small business Archives - Resourceful Business

Mexican Train Dominoes Offer Lessons for Small Business

29 August 2014May 4, 2017Ann MillsLeave a comment

On a recent vacation, my family taught me how to play Mexican Train Dominoes. The game is a variation of dominoes which allows players to add to their own line of dominoes, their private train, or alternatively, add to a line of dominoes open to all, the public train. Players try to get rid of all of their dominoes before their opponents and keep remaining dominoes to low numbers. After several rounds, the winner has the lowest number of points based on the totals of any remaining dominoes from each hand.

As I was new to the game, it took me several rounds to develop my own strategy. After settling on one that seemed to work, it occurred to me that my strategy had similarities to some of the key decision-making inherent in a small business. In addition to being a fun family game, Mexican Train Dominoes offer lessons for the small business.

Lesson One: Focus On What You Control

As I mentioned, in Mexican Train Dominoes, each player has a private train, which consists of a line of dominoes open only to that particular player. None of the other players can put down dominoes on someone’s private train. There is also a public train where all the players can put down a matching domino if they have one. As I organized whatever dominoes I had been dealt, I found myself segregating out the dominoes in my hand which worked on my private train from ones which worked on the public train. I could control the orderly play of my private train dominoes, but I had no control of what the public train opportunities were as the dominoes would change as players put down various combinations.

In fact when running a small business, one of the most important components of any strategy is focusing on what you control. For example, you can’t control whether a competitor opens up a shop next door. However, you can control the decision to expand your own product line once the competitor opens up. You can’t control the consumer trend towards iPads and mobile devices. You can ensure that your website is responsive and mobile-friendly.

Lesson Two: Identify and Minimize the Risks You Can’t Control

After I was dealt my starting dominoes at the beginning of the game, I would find myself separating out the dominoes that I could match up and use in my private train into one pile. I would organize them into a line so as to match as many as possible, and I would move them around until I had one orderly line which I could use for my private train.

My second pile would have the dominoes that I could not use in my private train, but rather would have to dispose of in the public train. Since I had no control over the public train, I would always strive to play any dominoes in my public train pile first. In effect, I was minimizing the risk I could not control, the playability of the public train.

Similarly, for a small business owner, it is important to identify and minimize risks to the business that are outside of his or her control. One example might be a business that is a strictly brick and mortar storefront. A particularly precarious winter or nearby road construction can make access to the store difficult and imperil sales. However, in understanding the risk of being a brick and mortar business, the owner could develop an online e-commerce website for popular products or offer deliveries within a certain radius.

Lesson Three: Leverage Your Assets

One of the rules in Mexican Train dominoes relates to the double domino, a domino which has the same number on each side of the line. If a player has a double domino, (s)he plays it perpendicular to the line of dominoes, and it must be followed by a regular domino with the matching number on one side.
Double dominoes can be critical to a winning strategy. First, they allow a player to put down two dominoes. In playing a double domino, a player can quickly decrease the point value of the dominoes left in his or her hand. Strategically, the opportunity to play a double domino should not be missed, and if possible, it should be played early.

Similar to playing a double domino, a savvy business owner will leverage the assets of the company to gain a competitive edge. The assets might be personal contacts or an alumni network. Social media is an excellent way to leverage and broaden the audience for marketing campaigns or promotional offers. A small business can also leverage a customer relationship in one business line into another area and grow the overall business with the client.

Clearly, Mexican Train dominoes is not just amusing child’s play. There is some luck of course, but also plenty of strategy. The next time you have an opportunity to enjoy dominoes, remember the small business lessons implicit in the tactical side of this clever game. And if you could use some assistance identifying and focusing on strategic areas for your business, minimizing risks outside your control or just leveraging what you have, contact us. We will help you develop a winning strategy!

Clothespins in a Jar: A Childhood Game That Will Improve Your Small Business

4 June 2014May 4, 2017Ann MillsLeave a comment

Summer is a wonderful time to retool a small company. The dynamics of the business often change, and the less hectic pace can provide the perfect backdrop to contemplate the to-do list. It reminds me of a childhood game, clothespins in a jar. When summer comes around, mothers sometimes ask their children what they want to do in the summer. The child will name a few things like trying the new neighborhood playground or learning to ride a bicycle without training wheels. The idea is written on a clothespin and put in a jar. The jar sits on the kitchen counter and the clothespin is removed from the jar once the activity is done. The goal is to have the jar completely empty before the fall when school begins and busy schedules resume. It is a fun game and a fabulous visual reminder all in one!

This summer, why not put a few clothespins in a jar for your small business. Select projects that you have not had time to focus on and either do them, or contract them out. Here are ten ideas to get you started and improve your small business:

Content Management

Produce a quarterly eBlast or newsletter and send it to your clients. The Return on Investment (ROI) is high when you find ways to keep in touch with your current and past customers. They will remember your company when you keep your brand in front of them in creative ways. Don’t succumb to the temptation to do a purely promotional newsletter, but rather develop original content so your clients will enjoy reading the eBlast.

Learn your website content management system (CMS). If your website is built on a platform like WordPress, learn how to upload your own pictures and edit the content instead of paying someone else to do it for you. According to WordPress creator Matt Mullenweg, almost 19% of the web now runs on WordPress, so understanding WordPress CMS is well worth the time and effort.

Social Media Strategy

Rebrand your social media. Have the banners, profile pictures and backgrounds customized to show your products, services and logo in an eye-catching way. Social media helps you engage with customers, show your brand and market your business too.

Integrate social media on your website. If you don’t have clickable, visible links to all of your social media platforms on your website pages, get a developer to add them for you. Once you integrate your social media, make sure to manage it. See my previous blog: Stop Ruining Your Business with Social Media.

Come up with a promotion for your business and post it on social media. One of my favorite Facebook promotion ideas is to have your customers post a picture of your product and how they are using it. Have them post the picture on your social media company page with a comment about their photo. Offer a prize for the most creative picture, then ask if you can use it in your marketing!

Finances

Get your business finances in order. Hire a QuickBooks Proadvisor or bookkeeper to set up a proper chart of accounts for your company and get all your revenue and expenses entered. Create a quarterly management report on QuickBooks and start to look at year-on-year comparisons of your business performance.

Keep track of your expense receipts in an organized way so you and your bookkeeper are not scrambling at tax time. Figure out a system to get company receipts to the bookkeeper in a timely fashion throughout the year. In addition to having documents at your fingertips in April, you will run your business more strategically by being on top of expenses.

Blogging

Start a blog, and then learn how to properly post it so it is optimized for search. By creating original content and developing a blog, your website traffic will improve. The market will also start to look to you as an expert in your field. Be patient, as sometimes it takes time for original content to produce results.

Website

Have your website redesigned so that the pages are fluid-width, responsive and they properly adjust to any screen size or mobile device. Website elements should adjust to accommodate desktop computers, iPads and mobile phones. If you have an e-commerce platform embedded in your website, it should be responsive and work on all devices as well.

Small Business Strategy

Allocate time each day to read. It is amazing how much knowledge you will gain by just reading 30 minutes per day in your field of expertise. Order subscriptions, find newspapers or electronic newsletters that have great articles and information in your company’s area of expertise. Set time aside to read them each day and stay informed in your field.

These ideas are just off the top of my head, and there are many more that will be specific to your company. So, this summer, if the pace of your business is a little less frenetic, create your own to-do list. Construct a visual reminder, your very own clothespins in a jar, and get motivated to dust off projects that you have been meaning to do. Need some assistance? At Resourceful Business, we can help with website design and redesign, QuickBooks, content management, blogging, SEO and small business strategy. Contact us.

Three Sure-fire Ways to Lose a Client

25 April 2014May 4, 2017Ann MillsLeave a comment

A few months ago, I heard about a client that was looking to get his newly redesigned website evaluated by a third party. It had been built by a web design company, and it was ready for launch. However, the client had lost faith in the website company that built it. Before the demo site became live, he wanted another company to take a look at it and give him an evaluation. He also wanted the contract reviewed to see if it had been fulfilled in all of the key areas.

It made me think. How can a business alienate a client to the point where the client no longer trusts the company at all? In interactions with clients, I have seen similar situations on more than one occasion. There are common threads to the grievances, and so I thought I would share my experience. Here are three sure-fire ways a small business owners can imperil a valued client relationship.

Over-promise and under-deliver

As a small business grows, client work can come in fits and starts. The temptation is to take any and all projects that come in just to build the business brand. Without thoughtfully considering which project and how much business to accept, a small company can compromise its own performance standards. Taking on too much work has its risks, and the mistake occurs in the service industry as well as manufacturing.

Consider a service example with some anxious homeowners looking to downsize and sell their home. They are hoping to hear the real estate agent, the small business equivalent in our story, say their house is fabulous and the housing market is strong. They want a high selling price for their home and are thrilled when the agent tells them they can list their home at a high price without a problem. As they would like to move quickly, the homeowners are relieved when the agent encourages them to list the house before the busy season begins. Weeks later when there are few interested buyers and no visitors to the open houses, the homeowners feel misled and disappointed. The agent knew what the homeowners wanted to hear, over-promised and then under-delivered.

Ultimately, the homeowners will tell their friends and family about their disappointing experience. The real estate agent will certainly not gain any new clients based upon the homeowner’s word of mouth. In fact, the agent may lose future clients. The risk is clear. In a recent New York Times article about the potency of unfavorable comments, “Praise is Fleeting, but Brickbats We Recall,” Clifford Nass, a professor of communication at Stanford University, confirms, “…almost everyone remembers negative things more strongly and in more detail.”

Don’t establish concrete deliverables

Every project or commitment made to a client has implicit “deliverables.” A deliverable is a product, service or goal that needs to be finished by an agreed date. A lawyer may owe a draft contract for her client’s review. A Chief Financial Officer (CFO) may owe a management report to the head of the company for an internal review. A website designer may owe a page layout proposal to his client. Each person has a deliverable, and without specific deliverables, a project can drift and the timeline to completion lapse.

One aspect of deliverables that is often overlooked is that deliverables go both ways. The lawyer can send the client a contract for review, but the client needs to review it and get back to the attorney in a timely manner. After the CFO provides the head of the company with the management report, the head of the company needs to actually read it and provide relevant feedback. And once the client approves the layout proposal for the website, he needs to write the content to go into the pages so the website can go live. In fact, my company has seen situations where the client does not get to his or her deliverables in a timely manner, and the project shuts down.

The business owner can take the position that it is the client’s fault, but ultimately it is in the small company’s interest to stay on track and remind the client. Otherwise as the project unravels, the customer gets disheartened, the business’ reputation in the market is harmed, and both sides leave the project determined never to work with the other party again.

Ignore client phone calls or emails

Small business owners have limited dollars and even less free time. Their schedules are hectic as often they juggle multiple roles, particularly in the startup phases of the company. More than once, my company has witnessed clients involved in a project that are no longer being serviced properly in some way. For example, a business owner builds a website with a web design company, but now is in need of some minor upgrades or changes. Because the work is small, it never seems to get done and the client’s calls and emails get ignored. I have personally seen an instance when a client and a company started to disagree on a few matters. Interestingly, in this case the deliverables had fallen by the wayside, and as time progressed, the needs of the client had evolved and were not really covered in the original contract. As the relationship worsened, the company became more and more lax about answering the client’s calls or emails. Eventually, the web design company lost the customer.

Clients are the backbone of any small business. They can grow with your business as their own ventures succeed. They can expand their commitment to a company horizontally or vertically by working across different product areas or expanding within a business line. Satisfied customers give a business referrals which ultimately grow the customer base for the small business even more.

So, don’t fall into the trap of over-promising and then under-deliver. Take the time to plan out and agree on the project timeline and deliverables, and service your clients even when the task at hand is small. Don’t imperil your client relationships; cultivate them and watch your business grow.

If your company is struggling to manage its valuable client base, contact us, and we will help get your project and relationships back on track!

Small Business Strategy: The Importance of Stakeholders

24 March 2014May 4, 2017Ann MillsLeave a comment

Every business, regardless of size, has a management structure. Even sole proprietors subcontract out work and may find themselves managing the subcontractors. Whether a person is an owner, manager or employee, (s)he plays a role in the success or failure of the enterprise. Sometimes, making employees or managers stakeholders in the business can have dramatic effects that benefit the company. Let me give an example to illustrate a key small business strategy and the importance of stakeholders.

Two retail stores operate down the street from each other. Both are small businesses with an owner, manager and several employees. Business is hectic, and the owner of Business A assigns the manager the task of putting out the work schedule each week and allocating hours amongst the part-time staff. Over the course of several weeks, the manager receives complaints from the staff that they are not getting enough hours. So, she tweaks the schedule and adds a few more hours here and there. Some of the shifts now overlap, but everyone seems happier. The owner notices that the payroll seems to have gone up and wonders why.

In contrast, the owner of Business B, down the street, also assigns the manager the task of putting out the weekly work schedule. For the increased responsibility, the owner also gives the manager a small allocation of the net profit each month should the business beat certain net profit targets. As the weeks go by, the staff complain that they are not getting enough hours in their shifts. The manager could allocate everyone a few more hours. However, the manager knows that if she allocates unnecessary hours to keep the employees happy, the net profit target at the end of the month might be jeopardized due to the extra payroll expense. The manager chooses to keep the schedule intact and instead explains to the staff that the business does not require more shifts.

The difference is striking. In Business B, the owner made the manager a “stakeholder” in the business and, in effect, changed her decision-making process.

What is a Stakeholder?

A stakeholder is defined as “a person with an interest or concern in something, especially a business.” By having a financial interest in the success of an entity, stakeholders will intuitively begin to consider the profitability of decisions, even if subconsciously. It is why profit sharing, end-of-year bonuses and stock awards in lieu of cash are often used in the for-profit environment. On a smaller scale, I have seen small businesses distribute a little bit of each month’s profit to their key managers should the business achieve key targets. The managers embrace the business and work to make it better every single day. They start to think about the business’ reputation and how to get clients to become repeat customers.

When The Resourceful Business is asked to advise clients on their current strategy, one of the first things we evaluate is who in the company has the role of stakeholder. It can drive the day-to-day decisions being made in the business.

How Being a Stakeholder Will Change Behavior

In Business A, the owner would eventually sit down with the manager and explain that the work schedule should not be compromised to benefit the staff. Rather, the manager should create a work schedule to benefit the business, although a strong incentive to do so is not really in place. As the staff complain, the manager could still be motivated to add a few extra hours here or there, perhaps just not as many as before.

In Business B, the owner has incentivized the manager to create an efficient work schedule by making the manager a stakeholder. I outline this contrast as a reminder that it is very important for a small business to constantly evaluate who has the role of stakeholder. It may seem counter-intuitive to widen the base of stakeholders in a small, growing business. However, if a business exceeds expectations at the end of a given month, even a small distribution of profits to key staff members is incredibly motivating. Cost-cutting suggestions will start to trickle in and some fabulous new ideas will too.

A small business can thrive by considering how it designates and incentivizes its stakeholders. Need a strategic perspective on the structure of your business? Contact us.

President's Day Lessons for small business

Presidents’ Day Lessons for the Small Business

8 February 2014May 4, 2017Ann MillsLeave a comment

Presidents’ Day is around the corner, and it is worthwhile for the small business to stop and think about why we remember two of our great Presidents, George Washington and Abraham Lincoln. Their place in history extends far beyond their historic actions and ideas. Rather, their legacies are also defined by moral character, tenacity and tactical skill. As a small business owner, it occurs to me that each of these traits also define a great business. Here’s why.

Moral Character Grows the Client Base

History remembers Abraham Lincoln as a President that perceived slavery to be a fundamental evil; and therefore, he worked tirelessly to abolish it. His morality and view of slavery became the basis for his actions as President. Similarly, a small business must have a strong moral character in all that it does; because without one, it will never build lasting client relationships. A strong sense of morality will guide the major decisions of the business and underpin client relationships.

In fact, one of the most rewarding aspects of my business is interacting with clients. The one-on-one time that I spend with a small business owner establishes a foundation of trust. Personally, I have found that if I look a client in the eye and give him or her advice, (s)he will usually take it. It is because a business that develops a reputation of integrity combined with a track record of working solely in the interest of the client becomes a very valuable ally.

For example, there are some services that my company helps clients with, and we simply pass through the costs with no markup. Our clients are always pleasantly surprised. But it is not a stretch for us, because our business grows when we represent clients honestly, work solely in their best interest, and build the relationship. Our business is unique in that it offers many different services, and invariably, clients start with us in one product line and then add another. If we can be trusted in one area, then we earn a presumption of trust in another. Perhaps in the case of Abraham Lincoln, the nation’s belief in his moral character earned him the chance to move forward with his difficult domestic agenda.

It is the moral character of the business, in effect, which grows the client base.

Tenacity, but with Focus

Tenacity is one of my favorite words. It means, “the quality or fact of being very determined.” Particularly when a small business grows quickly, an owner can feel overwhelmed. Leads seem to come in from everywhere, time is sparse, hours are long and simple tasks like paying the bills go out the window. In those times, tenacity is critical, but it must be with focus. Successful small business owners work extremely hard, are determined to pursue their passion which underlies the business and commit the time to doing so. But as the business picks up, time management and the ability to focus on the key goals are critical.

Where should you focus?

Cost control and expenses
Client relationships and maintaining an on-going dialogue with your customers
Follow-up conversations and work on running projects and current initiatives
Key strategic objectives that are core to the business

Therefore, continue to pursue important deadlines, client relationships and projects with tenacity, and concentrate on key business objectives if you must do some picking and choosing. If a business is not executing particular aspects very well, it may be prudent to shed them if they are not core to the business. Don’t be afraid to make these types of difficult decisions to retain your focus.

Be Tactical and Smart, or Lose Ground

George Washington is often remembered as the general who crossed the icy, Delaware River on Christmas Eve during the American Revolutionary War. It was a turning point in the morale of the Continental Army and a bold strategic move. He knew that without the element of surprise, his army had no chance against the Hessians.

When I spend time with a new business, I am often caught off guard at how often the team has fallen into a pattern of complacency. The owners have taken a view that it seems to work, or at least it works well enough. Business is humming and no one on the management team has the time to contemplate the next downturn. What revenue streams could be jeopardized? Should they be bolstering other areas of the business just in case? On occasion when my company is brought in for strategic planning, I often hear, “Let’s think outside the box.” I always respond, “But, the answer might be in the box.”

Tactical thinking means planning ahead and envisioning scenarios different from the status quo. It means developing initiatives in anticipation of a changing environment often using resources you already have. It does not necessarily mean that the business needs a complete overhaul or change of course. It does mean that management needs to look at different scenarios and be prepared to act. Let the competition be complacent, like the Hessians, who assumed that the holidays would be a time of rest. Use surprise in your favor and be prepared to move in a different direction even when your competitors do not.

For a great example of the importance of forward, tactical thinking, see the Wall Street Journal article, “Apps are Wrecking Mom-and-Pop Pizza Shops.”

So, this Presidents’ Day, consider whether your business conducts itself with moral character, tenacity and tactical smarts. If you don’t think your company passes the litmus test in any one of these three areas, contact us and we will help realign your strategy.