Wyoming Entrepreneur Blog

Financial Literacy

I recently had someone tell me that after receiving their tax information back from the accountant, they realized that they need to have a better understanding of the financial side of the business. This is a fairly common theme this time of year.  Perhaps you received the news that you owe some tax to the IRS because you made a profit, yet you don’t have the cash to actually be able to write that check.  How can this be?

There are a number of reasons why this could happen and many business owners don’t truly understand all of the financial relationships that take place.  The income statement is fairly familiar to most as it tells you whether or not you made a profit, but the balance sheet is typically not as well understood (if they even know what that is), yet it is on the balance sheet that cash is managed.  And we pay bills with cash, not profit!  Do you have money tied up in accounts receivable, excess inventory, have loan principal payments to make, is debt structured properly, and so on?  All of these could be part of the answer.

Until September of 2012, Wyoming Entrepreneur – Small Business Development Center has made available to every business in Wyoming a program called Profit Mastery.  It is FREE, and is a great resource to help business owners obtain a better understanding of the financial side of their business.  To learn more about this program visit our web site at www.wyen.biz and click on the Profit Mastery button at the bottom of the home page.  This is an on-line course that you can take at your convenience, with great tools to assist you in implementing the concepts in your own business.  If you have questions about the program, contact the Wyoming Small Business Development Center office in your area, or call 1-800-348-5194.

Amazon's Top 10 Leadership Lessons

I just read an article the April 23, 2012 issue of  Forbes article, George Anders talks about Jeff Bezos’s “Top 10 Leadership Lessons.”  The article is well worth reading, but to summarize here they are.  Jeff Bezos, the founder, president, chief executive officer (CEO), and chairman of the board of Amazon.com.   This is a guy who walks the walk and has created one of the most innovative and game changing companies ever. 

1)       “Base your strategy on things that won’t change.”  In Amazon’s case this means that to sell more things, offer wider selection, lower prices and fast and reliable delivery.

2)      “Obsess over customers”.  When you have a meeting of the important people in your company who’s missing?  At most companies the answer is “the customer”.  At Amazon, the customer is always the  prime consideration.

3)      “We are willing to be misunderstood for long  periods of time”.  Most companies expect success in short order.  Bezos is willing to stick with a plan for a long time if it makes strategic sense and if there is a good long term payoff.

4)      “There are two kinds of companies: those that try to charge more and those that work to charge less.  We will be the second.”  Most companies talk about holding down costs, but Amazon lives for frugality.

5)      “Determine what your customers need, and work backwards.”  At many companies products flow from the engineers and reflect their tastes.  At Amazon, the desires of the customer are considered first.  If the customer doesn’t like something, then Amazon gets rid of it.

6)      “Our culture is friendly and intense, but if push comes to shove we’ll settle for intense.”  At Amazon results and data count more than building a friendly culture.  I’m not sure I agree 100% with this idea, because I think a friendly, cooperative culture has huge dividends, but it is hard to argue with Amazon’s results.

7)      “If you want to be inventive, you have to be willing to fail.”  Lots of books and experts say this, but Amazon has lived it.  They have had numerous failed initiatives, but they learn from them and move on.

8)      “In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.”  In this age of viral videos, social media and consumers who talk about their experiences, the old way of advertising is dropping away. Instead you need to work with your customers and get them involved in your company.  Word of mouth (or keyboard) really is key in today’s world.

9)      “Everyone has to be able to work in a call center.”  Amazon managers, including Bezos, work at least two days a year in the call center handling complaints.  Does your company president?

10)  “This is Day 1 for the Internet. We still have so much to learn.” Bezos said this in 1997.  It is still true today.  Just look at the number of companies that have come and gone since 1997.  Amazon is still here.

The lessons of Amazon and its success have bearing on us here in Wyoming.  After all, JC Penney started in Kemmerer.  Who’s to say some Wyoming company won’t be the next Amazon?  What do you think? Are these a good set of rules for today’s company?

Your Company’s Name – It’s Where It All Starts

I’ve had a number of clients over the years ask me why their company never shows up on search engine results.  There can be any number of reasons why search engines aren’t “seeing” your website.  However, I’d like to discuss one that often times is missed in the rush to “optimize” a web site.  A key reason for search engine invisibility can simply be the name of your company.

When Google looks at a search term, it tends to first think of it as a brand before anything else.  Ann Smartly, writing on the MarketingProfs website (www.marketingprofs.com) gives an example of the results for the term “Armstrong”.  She indicates that most people would think of “moon”, “space” or “Tour de France”.  Most people would be wrong.  Google shows “Armstrong Flooring”, “Armstrong World Industries” and “Armstrong One Wire (an internet service).  The astronaut and the bicyclist follow these “brands”. ; As Ms. Smartly says, “Google seems to favor brands and is likelier to suspect that your intent is navigational instead of informational (go instead of know).”

One way of winning the war is to instead of fighting a battle against multiple opponents; try to make your brand name unique.  This can be challenging if you have a common name.  “Jones Consulting” would be a pretty poor choice.  There are a lot of companies with that name out there.   Renee Jones Engineering Consulting would be better, but with such a common name, you might need to look for a more unique usage.  “Rock Springs Engineering Consultants” would, as I write this, probably come up first in Google as there are no companies showing up with that name. 

The idea is to become the dominant interpretation of the combination of words in your company name. Google suggests that if you can make your name and brand stick together, you instantly become a dominant interpretation.  Using this concept, a company called Renee Jones Mining Engineering would likely rank number one on Google.

So there you have it.  Before you worry about optimization of your site, and certainly before you sign incorporation papers, spend some time searching names on the internet.  A unique business name can be an important first step in achieving online visibility.

Have you had problems naming your company?   Do you have a great name?

I am a graphic designer who is considering joining a “coworking” space. Why should someone choose this, instead of just working from home? - Cindy in Lander, WY

Coworking spaces attempt to capture the best of different workspaces where freelancers and independent workers get things done— the flexibility of a home office and vibe of a café— and bring them together with an emphasis on collaboration and building community.

The benefits:

Greater motivation. Productivity spikes when you’re working alongside other entrepreneurs. Coworkers join their coworking spaces because they find that the environment, in one form or another, satiates their own psychological craving for a community of like-minded entrepreneurs.

For many, it’s about the energy boost of being around other people. Alan Pinstein, who runs his real estate software service Neybor out of Ignition Alley, tells us, “We can all learn from each other and meet new people. It’s great, especially for people coming from a work-at-home situation where they need the social interaction and need to see people around to feel some energy in the room.” Alan compares the experience to the energy of being in a large metropolis. “I used to live in New York City and [coworking] brings that energy you find in the streets of New York to your office environment. To me, being here you get to feel everybody’s energy everyday.”

Graphic designer Judi Oyama’s experience at NextSpace told us that one of the core attractions of coworking for small businesses is that it enables you to get things done by filling in any gaps in skills and needs. When you aren’t stymied and stonewalled by things you can’t do, you feel motivated to launch new projects and try new business ventures.

Quality social encounters. Coworking gives you more social interaction. Join a space and get out of your pajamas and out of the house. Industrial and graphic design expert Anthony Grieder exchanged his home office where he had run Alloy Design, Inc. for over a decade for coworking space Boulder Digital Arts after coming to a realization that he wanted more people around him. “I had been in a home office for the past 12 years, and needed to get back into a more social situation.”

For others, being around people is a necessity for their business, especially for those in the creative field. Graphic designer Johnny Bilotta says that he turned to coworking at Indy Hall to test ideas and get immediate feedback. “One of the things I lost by working at home was the social aspect of going to an office. I couldn’t bounce an idea off of somebody, and being a designer, I need people’s opinions on things. I like to get people’s opinions on colors, for example. Even if it’s just waxing philosophical over a cup of coffee about a different design philosophy or something— I missed that from working at home.”

A professional venue— and outlook. Going to a coworking space disciplines your approach to your independent work or business. Franchise business consultant Kyle de Haas, a member of Cospace, likes how coworking puts him in a professional, ready-to-work frame of mind. “There are too many distractions at home that deter me from being as efficient as I’d like when I work,” he tells us. “I’ve learned over time that I respond well to getting dressed and going someplace to get work done. It promotes a healthy work-life balance.”

Instructional designer Lisa Van Damme marvels at how coworking at Boulder Digital Arts provides the right incentives to do her work in a more professional and balanced way. “There’s something to be said about getting dressed in the morning and leaving the house versus working in pajamas ten steps away from the bed.”

‘Accelerated serendipity’ galore. With coworking, communities can be very diverse, and you never know whom you’ll bump into in an encounter that could change your business forever. Freelance writer Kevin Purdy tells us, “I gained at least ten successful Lifehacker post ideas from working at Coworking Rochester, if not more. Personally, I’ve picked up post ideas and topics galore from Coworking Rochester for my freelance writing projects.” He also says that “problems I’ve had with my personal website, or even my out-loud ‘I wish I could…’ queries, have been tackled with enthusiasm whenever I’ve coworked.”

Action Alliance for Children’s Lisa Shulman Malul, a member of The Hub Bay Area, explains how crucial this exchange of ideas is in keeping their organization relevant, their ideas fresh, and their energy levels charged. “I think in any field you can get used to talking about your issues or the things that you cover within a narrow spectrum. The idea of interacting with [different audiences] on an ongoing basis gave us opportunities to hear more about how other people understand our work.”

Shared resources (from equipment to expertise). If you need to get things done on the cheap, coworking spaces are the place to do it. Instead of shouldering the cost of office space, Wi-Fi, the coffee machine, copier and printer, you split the cost with the other members of your space. You can also leverage better prices for other equipment or subscriptions with group deals.

And then there are the human resources— the people that can be sourced for team projects and group ideas. Members benefit from classes and lectures given by fellow members at many coworking spaces. Alongside being able to seek out your neighbor by dropping by for a chat at his or her desk, you can also seek out formal channels of skills exchange at hosted events where members take turns giving classes.

Companies hiring from the available pool of freelancers is commonplace at Gangplank. “In Silicon Valley, the joke is that you can change your job without changing your parking space. We say at Gangplank that you can change your job without changing your desk,” says co-founder Jade Meskill. “We've had people who wanted to get out of the consulting business and work for a product company, and be hired directly by one of the other companies inside of Gangplank.”

The price is right. Jason Richelson, a former member of Hive at 55 says that coworking makes it easy to save money, especially for the entrepreneur just starting out his or her business and trying to reach a sustainable operational level. “You just don’t want to commit to a lease in the initial stages of a new company, so going month-to-month is the only way for startups. And with coworking you don’t need to think about furniture, Internet, printer, etc. because it is all there.”

Expansion opportunities and an impressive ROI. The expenses incurred (monthly dues and commuting expenses) are generally outweighed by the gains. In the first Global Coworking Survey held by Deskmag, 42 percent of coworkers said that their incomes increased since joining a coworking space— probably from having access to wider social and professional networks and securing better job opportunities.

The downsides:

Little privacy and too many distractions. Sometimes the nature of your work is not compatible with the openness needed to make coworking work. Lawyers or accountants with secretive clients, for example, may need their own private offices that can be secured at all times. Even coworking advocates are not immune to the distraction that comes with the free flow of people in a coworking space. Software developer and cloud computing expert Adam Lindsay, a member of Coworking Rochester, tells us that prospective members should be warned about potential distractions when considering a space, which can affect productivity or be stressful when you have too much on your plate on a certain day. “If a person is easily distracted, coworking might not always be good. Make sure the coworking environment has quiet spaces you can escape to.”

Not the right crowd. Sometimes the chemistry really doesn’t work out, between you and the rest of the coworkers in the space. You may have different expectations, and the coworking space just didn’t meet them.

::::: Genevieve DeGuzman is the co-author of ‘Working in the UnOffice: A Guide to Coworking for Indie Workers, Small Businesses, and Nonprofits’ (Night Owls Press, August 2011).

Reprinted with permission from an article by Genevieve DeGuzman The entire article originally appeared in Deskmag http://bit.ly/r34StT on 2011-10-21.

For more information about the services of Wyoming Entrepreneur, or to ask a question, call 1-800-348-5194, e-mail wsbdc@uwyo.edu or write 1000 East University Avenue, Department 3922, Laramie, WY 82071-3922. Additional help is available on our website www.wyomingentrepreneur.biz. The Wyoming Entrepreneur partnership program is funded in part through a cooperative agreement with the U.S. Small Business Administration. Additional support is provided by the Wyoming Business Council and the University of Wyoming.

Is your sustainability message a bit stale? Spice it up and make it memorable!

Even though we are heading into warmer months of spring and summer, here’s proof that your sustainability messaging doesn’t have to be boring: In late January, the World Wildlife Fund launched a website (sweaterday.ca) for National Sweater Day (February 9). The premise? Canadians were encouraged to lower their thermostats a few degrees and put on a sweater to stay warm – thereby making grandmothers happier all over the country.

We spend a lot of time in the Shelton creative department discussing creative strategy and the best way to make things “stick” with customers – what makes a campaign memorable and what makes people act sustainably. Some of you might recall former President Jimmy Carter’s famous “sweater speech,” in which he encouraged everyone to minimize their energy consumption and break out the cardigans. Thirty-two years later, the same request was made of Canadians through a completely different approach – and without political agenda. Let’s take a look at what this new sweater campaign did right.

First, “The Granny Call Centre” took a request for sacrificing one’s personal comfort (which we know is a huge motivator for consumers) and put a fun, positive spin on it. Its approach was human and universal  – most of us have a beloved grandmother, and most of us have received an overdone/overblown/oversized sweater from her at least once. It even made the sacrifice seem downright cozy, if not a bit tongue-in-cheek: as one Scottish granny says, “Don’t be ornery – just put on your sweater!” By taking an age-old, grandmotherly adage and marrying it with an accepted societal joke, the campaign became a prescriptive instrument of engagement and awareness.

Secondly, the campaign has the potential to create change by going viral. This fun, buzz-worthy campaign can be passed along to friends and family to create change through subtle peer pressure – people wearing sweaters and lowering the thermostat not because of kind, rosy-cheeked grannies, but because their hipster Canuck friend Dan found a fun, slightly loopy campaign online and decided to play along.

Regardless of how folks get there, the end result is positive. Wonder if any of those grannies are familiar with the term ‘win-win’?

Guest article by Stephanie Alexander, Senior Copywriter for Shelton Group, LLC

Why Family Businesses are Special Today

Family-owned businesses are stable and optimistic, even in times of economic uncertainty. A recent national study by Kennesaw State University, the American Family Business Survey of family-owned businesses, studied the strengths, challenges and changes since a previous study done in 2002. It found that family business owners:
1 | Are optimistic about future growth - Even during some generally depressed business conditions, family business owners express optimism. Figures confirm that family businesses are better able to weather economic hardship and stabilize the economy than their non-family counterparts.
2 | Lack a sense of urgency about retirement and succession planning - Family businesses face some significant succession challenges. Over forty percent of business owners expect to retire in the next ten years, but many are less certain about retirement. Almost one third have no plans to retire, ever. Nearly another third report that retirement is eleven or more years away. This means that many owners plan to die running their business, which is not beneficial to their family, the business, its employees or its customers. Furthermore, nearly one third have no estate plan beyond a simple will.
3 | Select women as leaders - There has been an almost five-fold increase in the number of women leaders in family businesses in the last decade, far more than the increases seen in non-family businesses. The trend indicates that increased female leadership of family businesses should continue.
4 | Hold themselves and their employees to a higher ethical standard - Since family businesses are family and relationship oriented, they operate more ethically. Family owners have a major influence on their business and their values are emphasized in the business. Family orientation seems to translate into more ethical behavior and the resulting actions contribute significantly to their family’s identity in their communities.
5 | Expand on traditional management - There is a misconception that due to the relational nature of family businesses they are less professional. In one way this may be true, with only a few businesses having a written strategic plan or formal planning process. This is only one higher level of professional behavior. Despite the lack of formal strategic planning, they use other types of planning tools. Buy-sell agreements, business valuations, boards of directors, formal recruiting, performance appraisals, and benefits administration indicate their professionalism.
6 | More unified family values - Family unity and cohesion are critical to family business success and an important goal. Family members that agree on values, attitudes, and beliefs exhibit that unity and cohesion. The practice of these values result in increased levels of employee loyalty, commitment, and organizational citizenship. Similarity of values between family members in business and their customers can also improve relationships and foster economic stability.
7 | Place their trust in family members as key advisors – Overwhelmingly the business owner’s spouse is seen as their most trusted advisor, followed by their accountant, a business peer, parent, lawyer, and financial advisor.

Why Use Social Media?

Increasingly, many consumers are using social media channels like Facebook and Twitter to discuss companies, products and experiences with their friends and peers.  Monitoring what people say about your company, your service and your products is an excellent way to find out what you’re doing right or wrong. 

Consumers are also using these sites to research buying decisions.  If you are being discussed, it’s probably a good idea if you are part of the discussion.  A recent survey by ROI Research asked social network users the reasons they use social media to discuss products and services.  The table below shows some of the results:

View this photo

The study points out that when consumer voice complaints using social media channels, they tend to be in the areas of household products, telecommunications and healthcare.  Sports-related brands, magazines and newspapers and alcoholic beverages tend to receive relatively low levels of complaints. 
Would you refuse to discuss your products and services with a customer who came into your store?  If the answer is “yes”, then social media is probably not for you.  However, if you refuse to talk to your customers when they are trying to tell you what they like and dislike, then you may find it very challenging to be successful.  However, if you are interested in understanding how your and your products or services are perceived by the people who pay your bills, then social media can be a valuable tool and a way to connect with your customers.

No matter the industry, your customers are using social media and the web to research and discuss you.  If you want to be part of the discussion, you have to enter the conversation.

What have been your experiences with social media and your business?

Think Carefully When You Speak – You Might Be Offending a Customer

I had just finished a presentation where I was discussing the importance of marketing plans and planning to an audience of folks from the non-profit world.  I thought the presentation went well and there was lively discussion at the end.  All-in-all, I was thinking that this was a pretty successful day’s work.

As I was packing up two ladies from the audience, one of whom had participated in the discussion, came up to me.  They were somewhat hesitant, but then jumped in to tell me that some of my verbiage during my discussion was felt to be very offensive by some of the people in the room.

I was more than a little stunned.  I am an experienced public speaker and I strive to never use offensive language.  I apologized and indicated that being offensive was certainly not my intention and I asked what I said that was out of line.  The response was that when I was giving examples about understanding your customers and their demographics I said something along the order of “if your audience is left-handed, red-haired stepchildren, you should try to find out how many people meeting that criteria are in your service area.” In this case and for this audience a verbal crutch that I had relied upon for many years and which was intended to put across a simple point…that you need to know your customer was offensive. 

When I returned to the office, I went through a couple of stages of further reflection.  The first was “what the heck, don’t they understand I wasn’t meaning to offend anyone?  After all I’m a nice guy and I mean well!”.  This led quickly to thinking about times when what others have said that hit my “hot buttons”.  I realized what I think is an important lesson.

When you are trying to communicate an idea or concept, or if you are trying to sell a person on an idea, concept or product, why take the chance that you will make that person shut down and stop listening because a phrase or term you use is offensive to them? 

 

My “red-haired stepchild” seemed inoffensive to me, but one of the nice ladies who brought this up said to me “I’m sure you had some good things to say, but I shut you out once you had offended me”.   This is valuable information and I’m pretty sure that I won’t use anything red-haired as an example in the future.  (Left –handed Martians anyone?)

In today’s complex and changing world it may be impossible to always avoid any offensive, but I think that we owe it to ourselves, to our businesses and to our customers to try.  After all, an opportunity missed because of offense given is an opportunity that may not come around again.  Remember, each time you talk to a customer might be the last time if you don’t work at making it a pleasant experience.

Has this ever happened to you?  How did you handle the critique?

Putting sustainability into practice

Guest blog by Karen Barnes, VP Insight, Shelton Group.

http://www.sheltongrp.com/

I love a good theory as much as the next girl. But you know what I love even more? Seeing a theory come to life in the real world. A great idea put into practice, creating change.

Here are two examples from my recent travels. First, this is a really smart, very sustainable way to reduce the number of barely used bottles that get trashed by hotel cleaning crews every day, compliments of Hampton Inn. This is a great example of a nudge. By only providing these necessities in a self-serve, use-only-what-you-need fashion, Hampton Inn has made the desired behavior the default. If you don’t like this model, well, you can always opt to bring your own toiletries, so personal choice is still available.

No more wasted soap bars. No more tiny little plastic bottles in the landfill.

And other travelers are noticing additional benefits as well. Here’s a comment about the Skokie, ID, Hampton Inn. “I loved the bathroom dispensers for the shampoo and conditioner because we never ran out (I had 5 other girls in my room).” Not only is this solution more sustainable, it’s also more convenient — a huge driver for mainstream consumers!

Last week, I traveled to Washington, DC where I stayed at the Helix, a Kimpton Hotel, one of my very favorite boutique chains. Of course, parking is at a premium everywhere in the nation’s capital, but if you drive a hybrid to the Helix, you get a reward. Your parking is half-price!

If you’re a hybrid driver in the DC-area, you can also zip along in the HOV lanes and avoid the nasty traffic snarls. In other words, you get special rewards – really good ones at that – for doing the sustainable thing. You save money. You save time. Oh, and you can help “save the planet” at the same time.

For marketers, think about how you can reward your customers for doing the right thing. Can you give them ongoing rewards? Can you make something simpler, less expensive, or more convenient for them? Can you partner with other companies to extend or encourage the rewards? Since sustainability is rarely, if ever, the primary reason anyone purchases anything, rewards need to fill those primary needs in order to keep encouraging the desired behavior.

If you’re seeing examples out there or actually practicing some theories that are resulting in behavior change in the real world, we’d love to hear about and see them. Post ‘em here folks!

Note: Thank you, Karen, for allowing Wyoming Entrepreneur to re-post your article in our weekly blog!!

Can you really prepare for the "what if's" in your business?

Disasters always happen to someone else, right? We hear about tornadoes, earthquakes, floods, but seldom take the time to prepare for dealing with our own catastrophes. But, they can and do happen, just when we think the road is clear sailing for our businesses and lives. I would like to share a story with you about an experience I had in dealing with the “what if’s”!

One hot July morning several years ago, it was “work as usual” in my family-owned print shop. We were concentrating on the week’s big project, printing a family history book that was due in just a few days.  Without warning, the skies opened with a Wyoming downpour, accompanied by one-inch hail. Amidst the din of the storm, a new, horrible sound erupted…creaking, crashing and screaming, followed by a streak of employees rushing out the front entrance. The rear of the 50’x100’ clear span, flat roofed, concrete block building had collapsed. The down spouts were blocked by ice and the roof had filled with water, like a swimming pool. Unable to bear the weight, the whole roof caved in, releasing a tidal wave that swept from the back of the building where our paper was stored, through the darkroom, pressroom, reception area…right on our heels as we raced for the front door.

How could we have planned ahead for such a disaster? Businesses that recover quickly from catastrophes are those that have planned in advance. Consider a proactive strategy for your company…before a disaster strikes.

    * Be aware…minimize the risk of damage in advance of an emergency by examining your structure and identifying potential issues. Although we thought we were prepared for a “normal” flood (all inventory was stored on shelves above the floor), we had no idea that the building was poorly constructed and wouldn’t handle a heavy load of water or snow.

    * Develop a plan for handling a disaster…communicate with your employees and develop good relationships with your competition. The positive attitudes of our employees were crucial in creating a team that worked to reopen the business quickly. Our competition, other local print shops, offered to complete our jobs to meet our critical deadlines!

    * Review your insurance plan…be certain that you have sufficient coverage to pay for indirect costs of a disaster, the disruption to your business, as well as the cost of repair or rebuilding. Our insurance company worked closely with us to find a new building, remodel it and hire a moving crew, making sure we were able to continue business with minimal disruption.

* Consider your key partners… including relationships with your lenders. Our business loan payment was due on the day of the disaster. Our banker assessed the situation and allowed us to take two months off from our regular payment schedule, to insure cash flow stayed positive during the rebuilding process.

    * Develop a disaster recovery plan…review all the components on a regular basis. Remember to consider fire safety and emergency preparedness measures, business continuation and building repair plans, along with your insurance program. Learn from others who’ve been through disasters! Take pictures of your premises, keep accurate inventory and note potential dangers.

Although a business would not choose to experience a disaster, preparation for the “what if’s” can build positive continuity strategies that will carry the business forward with greater strength, determination and teamwork.