Business Record - Iowa Biz

Can You Hear Me Now?

It used to be that people ages 65 and older were the most likely to need hearing aids, but now hearing loss has become a Boomer phenomenon.

For the first generation raised on rock-n-roll, years of exposure to loud concerts, cranked-up stereos and gas-powered lawn mowers are a big part of the reason doctors diagnose more middle-aged people with hearing loss. According to study by The Ear Foundation and Clarity, half of the nearly 76 million Baby Boomers in America experience some degree of hearing loss. In the study, people with hearing loss express greater dissatisfaction with their friendships, family life, health and financial situation than people without hearing loss. 

In professional situations, poor listening can be just as detrimental.

Skillful listening and communication is important in today’s competitive work environment. People who are able to communicate effectively make successful leaders and typically develop more satisfying personal and professional relationships.
 
I recommend strengthening your communication skills with a quick review of the C.A.R.E. model for active listening.

• Concentrate – make sure you are focusing on the speaker.
• Acknowledge – use body language (a nod or occasional affirmation) to convey your attentiveness.
• Respond – make sure to ask questions for clarification and interest.
• Emphasize – share in the speaker’s emotions and feelings.

Remember to practice effective communication in the workplace to foster an environment of respect and cooperation, while increasing your team’s morale and productivity.

What is socialnomics?

Good marketing makes something happen.  Someone walks into the store.  A prospect fills out a form on your Web site.  The cash register rings.  A customer tells their neighbor about you.

One of the knocks against social media is that it's difficult to measure or calculate ROI.  This video shakes up that theory by showcasing how many businesses are not just creating communities...but they're creating revenue via social media.

I think the question is a valid one -- what are you missing out on, by not at least dipping your toe into the social media waters?

~ Drew

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The Perfect Gift for the Business Owner

Never Ceases to Amaze

As an intellectual property attorney, I see my share of online train wrecks. The train wrecks are usually business owners who thought the law was one thing when much to their chagrin, it turned out to be quite another. Many figure since there is no way to understand ALL of the laws governing online commerce, it is not worth the time to educate themselves about ANY of them. They learned out the hard way what a bad strategy that is.

80% of the Benefit for 20% of the Effort

The Law of the Internet is not only complex, but constantly changing. Even if you awoke knowing everything there was to know about Internet Law (which no one does), your warehouse of knowledge would be outdated by noon. It is no wonder business owners faced with such a Sisyphean task, opt to tumble blindly onward. Little do they know for about 20 percent of the effort, they can spot about 80 percent of the issues which cause the most grief to most business owners. You do not need to know how to solve every online legal issue to succeed. Being able to spot the usual suspects is often enough to keep your business out of hot water.

Handy Desk Reference

No one book will solve all of your legal problems. Actually, by itself, a book is not going to solve any of your legal problems. CyberLaw, however, might just give you enough information to steer clear of the most common online legal problems in the first place. Some business owners never realize that spotting the issues is half the battle. Spotted in time, you and your attorney can address most online legal problems and avoid their potentially catastrophic consequences. 

Leverage the Opportunity

Many companies see the complexity of online legal regulations as a hindrance, while more savvy companies see it for the opportunity it presents. Understanding the why online laws are the way they are gives your company a leg up on the competition. You can expand your business more vigorously in areas of lax legal enforcement or where the law is well settled and pull back in areas of heavy enforcement or unsettled law. Most importantly, understanding the reasons behind the laws allows you to extrapolate your strategy forward. Where your competitors are busy digging themselves out of holes they never saw coming, you can be anticipating the changes two or three years down the road and reaping the subsequent rewards. If you know a slightly nerdy business owner who has been good this year, now is the time to reward him/her with a holiday gift that really will keep on giving.

Brett Trout

Be a Nurturing Sales Professional

People tell me all the time that they are not good at sales or that they could not be a salesperson. It is understandable because most people have experienced the scripted, silly and often irritating closing questions of a salesperson trying to close a sale.

They believe that "successful" sales people must GET people to buy.  They must be a "closer." 

Fortunately, most of us are just not "closers" like Vin Diesel in the movie Boiler Room.

Of course, this example is over the top. But what is obviously happening here is that manipulative techniques are being used to close the deal because the sales person wants to close the deal whether or not the lead is ready to buy. In addition to being distasteful and bad for generating referrals, many "closers" have a tendency to offer discounts or additional value for free to get the deal done thus hurting long term profitability.

The fact is most sales people are not pushy. There are far more business owners and sales professionals who will test your interest with some qualifying questions and back off immediately if you don't demonstrate that you are ready to buy. They are afraid of appearing pushy or they convince themselves that spending time with "tire kickers" is a waste. 

Like a rolling stone, they will just go on to the next lead.

Consider this. Experts agree that it will take you at least seven to 12 contacts with a lead before they are ready to buy. If you give up at two, three, four or five, your competition is finishing what you started.

Also, experts agree that in large B2B sales, 25 percent of those who are going to buy do so within six months of becoming a lead. Another 25 percent buy within seven to 12 months. Another 25 percent within 12 to 18 months. And the final 25 percent buy after 18 months. If you give up too soon, your competition is finishing what you started.

For both the "closer" and the "rolling stone," LEAD NURTURING is the way to increase sales results (not to mention professional esteem).

Lead nurturing is the process of building a relationship based upon credibility and trust with your leads so that when THEY are prepared to buy, you will be the from whom they buy and all will enjoy the process.

Lead nurturing requires three things to get started.

1. A Belief that it will pay dividends
2. A System to do it efficiently
3. A Commitment to execute

What would the impact be on your sales if you abandoned the "closer" and "rolling stone" approaches and developed a system of lead nurturing?

Get it right the first time

Image via Wikipedia

Running to the secretary of state to get corporate filings is not the first step in developing your business.

Incorporating before your business has an identity is like getting a marriage license before you decide on a groom. You will likely have to start over.

First, determine: Who are you? What do you want? What is your growth strategy? What is your exit plan? 

Second, talk with advisers including: your lawyer, business mentors, tax professional, business partners. Gather information to use in determining an organizational chart, managerial structure, initial investors and future direction.

Finally, look at the types of business entities:

• C Corporation
• S Corporation
• Professional Corporations (PC)
• Limited Liability Company (LLC)
• General Partnership
• Limited Partnership
• Limited Liability Partnership (LLP)
• Sole Proprietorship
• Trust

Yes, there is a right time to get the real security of a business entity. If you are inventing, dividing profits or shopping ideas, you may want and need the protection of limited liability. Additionally, if you are beginning to negotiate contracts (even "little" contracts like your cell phone), you want your business entity in place. It is easier to have assets and liabilities in the name of your entity from the start. . . if you do it right the first time.

Like a good marriage, your business entity will need maintenance to go the distance. Like a marriage, it is easier to care from the start than to fix the problems. 

- Christine Branstad

The "Romance" of Interviewing

Image via Wikipedia

What if there were an even better way to figure out which candidate was most likely to succeed in your open position? Is there a better way than behavior-based interviewing, which about half of the Fortune 500 employers use?

There is.

At least there is according to Malcolm Gladwell, author of  "The Tipping Point," "Blink" and "Outliers." Behavior-based interviewing, you know, is based on the premise that what a person has done in the past is the most reliable predictor of how they are likely to perform in the future. So, using behavior-based interviewing, you might ask an applicant, "Sometimes things come up that get in the way of achieving our goals. Tell me about a time when your plans or schedule were seriously interrupted. What did you do?"

Sounds like a really good question, right? Now you're going to learn whether this person can adapt and stay focused on the goal! Not so, according to Gladwell's latest book, "What the Dog Saw." Supposedly, the problem with behavior-based interviewing is that it's too obvious what the interviewee is supposed to say. The interviewee can simply spin his example to fit what he knows the interviewer is looking for.

Gladwell tells of Justin Menkes, an human resources consultant from Pasadena who asks: "What if those questions were rephrased so the answers weren't obvious?" For example: "At your weekly team meetings, your boss unexpectedly begins aggressively critiquing your performance on a current project. What do you do?"

Wow! He's right. Suddenly I have to fess up. My focus is no longer on trying to figure out the "right" answer. Instead, it shifts to seeing myself in that situation and describing what I'd most likely do - without being able to anticipate how my response might land on the interviewer's ears.

This interviewing approach is known as structured interviewing. According to Gladwell, in studies by industrial psychologists, it's been shown to be the only kind of interviewing that has any success at all in predicting performance in the workplace.

• The format is rigid
• The questions are scripted
• The applicants are rated on a series of pre-determined scales

Hmmmm...so if it's such a reliable predictor of success, why aren't half of the Fortune 500 using structured interviewing rather than behavior-based interviewing? According to Menkes, structured interviewing just doesn't "feel right." For most of us, hiring someone is "essentially a romantic process." Kind 'a like dating. "We are looking for someone with whom we have a certain chemistry, even if the coupling that results ends in tears, and the pursuer and the pursued turn out to have nothing in common. We want the unlimited promise of a love affair. The structured interview, by contrast, seems to offer only the dry logic and practicality of an arranged marriage."

What do you think? You've undoubtedly interviewed applicants a some point in your career. Would you be willing to give up the subjectivity and chemistry we often base our hiring decisions on? Gladwell and Menkes say you should,..let go of the "romance."

A Paint Can of Cookies

Gifts come in many ways, but I was very surprised the other day when I received a UPS package that contained a paint can.  Needless to say I was very curious as to what the paint can contained.  It was a "welcome to the team" note with cookies from my new employer RSM McGladrey.  I have not even started the position and they are sending me a signal of their culture . Very impressive.  Even more impressive is an agenda for my first day that includes lunch.

What are the signals your culture sends to new employees?  Do they wait in the lobby with no conversation, wait for follow up calls or emails, have no idea of what the first day will bring or is it the standard paper work and then get them to work? 

First impressions are powerful and difficult to change, just as it is difficult to change a company's culture.  One of the greatest tools in changing company culture is new blood.  New employees bring no baggage and are eager to prove themselves.  They will be the first to accept change and step up to take on new challenges.

If culture change is a priority for you, it may serve you well to examine the process you use in bringing new people to your company.  It may be time for some new paint.

Seller Financing

Though sellers may not like it, seller financing is becoming a requirement for the sale of a business to take place. Some of the pros and cons are:

Pros:

1) Sellers generally get a 14 to 17 percent higher price on a sale when using seller financing
2) Buyers feel more comfortable that the seller has faith in the success of the business
3) Allows for a quicker close as buyers who may not be able to line up traditional financing can borrow from the seller
4) Seller financing can have better tax advantages to the seller

Cons:

1) The new buyer may not run the business as successfully as the seller, and the seller may have to take back the business or forgo the business note
2) Factors out of the control of the buyer, such as economic and natural disasters, could have a negative impact on the business, increasing risk to the seller rather than the buyer

One method that allows the sellers obtain the “pros” of selling a business without having to take the “cons” is having a buyer for the note lined up. How does it work? During the negotiations of selling the business, the seller can also seek out a buyer for the note. Once the deal with the business seller closes, or simultaneously with the business closing, the business seller can immediately sell the note or a portion of it to a note broker for cash.

The discount range on the sale of the note varies depending on various factors such as experience and credit rating of the business buyer and the maturity of the note. Discounts usually start at 15 percent and go up. However, this cost to the seller is usually offset by the increase in selling price obtained by using seller financing. In addition to the actual buyer willing to pay more for the business when seller financing is used, the market for potential buyers is larger when seller financing is available, which allows the seller to be more selective on who gets to buy his successful enterprise.

Selecting the less risk-averse buyer helps the business seller decrease the discount rate on the sell of the note. The discount rate on the sale of the note can also be enhanced for the seller after the note is “seasoned,” which generally takes at least four to six months. This allows the note broker to obtain more confidence that the business buyer is operating the business successfully and the decrease in risk is reflected in a better discount rate to the seller (i.e. note holder).

Certainly, this method is not for all sellers, but it is an option that a seller may have a need to utilize and transfers the risk to the note holder.

Feel free to contact me with your questions.

- Steve Sink

Make sure your brand is ‘infectious,’ not ‘contagious’

Cover via Amazon

Speaking of viral marketing, we are always looking for ways to engage our customers, contacts, associates and friends.

Last month, while gearing up to attend the Iowa Commercial Real Estate Expo in Altoona, I knew I would have an opportunity to connect with dozens of people whom I regularly come into contact with on my beat.

I also knew that within 10 minutes of entering the venue, I’d probably shake hands with at least 20 people.

I like shaking hands. To me, a handshake is a sign of courtesy, respect and camaraderie. Shaking hands is a physical link between friends, family, co-workers and business associates. I would say especially in B2B relationships, shaking hands is customary and generally expected. When you shake someone’s hand, you are acknowledging that person’s worth.

But I digress.

Two days before the expo, I watched “The Aviator.” The movie, which is about the life and times of the late Howard Hughes, shines a spotlight on the eccentric tycoon’s germaphobic disposition. According to one Wikipedia entry, “Hughes insisted on using tissues to pick up objects, so that he could insulate himself from germs.” I watched the film with great interest as it came highly recommended. Before that, I never really knew much about Hughes’ life, except that he liked to spend mountains of cash on making movies.

The following day, a friend of mine called to tell me that one of her co-workers came to work sick and was apparently telling people in the office that she had H1N1 flu. My friend, concerned about her own health and the health of her family, shared the apparent rumor with her boss.

The “sick” employee denied ever saying she had the flu and the employer did nothing but put everyone back to work.

The events of those two days are what got me thinking about writing this post. As employers, as small business owners, as salespeople and as media professionals, we all want to “infect” others with our products, our businesses and our career aspirations. And we all know that a handshake is an acceptable, practical and tangible way to do that.

We also understand that the more often we come into contact with clients, co-workers and contacts – and the more we do to engage them face-to-face – the more “contagious” our brand will be.

Of course, if you primarily connect with people using social media rather than in person, you have less to worry about. The downside to that, however, is if you don’t make face time with your peeps a priority, they will likely never really “catch” on to who you are or what you are trying to accomplish.

Again I digress.

I'm not trying to be crass. The flu is not joke and, thankfully, I’ve managed to avoid it so far this year. And if you’re one of the unlucky ones who have caught it, I’m sorry to hear it.

All I’m saying is, let’s make sure that this flu season, we “infect” others with our brands, not ourselves.

Here are three simple things you can do to reduce your risk:

• If you are sick, stay home. Enough said.
• If that’s not possible, let associates know that you may be coming down with something and aren’t shaking hands for a few days. They will understand and even thank you for it.
• In my workplace, where reporters and salespeople are constantly chasing down leads, bottles of hand sanitizer are popping up like dandelions in springtime. Use it, share it, use it again.

For more tips on sanitizing the workplace, click here.

- Todd Razor

'Tis the season to keep your business healthy

With cold and flu season here, many of you are making your doctor appointments for your flu shots.  The same should be said for your business.  Many business insurance policies come up for renewal in January.  Just like a doctor appointment, this is the time of year you should be making your appointments with your insurance agent.

In the midst of the holiday season, business may be up for some and for others business may be down. As Tim Johnson indicated in his blog earlier this month, this is a good time to "make your list and check it twice."

So let’s take at look at some highlights on insurance coverages that seem to be overlooked but can have a substantial impact on a business owner:

Building Coverage – Do you own your building? If not, you may not need to insure the building. However, you will want to make sure you have enough coverage for damage to rented premises. It is not uncommon to see a business owner only carry $50,000 or $100,000 coverage for this. Make sure your coverage is sufficient.

Business Personal Property – Have you consolidated or downsized any of your locations? Are you increasing your inventory to prepare for the holidays? Make sure your coverage is sufficient to cover any of your seasonal changes.

Tenant Improvement and Betterments – Who paid for the remodeling costs of your space? If you did, then you may want to have coverage for this on your policy in the event that you have a loss and want to reoccupy your same space. If the building owner paid for these costs or you acquired the space, then it will be up to the building owner to have the right coverage in place. Another point to make is that some companies will include this in with Business Personal Property coverage, which can be a much higher rate. So it may be cost effective for you to look at a company that separates this coverage out.

Business Income – Do you have enough income listed to cover your expenses if your business is inoperable? Do you want to be able to pay your employees during this time? If so, you may need to include ordinary payroll in this coverage.

Water Back-Up/Sump Pump – This is not flood coverage. This is coverage in the event that a sewer backs up or your sump pump fails and causes water to get backed up in your building and damages your property as a result. This coverage is not included in your policy. You will need to add it.

Landscape – Have you spruced up the outside of your building with new rock, bushes, plants or trees? If so, there are limitations on business policies for this coverage. Often times the coverage is minimal. So take a look at your policy to make sure you have coverage and that it is enough to cover any damages you may occur.

Business Income from Dependent Properties -- I am sure many of you have never even heard of this coverage. However, this coverage can provide a business owner with income in the event that their main supplier or manufacturer has a loss which in turn affects the insured’s business. So if your business is viably dependent upon another – you may want to review this coverage on your policy.

Vacancy -- Have you lost some tenants in your building or shopping center? Is your rental building sitting empty? Insurance companies can have different definitions of the term vacancy, which can mean additional costs and/or some penalty charges to the policyholder in the event of a loss. An endorsement can be added to the policy to help avoid this. So it is a good idea to discuss any vacancy concerns and make sure that your policy is written correctly to ensure you have coverage.

So in an effort to keep your business healthy, a good checkup may be all you need.