November 28, 2024

You are here: Home / Archives for Small Business

You’re the Boss Blog: How Two Owners Got the Web Sites They Wanted

June 1, 2013 by Leave a Comment

On Social Media

Generating revenue along with the buzz.

In my last post — The Problem Social Media Cannot Solve — I profiled DCC Waterbeds, a company that makes waterbeds for cows – yes, really – and that generously shared a tale of what went wrong when the owners hired a friend to build a Web site. This week, I’ve found two small businesses eager to talk about how they managed to build Web sites they love.

When Mackey Advisors, a 30-year-old financial services firm,
 decided it needed to overhaul its Web site, it chose to fix its branding first. “Our prior Web site was hard to update, the formatting was always wrong and was very static and not at all interactive,” said Mackey McNeill, president and founder of the 10-person company, which is based in Bellevue, Ky. “Not only did we need to update our Web site, we needed to update our brand.”

Mackey Advisors provides wealth management services to individuals and business owners, but it didn’t want to be perceived as just another wealth management firm. “We didn’t want to feel like stuffy white men in blue suits that want to tell you what to do with your money,” Ms. McNeil said. “We help people and businesses look forward with their money.”

In November 2011, Ms. McNeil chose Kari McNamara, a brand consultant buddy from her Vistage group, to refresh the brand and messaging and to revamp the site. “The first decision we made was to build a WordPress-based site,” said Sarah Grace Mohr, the company’s communications director. WordPress is an open-source development platform that has allowed small-business owners to manage their own sites (at least once they are set-up by a developer).

The consultant suggested a developer, Chris McMahon, to build the company site. “We trusted our consultant wouldn’t give us a poor recommendation,” Ms. Mohr said. But after getting the recommendation, Ms. Mohr did check him out. “I looked at half a dozen of his other client Web sites and spent a lot of time talking to him about ideas,” he said. “I hired him because he talked to me like a real person. He helped me pare down all my creative ideas to something that was more manageable and effective.”

Mackey Advisors invested $1,500, Ms. Mohr said, and got a site she and her team can update themselves, that allows them to interact with visitors, and that has the clean look they wanted (see photo above). Plus, she said, it’s not like every other wealth management side: “This Web site is more light-hearted than the sites of other wealth management firms. We wanted people to feel comfortable and not intimidated to talk about their money goals or challenges.”

At the end of 2012, the company, which takes in $1 million in annual revenue, decided it wanted to learn how to engage more with Web visitors. It invested an annual fee of $7,000 in a package that uses a WordPress plug-in to add the Hubspot software to the existing site. The software captures an e-mail marketing list from visitors who click on the site’s downloadable content. Hubspot also provides extensive traffic analytics to help determine which content performs the best. “Hubspot allows us to use our best keywords to create content, which helps our S.E.O. ranking and drives more visitors to our Web site.”

While its been just three-months since Mackey Advisors started using Hubspot, the results have been promising. “We’ve had a 25-percent increase in Web traffic since we started using Hubspot,” Ms. Mohr said, “and our interactions with qualified prospects are up significantly as well.”

Operating an e-commerce site brings with it a different set of challenges. Annette Giacomazzi got the idea to create CastCoverZ after her daughter Ellie broke six bones before the age of 12. Something of a daredevil, her daughter, now 16, always seemed to break something around a holiday. “It started with me sewing a little cover to match her Halloween costume,” Ms. Giacomazzi said. “She got so many compliments it gave me an idea for a business.”

Now, the four-and-a half year-old company, based in Hollister, Ca., has five employees and generates more than $500,000 a year in revenue. The company slogan is “Feel better, Heal better,” and that is what she wants her Web site visitors to think when they come to order a cover to decorate a new cast or crutch.

Two years ago, she invested $15,000 with a consulting firm, Web Marketing Therapy, to rebrand her company and re-think her online marketing strategy. She hired the firm after seeing the president participate in an online webinar. “My original logo didn’t represent what I wanted to convey,” she said. “I wanted something fresh, cheerful, and bold. The re-branding costs included new print design and printing of support materials.”

Next, she reviewed proposals from multiple vendors before deciding to pay $3,000 to a local developer, Joanne Barker, to build the site. “I chose Joanne because she listened,” she said. “She got me.”

Ms. Barker built the site (see below) and shopping cart with custom code, which can be a scary path to take because the code is only as good as the developer. And if you ever want to move on from your developer, you could be left with a mess on your hands, including being at the developer’s mercy for maintenance and updates. None of those issues concerned Ms. Giacomazzi. “I had a vision and she translated that into a rockin’ Web site,” she said. “And from an infrastructure standpoint, the scalability we’ve achieved has had amazing reliability. We’ve also had the ability to make changes in minutes or a couple of hours, which is what keeps us fresh and relevant.”

Two years later, however, she has outgrown her custom code and now plans to transition her site to the Bigcommerce shopping-cart system by the end of June. But Ms. Barker is not losing a client. “Joanne is building my site,” Ms. Giacomazzi said. “She has tweaked many things on Bigcommerce’s templates. This ensures that the CastCoverz Web site will not be an out-of-the-box Web site but have my stamp on it, with her signature.”

In my next post, I will highlight some alternative ways you can update a Web site.

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media strategy and content development company. You can follow her on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/31/how-two-owners-got-the-web-sites-they-wanted/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: Why We Are Hiring Outsiders to Critique Our Performance

May 30, 2013 by Leave a Comment

Hoi-Sun Tong (left) and Franya Barnett (right) are Vanessa K. Rees Hoi-Sun Tong (left) and Franya Barnett (right) are “process rhinos.” Sonu Panda is co-founder and chief operating officer.

Building the Team

Hiring, firing, and training in a new era.

Sonu Panda is an animal.

As co-founder and chief operations officer of H.Bloom, Mr. Panda is maniacally focused on the minute details of our business. His mission is clear: to make sure that each delivery that we make is a luxurious experience for our customers. To aid him in his quest, he is building an internal consulting group made up of folks who carry an unusual title: process rhino.

In a column for Forbes called The Rhino Principle, Paul Johnson described the rhinoceros as single-minded: “When it perceives an object, it makes a decision – to charge. And it puts everything it’s got into that charge.” Our process rhinos are putting everything they’ve got into analyzing the daily processes that enable H.Bloom employees to buy the best flowers, design exquisite living art, produce remarkable arrangements and deliver those arrangements to our corporate and consumer customers.

If you are wondering why I’m writing about Mr. Panda and rhinos, it’s about training. In my last three posts, I’ve written about our fundamental belief in gaining a competitive advantage through practice, how we facilitate management classes, and how we emphasize the lessons learned in those sessions. Today, I want to describe the dedicated team that we are building to identify and document the best way to do things at H.Bloom. The playbook that they create will enable us to provide better training to our team. And, it is with better training that we will ensure we deliver the best products and services to all of our customers.

In the first of the these posts, I referred to our SEED Program, where we train aspiring business leaders to run the operations of future H.Bloom markets. Today, graduates of the program manage four of our five markets, and we have another four folks in the program currently. Until now, though, the training has focused almost exclusively on the job, rotating trainees through all aspects of a market’s operations and shadowing the existing market manager. It has been learning by doing.

The ideal training program would provide SEED participants with a playbook, enumerating every process that happens within an H.Bloom market and identifying the right way to do things. Practice makes perfect only if you are practicing how to do things perfectly. We needed to take the time to analyze our operations, but everyone involved in our operation was already working at full capacity. In order to analyze the processes and build our playbook in a meaningful time frame, we needed a dedicated team to do it. So, we are creating a team of internal consultants — our team of process rhinos.

We are hiring these folks from outside of the company, so that they bring an unbiased perspective when determining whether processes are optimal. Instead of coming from a background of deep experience at H.Bloom, these new full-time employees will apply the Socratic method of asking question after question until they identify our best practices. We rationalized the additional expense of this team in a very straightforward way. First, if we build a team of process rhinos, and they help us expand rapidly to cities around the world, their amortized cost will be negligible. Second, if their work to build the playbook has a positive impact on the rate at which we expand to new regions – directly affecting the slope of our revenue growth – the investment will be well worth it.

Here’s the plan that Mr. Panda has laid out: Examine existing operational processes. Document those processes with great detail. Seek feedback from all stakeholders to determine the best ways to do things. Roll out the new procedures to all markets. Track what happens. Build a new training curriculum for SEED participants.

With a playbook, all employees in an operational role will train faster, retain more, and have fewer on-the-job questions. Moreover, our SEED participants will now have a formal curriculum to augment the on-the-job training. This is particularly important as we begin to accelerate our expansion in the coming months.

Mr. Panda has already hired two of the rhinos, and he is actively looking for a third. The profile of the ideal candidate is simple – someone who is smart and has the ability to synthesize a lot of information and then can disseminate new standards across the company. The person will also have to be ready and willing to work hard.

If all of this works, we will deliver a better product and better service to our customers. We are making a big bet on training, and with this internal consulting group, we are investing in the people and playbook to ensure that we train well. Now that Mr. Panda has hired a team to develop our playbook, he meets with them weekly for status updates, but otherwise, he gets back to his role as C.O.O. and gets out of their way.

Once you find a team of rhinos to analyze and optimize your processes, it’s best not to get in the way of their charge.

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/30/why-we-are-hiring-outsiders-to-critique-our-performance/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

New York Challenges a Coffee Shop Logo

May 29, 2013 by Leave a Comment

Then came the logo — a cartoon of Mr. Penix’s tattooed fist grasping a coffee-filled portafilter, punching through the name of the East Village coffee shop Mr. Penix co-owned, Everyman Espresso. It said everything Mr. Penix meant for the shop to stand for: an in-your-face passion for New York City and for fine coffee.

Then, last month, came the letter from agents for the state’s Department of Economic Development.

It said, “Everyman Espresso’s unauthorized and confusingly similar use of the I ♥ NY® logo” violated federal trademark law and implied “a misleading designation of source, origin, endorsement, sponsorship or approval by the New York State Department of Economic Development of your merchandise.”

Stop the French presses.

Down came the logo from Everyman’s Web site. Down to the basement went the mugs and T-shirts and onesies emblazoned with it. Out went the letter from Everyman’s lawyer, promising, “My client shall cease all use of its mark.”

Mr. Penix and his partner Jay Terrana hoped that would be enough. It was not.

Back came the reply from a lawyer for CMG Worldwide, the agency that is kept very busy protecting the trademark of the state’s iconic, oft-ripped-off “I ♥ NY” mark.

“We expect that any entity that infringes on the rights of our client compensate it for unauthorized use,” the lawyer, Clare Neumann, wrote on May 20, requesting “an accounting of all gross revenues generated during the period when the I ♥ NY® Trademark was used” to help her set the appropriate penalty.

That, in coffee parlance, has left a bitter taste in Mr. Penix’s mouth.

“Basically, it’s extortion,” he said. “It’s also ironic because we are being threatened by the entity that has vowed to grow our New York business.”

The mission of Empire State Development, the department’s parent agency, is indeed “to promote a vigorous and growing economy, encourage the creation of new job and economic opportunities, increase revenues to the State and its municipalities, and achieve stable and diversified local economies.” Empire State Development is also home to the state tourism department, which started an effort last year to revive and reinvent its “I ♥ NY” campaign.

On Monday, Everyman slapped a “Censored” sign over the logo on the door of its second shop, on West Broadway in SoHo, which opened last summer. Everyman’s principals are complying with Ms. Neumann’s request, albeit under protest. “We just think there’s no likelihood of confusion,” Mr. Terrana said.

Ms. Neumann’s response is, essentially, that the law — specifically, section 43(a) of the Lanham Act, 15 USC 1125(a) — is the law. Nor does the fact that the red coffee cup does not much resemble the red heart of the I ♥ NY logo make much difference. Federal regulations, she said, “prohibit companies from using any part of a trademark.”

In the 36 years since the designer Milton Glaser came up with the logo to help boost New York’s sagging mid-’70s image, the state has filed thousands of trademark objections and cease-and-desist letters. Last year alone, a state official said, more than 100 letters were sent.

Many go to vendors who use the whole logo without permission. But the state has also gone after the makers of “I ♥ Yoga” T-shirts and “I ♥ Paris” bumper stickers. After Sept. 11, when Mr. Glaser designed an “I ♥ NY More Than Ever” logo with a smudge on the heart, the state even threatened to (but did not) sue him, Mr. Glaser said.

But Everyman has another option, Ms. Neumann wrote. It can submit a proposal to buy licensing rights, an arrangement that state officials said brought in more than $2.5 million last year.

No thanks, said Mr. Terrana. “It would just make more sense for us to change our mark than pay on an ongoing basis to use theirs,” he said. “That’s setting aside the fact that we don’t think we’re infringing on it anyway.”

Mr. Penix’s tattoo itself is safe — as long as he doesn’t misuse it.

“I just have to keep it separate from the promotion of the business and put it away for photos,” he wrote. “No more fan photos of the fist.”

This article has been revised to reflect the following correction:

Correction: May 29, 2013

An earlier version of a picture caption with this article incorrectly stated that Sam Penix’s tattoo predated the coffee shop. The coffee shop happened first.

Article source: http://www.nytimes.com/2013/05/30/nyregion/new-york-challenges-a-coffee-shop-logo.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: Which Start-Up Should This Entrepreneur Pursue?

May 29, 2013 by Leave a Comment

Aseem Badshah has to decide which promising start-up to pursue.Matthew Ryan Williams for The New York Times Aseem Badshah has to decide which promising start-up to pursue.

Case Study

What would you do with this business?

We just published a case study about a young entrepreneur, Aseem Badshah, who is torn between two ventures and needs to decide where to focus his time and energy.

His first business, Uptown Treehouse, creates online marketing campaigns. Three years old, it earns more than $300,000 a year on revenue of $1.3 million. His new idea is a software product called Socedo which scans social media and other public Web sites to find sales leads for clients. Mr. Badshah has 200 companies using a test version of the software and has received positive feedback.

Now he needs to decide if he should spend all his time on one of the businesses — or if he can split his time between the two ventures.

Uptown Treehouse is a successful, going concern, so if Mr. Badshah focuses all his energies there, he will face less financial risk. The company, however, offers limited growth potential that will be determined by the number of customers it can serve.

Alternatively, he could sell or close Uptown Treehouse and focus entirely on raising capital to build the Socedo team and technology. This option would be riskier because Socedo is an early technology start-up — but it also offers greater potential rewards because it is a software product, not a customized service, and could sell in high volumes quickly.

So far, Mr. Badshah is pursuing a third option: delegating the running of Uptown Treehouse to a general manager and using its profits to finance Socedo. He tries not to spend much time on Uptown Treehouse but concedes he is distracted by it. His eventual goal is to raise money from outside investors so that Socedo will not be dependent on Uptown Treehouse.

Below, you will find the recommendations of a serial entrepreneur, a small-business cash flow analyst and a start-up expert with both academic and business experience. Please use the comment section to tell us whether you agree or disagree with their advice — and to offer your own suggestions for Mr. Badshah. Next week, we will publish a follow-up.

Fred Dewey, former chief executive of Kachingle and current partner at Emotional Intelligence at Work, a training program: “Over the past three years, I was the C.E.O. of a start-up and spent some of my free time on another idea. We had a weekly conference call on my ‘spare-time project,’ where I gave input. Now it’s ready to fly and I’ve moved over to focus on it. Badshah should separate the two companies financially and divide his time 90 percent/10 percent between Socedo and Uptown. With discipline and a good Uptown general manager, he will be able to keep the value and profits of Uptown, while putting most of his energy into Socedo. Socedo’s funding plan A should be to raise outside capital with a plan B of using Uptown profits.”

Dan J. Cunningham, a financial and cash flow analysis consultant for small businesses over the past 35 years: “The revenue Badshah is making from Uptown Treehouse puts him in the top 1 percent of all American earners, so from a financial perspective, it would be difficult to see why anyone would want to give up that situation. It looks like he thinks his original company is not very exciting and that he won’t get a big payout one day where someone comes in and pays him millions and millions of dollars for his company. The risk of the new venture is, if the planning and assumptions are wrong, there will be no buyout and no millions and millions of dollars. There’s definitely something to be said for plodding along with a sure thing and making a lot of money while you do it.”

Steve Blank, an associate professor at Stanford University and author of “The Start-Up Owner’s Manual”: “Pick one business and commit to it. Betting on one idea focuses your heart, soul and all your energy on its success. If you are not fully committed to your idea, why would an investor commit to you? You can’t give your whole self to multiple girlfriends or boyfriends — it’s the same with business.”

What do you think?

Article source: http://boss.blogs.nytimes.com/2013/05/29/can-one-owner-build-two-start-ups-at-once/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Case Study: When Your First Company Is Working, but You May Have a Better Idea

May 29, 2013 by Leave a Comment

THE CHALLENGE Founded by Aseem Badshah, Uptown Treehouse creates campaigns employing elements for Facebook, Twitter, LinkedIn, StumbleUpon and Outbrain. It helps companies introduce new products and initiatives and has worked, for example, with both Guess Jeans and the television show “Breaking Bad.”

While building the company, Mr. Badshah and a programmer, Kevin Yu, created software that searches social media and other Web sources to generate sales leads, and that software has taken on a life of its own.

In fact, the lead-generation software was so effective that Mr. Badshah and Mr. Yu created a separate start-up, Socedo, to develop and sell the software. Thus far, however, they remain uncertain as to how to finance the start-up and how to divide their time between the two companies, which are in different cities. They believe Socedo, based in Seattle, could earn much larger profits, but with much greater risk.

THE BACKGROUND Mr. Badshah, 24, graduated from the University of Washington in 2010 with a business degree. He moved to Los Angeles with the idea of starting the marketing agency that became Uptown Treehouse.

As part of the promotional campaign for the agency, Mr. Badshah started looking for ways to find sales leads that might turn into clients. His team created software that scanned social media for words that would identify potential customers. Then they used those words to start a conversation with the target customers through social media channels.

When the Microsoft development team was looking for people to create Windows 8 or Windows phone apps, for example, Mr. Badshah’s software scanned social Web sites and public forums for people who were commenting on mobile application development and let the development team contact them, offering links to Microsoft resources and connecting them to others who could help them develop new applications. Mr. Badshah found this new referral system more effective than cold-calling for customers.

Inspired, he teamed up with Mr. Yu, a former Microsoft engineer he had met during a University of Washington entrepreneurship event, to start Socedo, choosing the name because it was a combination of social and succeed, and because they considered it short and “brandable.”

Over the last year, the programming team has continued to develop the lead-generating software, which is now being tested by some 200 companies — mostly small outfits but also a couple of big names in Mr. Badshah’s Seattle hometown, Zillow and Microsoft.

Thus far, Mr. Badshah said, the testing has indicated that some 20 percent of the sales leads Socedo generates for its clients are of high enough quality for those clients to include them in their sales pipelines. With about 10 percent of the companies indicating they are ready to pay for Socedo on a monthly basis, he now hopes to introduce the software for sale in the next few weeks.

THE OPTIONS Torn between the two ventures, Mr. Badshah has come to a decision point. He could continue building the Uptown Treehouse business and invest all of his time in that. There would be less financial risk because it is up and running and requires less investment in technology, but the company offers a linear growth curve based on the number of customers served and the number of employees that will have to be hired.

Option two is to sell or close Uptown Treehouse and use 100 percent of his time to raise capital to build Socedo. This option would be the riskiest because it is an early technology start-up, but it also offers greater potential rewards because he would be selling a software product, not a customized service.

The third option is to delegate the running of Uptown Treehouse to a general manager and use its profits to finance Socedo. Mr. Badshah would try not to spend much time on Uptown Treehouse but concedes he could be distracted by it.

There would be a risk in tying together the two companies financially because the loss of a client at Uptown Treehouse could affect cash flow at Socedo. Also, there are other software companies with similar ideas, and they may be able to grow faster than the Uptown Treehouse profits would permit Socedo to grow. If those competitors grow faster, they might capture the market first.

Article source: http://www.nytimes.com/2013/05/30/business/smallbusiness/when-your-first-company-is-working-but-you-may-have-a-better-idea.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Case Study: When Your First Company Is Working, but Another Is Beckoning

May 29, 2013 by Leave a Comment

THE CHALLENGE Founded by Aseem Badshah, Uptown Treehouse creates campaigns employing elements for Facebook, Twitter, LinkedIn, StumbleUpon and Outbrain. It helps companies introduce new products and initiatives and has worked, for example, with both Guess Jeans and the television show “Breaking Bad.”

While building the company, Mr. Badshah and a programmer, Kevin Yu, created software that searches social media and other Web sources to generate sales leads, and that software has taken on a life of its own.

In fact, the lead-generation software was so effective that Mr. Badshah and Mr. Yu created a separate start-up, Socedo, to develop and sell the software. Thus far, however, they remain uncertain as to how to finance the start-up and how to divide their time between the two companies, which are in different cities. They believe Socedo, based in Seattle, could earn much larger profits, but with much greater risk.

THE BACKGROUND Mr. Badshah, 24, graduated from the University of Washington in 2010 with a business degree. He moved to Los Angeles with the idea of starting the marketing agency that became Uptown Treehouse.

As part of the promotional campaign for the agency, Mr. Badshah started looking for ways to find sales leads that might turn into clients. His team created software that scanned social media for words that would identify potential customers. Then they used those words to start a conversation with the target customers through social media channels.

When the Microsoft development team was looking for people to create Windows 8 or Windows phone apps, for example, Mr. Badshah’s software scanned social Web sites and public forums for people who were commenting on mobile application development and let the development team contact them, offering links to Microsoft resources and connecting them to others who could help them develop new applications. Mr. Badshah found this new referral system more effective than cold-calling for customers.

Inspired, he teamed up with Mr. Yu, a former Microsoft engineer he had met during a University of Washington entrepreneurship event, to start Socedo, choosing the name because it was a combination of social and succeed, and because they considered it short and “brandable.”

Over the last year, the programming team has continued to develop the lead-generating software, which is now being tested by some 200 companies — mostly small outfits but also a couple of big names in Mr. Badshah’s Seattle hometown, Zillow and Microsoft.

Thus far, Mr. Badshah said, the testing has indicated that some 20 percent of the sales leads Socedo generates for its clients are of high enough quality for those clients to include them in their sales pipelines. With about 10 percent of the companies indicating they are ready to pay for Socedo on a monthly basis, he now hopes to introduce the software for sale in the next few weeks.

THE OPTIONS Torn between the two ventures, Mr. Badshah has come to a decision point. He could continue building the Uptown Treehouse business and invest all of his time in that. There would be less financial risk because it is up and running and requires less investment in technology, but the company offers a linear growth curve based on the number of customers served and the number of employees that will have to be hired.

Option two is to sell or close Uptown Treehouse and use 100 percent of his time to raise capital to build Socedo. This option would be the riskiest because it is an early technology start-up, but it also offers greater potential rewards because he would be selling a software product, not a customized service.

The third option is to delegate the running of Uptown Treehouse to a general manager and use its profits to finance Socedo. Mr. Badshah would try not to spend much time on Uptown Treehouse but concedes he could be distracted by it.

There would be a risk in tying together the two companies financially because the loss of a client at Uptown Treehouse could affect cash flow at Socedo. Also, there are other software companies with similar ideas, and they may be able to grow faster than the Uptown Treehouse profits would permit Socedo to grow. If those competitors grow faster, they might capture the market first.

Article source: http://www.nytimes.com/2013/05/30/business/smallbusiness/when-your-first-company-is-working-but-you-may-have-a-better-idea.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

The Next Level: The Unsung Heroes of Fast-Growth Companies

May 29, 2013 by Leave a Comment
The Next Level

Avoiding the pitfalls of fast growth.

Academia and media tend to focus on leaders. As a result, they often miss the importance of the unsung heroes in disruptive, fast-growth companies who make sure the disruption is carried all the way through the company.

This person has a similar skill set to an unsung hero in health care during combat — the head nurse, a person serious enough to give urgent orders, soft enough to hold a soldier’s hand in pain, and strong enough to wake up the next day and do it all again. Most people don’t even know this role exists in fast growth, but don’t try to grow without one. Who is this person? A No. 2 Who Can Do.

Often, the No. 2 is the smartest person in the room, talks the least, gets the most done and does not have a big ego. Like head nurses, as long as the No. 2’s can keep the company alive and going, they are just fine letting others shine. Really good No. 2’s don’t care about titles, offices or who goes to lunch with whom. In fact, all of this stuff runs contrary to what a real No. 2 can do.

A true No. 2 Who Can Do must go up, down and across your organization and have “walking around” rights in your company and customer environments. Titles can help you go to the top but can also prevent you from going down the organization to fix the root causes of problems.

At my company, STI Knowledge, I had a great No. 2, Gary Volino, who went up and down and across the company every day. He came to work with us when we had 48 employees, and he really had two jobs: fix problems on the inside and protect revenue on the outside. We called him the “Mad Italian” because he worked so hard and was so funny. He was 5-foot-7 and had done stand-up comedy at night when he was a consultant at Price Waterhouse. He was funny but also very real.

I asked him once why he had so many chief executive friends. “I am a small-frame guy,” he said. “I don’t think they find me intimidating.” He and I worked together for seven years and never had a cross word, and he never had an official title. I cannot even recall where he sat, but I do know this: Without Gary we might well have been just another company that started fast and then hit dead man’s curve — where the growth stalls and the company falls.

Because too many companies hit that curve somewhere between 50 and 500 employees, I will lay out some prerequisites for hiring No. 2’s. They have to be able to knock down doors day after day, perhaps even literally. Once, having flown back from New York, I had arrived at the office late in the afternoon with a skip in my step and a pretty big smile. We had just won an account with Ralph Lauren, having beaten out all of the big guys.

As I was walking tall around the office, I saw Gary coming down the hall with a sense of urgency, calm but concerned. Welcome to the N.F.L. — Not For Long — which is the length of any celebration at a fast-growth company. I asked Gary what was wrong. He said that when our controller left the company, he had locked the payroll checks in the safe. These were the payroll checks we have to send overnight to our remote employees, including the new hires on site at Ralph Lauren. When a premier company takes a chance on an insurgent company like ours, you cannot have your employees saying, “Our paychecks are late.”

I said, “Break the safe.” Gary said, “He locked the safe in the storage room with the iron door, and we have five minutes if we are going to get the checks on the FedEx jet.” So the “Mad Italian” broke down the iron door, and everyone was paid. No. 2’s don’t second-guess — they do. Of course, a No. 2 like Gary patches up a lot more things than he breaks down: system shortfalls, skill shortcomings, hurt feelings, customer expectations, sales revenue, and strategies of swinging for the fences. I don’t think I ever asked him to work on a problem. A good No. 2 finds problems and solves them, usually without drama. When things were tense, Gary would say something funny to make everyone laugh. Humor can solve more problems in fast-growth companies than anything, other than revenue.

A true No. 2 does not necessarily think he should be the second-highest paid person in the company but does want to be a significant equity holder. Gary was the second-largest equity holder at STI, but he never asked me if that was the case. He asked for a certain amount and I agreed. The subject was never discussed again.

So how do you find such people? You don’t. They find you. If you go out there and tell the world that you are looking for a No. 2, you wind up with a show horse instead of a work horse. You are also telling your people that you are putting up a wall between you and them. Most often, good No. 2’s emerge from an existing leadership pool. Or, occasionally, they will find you and say, “I want to work with you.”

They are even good at picking No. 1’s.

Cliff Oxford is the founder of the Oxford Center for Entrepreneurs. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/29/the-unsung-heros-of-fast-growth-companies/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: The Challenges of Raising Prices and Competing With Online Retailers

May 28, 2013 by Leave a Comment
She Owns It

Portraits of women entrepreneurs.

Jessica Johnson doesn't mind letting some customers go.Sara Krulwich/The New York Times Jessica Johnson doesn’t mind letting some customers go.

At the last She Owns It Business Group meeting, the owners talked about several issues related to pricing. This post focuses on the prices charged by the two family businesses in the group, and the particular challenges of selling a product that is sold online for less.

Deirdre Lord, who owns the Megawatt Hour, had a question for Jessica Johnson and Susan Parker. Both took over businesses handed down from their parents, and Ms. Lord wondered whether they inherited pricing schemes as well.

Ms. Johnson, who owns Johnson Security Bureau, said she inherited the terms on certain contracts that were not yet up for renewal. When she eventually approached at least one of those clients to discuss rate increases, the client protested that other companies offered to handle the job for less. As she has said previously, Ms. Johnson doesn’t mind letting that kind of customer go.

She said her more savvy clients understood that external factors affected pricing and they would incorporate rising costs into their contracts. “That’s the kind of business we prefer to go after now, as opposed to, ‘No, you signed the paper, you’re stuck with it forever,’” she said.

In light of the Affordable Care Act, which will require businesses with more than 50 employees to provide health insurance for those employees, these considerations will become even more important, said Ms. Johnson, whose company had more than 100 employees and had not previously offered health insurance. “I’ve been running the numbers for several of our contracts looking at what’s going to happen when health care kicks in next year,” she said, adding that she had been proactive about talking to clients about how her prices could be affected. “We can kind of set the table and let them know that a price increase may be coming and see if that means that they’ll stay with us or they’ll go to someone else.”

Ms. Parker owns Bari Jay, which manufactures bridesmaid and prom dresses. She’s the only owner in the group with a company that sells a product, not a service. When she and her sister took over Bari Jay, the prices of the dresses already on the market remained the same, she said. But soon after, their factories raised their prices, and they, in turn, raised theirs as well.

“I had no one to teach me how to price a dress, so I came up with my own formula,” she said.

“Is it working?” asked Beth Shaw, who owns YogaFit.

“Really well,” Ms. Parker said.

“Do you take your fixed costs and then do you divide that up by the number of units you sell a year?” Ms. Shaw asked.

“Yes, and then I add a margin on top of it,” Ms. Parker said. While stores have complained that her prices have gotten high, she said higher prices are a bridal-industry phenomenon. “Making a dress in China has gotten really expensive,” she said.

Like other bridal companies, Bari Jay sells a sample dress to its stores, which then place orders based on the sample. About 10 years ago, Ms. Parker said, many of Bari Jay’s competitors started giving away free samples. “My father tried it, and it almost put him out of business,” she said. So, instead, Bari Jay offers volume discounts.

“That’s a great idea,” said Alexandra Mayzler, owner of Thinking Caps Group.

“There’s an incentive to buy more dresses, and if you buy less than the minimum, then you’re going to pay full price,” Ms. Parker said.

“With pricing, you definitely have to do what Susan was saying: think about cost, all of the math, but then you have to say to yourself, ‘Who am I going to sell it to?’” Ms. Mayzler said. You have to determine what they expect and whether you’re willing to “deal with the relationships that come because you’re in a particular price bracket,” she continued.

Ms. Parker agreed and explained that she doesn’t rely exclusively on her formula. For example, if her formula demands that a certain dress be priced $10 more than another, but the lower-priced dress looks more expensive, she will “tweak” the prices accordingly. She also explained how price perception affects her business. Bari Jay sells to stores, which then sell to customers. “All of our stores pretty much adhere to M.S.R.P.,” she said, referring to the manufacturer’s suggested retail price.

But on the stores’ Web sites, it’s a different story. Customers buying online can get the same dresses for less, said Ms. Parker. But they don’t receive the services, like a fitting they would get at the physical store. When you buy online, Ms. Parker said, “They’ll send it to you in a ball and if it has a stain or damage, it’s on you.” This annoys the stores that carry Bari Jay but don’t sell online. And it bothers Ms. Parker and her sister. “It cheapens our name,” she said, adding that customers who are willing to pay more don’t want to wear a dress that someone else was able to buy for half the price.

You can follow Adriana Gardella on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/28/the-challenges-of-raising-prices-and-competing-with-online-retailers/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

She Owns It: The Challenges of Raising Prices and Competing With Online Retailers

May 28, 2013 by Leave a Comment
She Owns It

Portraits of women entrepreneurs.

Jessica Johnson doesn't mind letting some customers go.Sara Krulwich/The New York Times Jessica Johnson doesn’t mind letting some customers go.

At the last She Owns It Business Group meeting, the owners talked about several issues related to pricing. This post focuses on the prices charged by the two family businesses in the group, and the particular challenges of selling a product that is sold online for less.

Deirdre Lord, who owns the Megawatt Hour, had a question for Jessica Johnson and Susan Parker. Both took over businesses handed down from their parents, and Ms. Lord wondered whether they inherited pricing schemes as well.

Ms. Johnson, who owns Johnson Security Bureau, said she inherited the terms on certain contracts that were not yet up for renewal. When she eventually approached at least one of those clients to discuss rate increases, the client protested that other companies offered to handle the job for less. As she has said previously, Ms. Johnson doesn’t mind letting that kind of customer go.

She said her more savvy clients understood that external factors affected pricing and they would incorporate rising costs into their contracts. “That’s the kind of business we prefer to go after now, as opposed to, ‘No, you signed the paper, you’re stuck with it forever,’” she said.

In light of the Affordable Care Act, which will require businesses with more than 50 employees to provide health insurance for those employees, these considerations will become even more important, said Ms. Johnson, whose company had more than 100 employees and had not previously offered health insurance. “I’ve been running the numbers for several of our contracts looking at what’s going to happen when health care kicks in next year,” she said, adding that she had been proactive about talking to clients about how her prices could be affected. “We can kind of set the table and let them know that a price increase may be coming and see if that means that they’ll stay with us or they’ll go to someone else.”

Ms. Parker owns Bari Jay, which manufactures bridesmaid and prom dresses. She’s the only owner in the group with a company that sells a product, not a service. When she and her sister took over Bari Jay, the prices of the dresses already on the market remained the same, she said. But soon after, their factories raised their prices, and they, in turn, raised theirs as well.

“I had no one to teach me how to price a dress, so I came up with my own formula,” she said.

“Is it working?” asked Beth Shaw, who owns YogaFit.

“Really well,” Ms. Parker said.

“Do you take your fixed costs and then do you divide that up by the number of units you sell a year?” Ms. Shaw asked.

“Yes, and then I add a margin on top of it,” Ms. Parker said. While stores have complained that her prices have gotten high, she said higher prices are a bridal-industry phenomenon. “Making a dress in China has gotten really expensive,” she said.

Like other bridal companies, Bari Jay sells a sample dress to its stores, which then place orders based on the sample. About 10 years ago, Ms. Parker said, many of Bari Jay’s competitors started giving away free samples. “My father tried it, and it almost put him out of business,” she said. So, instead, Bari Jay offers volume discounts.

“That’s a great idea,” said Alexandra Mayzler, owner of Thinking Caps Group.

“There’s an incentive to buy more dresses, and if you buy less than the minimum, then you’re going to pay full price,” Ms. Parker said.

“With pricing, you definitely have to do what Susan was saying: think about cost, all of the math, but then you have to say to yourself, ‘Who am I going to sell it to?’” Ms. Mayzler said. You have to determine what they expect and whether you’re willing to “deal with the relationships that come because you’re in a particular price bracket,” she continued.

Ms. Parker agreed and explained that she doesn’t rely exclusively on her formula. For example, if her formula demands that a certain dress be priced $10 more than another, but the lower-priced dress looks more expensive, she will “tweak” the prices accordingly. She also explained how price perception affects her business. Bari Jay sells to stores, which then sell to customers. “All of our stores pretty much adhere to M.S.R.P.,” she said, referring to the manufacturer’s suggested retail price.

But on the stores’ Web sites, it’s a different story. Customers buying online can get the same dresses for less, said Ms. Parker. But they don’t receive the services, like a fitting they would get at the physical store. When you buy online, Ms. Parker said, “They’ll send it to you in a ball and if it has a stain or damage, it’s on you.” This annoys the stores that carry Bari Jay but don’t sell online. And it bothers Ms. Parker and her sister. “It cheapens our name,” she said, adding that customers who are willing to pay more don’t want to wear a dress that someone else was able to buy for half the price.

You can follow Adriana Gardella on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/28/the-challenges-of-raising-prices-and-competing-with-online-retailers/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

You’re the Boss Blog: This Week in Small Business: Be a Plumber

May 28, 2013 by Leave a Comment
Dashboard

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Must-Reads

These e-mails show how Steve Jobs won negotiations. Ezra Klein explains why we should stop celebrating our falling deficits.

Economy: Restaurants and Real Estate

Intuit’s profits rise on “small-business strength.” Research from Dell and Intel shows optimism among small businesses, but an index from Experian and Moody’s Analytics projects more struggles through the end of the year. Restaurant sales are at a high. Existing home sales are up 9.7 percent over a year ago, new home prices touch record highs and Matt Phillips says the hidden indicators on housing are buried in Home Depot’s “rock solid” earnings. But the Architecture Billings Index reverts to negative territory for the first time in nine months. Travel on all roads and streets (pdf) declined by 1.5 percent in March (compared to last March). The Federal Reserve chairman says Congress’s fiscal policy is hampering economic growth.

Management: Oh My Stars!

Here are eight ways to run a small business. Kat gives some advice for stepping up your work wardrobe, and Kimberly Crossland believes you should be working out every day. “Oh my stars!” is just one of 11 old-fashioned sayings Kristin Piombino wants to bring back. Here are a few tips for fighting small-business fraud. By Jane Applegate offers ways for more women to get on corporate boards. Eric Yu provides a straightforward guide for value-based pricing. Mars Dorian shares five creative lessons he’s learned from his enemies, including: “Ask for that slap in the face.” The Blunt Bean Counter shares advice for finding a business partner. Bob Dahms explains why coming up with the right name is crucial for your business.

Employees: Groupon’s Giant Cat

A Florida business owner gives half of his company to his employees. Laura Vanderkam wonders if it is worth it to train new employees. A giant cat in a spaceship helps keep Groupon’s employees on task. Tim Berry explains how to calculate the hourly cost of an employee. SAP plans to hire a “whole bunch” of people with autism. A hairy, grown man impersonates a 2-year-old girl.

Youth: Be a Plumber

Yahoo buys Tumblr from a high school dropout and promises not to mess it up. This is how to set goals. An 18-year-old takes the science world by storm, a teenager develops a computer algorithm to diagnose leukemia and another teenager wins a fellowship to skip college and build a crowdfunding platform. Mayor Michael R. Bloomberg recommends skipping college to be a plumber. Young entrepreneurs pitch ideas to Warren Buffett and win prizes for their businesses. A bored teenage girl plays “Eruption” better than Eddie Van Halen. Here are the best commencement speeches of 2013, and Dave Kerpen advises graduates to master these 15 simple skills.

Entrepreneurs: Dig Deep

American entrepreneurship rates reach their highest levels in more than a decade according to researchers at Babson College and Baruch College. Wade Steenhoek asks if entrepreneurship can be taught. Jeff Cornwall thinks there are industries that are ripe for the “destructive, disruptive, and opportunistic work of entrepreneurs.” Barbara Corcoran prefers to see entrepreneurs dig deep into their own pockets and put some skin in the game before asking for money. Jack Dorsey of Twitter says, if you have an idea, “get it out of your head and start working on it.” Not taking risks just for the sake of taking risks is one of seven signs of a true entrepreneur, according to Steve Tobak. Charlie Osborne reveals the one mistake every entrepreneur must avoid.

Finance: The East Coast Is Riskier

Kathy Davis lists 10 ways to increase small-business profit and productivity, and here are three ways to save money for your business. The Small Business Administration starts a new program with banks to increase lending to veterans. Patrick Clark thinks it is riskier to lend to East Coast small businesses, and Ami Kassar explains why alternative lenders should set some standards. Ty Danco and Dharmesh Shah explain the hows and whys of updating angel investors. An online software service is introduced to help manage receivables. These 31 charts will restore your faith in humanity.

Social Media: Migrating From Facebook

A new study shows teenagers are migrating from Facebook to Twitter. More family farms are becoming connected through social media. Heidi Cohen shares 31 social media marketing tips. Marsha Friedman has a few strategies for building a social media audience, and this may be why social media doesn’t work for your business. Here is how to make 100 blog posts every day. Ken Mueller shares five places where you might not want to check in online. Thomas von Ahn explains how to get 58 percent of your revenue through LinkedIn groups. Here are 30 small-business champions to follow on Twitter, and these hard-to-believe “facts” really are true (according to BuzzFeed).

Sales and Marketing: Publicity Stunts

Emanuel Perdis has seven rules for coping with sales rejection. Brockwell Bone says that in tough times, small trims make more sense than cutting off all marketing. Carla Johnson describes how your content strategy can thrive when marketing and technology work together, and Ned Smith believes more small businesses are becoming tech-savvy about customer management. Here are a few examples of businesses that have pulled outrageous publicity stunts. I.B.M.’s Watson gets a job in customer service.

Online: Dissatisfied?

A survey reveals that half of small-business owners are dissatisfied with their Web presences (and this bride is probably dissatisfied with her dog). A study finds more than half of American women would rather give up sex than their mobile devices. A viral Dove campaign becomes the most watched ad ever. Google Checkout will be shutting down. This is the essential small-business Web site checklist. Amazon sets its sights on men’s grooming. The Los Angeles Times wins the headline of the week award.

Around the Country: Pickpocket-Proof Pants

A Southwest Missouri bank has set up an account so local residents can donate to storm victims in Oklahoma, and this moving video captures the moment when a survivor finds her dog. Here are other ways to help the victims. Staples increases benefits for its small-business customers. A company donates $120,000 of cloud services to St. Louis entrepreneurs. John Patrick Pullen explains why even small businesses are bigger in Texas. A Long Island entrepreneur designs pickpocket-proof pants. A bill that would give Oregon distillers more opportunities to market and sell their spirits heads to the governor’s desk. These big cities are showing strong growth, while these cities are the most stressed. The National Association of Small Business Professionals adopts tougher and more stringent approval standards for its accredited business program. There are 100 different types of fungi on your feet right now!

Around the World: Greece

Global steel output was down in April. Greece is not turning the corner. Manufacturing in China contracts. A crane accident shuts down power to a third of Vietnam, and an alarming decline of frogs and salamanders is reported.

Red Tape: Tesla Pays Off

An investigation by the House Committee on Small Business finds the General Services Administration owes more than $3 million to small businesses. The immigration bill advances in the Senate, and David Bier gives five reasons that immigration creates economic benefits. The chairwoman of a leading global payment service strongly favors guest workers. Some online businesses are frustrated with “misrepresentations” regarding the Marketplace Fairness Act. The Occupational Safety and Health Administration is offering training grants. Tesla pays off its federal loan.

Technology: The New Bad Guys

This is the Senate report on how Apple used shell companies to save $44 billion in taxes, and this is a chart of the company’s international tax structure. “Tech has replaced banking as the new corporate bad guy,” says Rana Foroohar. Dan Pallotta suggests five things Tim Cook should do, including, “Make a self-deprecating joke”: “Mock himself. People would love it. They would love him.” New software brings face detection to stores and streets for $40 a month. New 3-D printers may level the playing field for small businesses, and this video gives an example of how 3-D printing is changing the world. (NASA wants to use the technology to make pizza). Matt McGee gives a tour of the new Google Maps, and a card counter develops a Google Glass app to beat the house. Eric Knorr says you need to protect yourself from the coming cloud crackup, and Lucas Mearian suggests ways to keep the feds from snooping on your cloud data. These are some great apps to help you build your business, and these are the five most important online tools for small businesses. This is how to use your cellphone as a survival tool.

Tweet of the Week

@marshallk I have the smartest, best informed “to read” folder ever. It’s just sitting there, to be caught up with someday, being real smart! sigh…

The Week’s Best Quotes

Christian Pretorius explains how to set moods: “In the first second, that instant when you first establish eye contact before you say anything and before you break silence — give people your sincere smile.”

Elizabeth Dunn and Michael Norton reveal the secret to buying happiness: “Experiential purchases — such as trips, concerts and special meals — are more deeply connected to our sense of self, making us who we are. And while it’s anyone’s guess where the American housing market is headed, the value of experiences tends to grow over time, becoming rosier in the rearview mirror of memory.”

This Week’s Question: Are you dissatisfied with your Web presence?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/05/28/this-week-in-small-business-be-a-plumber/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,
« Previous Page
Next Page »