and increasing transportation costs, Fish foresees a resurgence of specialty manufacturing in North America. Capital is now looking at opportunities in aerospace and transportation. “Bring us the designs," says Fish, "and we can make pretty well anything."

For perseverance, creativity, his concern for others and his unbounded confidence, Canadian Entrepreneur is proud to name Aaron Fish our first Entrepreneur of the Week.

You can read his full story here.

Coming Monday: Entrepreneur of the Week!

I've been dropping hints about the new Monday series that will replace the "Best Ever" Motivational Quotes we've been running for the past two years.

The new series is: Entrepreneur of the Week. A weekly salute to a Canadian business owner or innovator who has captured our imagination (or the headlines).

It's a bit of a gamble - but we think we can find someone worthy of the title every week. Your suggestions and nominations will always be welcome. Just email rick (at) rickspence.ca.

How will we choose them? An Entrepreneur of the Week must embody most of these seven entrepreneurial traits and values:

* Innovation
* Success
* Risk-Taking
* Creativity
* Growth
* Strategy

* Impact

We'll see you Monday for our first Entrepreneur of the Week. This owner's story will be as dramatic as it inspiring.

Starting a Business in one easy question

I just started using Yahoo’s online “Answers” service to suss out some anecdotal information for an upcoming speech. Today I discovered its daily archive of questions relating to “small business.” Scores of people looking for very specific business intelligence, such as how to conduct online surveys, how to make aromatic candles, or, hmm, how to recruit actors for an adult video business.

Anyway, the more general questions fit my expertise. I wrote the following reply to a recent college grad who says he hates his current job and wants to open a private music studio in his apartment. (Of course, most of this advice will relate to starting any kind of business.)

Some of the best businesses in the world have been started by people who hated their jobs and longed for something else. But new businesses fail when they are launched on impulse, without proper planning. Don't you make the same mistake.

You will be telling your students to practice every day - and so should you. In business, it's called planning. You must know what your costs are going to be, how much you will charge, how many students you need to make a profit, and how you are going to attract them.

Set out a timeline for starting your business. Allow adequate time for researching the market, preparing demo videos, developing a professional name and logo, researching your pricing, identifying potential allies and partners, creating a thoughtful marketing plan, and exploring zoning and licensing laws (you can flout them if you want, but you should know what the laws are that you are flouting),

Most importantly, find a mentor (or maybe two): someone who has run a business like yours, knows what he or she is doing, and is willing to share experiences and teach you the ropes. Don't try to do it all yourself: you will be wasting time reinventing the wheel and making old mistakes.

You may have to stick with your job for another few months. But it will be easier knowing that you are working on an exit plan. And you will have more time to bank money to support you during the first lean months.

For online advertising, learn about pay-per-click ads: Google AdWords, for instance. They let you target people who are searching for information on specific keywords - say, "music teacher" or "saxophone lessons" - within your own geographical market. And you pay (say, 20 cents a click - you set the price!) only if someone clicks through to your website.

Your site can be a one-page information site to start - that often comes free when you buy a domain name.

The good news is that since you are used to working for minimum wage, your revenue goals can be modest. If you are good at what you do, and you do a proper marketing job, you should have no problem replacing that income.

Follow your dreams - but run a check on them first to make sure they make sense.

* For more questions and answers on small business issues, check out Yahoo Answers here.

Should you start using Yahoo Answers? It may help your search engine positioning. I registered three days ago. Today my Yahoo registration (with my scanty record of questions and answers) ranks 9th when you Google my name. That ranks ahead of all my columns in the National Post or (sigh) 19 years of writing for PROFIT Magazine...

Did your RickAlert arrive this week?

In answer to many (okay, three) requests, two months ago I started sending out a weekly email with a link to my latest Financial Post column (and occasional other writings in PROFIT, MoneySense or TechData magazines). It's small-business intelligence on demand!

If this offer sounds enticing, just send an email to rick(at)rickspence.ca. Please mention "RickAlert" in your subject heading or text, and I will add you to the mailing list.

RickAlerts contain no advertising, and you can cancel your subscription any time. And of course I won't sell, rent or otherwise abuse your email address. That's just bad business.

This week's Post column looks at ways to beat the current slowdown, hands-down. It ends with a rhetorical flourish that' s meant to remind us that things really are cheerier now than in past recessions:

Excerpt: "...There are also opportunities that were unimaginable in the recessions of the '80s and '90s: the emergence of voracious new consumer markets in India and China; vibrant commodities and exploration markets; the increase of free-trade deals with foreign markets (and the exporting infrastructure to go with them); the boom in health care and personal services for affluent Baby Boomers and the availability of low-cost e-commerce options....
The future really is in your hands."

For the full story, click here.

Easy Zoom, Easy Go

The CBC website has a mainly sympathetic story about Anglo-Canadian entrepreneurs Hugh and John Boyle, whose six-year-old Zoom Airlines Ltd. crashed and burned last week.

The article describes Hugh Boyle as “the classic entrepreneur: a man with ideas, and energy, and a great deal of self-confidence. And he's followed a classic path: start with next to nothing, win big, retire, get bored, start again. And fail.”

The Scottish-born Boyles made their fortune in Britain in the direct-sell travel business. Hugh retired and moved to Ottawa in 1998, where he became frustrated with the lack of direct airline flights to sun destinations. In 2000 he started his own direct-sell tour operator, and then launched Zoom to provide airplanes for his tour company.

Before the closure, 2007, Zoom and its British sister company Zoom Airlines Ltd. had more than 600 staff and revenue of some $250 million. The business was apparently quite profitable until rising oil prices hiked costs expenses by an additional $50 million a year.

Asked in late 2007 if anyone had told him he was crazy for starting Zoom, Hugh told the Ottawa Business Journal, "I probably am. My wife tells me I am most days."

Also interesting, as always, are the reader comments. One CBC.ca reader praises Zoom for filling a market gap with its transatlantic flights, while another lambastes the company for selling tickets right up until the closure, and for deserting and/or stranding passengers without notice.

Sadly, this has emerged as a common risk that Canadians take when they fly with discount airlines. You never know if you’re home free until you’re safely back home.

Other than that, I don’t fuss over these airline bankruptcies. Most passengers get their money back, and in the meantime thousands of Canadians have saved big money on their vacations.

It’s very different from other businesses. If a factory closes down, the jobs and the value it created are usually gone forever: the equipment gets scattered, and the owner’s web of customer/supplier relationships can’t be duplicated. But when an airline closes down, the planes are merely re-leased or resold, and there’s always another entrepreneur willing to try his luck and start again (giving the workers a chance to stay in the industry).

Happy Trails, Zoom; what colours will your planes wear next?

For the full story, click here.

Best-Ever Entrepreneurship Quotes, Week 100

This is No. 100 in our series of weekly inspirational business quotes. I hope you have enjoyed this series; you can never have enough motivation. In fact, you can re-read any entry in this series any time by browsing though our archives).

We conclude this series with an observation from John W. Dafoe, greatest of Canadian newspaper editors, as well as a publisher, statesman and canny marketer. Born in "Canada West" near Ottawa before Confederation, he watched the country grow up and assume the responsibilties of nationhood through his 43-year stint as editor of the Winnipeg Free Press. (He died in harness in 1944, stll editing the paper at age 78.)

Perhaps only a Western Canadian, filled with boundless optimism, could have said, as he did in the middle of the Dirty Thirties, "The future will be what we make it." But such a sentiment is surely the hallmark of our greatest entrepreneurs.

Next week: An exciting new weekly series begins. Please join us.

The Mistakes that follow Failure

You may not recall the name Julie Wainwright, but you probably remember the company she led: Pets.com.

Founded in August 1998, the online pet-supply company went public in February 2000 and went bust nine months later. Since then it has acquired iconic status as the classic dot-com disaster – a domain name looking for a business plan. Its mascot, the infamous sock puppet, became a much-satirized symbol of Internet excess.

Prior to buying into Pets.com and becoming CEO, Wainwright had enjoyed a stellar entrepreneurial career. As CEO of Reel.com, she grew the online video store sales from $1 million to $20 million in a single year, then engineered its sale to Hollywood Video for $100 million. At Berkeley Systems, she oversaw a strategic shift from producer of software utilities (such as screensavers) to a developer of interactive entertainment (including the popular game, "You Don't Know Jack").

Wainwright resurfaced recently as company-founder of SmartNow.com, an information site (beauty, health, fitness, relationships, you know the deal) for women over 30. In a brave move, she has written an editorial about her personal problems since closing Pets.com.

“What most people don’t know is that the very same week that Pets.com failed, my marriage of seven years failed as well. Actually, it had been failing for a long time. It became officially over that week. My husband decided to call it quits the day before I announced to the employees and the public markets that I was shutting down Pets. It was a really bad week.”

Why is this relevant to Canadian Entrepreneurs? Because it’s so easy to make the same mistakes Wainwright did: focussing too much on your business, and taking the rest of the world (including your spouse) for granted.

“Now, I would like to tell you that [after the failure of Pets.com] I was down but not out. That I just brushed myself off and got on with life. I didn’t. At first, I kept myself hyper-busy. That lasted for about three months. Then, I sank into a depression. I’m sure I was in shock for a long time. It was a very dark, confused time in my life. I kept pushing myself to get back to normal. That didn’t happen.”

Check out Wainwright’s list of “Five Life-Changing Mistakes and How I Moved On.” Here’s a quick summary:

Mistake 1: I allowed others to define me. I completely defined myself as a failure, as the press did.

Mistake 2: I built my image of myself on two main supporting pillars [being “smart,” and being married].

Mistake 3: I stopped believing in myself. You can see how the first and second mistakes might lead to the third.

Mistake 4: I stopped taking care of myself. I had gained weight over the years and stopped exercising. When Pets was collapsing, I started exercising again and the pounds had started to come off, so my physical health had started to improve. What I didn’t realize is that my emotional health was deteriorating. I did not recognize my own depression. For at least two years after Pets shut down, I didn’t care if I lived or died.

Mistake 5: Allowing my head to rule my heart… The head is the ego. Mine was shattered. I had to exercise my heart in order to heal.

Wainwright’s article includes a lot more information, including details on how she coped with each of these problems. It’s candid, revealing and inspiring.

As Wainwright concludes, “If you have made your own mistakes and are not sure how to get on with your life, perhaps my reflections will help you. And if you make mistakes in the future, I hope my lessons help you in some way and that you will learn from your humanness and not slip slide into a dark place for long.”

Check out her story here.

Gold-Medal Economics Lesson

Economist William Watson had a great column last week in the Financial Post on why the Olympics works differently from the world economy.

Noting China’s sudden dominance in gold-medal victories, Watson figures some Canadians might be wondering whether the developing nations that are beating us so handily now at track, gymnastics and field hockey will soon be wiping the floor with us economically.

It’s a good question. Fortunately, as Watson writes, “economic life is very different from Olympic life.”

Point 1: In the Olympics, you're either a winner or a loser. There are no medals for fourth place, even if you finish one-tenth of a second out of gold. “But in economic life,” says Watson, “close counts a lot.”

If you are lucky enough to be the country whose living standards are ranked fourth-best in the world, you still have it pretty good. Iceland last year was No. 1, with a score of 0.968 out of a possible 1.0. Canada was fourth, with 0.961. The difference among the top countries is essentially negligible.

Point 2: Economics is not a zero-sum game. Winners create wealth, they don't take it from other countries. With China, India and other countries emerging from poverty to become industrial powerhouses, Canada may lose some companies, and indeed whole industries. But we also gain billions of new customers, with growing appetite for imported goods and services that smart businesses are moving to supply.

As Watson concludes, “economic life is almost infinitely expandable. The number of medals available to be won is limited only by our imagination and entrepreneurship. There are plenty for everyone.”

You can read Watson's original article here.

Best-Ever Entrepreneurship Quotes, Week 99

This is No. 99 in our list of motivational business quotes. The series, begun in September 2006, ends next week with No. 100. Feel free to guess which Canadian Entrepreneur we have chosen to finish off our series.

Two weeks from now, a bold new weekly series begins on this blog.

In the meantime, who else could we quote in our 99th week than Wayne Gretzky, the man who redefined hockey for a whole generation of sports fans? Hard to believe it’s been 29 years since I first met him in the Edmonton Oilers’ dressing room as a budding sports reporter for Alberta Report magazine. Since then he’s been named the top player in NHL history, and his jersey number, “99,” has been retired not just by the teams he played for, but by the entire league.

Not the strongest or fastest player on the ice, Gretzky developed a breakthrough strategy involving timing, anticipation and positioning. Journalist Peter Gzowski, who followed the Amazing Oilers for a whole season, thought Gretzky could “see” a play developing faster than anyone else in the game. It’s a powerful reminder of the importance of stepping back from a situation and seeing the big picture, rather than chasing everyone else around the rink – or your competitors around and around your market.

Gretzky’s unique and thoughtful approach to hockey produced a surfeit of motivational quotes that apply to sports and business alike. Here are just a few of them:

* “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

* “I wasn't naturally gifted in terms of size and speed; everything I did in hockey I worked for.”

* “Procrastination is one of the most common and deadliest of diseases, and its toll on success and happiness is heavy.”

* “The highest compliment that you can pay me is to say that I work hard every day, that I never dog it.”

But my favourite motivational Gretzky quote involves his understanding of opportunity, and the sheer importance of taking a chance:

“You will always miss 100% of the shots you don't take.”

What can we learn from the Olympics?

Del Chatterton of Montreal-based consultancy DirectTech Solutions, an occasional contributor to this blog, has written a terrific (and timely) newsletter article offering 12 “Olympic Ideas for your Business.” (I love "Tear and Repair.")

Since I couldn't find a copy of the article to link to, I will copy and paste below, and hope Del doesn't mind.

The Olympic Games of 2008 have already provided inspiring examples of what the human spirit can accomplish, but there are also some interesting ideas from the Olympics that can apply to business. Consider these ideas.

The four-year planning horizon: Set aside your current plan. Review the results for 2008 and define new Olympic performance objectives for 2012 with specific milestones for each year until then.

Focus on your strengths: Choose to compete in the areas where you are most likely to succeed. Michael Phelps selected eight events he could win in - he did not try 15 events hoping to win eight.

Decide: You have to make choices to either give it your best effort over a long period of time or quit.

Push your limits: Test your capabilities and endurance to the maximum. "Tear and repair" is the way to build strength and endurance in muscle tissue; maybe in your organization too.

Learn from the leaders: What do the top competitors do that you can also do? Look at their preparation and training techniques; the little things that add up to a big difference.

Learn from your losses: Study your own performance and learn what makes the difference between your best results and your second best.

It's not for the money: You have to love it enough to do what it takes to be a winner. The money will follow if you have the passion and persistence to excel.

There is only one gold medal: You may have to settle for being the fourth, or sixteenth, best in the world at what you do.

Prepare for upsets: The best competitors know how to deliver for the big events and usually avoid surprises. You could be the upset winner when the opportunity arises if you are equally prepared and committed to maximum performance when it's required.

Have a world-class support team: Coaching makes a difference. Check that your consultants, advisors and support staff are up to the Olympic standard.

Don't cheat: The short-term glory of victory will eventually be replaced by the long-term disgrace of breaking the rules.

It's never too late: Canadian equestrian Ian Millar finally won a medal at age 61 after competing in nine Olympics. American swimmer Dara Torres at age 41 won three silver medals at this Olympics after coming back from retirement. Her first medal was at age 17.

Del also offers creative, practical business management solutions at DirectTech.ca

Purdy Crawford spills the beans -- Updated

What's going on in the ABCP imbroglio? What's the future of Canada's commercial paper market? What will happen to the $32 billion in frozen asset-backed commercial paper? And how can we make sure messes like this never happen again?

You can get the latest info from the horse's mouth today at 3:30 pm (I'm presuming that's Eastern Time; so 4:30 Atlantic time, and 12:30 Pacific) at the Globe & Mail website. Purdy Crawford, the retired Imasco CEO brought in to clear up the asset-backed paper mess, will appear live on the Internet to answer your questions and explain what happens next.

If you can't make it at 3:30 EDT, you can submit questions prior to the event, and check out the transcript later.

I will post a link to the transcript after the event.

Get more info on the event here.
Submit your question by leaving a comment here.

Read useful background information here:
Court strikes down ABCP challenge
In ABCP ruling, judges approve legal shield

Kudos to the Globe for arranging live interactive sessions like this. They build awareness and create dialogues that could happen no other way (since no sane person listens to talk radio any more).

UPDATE: You can read the transcript here. It's not much like a dialogue, after all: it reads more like a terse email exchange with someone who doesn't really want to say much. Still, it's a newsmaker caught in amber at a busy time, so you may enjoy.

I asked a big-picture question: What have we learned that might help us avoid similar fiascoes in future?

Crawford's reply: "I have committed to appear before the House of Commons finance committee to review what reforms if any should be made in this matter. At this stage, we have been working to complete the restructuring and have not focused on what the reforms, if any, should be."

History on the run, bah!
Read all 6 questions and answers here.

Best-Ever Entrepreneurship Quotes, Week 98

Here's your inspirational quote of the week as we begin our countdown toward 100.

This week, a motivational gem from a man who's been hailed as the greatest Olympian of all time. U.S. swimmer Michael Phelps has just set a record for winning the most gold medals in one Olympics game. (If he were a country, he'd be in sixth place.)

"You can't put a limit on anything. The more you dream, the farther you get".

Michael Phelps (born June 1985), member of the U.S. Olympic swim team, 2008

Advisory Boards Work

My column in this week’s Post looks at advisory boards. Ever since I worked on a series abut advisory boards with entrepreneur Greig Clark for PROFIT Magazine last year, I am seeing more and more businesses that could use a formal set of advisors – to help them with marketing, developing contacts, sourcing financing, creating more efficient processes, improving their recruiting efforts, cracking new markets, and so much more.

The truth is, however, that advisory boards are complex structures that require the entrepreneur to be organized, proactive, inclusive and accountable. It’s like getting a dog. Once you bring it home, you're responsible for it forever: feeding, bathing, brushing and walking. The closer they get to your company, the more your advisors will expect to be kept regularly informed, consulted, heeded, and perhaps even rewarded for their efforts.

Yes, you're opening a Pandora's box.

But if you're the type that welcomes organization and governance, knows how to ask for advice (and take it!), and can swallow your ego and accept direction – you can really benefit from an advisory board that helps solve problems and expands your access to resources.

Where do you find advisors? Use your personal network, and that of your friends. Strike a balance between smart, communicative entrepreneurs and disciplined, experienced professionals. Meet with each candidate a few times and ask lots of questions to make sure you're compatible before you bring them on board – you may be going through hell together, so make sure they’re the sort of people you want on the journey.

My secret hope is that some bank, university or other organization that markets to small business will pick up on this. What we need is an annotated directory of Canadian entrepreneurs and advisors willing to participate on advisory boards. Any organization that offered to sponsor such a useful resource would make friends fast.

But I digress. Click here to read my Post column and find out why accountability trumps autonomy.

Best-Ever Entrepreneurship Quotes, Week 97

I was in Windsor, Nova Scotia this past weekend for a Spence Family Reunion. The events included a brief tour of Haliburton House, the home of Windsor’s favourite son, Justice Thomas Chandler Haliburton (1796-1865), who was one of Canada’s first best-selling authors.

His “Clockmaker” books, chronicling the comic misadventures of Yankee salesman Sam Slick, were best-sellers in North America and England, putting him in the same leagues as Mark Twain.

Although little read or remembered today, Haliburton was the first to coin (or just popularize) many phrases and expressions that are still in common use today. Examples:

* As quick as a wink
* Seeing is believing
* He drank like a fish
* I wasn’t born yesterday
* A stitch in time saves nine
* Barking up the wrong tree
* A miss is as good as a mile
* The early bird gets the worm
* And that perennial favourite, “This country is going to the dogs.”

For motivational purposes, however, you can’t beat this zinger:

“Punctuality is the soul of business.”

In a world of broken promises, how do you use punctuality to beat the competition?

Your Bucket List

Happy August Holiday Monday!

The Post does not publish today, so look for my column in tomorrow's paper.

As a holiday treat, here's a link to last week's column, which dares you to think about what would happen to your spouse, family, staff or executors if you were suddenly to die or become incapacitated.

Not a fun thing to dwell upon. But wouldn't you rather be remembered for your success and business acumen, rather than for a messy desk and your lack of comprehensible records?

One entrepreneur has already told me that his wife has been after him about this for years. The dog days of August might just be a good time to get your "business will" in order.

Here's the link: A bucket list for business owners

Thanks to Elizabeth Verwey for doing all the work.

Best-Ever Entrepreneurship Quotes, Week 96

Here’s your weekly motivational message, personally selected to get your week off to an inspired start.

This week: a formula for success.

Quality = Results of Work Efforts (divided by)
white typewh Total Costs

W. Edwards Deming, 1900-1993. Consultant, Statistician and founder of the “quality” movement

Dr. Deming believed that when people and organizations focus primarily on quality, defined by the above ratio, quality tends to increase and costs fall over time.

Alternatively, when people and organizations focus primarily on costs (standard human behavior), costs tend to rise and quality declines.

Why? Deming blames the failure to monitor and minimize waste, ignoring amount of rework occurring, taking staff for granted, not rapidly resolving disputes, failing to notice lack of product improvement... Plus, over time, the loss of customer loyalty.

What's your choice?

Get your staff to do more

How do you get your staff to dig deep and “go the extra mile” for you?

An Oshawa, Ont. entrepreneur asked PROFIT Magazine that question, and this week a number of other entrepreneurs offered their solutions. This “Peer to Peer” feature is one of the coolest resources for Canadian entrepreneurs, because it’s not some journalism grad telling you what to do – it’s experienced entrepreneurs telling you what’s worked for them.

The question: “How can I encourage my team to be more entrepreneurial? Why don’t they care more about my business?”`

Here’s a selected look at some of the answers PROFIT’s readers came up with.

Answer 1: You can’t. That is why they are employees and not entrepreneurs. What you can do, however, is to start finding out what is truly important to them, then gearing their compensation (financial and other types) around it.
Most employees will not put in the extra effort if they believe it won’t get them something they value in return. ... If you do this, you’ll start to see a gradual change over time towards a more employee-preneurial atmosphere.

Answer 2: The most important thing you need to do is set expectations—from the recruitment process, during employee orientation, in regular team meetings, and with your performance-management programs.
To find entrepreneurial people, you need to identify in the recruitment and selection process those people who are keen to grow a new business.

Answer 3: Change the feel and atmosphere from “my company” to “our company.” … The staff have to see and feel the results from going the extra mile.

… When they feel the results—or lack of them—from their work and the effects on “their company,” they will feel empowered… Raving Fans: A Revolutionary Approach to Customer Service by Ken Blanchard comes to mind first as a recommended read, but there are many others.

Answer 4: Commitment comes from a sense of ownership. In some cases, selling shares or parts of the company to key employees is an effective option, though it is not usually very easy or simple. …

The other option is to create leaders. When someone is (really) in charge of a project that they helped get started or that originated from their ideas, that person essentially “owns” the project and will often go the extra mile to see it through.

… Talk to your people, asking them questions such as, “Are there operations that don’t make sense?”, “What would make a given task easier?” “How would you do it?” and “How should it be done?” Not only will you probably be surprised at their answers, you will likely perceive some of your staff differently.

You must be willing to involve them in improving certain aspects of their job, as well as get them involved in something bigger than simply completing the order, shipping the units or finishing the project.

Great stuff, huh?. Click here now for the full story.

For other Peer to Peer solutions, click this way.
This page also includes a clickable form for you to ask a question of other Canadian entrepreneurs. Go for it!

Do You Use Meaningless Words?

Tele-sales consultant Art Sobczak of www.BusinessByPhone.com reminds us that when we are selling, we have just 10 seconds or less to capture a listener's attention, break their preoccupation with what they’re doing, and place them in a positive, receptive frame of mind.

That's why you must never “muddy up your call with wasted words, or meaningless words.”

Here are some of the words and phrases that Sobczak considers overused and essentially meaningless:
* "cost-effective"
* "leading," or "premier," as in, "We're the leading company in this field." According to whom?
* "solution provider" (Who isn't?)
* "I'd like to discuss how we can meet your needs."

Sobczak offers this advice for your next sales call: Use clear terminology to quickly create interest. “Do this by alluding to what you might be able to do for them, and then asking a question.”

Example: “Art, depending on how you're using your existing list of customers, we might have a way to help you get two or three times the amount of repeat business you're doing now. I'd like to ask a few questions to see if it would make sense for us to speak further."

He finishes his article by quoting French essayist Joseph Joubert: "Words, like eyeglasses, blur everything that they do not make more clear."

Best-Ever Entrepreneurship Quotes, Week 95

A special motivational message.

“I'm not a dreamer, and I'm not saying this will initiate any kind of definitive answer or cure to cancer, but I believe in miracles. I have to.”

Terry Fox, 1958-1981
Canadian dreamer. Canadian hero.

Terry Fox was born on July 28, 1958. He lost a leg to cancer in 1977. In October 1979 he asked the Canadian Cancer Society to support his run across Canada to raise money for cancer research. His letter included the above quote.

Terry's Marathon of Hope saw him run halfway across Canada on an artificial leg before his illness forced him off the road. He died in June 1981. Since then, the annual Terry Fox Run and related charities have raised $400 million for cancer research.

Today is Terry’s birthday. He would have been 50 years old.

What's your dream?

Working ON your business, not in it

In his classic book The E-Myth, Michael Gerber identified the No. 1 challenge of entrepreneurship: working on your business, not in it.

But how do you make that leap from day-to-day “technician” to visionary executive?

In the E-Myth blog this week, Susan offers a simple process for busy entrepreneurs.
Her first point: Take one step at a time.

“Baby steps are better than nothing,” she says.

Next: “Make the most of your time,” she says. Free up time by taking control of your to-do list: Organize, Prioritize, Book the Time, and Delegate.

“Effective Time Management” is all about keeping a Time Log. A time log enables you to learn how your time is actually spent, and helps you put a value that time. The process shows you just how expensive you are to employ. You’re probably doing a lot of technical work that you could pay somebody else to do—just as well—for less money.

For more information and lots of great ideas, see Weber’s full article here.

Best-Ever Entrepreneurship Quotes, Week 94

Here’s your weekly motivational message, intended to get your week off to an inspiring start.

"How you think when you lose determines how long it will be until you win."

G.K. Chesterton, British author and essayist, 1874-1936

What’s going on with e-commerce in Quebec?

Is Quebec falling behind in online retailing?

Internet strategy specialist Jean-Francois Renaud of Montreal-based consultants Adviso wonders in a recent article why Quebec companies offer so few transactional websites.

More than 40% of Quebecers bank online, but only 19% of consumers shop online. Renaud blames that dismal performance on the fact that Quebec companies don't take e-commerce seriously: 93% of them do not sell online.

“It is mostly the large websites with well developed English versions that have a real e-commerce presence online,” writes Renaud in a recent newsletter. Yet he is convinced that Quebecers, like consumers everywhere, want to use their computers to shop, to read up on future purchases and explore store locations.

He also warns that e-commerce is the future. “Who will be the consumers of tomorrow and of the next 10 years? Generation Y, the greediest and most exacting when it comes to the information found on websites they visit. This generation places importance on a web presence and values sites that offer just that.”

To demonstrate how businesses are missing out, Renaud compares two Quebec retailers, each of which has between 50 and 100 stores. “One offers a transactional website that is extremely developed offering all their products and more, has an aggressive email marketing strategy, and web promotions with the goal of driving store traffic. The other has a prehistoric transactional website that is not even Web 1.0.”

The result? The first store boasts more than 50 times the online revenues of the second store. “In short, it is more than a profitable project.”

To be fair, Renaud notes that it’s hard to find good e-commerce solution providers in Quebec. Many offer entry-level solutions and some offer costly state-of-the-art systems, but “few providers offer a medium solution, for projects between $25,000 and $75,000.”

Sounds like a market offering a few opportunities...

You can read Renaud’s complete article here.

Why Blockbuster busted

Long before he became leader of the Green Party, Jim Harris was a business writer and strategist. His best-selling book Blindsided was one of the first great expressions of the new disruptive economy, in which established businesses can be skunked almost overnight by aggressive new competitors with innovative approaches.

Now that he’s a former politician, Harris is back to writing/speaking/disrupting. In the latest issue of Backbone magazine (which covers business and technology), he looks at how the once-mighty Blockbuster chain has been squeezed by video-rental upstart Netflix.

“One day in 2000, a tiny start-up company met with the Blockbuster execs. It offered to sell a majority of the company for a US$50-million investment. And the Blockbuster execs looked at the little company’s business model and decided it was deeply flawed. Instead, the wise Blockbuster execs signed an exclusive 20-year video on demand (VOD) deal with Enron.

"The little rejected company was Netflix, and it soon grew up: as of May 2008, it was worth US$1.9 billion. Blockbuster is valued at US$345 million.”

(I love the little dig about Enron. Enron! Who knew?)

Netflix is an online movie rental service with 8.2 million subscribers who can access more than 100,000 movie and TV titles. Its most popular subscription plan lets customers rent three titles at a time, with no due dates, late fees or shipping charges (on an unlimited number of rentals), for just $16.99 a month.

With Blockbuster now closing many of its stores and Netflix gaining market share in the video download market, Harris declares, “Blockbuster can’t survive in its current form.”

For the full story, click here.

(In Canada, Zip.ca does much the same thing as Netflix. This year it wil ship its 10 millionth DVD.)

Your 10-Point Guide to Speaking and Selling

My column in the Post this week offers 10 tips for more effective public speaking.

(Guaranteed applicable to story-telling, sales presentations, copywriting, and other common marketing situations.)

Check them out here.

Best-Ever Entrepreneurship Quotes, Week 93

Here’s the latest entry in our 100-part series of inspirational quotes, personally selected to get your week off to an inspiring start.

This week, the secret of selling - and of not being sold.

"Life is pain. Anyone who tells you differently is selling something.”

William Goldman, novelist and screenwriter

The Princess Bride

How to stay up to date and out of the sun

Montreal marketing guru Mitch Joel has just started writing a column for in the Montreal Gazette. His inaugural column reveals how to get started in digital media.

“Without a doubt, my answer is always the same,” he says. “Get yourself a news reader (also known as a RSS reader). I prefer Google Reader, but you can use iGoogle, My Yahoo!, Netvibes or any other Web-based tool that enables you to subscribe to websites.”

Here's the benefit of a news reader: When you find content information you like on the Web, the Internet will notify you when the website or blog has been updated. No more searching for the news: it comes to you!

Joel also recommends you start reading up: some of the world’s best marketers share their expertise freely on their blogs, so why not take advantage of these gifts? His seven favourites:

- Chris Brogan blogs about how business can better build communities.
- Seth Godin “The best-selling marketing author… Godin's posts are short, pithy and brilliant.” (Seth is also a favorite here at Canadian Entrepreneur.)
- GrokDotCom is the corporate blog from Future Now Inc. It focuses on “the human reactions to marketing, sales, PR and media.”
- How to Change the World - the personal blog of Guy Kawasaki, for entrepreneurs and start-ups. (I love this one too.)
- ReadWriteWeb – “If something cool is happening on the Web and it affects business, it's on ReadWriteWeb.”
- TechCrunch – “It's about all things geeky, but in an understandable context.”
- Web Strategy - By Jeremiah Owyang, a senior analyst at Forrester Research. “The latest and greatest on what companies are (and should be) doing in business today.”

More summer reading to keep you out of the sun!

You can read Joel’s column here, or visit his blog here.

Best-Ever Entrepreneurship Quotes, Week 92

Here’s the latest entry in our series of motivational quotes, personally selected to get your week off to an inspiring start.

This week, a seasonal cue to understanding customer behaviour.

"People don't notice whether it's winter or summer when they're happy."
Anton Chekhov
Russian physician, playwright and short-story writer, 1860-1904.

Flying High in an Industry Downturn

Did you know 2.5 million people will fly with Montreal-based Air Transat this year?

The plucky charter airline, barely 20 years old, continues to thrive while big scheduled airlines cut back. And it’s improving its customer service, not cutting back.

How do they do it? Travel writer Sam Ion chatted with the company’s brass and produced this report.

Based on her findings, I would say the secret is:
1) Know your niche.
2) Service the heck out of it.
3) Invest in training so your people know the right way to treat your customers – especially if you're asking for problematic things such as fuel surcharges.
4) Integrate vertically to expand your services while controlling costs.

As Air Transat president and CEO Allen B. Graham, told Ion, "In the end, giving customers what they want is all that matters.”

Jim Estill: Solid Gold

Globetrotting CEO blogger Jim Estill of Guelph-based Synnex Canada is blogging up a storm, even during his current trip to China. As always, his observations on business, productivity and life are pure gold.

In this post, he writes about 10 shortcuts for mastering speed-reading. They're all quite doable, starting with No. 1, "Know your purpose. What are you trying to learn?"

In "Managing Gowth Businesses," Jim finds time during his trip to China to blog about the six keys to successful mission statements.

And in a June 5 post called "Junior Achievement Banquet," Jim muses on the difference between small businesses and big ones - and why there will always be opportunities for entrepreneurs and startups.

Here's how he sums up the advantages that small business has.

"I always love the enthusiasm of youth. I love that many of them want to start businesses. Their fears in starting a business are that other companies are bigger, more established and have more resources.

"My fear as a larger business is exactly the opposite. We have resources and are well established but this means we are not as nimble as we need to be. It means things can cost more than they should. Overheads can be higher. The battle for larger business is to try to act small."

There's lots more good stuff from Jim. Just click on www.jimestill.com and read down till you stop learning.

Best-Ever Entrepreneurship Quotes, Week 91

Here’s the latest entry in our series of motivational quotes, personally selected to get your week off to an inspiring start.

In honour of Canada Day (July 1), here's a message from Canada's first Prime Minister.

"Whatever you do, adhere to the Union. We are a great country, and shall become one of the greatest in the universe if we preserve it; we shall sink into insignificance and adversity if we suffer it to be broken."
Sir John A. Macdonald (1815-1891)
from an 1861 speech, quoted in E.B. Biggar, Anecdotal life (1891)

How Manufacturers Will Survive

Here’s a powerful story from PROFIT Magazine that illustrates the journey many (if not most) Canadian manufacturers will have to make to survive in today’s competitive global economy.

Peter Hart runs a company in St-Laurent, Que. called Rideau Recognition Solutions. It started out making custom jewellery and promotional merchandise, but by the 1980s it was clear that Canadian manufacturing would become a dying art.

To survive, Rideau adopted a new strategy based on the highest value it provided to its customers. It`s now become a hybrid manufacturer and service supplier specializing in employee- and customer-incentive programs.

As Eleanor Beaton wrtes in the June 2008 issue of PROFIT, ``No longer would he sell only corporate gifts to order; he’d sell a turnkey recognition system that would encourage customers to stick with Rideau."

That change has helped Rideau rank in the Top 200 of Canada`s Fastest-Growing Companies for the past three years.

There's lots more, but you will have to click here to read the rest of the story.

The lesson: your greatest asset is not the product you make, or how you make it. It's the relationships you have with your customers and how well you understand how to solve their problems.

Sign up for your free RickAlert

I got had the hugest compliment the other day when a friend told me that his son buys the Financial Post every Monday just to read my column. What makes this especially cool is that the son, a business professor, didn’t know his father and I are friends.

On the other hand, many contacts have told me they already read two newspapers a day. While they would like to read my "Growth Curve" column, they just can't bring themselves to buy another paper.

So I’m starting a handy new service.
Every week I will send out an e-mail with the link to my latest column at National Post.com, which is usually posted every Monday morning. That way, anyone can read my column each week, without having to remind themselves to go looking for it.

If you would like to receive your weekly RickAlert, send me an email. I’m rick (-at-) rickspence.ca

(Of course, your email address will be known only to me, and will never be sold, rented or otherwise abused.)

Fast Talk: Lessons from the PROFIT 100

Every year the editors at PROFIT Magazine ask the entrepreneurs who run Canada’s Fastest Growing Companies to offer their best management/leadership advice.

The result is always a plethora of poetic punditry, like a graduate business class taught in haiku. Here are some of the gems unearthed from this year’s PROFIT 100 team.

Come up with a plan, and stick to it. Do what you say you are going to do.

Tell your employees about your strategy, repeat it over and over and over again, and get them to own a part of the outcome.

Be willing to constantly evolve your management practices to meet the changes in your market.

Treat your people well and they'll treat your customers well, and your revenue will follow.

Never stop dreaming! People give up too easily.

Manage your business by numbers. The more you look at your numbers and the more reports you have to analyze your business, the quicker you can make decisions.

See yourself as a servant, find really great people and give them everything they need to succeed.

Assess risk, but don’t be afraid to take it.

Be positive about the future. That gives you your strength when things get tough.

Hire the right people, but don’t trust them. Always have checks and balances in place to ensure everybody in the company is doing their job.

Don’t let your good people leave.

Compete for talent the same way you would compete for a customer.

Maintain focus on a niche market, where the competition isn’t nearly as intense. Then, hopefully, you can own it.

Market yourself. If you’re leading the company, you’re the person customers are looking at.

Don’t underestimate the value that a strong banking relationship can add to your growth.

Believe in karma. What you do comes back to you.

Don’t stop till you succeed.

You can read the whole list in the June issue of PROFIT. It's on newsstands now.

George Carlin's Business Smarts

Trail-blazing comedian George Carlin died Sunday at the age of 71. The Toronto Star today published his "advice to young comics," which originated in a 2001 interview with Carlin by Star correspondent Leatrice O'Neill.

I thought Carlin's advice was pertinent to artists and entrepreneurs everywhere. We practice much the same craft: selling ourselves and our ideas, communicating with others, keeping our pitch unique and fresh.

Here's what he said:

"Get out in front of the audience as often as you can. That's an obvious thing, but there are people who don't do it as often as they should. Just hear yourself. You gotta hear yourself all the time."

In other words, practice makes perfect.

"Don't worry about what they think of it. It's up to you. Find your common voice. Find your identity. It took me a long time."

Entrepreneurs too must find their own voice: their own mission statement, their own cost-benefit ratio, their own unique brand.

"The writing must be given all the attention. You gotta write good stuff. You gotta be thinking. You gotta be using your head all the time."

Entrepreneurs reinvent themselves all the time. Their market is always shifting, the competition is catching up. Entrepreneurs, like their BlackBerrys, are "always on."

In honour of Mr. Carlin and his entrepreneurial instincts, here are seven words and phrases you don't hear enough on TV:

Hard work; invest; responsibility; accountability; market (as a verb); long-term; strategic planning.

RIP, George.

Shhhh -- a big international confererence is here in Canada!

As I write this, the International Council for Small Business is holding its annual conference in Halifax, N.S. How do I know this? I read it on my blog.

You may not have noticed the new feature, Entre-News, at the bottom of the right-hand column on this page. It's a customizable newsfeed provided by Google based on keywords I select. I just installed it last week, and I change the keywords regularly. Last week I set it to "Calgary business" and then "Vancouver business," and tonight I changed the search term to "Halifax entrepreneur." And what pops up but news that the world's pre-eminent small-business research body is meeting in Canada this week for the first time since 1979!

The academics' theme this year is "Advancing Small Business and Entrepreneurship: From Research to Results." Though something tells me that if they were really interested in results, they might have informed this blog of the event. Okay, it's not just the blog - I'm also the only national small-business columnist in the country. You'd think they would let a guy know...

According to the Halifax Chronicle-Herald (it was my grandmother's favourite newspaper), the conference, which runs till June 25, brings together more than 1,000 policy-makers, academic researchers, educators, service providers and consultants focused on small-business entrepreneurship.

"The biggest outcome will be the sharing of knowledge and the building of global networks," says Annette St.-Onge, a senior vice-president with the council and vice-president of Solutions for Women Business Owners Inc.

Among the topics being discussed: startups in China, technology transfer in Tunisia, microcredit, the development of entrepreneurship education in Canada, Entrepreneurs as Educators, design thinking for small business, Creating a New Generation of Business Leaders in Atlantic Canada, Support for Aboriginal Entrepreneurs, top-down tourism strategies, characteristics of fast-growth businesses, hiring practices in small business, SME exporters, Strategic Planning for Social Enterprises, "Hidden Champions in Developing Countries," Improving the Business Environment at the Municipal Level in Latin America, "Entrepreneurship and the Role of Government in Post-Socialist Economies," and many more. That's just a sampling of today's topics.

Obviously, this is a conference for scholars and theorists, not practicing business people. We can only hope that some of their research will make it out of the ivory tower and into the hands of people who can use it.

For more information on the conference or topics discussed, click here.
Read the detailed workshop program here.

WANTED: Young, Fast-Growing Companies

If you run a young, fast-growing business, you may belong on the PROFIT HOT 50!

Now in its 9th year, the PROFIT HOT 50 is the definitive list of Canada’s Emerging Growth Companies, ranked by PROFIT Magazine based on two-year revenue growth. A PROFIT HOT 50 ranking can inspire your staff, attract new clients, and spark relationships with other dynamic companies.

PROFIT HOT 50 companies enjoy many other benefits, including coverage in the October 2008 issue of PROFIT Magazine and online year-round at PROFITguide.com. PROFIT HOT 50 leaders also receive a free invitation to GrowthCamp, an exclusive three-day summit.

If your firm was launched on or after January 1, 2004, enter the PROFIT HOT 50 today!
The entry deadline is June 30.

For more information or to enter online, click here, visit or call 1-800-713-GROW.

(Rick's note: Yeah, I let this breathless press release run mostly unedited, mainly because it reminds me of when I used to write them. Seriously, though, many entrepreneurs have told me that GrowthCamp is the most outstanding business event they've ever attended. If your firm qualifies, don't miss this opportunity to apply for the Hot 50. It's a once-in-a-lifetime experience!)

You can also read up on last year's Hot 50 winners here.

Best-Ever Entrepreneurship Quotes, Week 90

Here’s the latest entry in our 100-week series of motivational quotes, personally selected to get your week off to an entrepreneurial start.
This week: communication advice from a cartoon character.

"If something is so complicated that you can't explain it in 10 seconds, then it's probably not worth knowing anyway."

- Calvin, precocious child hero of the 1985-1995 comic strip, Calvin and Hobbes, created by cartoonist Bill Watterson.

Although this quote was put in the mouth of a six-year-old cartoon character, its message strikes me as true. The way to communicate a complex idea is to offer your listeners the 10-second version first, and then ask if they want to hear more. Otherwise you risk boring your audience - or worse.

While he was much more impulsive, Calvin shares many characteristics with Charlie Brown - mature and introspective, with sophisticated insight and an implausibly rich vocabulary.
A few more choice Calvin quotes:

"I go to school, but I never learn what I want to know."
"If you do the job badly enough, sometimes you don't get asked to do it again."

"Weekends don't count unless you spend them doing something completely pointless."
"True friends are hard to come by...I need more money."

"To make a bad day worse, spend it wishing for the impossible."

From innovation to profit

Canadian entrepreneurs need to do a much better job of turning their ideas into commercially successful businesses. Many innovators and inventors are surprised to find out that the business side of commercialization is so much harder than the process of developing the product or servce in the first place. (Which is why Dragons' Den, with its emphasis on customer needs and marketing plans, is such a great national resource.)

My column in the National Financial Post this week looks directly at this problem. It's titled, "Take budding idea from prototype to final product," and it offers a seven-step formula for turning a product or service innovation into a million-dollar business. The points come from longtime Grimsby, Ont. innovator Ron Gdanski, who shared his experiences at the recent Innovation Forum sponsored by Enterprise Toronto.

It starts, naturally, with communication. Gdanski urges innovators to start by recognizing that their most valuable asset is not the invention they've been obsessively perfecting for so many years, but the way they describe it to others.

Read all about it, right here.

Live-blogging the PROFIT 100 Summit- All-Star Panel

The panel featured three smart leaders of prominent PROFIT 100 companies: Tony Lacavera, Globalive Communications; Rebecca MacDonald, Energy Savings Income Fund; John Nemanic, former CEO of Tucows/InternetDirect, now with GeeksforLess.com and TransGaming Technologies.

Q: What did you do that made your companies successful?

Nemanic: “I hired people smarter than me, because if they're not smarter than me, we`re not going to get to the level we need.”

MacDonald: created a flat management structure where you are never more than two phone calls away from a decision.

How do you deal with employees who can't grow with your company?

Lacavera: has had to fire friends five or six times. It’s hard to do, but it usually works out for the best for everyone.

Nemanic: “My experience is that the employees that give you the biggest headaches are not the ones you fire, but the ones you should have fired.”

Update 2
What other activities are getting your attention now?

Nemanic: Learning to surf (he has a house on the water in Panama); developing a closer relationship with his sons; working on alternative biotech projects.

MacDonald: Expanding into the States: “Try doing business in Texas when you're a woman with an accent.” She has a five-year goal for Energy Savings to become the dominant player in North America.

Lacavera: Buying up bandwidth to create a national wireless platform that will reduce telecom costs.

Go Yak!

Live-Blogging the P100 Summit - 2

Here are some points from PROFIT 100 speaker Brian Beaulieu, a common sense, plain-speaking economist, from the Institute for Trend Research. He warned us early on, “I don't have good news for you.”

* The US economy has slowed down to less than 1% growth.

* The liquidity crunch has not gone away.

* There’s a breaking point for how long the consumer can keep the growth going, in Canada and the U.S. Canada is hampered by the strong loonie, shrinking auto industry, and low levels of business reinvestment.

* “You will be confronted with increasing headwinds and you have to be ready for this.“

* “A perfectly acceptable strategy is to sell your business at the top of the business cycle ... you could sell it to your kids.“

* “Banks have a new model now: It’s ‘trust no one.’ And they don't…they're running scared as can be ... And that's how a liquidity problem spreads very rapidly.“

UPDATE 2:

Beaulieu has just credited previous speaker Jaynie Smith: “One of the ways to combat an economic downturn is to understand what your strategic advantages are, and then pound away at them.“

He forecasts a steeper downturn than in 2001-2; more like the recession of the early 1980s. As Mark Twain said, “History doesn't like to rrepeat itself, but it sure likes to rhyme.“

Update 3:

* The deflationary trend for U.S. home prices will go till early 2010.
* Bealieu says interest rates will go up 100 basis points over the next year – and he`s an optimist. Some economists think rates will rise by 200 to 300 basis points: “That will delay recovery to 2012.“

Here`s the good news: “You should be thinking, so what? How do I turn this economic weakness to my advantage?“

* “A downturn can mean enhanced economic opportunities... at the bottom (2010) there will be lots of opportunities if you have the guts.

* His advice: “In 2010 you go into debt as much as you can – fixed, long-term debt. You borrow and borrow and borrow.”

* “You need cash and visceral fortitude. If you don't have those two things you will miss out on that massive period of opportunity.“

* “This will be the mother of all buying opportunities for real estate… Buy as much as you can, and then sail through the rest of your lives watching the value of your real estate go up around you.”

Update 4:
Beaulieu cited the following sectors as growth industries or recession hedges:
Energy, travel, green, higher education, health-care practices, leisure, pets.
* ``There`s a worldwide explosion in pets,`` he said. ``We see people cutting back on dental care in order to take their pets to the vet.”

He ended on a high note. “We have no excuse for letting our business go into business cycles- not in this room anyway.”

Liveblogging the Profit 100 Summit-1

I'm in the dining room at the Granite Club which is packed with PROFIT 100 entrepreneurs assembled for a one-day summit and celebration.

Florida-based speaker Jaynie L. Smith is talking about competitive advantage. She's the author of a book called Creating Competitive Advantage.

She started off by asking the attendees to write down their competitve advantage. Then she asked people to stand up if they had written down any of the following advantages:

Customer Service
Quality
Reputation
Results
Employees

Pretty well everyone was standing up by then.

Smith then pointed out that those are the same competitive advantages everyone else is selling. In other words, everyone is selling the same thing. All those wonderful qualities - including knowledge, innovation, relationships, etc. - are all just commodities now.

They're all cliches.

2. Jaynie is explaining Three Types of Competitive Advantage. And everyone is writing this down. Well, except for those on their Blackberries.

Sustainable: can be maintained, with a little work.
Competitive Advantage: differentiates us for a time.
Competitive Positioning: may not be unique, but can position you as a leader.

A few minutes ago, she mentioned the book Differentiate or Die as must reading for CEOs: "If you don't have tme to read it, just memorize the title."

Smith's 3 Strategic Flaws of Most Companies:
1. They don't have a competitive advantage;
2. or they have them, but don't know them;
3. or they know them, but don't tell them.

She asked the CEOs of they recognized themselves on this list. From the murmurs in the room, most of them think they're either No. 2 or 3.

Update 3.
Create statements of competitive advantage by analyzing what matters to customers. Examples: “We have a 95% customer retention rate.”
“85% of our business comes from referrals.”

Where possible, relate these statements to your competition. Example: Saying you have 50 service reps is not as powerful as saying that you have 25% more reps than the competition.

Where do we find these statements? “Right under our nose,” says Smith. She cites the example of J Tech, a supplier of pagers to the restaurant industry. They allow restaurants to notify guests waiting in the bar when their tables are ready in the dining room. When Motorola started eyeing their niche, J Tech went to Smith for help. She helped them come up with the compelling statement, “Of the 50 top restaurants, 100% of them use our pagers.” Motorola never did enter the market.

Your goal, says Smith, is to build confidence and reduce risk in the buying decision. When you do that you no longer have to compete on price.

Update 4.

Look for “only statements” you can make: they are the only true competitive advantage. E.g., we are the only supplier with this system, with this level of quality, or to be chosen by all the best seafood restaurants on the east coast.

``Invest in appropriate market research” to make sure you know why your customer buys. Her company has done a lot of market research for their clients on buying decisions, and often she gets to tell her clients why their customers buy from them. Usually she asks them to tell her why they think their customers buy – and in the past few years, she says, only one company has ever gotten that right. And even they only got two out of three.

Even if it costs you $15,000, she says, outside market research will be a much better investment than lowering your price.

Update 5:
Look for the Shadow Effect: What one thing is so important to your customers that they will forgive you for everything else. EG, for airlines it`s leaving on time: if you can do that, then your customers are likely to think that their flight is smoother and your food tastes better.

You have to identify the Shadow Effect in your marketplace, and then make sure everything you do revolves around getting that right.

One more point: What do visitors want from your website. Not ``About Us``, but ``Why Us.``

Best-Ever Entrepreneurship Quotes, Week 89

Here’s the latest entry in our ongoing series of motivational quotes, personally selected to get your week off to an entrepreneurial start.

"So much for a 'temporary measure' introduced to fund the expenses of the First World War."
Ottawa software developer Ram Balakrishnan, commenting on income taxes to mark Tax Freedom Day, which took place across Canada on June 14 this year.

Balakrishnan has been blogging since 2004 under the name Canadian Capitalist. (His site, recently ranked the 5th most popular personal finance blog by the Globe & Mail, has long ranked as one of this blog’s “Best Outside Posts” -- see list at right.)

According to the Fraser Institute, Tax Freedom Day marks the day on which Canadians start working for themselves every year – having spent the first 5 1/2 months of the year working just to pay their taxes. (Besides income tax, the burden of course includes sales taxes, EI premiums, CPP contributions, provincial health premiums, municipal property taxes, employer contributions to EI and CPP, liquor tax, tobacco tax, amusement tax, fuel tax, gasoline tax, land transfer tax, motor vehicle license tax, import duties, and so on.)

The good news is that Tax Freedom Day is now coming earlier and earlier each year. After hitting a record-late date of June 25 in 2005, TFD took place on June 23 in 2006 and June 18 in 2007. Enjoy!

For more on Tax Freedom Day click here.

Seinfeld on Marketing

Can Seinfeld teach you about marketing? Utah marketer Bill Gammell thinks so. He’s written a short e-book called Seinfeld on Marketing: 7 Marketing Lessons from the Cast of the Show about Nothing.

I was never a huge fan of the show, but the following excerpt from the script (reprinted in the book as Lesson 2) sounds eerily real.

Jerry is picking up his reserved rental car at the rental agency:
JERRY: I made a reservation for a mid-size.
AGENT: Okay, let’s see here. (The agent checks on her computer)…
I’m sorry, we have no mid-size available at the moment.
JERRY: I don’t understand. I made a reservation. Do you have my reservation?
AGENT: Yes, we do, unfortunately we ran out of cars.
JERRY: But the reservation keeps the car here. That’s why you have the reservation.
AGENT: I know why we have reservations.
JERRY: I don’t think you do. If you did, I’d have a car. See, you know how to take the reservation, you just don’t know how to *hold* the reservation, and that’s really the most important part of the reservation—the holding. Anybody can just take them.

Funny stuff. And it feels so real. I've been in many situations like this, and I just wish I had Jerry’s clarity in pointing out the gaps in the clerk’s logic.

Gammell draws a lesson in branding from this scene:
"When you think about it, a reservation is nothing more than an expectation. And quite simply, this is also the definition of a brand. A brand is a perceived expectation in an exchange of value. In other words, if I give you something that I value (my time or my money), then I expect something of value in return from you. The stronger the brand is, the greater the expectation I have. But this expectation of mine goes much deeper than just your products or services. It is an expectation of anything and everything relating to your business."

If you want more, you can download the e-book for free by clicking here. It’s a fun read that won't take 15 minutes.
Not that there's anything wrong with that.

Your Dragons' Den preview

I spent yesterday at CBC on the set of Dragons’ Den, the show that brings together aspiring entrepreneurs with multimillionaire investors – for fun, financing, and fireworks. Its two-week shooting schedule winds down today, and the show will run for 10 weeks (or possibly more) starting in October.

As a guest on the set, I can't tell you what specifically I saw. But crew members are crowing that more deals are being done than ever – and for much higher amounts. This could be the year that the Dragons earn their wings.

New dragon W. Brett Wilson (second from right), who made his money in the oil business in Calgary, this year replaces Lawrence Lewin, who has bowed out for health reasons. He brings a more thoughtful, purpose-driven approach to angel investing, so there have been fiery clashes with some of the more veteran dragons who have made a reputation as being solely driven by the “Mun-ey” (as Kevin O’Leary would say).

Since I can't give you specific tidings, here are some of the Dragon quotes I noted down during yesterday’s taping. They should give you a taste of what’s coming up in Season III.

“Financial abuse is a serious crime. You should be arrested.”
“You're solving a problem no one knows they have.”
“You don't take No for an answer.”
“What I like about me is my consistency.”
“There's something scary about your inability to accept No.”
“This business is worth only five times EBITDA because it doesn't grow.”
“I’m going to be dead in 20 years. I want my money back sooner.”
“If you worked for me, I’d fire you.”
“I'm just waiting for us to save the whales on this one.”
“How can you not know your margins?”
“You're asking me to minimize your risk. As an entrepreneur, sometimes you have to take the risk.”
“I like your product, I like your presentation. I don't like the deal.”
“As an officer in the public markets, there is no way I can be booty-licious.”
"You can't talk yourself out of a crazy valuation.”
“Now you make me crazy. Now you make me mad.”
“People are lazy. They won't input the data.”
“Your product is fantastic. Stop developing the product and start selling the product.”
“I beg you not to pursue this. It’ll be as slaughterfest.”
“In the nicest possible way, this is not a good business.”

I also enjoyed the Dragons’ interplay with each other.
“Is gigajoules a real word?”
“Are you out?” “As out as I can be.”
“People let you near their babies?”
“Could you be any more predictable?”
“Am I the only one still thinking?”
“I think this is the highest ratio of valuation to crap that we've ever seen.”

Looks like a fun ride.