Inside Small Business | Small Business & Home Business Marketing
Archive for 2008
Business ESP
You can’t communicate with employees through ESP no matter how hard you try. And I’m not kidding. Sometimes we act like everyone should just be able to figure out what we’re thinking, and it happens all the time. If Ideas and requests aren’t properly communicated they’re not going to be understood.
I had an employee who was rolling into work late, sometimes an hour late or more. I would stew about it. It would frustrate me and I just didn’t know why it was happening. Turns out, after I decided to lay down the law about it, that he actually didn’t know when work formally started because no one had ever told him. Thinking back on it, I know I didn’t say anything about a specific clock-in time and no one else had mentioned it either. Wow. I made a big mistake by thinking that an employee could somehow get inside my brain and know what I was thinking. And this doesn’t just happen with employees. It happens with business partners, suppliers, customers, and just about everyone else I encounter during a business day.
Of course communication is the missing piece here. Things have to be spelled out. It’s not because people are dumb or inept or anything like that. It’s because everybody is different and they all have different perspectives and ideas. It’s immensely helpful to sit down with someone, no matter who they are, and simply communicate. Maybe you’re better about this than I am, but I find that there is a constant need for more complete and basically better communication.
This goes the other way too. Sometimes people aren’t communicating their ideas to me. Maybe they don’t want to say something critical to their boss or maybe I’m simply not listening as I should be. It’s vital as a business owner, I think, to ask people what they’re thinking. I mean really ask, and be specific. Bad communication is a big roadblock to successful business and it takes constant attention to always maintain proper communication.
Logo Agony
I’m a designer’s worst nightmare. With a background in graphic design, marketing, and corporate communications, I had particular and robust ideas about what I wanted. Okay, I’ll admit to being a recovering perfectionist as well, and doubtless that contributed to the lengthiness of the process. The actual passage of time was perhaps not unusual, but the many fits and starts and the angst surrounding them are unforgettable.
Entrepreneurs setting out to start a new company, in my opinion, would be wise to set aside a hefty budget for graphic identity. I did not. I wanted world-class design, however, and that is where Logoworks came in. Headquartered in Utah, Logoworks caters to small businesses. It designs logos, business cards, and websites inexpensively by using top-notch designers who never have to actually speak with clients. Instead, all communication takes place via formatted e-mail and account coordinators who do have to speak with clients.
What gave me pause was the distance (Cape Cod is more than a walk to the beach from Utah) and, more important, the consequent lack of day-to-day rubbing of elbows. In the end, I came away thinking the Logoworks formula is actually superior to working with one local designer, who would have had competing priorities. At each step of the way, it is spelled out how the process will work and how long turnaround times will be for each revision round.
The package I purchased from Logoworks included unlimited revision rounds for logo design. And it’s a good thing. Because when it came to satisfaction with the early concepts, I was less than enamored. Granted, my list of “theme” words was far-reaching: sophisticated, no-nonsense, innovative, light-hearted, new, fresh, natural, beautiful, intelligent. I also specified that the logo must not even hint of anything related to women’s cosmetics – no lipstick cases, no brushes, no frills. A tall task, indeed.
At the end of an arduous process, with many visions and revisions, I loved my logo and I love it still. It worked with business cards and packaging and printed materials and website and more. But, please, you be the judge. Does it do what I wanted?
Stay Focused. Be Flexible.
Understand that your business, your product, your marketing, even your life won’t turn out the way you planned. I think one of the big challenges with a start up business is, knowing whether to act on a new idea immediately or put it on the shelf for later. The problem is, some great ideas can take you away from your focus on your current goals. New business owners can hop from one suggestion to the next, making significant changes after getting the company started. This wastes time and creates additional expense that you need to avoid. Ask yourself, “is this new idea or suggestion helping the business to reach it’s goals or diverting valuable resources away from these goals”. However, once in a while, an idea or suggestion comes along that must be embraced and acted upon immediately. Your minds and plans must be flexible enough to make those critical changes.
So stay focused, be open and plan for some changes.
What’s your process?
My bread-and-butter consulting comes from doing business analysis of process. There are about 3 main things to avoid when designing business process - and almost every client I work with has violated these rules…so I thought i’d put these out for you to think about.
1. Don’t replicate something you can reuse. I have a client that supports their products with 2 different processes. One process if you call their call center. A completely different process if you order via the web. The customer experience is VASTLY different, depending on the channel you choose, but the product you receive is the same. It costs the client twice as much to support their product, because they’ve replicated their entire product support infrastructure twice. This also illustrates one of my favorite tenets of the “new” web economy: Putting a traditional business on the web will usually highlight the poor business practices of the business…because now all the internal workings of customer service are now exposed to the customer.
2. Avoid audits & inspections. Any time you have someone checking someone else’s work - this is ALWAYS a waste of time. One client has 80 people performing a check of sales orders - rejecting those orders back to the sales people to correct them. Better process design would be to enforce some edits on the sales people’s order forms so that they can’t make bad selections…that way, you don’t have to check them. While this example isn’t quite so extreme for small business - it should illustrate that good process design will ensure that work gets done right the first time - instead of inspecting it into the back end - at additional cost.
3. Avoid handoffs - collapse the job responsibilities. Your customer is the ONLY focus you should keep as you design your customer service process. If you hand off from an ordering clerk, to an inventory clerk, to a shipping clerk, to a billing clerk as part of your fulfillment process, you run the risk of providing poor customer service. Many times, each department will insist upon the “longest interval” as their agreement to provide service. If each department listed has an “allowed” 72 hour turnaround, there will be a 12 day lag before your customer is served. Better process design would collapse the job responsibilities (with more training) to a “customer service agent” that can handle the transaction from initial order through to billing fulfillment. That way, inefficiencies of handoffs are avoided, and your “customer service agent” can ensure that the customer has been truly served.
A business is nothing but a collection of it’s processes. Make sure yours are designed to take care of your customers - not your internal groups.
Hiring the right resources
I thought I’d write a bit about hiring the right people. I read Mike’s blog entry about hiring, and I wanted to add a few comments on that subject.
Our business is defined by knowing and hiring the right resources always. The best source for quality people is always from the personal network - as most of our best resources come from those we know. Quality people tend to know other quality people, and there’s still no substitute for personal recommendation.
However, when you can’t rely on the network connections for people, I thought I’d pass along some screening tips I learned as a recruiter during my stint in Big 4 consulting.
We had a pre-screen interview (30 minutes or less) and it had 4 questions on it. I think those 4 questions are able to identify the best quality candidates, and here’s why:
Question 1: What does the company do? This question demonstrates that the candidate has at least done some research about your company, and may even demonstrate some surprising understandings based on what they might find out about you. You can judge interest and understanding from this question.
Question 2: What extracurricular leadership activities do you take part in? Everyone has a “day job”. That may be as a student (if you’re doing new hires), or a current position (if you’re hiring an experienced candidate). If someone is willing to devote their time & talent outside of work to something else (in a leadership role), then that person may have leadership qualities you can tap into. If the person is neighborhood garage sale coordinator, soccer coach, youth club leader, or any other leadership activity, this demonstrates two things that are valuable: Leadership, and initiative - both vital qualities in a successful candidate.
Question 3: How many hours do you work in a typical week? For new hires, we determined that a full time student that also held a 20 hour/week job (regardless of the nature of that job), showed the ability to schedule, time manage, and demonstrate responsibility. This question is obviously geared for student recruiting - but the same can be applied to experienced hires as well, just with different frame of reference. Ask those questions that demonstrate the ability to multitask, or hold a disciplined work schedule (ask anyone with kids this question, and you’ll know what I mean).
Question 4: Tell me about a time when you were NOT able to perform a task you were instructed to do. What did you do? This question is one designed to reveal their problem solving ability. You will learn a lot about the person based on the situation they explain to you (can they even explain themselves well?). The solutions to overcoming their difficulty will tell you something about their ability to solve problems for you. Answers like “I got help” or “I researched the problem until I found the answer” are generally good, while “I quit”, “I yelled at the customer because they were stupid”, “I told the boss to deal with it”, (all answers I’ve received in interviews) may not indicate the best person for the position.
These 4 questions typically take about 20 minutes, and can tell you the factors about an employee that have the best indicators of success: Interest & Understanding, Leadership, Initiative, Time Balancing, Scheduling, Responsibility, and Problem Solving ability. You’ll also likely be able to assess if the person would be a good fit with the team that you’ve already got in place, because those same skills you’re interviewing the candidate for, will also be valuable skills for fitting in with your current team.
I’ve seen fancier interview techniques, but these 4 questions seem to be an accurate indicator of success in my field, and I think you’ll see that most of these traits are the ones that are the best indicators of success in any field.
Tracking Performance
It is always important for us to track performance regardless of the task. We watch overall gross income performance, profit and loss, inventory costs, expenses, and all sorts of other performance indicators. We also watch job performance. We track tasks like phone orders taken per person, number of customer service emails sent, and number of web site updates made. It’s extremely useful to know what jobs are being done and how efficiently they’re being performed.
There are drawbacks to all this tracking though, and I didn’t understand much of it at first. I’m still learning too, but I’ll mention a couple of lessons that I learned here. For instance, I had to learn to really analyze the numbers to get the whole story. We started tracking our shipping workers’ numbers so that we would know how many packages they ship out per day per person. Sometimes a shipping worker’s numbers would be far lower one day. They might have been taking inventory or working on something still important, but not related to the single number we were watching. It was a problem. We’ve since learned to judge performance based on a number of factors, not just one.
Another issue with performance tracking is deciding how much information to provide to employees. The whole objective is to improve performance by tracking it, not to create contests or destroy quality in a wild dash for higher numbers. I’ve found that it’s best to track and privately review performance with employees instead of having the performance numbers sitting out there for all to see. We’re also trying to avoid the phenomenon where an employee hits their usual satisfactory target number and then slows down for the rest of the day.
It’s difficult to know what performance benchmarks to track and how. Every company is different and I won’t assume that your company works just like mine. I do think that performance tracking is valuable and necessary, but figuring out how is completely up to you.
What’s in a Name?
I don’t remember exactly when the name Alice emerged as the winner. I know I put friends through tedious brainstorming. I know at one point I decided it should be a proper name rather than a “beauty” phrase, and I recall deciding to use “cosmetics” rather than “mineral makeup” because I didn’t want to limit myself, even though using the phrase “mineral makeup” would have worked better vis à vis the search engines. Thousands of women search for mineral makeup each day on the internet, and the numbers are growing . . . pray the numbers keep growing!
My funny and indomitable mother was named Gertrude Alice Keebler. Of course she hated that. So she set about changing her identity and became Kay (for Keebler, her last name). I’ve always admired her for that – to be a young woman in the 1930’s and make such an assertion stick was no minor accomplishment.
Though happily known as Kay by friends and family all her life, she did concede a bit to officialdom by signing checks and other legal documents as G. Alice Keebler, then after marriage, G. Alice Gray. When choosing her headstone, her heirs felt a moment’s indecision, but in the end, we opted for what we knew she would want, G. Alice Gray.
So what about Alice? A perfectly nice though under-used name. An accessible, welcoming name. A name that took second place to an initial! Alice it was.
Of course there is that other Alice—the one created by Lewis Carroll in 1865 and the one I studied as a graduate student in Oxford once upon a time. Clearly books for adults as well as children, Alice in Wonderland and Through the Looking Glass are classics along with their beloved namesake. Carroll’s Alice is always curious, always adventurous, always undaunted.
Not a bad thing to hitch our wagon to her star, linking our search for beauty as we age gracefully with her enchanted travels through the looking glass.
Outsourcing Woes
Outsourcing the tasks or things in your business that you are not very good at or that are just too time consuming is a great idea. Most of the time this can be an awesome decision and can free up valuable time and energy to pour into the important things like generating new business and customer satisfaction.
Though I am great with photography, I am not much of a web designer. I even took classes on HTML and Flash in college but found it incredibly time consuming and couldn’t personally translate the “numbers and letters” of HTML into photos, colors, and design elements. In comes my web designer specific for the photographer’s needs! They do all the design but I can customize the sight on a daily basis by changing text, photos, and colors whenever I want! It’s been really great…until this week! This week I was informed that my site was accidentally deleted along with all the photos and info as it was being transfered over to a new server. What!? All gone?! I have to start from scratch at the beginning the summer wedding season?! Yep. The positive spin on it is that I will get a shiny new updated website with all the bells and whistles with great customer service!
I was frustrated at first because I am thinking of all the hours of work that will have to go into this remodel that I wasn’t really looking to do right now. In truth, it will probably be really good for my branding. I had a website before I had a clear brand. Now that my brand is better understood and established (with the help of Logo Works!) I will be able to design my site more specifically around it. Hopefully you’ll be able to check out the new and improved site before the end of this month!
Jason
Learning to Give Responsibilities to Others
Being a (very) small business owner, I’ve experienced a trend over and over again that never seems to get easier: giving up responsibilities, duties, and decision making to employees.
When we started eReplacementParts.com every responsibility fell directly on the owner’s shoulders. We were in charge of building the site, writing all the content, taking all the orders, and shipping all the tool parts. Just from talking to other small business owners I know, it seems that lots of companies start this way. Perhaps yours did as well. Maybe it still operates that way.
For us right now, growth is our focus. We work hard to sell as many parts as we can and not be content with simply maintaining sales levels. As we grow, we need more people to make the company work and that means I have to give some, and then eventually most, of my responsibilities to others. To be honest, it’s tough to let go. Now we have entire departments dedicated to shipping our packages, taking customer phone calls, and building the website. When I walk through our building, I pass many people and their jobs used to be my job. I took a lot of pride in doing those jobs and it’s hard to really let go and trust that my employees will handle things as well as I did. And while they’re not clones of me, they’re able to handle their individual responsibilities just as well as I can and they’re far more specialized.
I think giving up responsibility is a tough thing for any business owner. For some small companies, the goal is to maintain size and perhaps the owner prefers to retain a large share of the load. That’s fine, but I believe that a small business will remain a small business as long as the owner is the primary worker. Potential is limited. If the goal is to grow, a business owner must give up some responsibilities to employees so that he/she can focus more on the company itself.
Product Development
Sampling gorgeous eye shadow colors, what could be more fun for a makeup addict? Looking back, I have to laugh. I remember telling friends that my red eyes were caused by allergies.
But pulling together a coherent line of private label cosmetics and accessories proved to be a monumentally detailed and challenging task, one that took many hours of sampling, testing, budgeting, rebudgeting, and keeping an eye on the big picture. Foundation, eye colors, concealers. Brushes and bronzers and blush, oh my!
For months I sampled cleansers, toners and moisturizers and the jars and bottles to hold them. At one point, I settled on a lovely bottle with gold trim for my toner, only to realize that the minimum order was 5,000 units—a tad beyond even my Scenario C budget. There were many learning experiences in this process, and like, perhaps, many small business owners and their product offerings, I had not done anything quite like it before.
At some point I realized I needed to set some boundaries around exactly what it was I was going to sell. Taking the entire skin care component out of the picture and saving it for some future rollout was a decision that eased the budget and the psyche.
Another learning experience but much greater setback was yet to come. Once I had settled on all the colors of mineral makeup for my line, I ordered quarter pounds of a half dozen of them to start experimenting with filling sample jars and trying out sifters and types of labeling. When the wrong formula arrived, my wholesaler was surly and uncooperative, and I did not want to run into that situation again. I learned from that that I needed to put my faith in more than just one main supplier, and I had to start the process of testing and sampling all over again.
Today, my line of mineral makeup consists of 53 shades in all. I order the colors from three separate suppliers, the accessories from two, the jars and lids and sifters from several, and the labels and the custom brushes from two others. Ultimately it all fell into place, but not without blood, sweat, and allergy eyes.
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