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May 2007

Business Succession via ESOP's

All owners will one day face the dilemma of how to transition their business once they have made the choice to leave.  There are many ways to conduct a business transition, but I would strongly encourage you to evaluate the merits of creating an ESOP (Employee Stock Ownership Plan).

I just attended the National ESOP Association's Annual Conference in Washington D.C.  Once again, I came away from the conference with an even stronger belief that ESOP's are a wonderful tool for business succession. I heard former owners and the new employee owners speak of their successes and challenges.  The difference is that they are now on common ground instead of owner vs. employee.  The common ground that ESOP's provide has led companies to stronger financial success.

A study by Professor Hamid Mehran of the J.L. Kellogg Graduate School of Management, Northwestern University, showed that when evaluating comparable companies, those with ESOP's showed on average 2.7% higher profits.  ESOP's also allow more people to experience business ownership and the risk and rewards of being an owner - something that most former employees would never achieve.

The original owner most likely could sell their company at a higher value to an outside entity, but then the employees are at the mercy of the new owners.  An ESOP provides many different benefits to all involved.

  • Potentially pay no tax on the original sale of the company
  • Potentially pay no tax on the profits of the ESOP company
  • Allows the employees who helped build the company an opportunity to share in the future success of the company
  • Reduces the chances that the company will move

Do not think that an ESOP gives everyone an equal voice in the company.  The company still maintains a management structure, a board of directors, trustees, and keeps many of the same decision making processes that were in place before the ESOP.

Creating an ESOP is a process that you should research and make sure that you have good advisor's at all levels.  The following are links to web sites that contain a wide variety of free ESOP information:

National ESOP Association

National Center for Employee Ownership

Ohio Employee Ownership Center

The Beyster Institute

Please take the time to consider and research the ESOP path for business succession.  It is well worth the effort.

Just say no.

Today, we're going to talk about the power of "no."No

Now... just so you know... I'm a recovering perfectionist, so I know the thrill of saying "yes."

You perfectionists out there know what I'm talking about.

Here's a scenario:  Someone comes to you with a task and they really need help.  Maybe it's a volunteer position... a side project at work... or even a position on their softball team.  They let you know that they really really need you.

You already have too much on your plate... but you say "yes."

And... for a moment... it feels really good.  Doesn't it?  The person really appreciates the help.  You get to be the "go-to person."  As they walk away... they might even say, "I knew I could count on you.  You're the person everybody can always count on." 

Ahhh yes... it feels good.

But then... maybe 5 days... 5 hours... or 5 seconds later... the weight of your "yes" sets in.  It becomes one more thing piled on a growing stack of tasks.  One more thing on a mile-long to do list.

So... as a perfectionist... what do you do?  You work to get the job done.  Right?

The problem is... when we say "yes" to the wrong things, we have to say "no" to a lot of the right things. 

You have to sacrifice time on other important roles or time with important people... to get the job done... right?  Or... you have to call the person or send a painful e-mail to let them know you just can't get it done. 

And then, the thrill of the "yes" becomes the the pain of the "late no."  Have you felt it?

Okay... so let me ask a question.  What if you said "no" more often? 

I know.  I know.  It might be painful at first.  And... you may not get to always be seen as the "go-to" person all the time. 

But... let me ask a second question.  What would you get to say "yes" to, if you said "no" more often?

Maybe you'd be able to do a better job on a more important project.  Maybe you would even enjoy your work more.  Or... maybe you'd be able to have a relaxed dinner with your friends or family at the end of the day... because you'd know that you'd gotten the right things done in the right way.

Is it worth a try?  Author and speaker,Tim Sanders thinks so.  Check out his post on the power of no.

So... what is something you're going to say "no" to today?  Seriously... click on "comment" below... and let the world know about one thing that you'll say "no" to.

Photo credit: righteye

Big Event, Big Investment – Protect It

Bank_2 I’ve been watching the neighborhood lately as it swarms with teenagers and families headed to nearby graduation parties. My guess is that most of us have been invited to one or two recently – or at least have driven by the busy streets with cars parked for blocks on end.

Most of us may plan get-togethers and worry more about the menu, the music and the people we invite. But as a business owner or homeowner, you have more at risk to protect if something goes wrong. Or at least if things don’t go as you had planned.

You may not need specialized insurance to protect you from every possible thing that could go wrong. But there are some situations that may be worth considering – and discussing with your agent to make sure you’re covered.

For example, what if you decide to hire a band because the iPod just won’t do? No problem.

It's the day of your event and you watch the truck with a trailer circling the area until it pulls up to your door. As the band starts unloading their gear, you get a little nervous about the damage to your property as the items are being unloaded.

During your event, a female guest (who happens to be a good friend), loses the padding off her high heel shoe. The next day, you notice that your new cherry hardwood floors look like a hail storm hit the area!

Do you sue for property damage? It's your friend - so how do you handle a touchy situation like that? Maybe your current policy has coverage for such damage. But you're not even sure where to start.

Of course, we all know that Mother Nature isn’t always reliable (at least not in Iowa). Have you ever thought about what you might do if you plan an extravaganza outdoors – with no indoor contingency plan? You invest money and probably make deposits on things like a caterer, some tables and chairs, maybe a tent.

And then the winds and the rain kick in. Big time. It looks like monsoon season.

Can you get your money back? You know as well as I do that the answer in most cases is "no."

So what do you do? If your investment is big enough, it may be time to protect yourself in case the worst happens. In some cases, it is better to be safe than sorry. Purchase special event coverage.

Built By Association

Huddle_2As a consultant, I field a lot of questions about project management resources:

  • Where can I find examples of a report or deliverable or project plan?
  • Do you know of somebody looking for a project management position?
  • Is there a project management training class out there I can send my people to?
  • How do I get certified in project management?

Finding answers to Almost all of those questions eventually involve leveraging the local chapter of the Project Management Institute.  In this day and age of trying to find more information with the least amount of effort, participating in a professional association is a sound use of your time.  As I've brought up numerous times, small business owners are among the most time-strapped individuals around.  You need to use your time wisely, and taking part in a professional association is an investment of your time, not an expense.  You obviously cannot participate in every association, so select one or two that will benefit you the most.

As I've matured in my project management career, I still find that there are new things to learn from presenters and workshops that the chapter sponsors.  The biggest benefit, however, comes from the relationships and networking that have been built up over the years.  Many of us in the chapter have known each other for years, and we know who the best resources are for specific project management issues.  Many of the people in the chapter are very helpful and giving individuals, and I know that most of my questions can be answered through a couple of phone calls or emails.

If you've been hesitant to join a professional association, try attending a couple of meetings and/or checking out their websites.  You might be surprised what they have to offer.

Just out of curiosity, what other professional associations would you recommend?

Carpe Factum!!

Do You Leave the "Customer" Out of "Customer Service?"

"Benchmarking" has been a growing trend in business for some time. Corporate managers and executives regularly ask about customer surveys that will "benchmark" their service against other companies in the industry. I understand the lure.

Upper management loves to show their Board of Directors a bunch of charts and graphs that show they are rated in the "Top Ten" for customer service. Those nifty plaques look good in the lobby trophy case. Marketing departments love to tout that "Finkledorpher and Associates rank us #1 for Customer Service!" (right Drew?).

But before you have that trophy case installed, let's think about it...

  • What if every company in your industry provides awful service? I'm a loyal Chicago Cubs fan [waiting for the snickers and groans of pity to die down]. So what if the Cubs are rated number one in fan loyalty? They're still, at best, a mediocre baseball team with huge problems in their bull-pen. I'm always amused when computer companies like Dell and HP tout their great customer service rankings. Everyone knows that all computer companies are notorious for offering 2nd rate, outsourced tech support. Being ranked number one among the mediocre may make you feel better - but it won't help your long-term success.
  • Your customers don't care about your rank - they care about their experience. What is really important to the long term success of your business is knowing what your customers expect and then meeting/exceeding those expectations. While you're touting your customer service ranking your customers are making future purchase decisions based on the real moments of truth they are having with your front-line employees. You might be feeling really great about the plaque on your wall while your customers are exiting in droves.
  • You need actionable data. Recently, our group delivered a focused customer satisfaction survey to one division of a large, international corporation. The project provided a wealth of customer data regarding what this division needed to do to increase satisfaction and loyalty across their customers. When the division manager began sharing the data with her colleagues - the other divisions were blown away. They had to admit that they had wasted a lot of money with big-name research firms to provide them with data so broad and general it didn't help them make strategic action plans for improvement. It was just another nice looking notebook with a big name to place on the bookshelf.

Successful customer service begins with knowing your customers, knowing what your customers expect, and making changes to your service delivery system in order to exceed those expectations. The real customer service trophy is your bottom line - when your customers keep coming back for a service experience your competitors can't deliver.

Are you leaving your customer out of your customer service equation?

I Want More Web Traffic

A hypothetical conversation between a small business owner and a web developer:

Small Business Owner: More traffic, please. 
Web Developer: What will more traffic accomplish?
Small Business Owner: (deep sigh, wondering if he hired the right person) Everything!  More sales, more contacts, more...everything.

Web Developer: What kind of conversion are you getting now? What page are people exiting your site from?
Small Business Owner: I have no idea.

Web Developer: What web page do they enter from? How many pages per visit?
Small Business Owner: Umm...I dunno.
Web Developer: While more traffic is always a plus, let's first take a look at your stats and see what we can find out about your current traffic.

Sounds like the Small Business Owner may have the right person after all. If you're not converting your current traffic, going after more traffic is putting the cart before the horse.

You should check your website statistics regularly and with purpose.

  • How do visitors enter your site? Yes, your home page is probably the most popular (it's printed on your collateral), but take note of which sub pages are in the top tier of visits.
  • Number of visits and unique visits. It's possible that half of your traffic comes from your own office. There are ways to eliminate inclusion of your own IPs in the measurements.
  • How many "page views" per user? This shows how long or deep users are going into your site. If it's an average of less than two pages per user, you should probably ask why people aren't staying longer.
    • Are they finding what they came for?
    • Is your content holding their attention?
    • Is the site easy to use?
  • "Hits" are overrated. Pages that have 40 little pieces of art, an email form and a couple of widgets are going to result in 43 hits - but just one page view.
  • Where are your visitors coming from? If it's a search engine, what search term are they using?
  • What page are they exiting from? If visitors are leaving from your store or contact page - better look at what's happening on that page that's causing people to leave from there.

You may already have an analytics program in place (such as AWStats or SiteMeter) - and if you don't, Google Analytics is free, in-depth and very useful. Check with your web developer. Ask for help in understanding the traffic pattern.

By doing so, you may start increasing sales and traffic without a complete overhaul or a higher advertising budget.

    Be consistent. Be consistent. Be consistent. Be...

    Same_2 consistent.  Add to that, be predictable.

    Why?  It feels safe, trustworthy and comfortable.  And, it creates an expectation in a customer or prospect that you can successfully fulfill.

    Always remember...you get tired of your message much quicker than your audience does. You may not even get noticed the first few times someone hears from you. You just have too much competition for their attention. After six or seven times, there might be recognition, but perhaps they don't need you yet. Typically it takes 8-13 interactions for your audience to really register that you are talking to them.

    But what would happen if you stopped talking to them after attempt #7?  Or if you speak to them differently each time?

    We've been sending out a weekly e-mail marketing tip since 1999. We get calls from people who want to hire or interview us - some who have been putting our weekly e-mails in a 3-ring binder for several months or even a couple years, but they just hadn't needed us until that moment.

    Thank goodness we didn't take them off the list after the first five contacts didn't elicit a response!

    Whether the magic number of contacts is five or fifty-two, make sure you are consistent and repetitive in your efforts to reach out for new customers.

    Intellectual Property - What is it?

    Intellectual property is any intangible covered by laws governing its ownership and transfer. Patents, trademarks, copyrights and trade secrets are all types of intellectual property. Businesses are still defining the metes and bounds of intellectual property however, creating new types, like domain names and common short codes, every day.

    Why is intellectual property so important? Unlike with tangible property, such as a vehicle or a building, you can allow others to use your intellectual property, without necessarily diminishing your ability to use it at the same time. The Internet makes intellectual property even more valuable, bringing creators and consumers of intellectual property together and reducing licensing and transfer costs.

    For many companies, intellectual property is their most valuable asset, sometimes adding billions of dollars to a company's books. Strangely however, many companies do not even know what intellectual property they own, how to protect it or how to avoid infringing the intellectual property of others. While that head in the sand approach may have served them well in the desolate, pre-Internet business landscape, as the Internet pushes companies closer together, ignorance of intellectual property is a recipe for disaster.

    If you are unsure what intellectual property your company has, conduct an intellectual property audit. While you can do the audit yourself, an intellectual property attorney might help you find intellectual property you did not even know you had.  In the Internet age, with billions of eyes watching, your company has to know what intellectual property it has, how to protect it and whether your company is infringing the intellectual property of others. If you do not, some other company will, taking your unprotected intellectual property or suing you for unauthorized use of their, properly protected, intellectual property.

    Even if the audit reveals no immediate action is required, at least you can rest easier at night knowing your intellectual property ducks are all in a row.

    Living the Lobster Life

    LemonadeWhen you opened your first lemonade stand as a kid, you made your first business tax decision.  While you didn't realize it, you were choosing to operate as a sole proprietor (you did report that income, right?). 

    Grownups often put no more thought into how they run their businesses.  The historic default choice for adults was to operate as a corporation.  The lure of 15% corporate tax rates on the first $50,000 of taxable income still entices many folks into the C corporation.  What could be simpler? 

    Many things, as it turns out.  A wise tax lawyer writes:

    Decisions to embrace the corporate form of organization should be carefully considered, since a corporation is like a lobster pot: easy to enter, difficult to live in, and painful to get out of. 

    Life in a corporation can involve lots of complications over the years.  This is especially true for life as a "C corporation," which pays its own taxes; this contrasts with an "S corporation," where the shareholders pay the tax on the corporation income.

    • When you're ready to take income out of a C corporation, you have to pay another tax.  If you cash out with a dividend, it's taxable; if you sell your stock to someone, that's taxable too.  You pay two taxes on C corporation income, in other words; the corporations pays taxes when the income is earned, and the owner pays taxes when he takes out the cash.
    • If you take the earnings out as salary, you don't pay a second income tax, but the salary is subject to FICA and Medicare tax.
    • If you lose money when you start a C corporation, the losses are stuck there until the corporation makes some money; they aren't available to reduce your personal taxes.
    • If you make a lot of money, you find that the benefit of the 15% rate starts to be recaptured, and is gone completely once corporate income hits $335,000.
    • If you are a lawyer, accountant, doctor or consultant, you might find that you don't even get the 15% rate at all.  You face a 35% rate from dollar one.
    • When you've had your fun and it's time to move somewhere warm, it can be hard to sell corporate stock.  People prefer to buy assets.  If you buy stock, you buy all of the company's history, including any bad deeds.  Selling assets can be expensive.  There is no capital gain break for C corporations that sell assets, so you can have a lot of income taxed at a 35% federal rate - and don't forget Iowa's highest-in-the-nation 12% corporation tax rate.

    That's not to say that C corporations are always bad.  Many effective tax structures involve a C corporation.  But don't incorporate until you've had a chat with your tax pro.  That lobster pot can get a bit cramped.

    Photo on Flickr by rubber cat

    Collaborative Competition

    Armwrestle_2 I often get the question: "Who are your competitors?"  My response usually gets odd reactions and/or a muffled comment that I think sounds like "Yea. Right. You're ignorant."  I could be wrong though.  They may be saying "You're right. You're excellent." Most of the time I never know.

    My response to the question is always: "Nobody. I don't view anyone as competition."  I'll give them some time to mumble something and then I'll give my reasoning...

    In todays world, the marketplace is highly competitive and always changing. Because of this, businesses need to be connected to various types of resources.  Businesses that stand alone and are unwilling to collaborate with 'competitors' may miss an opportunity to grow strategically and/or financially.

    Here is a real world example: My first job was with Country Insurance and Financial Services. I lived, worked and played in Plymouth, MN and I conveniently joined Country at the beginning of an acquisition.  Very difficult, but a great learning experience.  Early on in my practice I realized that I was not going to write every policy to every person I met.  So... I began looking for agents that directly competed with me.  I soon developed a trusted group of insurance agents that had the exact same products, only different descriptions.

    If a potential client would say, "You're $300 more than my current rate!" I would say "Okay. Let me give you some names and numbers of others that I know and trust and see how they compare" instead of saying, "Yea, but I'll be the best darn agent you've ever had!" Let's face it... even I'm not going to pay $3600 more per year because I can call my agent on his cell to tell him "Hey. I just drove my truck in the lake."

    This is a collaborative selling process based upon networking with the right people.  It's not a new concept, but because the marketplace & practitioners within different industries changes so quickly; businesses and business owners must be able to utilize each other to add value to potential customers.  You may just find that potential leads you 'lose' will come back to you (with friends) in the long run.

    Photo on Flickr by Elijah

    IowaBiz Appears in Business Record

    Videoib In this week's issue of the Des Moines Business Record, the online version of the article, Social Media Gain Importance in Marketing, includes a video showcasing IowaBiz.

    The article spotlights how businesses are getting involved with social media (definition). Nathan Wright, founder of social media consultancy LavaRow, talks about the importance of companies creating a social media strategy, allowing them to relate and connect online effectively with their customers.

    Claire Celsi of The Integer Group and Mike Sansone of ConverStations (and IowaBiz) are also quoted in the article.

    Money Quote:
    "You can engage your customer as an interruption with a radio or TV spot for 30 seconds," Wright said, "or you can create something like this that engages them for three weeks to three months."

    Other Social Media Resources:
    - Social Media Biz
    - Many to Many
    - Britopian
    - Rules of Social Media Optimization (SMO)
    - Social Media Optimization

    Pointing Out the Elephants

    Elephant It seems so obvious. People can't get traction if they're not being explicit. But how often have you -- or someone you know -- talked all around an issue in a meeting rather than bringing up and discussing "the elephant in the room." The elephant is implicit and considered undiscussable. Why is that? We all know it. We can see it. But we can't talk about it. We pretend it's not there, even though it's so huge, it's crowding out all hope of moving forward.

    It's funny, but if someone just has the courage -- and it DOES take courage -- of pointing out that there's an elephant in the room, the elephant starts to shrink. We could all see the elephant individually before, but NOT collectively. Now, the invisible has become visible to the whole group. There it is -- an elephant!

    An elephant might look like:

    • Someone says they believe in one thing --"an open door policy" is a favorite among my clients -- but when someone shows up to talk with them, they subtly behave as if they're too busy.
    • A senior leader made a decision that's negatively affecting a team's work, everyone knows it, but they tiptoe around the issue if that leader's in the meeting.
    • An organization says it values diversity, but punishes wacky suggestions or people who push the envelope. An elephant is born.

    Pointing out the elephants you see in the rooms you live in is a risky thing to do. But if done skillfully and respectfully, there's not another leadership skill that will reap greater reward. Not just for you, but for everyone else in the room with you. And for the organization that you are all a part of. Learn the skill by starting slowly. Practice with small elephants before you tackle a mother with a newborn. Two great resources that are quick reads are:

    1. Crucial Conversations, Tools for Talking When Stakes are High, by Patterson, Grenny, McMillan and Switzler.
    2. Naming Elephants, How to Surface Undiscussables for Greater Organizational Success, by Hammond and Mayfield.

    Photo on Flickr by Ben-O

    Iowa Film Promotion Act: Lights, Camera, Action!

    Iowa - the new Hollywood?  It may sound crazy but Governor Culver and lawmakers are hoping to snare more filmmakers with the passage of a new law that provides incentives for movie producers who create their films in Iowa.  Governor Culver signed the bill into law just this week.

    The Iowa Film Promotion Act (House File 892) offers 25 percent tax credits for local filmmaking expenses and overall investments for films shot in Iowa with budgets of more than $100,000.  Details of the program have yet to be determined but there will be an application / certification process followed by a claims submission process.  If you are a filmmaker or investor interested in these incentives please contact the Iowa Film Office for more information.

    The new law allows Iowa to compete with surrounding states that offer similar incentives.  It will also have another positive impact.  Young, aspiring filmmakers now have a reason to stay in the state rather than take off to Southern California, New York or Chicago.  According to an article in the Des Moines Register, that is just what three young filmmakers intend to do. 

    With the new law and upcoming movie releases like the The Final Season, maybe the rise of the film industry in Iowa has just begun.  Baseball movies could be our ticket.  The Cityview reports another Iowa movie called "Sugar" is planned about a Domican baseball player.  Of course most people remember "The Field of Dreams" which is one of the all time great baseball movies and its famous dialogue, "Is this Heaven? No, it's Iowa."  The movie site in Dyersville still remains open to the public to this day.

    I wonder if it is too big of a leap to go from lawyer to blogger to screenwriter?

    Who Do You Trust? - Part 2

    56295840_e7a16faaa3_m_2You know the story - it is either the CEO, senior managers, middle managers, direct supervisors, or influencer's in the organization that just do not get it.  They ask you to trust them and the organization.  Consistent experiences of trust across this power group will lead to high levels of organizational trust.  When there is high organizational trust, companies will have a higher level of success in changing culture, implementing participation, fostering innovation, and dealing with failure.

    Does this mean that those who do not have power do not have to worry about trust?  No- you must be a part of consistent trust.  It completes the cycle and creates a positive forward motion.  Yes, those with power have a higher responsibility to build trust, but everyone has responsibility for organizational trust.  You can not alienate yourself from organizational trust since you are a part of the organization.

    High organizational trust will not eliminate conflict, hard decisions, job loss, lack of profits or low stock value.  It will set a strong foundation that allows the organization and individuals to not loose face during difficult times.  Trust allows respect to continue and the opportunity to heal damaged emotions.

    So who do you trust in your organization?  The answer to this question will tell the tale of your organizations ability to adapt and prosper in todays business world.  If you only have a few names on the list, your organization has a lot of work to do.

    Please remember that organizational trust starts with individual trust, so ask yourself, "Do people trust me?"  This one is totally under your control.  It is really easy to point the finger at others, but point it at yourself first and make sure your own house is in order.

    Fill up the tank...

    A few weeks ago I asked you to think about what makes you run out of gas. 

    You know... what wears you out... what dries you up... what makes you poop out? 

    Okay... you've got the picture.  (check out the post.)

    Now that you have some things in mind... I'm going to ask a different question. 

    What fills you up?

    Seriously... think about it.  If you're worn down... what do you do? 

    When your mental... spiritual... emotional... tank is on "E" and your internal warning light's blinking... what do you do to fill back up?

    Does anything come to mind?

    Maybe you escape by listening to some of your favorite music.  Maybe its reading from a favorite book.  Maybe you journal.  Maybe it's time with your favorite people.

    Heck... maybe you play a video game. Yes... I even said video games.  (Read a post from SHARP BRAINS about how aging Japanese are using video games to re-energize!)

    What is it for you?

    I have a friend who swears by what he calls "encouragement calls." 

    When he starts to get a little down... or if he's feeling the need for some mental juice or encouragement... he just calls somebody else to pump them up. 

    He explains that he'll call and leave a voice mail to let that person know how great they are... or to remind them of something they've done that's made an impact on his life.

    Full_tank He's told me that it seems like reverse logic to give away what you need.  But... he says it always comes back to him... seven fold. 

    Plus... he's shared the strategy with a number of people... and they've started to do the same thing. 

    Now... people have started to call him with an "encouragement call" out of the blue... and he said... "they usually come at just the perfect time."

    How about you? 

    What do you do to fill up? 

    What do you do to re-energize?  Go ahead and comment... and let us know.

    Oh... why not try out an "encouragement call?"  Let us know how it goes.


    Photo credit: Carl M.

    Evidence of Insurance - Can You Prove It?


    In an earlier post, I explained about Certificates of Insurance – when they’re needed and why. I’ve discovered over the years that there's a bit of confusion between Certificates of Insurance and Evidence of Insurance. If you know up front what type of verification you need, you'll get what you need when you need it.

    So here’s what you should know about Evidence of Insurance.

    As a business owner, you may have some expensive equipment that you’ve decided to lease rather than buy. Maybe it’s a copier, computers, a phone system or specialty equipment for your industry.

    The company you’re leasing from will probably ask for Evidence of Insurance. Basically, they want to make sure that the equipment will be insured if something happens to it. For example, the lending company wants to be covered if the equipment is damaged or destroyed in a fire, from vandalism, etc.

    Having the name and address is crucial in making sure the Evidence of Insurance gets to the right person.

    Because you have purchased a new piece of equipment, it may lead to a discussion with your agent about additional coverage like equipment breakdown insurance.

    When you’re signing a lease, some companies may offer to purchase the insurance on your behalf – and then bill you. That may sound like an easy option – but check out the details before signing off on this type of agreement.

    In some instances, the insurance may be more costly than if you buy it yourself. And some lease agreements allow the lending company to continue billing you for insurance – even if you’re no longer leasing the equipment. Once you are no longer leasing the equipment, be sure to cancel the insurance.

    "Key" Issues To Project Scope

    KeysI have a box of keys at home.  Big keys.  Small keys.  House keys.  Office keys.  Cabinet keys.  Padlock keys.  Keys.  Keys.  Keys!!!!

    The only problem is that I have no clue what any of these keys actually unlocks.  Maybe an educated guess at best.  The problem is that I'm unwilling to unload any of these keys because one never knows when a new lock may just appear out of nowhere and need a key.  And - EUREKA - I'm prepared.  Meanwhile, the "key box" takes up real estate in a drawer in our house, and I generally run into it when I'm looking for something else.

    Are these keys like some of the projects in your organization?  Are they simply solutions waiting for a problem?  In companies of all sizes, it can become very easy to be enamored by the latest hot software solution du jour.  Some people fall under the spell of evil consultants who make lofty promises.  Worse yet, sometimes we let executives go to the restroom with trade magazines.  They go in seeking a nature call and come out with the latest ad-induced idea, shouting, "Hallelujah!  I gotta get me some of that!"  It doesn't matter what "that" is; they've found a solution and it becomes your issue to retrofit it to a problem.

    Think about the projects that your organization is currently tackling.  Can you really name the problem or opportunity that each is intended to solve?  John Dewey once stated that "a problem well defined is a problem half solved."  Yet how many of your projects are simply keys without locks?  Here is a quick and easy test:  How many of your so-called problem statements start with the words "we need" or "we have a lack of"?  If so, you've probably defined a solution rather than a problem.  Case in point, if your problem statement is "We need a new computer system," what is the solution?  (No peeking.)  Yup, you guessed it.  I have a two-year-old here at home who is excellent with asking "why" questions.  I'm thinking of asking her to subcontract to me, so I can assign her to the clients who cannot define a good problem statement.  If you ask "why" enough times, you'll get to the root cause of the issue.

    Why should you as a small business owner or employee care about this?  Good question.  As somebody who probably has limited resources, you don't have the time or money for people to be running down rabbit holes after half-baked ideas.  (If you do have people with ample time on their hands, send them over to my house and I'll let them find the locks to all my extra keys.)  The trick to avoiding the key-without-a-lock project is to write a brief yet solid business case before approving the idea to become a project.

    This is more than just an academic exercise.  In my book, Race Through The Forest - A Project Management Fable (Tiberius, 2006), I recommend a simple approach to documenting a business case.  Because the business case is the "senior artery" that carries information and decision-making ability to the entire project life cycle, it's also a great way to remember the content of your business case:

    • Stakeholders - list those people who might or should care about this project
    • Rationale - document a compelling reason (problem or opportunity) for undertaking this project
    • Alternatives - list feasible options for addressing the problem or opportunity
    • Recommendation - choose which of the alternatives is the best solution
    • Timeline - lay out the high level milestones for completing this project (with specific dates)
    • Estimates - set expectations about the amount of effort it will take to complete the project
    • Risks - consider the main things that could go wrong (either by undertaking the project or staying with the status quo)
    • Yes/No Decision - even if it's just a contract with yourself, document the approval to proceed.

    Don't trick yourself into thinking you have to write a 150-page dissertation for your business case.  After all, you are a small business owner who is strapped for time.  You'll know when you have enough documented to justify it in your own mind.  Some of the best business cases I've seen were under five pages.  Taking this simple step should help you get rid of those keys without locks, and help ensure that you are spending your time and resources on the truly critical problems or opportunities within your organization.

    Carpe Factum!!!

    Customer-Centered or Number-Centered?

    My wife and I had lunch with our sister-in-law yesterday. She and my wife's brother have been in the medical field for a while. She was talking about how difficult it is not to "dehumanize" the patients that roll through their area of responsibility. Bring in another one, poke 'em, prod 'em, run 'em through the tests, mark the chart - NEXT!

    I hear the same struggle in call centers and retail businesses. The fact that we tend to talk about "calls" instead of "customers" should say something. We focus a lot on "numbers" - ("Take a number! Get in Line! Number 32!? Next!") which often leads to Customer Service Reps (CSRs) forgetting that they are talking to or dealing with a real human with questions or issues that need resolution.

    Companies who earn the customer's satisfaction are typically the ones who are customer-centered:

    • They focus on customers through research that identifies what drives customer satisfaction, instead of focusing on what will make them better than other companies in the industry
    • They use the customer's satisfaction as the foundation of their quality efforts, not what will drive numbers to reduce cost
    • They help the front-line CSRs connect to the customer in a myriad of ways - from making CSRs aware of research results, to finding ways to let them meet actual customers, to incenting CSRs who drive customer satisfaction

    Is your company "customer-centered" or "number-centered"?

    WSJ Small Business Link: IT Outsourcing

    The Wall Street Journal has launched Small Business Link, a special section serving small business leaders combining the best features from their online and print offerings.

    Each month, the Small Business Link will focus on one particular issue facing small business owners. From there, readers can participate in a conversation with others - including the people featured in the articles.

    The first topic, focusing on Employee Benefits, was quietly launched on April 9. This month, the talk centers around the Technology Outsourcing and includes these helpful articles:

    • Which IT projects should be outsourced
    • The importance of IT security
    • Do's and Don'ts of Outsourcing

    Also available are videos and podcasts on these important issues. There are plenty of high-quality, high-touch IT companies in Iowa that not only offer expertise in their field, but understand how small business work - because many of them are small businesses.

    Next month's Small Business Link will focus on Recruiting, a timely topic with the Iowa-ABI Workforce '07 Convention just around the calendar.

    Let them discover how good you are

    Discover About a week ago, I wrote a review for How to Talk to Customers.  The book is an excellent resource with practical tips and exercises on how to enhance your customers' experience with your company.

    This book is well worth the read.  I'd be stunned if you didn't make at least a couple changes in your organization after finishing it.

    Here are some additional benefits from this book.

    You can take a quick test to assess your organization's service culture.

    Tom Larkin, one of the authors, along with Wells Fargo's manager of learning and development Jason Checketts will be offering a FREE webinar on May 15th and 17th.

    They also have an extensive library of articles on customer service.

    Not only did I want to alert you to this book and these other free tools, but more important, I want to suggest that you can and should employ the same marketing tactic. 

    The author's company, Communico Ltd. sells customer service training. To hire them, you need to be reassured of their expertise.  They could tell you how brilliant  they are. Or they could let you benefit from tidbits of their expertise. Which will let you discover for yourself how good they are.

    Which scenario is more likely to inspire you to buy?  How could you let your prospects discover how good you are?  How could you do it in a way that inspires them to tell their friends and peers?

    Fire up that document shredder

    J0399350 It is spring. Time to clean house. Get rid of those old electronic documents just waiting around for a lawsuit so they can bite you in the behind.

    Just last December, Federal courts adopted some new rules. Under the new rules, when you get sued, you have to turn over electronically stored information (ESI) along with hard copy documents. If you do not have an effective document retention policy (DRP) in place, this could mean producing millions of electronic documents instead of hundreds. How long is it going to take your company to find those million documents, sort them, weed out the confidential information and convert them to a standard format the other party can read? Who is going to run your company while all of your employees are busy finding, reading and sorting electronic documents?

    Can you just get rid of anything you want? Well, for publically traded companies and other companies subject to the Sarbanes-Oxley Act premature destruction of ESI can result in fines and even prison sentences for the individuals involved. So where do you draw the line? The key is to work with your attorney, your information technology department and your document management team to develop and enforce a DRP customized for your company.

    Dragging your feet will only suffice until you get sued. At that point, you will still have to put together a DRP; it will just be with ten lawyers instead of one. Now I realize you are all saying "Hey, what's wrong with ten lawyers?" Well, nothing. In fact, my buddies and I were looking for a company to get sued without a DRP so we could buy new hogs to drive Sturgis.

    You, however, might have a different idea on how to spend your money. Plus, if you implement a DRP BEFORE you get sued your ESI will more likely help you win the case than lose it. Judges and juries are becoming less and less sympathetic with unorganized companies unaware they had hundreds of electronic smoking guns stored on the hard drive of some employee that left the company in the 90's.

    How much more is it going to cost to have a lawyer sift through all those extra documents? How much more is it going to cost to argue about those documents in court? How many more documents are you going to create before you implement a DRP? Why not store them correctly in the first place? 

    Implementing a DRP is a big step, requiring committed personnel and some additional resources. The payoff however, extends far beyond the courtroom. Weeding out the chaff and making the remainder more readily accessible streamlines every department in your organization. Once the DRP is in place and working, it actually takes fewer resources to maintain your trimmed down ESI than to randomly store every piece of spam on your local hard drive.

    You have two choices. You can either implement a DRP now, with your own people, on your own timeline or, you can have ten lawyers do it in the first two months after you get sued. There is probably a ten fold price difference between the two options and the later option may still lose you the lawsuit. But really, is there any substitute for that warm feeling you get knowing your original copy of Windows NT is still safely tucked away somewhere on a 5.25 inch floppy in the bottom drawer of that beige file cabinet in the basement?

    From Zero to Something in Seconds

    We've all heard one, we've all tried one, but at the end of the day- do we know what we heard or said?  And better yet, do we understand how and where success can be created in a conversation that we just had? 

    A porch pitch, an elevator pitch, a brief rambling…  call it want you want, but at the end of the day, if you don't know what the person across from you does... how can success be created for either side of the conversation?

    For an entrepreneur/intrapreneur looking for collaboration or connection to a resource; make it easy for others to understand what your needs are.  After all, you're networking for a reason and if you can't describe in short form why you exist, you may have given failure an opening.

     For 2 1/2 years I've been practicing my elevator pitch.  I'll be the first to admit... it's not great... but it's getting better.  The fact of the matter is that many times your elevator pitch may change based upon your audience.  And while the words may be different, the meaning of your business shouldn’t change. With that in mind, what core values does your business possess?  The following questions can assist in uncovering the value within the corporation you work for or within your own personal practice.

    Why do you exist?

    Describe what the need is in the marketplace and why you fulfill the need.  You don’t have to validate (in this initial conversation) that there is a market for your product or service, but make sure you plant a seed in another’s mind that you understand your industry.  In a networking situation, you have succeeded if the other person seeks to know more about your personal practice.  The follow up conversation can lead to marketplace validation.

    Why are you different?

    Describe how your business or personal practice is not a commodity.  Whether the differentiation comes from experience, attitude, motivation or even a niche within a niche; a person needs to know why you stand out from others.  This doesn’t imply being quirky.  Your description should cause them to remember your business needs, not your behavior.  Your behavior and mannerisms will cause you to be remembered for your personality, not your business.

    Who do you work with?

    Describe who and where your target markets are.  This can be achieved by simply stating two or three needs that you currently have.  The idea is to say the right “buzz words” that connect a person within their network to your resource needs.  Be careful to NOT limit yourself to certain industries. Success often lies around the edges of your business model. 

    The ability to explain your existence, differentiation and target market will put you in a position for a successful elevator pitch.  Not everyone will know someone that can help you, but it’s important to remain in the mind of others.  This activity takes time to perfect and will only get better with practice. 

    Ulitimate Franchise Due Diligence

    In my last post I discussed some available franchise due diligence resources for prospective franchisees.  And while I know due diligence is critical before buying a franchise, I cannot help but remember an email I received from a non-client franchisee in response to a different franchise due diligence post I wrote after the Franchise 500 issue of Entrepreneur hit the news stands:

    The most difficult information to obtain and verify is franchisee profitability.  The profitability of the franchisor and the franchisees is not always related.  Sometimes those selling franchises make money while the franchisees do not.  And it is not always due to lack of due diligence on the part of the franchisee.  It may be because of inaccurate information supplied by the seller or franchise support that was promised but never delivered.

    The reality is that franchisors are required to make only limited disclosures about profitability and many will make no earnings claims of any type.  The number one reason listed to not buy a franchise according to Nolo is questionable profitability.  So what is a prospective franchisee to do?

    Franchise lawyer Richard Solomon of Houston, Texas says you should consider conducting the ulitimate due diligence by going to work for someone in that franchise business for a year.  In buying your franchise you may be asked to make a substantial investment of $150,000 to $1 million.  Solomon believes that even if you made minimum wage for a year you will be much better off than risking your liquidity on an investment you know a lot less about because you were in a hurry. 

    Risk is inherent in any business venture.  You are taking a chance and a leap of faith.  But actually working in a franchise business before you buy would allow you to find out whether you want to stake your life savings on the opportunity.  Taking a chance with maximum information is not random chance but a calculated risk - and that could make all the difference.

    Imitations are Redundant

    Imitation I can't think of a thing that is more debilitating for leaders than the fear of making a mistake, of being wrong, of looking foolish. Taking risks is what being alive is all about. And yet, I can tell you that leaders are sometimes terrified by that first step, the initial sentence, the blank page. Of being found out that they are human.

    It's been my experience that a primary reason that managers keep doing things the same old way, even if they're bored with them or sense there's another, better way is that they want to do them perfectly -- first time. I know, I know. That's completely irrational, impractical, not workable -- and yet, it's how most people run their lives, especially at work.

    Whoever said we had to do it perfect?

    Probably our parents. And if not our parents, those bastions of perfection -- school teachers. And, I have to admit, I was one, at a point early in my career. I shudder to think that at one point I would have corrected the paragraph above by writing in big, bold RED letters: "...perfectLY and paragraphs should be more than one sentence!" Yikes! Talk about stifling the flow of creativity.

    Way too many people have an image of themselves that's "perfect." If they can't perform according to their own imaginary standards of perfection, they drag their feet and procrastinate until it's too late to do it perfectly (...funny how that then eases their guilty minds). Or, they never take a run at trying something new and it seems to me, run the risk of missing something that might have been great fun and life-altering.

    Anna Quindlen in her book, Being Perfect, says "Perfection is static, even boring. Imitations are redundant. Your true, unvarnished self is what is wanted." What a paradox! We hate to think of ourselves as boring, and yet we strive for perfection. Get real.

    Photo on Flickr by kcalano

    Who Do You Trust? - Part 1

    56295840_e7a16faaa3_mTrust is a word that we are taught at a very young age.  We are told not to lie, have integrity, follow through with your commitments, and a plethora of other ways to prove that we are trustworthy.  In families we have debates, arguments, and all too often significant upheaval over the issue of trust.  In companies we play politics, protect our backs, save emails for later events, and carefully plan who you can talk to and trust.

    Companies send their employees to conferences and trainings through out the year.  They go and absorb vast amounts of information, ideas to use, and stories of success and failure.  These employees come back excited to discuss and implement their new ideas.  When they move ahead, in the majority of cases, they get lack luster results and wonder what went wrong.  The issue is trust.

    Trust is one of those concepts that people tend to migrate to the ends of the spectrum when beginning a new relationship with an individual. They enter the relationship trusting or not trusting. Then with time and experience, they either solidify or shift their position on the trust spectrum.

    I believe that working adults (other than maybe their first job) come into organizations not trusting the organization. Organizational trust is built upon individual trust coupled with consistency in that trust between individuals. This consistency is where organizational trust fails miserably and is impacted by who has power in the organization.

    Come back for Part 2 on "Who Do you Trust?" in few days!

    What's on your "fun list?"

    Okay... so... did you take the challenge from last week?  What was on your list? 

    Grow_up_3Where you surprised by anything?  Did it make you think about things you hadn't thought about doing for a while?  Did you run out and do something on your list that you hadn't done for a while?  (I hope so!)

    Now... you might be wondering how the "fun list" helped my client who was thinking about a career change... and wondering what she wanted to do with her life.

    Well, first of all... it's just a fun thing to do.  (Sometimes... that's enough.)

    But second... we dug into her list.

    One of the things that came up was that she loved to do puzzles. 

    When I asked her about it... she said that she had loved to do puzzles since she was a little kid.  She said she used to spend hours on puzzles.

    Then... it hit her.  Puzzles were the reason why she'd gotten into computer programing.  She explained that she loved figuring out the puzzle of fixing or improving a program. 

    She said... "I loved to dig in... and you know... solve the puzzle."

    As we explored that... she realized that over the past 2 years... she had started to move away from programing... and more into managing people and projects.  And... we noted that neither of those things (managing people or projects) were on her fun list.

    So... we started to brainstorm on how she might be able to get back to solving puzzles more... at work. 

    Over time, she was able to take on more projects where she could get involved with the actual programing.  This allowed her to get back to what she loved.

    Yes... she continued to manage people and projects... but since she had more of her "fun list" and puzzles in her daily life... she got back to the heart of what she loved doing.

    Her performance improved... and she stayed in her position.

    It was a small shift.  But... it helped to change everything for her.

    Lastly... she also made the commitment to do something from "fun list" weekly.  AND... she commited to adding to her fun list often.

    How about you? What's on your list? 

    More importantly... how might you infuse your daily life with more of those things?  How might that impact the way you live... work... and relate with others?

    Give it a try... and let us know what happens.

    Photo credit:lonatic

    Time for a party?

    As the weather turns warmer, you might be thinking about hosting a neighborhood barbeque. Or maybe you’re planning an event to say “thanks” to your clients.

    Whether it’s business or personal, holding an event may mean more than just sending out an invitation. With some planning, you can make sure it’s a safe one.

    Figuring out where to hold an event may be the easy part. Of course you want to know if the space will accommodate the number of people who will attend. Also find out if there’s enough parking.

    Other things to consider - do you have guests with special needs (handicap, elderly, etc.) to consider? What things do you need to think about from a safety standpoint (lighting, potential for slips, etc.)?

    You may want to ask about the insurance coverage for the facility that will be hosting your event. What insurance do they have? Does it cover your event? Does your personal or business insurance provide necessary coverage?

    Depending on your event, you may want to ask about insurance for special events.

    Alcoholic beverages
    We’ve all heard the horror stories – and probably think it won’t happen to us. No one at our party will get into an accident after having a few beers. But what if it does?

    If you’re having an event off-site, find out if you’re allowed to serve alcoholic beverages. If so, do you need a special permit? And what consumption laws should you know about?

    Do you need to plan for a designated driver (or other transportation) if someone needs it? Who will be responsible for monitoring consumption – in case someone is “over-served?”

    In some instances, liquor liability insurance may be an important safeguard. It provides coverage for bodily injury or property damage when an insured is held liable for such things as:

    • Causing or contributing to the intoxication of a person
    • Furnishing alcoholic beverages to a person under the legal drinking age
    • Violating any laws relating to the sale, gift, distribution, or use of alcoholic beverages
      Whatever the celebration, it pays to be cautious – and prepared.

    A little bit of insurance can go a long way in protecting you, your event and your business. Make sure your event goes off without a hitch. Better yet – make sure it’s a safe event that everyone enjoys!

    Put Eeyore To Work

    EeyoreWe've all seen them.  We call them devils' advocates or naysayers.  We joke about their constantly negative disposition behind their backs.  We cringe when they are invited to brainstorming sessions.  We try to work around them because we know they will kill the idea with a litany of reasons why it won't work.

    What do you do when Eeyore is on your project team?

    There is actually a very good role for the project stakeholders who are all too willing to tell you why your project isn't a good idea:  put them in charge of risk management.  Managing risks is an activity that too many project managers let slip through the cracks.  They don't like to think that something might go wrong on their watch, and so they try to ignore all of the speedbumps and potholes in the road... until it's too late.

    Oh, bother.

    That's where the resident Eeyore is of value.  This is a person who will tell you what can go wrong, why it will go wrong, when it will go wrong, and exactly how it will go wrong.  Instead of avoiding Eeyore, harness all of that great negativity in the planning phase of your project.  Eeyore is now happy, because somebody finally listened to him.  You can be happy, because many of the potential pitfalls of your project have been identified and you can deal with them proactively.  Your team is happy because Eeyore has the negativity out of his system (it's been documented, right?), and they can all move forward.

    See?  In projects, there's generally a role for everybody.

    QA: Not Just for 'Call Centers' Anymore

    RecorderI would hate for any small business owner or manager to assume that call monitoring and Quality Assurance (QA) are just for "call centers". As I mentioned in a previous post, any business that has a person whose primary job is talking on the phone with customers is a call center.

    Even if you have a single person, or a small team of people who spend much of their time on the phone with customers you can and should start a QA process. Each of those calls could be a make it or break it experience for your customers. The data from a quality assessment can give be beneficial to both you and your front-line agents. Let me give you a few examples from some of our Service Quality Assessment (SQA)projects:

    • Four Inside Sales representatives take orders in a business-to-business application and provide after-order support. With regular feedback and coaching, the team now has the highest quality scores we've recorded from any client in thirteen years. The company has carved a strong position in their market as the go-to company for quality, personal service. They can charge more for their products, because customers will pay more for the quality, personal service.
    • One inside sales representative started in a new position for a company. Because the company had taken the time to determine the service behaviors they expected on the phone the new associate could be trained prior to taking their first phone call. Because they had figured out a simple, economical way to record phone calls - this associate could receive immediate coaching and training regarding their service skills.
    • A single receptionist and one back-up take between 100-200 phone calls a day. Often, they must determine which department the caller needs. Misdirected calls are costly in time, customer satisfaction and internal frustration. A QA project was undertaken to measure the level of service being delivered at this initial point of contact and to determine if calls were being correctly routed. Results revealed situations where calls were easily misrouted. Efforts were then taken to train receptionists to identify these situations and ask the appropriate questions.
    • A sales team of four are tasked with spending 30 percent of their time making outbound calls to customers and leads. An SQA pilot project revealed that the team was spending far less time on sales calls, but because overall sales were good it was assumed they were working the phones. The sales team was content picking the "low hanging fruit" that was dropping their way. While the company was doing well, there was a lot of business being left on the table.

    A successful QA process is about getting objective data regarding the quality of service and sales your team is providing. This data is invaluable for making tactical business decisions as well as determining specific training and coaching needs for your people.

    Are you listening or are you assuming?

    Does Your Web Strategy Include Listening?

    Hear that? It's the voice or your customer, the sounds of pleading from prospects, the scratch of your competitor in the news...but can you hear it with all the surrounding noise? Are you even listening?

    The mindset around web publishing seems to have always been 'push' - all about getting your message out. Though the landscape isn't really changing (it's always been about others more than ourselves) - we're becoming more aware that other voices exist. And sometimes, they're talking about us.

    How do we keep track of it all? RSS or Syndicated Content. Content coming to you rather then you going to get it.

    Here's a simple video that explains it (from the folks at CommonCraft):

    There are two types of Internet users, those that use RSS and those that don't. This video is for the people who could save time using RSS, but don't know where to start.

    Related Posts:
    - A Simple Business Case for RSS Feeds
    - Search Once and Subscribe
    - How To Subscribe to Feeds

    The eyes have it

    Eyes_2 So, you want to create an effective website. Do you know where to put the most critical data? How to design the page to optimize usability? You should know what eye tracking tells us.

    Using a combination of complex hardware and data analysis, eye tracking maps a tester's eye movements across a computer screen and assesses the amount of mental strain exerted at any given moment. It does this by recording scanning patterns of the eye, measuring pupil dilation (which correlates to cognitive effort) and taking over 250 observations of each eye per second.

    • A minuscule percentage of the subjects scrolled down to see what was being offered below the browser's bottom border. Clearly, home pages are viewed as portals to get where the visitor wants to go...not lengthy destination pages.
    • Web visitors look to the upper middle of the home page first. Putting your navigation tools there allow them to get where they want to go fast. Over 20% of their attention was focused here.
    • Text heavy sites are more difficult to use. Most visitors only read the first two lines before moving on.
    • Clean, non-cluttered sites produced higher success rates. Users didn't have to filter through as much unnecessary information.
    • Buttons/Icons with 1-3 word descriptions got the most use. Wordy button labels got the least.
    • Banner ads, on average, earned about 13% of the viewer's time and interest.

    Before you design your web page...keep in mind that just like any other visual medium, you have to have a flow pattern for your viewer's eyes to follow. Don't make them work to get the message.

    This site is intended for informational and conversational purposes, not to provide specific legal, investment, or tax advice.  Articles and opinions posted here are those of the author(s). Links to and from other sites are for informational purposes and are not an endorsement by this site’s sponsor.