http://profitgrowthnetwork.com Profit Growth Club RSS Feed Fri, 18 May 2012 23:59:07 GMT no http://profitgrowthnetwork.com/view?v=HXU2rXY6PHs Driving behind a septic tank cleaning truck today, I saw a great slogan painted on the back: "We Want Your Stinkin' Business." Excellent! Every business needs a slogan that stands out, whether by humor, simple and compelling language, a guarantee, or a clear primary benefit to your target market. Mmm Mmm Good, Just Do It, Campaign for Real Beauty, The Real Thing, i'm lovin' it, They're Grrrreat!, Have it Your Way, Where's the Beef, Five Dollar Footlong, Think!, Snap Crackle Pop, She's Got Short Shorts.....These are just some examples of slogans that have made the grade. Note that some of them have been around for 100 years. A great book to read on this subject is Words that Work by Frank Luntz. In the meantime, what language can you use to tell people that you want their stinkin' business?     Marketing Wed, 11 Nov 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=HXU2rXY6PHs no http://profitgrowthnetwork.com/view?v=BsD_sxdLUno Recent research by Investopedia revealed 9 companies out of Fortune's "100 Best Companies to Work For" that have never had layoffs. They include: Nugget Market, Devon Energy, Aflac, Quick Trip, The Container Stores, NuStar Energy, Stew Leonard's, Scottrade, and Publix Supermarkets. If you would like to create a company that also doesn't have layoffs, here are some common themes from the above examples: - Cross-train employees so that they can fill various roles. - Keep branches relatively close together, so that employees can easily move from one branch to another. - When employees leave, don't replace them automatically, especially during slow times. - Grow conservatively. That way, you don't create an internal "bubble" that can't handle short-term downswings. - Create flexible positions via telecommuting and flex schedules. - Stay private and closely held, so that you don't have to pay out dividends to shareholders. - Pay annual one-time bonuses instead of giving large raises, so that you don't force seasoned employees to become "over-priced" with high salaries. Also, you can cut bonuses instead of employees when times get tough. - Make a commitment in your culture to avoid layoffs at almost all costs. - Avoid excessive debt. The companies that have followed the above strategies also offer great benefits and training. As a result, top talent comes to them. These companies show that even in tough times you can do well by taking care of your people. General Management Wed, 04 Nov 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=BsD_sxdLUno no http://profitgrowthnetwork.com/view?v=1OPRaHg3Zkk Like it or not, the world has become more cynical and skeptical of business than ever. Most of the blame for this condition falls squarely on the shoulders of big business leaders, from Enron almost a decade ago to Madoff, Goldman Sachs, Bank of America, and General Motors today. In some cases, business leaders are downright immoral. In other cases, they are insensitive or incompetent. Regardless, small- and mid-sized business owners now bear much of the brunt of this cynicism, whether fair or not. As a result, this is a wonderful time to assess your business in the context of integrity. I believe that integrity is a key hot button word in business today. If you have it in your business -- so deeply that you don't have to boast about it -- your business will be a leader. Integrity in business has a few layers of meaning: One: You keep your word. If you make a promise to a customer or vendor, you go out of your way to keep your promise. For instance, you don't delay vendor invoices without reason, promise a delivery date to a customer and then miss it, or quote a price to a prospect and then add on extra fees that you never disclosed. Your marketing collateral under-promises, so that your business can over-deliver. Two: You bake "reliability" into the fabric of your business. A business keeps the promise of its brand and marketing materials day in and day out, through consistent, reliable results. Every single customer interaction should be consistent and positive. Three: You are willing to look deeply at your business practices and constantly improve them. The root of the word integrity has to do with wholeness. You want a business that is whole. This means creating a business that is complete, that is a working system -- with or without your being there to oversee the details. This point goes hand in hand with the previous point, creating a reliable business. If you strive for improvement in everything you do, your business can only become more and more reliable. Here, improvement means everything from operations and efficiency to quality, safety, and environmental impact. Four: Your business treats everyone it contacts with dignity and respect. This includes vendors and employees. It is your call whether it makes sense to offer best-in-class benefits to employees or not; after all, benefits are expensive and you are running a business. However, integrity means that you take an interest in your employees and their aspirations, help them develop skills, give them opportunities to grow the business by taking on more responsibility, and give them the tools they need to succeed. You care about them as people. Five: You do what is right in your community and society. Businesses with integrity don't harm the environment or their community, and also strive to give something back. We all know the businesses in our community who have integrity on this point. They are the ones that encourage employees to volunteer, that sponsor local events and non-profit organizations, and that help out people in need. It is fine to do these things in order to be more visible and get a marketing benefit; however, doing good is part of the culture of businesses with integrity. A "whole" business is one that recognizes its place in the community at large. Six: You contribute. The essence of the previous five points, and the essence of any business, is that you contribute. You add value. You make things better, not worse. In fact -- unlike with government -- you add so much value that people voluntarily pay for your products and services. Integrity is about making a contribution, one that has customers walk away saying, "Wow, I got great value for my money." Society may look down on businesses for asking for money in exchange for our contributions, but in my judgment business is the most honest way to contribute. In an honest business transaction, there is never any doubt that both parties walk away satisfied about the mutual value they have received. We all think we are people of integrity. We take offense whenever anyone suggests we don't have integrity. However, people with true integrity do something extraordinary: They realize that no one has complete integrity. They look for places where they have room to improve, fill those holes (to make the business and their lives whole), and keep looking for other areas to improve. It is an ongoing process. Strategy Mon, 02 Nov 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=1OPRaHg3Zkk no http://profitgrowthnetwork.com/view?v=_d3_y3qRETg These days, potential buyers are more skeptical and cynical than ever. Therefore, if you want your sales to soar, you need to make it as risk-free as possible for them to do business with you. For instance, instead of hitting them over the head with a sales pitch, offer a free, valuable educational piece that gives them information that will be of benefit to them, and that demonstrates your credibility. If you are a web designer, offer a checklist of the key features required for a website to attract visitors. If you sell appliances, offer information showing recent brand comparisons for quality, cost, and service. If you are a real estate broker, provide recent comps of properties that have sold and are for sale. By offering no-risk information, you establish yourself as an expert and "pull" your prospects in to you. With 5 to 7 valuable interactions (per the research), you will become the go to expert in your market and people will call you first when they have a need. That's not enough. You also should have a strong guarantee so that prospects can take comfort in buying from you. I like the guarantee from the Men's Wearhouse CEO: "You will love the way you look. I guarantee it." Does your product or service match the promises you make in your marketing? If so, back up your claims with an iron-clad guarantee. Your returns might go up a bit, but so will your sales. That's because you will set yourself apart from other businesses that are unwilling to be so bold, unwilling to put their money where their mouth is. The key to a strong guarantee is that you make it unconditional. The more asterisks you add, the more conditions you layer, the less believable your guarantee becomes. Eventually, with enough conditions, you do more harm than good. If you can't offer an iron clad money-back guarantee, at least offer a service pledge. Put together the 5 rules that guide how you serve your customers, and make sure you meet those rules. For instance, if you run a plumbing company, rules might include: you show up on time; you leave a site clean; your plumbers will be professionally dressed; estimates will be accurate; and if you have to come back to make a job right, it is on your dime not the customer's. There are other ways to take away risk, and these should also be part of your service delivery: Make it easy, quick, and hassle free to order; reassure the customer that they are making a smart choice; provide a "10,000 mile check up" (or the equivalent in your industry) after any sale; and call to follow up with a customer and see if they are satisfied or need any issues resolved. You get the idea. These days, customers need to see that you are credible and can solve their problem. But they are still reluctant to buy from a stranger. To gain their trust, take their risk away. This process begins with a softer, more educational approach to marketing. It continues with a guarantee on purchase. And then it keeps going with the way you take an order, provide service, and follow up. Marketing Tue, 27 Oct 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=_d3_y3qRETg no http://profitgrowthnetwork.com/view?v=VKsXxn0bd0E Advice to entrepreneurs when good times return: Cash flow can be the ultimate competitive advantage. Many businesses that died during the recession had good products and services, but lacked the cash to survive a downturn. Some unlucky entrepreneurs simply opened their business at the wrong time, and couldn’t have foreseen a downturn this severe. However, many existing business owners failed to store up ample reserves and secure sources of cash when the inevitable bad times hit. They just couldn’t outlast the drop in consumer and business spending. Meanwhile, businesses that had cash were able to do things that others could not: - Make acquisitions (something that Google and Oracle are famous for doing during down times); - Invest in new capacity (a strategy that Intel has made part of its strategy throughout the ups and downs of the silicon chip cycle); - Continue to market to new and existing customers, thus remaining visible and “on top of mind” when good times return; - Keep key people and top talent and recruit top talent from other businesses; and - Stay alive, even if on a heavily reduced budget. As we enter a new business cycle, there are eight important lessons to take away about creating cash flow reserves for the future: One: Build up reserves for the lean times. Make it part of your financial planning. Two: Put plans in place to quickly flex down on fixed costs in case the economy or industry takes a sudden downturn. Three: Create a more flexible cost structure, for instance one with contract staff that can come and go with demand. Four: Understand your cash flow cycle and have sources of reserve cash available (i.e., from banks, investors, inventory management, asset sales, and receivables/payables management) when needed. Five: Continue to get lean and mean with tight operations and strong negotiations with suppliers. Six: Set up a system to continuously measure, test, and roll out only successful marketing initiatives. Stop wasting money on marketing that you can’t measure or that is not producing a clear return. Seven: Set your business apart with a compelling strategic edge and marketing message so that you dominate the competition. “Me-too” businesses are the first to lose revenues and cash flow in a downturn, because customers feel no loyalty to them. Eight: In good times and bad, go out of your way to provide an outstanding and consistent customer experience. If you can, provide such great service that you become indispensable. That way, even in downturns, customers continue to come back. Strategy Fri, 23 Oct 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=VKsXxn0bd0E no http://profitgrowthnetwork.com/view?v=DbwHYqiM7B8 Selling is a crucial skill that every business leader needs to master. Unfortunately, many business people consider “selling” to be a dirty word. They struggle to attract new business and attain sales leadership without feeling like they are begging for the business, wasting their time with prospects who never buy, or having to resort to gimmicks and un-natural scripts. At the same time, high quality sales training start at $2,995 on the market (and go up to $7,500 -- with one company asking around $12,500 for a series of weekly one-hour meetings). For this reason The Profit Growth Network has developed a best practice selling skills training program that is ABSOLUTELY FREE to members. It includes a comprehensive approach to attracting new business in a way that is natural and authentic. Equally valuable, this program is about setting up a practical process to generate more revenues through authentic sales techniques with less time, hassle, and struggle. “We surveyed our members,” said Profit Growth Network CEO Andrew Neitlich, “and they overwhelmingly said that the top area they wanted to learn more about was selling skills. So we are rolling out this training to meet the demand. The training is based on a sales curriculum I developed for executives of a Fortune 500 company that generated $12 million in incremental revenues within 6 months of roll out. Business owners can use it for their own sales activities, or to have a common language to share with others in their company.” The training will begin in September 2009 and repeated frequently. It will be offered to members around the world via a 12-week series of teleconferences. Topics range from natural and authentic selling conversations to creating a common language for the sales process and sales management tools. All calls are recorded and posted in the member area for anyone to enjoy. Plus, members can always ask questions about the materials and receive a response within 1 business day. Neitlich added, “Every quarter we plan on rolling out a new best practice executive development program that will be free to members. That way, we continue to grow our intellectual content and help our members succeed.” Members of the Profit Growth Network already receive an unparalleled amount of executive and entrepreneurial education, based on the CASTLE model for business growth. This includes 6 powerful executive education programs (in addition to the new sales training) about growing one’s business profitably and increasing the value of the business (valued in the marketplace at $13,070), along with 5 powerful guidebooks about business and strategic leadership. To learn more about the program, simply click here. News Room Wed, 07 Oct 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=DbwHYqiM7B8 no http://profitgrowthnetwork.com/view?v=hS8wtYbiky4 Okay, enough is enough. I am sick and tired of small thinking. I just got off the phone with a self-proclaimed entrepreneur, and I thank him for inspiring a new initiative at The Profit Growth Club. The individual I just spoke with has great passion for his professional skills and a great service that he is offering. But he lacks any vision or aspirations beyond working a little to make a decent wage. All he wants is a business that lets him work 20 hours a week while making as much as he could make with a low-wage job (enough to "pay the bills" in his words). In other words, he isn't an entrepreneur...just a small-time sole proprietor trying to make ends meet. I know this guy and I know his skills. With a little bit of coaching, he could create a company that still let him work 20 hours a week, but that brought him home more money in a year than he will make in a lifetime working under his current way of thinking. It would take a few years of hard work, but then everything would be different, forever. But he doesn't want to put in the hard work now for an easier life later. On the one hand, that's fine, I guess. Everyone makes their own choices in life and that's what makes the country great. But then again...Maybe I'm overly critical, but I'm finding lots of people like this guy out there these days. I think lots of people are thinking way too small. Lots of people are selling themselves short. Or, as Homer Simpson said in a recent episode, "We never give up until we try one easy thing that doesn't work." Inspired by this phone call, I am launching a new initiative for Profit Growth Club members. It's simple: I want you to commit to making an additional million dollars in revenue or profits over the next 12-36 months. You choose the timeline. You choose the goal. It has to be at least a million dollars in ADDITIONAL revenue or profits within 3 years time. You can pick a bigger number if you want; life is short so why not shoot for the moon? (I suppose you can pick a smaller number if you don't think you can achieve a million dollars; the process will be the same. But why not set aside your limiting beliefs about what you can achieve, and set a truly audacious goal?). Go ahead, take a stand. Dream. How do you want to run your business knowing that you are not living a "practice" life? Regardless of how big you stretch, The Profit Growth Club is going to help you achieve your goal. If you are willing to stick your neck out and declare an incredibly ambitious goal, we will go out of our way to help you succeed. In addition to our regular content, we are now offering a special coaching track -- at no additional charge to members -- dedicated to supporting and inspiring big thinkers to achieve incredible goals. An extra million dollars won't just happen, and probably you will experience setbacks, limiting perceptions, and some tough emotions along the way. When those issues come up, we are here to help you stay the course. We will also provide you with a system and tools to help you track progress and create a realistic, step-by-step plan for success. Not a member? Sign up with us and we will fill you in on the details as soon as you join. Why wouldn't you become part of a group of CEOs and entrepreneurs who are totally focused on growing their businesses and achieving audacious goals? Already a member? Log in and email us your goal. Include a specific, measurable goal and a deadline. We will be in touch to connect you to this new track and keep you accountable. NOTE: Please know that I am not talking about taking huge risks to achieve at least an extra million dollars in revenue and/or profits. I am not going to ask you to mortgage your home or bet your life savings. That's not the responsible way to grow a business. What I am going to do is help you build on your strengths, aspirations, and work ethic and hold you accountable for doing what it will take to achieve your goals. I look forward to working with you! Accountability/Results Tue, 06 Oct 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=hS8wtYbiky4 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=SDdKz6sgwNY There is a right way and a wrong way to think about investing in a franchise. I have worked as a consultant to a number of franchises, and overall have not been impressed with the supposed "system" that franchise companies promise to their franchisees. Other than a very few, very well known names, the franchise world -- in my opinion -- has been saturated with companies who try to franchise before they have developed a viable marketing and operating system. Equally troubling, because it is so hard to sell franchises in today's busy market, your initial investment goes largely to pay marketing expenses to the franchise (instead of to support for your business), including as much as a 40% commission to franchise consulting firms that pitch a franchise to potential buyers. Here are three rules to consider before you buy a franchise: 1. Never buy a single franchise unit. If you do, you are essentially buying a job, while hoping and praying that your franchise company is viable. Why would you invest your life's savings plus ongoing royalties in the hopes that the franchise brand will bring you business. Too many franchises are selling a house of cards, and they can even hide numbers in their franchise offering to make their business look less risky than it is. Plus, your upside is forever limited to your geographic territory and basically zero appreciation on your investment when you sell. 2. If you do buy into a franchise, raise enough capital to buy a master license or multiple units. That way, you can open multiple units or sell territories within your region. But again, only do this if you are 100% sure that franchisees can make money. Otherwise, you are buying into what is essentially a ponzi scheme; eventually your franchisees will fold, your reputation will suffer, and you will be left holding a worthless territory. 3. Rather than buy a franchise, create a franchiseable business of your own. In my opinion, it is easier to do this than to deal with a franchise headquarters and all of their legal requirements and restrictions. Once you have a franchiseable business, you can do all sorts of things with it: hire competent leadership to grow your business while you set direction (and enjoy the profits); enter into joint ventures with others who can invest in and grow your business; sell the business for a premium price; and create your own franchise. With a franchiseable business, you have unlimited choices, including the option of creating your own franchise organization. However, if you do choose the franchising route, make sure that you really do have a system that can help individual franchisees make money. Otherwise, you are hawking a house of cards that will damage your reputation, pehaps lead to a class action lawsuit against you, and potentially cost you everything you worked so hard to create. The Profit Growth Club is designed to teach you how to create a business that runs by itself, so that you have unlimited options and don't need to bet on a franchise company for your success. To learn more, click here. Risk Management Tue, 06 Oct 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=SDdKz6sgwNY no http://profitgrowthnetwork.com/view?v=YTc79_ohu7s So far this year three groups have approached me to join them in so-called “no brainer” sales opportunities. Both groups noted that the prospect was qualified and ready to go, and that they were the first choice to win the deal. The leader of each and every group promised me, in exactly these words, “This deal is ours to lose.” Unfortunately, once I got involved and started doing due diligence it quickly became clear that these groups either had no idea about how to sell or were living in a fantasy world. Not one of the three deals closed and, based on my assessment, these so-called “no brainer” deals had barely reached the beginning stages of the selling process. In all three cases these individuals – successful and high-powered though they were – really didn’t know how to sell. They were selling backwards! Let me explain what that means with a simple assessment. If any of these twelve statements apply to you, you are probably selling backwards, too: You feel like you are spinning your wheels chasing prospects and working too hard to close deals. Prospects tell you that they want to buy from you, and then never seem to sign on the dotted line and follow through. You wonder if there is some magic script or formula you could use to close more deals. You spend lots of time developing a beautiful proposal, and then the prospect says, “Thanks. I’ll think about it.” You get to the end of the sales process only to find out the prospect doesn’t have enough money to afford you, isn’t really serious about taking action, or isn’t the key decision maker. You feel like you have to put on an act or be inauthentic to close business. You keep responding to ongoing requests from prospects for more information, and can’t understand why they won’t just make up their mind. You are sick and tired of giving out tons of free advice and information, and can’t understand why so many prospects never pay you for your services or products. You wonder why generating qualified leads feels like such an uphill battle. You can’t stand it when a client seems ready to go and yet keep telling you, “Maybe. I need more time.” You are more than happy to cut your prices so long as you win the business, but you worry that – aside from sacrificing your respect – you are training your prospects to treat you like a commodity. If you suffer from even one of the above situations, then selling is not as productive, profitable or fun for you as it could be. The good news is that there is a better way.  I know, because I used to sell backwards, too. Then I learned how to get more clients/customers in much less time. As a result: - Clients/customers come to me, and I don’t have to chase them. - I don’t do a shred of work to win new business unless I have explicitly confirmed with the prospect that four key things are in place. - If a prospect lies or won’t give me a straight answer, I know exactly what to say to get them to make a decision and stop wasting my time. - I never write a proposal or a contract until the business is already mine -- and prospects are 100% okay with this approach because of the way I frame the discussion.  - I enjoy being on equal footing with prospects so that they don’t lie to me, waste my time while gaining free consulting, nickel and dime me, or take forever making a decision.  - I am in control of the selling process, but the prospects feels like he or she is in control. - I don’t have to negotiate on pricing, even in a tough economy. - I can be natural and authentic when I sell, so I don’t feel like I am selling out my values. - I spend my time growing my business instead of chasing after new business. In short, I make lots more sales in lots less time, and I don’t ever feel like I am selling. Want to learn how to stop selling backwards? Want to benefit from as much as a 100% increase in sales in half the time? The Profit Growth Club’s next teleconference series will be on this very topic (and all calls are recorded so you never miss a thing if you can’t make the live call). Best of all, you don’t have to pay anything near the thousands of dollars that most sales training franchises charge. You pay one low monthly membership. Click here to join now. Or, just wait until the next prospect drives you crazy and never buys. Then join our Club and learn how you could have handled the situation differently and saved yourself lots of time and aggravation! Marketing Sat, 29 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=YTc79_ohu7s Andrew Neitlich no http://profitgrowthnetwork.com/view?v=1d09PAQvGRM The CASTLE System for profitable business growth, created by the Institute for Business Growth and taught by business coaches around the world, is a powerful methodology for any business owner to grow a business. Members of The Profit Growth Club get exclusive access to this system for improving profits by 24% to 157% in six months. CASTLE is an acronym that stands for: -         Control -         Aspirations -         Strategy -         Tactics -         Leverage -         Evolution Control refers to the business owner’s mastery of the financial performance of the business, from knowing his or her breakeven volume to understanding and improving the key levers that have the most impact on revenues and profit. Most business owners do not pay enough attention to projecting and meeting key metrics. A business owner must control of their business and grow it proactively, by focusing on the numbers that really matter. Aspirations are the business owner’s long-term goals for the business. Without high aspirations for the business, the business owner will not be motivated to make any changes or difficult decisions required for lasting success. Business owners need the ability get back in touch with their passion for starting the business, set their most ambitious goals, and – if they have lost their spark -- get excited about going to work in the morning again. Strategy is a plan for the business to compete and dominate its market. Business owners do this by clarifying their positioning in the market, target customer, products, services, and what they do best. Tactics are ways to achieve their goals and aspirations to create a profitable enterprise and get visible in the marketplace. Leverage refers to a variety of ways for the business owner to build a business that runs without him or her. With proper leverage, the business owner can focus on setting direction and standards, make more valuable use of their time, build an enterprise that has significant worth, and achieve their aspirations. Most business owners have jobs, not businesses. Perhaps your most important role as a business owner is to shift from, as Michael Gerber describes in his eMyth series of books, working in the business to working on it. Evolution describes the way that the business owner will continue to learn and develop, including new skills, attitudes, beliefs, and knowledge. That way, the business owner can grow with the business. If you follow the CASTLE model for business growth, you will have a methodology and systematic way to improve the value of your company and its results. General Management Thu, 27 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=1d09PAQvGRM no http://profitgrowthnetwork.com/view?v=Fk2Yvo_NW6Y st1\:*{behavior:url(#ieooui) } I went to Harvard Business School to learn how to start and run a business. While I learned an enormous amount about what it takes to be successful in business, twenty years later I now know that no business school – not even Harvard – can teach the core requirements of entrepreneurial success. Schools like Harvard can teach analytic frameworks and provide written case studies about entrepreneurs. However, these schools can’t give people the inner attitudes and ways of being of a true entrepreneur. Here are eight things they can’t teach you at Harvard Business School:   One: Passion. Entrepreneurs are passionate about solving a problem for a target market and profiting from their solution. This passion drives us forward when others doubt them. It pushes us to overcome huge obstacles. It keeps us going when ordinary people would give up.  Two: Ethics. Despite courses on ethics at Harvard and other top business schools, Harvard MBAs are not exactly leading the world in integrity. Successful business people understand that we work in a community and have an obligation to be good corporate citizens – even if it means giving up profits to do the right thing. We also know that people do business with those that they trust and respect, and integrity is a big part of building trust.  Three: Appropriate confidence. Many people who come out of Harvard Business School are extremely confident (even arrogant), but not necessarily competent. In fact, at least one of my entrepreneurship professors told my class that a recent Harvard grad is likely to drive a business into the ground without a few years of solid seasoning as a manager. The successful business owner has confidence backed by substance. We know our market, we know the problems our market faces, and we can deliver a consistent solution to those problems. We keep our ego in check, and yet we have the confidence to push forward in good times and bad.  Four: Street Smarts. Entrepreneurs know how to find practical, creative, low-cost ways to get things done. That is something that no school can teach. Professors and text books are rarely street smart!  Five: Personal Responsibility. It is easy to go to a university and be an outside observer. Students don’t have personal responsibility for meeting payroll, keeping employees and customers safe, and assuring positive cash flow. Students are like Monday morning quarterbacks, able to question the judgment and risks of others. Entrepreneurs know that the “buck stops here.” We have no choice but to take 100% responsibility for anything that happens in our business. For instance, this week I was very impressed to see the CEO of a restaurant chain serving coffee to customers. I asked him why he was doing that and he explained that a couple of his wait staff didn’t show, and he was the only one who was available to step in. That’s personal responsibility!  Six: Resilience. If you want to learn resilience, start a business. Entrepreneurs know what it is like to expect an investment come through, and then have it fall through at the last minute – while still having to keep the business going. Entrepreneurs know what it is like to get a bad shipment from a vendor – while still having to ship product to impatient customers. Entrepreneurs know what it is like to have a key employee get sick or leave – and then have to step in for them. We can bounce back from almost any setback and keep going, even if it means rebuilding our business from scratch after we run out of cash.  Seven: Relationships. Business schools are great at teaching you frameworks. But they can’t teach you how to get along with diverse people, resolve conflicts, influence employees to go the extra mile or improve their standards, or build loyal relationships that result in streams of referrals coming your way.  Eight: Leadership. Finally, leadership is a vague term and business school classes talk endlessly about what makes a good leader. Entrepreneurs know what leadership is. It is a way of being. Successful businesspeople have it, and it can take years to develop and improve. No business school can teach it.   Pep Talks Wed, 26 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Fk2Yvo_NW6Y Andrew Neitlich no http://profitgrowthnetwork.com/view?v=dNjkmiIfsDw If you want to learn the truth about a company, don't talk to the top; talk to the front-line employees. I had that opportunity while my wife and I ate lunch at one of the top-rated hotels in the USA and the world, the Ritz-Carlton of Sarasota Florida. Almost everyone knows that the Ritz is famous for its service and quality, and many of you have watched videos from Ritz leadership describing how they do it. But what would a regular waiter at the Ritz say about the hotel's "secret sauce"? This employee made the following observations: First, the company hires absolutely great people. In his case, he used to work at a nearby hotel that competes with the Ritz. He explained, "Everyone know the employees who do the little extra things in top hotels and restaurants in the area. I was one of them, along with two other employees at the hotel where I worked. People at the hotel told us that the Ritz would want to hire us, because they look for people like us, people who want to do everything a little bit extra." Second, I asked about how big a factor leadership and management is at the company, and his reply was surprising. "They're good people, but 'empowerment' is really big here. They give us lots of power to notice things, fix things, and solve problems. They give us the tools to make things right. I couldn't work here if I couldn't notice something wrong or out of place and then fix it." Isn't that interesting? We focus so much on the role of leadership and management, and at the Ritz it appears that front-line employees are the ones expected and encouraged to lead, especially when it comes to direct interactions with the customers. Management is there to support the front line and make sure they have the tools they need to succeed. Third, this employee notes that he came to the Ritz because many of the benefits were terrific, especially retirement and the fact that the Ritz washes uniforms for them ("That's a big thing, and if you are in the industry, it matters when you don't have to wash your own uniforms," he explained). He as made a bigger base elsewhere, but the benefits are what really keep him here. Finally, I was expecting him to mention the famous Ritz training as a major reason for his wanting to come here, but I had to ask him about the training to get him to say anything about it. When he did, he was non-plussed: "Yeah, there was a lot of that, especially when we opened up. It was pretty serious and intense." Then he moved on to talk about the benefits and the empowerment again. So what we have here -- according to the front lines -- is a brilliant system that finds the best, and then sets them up in an environment where they can do what they do best, and keeps them there with a total package that makes them want to stay. I love it! Business Case Studies Mon, 24 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=dNjkmiIfsDw Andrew Neitlich no http://profitgrowthnetwork.com/view?v=GWyXuOQHINk You would think that in this economy every single business owner would go out of their way to provide outstanding, or at least consistently reliable, service. Unfortunately, this is not even close to what’s true. My wife and I have been patronizing many businesses lately as we prepare for the birth of our third child, and we have found an incredible range of great and horrible service. The bottom line: You are a foolish business owner with a short-lived business if you don’t create a service model that provides a consistent, reliable, predictable, positive experience for your customers.   Examples of the bad:  One: An electrical company returns to our house four times to install a few new lights and fans. The electrician keeps neglecting to bring the right tool or equipment, and apparently never evaluated the requirements of the job up front. He even began arguing with my 9-month pregnant wife on his fourth visit, which was a bad, bad mistake that I guarantee he now regrets.  Two: A contractor we had used before doesn’t provide an estimate for new work when he says he would. “I’m really busy,” he whines.  Three: I sent out three emails in 10 days to the customer service department of a $3,500 software product I am thinking of buying and get no response. Really? This company can’t answer a couple of questions in exchange for $3,500?  Four: We discover as we remodel our house that the original builder/contractor, the behemoth US Homes, cut some corners when they built our house. As a result, we will not only never buy a new home from them, but we will tell others the same. US Homes has easily lost a half million dollars in revenues as a result.  Five: I order 30 boxes of one of my books from a printer, and get only 6 boxes. The printer has no idea what happened to the other 24 boxes. No idea at all -- and I paid extra for rushdelivery. Six: A waitress at a local Mexican Restaurant stands by our table telling us her depressing life story, and meanwhile neglects to put in a to-go order. We have to wait 20 extra minutes for the order.  Seven: Why can’t Wendy’s Hamburgers ever get my order for a Spicy Chicken Sandwich done right? All I want is the sandwich with mustard and ketchup, no mayo, and extra pickles. Nine times out of ten, I got something different.  After the tenth try, I stopped going. Customers are willing to be patient, but only up to a point! Eight: A CPA I have been testing out has been sending me IRS forms for payroll taxes. She has gotten 2 out of 4 completely wrong, almost costing me a lot of money in IRS penalties and interest (due to miscalculations, not anything I actually owe). Rather than respond promptly to my emails, she took her time, and showed no sense of remorse. She didn't even call to apologize. I can't believe that an educated professional would behave this way. Examples of the good:  One: The builder overseeing the renovation to our home comes out almost every day to see how we are doing and to clear up any issues with the sub-contractors (He even called the above-mentioned electrical firm to force a change of attitude and service).  Two: A local Indian Restaurant gives us a takeout bag and forgets to add an order of shrimp. The owner runs out with the missing dish, but sees we have pulled out. She has a waiter follow us home and deliver the incorrect order – along with a pair of glasses my son left there – with their apologies. Maybe they never should have gotten the order wrong in the first place, but they sure recovered nicely!  Three: After a disastrous computer repair experience with Best Buy/Geek Squad (described in a previous blog), a local computer firm fixes my wife’s computer in 2 days and for around $20. Geek Squad needed 6 weeks and $84 just to look at the computer (and their attitude stunk the entire time).  Four: I recently installed TradeStation’s trading platform on my computer. The company assigned me a personal representative who has been incredibly responsive – unlike the software company mentioned above. He has called me personally to see how I am doing and answer any questions, and answers emails personally within hours.  Five: I take my kids out fishing with a nephew who is in town. Captain Ed of Fish Factor Charters is incredible – baiting our hooks, casting our lines, telling us exactly how to hook the fish, and moving to a new spot as soon as a current spot dries up. We catch 12 fish and only one is edible or legal, but the kids have a great time thanks to his knowledge, patience, and personal service.  Six: At the Sarasota YMCA, my kids and I are at the pool when it starts to lightning. The concession stand – which offers the best shaved ice in the world for only $2 ($1 for a small) – has closed. However, when they see me coming, they offer to open up for a minute just to get me my regular shaved ice.  Seven: Our family is blown away by the service we get from the staff and tennis professionals at both Bath & Racket Tennis Club and Laurel Oaks Tennis Club. The people there are friendly and professional, go out of their way to make sure our kids are happy, and – even with some outdated facilities at one of these two clubs – give us one of our few reasons (aside from the fact that both sets of parents live here for our kids) to live where we do.  If you are a sole proprietor, you have no excuse to not deliver perfect service every single time. If you have employees, all you need to do to make sure your service is consistent and positive is: be committed to the customer’s experience; put in place metrics and standards to meet the customer’s expectations every time; establish procedures and processes so your employees provide exactly the same experience; train your employees to handle unique situations (and give them the authority to do so); reward the employees who perform; and monitor how you are doing so you can follow up.  But if it is so easy, why is our service experience so spotty? Either it isn’t as easy as it looks, or lots of business owners have a thing or two to learn about basic management and follow through.   General Management Sat, 22 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=GWyXuOQHINk Andrew Neitlich no http://profitgrowthnetwork.com/view?v=gjlo04lHW1M st1\:*{behavior:url(#ieooui) } Every business school student hears the old adage: Do one thing well and “stick to your knitting.” But what does that mean in practice? Tervis Tumbler, the leader in the insulated drink ware market, is a great example of doing one thing best. Tervis CEO Laura Spencer explains how Tervis has succeeded, going back way back to the 1950s, based on a single-minded focus on dominating one area.   First, in case you don’t know Tervis, for 60 years they have been making tumblers, those clear, sturdy drinking glasses. Last year they did around $34 million in sales with 210 employees, and they expect sales to grow this year. Their products are so well-made that Tervis guarantees them for life. They are made in the USA, feature double insulation, are microwave/freezer/dishwasher safe, are as clear as glass, and come in designs for any taste (from flower patterns to NFL, MLB, and college team logos). CEO Spencer explains, “We are successful because we have stuck to our core. We focus on insulated drink ware, and we keep improving while staying on that path.”  The company veered from that core only once, “in a minor way” according to Spencer. Almost a decade ago, they introduced "Island Canvas Gear," a line of LL Bean-type tote bags. The company thought that this product would go along well with tumblers, and the line was profitable.  However, Spencer explains that “It was profitable, but for the amount of resources we put into it – such as ordering an entirely different set of materials – we realized that it was not where we wanted to focus. They were a distraction. Even if you are making money on something, it still takes resources away from something else.”  The company continues to lead the market because it stays close to customers and on top of trends and get new ideas. The members of the sales & marketing team talk with customers by phone and at trade shows to learn about emerging needs and to review new ideas. Then, after working with artists to design new products, Tervis tests ideas in their four Florida factory stores and on their website to quickly see what works. They also work with certain customers to design and manufacture exclusive products.  Because Tervis is the leader in a focused niche, they get some big advantages over the competition. For instance, they are able to build relationships with prime licensors like Major League Baseball, the NFL, and college sports. There are three reasons why. First, many of these organizations are reducing the overall number of licensors they have, and so they want unique products like tumblers. Second, major licensors absolutely insist on the highest quality product, and Tervis leads the field. Third, licensors want to work with companies that perform and do what they say they will do; Tervis has 6 decades of experience delivering a virtually indestructible product. That’s the power of focus!  The final piece of advice that Spencer offers for companies who are willing to focus single-mindedly on dominating a niche is to take time for strategic planning. “We go off-site to make sure we continue to stay focused and don’t lose the forest for the trees. Then we can come back and execute on a daily basis.”  When you examine Tervis Tumbler, you discover a company that is 100% organized and intensely focused on doing one thing better than anyone else. This fanatical focus gives the company an edge that gets them deals with major licensors, and earns ongoing loyalty from retailers and consumers.  How about your company? Can you say that you have a product or service that dominates your marketplace, and that your focus is on constantly improving while remaining committed to what you do best? Would you eliminate a profitable line because it distracts you from your core focus? Do you have the staying power to focus on excellence in your area for more than 6 decades? For most companies, the anwer is no.   Business Case Studies Fri, 21 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=gjlo04lHW1M no http://profitgrowthnetwork.com/view?v=fWvuCx1p4Ng The following story is 100% imaginary. It didn't happen and in no way reflects actual characters or events. Now...Imagine that you are the investment banker in this story. What would you do? There are three characters in this story:  One: The Entrepreneur. He runs a company that is desperate for cash. If he can raise $3 million, he can win a $110 million contract worth $35 million in gross profit to him and investors. But he is out of cash and needs to raise money in less than 30 days to win this deal. He is ethical, knows his business well, but is an operations guy. He has little or no experience in the world of finance or Wall Street. Plus, he has payroll to meet and is loyal to his employees and is willing to take big risks to protect them and his company. Two: The Promoter. He has a publicly traded bulletin board shell and a retail network that can raise cash. What he needs is an “asset” to roll into the shell. Then he can spin a good story to investors to raise cash quickly and make a profit himself on the rise in share price.  Three: The Investment Banker. He is a seasoned long-time Wall Street player and hedge fund manager. He has retired from formal work but continues to love to get into business opportunities. Over the past decade, he has helped a number of early stage companies get noticed by Wall Street. The Promoter would like him to get involved in this current deal, bringing it to his network for funding, advice on structuring the deal, and for the credibility his name brings.  Now, here are the (made up) facts that make this story interesting: The Promoter’s shell currently has in it a company that supposedly owns the rights to a breakthrough drug for cancer treatment. The Promoter put all of his money into this company and persuaded his friends and family to do the same. Unfortunately, after promising initial experiments, a recent trial proved the drug to be worthless (and thus the company itself). The stock of this company is basically worthless other than the value of having an empty shell.  The Promoter has not yet released this information to his shareholders or to the public, despite the fact that it is material information and SEC law requires it to be disclosed. His strategy – unethical and illegal though it may be – is to roll the promising new company into the shell, raise cash with the new company’s story, and then announce the bad news about the old company (when it no longer matters). This is patently illegal and unethical because he is not disclosing the truth about the failure of the previous company, and is hoping that the new company’s momentum will pump up the stock price.  However, the Promoter is not exactly known for his intelligence or his ethics, and he is desperate. He’s invested so much of his and his family’s time in this venture that he is now acting like an animal trapped in a corner, about to be attacked.  There is no ethical dilemma so far. The Promoter is a scumbag. However.... The Promoter has offered to The Investment Banker an easy $1 million worth of stock (once the new deal is announced). If he accepts, the Investment banker can trade this stock, stay under the radar, and never get noticed by the SEC. In exchange, all he has to do is wait for the news releases about the new company, and then bring the deal to his contacts when the dust has settled and the new company is performing. So, for a week or so worth of work, he can make an easy, risk-free $1 million – or more depending on how well the stock performs.  The Dilemma: Would you take the $1 million if you were in the Investment Banker's shoes? What if this deal just came to you and you could really use the $1 million? What about $10 million? $50 million? You will never get caught. Only the Promoter and (probably) The Entrepreneur will get in trouble with the law if they get caught.  Had this been an actual story, I would have to say that I am fortunate to have The Investment Banker as one of the colleagues in my network. In this fictional scenario, he not only turned the deal down cold and cut the Promoter out from any further contact with him, he also kept me from getting involved with this thing.  Is your network filled with people you can trust 100%, and have you earned their trust in return? Addendum: Here are other questions for you: As the Investment Banker, would you tell the SEC about The Promoter? Would you feel an obligation to warn The Entrepreneur, who isn't savvy about SEC law, about The Promoter and his tactics? What about me? Do I as someone a couple of steps removed from the deal have an obligation to report these dealings? At my level, it is all just heresay, but is that an excuse or do I need to blow the whistle?   General Management Thu, 20 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=fWvuCx1p4Ng no http://profitgrowthnetwork.com/view?v=bAvth2Vg3iM st1\:*{behavior:url(#ieooui) } Imagine this: You and your local business get chosen to be a reality television show, and the show becomes a hit. You become a star. The orders come pouring in from everywhere. People recognize you on the street. You get endorsement and speaking deals. You have hit the big time!  I contacted the Food Network’s Ace of Cakes star Chef Duff Goldman for his experiences and advice about how he made exactly that happen for his Charm City Cakes. However, instead of focusing on fame and how to get a television show, Duff quickly showed that first and foremost he is a business leader who is passionate about excellence, discipline, and how to build a winning team.   If you are reading this case study for the secrets to getting your business on television and becoming famous, let’s get that over with. According to Duff, “If your cause is to get on TV, it will never happen. Fame is a by product of doing something else. Fame for fame’s sake never happens unless you are Paris Hilton, and she got famous because some guy took a night vision camera video of her doing whatever, and all of a sudden she got famous. Don’t make fame your cause.”  He continues: “That doesn’t mean that you shouldn’t avoid trying to get noticed. Just do whatever you do really well. Make that your cause.”  If you really do want to get your business on a reality television show, Duff lays out a plan for you. He uses the example of a company that takes care of plants in commercial office buildings.  Step One: You better know everything there is to know about your business. “You need to know the ins and outs of every little thing. You need the answers to every question immediately. If your business is plants, and someone asks you the name of a particular plant and whether it is allergenic or not, you had better be able to answer on the spot. That’s how fast TV moves.”  Step Two: Run a tight ship. “In my case,” Duff says, “If I didn’t have a good bakery that’s profitable, I couldn’t catch anyone’s attention. We work hard and we play hard, and that’s what gets us noticed.” Step Three: Get a contract in a building with a production company. Duff advises, “Set up your plan business in Los Angeles, find a production company that does reality TV shows, and solicit their business. If plants are your business, get hired to manage the plants for an LA production company." Step Four: You need to be a character, but don't force it or put on an act. According to Duff, “Be your natural goofy self. Don’t go over the top because production companies can smell that instantly.”  In Duff’s case, he started getting noticed when he was invited to participate in contests. “I provided a comedic outlet in an otherwise stressful situation. I wasn’t the best – in fact my competitors were vastly superior to me – but I was the funniest. I was genuinely having a good time. Winning, being on television, and getting the prize money were not key for me. I got to learn from incredible people by picking their brain. After a competition ended, I’d talk to others and learn. I’d ask, ‘How did you do that?’ and learn from them.”  Now Charm City Cakes is what Duff calls a “micro-economy” that includes the bakery, television show, and endorsement deals. Duff has a simple philosophy when it comes to setting priorities with everything he has going on. Like a bakery where you take a number to get served, his rule is, “First come, first served.”  In at least one instance, this philosophy cost Duff an appearance on one of the top late night talk shows. “They wanted me to make a crazy cake with fireworks, for a show airing in two days. But I had an order for a birthday cake for a customer down the street, and that came in first. I was bummed that I had to miss out on this show and meeting the host, but to call yourself a businessman business has to be first and foremost. The bakery, the employees, and the customers have to come before television and celebrity. If you keep that attitude, I think you can be in business for as long as you want to be.”  Here’s the thing that impressed me most about Duff: We very quickly moved to what really matters to him….building a winning team. Duff loves sports; he played ice hockey, lacrosse, and football, and knows a thing or two about winning. He explains, “When a place of business feels like a winning team, the things you can do are astounding.”  In the case of Charm City Cakes, the team is a group of extremely creative, talented, and smart individuals – “geniuses and artists” according to Duff. For instance, Artistic Director Anna Ellison is a nationally ranked Scrabble player, and Executive Sous Chef Geof Manthorne has a “laser wit that stupefies.” Duff can’t stop gushing about his employees: “A business is only as good as its employees. I’ve found the right people, and they are amazing. They truly astonish me with what they can come up with.”  Perhaps more challenging (at least for many business owners), the employees at Charm City Cakes are all close friends. “We’re all in bands, we go to each other’s shows, we go on vacation together, and we like, love, and respect each other.”  Duff realizes that with this type of talent and these kinds of close relationships “you can’t force your way into getting people to perform at their optimum level. You have to give praise, let people use their skills, give everyone the tools they need, and let every employee have a sense of ownership. That makes happy employees, and happy employees are great to be around.”  At Charm City Cakes, Duff has a natural gift for creating happy employees who feel a sense of ownership in the company. First, unlike the stereotypical chef (think Gordon Ramsay on Hell’s Kitchen), he never raises his voice. “The last thing you want to do is yell at someone in public. No one will respect you if you yell. The rod is not the way to handle issues. If someone has a chronic issue and employees can’t work it out among themselves, I’ll handle it in private. We’ll go into the back room and discuss whatever’s going on.”  Also unlike the typical chef, he does not run a dictatorship where his opinion is all that matters. Instead, “We are pretty democratic. We make decisions pretty much by committee. If we’re on the fence, I’m the final arbiter, but usually we agree on the way to go.”  Duff shares everything from praise to his endorsement fees with his team. For instance, any time a thank you note comes in from a customer or a letter comes in from a fan, the bakery’s Manager Mary Alice prints it out and leaves it on the lead baker’s desk. He comments, “The employee sees the note on his or her desk the first thing when they come in. It puts a spring in their step the rest of the day….and we get thank you notes and fan letters every day.”  Likewise, he puts a share of every dollar he makes from endorsements and speaking engagements into a rollover CD that is split equally among all employees (i.e., out now is his book Ace of Cakes: Inside the World of Charm City Cakes). “We created this thing together. It’s not just me. My employees know this is the truth and I tell them this is the truth.” Note that the CD money is in addition to the money that employees earn for agreeing to appear on the television show, which has allowed some of his employees – many in their early twenties – the resources to buy their own home. Employees also get two months of paid vacation. Duff notes “We did this long before the show and long before we were financially stable. I want my employees to remain balanced. If someone is not feeling super-motivated on a certain day, I encourage them to go home or go to the beach. These are people with many other interests and I want them to stay fresh.”  Gratitude is a big part of his management style, too. In addition to raving about his employees and his bakery customers, he is also thankful for the people who come up to him and members of his team in public. “Those are the people who watch our show, love what we do, and identify with us. We need to acknowledge that these are the people who keep us on.”  While all of this success could go to another chef’s head, Duff is still careful to do his share of the hard work. “Especially in a smaller business like ours, employees see me every day. We work side by side. My job is still to run the bakery and decorate cakes, and I do that every day. If I were an absentee owner, they’d resent me really quickly.”  I came into to our interview wanting to talk about how a business owner can get a reality television show, and instead I got to learn from a down-to-earth business leader who knows how to build a great team. As Duff concludes, “We have a good thing going. Everyone realizes it, and we are a strong team. I am the coach, and we have made it to the playoffs.” After talking to Duff for a little while, it's hard not to root for him and his team to win it all. Business Case Studies Sun, 16 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=bAvth2Vg3iM Andrew Neitlich no http://profitgrowthnetwork.com/view?v=yNZn9P-Wqe4 My kids (7 and 4 years old) have been coming home from summer camp buzzing about colorful strips of tape on their tennis racquets. “Tomorrow I am going to get the green tape,” they younger one says. “I already got that one, plus the one for good sportsmanship,” the older rebuts. They are part of a program called Tennis Tapes, a business that offers two insightful lessons for business owners.   First, some background: Tapes Tennis has designed a system much like Martial Arts where children earn a belt color according to the skills they are able to perform on the court. Children earn a different colored tape that is placed on their racquet as they complete a skill test. Co-Founder (with his wife Susan) Gabriel Ferrer explains how he got this idea: “It is difficult for kids in tennis because it takes a long time for a kid to be successful in this sport. Kids can play soccer, football, and baseball right away. But it takes more time to learn to hit a tennis ball back and forth. The idea of Tapes Tennis is to keep kids motivated until they learn enough skills to play.” The Ferrers started the program in the past year, and are already operating in three locations in Sarasota and Manatee Counties in Florida. Their two teenagers also help to teach the program, which they do quite well; that's partly because they have grown up while watching Gabriel coach tennis at leading facilities, including Nick Bolletieri’s famous Tennis Academy. For now, the Ferrers want to spend at least a year to refine the program and test the market. Currently they are getting excellent results through word of mouth, carefully placed signs at McDonald’s and shopping malls, and by educating tennis club members via member newsletters. Gabriel shares one part of his future vision: “I would like to develop something with software and the Internet so that a coach can easily enter a kid’s achievements and the skill tests he passed. Then an email can go to the kids or parents that says, ‘Congratulations! You graduated the green level and are now getting ready to get your blue tape. Here are the next skills to work on….’ We can sell services like that, and more by being interactive.” What can you learn fromTapes Tennis? I see two lessons to take away. First, kudos to them for branding a program that would otherwise be a commodity. Tennis pros are almost a dime a dozen, even though most of them would take offense at this statement. Meanwhile, the Ferrers have chosen to focus on a niche in tennis -- kids who are just starting -- and they are creating a brand to dominate that space. They are trying to do for kids’ tennis what Redenbacher did for popcorn, Perdue did for chicken, and Boar’s Head did for cold cuts. Are you establishing a unique brand that is memorable and sets you apart in your niche?  Second, the Ferrers are creating valuable intellectual capital. They have many skills tests, along with the idea of colorful strips of tape that kids can put on their racquet grip. There are all sorts of directions they can take from here: training and licensing other pros; the internet-based service that Gabriel described above; books and DVDs for parents who want their kids to get into tennis; subscription-based services emailing a daily or weekly tennis teaching routine to parents/pros; and perhaps even a franchise system. What kind of intellectual property do you have in your business? If you can’t think of anything, your business might not be worth much down the road. Building a unique brand and developing leverage through intellectual property are both powerful business strategies, and we teach them to members of The Profit Growth Club. In the meantime, we will be following Tapes Tennis to see how they develop their game from here. Business Case Studies Fri, 14 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=yNZn9P-Wqe4 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=Cw5HPGJ8ZoU st1\:*{behavior:url(#ieooui) } A few years ago a professional fighter told me, “If you want to lose money, become a fight promoter.” Being a bit cocky, I took that as a challenge. I proceeded to invest, and then lose, almost a quarter million dollars into a professional fight league. Having succeeded in ventures in industries that I thought were much more complicated and challenging (e.g., technology, healthcare, consulting, online publishing), I can now state with confidence that promoting fights is the riskiest, most difficult business there is. If you can figure out how to succeed in this business, you are a better man or woman than me!  And so it is with great humility and awe that I was able to interview Roy Englebrecht, one of the most consistently successful boxing (and now MMA) promoters in the world, to learn his secrets for success.   Roy has every detail down when he promotes a fight: the setting up the fight, marketing, working with the state boxing commission, meeting a budget, and even the right way to use ring card girls. His system is so perfected that now he teaches aspiring promoters to succeed with his Fight Promoter University. During this program, participants get to help Roy set up a fight, meet with industry experts, and learn the tricks.  His credo is simple: “Give fans great entertainment at the right price, in a clean environment, and say thank you and mean it. Then they will value you and keep coming back.” He continues, “I come from a minor league sports background, where fans come out and don’t know a single player. I learned how to give a great experience via good prices, fun events throughout the game, and a clean stadium.”  In his Battle for the Ballroom, he has learned a long list of things about creating a profit in this business (things I didn’t follow when I blew my money on my fighting venture):  One: Embrace your status as a minor league operator, and don’t act like you are Don King. You don’t need to pay huge rent for a gigantic venue, when fans want to be on top of the action in a more intimate setting. You don’t need to pay big money for a 10-round main event, when that fight is often the worst of the night and, at $35 per ticket, fans just want non-stop action with fighters who are giving everything they’ve got. Roy admonishes, “Leave you ego at the door. You are a minor league operator, and there is a successful template you can follow to succeed. Don’t make the same mistakes as other promoters who let their ego get in the way.”  Two: Build up a loyal pool of fans who keep coming back. One way to do this is by contracting with a single venue. That way, you can offer season tickets and develop a reputation as the place to go for great local fights. Another way is by having promotions at the fight to collect fans’ contact information, so that he can follow up with them after the fight. Third, Roy stands outside at the end of every fight to greet and thank fans personally; he doesn't sit in the first row of the fight like other promoters. He even answers the phone himself, and, he claims, "People can't believe they are speaking directly with the promoter and not some assistant." Three: Provide entertainment and a “Wow!” experience for fans throughout the fight. For instance, during each fight, one lucky fan gets to sit ringside and watch the fight in a special chair.  If the fight results in a knock out, the fan gets $100. If not, the pool goes up to $200 and the next fan gets picked. Similarly, Roy pioneered the concept of having two ring card girls in the ring at the same time (walking in opposite directions), instead of just one, so that fans have twice as much to see. “I learned this from watching lots of television shows. I watch fights on Spanish channels, Pride fighting, and the WWE and learn everything I can about how to enhance the entertainment experience.”  Four: Get creative in attracting sponsors. For instance, Roy offers sponsors the change to walk down the aisle and even step into the ring with a fighter. “Where else can you be part of the action like that? You can’t walk on the field in the NFL, and you can’t walk on the court when you go to a Lakers game. I can’t sell sponsorships based on television viewership, because these fights are not televised. But if someone brings 20 people, I can let him or her walk the fighter in and be introduced. They feel like they are hallowed ground standing in the ring before the fight starts.”  Roy also lets sponsors do trophy presentations, or let their own customers do the presentation. “A customer of a sponsor can present the trophy at the end of the fight, get their photo taken with the fighters and the ring card girls, and the sponsor has a very happy client."  Five: Remember that everything is a show. “I can’t control what happens when the bell rings. The fight might be a quick knock out or go the distance. But I can control what happens before the bell rings. Promoters don’t just produce the fight. The are putting on a show.”  Six: Keep raising the bar so that the industry gets better, too. Lots of promoters are not happy that Roy teaches people his secrets at Fight Promoter University. “They tell me, ‘We don’t need more competition.’ But I feel like I owe it to the business. Why not give something back. I’m secure enough to teach people my secrets, my formula. And a rising tide raises all boats. There are still promoters who promise the world to everyone, cancel shows, burn their fans, and then just leave the sport. It’s a tough business for the smaller guys, and I can show people have to have fun, make money, and do some good.” It seems to me that Roy's success principles apply equally well to just about any business. The customer experience can always be improved with a little showmanship, and every business owner should have a template to create a repeatable, consistent customer experience each and every time. But when our interview ends, I don't have much appetite to draw general business conclusions from his success. All I can think is, “Why didn’t I call this guy before I lost my shirt in this business?” Business Case Studies Thu, 13 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Cw5HPGJ8ZoU Andrew Neitlich no http://profitgrowthnetwork.com/view?v=8E-8tomsZYA st1\:*{behavior:url(#ieooui) } My hometown of Sarasota Florida is not far from the epicenter of the current real estate foreclosure disaster and one of the biggest unemployment rates in the USA. Plus, it is off season, never a good time in an economy dependant on tourism. In the midst of this bad news, it seems remarkable that McCurdy’s Comedy Theatre & Humor Institute continues to thrive. Co-owner (with his wife Pam) Les McCurdy was kind enough to share his business insights.   First, full disclosure: I am biased as I write this. I love going to McCurdy’s Comedy Theatre. To me, McCurdy’s is up there with our Ritz Hotel, the Sarasota Opera, and the gorgeous Siesta Key Beach as institutions in Sarasota. I am grateful that Les and his wife attract famous comedians and headliners to his establishment in this slightly-off-the-beaten-track town, while providing a great time to his guests with good, mostly clean fun.  According to Les, there are only two secrets to his success. Let me share those with you, and then add a few more that I heard when we spoke.  First, Les explains, “We had a good business plan going it. It was thorough. It was thick. It’s a book. We played out every scenario. We spent three or four months developing this plan on paper. My wife won an award for that plan.”  In addition to having a strong plan Les says, “You have to follow through with a consistent product and service. That’s really it. No matter how the economy is doing, the key is to be reliable. Here in town about 20 or 30 restaurants have gone out of business this year. When you look at the names on the list, a lot of them aren’t shocking. Some are new and didn’t have time to gain a foothold. Some were undercapitalized. And many were mediocre, with an inconsistent product and service.”  He continues, “Those who are still doing well have been here for a long time. They are reliable. Right now people are saying, ‘My money is more precious to me. I am not going out as much to eat, for entertainment, or to buy new clothes. When I do spend money, I don’t want to do it frivolously. I want to get entertainment that I know is going to be top notch. I want good service, good food, and to know that I will be treated well because I always have been.’ That’s what we do. We focus on the customer, and our service, and our employees. We make sure everything is consistent and not just average. We always want things to be better.”  Les can’t believe that other businesses can’t quite grasp this simple rule. “It is amazing to us with the competition so keen right now for that dollar that you can still walk into an establishment and get bad service and a bad product. How in the hell does that happen? You’d think everything would be top notch and crackerjack. It’s not!”  Here are a few more rules that I learned while listening to Les:  Find what you love to do. Les shares, “Stand up comedy was the thing I seemed to be the most gifted at. It came to me easier. It was incredibly fun. It fit my personality. So my focus was to make a living at it.”  Live where you want to live. “I ran a comedy club in Chattanooga with my wife and two friends. We knew the area and there was no other club there, but we didn’t want to live there. We beat around the idea of moving to Los Angeles to go for the gold ring. We had friends and family there, but we didn’t want to live there. I toured the country, came to Sarasota, and wanted to end up here. My wife and I were talking about what we would do if, after 10 – 15 years of living in LA one of made it big. Pam said that the first thing she’d do is buy a house on Siesta Key in Sarasota. So we moved here.”  Be willing to hustle for a long time, and be patient. “We first started out in the banquet hall of a Holiday Inn near the airport. It was me, Pam, a phone, and maybe we had $2,000. Then we cut a deal with the owner of the Holiday Inn. He staffed it and took the bar. We took the door. Meanwhile, I toured 20-25 weeks out of the year doing comedy and Pam worked different jobs. We started in 1988 and for 12 to 13 years we hustled by creating symbiotic relationships with bars and banquet rooms. We only opened our current location in 2001.”  Take the leap when the time is right. “In 2001, we decided to go for broke and have our own place. We spent every dime we owned. We borrowed more money than we could pay back. But we felt comfortable after 12 years. We had a great reputation.”  Be prepared for the worst, and have faith. “It took us four months to build out our theater. Then, three weeks after we opened, 9/11 happened and we thought we were dead in the water. This was no time for comedy. We could be going to war. Going out for some comedy seemed trite. But we got some nice crowds, and then we held a grand opening with David Brenner, who was doing a 9/11 tour. We sold out, and have been doing well ever since.” Note that in today’s tough economic times, McCurdy’s has become a kind of folk hero in town for offering free comedy tickets to families in need, and offering some great specials to get people out and laughing on weekdays.  Know your aspirations, and stick to them. Les tells me that he is “as happy as a clam” now. He loves where he lives and what he does. He doesn’t aspire to build up a chain. “One’s enough,” he says. “It would be cool in the future to actually own a building that has more room and is bigger. Then we can have a theatre and classrooms. It would also be great if we could have our Humor Institute last beyond Pam and me and still be here when we die. That way when we are gone the area is set up to get more great performances and training in humor.” Business Case Studies Wed, 12 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=8E-8tomsZYA Andrew Neitlich no http://profitgrowthnetwork.com/view?v=Psdy-trKwiw st1\:*{behavior:url(#ieooui) } I love a maverick who brings an entirely new model to an entrenched industry, especially when that industry happens to be law. If you want your company to win with a game-changing strategy, you need to read about VistaLaw. Rob Walton, a VistaLaw co-founder, started with an insight that he admits isn’t a big surprise: The current legal industry model is not very efficient. Partners at the big law firms are encouraged to charge the most billable hours at the highest rate possible. Partners at major firms can bill up to $1,000 per hour, and they bill associates out at a rate that far exceeds their value and experience.  According to Walton, the in-house counsel of a Fortune 500 company once commented that legal services are the only vendors where rates go up instead of down every year. This source compared the legal industry to a medieval guild, protecting itself and its members even though their model does not meet the needs of customers.  While there are legitimate reasons to bill as many hours as possible (e.g., to avoid liability by being as thorough as possible), corporate clients get frustrated by the cost, inefficiency, and difficulty getting a clear answer on an issue. They want to see more reasonable fees, faster answers, and clear results.  In addition to the mismatch between what clients want and what law firms deliver, Walton noticed two other shifts in the legal industry:  First, many legal services are becoming commodities. Clients are not willing to pay high rates for commodity services. The current legal model – based on a pyramid with a few multi-million dollar earners at the top and many associates grinding away while billing out at higher rates than they deserve– is not sustainable when services become a commodity.  Second, technology makes it much easier to render legal services without high overhead (e.g. expensive offices, high travel bills).  In this context – and after tiring of working in the current legal industry – Walton and his partners decided to try a new model, one that offered better value to clients. In this new model: First, only experienced attorneys do the work. Clients don’t have to pay huge hourly rates to train junior law firm associates on their own dime. Second, only trusted attorneys can join the team. VistaLaw is not a temporary staffing firm or a recruiting firm. To join VistaLaw, an attorney needs to be brought in by a partner who knows him or her well from previous work. That way, every member of the firm is trusted and “vouched for.”  Third, prices are reasonable, not outrageous. VistaLaw provides flexible pricing schemes based on (gasp!) what works for the client. Fourth, the emphasis is on efficiency. Walton and his partners rent simple offices for 40 hours per month (not week) to meet with clients when required. They work from home when appropriate, or side by side with clients, and don’t need the high-rent Class A office buildings.  Fifth, the firm is an early adopter of technology that can make them more efficient. Many attorneys might know about Blackberries and Google, but they don’t really use technology to make their practice more efficient. For instance, in addition to using Skype for free international teleconferences, VistaLaw is experimenting with Wikis to create best-in-class legal documents.  This model appears to be especially valuable to companies that have a need for a major project (e.g., getting the books in order for a rapidly growing company) or that have a peak period and need to supplement their in-house legal counsel. Since its inception, VistaLaw has a presence in Washington DC, London, Paris, and the Middle East. Walton’s vision is to continue to expand cautiously as they see areas for growth, while remaining nimble.  So, what are the lessons if you want to change the way an industry works? According to Walton: One proactive and embrace change. Exploit your lack of patience for doing things the same old, cumbersome way. Two: Be sensitive to the constantly changing needs of the customer to reduce costs and be more efficient. If you are, you can discover an entirely new way of delivering solutions. Three: Embrace technology to be more responsive and efficient. Four: Provide excellent value. For instance, don’t bill the client as if you were creating a solution from scratch when you are not actually reinventing the wheel. Five: Realize that loyalty from an employer and job security are dead.  “No one can say with confidence that their company will be there ten or fifteen years from now,” Walton says. “Find what you want to do, and do it.” Business Case Studies Tue, 11 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Psdy-trKwiw Andrew Neitlich no http://profitgrowthnetwork.com/view?v=YaOdXD8YHcE As The Profit Growth Club grows, we now are adding industry-specific content for our members. As a first example, members who are coaches, consultants, CEOs of professional service firms, and CEOs of companies based on specialized skill and knowledge now receive the 174 book Guru Millionaire: How To Make a Fortune With What You Already Know by Andrew Neitlich. To get this practical guidebook -- which normally sells as part of a package for over $200 -- simply join The Profit Growth Club today. Guru Millionaire lays out a step by step process for business owners and leaders to generate increased revenues and improved brand awareness by becoming the "go-to" expert in their field. Most business owners -- especially those in knowledge industries -- have an opportunity to brand themselves as a true go-to professional in their specific market, so that they are the first ones that reporters and potential customers/clients call when they have a need. Once a business owner (or his or her firm) becomes the go-to expert, new sources of revenue and income streams are available -- along with higher fees, a more appealing clientele, and less work to attract new business. Guru Millionaire shows business owners how to become that go-to professional, or guru, in their field and reap the rewards. It also lays out a number of profitable business models to help business owners achieve greater leverage over their time and in their business, thereby increasing the value of their enterprise significantly. Again, to get your copy of this book, simply join The Profit Growth Club. News Room Mon, 10 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=YaOdXD8YHcE no http://profitgrowthnetwork.com/view?v=TatoLHbhwr4 st1\:*{behavior:url(#ieooui) } The new movie about Julia Child’s life and a 30-something woman trying to cook her way through her entire cookbook in 365 days (while blogging about it) has not received great reviews from “real” movie reviewers. However, as a movie about what it takes to succeed in business, it was refreshing. I left the movie feeling charged up and grateful to be doing what I love for a living while making a good living at it. Here are some of the reminders about business that you can learn when you see Meryl Streep’s and Amy Adams’ fine performances:   One: Never forget the joy and passion that initially caused you to start your business. Amy Adams’ character Julie is unfulfilled in her job, and takes on her cooking/blogging project as a way to build on the two things she knows she loves (cooking and writing). Julia Child is an unemployed diplomat’s wife in France, and tries hat making and bridge lessons to no avail before discovering that cooking (and eating) is the thing she loves more than any other activity. This joy and this passion keep both going.  Two: Success is never, ever guaranteed, but if you keep moving forward, you build up momentum until you are more likely to reach a tipping point. Early on, Julie writes in her blog that she wonders if anyone is reading it, and her mother posts a comment that she is probably the only person in the world who will ever read her blog. A reporter for The Christian Science Monitor promises to interview Julie along with a famous food personality, and they cancel at the last minute. It is only with around 15 days left in her project that a New York Times writer does a story on Julie that causes huge media attention and an eventual book/movie deal.  Meanwhile, Julia Child faces ridicule from the President of Le Cordon Bleu cooking school, spends eight years of her life writing a cookbook only to have to rewrite it for an interested publisher (who rejects it a second time), and constantly worries that her passion will have been nothing but “something to do.” It is only through a few kind and supportive friends, her persistence, and her incredibly positive attitude that she finally gets published – and then the rest is history. But it almost never was!  Three: It is very difficult to separate your business and your personal life. Julie has some big fights with her husband over her obsession with her project, and they nearly break up. Julia Child has a love affair with her husband throughout her life, and yet must deal with his frequent relocations (she has to type her book out on carbon paper and mail copies to her two collaborators after moving out of Paris).  Four: Have courage. Julia frequently tells her audience to have courage. You have to have the courage to stab a lobster between the eyes, to point your knife at the duck you want to bone as if challenging it, and to have conviction when flipping a pan full of food in order to assure a successful flip. Julie also learns courage during the movie – the courage to finish something for once in her life, and the courage to live up to her full potential. You can’t succeed in business without courage. Too many things go wrong. Too much is uncertain, even if we calculate risk like the best Wall Street trader. You must persist, even when your Bœuf bourguignon burns only a few hours before a major food reporter is coming to see you.  Julia Child was always in awe of the book The Joy of Cooking by Irma S. Rombauer. I like that book title, The Joy of Cooking. Millions of businesspeople around the world get to experience a different, but not unrelated kind of joy, one that we could call the Joy of Business. I feel privileged every day to be part of our wonderful community of passionate, courageous, and persistent entrepreneurs, and to live in country where we can still practice our passion in relative peace and freedom.  Keep it up, and go see the movie if you need a little inspiration while you teeter on the edge of breakthrough success. Pep Talks Sun, 09 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=TatoLHbhwr4 no http://profitgrowthnetwork.com/view?v=g_VBF0I4yIE Olympic and professional boxer Roberto Benitez translates the principles of discipline, faith, and motivation from the boxing ring to the executive suites. DON'T WORRY ABOUT THE BLACK SCREEN. THAT IS ONLY THE INITIAL FRAME. CLICK THE VIDEO AND THEN THE START BUTTON AND THE VIDEO WILL PLAY FINE. Pep Talks Sat, 08 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=g_VBF0I4yIE no http://profitgrowthnetwork.com/view?v=8TBgT1Lt1PA The Profit Growth Club is delighted to announce that it is acquiring The Executive Think Tank, a leading site for executives and business leaders. All content will be merged into The Profit Growth Club, and the thousands of members of The Executive Think Tank are welcome to join as members. CEO of The Profit Growth Club Andrew Neitlich said, "This merger makes great sense, as both sites provided resources to a similar audience. The Profit Growth Club provides a formal system for business owners to take their business to the next level, and we can incorporate the wonderful content from The Executive Think Tank into our framework. That way, our members get even more content and can benefit from networking and sharing insights with the thousands of members of The Executive Think Tank." As of Tuesday August 18, visitors to The Executive Think Tank will be redirected to The Profit Growth Club site. News Room Fri, 07 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=8TBgT1Lt1PA no http://profitgrowthnetwork.com/view?v=_h3cvep6FKY Following are two examples showing that, as formidable as some huge companies may seem, you can beat them. These examples come from Best Buy/Geek Squad and Wal-Mart. First, let's look at Best Buy/Geek Squad and how they have alienated a customer, at least from their computer business. I've purchased lots of consumer electronics from Best Buy over the years, and appreciate their no-commission customer service reps and the way their stores look. However....recently I had to return my wife's laptop to Best Buy for service, and decided to try out their Geek Squad group. Normally I go to our local computer repair shop, but my wife bought her laptop at Best Buy and it was still under warranty. Did I make a mistake! Here is what happened: 1. My wait for anyone to acknowledge me was 25 minutes of waiting in line. There were plenty of Geek Squad employees around, but none seemed to care that I was waiting. I wasn't alone. There were 3 people in front of me, including one old woman in a wheel chair; I couldn't help but wonder if she came in sometime in her thirties, and had aged while waiting for someone to serve her. 2. The wait process was excruciating. I saw people behind the counter, but none would look me in the eye, tell me how long it would be, or basically appear to be human. Some were looking at laptops, and I assume they were working on them and didn't want to be disturbed. If that was the case, they should have been "off stage." Meanwhile, I saw behind the counter a long line of computers sitting there like the warehouse seen at the end of the first Indiana Jones movie. That should have caused me to run right there. 3. When I finally got waited on, the paperwork was ridiculous for a technology service firm. I filled out my name and info, and then the counter clerk walked about 10 yards away to print up all sorts of copies, enter a ton of data into the computer, print out some more paperwork, and have me sign a form. I felt like I was at a 1980s Department of Motor Vehicles or, even though I never had to experience this, like I was at a Soviet Union government office. 4. The clerk told me that the wait for work would be 7 to 10 business days. They would have to send the computer to their actual service center and wait for it to be serviced there, at least for two issues. Then the local Geek Squad could handle a third issue. Note that my local computer repair shop usually completes similar work in under 3 business days. However, we were under warranty and I was curious about whether Geek Squad was any good, so I let the computer go. 5. I got an email from Geek Squad saying my computer was in good hands. 6. Five days later I got an email from Geek Squad saying that my computer was now at their main service center and had been assigned a tech. 7. Six, seven, eight, nine, ten, up to 14 days later I checked the online status of my order and all it said was that the computer had been assigned a tech. Memo to Geek Squad: Don't send out emails to customers about updates unless you actually plan to make progress and update the online form. Either the Geek Squad wasn't working on my computer, or were working on it but weren't updating the system for me to see progress. 8. Two weeks later my wife called Geek Squad and discovered the nasty truth. The monotone voiced, somewhat negative sounding Geek Squad rep told her the computer would be ready in SIX WEEKS! Not 7-10 days. SIX WEEKS! I called back to confirm and asked what was going on. The rep said, "I have no idea. They don't give me any information either." Is Best Buy TRYING to go the way of Circuit City? Anyway, I called my local computer store, told them the problem, and they promised 1-day turnaround. They also noted that the issue might not cost more than $5. Here is the cost to Best Buy/Geek Squad: We are buying two computers this year. Even if Best Buy is less expensive than my local computer store in Sarasota, I'm going back to the down-home, friendly, personal service that I get there.  End of story. Note that any first year business school student could look at the above process and come up with a half dozen ways to fix it. Why can't Best Buy? The answer to that question is also the reason why you can compete against them. More in a moment... The second example is simpler and comes from Wal-Mart. Yesterday I went in the store to buy some high powered water guns for my kids' last-day-at-camp party. When I finally found someone to answer some questions, he seemed annoyed and put out to hear from me. He interrupted me to answer a phone call, and spent a while on the phone being mean and annoyed to whomever was unfortunate enough to be calling. Then I asked him my questions, and he was very impatient. My question was, "You have one of these items here and I want two. Do you have another one in the back?" His answer was, "No, this is all we have. Nothing in the back. I am in the middle of doing inventory, my truck hasn't come, and what you see is what you get." And off he went to count inventory. I left and went a mile down the road to buy the water guns. Wal-Mart -- and normally I am a fan of this store for 24 hour last minute purchases -- has a couple of problems here: First, this particular employee was rude and impatient, too busy to deal with customers vs. doing inventory. Second, Wal-Mart only had one item on the shelves and so they lost a sale. Third, it took too long to find help and when I finally did, instead of help I got attitude. The lessons from both cases for smaller companies is that YOU CAN COMPETE AND WIN: 1. You can compete because you care more. 2. You can compete because you are closer to the customer and can solve their problems more quickly and personably. 3. You can compete because you can manage the little things that minimum-wage level employees who are part of a huge beauracracy could care less about. 4. You can compete because when you notice problems you can put in place systems and processes to change them. You are steering a much more agile boat, not a huge cruise ship. Go get 'em!   Pep Talks Thu, 06 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=_h3cvep6FKY no http://profitgrowthnetwork.com/view?v=oq2yZ7wmilc Professional boxer Roberto Benitez explains some common strategic themes in boxing and in business, especially when it comes to beating a tough competitor/opponent. DON'T WORRY ABOUT THE BLACK SCREEN. THAT IS ONLY THE INITIAL FRAME OF THE VIDEO CLIP. CLICK THE VIDEO AND THEN THE START BUTTON AND THE VIDEO WILL PLAY FINE. Strategy Thu, 06 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=oq2yZ7wmilc no http://profitgrowthnetwork.com/view?v=ittn-V8FVtk In both good and bad times, there is no excuse for a business owner to leave money on the table. Following are seven simple examples of real businesses doing just that. Don't be one of them. One: Letting current customers slip away. A few years ago I had an ear infection. The ear doctor needed to see me every month or so to make sure this very dangerous infection didn't return. After a year or two, I figured I could stop seeing him unless something flared up. However, had I received any call or notification from the doctor's office to make an appointment, I would have. I would think that for both business and medical reasons, this doctor should have set up an automatic system to make sure current customers don't slip away. Lesson: Have a system in place to track customers whose loyalty has slipped and follow up with them. They may only need a reminder. Two: Failing to follow up repeatedly to reschedule a cancelled appointment with a customer. Related to the above case, my dentist recently cancelled my appointment to get my teeth cleaned. They tried to reschedule once, left a message with me, and then gave up. I have since switched to another dentist that I happened to see while driving by. I never would have done this had this dental practice been more proactive and systematic in retaining my business. Lesson: Call multiple times to reschedule any kind of missed or cancelled appointment. Three: Failing to schedule the next appointment. At my home, I use a window cleaning service and a lanai (that enclosure around the pool) pressure cleaning service. The window cleaning service calls me every 90 days to schedule service. The pressure cleaning service never calls me to schedule service; I have to call them when I think I need to clean the pool deck. Guess what? I have faithfully used the same window cleaning service for 7 years now, but I have changed pressure cleaners repeatedly because I forget the name of the business that came last. Lesson: Call customers to remind them for service or, as hairdressers do, schedule the appointment immediately at the end of the current service. Another related lesson: Give customers a sticker they can post (near an applicance that they repair, for instance) or other easy way for them to always remember you name. A coffee mug with your name and contact info is better than a business card! Four: Abysmal, robotic customer service -- especially when your customer needs you most. I am getting to the point that I will never use another national-scale bank again. For instance, I have a home equity line and first mortgage with Chase Bank. I always pay on time, have been a customer for years, and have a great credit rating. Recently they downgraded my home equity loan limit to keep up with the falling market, just as my pregnant wife and I were adding an addition to our home (which should increase our home value and more than offset the recent market decline!). I called to add just $10,000 back to the line in order to pay off the final amount of the addition from that line, citing a number of valid reasons about values in our area, and the robotic customer service rep stonewalled. They only go by a computer appraisal. My only option is to do my own appraisal at my risk, but what's the point if I will have already pulled cash from another account to complete the work on the home? I wanted a quick, small increase in my loan, at an amount still less than the total limit of the loan before Chase reduced the limit in the first place. I will never, ever do business with Chase again, and unlike the usual dissatisfied customer who tells 11 people, I'm letting hundreds of thousands of people know -- all over a measly $10,000 and convenience. Lesson: Don't let your profitable customers down, especially when they need you most. Allow and encourage employees to make quick decisions that will keep customers loyal. Five: No inventory on hand. As part of the above-mentioned renovation, my wife and I needed around 10 light fixtures for the home. We went to one local lighting store and thought we found a couple of really nice fixtures. Unfortunately, the store didn't have the items in stock (even though they were displayed on the wall -- but in samples of one instead of the pairs we needed). We were ready to buy from a store struggling in recession, and their lack of inventory management kept them for a sale. We went down the street to another store, and they got the order because they had supply on hand. Lesson: Make sure you don't run out of inventory when you have a willing buyer. Six: Unreachable. I have a great landscaper. But for no apparent reason, he doesn't have a website and isn't listed in the yellow pages. When I needed to re-landscapte my yard with a privacy screen, I couldn't find him. So I called someone else and my "regular" landscaper lost the job. Lesson: Make sure it is ridiculously easy to reach you by web, email, phone, fax, text, facebook, linkedin, Google search, etc. Seven: No 10,000 mile checkup. I can list hundreds of businesses that have served me over the years. However, I can list only a handful that call me after a service to make sure everything is going well. And then, per the lessons above, they call again to see if I would like another service when the time is right. The rest of these businesses don't offer this follow up -- or 10,000 mile checkup as the auto manufacturers call it -- and so they often never see me again. Lesson: Offer a "10,000 mile checkup" to your customers. For instance, if you are an accountant, call your client a month after taxes are filed to see how everything went and whether they want to meet with you to discuss the coming tax year (my old accountant didn't do this, and if my new one doesn't, she probably won't be my accountant for very long either!). Join The Profit Growth Club and get a systematic approach to growing profits. You will never leave money on the table again! General Management Wed, 05 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=ittn-V8FVtk no http://profitgrowthnetwork.com/view?v=oBsWhatjtXw These days, most advertising opportunities are expensive and fail to work. Having said that, there is one extremely powerful, low-cost, high-return advertising tactic that seems to be producing great results for many businesses. The tactic: Signs, flyers, and inserts combined with smart guerilla marketing. Here are some examples: - Massage Heights is a national massage franchise. When employees are not busy, they will take a sign out to the nearby high-traffic road and hold it up to traffic. The sign invites people in for a one-hour massage at just $39.95. Basically, they get the same exposure as a billboard that costs $5,000 or more per month -- for the cost of an hourly employee. - Heavenly Cupcakes does the same thing but ramps it up a notch. They hire someone to dress up in a giant pink cupcake suit and hold up a sign directing traffic to their store, which is a couple of streets of the main road in town. For a small investment, they get great exposure and can drive people to their slightly off-the-beaten-path location. Nobody misses this cupcake person! - Chipotle, a national burrito chain that just opened in town, posts handmade signs at local YMCAs offering free burritos for athletes and their families on certain days of the week. That way, people get into this newly opened store to try out the food and hopefully become loyal customers. - Our local Chic-Fil-A provides an occasionaly free or discounted lunch to kids at local camps. The kids rave about the food to parents, who can't help but see all the Chic-Fil-A bags and boxes when they pick up their kids from camp. At the same time, this same store offers fund raisers for schools, where on certain nights they bring in the cow and face painters, and give a portion of the evening's revenues to the schools. - AMC bowling prints coupons for free bowling with a retailer's name on them and leaves them in the retailer. That way, the store or restaurant gets credit for giving away a free game of bowling while AMC gets some great traffic to their lanes. - A local Caribbean Pie company prints low-cost flyers and leaves them with local hair dressers in exchange for some free pie. Clients are a captive audience and immediately start asking about this company and if their pies are tasty or not. - Local professional firms -- lawyers, accountants, contractors -- are teaming up with each other when they send out bills. They make a quick insert that promotes their business, and that insert goes into their colleague's bills. In exchange, they do the same for their colleagues. Essentially, everyone expands their lead pool at very low cost. - Dunkin Donuts offers a deal to Tampa Bay Rays fans that they announce at Tropicana Field: If the Rays win a home game, go into any Dunkin Donut for a free donut. All you have to do is say that the Rays won. No ticket stub needed. Tell me that you would walk away from a free donut -- or get your free donut and not also get a few more things (like coffee and more donuts) once you are in the store. - A fitness program brings some very nice signs and flyers to clubs to promote its body pump classes. Now, there are millions of fitness programs out there. However, this company gets in the door because it offers these professionally designed marketing materials to stand apart. People see these signs and flyers and think that this program is above and beyond the usual generic stuff. By adding some "Hollywood" to their marketing at low cost, this program is growing nationwide! Think about how you can get your business more visible with low-cost advertising. The companies above are both large and small, and yet they all are investing their marketing dollars wisely. Of course, once you join the Profit Growth Club, you get dozens of ideas like this, all organized in a system to grow your business profitably, and all with 24/7 support. We will even review your marketing materials for you and give you our advice free of charge, just because you are a member! Marketing Tue, 04 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=oBsWhatjtXw no http://profitgrowthnetwork.com/view?v=KQTocgv9uW8 Hall of Fame NFL football player (New York Giants, 2 Superbowl rings) and entrepreneur Leonard Marshall shares some leadership lessons he learned from legendary coach Bill Parcels, especially about creating a Superbowl-caliber team. Note that Leonard was kind enough to let us film him on the spot, and so there is some traffic noise; our apologies! General Management Tue, 04 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=KQTocgv9uW8 no http://profitgrowthnetwork.com/view?v=zNdlMHalAi4 Hall of fame football player, entrepreneur, and executive Leonard Marshall discusses the inspirational lessons he learned from a very difficult childhood. He talks about focusing on what he DIDN'T want to become, and using that as inspiration to keep pulling himself up. Note that Leonard was kind enough to let us film him on the spot, and so there is some traffic noise; our apologies! Pep Talks Tue, 04 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=zNdlMHalAi4 no http://profitgrowthnetwork.com/view?v=zQuEGnvwxVk Every business should have processes, procedures, and systems in place such that the business owner(s) can franchise the business and ultimately dominate the market. Whether you want to formally franchise your business or not, you create enormous leverage for yourself when you have a system in place that lets others grow your business for you. Here is one case study in how to do that.   This article is based on correspondence with Shane Evans, founder of the franchise massage company Massage Heights. I learned of this company because I get frequent massages for some chronic neck and back pain (and the relaxation is great, too!). Recently while driving down the main road in our town, I saw a professionally dressed woman with a sign that offered a $39.95 one-hour massage from Massage Heights. I had never heard of this new company, had no idea it was a franchise, and yet couldn’t resist.  While I usually feel a bit of trepidation whenever I go to a new massage therapist, I was instantly delighted with my experience at Massage Heights. There was a professional greeter at the front desk. The lobby was clean and elegant. Once I went past the lobby doors into the massage area, I would never have guessed I was in a strip mall. The surroundings were up there with top massage facilities in elegant hotels. Best of all, my masseuse was professional and did a great job. I was very pleasantly surprised. More interesting, Massage Heights offers some unique offerings not found in competitive establishments. You can pay one-time rates that are competitive, or you can sign up as a member and get unbeatable rates on massages. For a loyal massage client like myself, that kind of deal – in a professional environment – is of value to me. The massage business seems like a tough one to franchise. It is highly fragmented, and most massage therapists are independent businesspeople (but often with no business experience and even a disdain for the idea of generating profits). Each massage therapist has their own style, and quality is all over the map. Everything from music, cleanliness, type of massage bed, and pricing varies. Some therapists talk to you throughout the massage, sometimes sharing personal life stories that fall into the category of “too much information.” In short, you never know what you are going to get when you make an appointment for a massage, and have to hope for the best. The founders and executive team of Massage Heights are working to change this situation, and I think they have an outstanding chance of transforming this industry. Their ambitious goals call for 1620 stores up and running by 2013, and they are signing deals with regional franchise developers.  Founder Shane Evans originally founded the company without the intent of franchising. She saw an opportunity to provide therapeutic, non-spa facilities based on three principles that no other massage business brought under one roof: “”convenient, affordable and professional.”   Evans quickly discovered that this model worked. “After we opened our first retreat, it was very apparent that there was a definite need, as people were coming from clear across the city in search of these core principles. Not only were people seeking out our services, but they were asking if were going to open any others and how could they get involved as partners.”  The founders concluded that their concept was franchiseable soon after. Evans listed three factors that supported this conclusion, “First, the level of business success we had in a short period; second, the level of interest from the community not only as consumers, but as investors; and third, we had the business model evaluated by a group of franchise experts- a combination of business advisors, attorneys and franchise specific business consultants to determine viability and replication.”  Evans offers the following advice to people who might be considering franchising as a way to build a business: “First and foremost, you must have a passion for whatever you do.  When deciding on a business, not only must you consider the probability of success, but what is going to make you happy, especially in a retail industry. Whether it’s food, clothing or massage, as an owner you either need to be able to hire the right people to run your business or run it yourself.  If you’re going to run it yourself, loving what you do is key because your passion is passed onto your staff and your customers and ultimately drives your success.”   “Second,” Evans continued, “when considering various franchise concepts, it’s important to do your homework.  Call and visit as many franchise owners as possible and get as much of the right kind of information as possible.  If you come across an owner that says all the right things about the company, the training and support, but they tell you that they haven’t been successful, dig deeper to find out why.  Ask what their level of involvement in the business is, what kinds of marketing they do and how often they are doing it.  Are they involved in the training of new staff members at their location and what is the training period for those staff members?  What kind of people do they look for when hiring?  Many of these questions can help you determine what the owner really knows about running their business.  If they can’t answer the questions, then they may not know their business and may not be very successful.”  Massage Heights decided to structure their franchise model with a Regional Developer/Area Developer model. Evans notes that this model is a way to quickly expand a market with a strategic partner that also provides a direct layer of support for the franchisees in a specific territory. She explains, “It’s much easier to control the customer experience and brand essence when you have a partner living in a market to inspect, communicate and support the larger group of franchisees.” If you want to create an actual franchise for your business (after you have proven the concept so that your franchisees will succeed), then follow Evans’ path and take advantage of high-quality partners and advisors. Evans shares, “We have been very fortunate to work with some great partners. Many of the alliances we have are relationships formed thru the International Franchise Association.  I recommend that all franchisors and franchisees join and attend as many conferences and learning sessions as they can.  In addition, there are great on-line training programs and supplier sources - a wealth of information!  Also, as a franchisor, your training and operations staff is integral to the success of the system. A good training and support system will provide the right information, the right way, so that the franchise owner can execute effectively.  Committed, experienced support staff make all the difference!”  Finally, I asked Evans to share the one or two things she wishes she had known before franchising that she knows now.  She answered, “The franchisor/franchisee relationship is very unique in the sense of how it’s managed.  There is a tension because you want entrepreneurs in your system, but entrepreneurs are risk takers and often want to change things. Changing and evolving are not necessarily bad, and we’ve taken many suggestions and ideas from our franchisees that make our system what it is today. However, there has to be a methodical strategy in place when making changes to protect the brand, and the overall customer impression of the brand.  Entrepreneurs don’t necessarily think about how a change in their location may affect their colleagues. Like the Nike slogan, they often ‘just do it!’ Controlling that urge to do so would be simple if all of the retreats were corporate owned, but with franchise relationships, there is a fine line between dictating and managing.  Learning that early on is priceless!”  The bottom line: You may or may not want to create an actual franchise, the way that Massage Heights is doing. Regardless, you can learn a lot from Massage Heights. First, have you proven demand for your concept? Second, do you have a business model in place that can dominate your marketplace and even transform your industry? Third, do you have systems and processes in place to assure the ongoing growth and success of your business?  The members of The Profit Growth Club are all working towards the common goal of building a business that can run without them. Why not join us? Business Case Studies Sat, 01 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=zQuEGnvwxVk Andrew Neitlich no http://profitgrowthnetwork.com/view?v=qQTP-IRMVbQ The Profit Growth Club is delighted to now offer members three ebooks only available here. These three books will be valuable to business leaders who want to achieve truly amazing results in their company, build championship teams, and overcome obstacles in an extremely challenging world. To gain instant access to the wisdom and insights in these resources, desribed below, please sign up now at www.profitgrowthClub.com. The three books, exclusively avaialable only to Profit Growth Club mebers, are: Creating Amazement, by David O’Meara. We all want to live inspirational lives and have our organizations do amazing things. However, until now no one has explained an explicit process to create amazement, especially in business. In this book, leading motivational speaker and athlete David O'Meara shares his insights about how to create amazing results, even in the face of cynicism and seemingly invincible obstacles. David is famous for taking on amazing challenges of his own -- in addition to teaching others how to excel -- most recently by running 20 one-mile races in 20 weeks, in 20 cities, in under 5 minutes per race, all at age 45. You don't have to be a runner or care one bit about running to benefit from the incredible wisdom in this book. However, if you are an executive and a leader, this book provides must-read wisdom from somebody who has personal experience about achieving, and helping others to achieve, peak performance. Superstar for Life: Creating Winning Teams in Sports and in Business by Ray Harper. Coach Ray Harper is one of the most successful NCAA coaches of all time, second only to John Wooden in National Championships in basketball, and now he shares the secrets of his success creating winning teams. Harper’s approach is refreshingly simple, authentic, and powerful. He begins with the importance of knowing yourself and your values, reveals the four foundations of winning teams, explains how to motivate the team in different situations, and shares a guide for getting everybody on the same page and prepared to deliver remarkable performance. Includes a Team Building Play Book for you to improve performance on your own teams. Success in a Challenging World, by Corey Crowder and Andrew Neitlich. Former NBA player Corey Crowder and executive coach Andrew Neitlich teamed up to interview 24 success stories who achieved their career goals despite facing significant obstacles. This remarkable book has three parts: 1). edited transcript of each interview, so that you can hear from the success stories themselves – including an Army General, 26-year old multi-millionaire, physicist, media executive, owner of a leading online retailer, CEO of a restaurant chain, and CEO of a major distribution company; 2). A summary of the common themes and advice about individual success; and 3). a summary of advice about what corporations need to do to recruit and retain talent. News Room Sat, 01 Aug 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=qQTP-IRMVbQ no http://profitgrowthnetwork.com/view?v=Arg2S-1BxCs The CASTLE System for profitable business growth, created by the Institute for Business Growth and taught by business coaches around the world, is a powerful methodology for any business owner to grow a business. Members of The Profit Growth Club get exclusive access to this system for improving profits by 24% to 157% in six months. CASTLE is an acronym that stands for: -         Control -         Aspirations -         Strategy -         Tactics -         Leverage -         Evolution Control refers to the business owner’s mastery of the financial performance of the business, from knowing his or her breakeven volume to understanding and improving the key levers that have the most impact on revenues and profit. Most business owners do not pay enough attention to projecting and meeting key metrics. A business owner must control of their business and grow it proactively, by focusing on the numbers that really matter. Aspirations are the business owner’s long-term goals for the business. Without high aspirations for the business, the business owner will not be motivated to make any changes or difficult decisions required for lasting success. Business owners need the ability get back in touch with their passion for starting the business, set their most ambitious goals, and – if they have lost their spark -- get excited about going to work in the morning again. Strategy is a plan for the business to compete and dominate its market. Business owners do this by clarifying their positioning in the market, target customer, products, services, and what they do best. Tactics are ways to achieve their goals and aspirations to create a profitable enterprise and get visible in the marketplace. Leverage refers to a variety of ways for the business owner to build a business that runs without him or her. With proper leverage, the business owner can focus on setting direction and standards, make more valuable use of their time, build an enterprise that has significant worth, and achieve their aspirations. Most business owners have jobs, not businesses. Perhaps your most important role as a business owner is to shift from, as Michael Gerber describes in his eMyth series of books, working in the business to working on it. Evolution describes the way that the business owner will continue to learn and develop, including new skills, attitudes, beliefs, and knowledge. That way, the business owner can grow with the business. If you follow the CASTLE model for business growth, you will have a methodology and systematic way to improve the value of your company and its results. Marketing Tue, 28 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Arg2S-1BxCs no http://profitgrowthnetwork.com/view?v=Xvhx3T-D43E The Profit Growth Club is pleased to announce an alliance with The Center for Executive Coaching. All participants in the Center for Executive Coaching's live seminars now receive a free lifetime membership in The Profit Growth Club. The next live Executive Coaching Intensive seminar will take place November 5-7, 2009, in Tampa Florida. The seminar will cover all aspects of being a successful executive coach, including: the executive coaching process, 8 coaching conversations to master, the initial assessment (including 360 degree assessments and assessment tools), coaching executives on high stakes situations (with frameworks, distinctions, and assessment worksheets so that you have a ready toolbox at your disposal that you have full license to use and even adapt), creating your own executive coaching tools to set your practice apart and be perceived as a "thought leader" in your niche, and the Center for Executive Coaching's acclaimed business development system. For more information about registering for this seminar, visit www.centerforexecutivecoaching.com . News Room Tue, 28 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Xvhx3T-D43E no http://profitgrowthnetwork.com/view?v=An3Woveqdw4 Lots of business owners seem to do things halfway. They want to grow their company, but seem tentative or afraid to take measured risks. They want to build a business that runs without them, but are reluctant to trust or give up control. They want to pursue a big opportunity, but throw up all sorts of road blocks and limiting beliefs that keep them from taking effective action. For instance, a golf professional in the Orlando area was recently offered the opportunity to produce an international video series featuring his approach to teaching golf. This opportunity was a "no brainer." There was no investment on his part, and the publishing company -- a respected company with a strong track record -- was committing to major marketing expenses to get him exposed on a worldwide stage. All that this entrepreneur had to do was dedicate two or three days to producing the videos, and then take a bit of time to review the near-final product for quality or final edits. Even if his royalty income was small, he still would have helped his personal brand name to grow significantly. But this individual hesitated, and lost the deal to another pro. Why? Because he couldn't get out of his own way. He created so many concerns, objections, and fears about the deal that in the end he ended up stuck teaching in his local market. He ran an extremely busy golf program, but as currently structured, he was not -- and once again is not -- going to create anything of lasting value. Are you hesitating about something in your business? There is a famous quote, my personal favorite, that I read anytime I feel like I need to take a leap into the unknown and "just do it." If you haven't read it yet, I bet that after you do, you will want to hang it in your office on a giant banner: "Until one is committed, there is hesitancy, the chance to draw back, always ineffectivness. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves, too. All sorts of things occur to help one that would never otherwise have occurred. The whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents and meetings and material his way. I have learned a deep respect for one of Goethe's couplets: 'Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.'" (from W.H. Murray, "The Scottish Himalayan Expedition")   Pep Talks Wed, 22 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=An3Woveqdw4 no http://profitgrowthnetwork.com/view?v=dsGFB1B1PLE Thanks to an alliance with an extremely successful investment banker, I am privileged to see how a Wall Street investor evaluates companies. Recently we were on a call with a prospective client who was leading a rapidly growing company, and I took away four pieces of advice for small and mid-sized business owners looking to generate real wealth in only a few years.   One: Have huge aspirations. It is fine to want to make a living as a business owner. Most “mom and pop” stores do just that (barely). However, if you want your company to be worth millions, you need to have huge aspirations. Investors, the media, customers, top talent, and prospective buyers are all attracted to business owners with vision and the guts to declare tenacious goals. You may feel uncomfortable and even inadequate declaring audacious aspirations for your business. Few people who created Fortune 500 or even Inc. 500 companies had done anything on that scale before. You have to be willing to break from your own past and see yourself – along with your team – creating something amazing. Too many people in this world think too small; we need leaders who can think big.   Two: Put in place a platform to achieve your aspirations. Wall Street doesn’t want dreamers who can’t deliver. In fact, investors will punish you and your business if you don’t perform. If you have huge aspirations, you need to match those aspirations with a business platform that can achieve them. This includes: a top notch team of smart and experienced people, systems and processes, a strong business model that generates profit and cash flow, a marketing machine to attract business, some sort of edge that sets your business apart and is in demand in the marketplace, and a plan to implement.   Three: Tell a compelling story. To reach the big time, you need to be able to communicate your vision of the company in a compelling way. What is the problem your company solves, and for whom? How big can the market and your company get? Why is your company on the cutting edge of major trends in business and society today? How have you reduced the risk of everything that might go wrong? What early successes have you had to prove that your idea will work and that you have momentum? What are some strategic partners that you have formed with big-name people or companies? In other words, assuming you have the substance to back it up, what is the sizzle that will grab people’s attention?   Four: Have a vehicle to generate capital and wealth. Smart business owners are constantly thinking about how they can build their company in order to create some sort of liquidity event (e.g., cash out). One of the more interesting ways to generate wealth quickly while having access to cash is by merging into a publicly traded shell. Going public with this tactic costs a lot less than raising capital from venture capitalists (a business model that is glamorous but makes almost no sense for most business owners). While there is a reporting and legal burden, becoming a publicly traded bulletin board company can – when done with professional, high-integrity partners – get your company notices and give you an easy way to raise cash. For instance, you can raise cash through a Private Investment in Public Equity (PIPE). This strategy is just one of many ways to prepare your company to cash out. There are others, and the point is that the savvy business owner is thinking about how to exit the business with as much wealth as possible.   Exit Strategy Sat, 18 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=dsGFB1B1PLE Andrew Neitlich no http://profitgrowthnetwork.com/view?v=cM6l8EiHzvI The Profit Growth Club has reached an agreement to provide membership FREE to all members of The Institute for Business Growth, a leading business coaching certification and training firm. Anyone interested in becoming a business coach instantly receives free lifetime membership in The Profit Growth Club, and can use the club to help their business coaching clients enhance their business and leadership skills, and improve results. For more information about The Institute for Business Growth, visit www.instituteforbusinessgrowth.com. News Room Fri, 17 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=cM6l8EiHzvI no http://profitgrowthnetwork.com/view?v=EjjjgfRGQaQ st1\:*{behavior:url(#ieooui) } Business owners fail in order to succeed. If you have recently failed, or feel that you are feeling, read this article.   In my own career, I can identify two types of business failures. The first type is failure that is part of testing, identifying, and rolling out successful products and services. In my publishing business, I am constantly testing new ideas. Out of every 10 ideas tested, 3 are outright failures, 6 are acceptable money makers, and 1 is a breakaway hit. In the baseball world, I hit 1 home run and 6 singles with every ten at bats.  In this particular situation, failure is part of the business model. Failing – often repeatedly -- represents a necessary step on the way to finding success. The requirement is to identify failures quickly and move on, without incurring undue losses, so that a win eventually comes along and more than covers the expenses incurred to roll out losers. Direct marketers, internet entrepreneurs, agile software developers, venture capitalists, and oil drillers use this approach. So do salespeople, who know that they need 99 rejections to finally get a “yes” and make the sale. In his book Good to Great, Jim Collins called this approach “throwing spaghetti against the wall to see what sticks.”  The second, more devastating type of failure happens when we invest a big portion of our time, money, and ego in a business idea that we are sure will work, and we lose everything. Worse, we lose everything for our investors, which could include friends and family.  I experienced this type of failure when I started a Mixed Martial Arts (MMA) fighting league a couple of years ago. After investing over $200,000 of my own money, and some money from family members, I realized that the business would not be profitable. It took me a long time to pay back the personal debt I had incurred, and pay back my investors (Even though they provided equity instead of debt capital, I still insisted on repaying their investment). Looking back, it is easy to feel like an idiot for starting this business. The risk/reward profile of the business was questionable, as I had to put lots of money in before seeing a penny, and there was no way to accurately project ticket sales until the week before an event. I had little control over many aspects of the business (e.g., fighter injury, state regulators, and the weather the night of an event). I miscalculated how much money would really be required to get this business off the ground. And I really didn’t know much about MMA, other than the fact that it was a rapidly growing sport. I probably never should have started this venture! Most importantly, I could have bankrupted my family had I kept going. Fortunately, my wife and I agreed on an investment stop loss and, once we hit that number, we assessed the business and decided to cut our losses. Still, we lost $200,000 that we could have spent on our retirement or our children’s college education! After a month of mourning my results and kicking myself, I saw things in a new light: Taking risks, even if they don’t work out, is a wonderful thing. Starting a business is a way for people everywhere to express their creativity and make their dreams come true. I had a dream, and I wanted to do something that pushed me beyond anything I had done before. Most people have dreams and never take action to realize them; I had at least taken action. I had met some fascinating people, put on some fantastic events for enthusiastic crowds, and learned a huge amount about an incredible sport and industry. My kids loved talking about the MMA business, and seeing the fighting cage set up before a show. Best of all, my wife and I had come closer together as well during this experience as we worked through the ups and downs. I failed, but I would never make the same mistakes again. I learned a great deal about the kinds of businesses that generate profit at low risk, and the kinds that don’t. Now I only start businesses where I have less than $10,000 of my own money at risk, and that allow me to generate at least a 10:1 return on my investment. I will never again put my family finances at risk for a business venture! In fact, since the MMA business shut down, I have made more money in my other businesses than ever before. I am more focused and more disciplined. If you are facing failure, know that it is okay to fail. Don’t wallow in self-pity. Taking risks is what makes the USA and countries like it great. Business owners are ordinary people who do extraordinary things, and become extraordinary in the process. Sometimes the business works, and more often than not, it doesn’t (even if you went into your business more prepared than I did with the MMA business). But you are taking action when most people never do. You have an idea and you are going for it. The worst case is that you fail, get up again, dust yourself off, and learn from your mistakes when you try again.  As Helen Keller wrote, “Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing.”  Or, as famous acrobat Karl Wallenda said, “Being on a tightrope is living; everything else is waiting.”  In my former business of Mixed Martial Arts, when a fighter finds himself in a hold that he can’t escape, he taps out. The fight ends and the fighter lives to fight another day. He congratulates his opponent, and loses no respect from his peers as long as he gave his best during the fight. At least he was courageous enough to get in the cage and face his opponent with the best that he had. Now he can go back to the gym, get stronger, improve his moves, and work to win the next match. Pep Talks Tue, 07 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=EjjjgfRGQaQ no http://profitgrowthnetwork.com/view?v=4Q7GNiC-qQ4 Many business owners believe that customers are most loyal in exchange for consistent, reliable service and delivery. While there is truth in this assumption, it is not completely accurate. Another secret is key to true customer loyalty. True loyal comes not from status quo service delivery, but rather from how you handle mistakes and breakdowns when they come up. Two examples illustrate this point. Earlier this week, the leading small business credit card processing site Authorize.net had a major service shut down. Hundreds of thousands of small businesses rely on this service to be able to charge credit cards and process transactions. When Authorize.net shut down, these businesses came to a halt. Meanwhile, the website at Authorize.net was completely shut down, leaving customers in the dark. Worse, when customers tried calling Authorize.net, they got a message saying that they were closed for the weekend and for the holiday (this was on July 3, just before the USA July 4th holiday). As a result, hundreds of thousands of businesses felt left in the lurch. Those without a backup credit card processor -- probably most of us -- panicked. The web quickly became flooded with angry posts on sites dedicated to small business and web design. How could a company as large as Authorize.net not have 24/7 customer service? How could they not be posting messages to let people know what was going on (and what was going on, anyway)? Even on a holiday weekend, customers appropriately commented that it was inexcusable to not be able to respond to whatever was causing the problem. A few hours after the shutdown, a few people were able to reach Authorize.net directly at their office. They discovered that there was a fire in the building and it was reported that sprinklers had caused damage to their servers. Due the holiday weekend, no one was on site, and the company was rushing to make calls to get some employees in to start fixing the problem. Now web comments became even angrier. How could a major card processing company not have instant redundancy? How could they have sprinklers in their data center (instead of ways to fight fire that wouldn't damage hardware)? And again, how could they continue to be so unrepsonsive. Soon after, the company set up a special Twitter account to notify people of their progress in restoring service. However, they gave no ETA for return of service. Also, when they indicated that limited processing was back up, a number of people reported that they still couldn't process their transactions, which hurt the company's credibility further. By afternoon on July 3, after around 10 hours or more, Authorize.net finally came back on line. However, their website had no details about the issue, and (so far) small business owners have received no apology or notification of how Authorize.net will handle such emergencies better in the future. Obviously, the above case study shows how NOT to handle a service disruption. In my own case, I will be looking for another service provider to handle my own credit card transactions, and will certainly put some backups in place. I have lost confidence in Authorize.net and feel no loyalty to them -- even if it costs me time and frustration to make a switch. Customers understand that companies can't provide 100% reliable service all the time. Even Fedex acknowledges that they are not able to deliver 100% of their packages on time (although they are working towards that number, and are not far off). However, to gain lasting loyalty and trust, a company needs to handle mistakes and breakdowns effectively. It is during these times that a company really earns their customers' trust. In Authorize.net's case, they should have done the following: 1. Provide 24/7 customer service, not limited service hours, including on holidays. 2. Invest in state of the art facilities, with distributed back up around the world, to handle disruption in a single facility. 3. Invest in fire control that won't damage their hardware. 4. Have a plan to quickly mobilize "all hands" in case of an emergency. 5. Have an alternative way to stay in touch with customers in case of a shut down. 6. Send a message to all customers after a service outage communicating what happened and making amends. This should include getting on the various blogs that customers use to discuss ecommerce issues. While setting up Twitter was a good idea, they did that reactively after a long wait. Here is a second case study. In this case, the company is Battaglia Flooring, in Sarasota Florida. This company happens to be installing new tiles in my home. Throughout the process, they have been incredibly helpful in notifying us of and minimizing the disruption that replacing tiles can cause in a home. The owner of the company has come out numerous times to inspect the work closely and have workers improve any defects. We have appreciated this personal attention to detail, and the owner's overall care and concern for quality. Yesterday, we noticed that a large section of patterned tile was off-center in our dining room; fixing the problem would cost time and money (including more tile). I called the company to fix the issue before normal business hours, at around 8 am. When the workers arrived at 9 am, they had already learned that we were unhappy, and told us of their plan to fix the problem. Unlike many contractor experiences we have had, there was no negotiating about whether we had to pay more money. The workers just got to work to fix the problem and make things right. They even put in some overtime during the holiday weekend to stay on schedule. We understand that it is not easy to renovate a house. We expect problems. However, it is rare to have a contractor in place who does what is required to make things right, with minimal hassle to the customer. The bottom line: It is important to provide consistent and loyal service over time (otherwise, customers will complain about you and your reputation will suffer). However, to really build customer loyalty, you need to be prepared to go the extra mile, especially when things go wrong. How your company and employees respond to mistakes is a big factor in predicting how long your customers will stay with you -- and whether they will rave about you to others. General Management Sat, 04 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=4Q7GNiC-qQ4 no http://profitgrowthnetwork.com/view?v=T0sdSCkqDPs The Profit Growth Club is delighted to make our entire program and system available absolutely free to US Military active personnel and veterans. We are so grateful for the bravery, sacrifice, and commitment of our military personnel that we want to offer something in return, no matter how small. As we have a talent for helping people grow successful businesses, we can offer that as a very small token of gratitude. No paperwork is required. All you have to do is contact us to tell us when and where you served, your email address and name, and the password you would like to use to log in. If you can, tell us about your current business interests as well, although this is strictly optional. News Room Sat, 04 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=T0sdSCkqDPs Andrew Neitlich no http://profitgrowthnetwork.com/view?v=DCtnS2xsXaM st1\:*{behavior:url(#ieooui) } The book Success in a Challenging World by Corey Crowder (former NBA player) and myself interviewed 24 African American leaders about the challenges they have overcome to succeed. You can get a copy of this book in ebook form at The Executive Think Tank. Following are some common principles about success that many of the interviewees suggested. One: Find your calling. The people we interviewed almost unanimously advised the need to find your passion or — as Ruth Williams-Brinkley defines it — calling. As Ron Johnson says, “Be driven by love and a passion for what you are doing.” Don Gibson turned a passion for baseball into a legal career focused on sports. Dr. Anita Davis-Defoe asks, “Are we going to answer the call to our passions or are we going to just kind of settle? That becomes, I think, a decision that confronts everybody at some point in time.” Michael Brown notes that to develop your unique brand you have to start by finding something that you are passionate about. Dr. Farrah Gray challenges us to answer a key question related to passion: “What would you do for work for years and years and never have to get paid for? So many people are caught up in jobs that they hate. What is it that you could work for 12 hours, lose yourself in, and not even realize you spent 12 hours doing?” All of the participants in this book have found a passion, whether it is education (Randall Dunn), motivational speaking and coaching (Susan Summons), customer service (Michael Brown), coaching and writing (Anita Davis-Defoe), public service (Tameika Isaac Devine), training athletes (Michael Douglas), physics (Peter Delfyett), medicine (Dina Strachan) or working in media (Brian Offutt). Two: Know yourself, respect yourself and be authentic. The motto at Milton Academy, Randall Dunn’s high school, is “Dare to be true.” Successful people seem to follow that motto. Brian Offutt chose to find a career and company where he could be openly gay. Ruth Williams-Brinkley acknowledges that she “lost herself” during her college days, and had to find herself to discover her love and talent for healthcare administration. Michael Douglas made a decision to stop “dumbing himself down” to make his bosses feel more secure. In his words, “I’m just going to be who I am and let the chips fall where they may. If you’re going to face your demise anyway, you might as well face it being who you are. So be authentic.” Many other interviewees for this book faced temptations to deviate from their path and do something that went against who they really are; they stood their ground and have not looked back. Additionally, part of knowing yourself and being authentic is respecting yourself, which is one of Don Gibson’s core pieces of advice to readers. Three: Dream. Leon Pitts noted in his interview, “For many of us, the flames have been stamped out of our lives.” He dreamed of traveling the world as a child, and had no idea that this dream would actually come true. Michael Douglas advises, “I encourage those who come behind me, and those who are with me now, to hang on to your dreams. Don’t be discouraged. Be dedicated to them. There are so many bumps that come in the road. Man, I found myself out on the street unemployed for a couple of years, looking for new opportunity. From there I had to remain dedicated, and it was tough…” Physicist Peter Delfyett virtually started his graduate studies over again in order to achieve his dreams — all despite advice from colleagues to stay on a path that wasn’t making him happy. Yvonne Davis has been a daydreamer since she was a child, and still dreams today: “I’m an adult, but I do the same kind of dreaming that I did as a child. I visualize. I daydream, but I’ve learned how to make these dreams become reality…. Dare to dream and never stop dreaming. Daydream during the day. Dream in the night. Always dream about what your potential can be. And let the dreams be in color. A lot of times when we go through bad times, we kind of give up on our dreams. But it’s the dreams that keep us alive. Share those dreams with people who love you and care for you, and they will help you achieve those dreams.” Susan Summons also encourages people to dream – both kids and their parents. Four: Have a positive attitude and see possibilities. Successful people are positive people. Peter Delfyett exemplifies this attitude: “You’ve got to be positive….Even if the glass is empty, think about how much water can go into it.” He further explained why the A+ student with the poor attitude won’t be as good a problem solver as the B student with the good attitude: “I tell kids that I was not smart enough to know whether a problem was hard or not. All I knew is that I was going to work hard. So, if the job was to dig a big tunnel through an iceberg and my only tool was a toothpick, the A+ student with the attitude would say, ‘Oh, that just can’t be done.’ But I’m not that smart. I’m going to say, ‘Wow. Take a look at this. I’ve got a toothpick. I’ve got a tool and my project is to dig a hole in the tunnel. Well, let me get started.’” Even in the face of discouragement from others and challenging circumstances, successful people are able to “flip the switch” as Delfyett says, and find possibilities. Five: Keep going; commit and have what Susan Summons calls “unlimited perseverance.” The people we interviewed do not give up. When Tameika Isaac Devine failed her bar exam, she kept trying. When no nursing school would accept Ruth Williams-Brinkley, she found a way to keep going and get back into school. When Michael Douglas experienced three family deaths in less than two years, he still managed to finish his studies (this is the same person who also talked his way into a pro football training camp so he could shadow the trainers there). When Curtis Gregory had to move to a new city for work, he commuted on weekends for four and a half hours to complete his MBA in his old city – even while going through a very difficult divorce and while his mother had a stroke. Alonzo Williams overcame significant police pressure to keep his passion for hip hop parties alive. At six years of age Dr. Farrah Gray sold rocks in order to help his mother pay her hospital bills after she suffered a heart attack. You can always turn around a difficult situation, if you keep going and have a positive attitude.   Six: We can always find reasons why we won’t succeed; make those reasons background noise. Everyone has a reason why they won’t succeed: too old, too young, wrong sex, wrong sexual orientation, tough economy, not enough education, difficult corporate culture, lousy boss, challenging personal circumstances, the perceptions of others, politics, and so many more. Successful people treat these reasons as distractions and keep moving forward. In Dr. Delfyett’s words, “There’s a part of me that likes to say, ‘You know, that’s background noise. I’m just going to ignore that.’” Similarly, Farrah Gray noted, “I had people in my family who told me, ‘You can’t do it. You won’t be anything.’ I mean, I heard it all, but I distanced myself from those people because I couldn’t allow the negative thoughts and the noise of people’s negative opinions to crowd my vision and to deter me.” And in the words of Tameika Isaac Devine, “There are always going to be outside things, whether it’s racism, sexism, ageism, or classism—there are always going to be outside factors that will push in on you and that you can’t control. You have to realize that those things that don’t break you make you stronger. You learn lessons from encountering those things. Apply those lessons to moving yourself forward.” Seven: Understand your history and then transcend it. Gwen Richardson has researched and written extensively about the African-American experience and why there are so few African-American entrepreneurs. Michael Pittman’s newspapers provide a forum to discuss key issues in the African-American history and culture. Similarly, Susan Summons talks about the need to know where you came from. Looking back in our individual and collective past is important to understand who we are. However, successful people do not let themselves be limited by their past. They look to the future and – per the previous advice – dream about new possibilities.   Eight: Develop a brand that shows your unique value to others. We loved Michael Brown’s advice that each individual creates his or her own brand to communicate value to others. What is your brand? What is your unique talent and value that sets you apart and makes others want to hire or pay you? The interview participants in this book would probably all agree that they do not want to be branded first and foremost as a minority. Dr. Farrah Gray notes, “I don’t use the term ‘minority’ much, because I think minority no longer describes a group of people. I think it of it, more or less, from a negative perspective. I think some people have twisted the meaning to be small-minded….Some people believe that the non-minority ice is colder than your ice and their sugar is sweeter than your sugar. Sugar is sugar and ice is ice.” It is more effective to identify your passions and talents and build a brand around yourself. Nine: Education, education, education. One way or another, the participants in this book found ways to get as much education as they possibly could. Dr. Bradshaw was most emphatic about this subject: “The common denominator is education. I think that if you are not going to invest in education, if you don’t get well beyond the twelfth grade, then you are destined to be living at or around the poverty line. You won’t be hearing or seeing too many of those ‘rags to riches’ kind of stories anymore in this country because the skills that are necessary to be a productive, contributing person in this society, those skills go beyond what you get in twelfth grade. I would certainly say, ‘Golly, get the education.’ That is foundational to moving anywhere.” Also, if you have the opportunity, consider Randall Dunn’s advice to look for name brand educational institutions that will enhance your résumé and give you added status. Ten: Build your network by respecting other people and giving before you take. Every single successful person we know has a network that helps them succeed. Your network of relationships is the only currency you have that, unlike the dollar, won’t devalue. We hope you noticed how different people in this book built their network to extend up, down, across, and outside their organizations. They do this by being givers, not takers, and by offering as much if not more value than they take from others. Michael Brown created his own advisory board, with rotating members who constantly give him advice and support – and he does the same for them. Dr. Farrah Gray launched business clubs so that groups of like-minded entrepreneurs could support one another. Leon Pitts piggy-backed off the network of his mentor to develop customer relationships nationwide. Ruth Williams-Brinkley knows the top recruiters at the major healthcare recruiting firms. Randall Dunn found his first opportunity as a school administrator through his former headmaster in high school, and has continued to network every since. Michael Douglas became skilled at making contacts in professional sports leagues. Curtis Gregory figured out how to build relationships with and find champions in people above him in his organization. Don Gibson networked his way into Major League Baseball within five months of discovering his passion. Constantly build and strengthen relationships! Eleven: Find mentors. The interviewees also were almost unanimous in pointing to the importance of mentors in their lives: parents, friends’ parents, a local librarian, college alumni, bosses and former bosses, entrepreneurs, and teachers. Some success stories, such as George Tinsley and Michael Douglas, even turned negative role models into mentors, by focusing on what they didn’t want to become. George Tinsley identified the pimp, alcoholic, and prostitutes in his neighborhood as mentors. Michael Douglas focused on the people working at his local car wash, and used them as examples of what he didn’t want to end up doing for a living. Yvonne Davis found mentors in people with conservative, even implicitly racist views, because these people could help her learn how she was perceived and deal with it. Mentors are everywhere, if you know how to look. Interestingly, formally assigned mentors were often the least effective mentors of all. For instance, Curtis Gregory described the way that his bank assigned a black executive to mentor him. This person turned out to be a poor fit and a worse role model. Meanwhile, Curtis developed much more helpful informal mentor relationships. Twelve: Master the “game” of getting ahead. Getting ahead is like a game. There are rules, some of them subtle. It is important to learn those rules. They can be as simple as not wearing argyle socks, as Curtis Gregory learned at one bank. More significantly, you have to know how to manage up, for instance by making your boss look good, not overshadowing him or her, and giving him or her credit. There are some battles worth fighting, and some battles that you can’t do anything about (and that will hurt your reputation if you try). It is important to identify and find champions above you if you want to be chosen for select opportunities, including those that might not be posted. You have to – as Brian Offutt and Ron Johnson discussed – learn to fit in, even in social settings that might be awkward or uncomfortable (like a Texas square dance). It is not enough to just get results; you also have to play the game so that people know you are part of the team. Thirteen: Pay your dues and be ready to make personal sacrifices in order to achieve your aspirations. None of the people you have read about are overnight success stories. You have to pay your dues. Pay your dues. Don’t be like the people that Michael Brown worries about: “What I’m seeing with minorities is that we ask for dessert before we eat our vegetables.” Even multi-millionaire Farrah Gray started in business at six years old – and thus had ten to 15 years of experience before breaking through. During this time, he mastered every aspect of his businesses as the OOO (Only Operating Officer). The entrepreneurs interviewed made it clear that running a business is not a nine-to-five job, not even close. The executives profiled in this book worked their way up the corporate ladder, and have invested many long days and nights to get there. Peter Delfyett almost reached the point of tears trying to solve a mathematical problem required to get his doctorate. Dr. Dina Strachan spent years in medical school, fellowships, and clinics before opening her own practice. Michael Pittman began with one house, then moved into apartments after a while, then offered windows, then offered roofs, then got into construction, and kept growing from there. Paying your dues often requires personal sacrifices. Curtis Gregory noted an executive panel he served on in which the majority of participants were divorced, and for good reason. In his book The Tipping Point, Malcolm Gladwell defines a point at which momentum change becomes unstoppable. In his book Outliers, he states that truly extraordinary people typically need 10,000 hours of practice and experience before they can truly master their field. The participants in this book worked and worked until they reached a tipping point beyond which their success was more or less assured. Go back and read some of the interviews. You can identify where in each person’s life they reach that tipping point. Dr. William Mays worked for many years before ending up at Procter & Gamble and getting his master’s in business before he had the skills and confidence needed to start his own chemical company; even then, he started his first company with partners who had the required capital. Ruth Williams-Brinkley had a long career in healthcare administration and consulting before she took a position as a CEO of a hospital system. Don Gibson spent many years as a lawyer before becoming a leader in sports law and marketing. Fourteen: Have a spiritual relationship and faith. In writing this book, I was most surprised about the importance of faith to the people we interviewed. As a secular person, I didn’t consider the impact that faith has had on so many people. But there is no denying it: Spirituality and faith can provide a strong grounding and sense of strength to people as they overcome obstacles and strive for success. In some cases, faith can turn one’s life around, as it did for Leon Pitts. Fifteen: Make smart personal decisions. If you have lots of distractions in your life, you are less likely to be successful in your career. For instance, many of the people we interviewed – especially women — advised against marrying and having children too young. Gwen Richardson emphasized the importance of having a spouse who supports one’s aspirations, especially if you intend to start a business and have to deal with the ups and downs of cash flow. Similarly, Yvonne Davis advised that people take good care of their bodies, in order to have maximum energy and mental focus. Finally, Gary Carpenter talked about the need to make wise financial decisions, by living frugally and saving as much as possible for retirement. Sixteen: Give back. Successful people recognize their good fortune and give back. They do this with money, time, advice, and by mentoring up and coming people. Farrah Gray has a foundation that is making a huge difference to people. Susan Summons has a non-profit organization that provides coaching and athletic opportunities for youth. Ron Johnson is delighted to help others find their passion and success as he has. Ruth Williams-Brinkley and Bellandra Foster take time to mentor others. Giving back can become challenging at some point, as Dr. Mays has discovered in trying to balance his business, family life, and commitment to the community. However, the people in this book feel a sense of obligation to make things better, beyond their own careers. Pep Talks Thu, 02 Jul 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=DCtnS2xsXaM no http://profitgrowthnetwork.com/view?v=bSuuuN4NVlE There are three cycles of growth in a business that any company experiences, during good times and bad. By recognizing each phase when it happens, you can provide the required amount of work to keep revenues growing or, in bad times, at least stable. More importantly, by managing each phase appropriately, you can get more out of good times and emerge stronger after bad times. Everybody’s Favorite Phase: Acceleration The best phase is called “Acceleration.” During this phase, you have to put very little effort into business development, because customers/clients come to you. You have established trust and credibility in your marketplace, created automatic marketing systems, and developed a huge contact list. Your business development machine attracts all the customers/clients you can handle. Your goal when you are in this phase is to keep investing in business development, as well as in the capacity of your company to deliver, in order to grow. You also want to build up a cash reserve for when a recession or other form of downturn might hit. The Second Best Phase: Momentum The second best phase is called “Momentum.” During this phase, things are fine. You have a good number of customers/clients, and are making a decent living. You invest time and money in business development, and get results equal to the investment you make. In Acceleration, you might invest one unit into business development to get back five or ten units of results. In Momentum, you get back one unit of results for every unit you invest in business development. Your goal in this phase is to break through to Acceleration. The Most Difficult Phase: Kick Start The most difficult phase to be in is the third phase, called “Kick Start.” This phase feels like pushing a rock up a hill. You have to invest five or ten units of effort in business development to get even one unit of result back. Your goal during this phase is to kick start your practice and get momentum. It takes intense focus and effort to do this, but is worth the effort to get back to the Momentum and then Acceleration phases. If you have been smart with your cash flow and built up a cash reserve during the other two phases, you will have a much easier time during this phase. In fact, during the Kick Start phase, cash can even be a competitive advantage, because competitors who lack a cash reserve may have to shut down. You can be in the kick-start phase for a couple of reasons. Almost anyone starting out automatically begins in this phase, because they need to take lots of action to get results. Business owners who stop marketing soon find themselves in this phase, too. Finally, a severe economic downturn can force many businesses back into the kick-start phase. When you experience the Kick Start Phase you and your team need to be prepared to put in extraordinary efforts to get the results you expected in the Momentum and Acceleration phases. You need to get back out there in the field and build relationships with prospects and customers. You need to cut your operating costs to what you absolutely need (perhaps using Kick Start as an opportunity to get “lean and mean” once again). If you have cash during an economic downturn, you might consider – as companies like Intel are famous for doing – buying up competitors or investing in new capacity so that you emerge stronger when the economy recovers. General Management Tue, 30 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=bSuuuN4NVlE no http://profitgrowthnetwork.com/view?v=1A7TSUMc1MY The successful business has three foundations, which we call "The Holy Trinity." If your business lacks any of these foundations, you are going to have trouble succeeding and achieving your aspirations. Foundation One: Opportunity. If you have high aspirations to grow your business, you need to assess the overall market opportunity and ask yourself, "How big can our business get?" Successful businesses focus on a growing market that can become huge or a huge market with room for new competition. What is the opportunity for your business to grow? How many people have the problem that your business solves? What are these prospective customers willing to pay for a solution to their problem? How many of these people could potentially become your customers? Foundation Two: A Platform to Deliver. The successful business needs a platform to deliver on the potential opportunity. This platform begins with a lucrative profit model and a way to generate positive cash flow. It also includes some sort of "edge" or unique advantage that your products/services have and that will compel people to buy. Then you need the systems and processes in place to get visible and deliver the promised products/services to customers with consistent quality and results. Too many businesses -- even those funded by professional investment teams -- lack a solid platform to deliver on the opportunity in the market. Foundation Three: A Management Team to Deliver. Finally, the successful business has a management team in place that knows the market, knows the product, knows operations, and knows how to attract customers/clients. Too many people go into business seeing a huge opportunity, but without any experience in the market or in key aspects of the business. How does your business stack up on the "Holy Trinity" required for business success? General Management Mon, 29 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=1A7TSUMc1MY no http://profitgrowthnetwork.com/view?v=aiMUubgW6g0 If you listen to shock radio, you are probably aware of the "Celebrity Death Watch." In this sick and twisted contest, shock jocks and their crew place bets on which famous celebrity will die next. Well, like it or not, many people now do a "Business Death Watch" in their communities. Is your business on the list? Here are some signs that it might be: 1. There is nothing unique about your business. You are just another "me too" concept that gives people no reason to switch to your business from their existing supplier. In my town, any time a diner opens that provides the same old sandwich and breakfast menu, we put it on the business death watch. In contrast, we visited a great candy store in Fort Myers Florida (Norman Love Chococates) this weekend. In a town known for generic chains, we found a place that had mastered the artistry of making fine confections. I have no idea why Norman Love chose to locate in Ft. Myers, but he has created an oasis of excellence and quality. His unique store -- including a great website -- is NOT on our business death watch. 2. You are in a saturated market. While Starbucks thought at one point that they could literally open stores on opposite corners of busy intersections, they eventually had to close down 600 stores. Every business has to avoid saturated markets. Why start another surgery center (or any other type of business) if there are 3 others located within a mile of you that aren't even filled? 3. Your fixed costs are very high. In my town, a Karaoke bar just leased a huge space. They are only open at night, and I can't imagine how much their lease costs. However, their parking lot remains empty and there is no way they are even covering rent. Watch out for high fixed costs....including not only rent but also employees, unproven marketing, and more. Be sure to test your idea to confirm demand and the ability to cover your costs before you put your life's savings into a new business! 4. You perceive marketing to be a a cost, not an investment. No business succeeds today without investing in smart marketing. Marketing must be your number one priority. The good news is that marketing doesn't need to be expensive. There are all sorts of low-cost, high-return ways to get visible to prospects. Plus, if you track where each and every prospect and customer comes from, you can make sure that you expand marketing that works while cutting back on marketing that doesn't. 5. You don't offer enough value to compel customers to return. A local bakery in our town recently went out of business. They had a great product, but their prices were ridiculously high. Customers came once, and didn't return. It wasn't worth it. Now the business is closed. 6. Your employees are unmotivated or poorly trained. We recently went to breakfast in the high rent district in our town. We sat down at a table -- and not a single member of the staff came to greet us, offer us a menu, or tell us they would be with us soon. We left after 10 minutes of being ignored. This was in a restaurant with about 5 tables filled, and 6-7 staff meandering around. I guarantee you that this restaurant will be out of business very soon, especially now that our slow summer season is upon us (we live in a highly seasonal winter tourist market). 7. You choose a lousy location (assuming you need a location at all). In Sarasota Florida, I can name five retail locations where businesses come and go every month or so. These locations just do not provide enough foot traffic. For instance, a restaurant location is located on a side street behind a bookstore. It is nearly impossible to find, and almost no cars or pedestrians pass by it. I've been living here for 7 years, and seens 5 businesses come and go in this same location. Doesn't anyone do due diligence anymore before leasing a space? The above are only some criteria to get you on a business death watch in your community, but they are the most common. General Management Mon, 29 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=aiMUubgW6g0 no http://profitgrowthnetwork.com/view?v=zwT3LybpjoM Ask any business broker in town, and they will tell you that 85% of listed businesses never sell. There are three reasons why: Problem One: You have not developed a business that runs independently of YOU. Too many businesses are so dependent on their founders that they are not worth anything to a potential buyer. The processes exist only in the founder’s head, and are not documented. Key buyers have relationships with and loyalty to the founder (not the business itself), and would rather shift their business to a competitor they know than to a new owner once the business is sold. Also, there may be no leadership team to continue to grow the business after the founder leaves. Why would anybody buy a business that becomes vapor after you leave? Solution: You have to put systems and processes in place so that the business runs without you. Problem Two: You have unrealistic expectations about the price you can get for your business. Your small business will not command the same multiple as a publicly traded company (e.g., 10-20 times earnings), not even close. Most small businesses sell for 1 to 2 times owner’s benefit, which is basically your income plus other benefits (i.e., car allowance, insurance, memberships), or for the value of assets in the business (i.e., inventory, buildings). Unfortunately, many business owners try to place a value on their years of blood, sweat, and tears that they have put into the business…and most buyers could care less. Others owners try to add a premium for the blue sky potential of the business; however, why should a buyer pay for potential that has not been realized? Solution: To sell a business, you have to have realistic expectations about what your business is really worth. Problem Three: You have sloppy or no marketing materials to persuade a buyer to take interest. Many business owners (and, unfortunately, brokers) present incomplete, unprofessional, and sometimes downright fraudulent sales packages. The numbers are not audited, or are inaccurate. The business valuation is based on future growth that may or may not happen (and if the growth potential is so assured, why hasn’t the owner already achieved these ambitious goals?). There is no overview of the marketplace and competitive landscape, or explanation about what makes this business unique. Without a professional and legitimate sales package, prospective buyers will be scared away. Solution: Create a professional, accurate package of information to inform qualified buyers about why your business is valuable and well worth the price you are asking.       General Management Thu, 25 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=zwT3LybpjoM no http://profitgrowthnetwork.com/view?v=lunlcZW-Nx0 In business as in life, you get what you tolerate. What are you tolerating as a business owner that you shouldn't be? Here are examples: - Employees and vendors who don't meet your expectations or aren't professional. - A conflict with a partner or investor that you are allowing to fester. - Customers and prospects who want something for nothing. - Sloppy processes and standards in your business. - Using your time "in" the business instead of "on" the business (per Michael Gerber's eMyth). - Raising the bar by setting your expectations even higher. - Becoming apathetic or even cynical about how successful you can be. - A slower rate of profitable growth than you would like. - Letting the business interfere with other areas of your life, such as family, health, community involvement, and your spirit. Again, you get what you tolerate. Stop tolerating things that you as a leader and business owner can't afford to put up with any longer!     Accountability/Results Wed, 24 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=lunlcZW-Nx0 no http://profitgrowthnetwork.com/view?v=ofyj6-5eBgo One of the most important metrics a business owner must know and track is the CPO, or Cost per Order (also called CPA, or Cost Per Acquisition). CPO tells you how much is costs to get an initial order from a new customer. For instance, if you spend $10,000 on a marketing campaign and receive 100 orders from that campaign, your CPO for the campaign is $10,000/100, or $100 per order. CPO tells you if your investment in marketing is paying off or not. In the above example, if your gross margin is at least $100 per order, you are covering your marketing and direct product costs (Cost of Goods Sold) with your marketing expenses. If your gross margin is more than $100 per order, you are losing money with every order. Now, some business money figure that it is okay to lose money on that first order, because they expect future orders from repeat customers to provide profit. They look at the lifetime value of a customer compared to what it takes to get that customer in the first place. That may be a viable strategy, but the best businesses make money right up front from a first-time customer, and don't settle for an unprofitable first order. If your CPO is too high, then you have a few options: - Get rid of marketing campaigns that are not bringing in enough business. - Renegotiate rates with vendors to bring down costs. - Find new, lower cost marketing campaigns to test (and then roll out if they are successful). - Test new marketing copy, including the offer you make to customers. - Improve your selling process so that your conversion rate from leads to customers improves. That way, you convert more customers and need fewer leads. - Launch products that have higher gross margins, and therefore allow higher costs to get a new order. The above assumes that you fanatically track the source of each order, and that you understand that marketing is an investment that must be monitored carefully. Think of every marketing campaign as an investment in your portfolio, and be merciless about removing campaigns that don't work while filling your portfolio with campaigns that do.     Make the Numbers Work for You Wed, 24 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=ofyj6-5eBgo no http://profitgrowthnetwork.com/view?v=7JnEo1gk6pE st1\:*{behavior:url(#ieooui) } Business owners have hundreds of tactics to attract new customers/clients. These tactics break down into eight high-level approaches:   One: Guerilla/Street Marketing. Jay Conrad Levinson pioneered the term Guerilla Marketing to describe the low-cost, high impact marketing strategies that smaller businesses can use to compete with the “big boys.” If you haven’t already read his classic book and series, you should be sure to do so. Local “Main Street” businesses should all be using guerilla marketing techniques.  Two: Educational/Expert Marketing. Any business owner can benefit by positioning him or herself as an expert by educating prospects about the problems they face and how to solve them. Professional service firms (e.g. lawyers, accountants, consultants, real estate agents, insurance salespeople, investment advisors, architects, engineers) especially benefit from this approach. Tactics range from speaking and writing to doing research on your target market and publicizing your findings.  Three: Relationship and Referral Marketing. EVERY single business should strive to make relationship and referral marketing a key part of their lead generation system. Nothing is more powerful than an endorsement from a trusted third party. Many business owners rely on word of mouth, but word of mouth relies on chance and the good will of strangers. It is not a proactive referral system.  Four: Online Marketing. Every business should have an online presence and work to generate leads over the Internet. There are a number of tactics to succeed in online marketing, from a clean website that captures visitor information to following up with prospects. Five: Direct Marketing. Direct marketing has been around for over 150 years now. Unfortunately, the prevalence of junk mail makes it harder and harder to cut through the clutter. Your clients should be careful to test results of any direct marketing campaign carefully and only repeat campaigns that work. Insanity is doing the same thing over and over again expecting a different result, and too many businesses continue to mail out letters and postcards that do nothing for them. Six: Channel Marketing. Distribution partners and strategic alliances are a fantastic way for many businesses to generate leads. Some companies (like Tupperware) have thrived through unique relationships with distribution partners. Others, like Microsoft, became successful by developing an exclusive distribution relationship (in Microsoft’s case, they became the exclusive supplier to IBM of Windows for PCs). Seven: Sales Force Marketing. A sales force can be challenging to manage, but is an excellent way to generate leverage and leads. You need to provide a detailed sales methodology and process for your salespeople to follow, along with a motivating compensation scheme, ongoing training, and the willingness to remove non-performers from the sales team. Eight: Advertising. Using traditional media is expensive and should only be done after all of the above tactics have been tested…and even then with careful test marketing at a manageable cost. Fortunately, thanks to cable television and other niche advertising opportunities, there are ways to reach a targeted prospect group at a relatively affordable rate. Marketing Tue, 23 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=7JnEo1gk6pE no http://profitgrowthnetwork.com/view?v=RKNZuhvJ0_c These days it is fashionable to blame businesses for all sorts of fraud and cheating. However, our experience is that most small and mid-sized business owners are mostly honest. It is the buyers we have to watch out for!   There is an old adage in the sales business: “All buyers are liars.” This is true in a number of ways:  -         Buyers claim to want to solve their problem, when they really don’t. -         Buyers pretend to be interested in a product, when they are not. -         Buyers tell you they have money to purchase, when they do not. -         Buyers tell you they intend to buy, when they do not. -         Buyers tell you they will get back to you, and they do not. -         Buyers tell you they are the primary decision maker, and they are not. -         Buyers tell you “maybe” when they mean “no.”  Many buyers will string along a salesperson for weeks, looking for as much “free consulting” as they can get so that they don’t have to buy. The above reality has led to a number of sales courses based on helping business owners get on equal footing with buyers. These courses train sellers to stop offering information without something in return, and to prefer a “no” from a prospect over a never-ending series of “maybes.” There are conversations and questioning techniques that can help sellers determine whether a prospect is really serious, or just shopping around. That way, you can spend time with qualified prospects, and not waste time with those who will never buy from you (but mislead you into getting excited that they are interested). For instance, you might ask questions such as:         -         If this is really a problem for you, why are you only acting on it now? -         Who else besides yourself is involved in making a decision? -         What is your budget? -         When do you expect to make a decision? -         What happens if you don’t take action?   You might even challenge the prospect to see if they are serious about buying or not. For instance, you might say:         -         You aren’t really serious about purchasing from me, are you? -         This price is too expensive for you. -         I get the sense that you aren’t serious about spending money to solve your problem.  Worse, there is a second category of dishonest buyers – those who intentionally commit fraud. We have surveyed companies to find that they experience a 4% - 10% bad debt and questionable return rate among their buyers. I worked with one direct mail company that showed me a database of people who had bought their products under aliases in order to get free merchandise – things they never intended to pay for. Other business owners have shared horror stories about customers who charge merchandise on their cards and then claim identity fraud – even when it was clear to everyone that no such fraud had taken place; the buyer simply wanted free products. While some buyers purchase with good intentions and have misfortunes keep them from honoring their word, too many others are out to get things for nothing. As business owners, it is up to us to protect ourselves from the above types of buyers. The first requires an appropriately assertive approach to selling. The second requires careful reviews of purchase behavior and constant testing to optimize payments and collections. The bottom line is that we as business owners must protect ourselves from unscrupulous prospects – even if the media doesn’t see this issue as a problem compared to all of the supposedly corrupt business owners out there. Marketing Mon, 22 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=RKNZuhvJ0_c no http://profitgrowthnetwork.com/view?v=0tXYhP77oE8 In business, big companies are looking to act smaller. As small to mid-sized companies, we have great advantages that we can exploit. Let’s call this the economies of lack of scale.   Here are ten reasons why smaller is better:   1.      We are more passionate. We are the actual owners, and often founders, of our companies. Our company is our baby. We care more. We feel the bumps more. We aren’t just in it for the perquisites, annual bonus, and stock options. Our business is part of who we are, and our energy can get us through tough times. While employees and executives of big companies bolt or point fingers at the first signs of trouble, we stay at it through thick and thin.   2.      We are more agile. A small to mid-sized business is like a Fighter Jet while a large business is like the Space Shuttle. It is much easier for us to maneuver. While a large business might take months of committee meetings to figure out if the dollar savings on a coupon should go on the upper left or lower right, we can launch a whole new product in that same time.   3.      We can flex up and down to get the resources we need. Most small businesses know how to hire contractors, sometimes from all over the world. We don’t need to figure out how to manage a full-time staff. When we have work, we can source it out to a whole pool of freelancers. We are much more flexible.   4.      We have fewer politics. Every organization that has people has politics. However, the smaller the organization, the more that the owners and employees can focus on serving the customer – instead of reinforcing their turf and status.   5.      We have more control. In a small company, people can step in to make things happen. There is no where to hide, and we can’t point fingers. We can see the entire process, and fix things that need fixing – often before a larger company even recognizes a problem.   6.      We are closer to the customer. In our world, often the business owner one of the people who serves the customer. In bigger companies, executives are so far removed from the customer that they make a big deal about listening in on customer service calls once a quarter! We control the customer’s experience, we can ask for customer input, and we can develop a special, personalized relationship with our best customers. You can’t beat that for building loyalty.   7.      We can use the same technology the “big boys” use. The Internet makes available to us all sorts of software, market research, and management tools, the kinds of tools that used to only be available to major corporations. Now we have the same analytical tools as Fortune 500 companies, except that we can react much more quickly to threats and opportunities.   8.      We can profit from “long tails.” While big companies don’t care about smaller opportunities – the “long tails” that are not best sellers or household names – smaller firms can make big money focusing on niche and even micro markets. In my own case, I make lots of money focusing on things like kettle bell training instruction, boxing instruction, and agility training for fitness professionals. These are topics that might not make enough money for the big names out there, but that are great money makers for a small-time entrepreneur like me.   9.      We have fewer sacred cows. Small and mid-sized business owners can eliminate anything from their business at any time based on profit and customer demand. Big companies should be able to, but often cannot. Just look at the major automobile manufacturers and their historic inability to adapt.   10.   We can look forward instead of backwards. While major corporations tend to focus more on past glory, we have the vision and creativity to consider what is coming around the corner. We look forwards and we remain creative -- and that is why big companies often have to grow by acquiring us.   Let’s celebrate and build on these great advantages! Pep Talks Mon, 22 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=0tXYhP77oE8 no http://profitgrowthnetwork.com/view?v=csuPrIEAMWk st1\:*{behavior:url(#ieooui) } To succeed, every business needs to stand out. Even better, a business should become famous in the minds of consumers for something outstanding.   What can your business become famous for? For instance: -         We recently saw a British Pub that, under the advice of famous chef Gordon Ramsay, created a campaign to bring back homemade gravy. They started a parade, a festival, and even printed up T-shirts to establish themselves as famous for cooking up top-notch homemade gravy.  -         In a cluttered local market for diners, a diner in our town in Florida is becoming famous for offering British-style service and unique breakfast dishes. They serve tea in British-style tea pots, and offer a quirky set of British baked scones and other goods. They also offer a unique menu that goes beyond the traditional eggs, pancakes, and bacon by adding some gourmet offerings. That way, they stand out from the crowd – and their food is outstanding.  -         A local plumbing firm guarantees that it is not only has the best plumbers in town, but also the cleanest. Their slogan promises that they are “the cleanest plumbers in town,” and their plumbers have a set of processes that no other plumbing company has to provide quality workmanship and professional handling on all service calls.  -         An orthopedic surgeon landed a deal to be the official surgeon of a minor league baseball team in town. Now he can promote himself with that distinction, and also gives out T-shirts with the team’s name and his medical practice name. Everyone in town knows him as the surgeon for professional ball players.  -         An online company that sells etiquette training kits has developed a reputation for making etiquette training fun, and not stuffy. In fact, the first chapter of her training manual is called, “What is a Cotillion, anyway?”  -         There is a miniature golf company – also in my home town – that stands out for the national chains (like Putt Putt) by creating a putting course with an adventure theme. They even have a lake filled with alligators, and kids can buy pieces of meat and feed the gators from a wooden pole (all done very safely). Kids from all over the place beg their parents to go to the “alligator golf course.”  Admittedly, some of the above strategies may seem a bit gimmicky. Nevertheless, they help the business stand out from the crowd. What is something that can make your business stand out? What will make you famous (in a good way) in the minds of your target market?   Strategy Mon, 22 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=csuPrIEAMWk no http://profitgrowthnetwork.com/view?v=PLOj_GzVc38 It can be lonely running a business, even if you have partners or run the business with a family member. One of the smartest things a business owner can do is develop a support network by starting, or joining, a Mastermind Group. A Mastermind Group is a group of non-competing colleagues that meets periodically to provide support, bounce ideas around, and even exchange leads or come up with joint marketing ideas. For instance, if you run an insurance agency, you might start a group with an attorney, a real estate broker, a home builder, and a banker. A good Master Mind group has 4-7 members. You should meet around once every week or every other week, perhaps for breakfast or lunch, and then check in as needed with other members.  I know one group that has met for the past 10 years. They even meet twice each year for a weekend retreat. At this retreat, they each work together to develop a strategic plan for the business. Members challenge each other to take the plan as far as it can go, and to make sure that the thinking behind each plan is well thought out and realistic. Another group started out as a Master Mind group with 5 members. As more people asked to join, it morphed into a monthly community breakfast club. Now all of the movers and shakers in the community meet monthly to share a meal, network, and hear a great speaker. You might consider starting a few Master Mind groups. It's a great way to generate referrals and be seen as a leader among your peers. For instance, a 26-year old multi-millionaire starts what he calls "Business Clubs." The members of his clubs all challenge each other to grow their businesses to amazing levels, and most have hit the million dollar mark in profits over the past few years! I learned on a recent radio talk show that in Okinawa Japan -- a place that boasts more people over 100 years old than any other -- community members create mini-support groups from a young age. These mutual support groups are always there for each member, providing funds if someone has a financial crisis, providing care if someone is sick, and providing support if someone experiences the loss of a loved one. While these groups are one of many factors accounting for longevity in Okinawa, they attest to the power of support in one's life. The same philosophy holds true for businesses. If you can find a group of mutually supportive business owners to share your successes and challenges, you have a much greater change of long-term success. Start now, if you don't already have a Master Mind group! Call four colleagues and ask them to lunch to begin to help each other take their business to a whole new level. What's the risk?   Pep Talks Sun, 21 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=PLOj_GzVc38 no http://profitgrowthnetwork.com/view?v=l3a4jXfuSxo There is so much hype about online marketing that the purpose of this blog entry is to provide you with a checklist for sound, proven, online marketing tactics. Here are the requirements of a solid online presence (and we go into much more detail about this information when you join our Network): 1. A website with the following components: compelling benefit-driven headline; testimonials to provide proof of your excellence; an irresistible marketing message; an offer to capture visitor information so you can follow up; great education that addresses your target market's most pressing issues; a number of ways to contact you; and copy that is about your prospect (not you) and draws your visitors in. 2. A mechanism to follow up with prospects via email. The emails you send are informational and build up your trust, value, and credibility. They also make a series of low-risk offers to build even more trust with your prospects (e.g., participation in a free webinar). It takes 5-7 positive interactions with a prospect for them to trust you enough to buy from you online! 3. Your website is optimized for search engines. Note that many web designers cannot do this well, and that a specialized SEO firm may be required. 4. You have a variety of strategies to drive traffic to your site while also increasing your search engine rankings: article marketing, reciprocal links (preferably triangular links as double are questionable), social networking, participation in blogs and forums, registration as an expert for media interviews, press releases, etc. 5. You test different offers on your website to maximize conversion. Traffic is easy to drive to your website. Getting people to convert to customers is the hard part. 6. You test various Pay Per Click services like Google to determine if these can help you drive traffic to your site (traffic that actually becomes customers). 7. You rigorously measure traffic and purchase behavior on your site, and constantly improve. 8. You reach out to affiliates and partners who can promote your products and services in exchange for a commission or other benefit. 9. The entire experience of ordering from you meets your customers' expectations, including follow up support. 10. You constantly offer your existing customers new products and services, and give them something special in return for their loyalty. Marketing Sat, 13 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=l3a4jXfuSxo Andrew Neitlich no http://profitgrowthnetwork.com/view?v=Uuf_tud6Wu0 Over a century ago, the famous words “Workers of the world, unite!” called for a revolution. Today, we need to change that statement to “Entrepreneurs of the world, unite!” More and more every day, government is overstepping its boundaries and threatening to take over – or maybe take down – our capitalist system. Meanwhile, the news media, movies, and television shows tend to vilify business leaders as corrupt and evil. It is time to remind the world about how essential, creative, and vital we are… We create the wealth that generates employment, revenues, and corporate profits that fund government entitlements. Without us, government – and all those who rely on government – comes to a halt. When others are mired in doubt and negativity, we see possibilities. When others can’t get things done, we find a way. Even when resources are scarce, we use our street smarts and creativity to make things happen anyway. While others waste time sitting in front of the television set or complaining about how they wish things were, we spend almost every waking hour focusing on how to make things the way we want them to be…including how to meet payroll and grow our business. We live by results. If we don’t get results, we die. When others want to point fingers and blame, we have no choice but to take 100% responsibility for what happens in our business and in our life. If we fail, we pick ourselves up, learn from our mistakes, and rebuild….and we wouldn’t have it any other way. We are responsible even when others are not, or refuse to be. “The buck stops here” rarely is true in government, and has become a myth for the “too big to fail” corporate behemoths, but is always true for the owners of small to mid-size businesses. Indeed, while huge, politically-connected corporations can’t even go out of business effectively, we do not have the luxury of being ineffective even a little bit. Any mistake we make is punished, often fatally. We accept this burden, and we thrive under it. While big government can mortgage our futures by printing money, mock the concept of a balanced budget, and use ridiculous accounting schemes, we do not because we cannot. We live in a world of accuracy, precision, and reality – where results must be real and value must be compelling for us to survive. Our efforts create jobs, benefits (when productivity allows), and cause money to flow freely for all. We generate the wealth that pays for our schools, infrastructure, military, social security, healthcare, and welfare. Government cannot exist without us. We are the ultimate creative economic force in any economy, anywhere. Unlike government, we cannot force “the people” to pay us. We must offer products and services that people actually value….enough to part with their hard-earned money. Government leaders may ignore us or pass laws that hurt us, but without us they cannot exist for long. They can only print money for so long before the economy will collapse. Meanwhile, they can never come close to controlling our creativity or appetite for risk, and they lack the skills to mimic our productivity and resourcefulness. We may not be heroic in the same way as the soldiers who risk their lives to protect our freedom every day. However, we are heroes in that we make a vibrant economy possible, and therefore we make good governance and a strong nation possible.  Our weakness is that we are fragmented and way too busy. It seems that government is taking advantage of these weaknesses. When we decide to exercise our power, watch out. Government cannot run without our contributions. Period. For now, let us celebrate our contributions, our willingness to take risks, and the wonderful results of our sweat and creativity. And let us unite together, so that if government goes too far, we are ready to exercise our incredible power! Pep Talks Fri, 12 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Uuf_tud6Wu0 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=oconBI9buf0 There are smart businesses and stupid businesses.  Smart businesses grow profitably, generate cash flow, increase in value over time, and operate without significant input from the founders. Stupid businesses aren’t set up to do any of these things, and are destined to eventually fail. Following are fifteen signs that you might have a business that is destined to fail: Marketing is not a priority. It is a sad but true fact that the most successful businesses do not always provide the best products or services. Often, less deserving businesses do better because they make marketing a top priority. If your business isn’t using at least seven different channels to get visible, then it is at risk.   You do not have a detailed cash flow budget and projections. Cash flow and profits are not the same thing, and the number one reason businesses fail – even those with strong potential – is because they run out of cash. It is essential to know how much cash you have, and how much you will need in the near and mid-term. Use a variety of different scenarios to assure enough cash in case of unanticipated problems or delays.   You aren’t developing sources of leverage. Businesses that last learn to operate without depending on the founders or owners. Smart businesses have standards, systems, and documented processes in place to provide leverage for owners and grow without depending on one or more key people.   You don’t have an “edge” in your marketplace. If you are a me-too business offering the same service, pricing, and products as everyone else, you won’t last long. You need some sort of edge that matters to your prospects and customers and keeps them coming back. Your advantage can include proprietary technology, product leadership, operational excellence, unique distribution channels, protected sources of labor or supplies, and more.   You provide lousy customer service. No business owner ever admits to providing lousy customer service, and yet too many businesses do just that. It is crucial to understand your customer’s expectations, know the “magic moments” when you can make or break the customer’s experience, measure results, train employees to delight customers, and put in place standards and processes to assure consistent service.   Your business lacks focus. Entrepreneurs love to start new things up, and this can be deadly for cash flow and customer perceptions. Know what you do well, and for whom, and be the best in that niche. Don’t have visions of grandeur. Don’t try to own the whole world. It is expensive to launch new products and enter new markets. For instance, a local boxing gym decided to get into kickboxing and mixed martial arts. They quickly lost their loyal base of boxing clients, without attracting enough new martial arts clients. Fortunately, the owner saw his mistake and regained his focus on boxing.   You don’t have the right people to succeed. Businesses need talent – “the right people in the right seats on the bus” as Jim Collins writes. If you don’t have systems in place to recruit, train, reward, and retain top talent, your business won’t last as long as it otherwise could.   You spend too much money on things that are unrelated to getting more customers and meeting their needs. Larry Ellison of Oracle used to say, “If you aren’t making it or selling it, what are you doing here?” Prune your business expenses to focus on those activities that add direct value to the customer. For instance, I worked with one business that had huge legal expenses related to contracts, trademarks, and patents. The business ran out of cash because of these costs. It would have been smarter to first test its products, use do-it-yourself legal services, and then spend money protecting its assets after proving market demand.   You don’t set a clear direction that every employee understands and embraces. Many business owners keep their strategy and goals in their head, without communicating clearly to employees. It is much more powerful to have a dialogue with employees about where you want to take the company, what it can do best, how it can make more money, and resources required to get it there.   Your fixed costs are too high. Constantly find ways to reduce fixed costs. Thanks to technology and the increased acceptance of contract labor, you can have a lean, mean, virtual organization and avoid huge overhead.   Your attitude is wrong. One of the biggest reasons businesses don’t last beyond the life of the original owner is because the owner cared more about ego, status, and maintaining control than on having a successful business. Strong business leaders surrender control to top talent, and place greater emphasis on bottom-line results than on their status or ego.   You don’t live by metrics. The best businesses pick a few key things to measure and constantly improve on those metrics. Examples include: number of leads, conversion rate, dollars spent per transaction, repeat business, and gross profit margin.   Your business fails the five forces test. Michael Porter devised the five forces model of competitive advantage. If you don't have lots of control over your vendors or customers, face significant government regulation, work in a highly fragmented industry with lots of competition, and anyone can easily enter your industry, then your business could be set for lots of trouble.   Lots of cash goes out before cash comes in. If your revenue cycle requires large outflows to generate cash inflows, then you are perpetually at risk of losses. For instance, imagine an event promotion company that needs to put down huge deposits in the hopes that lots of people will come to the event; that is a highly risky business and it is no wonder that so many promotion companies come and go.   You can't easily predict future revenues. The best businesses know that $X in marketing will generate $Y in sales, every time. The worst businesses face highly unpredictable revenue streams. To bring back the example of the promotions company, it is extremely difficult to know on a given date whether lots of people will come to an event or not, especially events with large ticket sales the day of a show. Poor weather, competing events, local traffic jams, and shocking news can all ruin an event. If your business meets even a few of the above criteria, I wish you the best of luck. You are going to need it.     General Management Tue, 09 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=oconBI9buf0 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=LmYYBYFBh0E It has become stale at this point to discuss goals and achieving goals. Everyone knows what it takes to set and achieve goals, and there is no shortage of acronyms (e.g. GOALPOST) to help managers remember that goals are time bound, measurable, significant, etc. This begs the question of why – if everyone knows how to set and keep goals – so many businesses fail to achieve their objectives. Goal setting is sort of like New Year’s resolutions: easy to make, hard to achieve. A business coach and advisor can help ensure that you and your leadership team set appropriately aggressive goals and achieve them. There are six steps to the process: First, set the right goals, based on a strategic plan that sets the most important priorities for the business to succeed and be dominant in its marketplace. Goals follow from a solid, elegant strategy for success. Second, launch a plan to achieve the goals. It is not enough to set goals in a vacuum and expect them to somehow be reached. The business needs to develop a clear plan of action, resource needs, roles and responsibilities, organizational structure, and commitment in order to put substance on how goals will be met. The goals need to be broken down into manageable chunks of time and tasks, with specific people responsible. For instance, if a business wants to generate 200 more leads per month, then it needs a plan of action to generate those leads, and that plan of action should break down further into specific action steps by specific people every single day. Third, create a dashboard of metrics to track goals over time and make mid-course corrections. Every executive should have a dashboard to track where progress is acceptable and where intervention is required. Fourth, hold specific people accountable for achievement of the goals. Develop a recruitment and retention system to have the right people in the right places in the organization – people that the leadership team trusts to get the job done. The business should constantly recruit for talent, and have a process to develop, reward, and retain top performers in the context of business goals. Fifth, have a process to track progress and make any necessary corrections. The leadership team should agree to meet regularly to track and discuss progress – and bring in other personnel as needed. Finally, know how to have conversations for accountability. It is up to the leadership team to hold everyone in the business accountable for results. The conversations required to hold people accountable vary depending on the situation and performance. Sometimes the manager needs to be directive, sometimes he or she needs to coach, and sometimes he or she needs to provide training and support. There are also explicit conversations required to set (or reset) expectations, acknowledge results, and provide incentives for performance. Again and again we find managers who wonder why their people aren’t accountable for results. In our experience, the issue resides with the manager, not the people. You get what you tolerate in business. If you aren’t setting and tracking the right goals and putting in place processes and conversations to manage by goals, you shouldn’t point the finger for poor performance at anyone but yourself! Accountability/Results Mon, 08 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=LmYYBYFBh0E no http://profitgrowthnetwork.com/view?v=Vn8mp5uo8Qc st1\:*{behavior:url(#ieooui) } Business owners sometimes make the mistake of jumping into business opportunities too impulsively, without doing the appropriate amount of due diligence. This observation is not as obvious as it may seem, because many entrepreneurs fail to separate facts from myths about their business. Here are two examples: First, what do you conclude when you see a business featured in Entreprenuer, Inc. or Fast Company magazines? Our instant reaction is that the business must be profitable. However, this turns out to be untrue. Most businesses featured in media have a certain glamour factor to them, or are backed by huge publicity efforts. The media features stories on businesses that are interesting first and profitable second. For instance, one company that specialized in promoting extreme sporting events for 18-34 year olds appeared in many publications as a highly successful venture. However, on looking at the numbers (not published in the media), this company was sucking up cash and mainly feeding the ego of the owner rather than having any chance of being profitable. The same principle applies to industry analysis in the media. When I worked for a Wall Street firm, the first thing the senior management taught us was, “If it appears in the newspaper, it is already too late.” Two years ago, every newspaper was featuring articles about real estate moguls who were speculating in hot markets like Southwest Florida. I know some of these moguls, and they are struggling to keep their own homes (and cars, in one case) today. Had you begun to invest in real estate after reading a newspaper article, you would have been way too late, and in worse shape than speculators who got in before the media frenzy. If you are about to make a business decision and are not already independently wealthy, forget about the “glamour factor,” forget your ego, and forget about status. Focus on facts and on detailed due diligence. Questions to ask include: 1.      How big can this opportunity get? 2.      What is the worst possible case? 3.      What are the relative probabilities of achieving a high, moderate, low, and loss rate of return? 4.      Given the probabilities, what is the expected outcome of this decision? 5.      Is my investment worthwhile given the expected outcome? 6.      Do I have the talent and resources in place to act quickly and take advantage of this opportunity? 7.      How do I exit? 8.      What reserves are available when it takes twice as long and twice as much money to achieve success? Sound business leadership requires an emphasis on cold hard facts, not the temptations of status, glamour, and being in the newspaper.   Risk Management Mon, 08 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=Vn8mp5uo8Qc Andrew Neitlich no http://profitgrowthnetwork.com/view?v=gg2-AbaCzk0 st1\:*{behavior:url(#ieooui) } In my home town of Sarasota, all sorts of businesses come and go. In fact, a group of business colleagues have something they call the “Business Death Pool” in which they bet on which new business will close down next.   It is enormously challenging to have a “Main Street” business that has limited resources, huge competition, and few ways to set itself apart compared to national and international firms with much, much deeper pockets.   Michael Porter’s Competitive Forces model of strategic thinking suggests that the best businesses have power over suppliers and consumers, and operate in consolidated markets with few competitors. Unfortunately, this obvious framework (e.g., strive to have a monopoly!) is not instructive for tiny businesses. But you can gain a leg up vs. the competition even if you aren’t Microsoft or Starbucks. Here are some ways to compete as a small business, even as a “me-too” business:   1.      Form alliances with other local business to beat the chains. In Sarasota, a group of locally owned restaurants created an association to publicize their restaurants as high quality establishments with the best produce and creativity. They also offer promotions, like special tasting menus and coupons, to encourage citizens to stay loyal. Alliances improve one’s power in the market vs. larger competitors.   2.      Develop strong customer relationships and loyalty. Larger and more impersonal companies can’t win on personal relationships. Small Main Street establishments can. Develop a set of tactics to continuously reach out to customers, thank them for their patronage, and offer them reasons to keep coming back. Make sure your employees learn your customers’ names.   3.      Get on the Internet. I was recently delighted to discover that one of our local printing shops in town has, through its Internet presence, doubled sales. Thanks to its website, even a major bottling company has become a customer, and helped the firm build a dedicated press just for them. With the Internet, every business that has a unique product and quality service can reach out into new markets – just as effectively as the big players.   4.      Have a unique and meaningful edge. Many of the businesses that go out of business or get on our Business Death Pool in Sarasota do so because there is nothing unique and better about them. The best businesses excel through any number of edges: unique marketing strategies that lock in a loyal customer base (think Tupperware and Mary Kay, or long term contracts with certain clients), a better and proprietary product, the ability to customize, unique sources of hard-to-find products, depth and breadth of experience, and local flavor that no outsider can match. Be famous for something!   5.      Get even more visible. Too many small businesses don’t invest enough in marketing, which starts a downward spiral of lower sales, less money to invest in marketing, lower sales, and then death. There are hundreds of low-cost ways to get visible, and every business needs to make marketing a priority.   6.      Remember the personal touches. You can do things that larger businesses can’t: handwritten notes to thank customers, special touches and enhancements for repeat customers, friendlier customer service, honoring special requests, and going the extra mile to solve a problem.   7.      Find a niche that larger chains won’t touch. Sometimes there is profit for small companies in niches that large chains won’t touch. For instance, book stores can still compete successfully vs. Borders by going deep in some area of literature or non-fiction that the big chains don’t serve. For instance, I order frequently from a book store in Texas focused exclusively on mysteries and horror. They have a much deeper selection than Borders or Amazon and provide in depth information and reviews about these genres.     Strategy Mon, 08 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=gg2-AbaCzk0 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=lWnLuJuwgvs The problem with most strategic planning exercises is that they result in a beautiful written document, but nothing ever gets done. In my experience, executives fail to implement strategy because they fail to complete a comprehensive strategic plan. There are three parts to strategy in any organization, and each is crucial. Most organizations skip one or more of these components, and that is why strategy rarely gets implemented properly. The three parts to any strategy are: Strategic context. Contextual questions are the broad strategic questions that must be answered. Too many organizations assume that everyone already knows and understands the strategic context. This is rarely the case. Key questions to answer include: What are our overall internal strengths, internal weaknesses, external opportunities, and external threats? How do we use our strengths to capitalize on opportunities and minimize threats? How do we shore up our weaknesses to be able to avoid threats and not miss opportunities? Who are our desired customers? Who are not our customers? How are the needs of our desired customers changing? Who are our competitors? Who are not our competitors? How are our competitors changing? Which products/services do we offer our customers? What do we not offer? How do our products need to change to remain competitive? Which products should we de-emphasize? What new products should we offer? What do we do best? What should we do best? Is our business model, based on what we do best, profitable? How can we make it more profitable? Where do we not meet the market’s expectations? What do we have to do to get better? What kind of organization do we want to be? How will we measure success? Strategic Priorities. Strategic priorities are the key things an organization must do to continue to compete and succeed. Most organizations have too many priorities, and need your help to focus. Given the work done about strategic context, what are the 5-6 priorities that we must complete in order to be the best, serve our desired customers? What resources (people, time, money) are required for each? What is the action plan? What are immediate next steps? Which current initiatives should we de-emphasize or stop? Strategic Alignment. Strategic alignment is the part of strategy that makes sure that things get done. Many organizations talk all day about strategic priorities, but never finish them. They need to answer these questions: Who is responsible for each initiative? How do we track progress? How do we communicate success? How do we reward success? What tools and support do people need to succeed? What do people stop doing to make room for new initiatives? Once all three elements of the plan are in place, and the leadership team agrees with the plan and commits to being accountable for achieving the desired results, then the strategy has an excellent chance of success. The business consultant has the opportunity to utilize this framework and put in place an efficient process to assure results. Our program shows exactly how to do this. Strategy Mon, 08 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=lWnLuJuwgvs Andrew Neitlich no http://profitgrowthnetwork.com/view?v=rirhQzGcJ6Y Your marketing message is everything you say or do to get people interested in your services. Unfortunately, most marketing messages are generic, boring, and irrelevant, for the following reasons: Too much about you and your credentials instead of about the prospect’s most pressing concerns; Mistaking a marketing message for a statement of mission, vision, and values; Creating a generic message that fails to set your solutions and your firm apart; No proof to justify your claims; and Failure to incorporate all required elements of an irresistible message. Following are the key ingredients of a compelling marketing message: A focused target market. That way, you can develop a marketing message that resonates with your audience. An understanding of the most pressing problems your market faces, and what these problems cost – in both business and emotional terms. Your solution, and the value/benefits it provides. Why your solution is unique and superior. Proof that your claims are true, in the form of data, case studies, and testimonials.   Once you have this message created, you can incorporate it into everything you do, while constantly offering valuable information that compels your audience to respond. Of course, The Profit Growth Club shows you exactly how to create a compelling marketing message. Your marketing message is everything you say or do to get people interested in your services. Unfortunately, most marketing messages are generic, boring, and irrelevant, for the following reasons: Too much about you and your credentials instead of about the prospect’s most pressing concerns; Mistaking a marketing message for a statement of mission, vision, and values; Creating a generic message that fails to set your solutions and your firm apart; No proof to justify your claims; and Failure to incorporate all required elements of an irresistible message.   Following are the key ingredients of a compelling marketing message: A focused target market. That way, you can develop a marketing message that resonates with your audience. An understanding of the most pressing problems your market faces, and what these problems cost – in both business and emotional terms. Your solution, and the value/benefits it provides. Why your solution is unique and superior. Proof that your claims are true, in the form of data, case studies, and testimonials. Once you have this message created, you can incorporate it into everything you do, while constantly offering valuable information that compels your audience to respond. Marketing Mon, 08 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=rirhQzGcJ6Y Andrew Neitlich no http://profitgrowthnetwork.com/view?v=BFihdxcB520 One habit that separates successful entrepreneurs from unsuccessful ones is managing risk. This article suggests two important tactics that every entrepreneur should lock in place in order to avoid losing their shirts. First, set a stop loss and don’t invest a penny more than your stop loss. A stop loss is the amount of money you will commit to the business before calling it quits. If you reach your stop loss, it is time to move on to other opportunities. For instance, the best gamblers bring a set pool of money to the table and quit if they exhaust that pool. Meanwhile, less sophisticated gamblers keep adding money to the pot, thinking that they will eventually catch up. It is these gamblers who lose their houses and families and are addicts. In my case, I have started around 10 businesses. Two have failed, and could have ruined me if I hadn’t set a stop loss in place. In the first case, my partner and I had a brilliant concept for an online subscription-based service that we thought would make us rich. $160,000 later and we were still struggling to get customers. But we had set a stop loss and decided to move on to other things. Similarly, I also started a professional mixed martial arts league, setting a stop loss at $150,000. The first show lost $10,000. The second show lost $40,000. Rather than continue, I saw that I’d only creep closer and closer to my stop loss at this pace, and just shut the business down. This was a difficult choice to make, because the business was fun, stroked my ego, and enhanced my status in the community. But the bottom line numbers didn’t justify continuing, and the bottom line should come before ego in business. To set your stop loss, consider everything you need to invest to get the business started. Then double it. In each of the above cases, despite the due diligence I did, unanticipated expenses and delays still came up every time. Second, spread your risk. Ask people with a stake in the business to contribute capital, time, or resources. For instance, in the fight promotion business, I did my best to find investors among beer wholesalers, famous fighters, equipment vendors, and people serving the MMA fan demographic. If you can’t find people to share the risk, then it is likely that your concept or business model is not very sound. Risk Management Sun, 07 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=BFihdxcB520 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=qqRl7sc0ltM Many businesses enjoy the glamour of trying to penetrate new markets. However, as the framework in this article shows, the lowest-risk and highest-return strategy is to continue to serve your current, receptive markets. To prove this case, let’s cover the four possible scenarios for growing a business, based on current or new products, and current or new markets: First, a business might introduce new products to new markets. This option is clearly expensive and risky. You have to come up with new solutions to the problems of a market you don’t know well, and that also doesn’t know you. Odds of success are not high, and the costs to reach this new market and develop new products will be high. Second, a business might continue to focus on its current products to its current customers. In this case, there are no additional product development costs, except perhaps to improve existing offerings. The market knows you, and you already have a solid foundation with prospects and customers. While this is not the most exciting option, it is the least risky and – so long as the market is growing and you have room to grow within it – has high potential. Third, you might introduce your current products to a new market. While exciting, this option can be costly and risky. You have to reach into a market that doesn’t know you, and this can take time and money. Also, you may have to change your products to fit the specific needs of the new market. If you pursue this strategy, it is important to test slowly and at low cost to establish whether demand exists or not. Fourth, you might introduce a new product to your current customers. This option ends up being less risky and expensive than introducing your current products to new markets. That’s because your market knows you, and so you have a ready list of current customers and prospects that are open to hearing about your new solution and that should be easy to reach. In this option your main risk is in the costs of testing and developing a new product. To rank order your risk/return, businesses have the most potential with current products offered to current markets, followed by introducing new products to current markets. Reaching out to new markets, whether with existing products or completely new solutions, is the most risky with high costs and no guarantee of returns. Careful, low-cost testing is the smartest way to approach these latter strategies – assuming the business owner wants the distraction and potential loss of focus on current customers. The bottom line: Start where you are and where you have been. That's the most profitable -- if least glamorous -- way to succeed. Marketing Sun, 07 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=qqRl7sc0ltM no http://profitgrowthnetwork.com/view?v=F6LWw4Ts_4A The most successful business owners have an innate understanding of risk and how to manage it. This article evaluates four different businesses in the context of risk to draw lessons about effective risk management. Risk concerns the overall impact and probability of a specific outcome. For instance, a 20% probability of a $100,000 loss has an expected value of a $20,000 loss while a 10% probability of a $1,000,000 gain has an expected value of a $100,000 gain. The smart business owner constantly assesses risk in his or her business dealings in order to minimize potential downside and maximize potential upside. Put another way: It is wise to invest in businesses and business deals that have a high probability of upside and minimal downside. While this seems obvious when stated explicitly, many businesses operate on quite the opposite principle. That is why so many entrepreneurs invest their life savings into a business only to see their dreams dashed. Following are four different businesses and their risk profiles: One: Online publisher. This business develops online distance education programs for fitness professionals. To manage risk and avoid large investments in product development, it begins with a simple ebook written by an investment. It tests the ebook with a low-cost website. If the ebook sells well, the company invests in an expanded program with a hard-copy book, DVDs, and seminars. It also tests different marketing strategies on a small scale, and rolls out the strategies that perform well. In short, this business is able to generate excellent profits through a strategy of low-cost testing and roll out. At the same time, it focuses its products in a niche market (fitness) in order to offer new products to its loyal customers, at a much lower marketing cost. Two: Mortgage brokerage. While almost everyone and their brother were starting mortgage companies in the first decade of the new millennium, only a few were really generating profits. In the case of this business, the owner had over twenty years of experience originating loans for one of the top financing companies in the world. He had outstanding contacts with lending firms, relationships with the top salepeople in the industry, a proven approach to closing business, and a keen understanding of his customer. He recruited four of the top salespeople he knew – on a commission-only basis --  and set up show with nominal costs in the basement of his house. Within a month he was generating over $100,000 per month in fees with almost no overhead. Here you see a business that generates excellent returns with nominal risk. Once the mortgage crash happened, it was easy for this business owner to close down his shop, avoid losses, and move on to other opportunities. Three: Event promoter. The promoter put on professional fighting events in a rapidly growing market. It cost over $85,000 to put on an event, and most of this money needed to be paid up front – before any receipts. It was virtually impossible to project ticket sales on a given night because most people purchased tickets two weeks before the event. A competing event, bad weather, or cancellation by an event participant could be costly and stressful. The returns on an event ranged from revenue of $150,000 to only $60,000. In short, this business provided very unpredictable returns with a high upfront investment (e.g. risk). The promoter depended on the glamour factor of the business, and hoped to brand his business and sell it down the road to someone interested in an exciting lifestyle business in a rapidly growing industry. However, does it make sense to rely on this exit strategy without a predictable cash flow? Four: Fitness facility. A fitness facility usually requires a large up front investment, in order to purchase equipment. This business owner began with a moderate space and equipment, and financed it at an excellent rate. He then marketed heavily to customers in order to generate ongoing monthly fees to cover his finance expense and rental costs. After six months, and thanks to effective and aggressive marketing, he was able to break even on his outgoing cash flow. After a year, he was profitable and preparing to open a second location. He had groomed a manager to run his first location, so that he could repeat the cycle on a second one. In this case, the owner generated excellent returns despite the requirements of a large investment up front. From the above examples, one can conclude the following rules of successful risk management: Test products and marketing strategies before investing huge sums. Expand only when the strategy has been proven. If a business requires a huge upfront investment on an unproven investment, don’t invest. Seek out and hire top talent who understands the business and can generate exceptional results – while providing leverage to the business owner. As Warren Buffet advises, only get into businesses that you understand and know. If you don’t know the business and still want to get into it, spend plenty of time on research. Look for businesses where cash comes in before it goes out – not the other away around. Where possible, minimize cash out with leverage. Seek out businesses with annuity streams of cash from repeat charges, membership fees, and high customer loyalty. Don’t invest in businesses that require high risk and offer only moderate returns (like the promotion business). Rather, seek businesses with low risk and high returns – or manage them with this principle in mind. It should be easy to flex up and down with business cycles; keep fixed costs low. Avoid business based on glamour instead of on steady streams of cash. Develop systems that enable business growth and expansion. Buy at a profit, don’t sell at a profit. That way, a market downturn will have only minimal effects on an investment. Risk Management Sun, 07 Jun 2009 00:00:00 GMT http://profitgrowthnetwork.com/view?v=F6LWw4Ts_4A Andrew Neitlich no http://profitgrowthnetwork.com/view?v=asfJhl2y7C0 In business, there are only three winning offensive strategies to beat your competition. First, you can compete directly against your competitor, going head to head. This is only advisable if you have some sort of major advantage vs. your competitor in cost, quality, service, technology, marketing channels, product leadership, or relationships. For instance, Fedex can claim a dominant advantage compared to the United State Postal Service in reliability. For a price, Fedex will get your product where it needs to be, faster and with greater reliability than the USPS. On the other hand, if you don’t absolutely need your product to arrive by 10:30 am the next day, the USPS can claim a major cost advantage over Fedex with its Priority Mail service. If you don’t have a major advantage that matters in your market, then the direct strategy is a mistake. It leads to a commoditized marketplace and negative effects like price wars, as many airlines experience. In that case, your next best strategy is to find a small niche and dominate that niche. Your niche can be based on geography, demographics, psychographics, or industry. For instance, few consulting firms have the resources to be considered the best consulting firm in the world. Therefore, many consulting firms specialize with a specific solution in a specific industry (e.g. marketing for technology firms; operational improvement for health care systems). If you can’t find a niche, then your final strategic option is to completely change the game. Microsoft did this when they bundled a suite of office software into one low-cost product, effectively putting Word Perfect with its single word processing software product out of business. TIVO changed the game with its revolutionary product for recording television shows. Many online business are trying to change the game, such as dating services, book sellers, and stock trading services. Changing the game means either providing a more complete, bundled solution, or coming up with an entirely new way of doing business. Every business needs to know whether it should compete head to head, find a niche, or change the game. Strategy http://profitgrowthnetwork.com/view?v=asfJhl2y7C0 Andrew Neitlich no http://profitgrowthnetwork.com/view?v=KjAUwFmxKy8 In this economy, and really in any economy, it is wise to keep overhead -- recurring fixed costs -- as low as possible. That way, your "nut" is a lot lower, and you can sell many fewer units to breakeven and make a profit. Few successful entrepreneurs start their business with expensive trappings like a big office or gorgeous retail space. These days, entrepreneurs are going back to the basics, and their strategies now make sense in all economic times. For instance: 1. The Wall Street Journal recently featured an article about retail businesses giving up their $7,000 or more in monthly rent to open shop from home and via the Internet. Bricks and Clicks are returning to just Clicks. Now these businesses focus on local customers from home, and are working to build an international clientele through smart online strategies. 2. Parenting product company Moms on Edge never even bothered with a retail presence. Instead, the company started from the founder's kitchen, ordered products from China that it stores in a nearby warehouse, and processes all orders online. The firm has been featured in Entrepreneur Magazine, won numerous national and international awards, and now has customers in 18 countries worldwide! To reduce overhead and increase margins even more, the company has launched new educational programs for Moms to help them become entrepreneurs. 3. Gyms are focusing on smaller spaces over huge, luxurious facilities. For instance, Tony Spain's Absolute Boxing operates out of a space less than 1,000 square feet, in contrast to huge franchises like LA Boxing that can require half a million dollars or more to start. Tony's clients love the old-school feel of his industrial space, and Tony uses his space brilliantly. His boxing bags retract to the ceiling when he needs floor space, and easily come back down when he wants to set up stations. His monthly breakeven might be 10 students, compared to hundreds for a traditional luxury gym. 4. Move over Mrs. Fields! Recall that this famous cookie entrepreneur began by passing out free samples from her space in a mall. A recent local news story featured a cupcake bakery that tested the market even more cost-effectively, with an online-only store. Once they got enough orders, the company opened a small retail presence. 5. Even restaurants are lowering fixed costs. A new trend in LA is upscale food trucks; gourmet chefs are forgoing the million-dollar overhead of a restaurant and offering their dishes via mobile trucks. Similarly, a Sarasota restaurant called Rays' rents space in a local diner every Fri and Sat night, transforming the diner into a beautiful French restaurant. Smart! Make the Numbers Work for You http://profitgrowthnetwork.com/view?v=KjAUwFmxKy8 Andrew Neitlich no