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Archive for May, 2009

Small Business Week And Small Business Owner Crisis

nsbw It’s Small Business week starting Monday. All kinds of sites, magazines and newspapers will be acknowledging the job that small businesses do to contribute to America’s success. And they should.

It isn’t easy and during a recession, small business owners are bound to come face-to-face with a critical choice.

This is the same choice franchisees would face within a tough few months after opening when I was COO and CMO of a franchisor. They would tell me they were in crisis, weren’t making money and were going back to their corporate job “to pay the bills.”

At that point they left their store to an employee or family relation who had no reason to make it work. Those people were placeholders where the owner needed firecrackers.

It was a slippery slope from them on. Quality, guest satisfaction and cleanliness issues quickly cropped up. Next it became difficult to find the owner at all because they would work nights or Sunday mornings – when it wasn’t busy and couldn’t really manage the crew. They’d try to justify it to me by saying they were still “in their store.”

Next came word they were buying their supplies at Sam’s Club or Costco to save a few bucks. Then staffing levels dropped.

It was sad to watch yet it happens all the time with businesses, services and franchisees, they couldn’t keep up with the demands to grow business because all they could see was money bleeding out of their bank accounts.

While I attended Glendale High School, I was in a production of Godspell. One of the characters made the point, “No man can serve two masters. He will either love the first and hate the second (they jumped into someone’s arms) or hate the first and love the second” (sneers and jumps out of the first person’s arms to the other.) You can’t be in two places equally.

I know this from experience, I heard the siren call of a corporate job and left my consultant business a distant second for a title and regular paycheck. I wish I hadn’t done that because it sapped my creativity to further my own business which became, by default more of a hobby. The smartest thing I ever did was give notice and say, “I believe in myself.”

When I was on MSNBC this week, the question was asked, “What would you tell a person who wanted to start a new business, but didn’t want to give up the safety of their day job?”

Here’s my advice: If you have a plan, a talent, the means and the drive – quit and follow your dream. Don’t listen to the siren song any longer. But don’t think you can just quit without a plan and be successful.

If you’ve jumped away from the safety of a steady job already, don’t go back. While it may seem easier, it will ruin your chances of your own business making it.

Small business owners are by nature optimistic and resilient and worth celebrating every day. Don’t give into fear – you can do this!

By the way, you can watch the first interview ever given by Karen Mills, the new SBA Administrator on MSNBC’s Your Business this Sunday, May 17 at 7:30am EST/4:30am PST so set your DVR’s. I’m on as well answering your questions. The program repeats the following Saturday a half hour earlier; check local listings.

McDonald's Teaches Retailers About Profitability

mcdonaldsjpg There is a great article about McDonald’s in this Ad Age article, http://adage.com/article?article_id=136601.

It talks about the long road McDonald’s has taken since 2002 to achieve profitable success. Ad campaigns focusing on the Big Mac, Quarter Pounder with cheese and chicken nuggets have stimulated demand for the items, making the quickservice chain less reliant on its lower-margin Dollar Menu items. “In the last eight months, we have placed greater emphasis on flagship-quality products,” McDonald’s USA Chief Marketing Officer Neil Golden said.

In essence they have suspended promoting the dollar menu while their competitors have carried on making up to 15% of Wendy’s sales (down from 20%) while McDonald’s Dollar Menu accounting for only 10% of overall sales. This means competitors are driving down profits and their ability to compete with the very giant who started the concept.

For retailers, we often believe the “loss leader” will increase volume but for many, particularly those without a sales training program, it erodes margins.

Just because the other guy is discounting either the hot new swimsuit or the leftover Webkinz, doesn’t mean you should join them. Look at your market.

If McDonald’s can change and only promote their high profit items during an economic recovery, why can’t you?

Amtrak Death Teaches How To Deal With the Unexpected

I was on the Amtrak train from Hudson, near where I live in upstate New York bound for NYC yesterday afternoon. We’d left at 3:20 on time for a 5:55 arrival at Penn Station. At 4pm the conductor came back to Business Class and asked all of us to remove our earphones and bluetooth devices as the train slowed. “The northbound train has struck a trespasser just south of Poughkeepsie. We’ll have to wait about an hour, hour and a half while they get the ambulance.”

With that he disappeared. I tweeted what happened and got a direct message from Toddr who was traveling on the opposite northbound train.

The conductor came back, said it would be longer, they had to get a new crew. He didn’t want to guess but figure another hour. With that he left to the back of the train. He returned in ten minutes with cookies and water. “I went to the train behind us and got some snacks for you all.” He continued to walk through the entire train passing his supplies to everyone.

After the second hour I asked how likely it would be I would make an 8:00 curtain to see Jane Fonda in her play 33 Variations. “It depends, we should have a straight-shot in but if there are other trains in our way – we share tracks with MetroNorth – it will be longer.”

After the third hour, I called Telecharge who graciously let me out of the ticket. The conductor returned again to say there were too many conflicting stories to update, they were doing the best they could to get us through the mess.

He updated us for the following hour until we again were bound for NYC at 7:48pm. He came back, “Well, I guess you can see we’re moving.” People told him how grateful they were for his good humor about it all.

“This wasn’t so bad – I’ve been through much worse, like the time in Boston. It’s different when you have cars at 45 degree angles tipping toward a big drop to a river. This was just like a derailment.”

Twenty minutes later we stopped, after five minutes he came on the PA, “Folks sorry, we’re the in the dark why we’re stopped as well. Once I know something, you’ll know something.” We looked at each other shrugged and returned to our iPhones and laptops. It had been five hours we had been on the train already.

I was struck with how important crisis management is in every job. You can’t train for every disaster or circumstance but the people you hire make all the difference. Our conductor exhibited my Seven Tips For Managing A Crisis Or Disaster.

Contrast that to the debacles of Domino’s burying their heads after the YouTube video in NC surfaced, the Popeye’s Chicken franchisees closing after they ran out of chicken or the KFC Oprah free chicken promotion last week.

Here are my Seven Tips For Managing A Crisis Or Disaster:
- Put yourself in your customers’ shoes
- Be proactive. Alert people as soon as you know something is wrong.
- Don’t sugar coat but don’t catastrophize. Just the facts.
- Tell what you know, don’t hypothesize.
- Keep people updated with status.
- If appropriate, give the steps necessary to restore normalcy.
- Respond to questions with truth.

What potential crisis or disaster could hit your business that may have happened before? A death in a family? Someone injured at work? A fire? Earthquake?

The more you teach the general ways to handle a crisis, the more you’ll make it a stepping stone instead of a cliff. Something your customers and employees will be able to get through hopefully saying, “That wasn’t so bad.”

Customer Experience Shopping Sears: Where America Slops

This is a repost of a story from a friend in Long Beach, California about a trip to the shoe department at Sears.

“It was a weekday mid-morning and for some reason their shoe dept was hopping. It was me and 3 other parties mulling around looking at shoes. I could see that we all were helping ourselves.

I saw a few pairs that I really wanted to try on and the prices were pretty good so I waited it out-and when I say waited it out I mean after 20 minutes I brought the shoes to the counter and interrupted a ‘sales’ girl from her daze. She said she would check. She brought out 2 of the 5 I asked about (size 10.5 pretty standard stuff) and walked away.

No, not to the other side to help out, but back behind the counter. OK so I tried them on -walked but didn’t like either one-so I picked out a few others and bugged the attendant with my request.

This time she brought me one that felt pretty good. I had spent a good 45 minutes thus far and I liked these so I decided to give Sears what you call “a charity sale,” she did nothing to deserve it.

I got in line-yes line, behind two others who somehow were able to find something they liked and purchased the shoes. Later that night I pulled them out to show my wife. That’s when I spotted the ink-dispensing security tag still attached! At that point I decided I was done with Sears and would return them in the morning for money back.

The next morning I went down ready for them to challenge me or try to convince me to keep them. I had all my reasons ready. I was excited to let them know how they had failed me.

Once again I got in line behind a guy holding a shoe from the display and a lady holding two shoes. My turn finally came -I told the girl, “I want to return theses shoes for cash. ” She said, ”OK” opened the drawer and handed me the money! I asked her if she was the only one working because once again it was pretty busy. She told me, “No, my manager is in the back stacking shoes!”

Holy @#$# I just couldn’t believe my ears. I am amazed that Sears can stay in business- the management obviously don’t know what they are doing.”

Update

This post was originally shared in May of 2009. That was before the notices of Sears laying off employees, selling off stores and losing $2.4 billion in 2011.

This isn’t just a story about a down-and-out retailer. Or a clerk who was disempowered but an illustration of lack of training, selection, focus, vision and well, basic operating procedures.

Well readers, what do you think this was? A training problem? A management problem? A hiring problem? A stock problem? A brand problem? Please comment below.

Celebrity Apprentice Shows Weakness In Selling

images I was watching the finale of the Celebrity Apprentice last night. I must admit it was the first time in years. (I would commend the first few seasons to anyone trying to understand characteristics of a team though – both the good and the bad.)

I had watched it all the way to the start of Season 6, when they came to LA and made the losers sleep in tents on the lawn. The boardroom cat fights grew in length and the “reality” kept ebbing. It seemed to become ways to pitch product placements by the seat of your pants.

Anyway it came down to Annie Duke, the world champion poker player and comedy legend Joan Rivers. Don’t worry, I won’t give the end away. I will say it was interesting, after a design firm pulled out of Annie’s plans and said it was due to Joan’s abuse of their designer, that Annie repeated that fact to everyone she talked to -all the way up to the final moments of the finale. Implying that if the designer hadn’t quit, she would have done better.

I flashed on the scene in Rocky Horror Picture show when Janet Wise says three times, “If only we hadn’t ______” and the audience would yell back each time at the screen “but you did!’

For Annie, the obstacle became a badge of honor. She may have thought of it as a way to get people to her side but it made her look weak. In sports they call it a “losers limp.”

How many employees do you know who blame the customer for them not making a sale? I used to hear it from salespeople on my team. The customer was a “jerk,” “too cheap,” “not ready to buy,” the list goes on and on.

The important thing to take away from this is to hire people that can take responsibility for their own actions. And if an employee screws up, it is up to us to make sure they 1) are able to admit it, 2)they know it is better to accept that responsibility and 3) not reward blame.

To change the dialogue after a missed sale, I would ask the salesperson, “Do you think you could have done anything better?” Many times, by asking this question, they were able to focus on the harder work of taking responsibility for the things they could change, not the easy way out of blame and “if only.”

Once the salesperson does that though, they have to let it go. Encourage them to learn from it, but not beat themselves up over it; just prepare to do better the next time the door opens.