Keep it to Your Shelf: Opinions and Business

“Don't have any opinions. They're bad for business.”
                                     -Jerome Lawrence, Inherit the Wind

Opinions and Business

There’s a saying that says, “opinions are like armpits: everyone’s got ‘em, and they all stink.” In a way, this is very accurate.

I had a friend who had a subscription to Angie’s List, which is a website that allows users to find specialists in all sorts of fields, from babysitters to plumbers to handymen, etc. He was a loyal customer for several years, until Angie’s List decided to take a stance on some political issues, including threatening to move their corporate offices out of state. My friend immediately canceled his account, citing that a company like Angie’s List had no business getting involved in politics.

Now, many companies issue statements and endorsements for political issues and candidates, so why was Angie’s List’s stance (which was covered by media outlets extensively) such an issue?

Well, it boils down to a failure by Angie’s List to properly communicate their company values. If Chick Fil-A had taken a political stance, it would not come as a surprise, as they are a Christian value-based company, and they align themselves with the Conservative movement. Hobby Lobby and Home Depot are others that have made public statements that have only alienated the few people who were not familiar with their company values.

There are instances when you, as the business owner, may make statements on behalf of your company, and those statements may be controversial, because the opinion is either not aligned with your company values or it is not addressed in that list of values. For example, your opinion may be that people who drink coffee are just as bad as people who smoke crack cocaine. This is a pretty controversial stance, and it can certainly alienate much of the world’s population. Even if you clarify that this is your opinion and not the company’s, the damage may have already been done.

So how can you avoid your opinions being meshed with those of the company? It all boils down to context. Barring concerns of mixing up your personal opinions and those of the company, your personal life should be completely separate from your company. What this means is that your personal email address should be different from your company’s; so should your social media accounts; If you are at work, in uniform, or speaking to clients, suppliers, etc., then you should act just like any other employee of the company. And this is true if you and your employees are in uniform even OUTSIDE of work.

Remember that if your goal is to simply have your company be your job, like many landscapers or doctors, lawyers, writers, etc., then it’s ok to have your accounts and statements be intertwined with those of your company. But if your goal is to be a true entrepreneur, and you hope to grow your business into a large corporation, you need to act like it from the go. Think of your company as a politician running for office; you will have a stance on issues that align with your values, but anything that can cost you the election should be off limits in conversation or other communications.

If you have any comments, questions, or want to lay all your controversial opinions on me as a way to vent (I promise not to share them with anyone else), please leave a comment or email me at HeadlessHammerhead@gmail.com.

Value Meals and Company Values

“Values are like fingerprints. Nobody’s are the same, but you leave them all over everything you do.”

-Elvis Presley

 

Define Your Company values

Recently I was driving around with my family on a Sunday, on our way to the park, when we thought, “Hey, we’ve never eaten at Chick Fil-A; why don’t we grab food there to take to the park?”

Unfortunately for us, Chick Fil-A doesn’t open on Sundays – they never have, and probably never will. This is part of their company values, much like southern supermarket chain Publix closes every major holiday (like Thanksgiving) to give their employees time to spend with their families – all at the expense of their own bottom line.  

Now, if you’ve been reading my blog, you know I’m a huge proponent of fattening the bottom line as a sign of success in business; however, I am also a big proponent of ensuring your company is not a robotic profit machine. In the end, it is humans who keep the company alive, and humans who can end its run. So, a company must have clearly defined values that will aid it in times of controversy, times of financial famine, and times of crisis. These values can serve as a company’s competitive advantage (which we’ll discuss in more detail in a future post).

I recently tried to rent a car at an airport and ran into a very common occurrence – the rep who was checking me into the car tried to scare me into buying the supplemental insurance. I’ve worked in the rental car industry before, so I know how this works, and as a test I told the girl “just give me the basic insurance.”

What many people don’t know about the rental car industry is that there are usually three insurance products offered, but most people will really only benefit from one – the damage waiver, or collision damage waiver. The other two are usually liability protection (which most people already have with $0 deductible through their own insurance), and personal injury protection. However, when a customer says “I’d like the basic insurance”, many of the reps, being hungry sales people, have turned semantics into a cash cow. You see, “basic insurance” to one person may mean “Damage Waiver and Injury Protection”, while to another it may mean “just Damage Waiver”.

This girl tried to slam me with both Damage Waiver and Personal Injury Protection. I called their corporate office later to report the behavior, and they assured me they would address the issue. However, I know their reply to me was simply a formality, as it is part of their company culture to try to maximize profitability from every rental, at any cost.

So why should this matter to you or your company? As in the case of the rental car company, many businesses turn a blind eye to behaviors from their employees – at every level, from front-line to upper management employees – and the behavior becomes one of the values of the company, albeit an unofficial one. If this happens within your company, customers and the public will judge you and your conglomerate by this behavior. This is not a good thing, because a customer who feels they have no choice but to “grin and bear” the circumstances they see as unscrupulous will jump ship and swim to the competition as soon as the competition’s engine is within earshot.

Now - what if your employees can name McDonald’s Value Meals quicker than they can name your company values? What can you do to define your values and ensure your employees abide by them? 

• First, your company needs to create a list of values. This list must be easy to read and understand, and it must be prominently displayed so all employees can see it at all times.

• Your values must be enforced. Punishment is never as effective as positive or negative reinforcement, so instead, try to reward employees who live by these values. Whether it is monthly with honorable mentions via mass email or in a newsletter, or even daily with a program like Kudos Points (Kudos.com), these rewards serve to reinforce what your company feels is appropriate behavior.

• Do not waver. Like Chick Fil-A, sticking to your values, even if it means fewer profits, will eventually translate into more success. Chick Fil-A has received a lot of publicity as a result of their Sunday policy, as well as their religious agenda, and it has actually helped the company grow. This is not to mean that you should inject your religious beliefs into your company, but rather create an environment and value system, and even a company culture that customers become familiar with, so that even if you sell your company or go public, the new leadership will not want to change these values, because they would be synonymous with your brand.

• Make sure your employees know your company values. The easiest way to determine this? Ask your employees If they know them. If not, it’s time to make it a point to instill these values or reiterate them more frequently.

• Make sure management understands and enforces your company values. If the preacher doesn’t follow his own gospel, then why should the parishioners?

With these five simple steps, your company should have a very solid base of values by which it operates. Companies that do not have a strong set of values usually pay the price in the end, whether it be because of lawsuits for unscrupulous behavior by employees or management, or simply by a loss of business from customers or clients. Values are the soul of a company, and just like a human can’t function in society without a soul, neither can a company.

If you have any comments, questions, or want some guidance with your values because you’re unscrupulicious, please leave a comment or email me at HeadlessHammerhead@gmail.com.

Put Your Hands on my Baby!

“You don’t have success unless you take someone with you.”

-Napoleon Hill                          

Learn to Trust the Experts

Although the quote above may have you think this post will contradict my previous post, it really won’t. I’ll start as usual: with a story. 

Many years ago, I had a friend who opened a women’s gym in a relatively small town. He had moderate success, even though he would never become wealthy running just one gym. He later admitted that he’d opened the gym to try and meet beautiful women (which is just as stupid a reason as you can imagine for going into business). Anyway, he wanted to cut costs as much as possible, and taught all the classes, and he handled all of the departments in the gym, like Accounting, Inventory, Legal, etc.

I’m sure you probably already know where I’m going with this, and you may think that you would not commit these mistakes yourself, but sometimes the reality of running a small business is that you have to wear all the hats if you can’t afford to have someone else wear them.  In a bout of desperation, you may choose to go the cheap way and do everything yourself. Avoid the temptation!

The first thing to ask yourself if faced with this issue of having to do everything yourself is, did I plan for this in my business plan? If your answer is no, then you need to go back and spend several hours or days researching and planning for this event. This is not easy, as your mind and ego (we all have them!) will try and convince you that you can do it, no sweat. Take the time to research the position you’re planning to take on – what responsibilities and skills will be needed.

A good method of getting quick answers for this is to look on job boards. So, for example, if you’re planning on handling your own accounting, look on accounting job boards and find out what you need to know for the position. Learn about SAP, AP, AR, Payroll, Taxes, etc. After you’ve researched these things, honestly ask yourself if you’d feel comfortable going on an interview for one of those positions you saw online. If your answer is no, or you have a doubt as to whether you could answer any questions the employer would ask you, then you’re not ready to handle that skill.

The second thing you’ll need to do is ask yourself if you have enough time to handle all the tasks. My women’s gym friend was teaching aerobics, cardio kickboxing, basic yoga, and doing personal training, and he also had to handle inventory, accounting, cleaning, legal, marketing, management, reports and general clerical (contracts!), as well as IT and maintenance for the equipment. 

Realistically, he couldn’t handle all of that by himself in a 24-hour day without doing a crappy job.

Finally, you need accept the reality of your situation and suck it up. Some of the skilled jobs need to be handled by someone else. The easy stuff, like cleaning, you’ll need to do yourself. That’s easy. But if you’re not a natural manager, or an accountant, or you don’t know all the laws in your municipality (city, county, state, etc.), hire someone to do it. And it’s extremely important to remember to let go and trust your people, always. Don’t hire someone if you’re going to micromanage them, because that would completely defeat the purpose, and it will take up more of your time than if you had done the work yourself.

If you have any comments, questions, or would like me to send you a list of resources that can help you decide on who and how to hire someone to perform a specific function of your business, please leave a comment or email me at HeadlessHammerhead@gmail.com.

Avoiding Business Abortion

“O God! Can I not grasp

Them with a tighter clasp?”

                                -Edgar Allan Poe, A Dream Within a Dream

Let The Bird Leave the Nest

In keeping with the theme from last week, this week I wanted to discuss another important aspect of starting your own business. This one, however, may be even more controversial than last week's post because it will probably feel like I am attacking your family; particularly, I am about to attack your baby and it's not gonna feel good.

Being an entrepreneur myself, I know the pride that comes with starting your business or creating your product: seeing your logo on a sign, seeing reviews on social media, reading your awesome title on a business card out loud. Owner. President. It's as good a feeling as having your kid become POTUS.

BUT  I am about to take that business card and rip it into hundreds of little pieces right in front of your face. Well, not me but I'm gonna ask you to do it. Go ahead - try it.

How did that feel? I bet it was a devastating feeling. But as an entrepreneur, you're gonna need to get used to it, but not always for negative reasons. Let me explain.

My first business was a tanning salon. Yes, I actually sold sunshine in the Sunshine State. I planned for over a year, researching the industry, trends, viability in my market, competition, location, and much much more. I wrote a 65-page business plan, and I was very proud of that. Even the bank loan specialists were impressed with the plan and many asked for copies to keep, even after denying me a loan. I'll get into more details on that in another post, but there are two important points here. First, I opened the business with my fiancée at the time (again, a future post will focus on starting a business with friends and family). My second problem was actually related to the first: my fiancée felt all those giddy things I mentioned in the second paragraph above, and she wanted to avoid feeling what I mentioned in the third.

When the business grew to a point where I felt it was time to expand (i.e., a second location, franchising the brand, etc.) she did not want anyone else to have a controlling interest in the company. Not even 5%. And to avoid a lengthy discussion or fight, I went along with it.

Then, about a year later, our relationship came to an end. We had a brief discussion about the business, and I told her to keep it. Most of my family and friends believe that was a mistake. But, an entrepreneur needs to be able to see when a decision or product or service is going to create a hemorrhage that could prove to be his or her own personal extinction asteroid. I had cut my losses and moved on; I knew I could open another tanning salon if I wanted to, and eventually buy her out - but I never cared for the tanning business.

Had I tried to fight for a share of that business, I'd probably still be fighting for it ten years later, and only the lawyers would be making any money off of it. Thing is, I had planned for this (and many other crazy scenarios) in my business plan. I'd even planned for an often-missed "best case scenario" (in which the business grows too quickly to be sustainable). The tanning salon is still afloat, but it's not making my ex a millionaire by any means.

So, learn to kill that baby. I recommend giving away a precious possession or buying a graphics tablet like the Buddha, Adesso, or Crayola, then write or draw something amazing every day or every week, and wipe it clean (or let it clear itself). You can even get a dry-erase board and do this on a budget. If you get a sweetheart deal from a "White Knight" investor like those on TV, weigh the options objectively and do it. It's usually for the best.

This ONE Thing Can Help Your Business Succeed

I have a passion. Well, maybe I’m starting a little too far along in the story here - let's roll back the clock a little bit so you can see where I'm coming from.

I was watching TV the other day and I caught the end of a show about some investors looking to finance the next big product or company. The premise involves amateur inventors and entrepreneurs who try to achieve the American Dream by getting one of these super-rich investors to agree to go in on their ideas - usually with a sizable investment that would allow the entrepreneur to scale their operation in a big way or just launch their product.

During this particular episode, one of the investors was intrigued by the entrepreneurs' idea, which would do something great for some poor people in Africa while providing a quality product to American consumers at a reasonable price. But this investor, however moved he may have been, responded with something that rang so true I wish I could repeat it to every single investor I meet without coming off as rude or preachy.

What did he say? It was something in the vein of, "this is great and it warms my heart, but HOW WILL IT MAKE ME MONEY?"

Now, before you whip out your list of expletives and email them to me (and compare me to a heartless money monger), let me explain why I think this is a crucial question to ask yourself if you are a serious entrepreneur.

I know most of us have a many things we're passionate about. Some of these things run so deep in our veins that we feel compelled to make a business out of it. Generally, there's nothing wrong with that. If you like to get creative with people's hair or makeup, you may want to open a beauty salon or start a cosmetology business. When I was a kid I met a guy so passionate about baseball cards and comic books that he opened a local "Cards and Comics" store (this is where I met him). I loved going there because this guy knew his stuff. He knew everything that was going on in the various series of comics, and he knew which baseball cards would be the next best ones to save in a hard plastic display case.

I remember wanting to buy some cards off of him, and he wanted more than the cards were worth, because he said Darryl Strawberry and a few others were going to be HUGE.

Here's the problem with this guy's business, though: he was too passionate about the business and not passionate enough about making money. There was no question that this guy knew his stuff - he knew the product inside and out - but he didn't know his business inside and out. The sad reality is that the best he could ever hope for, like the cosmetician or hairstylist, is to make a living, rather than make serious money. And again, if that's what makes you happiest, then that's almost all you'll ever need. Maybe the people on that show I mentioned could start a nonprofit to help these African ladies and they could feel fulfilled for the rest of their lives. But... to make it big, this "Cards and Comics" guy, named Rob, needed to focus more on growing his business.

I found out much later in life that eventually Rob closed shop in the early 2000's, which serves as proof of his biggest mistake. The key here is that, even a small business needs a plan for at least some growth. Even if to offset any unforseeables like a lawsuit, government regulation, or whatever. But his passion for baseball cards and comic books made him blind to shortcomings in his business. I'm willing to bet that, on a bad month, he convinced himself that the next big "crossover event" in a popular comic book would dig him out of a hole. Or perhaps the next Mickey Mantle would have a special limited edition card that would bring him a big payoff and keep him in the black.

His passion for the sport and the comics, however, blinded him to the possibility of Darryl Strawberry having substance abuse issues, or to Jose Canseco writing a bestselling book naming several top players as anabolic steroid users - which, of course, made many of these players lose all credibility as great athletes. So, cards that could have been worth thousands today, are worth $150 or less. Now, that may sound like a pretty good return on a card that only cost a few cents, but we can't ignore the time value of money, nor the harsh reality of inflation.

The big takeaway here is that if you have a passion that drives you to open a business, you first need to have an honest soul-searching introspection to determine if your business idea is one that can truly make you a millionaire or if your passion for the product or service would overtake your passion for making money. If it's the latter, you may be dooming yourself to becoming part of that infamous "80% of businesses fail" statistic - and nobody wants that.