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You’re the Boss: Deciding Whose Advice to Take

June 23, 2011 by Leave a Comment

Staying Alive

I’ve been writing lately about what I’ve learned from blogging. Last week, I singled out a comment that I found extremely helpful. This week, I want to talk about the opposite.

Since this is a moderated forum, spam and insane nonsense rarely make it to the page (except for this guy.) Thank you, editors! That still leaves room for people who disagree with my opinions — which make perfect sense to me — or who think they somehow indicate that I’m an inhuman monster (see some of the comments on this post about hiring.)

I’m going to disqualify ad hominem attacks from my list of unhelpful comments. I want to highlight, instead, a couple of ways that I have found advice to be less than useful. Doing this, I hope, will be helpful for small-business owners who must constantly decide whose advice to take. Here are four types of advice to watch out for:

The Complicated and Expensive Solution

Some commenters seem to believe that there are more resources available to a struggling business than my experience would suggest. The following is a comment from my post on soliciting employee ideas:

Here are my recommendations for helping to increase productivity and improve processes.

1) Identify the problems that would ultimately save the company the most time or money. Pick the top three.

2) Identify each step in the top three processes. Put a time or cost number to the step in the process. Eg. The average costs is $15 (labor and shipping) to provide finish samples to each prospect. Most prospects request samples three separate times before placing an order. That’s $45 just for samples. Don’t forget the opportunity cost of doing something else with the time spend handling samples.

3) Offer the employees a “commission” on the savings achieved by improving the process. Put the employee’s portion of the savings into his bonus pool for quarterly rewards.

At first glance this seems to be good advice. But if you don’t have a fairly sophisticated information infrastructure in place, with consistently good inputs being maintained regularly by people who care about what they are doing, it can be impossible to implement ideas like this.

Think of the amount of record-keeping this scheme would require. Who sets it up? Will you be collecting data on paper or electronically? Who trains your workers to do the proper inputs? Who makes sure the data is collected every day? Who tabulates it into useful form? Who figures out whether it makes sense and how to interpret it in a way that helps?

My experience with data is that, in real life, it’s so noisy that it’s almost impossible to draw conclusions. There’s a ready solution for these problems: plenty of money and management time. How many small, struggling businesses have both?

On the other hand, a business that doesn’t work toward understanding itself is at a serious disadvantage. It’s easy to get caught in a death spiral where ignorance leads to bad decisions, which eat up the money required to change course, which can only be generated by good decisions, which only come from good information. I’ve struggled with this and am still struggling with it. And apparently I’m not alone. Here’s a comment from my post about my goals for this year:

I noticed one common thread of advice that seems unrealistic. Comments suggest outsourcing, bringing on a new employee, training someone else, delegating, etc. In my case, I find lists very similar to Paul’s, yet outsourcing and delegating simply isn’t an option. As a start up, we simply don’t have the funds, or the stability, to bring someone else on. And it’s my impression my wife and I are not the only ones in this situation when it comes to starting a new business.

I make lists of goals to fight against the overwhelming thought of everything that still needs to be done in order to keep moving forward. Does any one have any advice on how to complete a long list similar to Paul’s without the option of help or delegation?

Chasing frantically after my bliss,

Roger

A few years ago, when I was exactly where Roger seems to be, I had a simple rule: when prioritizing, start with the thing that will bring the biggest check the fastest. In retrospect, that was kind of dumb.I should have been starting with the thing that would make me cash-flow positive.

What’s the difference? A big check is useful for immediate needs, but figuring out how to arrange things so that revenue consistently outpaces spending is more important. When management bandwidth is limited, you may have to turn your back on a revenue opportunity in order to set up a better system for tracking cash, or to analyze the electric bill, or to spend time checking local wage rates to make sure you aren’t paying too much for labor. I ignored every one of those issues for years while I scrambled for more sales, and it cost me hundreds of thousands of dollars. When I fixed those leaks, as explained here, I suddenly had cash. But I don’t want to give the impression that hard work is always rewarded — I was lucky, too, in that demand for my products has increased in the last year. If it hadn’t, all my tinkering would have been in vain, and the company would have failed.

Conventional Wisdom

I’ve been assured many, many times that I should be looking for repeat customers. For instance, from My Week in Cash Flow:

“I read your comment above about running into former happy clients, and wondered if it would help to focus on people/companies that are more likely to give you repeat business. A small company will buy maybe one or two conference tables, but an architect or an interior designer might order many, and do it repeatedly.”

There are lots of businesses where the repeat customer is the best customer. Restaurants come to mind, as well as professional services, and there are many others. But Google has made possible another type of business model, because the cost of finding people who are looking for something just once has become much less expensive than maintaining a long-term relationship with occasional buyers. I’ve made a conscious decision to build the business around non-repeat clients, and here’s why:

Architects and interior designers are the obvious target market for repeat sales. However, having a third party with design responsibilities makes it hard for me to steer my clients toward products that are profitable for us to produce. I much prefer to be the designer on the project, as we know the ins and outs of table design and manufacturing much better than architects, who are generalists.

Also, a significant number of our potential clients need a table made on short notice. That’s a profitable market segment that requires a nimble and responsive sales and manufacturing team. Architect jobs tend to require the opposite. It can take three times as many sales hours to sell an architect job. In the same number of hours, I can sell three times as many tables — at higher margins.

So in my experience, the potential for profit is greatest with one-time buyers. But aside from that, here’s the point I’m trying to make: I know my business well. I know what’s working, and I have learned the hard way that I don’t have enough resources to deviate from something that’s successful. All small-business owners have to put their eggs in a single basket to start. The first thing they need to do is to understand that basket and to try to make it work for them. If that doesn’t work, then try Plan B. And I hate to tell you, but if Plan B doesn’t work, you probably won’t get to Plan C unless you have unlimited money.

The Trustworthy Source Who is Just Plain Wrong

Much of the advice I got from my former partner was, in retrospect, simply incorrect. It took me quite some time to recognize this, because he is an intelligent man of great integrity, because he was far more experienced in business than I am, and because he believed what he said. In retrospect, I know that we failed to make profits because his main ideas on how to build the company — by adding production capacity without increasing efficiency — was a bad fit for our industry.

Woodworking production was going through a major technological change and we didn’t fully grasp how that would play out. My mistake was that I didn’t seek opinions from other sources. Moral of story: ask for opinions from everyone you can think of, and then sort them out using your own brains and experience. And remember, there’s one universal measure of whether an idea is good or not: does it make you money? Yes, I know that there may be other considerations. But as long as you obey the law and at least consider the Golden Rule, profitability is important.

The Wisdom of Crowds: Not Always

In the post about hiring that I alluded to earlier, I asked a question (“Should I fire a recent hire and replace him with a better qualified candidate who became available after the first hire had been made?”), got a bunch of answers, stuck with my gut instinct on my decision, took a public lashing and reversed myself. Here’s the interesting thing: in this case my first decision turned out to be the better one. Eight months after the fact, the first guy I hired is gone, with no regrets from any of his former co-workers — and the second guy is one of the best workers I have ever had.

One thing about blogging, or asking advice in general, is that it’s nearly impossible to present every nuance of a situation. That means that the consensus of what should be done is based on a subset of the facts, while you have them all. Also, the crowd doesn’t have skin in the game, so its point of view may reflect the fact that it has no incentive to puzzle through every aspect of the problem.

There are a couple of ways this played out in this case. First of all, I couldn’t discuss at length the personalities involved (for obvious reasons.) Second, the commenters didn’t place the same weight on the facts presented as I did. They were extremely concerned about the impact of my decision on my existing workers, while I was more worried about the cumulative cost of a lesser-performing producer. They discounted the difference in scores on our aptitude test, which in my experience is the single best predictive indicator of worker quality, and instead assumed that O.K. would be good enough in my shop. It isn’t. My take away: when the crowd is in agreement on one course of action, recognize that it may be because it doesn’t know as much as you do — and be ready for the possibility that its advice is flawed.

To sum up: think carefully about the advice you get. Can you actually execute it successfully? Is it just boilerplate that doesn’t apply to you? Does your respect for the source override your problems with the advice? And does consensus in the advice you are given mean that the crowd is correct or that they don’t have as much information as you do?

Last thing: I hope you don’t get the feeling that I don’t like the commenters on this blog. On the contrary, I think they are the most interesting part of the experience, and I greatly look forward to reading them. So please, please, please: fire away. And enormous thanks to everyone who has taken the time to post thoughts.

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside of Philadelphia.

Article source: http://feeds.nytimes.com/click.phdo?i=191777eefcdc4784ba68ce41aa6684e0

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You’re the Boss: Wells Fargo Bankers Will Take Your Questions

May 26, 2011 by Leave a Comment

The Agenda

Today, we’re publishing an interview The Agenda conducted with Wells Fargo’s two top executives for small-business lending, Marc Bernstein and Doug Case. Small-business owners have criticized big banks — and Wells Fargo is among the biggest — for doing little to help them through the most difficult days of the recent recession, but Mr. Bernstein and Mr. Case were resolute. Whatever the merit of the complaints against the banking industry, the officials said, the complaints were misdirected when it came to Wells Fargo.

“We are cognizant that the situation was ripe for people to feel like we weren’t serving them, and we tried to do whatever we could reasonably do to help our customers,” said Mr. Bernstein. “But Wells Fargo has been committed to small-business lending for a quite a while now, and we know here that we don’t help our customers, our communities or shareholders by declining a good loan.”

We’d like to know what you think. And so, for that matter, would Mr. Bernstein and Mr. Case. The bank executives have agreed to answer questions from You’re the Boss readers. Please read the interview, then post your questions here. We’ll deliver the questions to them, and post their answers in this space.

Article source: http://feeds.nytimes.com/click.phdo?i=9a8406f3538557d0a71b534dc62585ce

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You’re the Boss: This Week in Small Business: T.G.I.M.

May 23, 2011 by Leave a Comment

Dashboard

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

THANK GOD IT’S MONDAY Just checking. Are we all still here? Phew.

WE DID IT The debt ceiling has been reached. Barkley Rosser says to forget about it: “Treasury Secretary Geithner should simply ignore the debt ceiling and continue to pay the bills as they come in, thereby avoiding any defaults or spending cuts or financial crises.” Reuters’ James Pethokoukis says we should ignore the secretary’s debt-ceiling scare tactics: “Team Geithner has plenty of flexibility about which bills to pay and plenty of dough with which to do it.” Several small-business owners offer their own ideas for reducing the deficit. The Urban Land Institute says our infrastructure needs a $2 trillion upgrade.

THE STRUGGLE CONTINUES A Gallup poll says economic concerns have reached a two-year high. Seeking Alpha’s John Nyaradi tells investors that red flags are everywhere. For example: “There has been a significant rotation into ‘defensive’ sectors like utilities and consumer stocks. (This typically indicates money leaving ‘risk’ assets and often portends market declines).” Both Wal-Mart and Home Depot report lower sales. My kids are freaking out about this story (but Evan Longoria is keeping his cool). Housing starts and building permits fall in April, as does the Architecture Index. Industrial production stays the same because of a decline in manufacturing output. Existing home sales fall. The Philly Fed is weak.

WEAK IS GOOD Some small-business owners are benefiting from higher gas prices. American Airlines says that small-business travel spending is up. The Wall Street Journal’s Kathleen Madigan says that housing weakness is a mixed blessing: “the only sure way for home construction to recover is for supply to decline significantly.” Ezra Klein explains why a weak dollar isn’t so bad: “a stronger dollar is good for buying stuff and a weaker dollar is good for making stuff. What a temporarily weak dollar is particularly good for, however, is recovering from a deep recession.” Mark Perry says that manufacturing profits have returned to record high levels. Kash Mansori is cautiously optimistic about our manufacturing performance: “U.S. manufacturing has done far better during this recovery than what we’ve grown used to seeing over the past 30 years.” And in a new report, the White House reminds us of all the good things our president has done: “17 tax breaks for business owners, more than $50 billion in federal loan guarantees since 2009, and federally supported programs that have provided counseling to more than two million business owners.”

BLOW AWAY THE FOG Goldman Sachs’s chief economist says the next recession is “years away.” Vistaprint’s new index says most of us are pretty happy. Daniel Burrus, technology futurist, says we must envision our company’s future: “Even though we are surrounded by a fog of bad news regarding the economy and a slow jobs recovery, there is a mountain of great opportunity right in front of us. We simply have to blow away the fog to see it.” Stephanie Chandler gives us eight reasons to celebrate being a small business. For example: “Want to leave early and take your kid to the park? Take a vacation? Launch a new product? The only person you need to ask is the one you see in the mirror.” Dude, this California lifeguard is making bank.

PLANKING AROUND THE WORLD A new report from the World Bank predicts that by 2025 China, along with five other emerging economies — Brazil, India, Indonesia, South Korea and Russia — will account for more than half of all global growth, up from one third now. Mike Mandel points out that we’ve hit a milestone in trade: “For the first time, imports from China, Mexico, Brazil exceeded imports from the G6 countries.” BlackBerry makes a small-business push into China. Planking takes Australia. Ten Latin America start-ups are worth tracking. The United States trade representative says the government is creating more export opportunities for small businesses. International sales may be booming, but most big companies still rely on the domestic market for their profits.

LINKEDIN CASHES IN The Economic Development Administration introduces a new virtual community of organizations to support technology-based start-ups. LinkedIn is valued at more than $4 billion. Bank of America announces a suite of small-business credit cards. But be careful — some small-business credit cards may put you at risk.

WHAT DO TEXANS LOVE? A state lawmaker in Washington isn’t thrilled about cigar lounges. Unemployment in New Hampshire falls below 5 percent. An editorial says that Connecticut is closed for business. Brad McCarty says that Omaha is a great place for start-ups: “Rather than just having slogans and T-shirts, that Midwestern work ethic is coming into play and Omaha is facing problems with action.” Scholars at the Brookings Institution say that Cleveland has recovered from the recession. Michigan’s regulatory chief says the state has too many regulations. And why is Texas No. 1 for business? Because Texans love puppies, of course!

HELLO SOCIAL MEDIA, GOODBYE BRAINS A new survey says that nearly three-quarters of America’s small businesses are doing social media. But the Northeast is lagging. AdAge provides a breakdown of who these people are. A social media expert, Jason Falls, explains what small towns can teach us about social business. “You must give of your time, energy and compassion to show those there that you are, in fact, a part of the community.” The executive editor of The New York Times says, “Basically, we are outsourcing our brains to the cloud.”

DOUBLE SLURPING? GENIUS! ADP releases an Android app for managing payroll. Online cash management tool Bill.com adds document management. In a flash of genius, 7-Eleven is coming out with a dual-chambered Slurpee cup. Sam’s Club launches a health management solution for small businesses. Thinktank NDN launches a clean energy solution series in Washington. The Small Business Administration honors the best small businesses in America.

THE HOTTEST START-UP IN NEW YORK Liz Gannes explains why some young ex-Googlers left to do a social media start-up. Martin Zwilling says we need to do the right thing when starting a business: “Leading people to do the right thing as a team is one of the most challenging things to teach and coach.” Web site Startup Expert offers new services to help entrepreneurs. The San Francisco Chronicle tells the story of Gilt Groupe, “the hottest start-up in New York.” A mobile payments start-up raises $6.5 million. But suprisingly few Americans actually work in start-ups.

MICROSOFT’S BIG WEEK The Blackberry PlayBook is a surprise success. A new version of Peachtree accounting software for small business appears. Ramon Ray says that Google’s new Chrome laptop is built for the cloud professional. Microsoft is defended by Bill Gates, gets a big victory in Google’s backyard and reports that one in 14 downloads is malicious. Dell’s profit jumps. Hewlett-Packard cuts its sales forecast. Here are a few signs you may need a virtual assistant. The C.D.C. issues a Zombie Apocalypse alert.

THE WEEK AHEAD Durable goods, gross domestic product, personal income and consumer spending numbers are coming this week. And on Wednesday you can be proud to be a geek.

THIS WEEK’S AWARDS

TURNAROUND STRATEGY Jane Porter offers strategies for turning around a business. For example: “Instead of cutting staff, author Denise O’Berry suggests taking a closer look at lowering expenses elsewhere within the company. For example, when a small deli she worked with wanted to turn the business around, O’Berry had the owner review the menu offerings more carefully. It turned out that while the deli offered 50 items, customers were buying only 20 percent of them. By streamlining the menu, the business significantly cut expenses related to ingredients.”

CUTTING TO THE CHASE Jason Freedman gives advice on how to e-mail busy people: “Make your ask explicit. If you want a meeting, ask for a meeting. Provide some time options and ask for a specified length. If you want an introduction, ask for an introduction. If you’re looking for funding, tell him you’re currently fund-raising and ask to meet to show him your pitch. Don’t be sly. Don’t hint. Make the process ridiculously easy by just asking for what you want.”

GOING ZEN Mark McGuinness explains how the Buddha solved his marketing problems: “A classic marketing mistake is to look for everyone who could benefit from your product, service or message, and try to persuade them of its value. If we follow the Buddha’s example and focus on the people who actively want what we’re offering (not just the ones who need it), we’ll have a much smaller potential audience — but a much better chance of a positive response.”

THIS WEEK’S QUESTION How do you get a busy person’s attention?

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://feeds.nytimes.com/click.phdo?i=d6670d77655902eaad7461be61487f5b

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You’re the Boss: This Week in Small Business: Putting POM Wonderful on the Map

May 2, 2011 by Leave a Comment

Dashboard

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

BERNANKE MEETS THE PRESS In his first regular news conference, Ben Bernanke, chairman of the Federal Reserve,  said the central bank is ending round two of its quantitative easing (QE2) and projects slower growth and a modest uptick in inflation. Paul Krugman thinks Bernanke wimped out: “He has been intimidated by the inflationistas and is looking for excuses not to act.” Moneywatch.com’s John Keefe says, “The massive push of monetary policy through QE1 and QE2 did not make it through the system to provide additional credit to businesses.” Forbes’ Neil Weinberg thinks Bernanke is the Manny Ramirez of monetary policy. Some economists think QE2 was a flop.

HAS THE AGE OF THE ORC BEGUN? The International Monetary Fund says the Age of America is near its end. Wal-Mart’s chief executive says consumers are running out of money. A survey of small-business owners finds that Americans feel their economic dominance waning. A new Wells Fargo survey finds small-business confidence slipping.

A BIGGER WORRY: Why does Joe Biden have an economic adviser?

REAL ESTATE IS STILL LOUSY Calculated Risk reports more bad news for the real estate industry. Housing prices edge toward 2009 lows. Renters are facing record affordability problems. But new home sales are up (thanks to Tiger Woods). And the ports of Galveston, Charleston and Savannah are busy. Consumer confidence increases slightly. An Associated Press survey finds that only an oil shock can stop us now. The Wall Street Journal’s Justin Lahart reports that high gas prices can affect our buying choices. And last week’s S.P. downgrade could actually wind up making our bonds more attractive.

CONGRESS RETURNS THIS WEEK Business Pundit lists 10 big lobbies in Washington. A congressman says, “If the E.P.A. continues on its crusade of destruction and over-regulation, manufacturing and energy companies will take their business to friendlier lands overseas, jobs will be destroyed, and the environment will not be any better off.” A Democrat goes after oil speculators. The birther movement takes a hit and now Trump must defend himself against serious allegations.

THIS PARAGRAPH BROUGHT TO YOU BY POM WONDERFUL The Greater Dallas Hispanic Chamber of Commerce and Citibank plan to open a small-business “center of excellence.” San Francisco prepares for its small-business week. A Senate bill that would create a visa to make it easier for immigrants to start businesses in the United States could be a boon to Silicon Valley. A Pennsylvania town changes its name to promote a movie (and a certain pomegranate-based antioxidant). Missouri cuts a tax. And can you guess which state is tops in puppy sales (hint: it’s not Pennsylvania)?

WHERE’S YOUR ELEVATOR PITCH? A winery is offering $20,000 in grants to entrepreneurs. The New York Enterprise Report offers a webinar on entrepreneurship. The Massachusetts Institute of Technology introduces a $100,000 elevator-pitch contest. The world’s last typewriter factory closes. New airlines keep popping up. The royal wedding spurred lots of small-business opportunities. A few smart cookies won the 2011 Harvard Business Plan contest.

MONEY IN THE MACHINES A group coupon-buying site offers a new approach: “Unlike other group coupon sites, we charge only a small, monthly membership fee — and the first six months are free to try out. We don’t even ask for a credit card to sign up.” Noobpreneur.com thinks a vending-machine business can make an excellent start-up: “As a vending-machine business owner, an entrepreneur can expect rather lax hours, low start-up costs, and a fairly easy daily routine.” The O’Donnells launch a new Web site to help entrepreneurs market on the Internet. A start-up takes advantage of a mistake by Google. Chase commits to lending $12 billion to small businesses in 2011.

IT’S LESS RISKY IN RUSSIA? China’s policies may be hurting American businesses. The weak dollar makes American exports more attractive. Entrepreneur Serge Faguet explains why it’s less risky to build a start-up in Russia than in Silicon Valley: “Russia has many markets that are not dominated by anyone, while in other countries similar markets have companies that are already worth billions. There is a lot of buzz, but there are very few companies that are doing the right thing successfully.” A little advice for your Russian start-up: bring this guy along for the ride.

THE HEALTH CARE DEBATE CONTINUES John Taylor says last year’s legislation provides a disincentive to work. American Public Radio reports that small-business owners continue to tussle with the bill. The Supreme Court isn’t ready to hear a case on health care reform. A patient emits a potentially harmful gas.

PROBLEMS IN THE CLOUD Amazon’s apologies for its cloud service outage last week. CRN’s Robert Faletra discloses a big problem with the cloud: there’s no one to call for support. Mark Rushing isn’t impressed: “Despite all the effort and cleverness a systems engineer will devote to maintaining up time, the fact is, we are returning to a single point of failure every time we put something on the cloud, unless we are using the cloud as merely a supplementary or backup mechanism or have those mechanisms ourselves as backup.” Sony’s customers find their confidential data disappears in the … well, you guessed it.

YEAH, BUT DOES IT CALCULATE MILEAGE? Steve Jobs invents the HumancentiPad on South Park. John Brandon describes four geeked out cars for business, including the 2011 Audi A4, which “uses a new 3D mapping technology (Google Earth) and links to a server using a T-Mobile connection in the car. This means you can explore your surroundings and even see a rendering of what the office building across town looks like before you get there.” Netflix has more subscribers than the largest cable operator in the United States. Research in Motion buys scheduling-application maker Tungle. Meryl the Content Maven offers 10 steps for fixing common tech problems.

IS THE WEB DYING? Mobile payments company Square gets a boost from Visa and then its chief operating officer says the Web is dying: “Smartphone and tablet users prefer using native apps whenever possible, and only visit the browser as a last resort.” Memeburn’s Jennifer Kling wonders if Facebook is still right for small businesses: “Evidently, the ‘free’ platform that was Facebook is slowly becoming more and more unfree as we speak.” Karen Klein offers advice for improving your search engine optimization skills: “S.E.O. experts are basically self-taught, so your investment in upgrading your skills is likely to be more time-oriented than financial.”

WINNING/NOT WINNING Winning: a Seattle small-business owner gives a lift to cancer patients. Winning: Raj Thakkar, founder and chief executive of Charter School Business Management, is New York City’s Small Business Person of the Year. Winning: a start-up arrives in January and is sold to Yahoo for $13 million in April. Losing: Bree dumps Charlie.

ACTUALLY, IT’S THE AGE OF WOMAN More working women than men have college degrees. N.P.R. reports that sitting all day is worse for you than you think.

COMING THIS WEEK: Keep an eye out for the release of April’s manufacturing numbers (Monday), construction spending (Monday), auto sales (Tuesday), retail results (Thursday) and  job numbers (Friday).

THIS WEEK’S AWARDS

BEST REASON TO LOVE COMPETITION Josh Liu says not to be afraid of competitors: “Good competitors challenge you and force you to think hard about your business. If you are not any better, or cheaper, why should people buy from you? Your competitors can help you to examine your business, identify your competitive advantage, or further differentiate yourself in the market.”

BEST APPROACH TO SOLVING YOUR PROBLEMS Lifehacker’s Adam Dachis gives us a systematic approach to solving just about any problem: “You not only need to make your plans flexible, but you want to try and plan for surprises as well. You won’t always know what they are, but you can make educated guesses and be a little more prepared to deal with issues when they arise. This will help keep you motivated when solving problems that take more time, as these surprises won’t be so devastating if you’re ready for them.”

BEST EXCUSE TO YELL AT YOUR EMPLOYEES Terry Starbucker recommends 10 ways to freshen up our leadership. Example: “Find a fault, and make a big deal out of it. This is one of my favorites, because there’s always something that you can improve. Always. Just find it, and then, at a staff meeting, make a point to let everyone know you are not pleased. A little table-pounding is helpful too, but not too forcefully. You don’t want your staff to think you are going ‘Network’ on them.”

THIS WEEK’S QUESTION: Do you think yelling is ever justified in the office? I’m not sure I would do that.

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://feeds.nytimes.com/click.phdo?i=27ad7d5e0b0be6758e5d3b946382baf4

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You’re the Boss: Hiring Efficiently

April 15, 2011 by Leave a Comment

Tech Support

To most small-business owners, the terms video clip and impact are more likely to suggest the latest Jackass-style stunt immortalized on YouTube than something important to their bottom lines. But a few new online services are trying to get companies to embrace video in ways that could have a big payoff for very little effort.

One company that’s been experimenting with one of the services is ClassOne Equipment, which sells refurbished ultrahigh-tech semiconductor manufacturing equipment. With smartphone sales going great guns even through the recession, large pockets of the semiconductor industry have been booming, helping ClassOne double its revenue last year. Over the same period, the company went from 15 employees to 34 employees, and it’s about to hire three more. But that growth hasn’t come without its costs, said Byron Exarcos, ClassOne’s founder and president. Not surprisingly, one of the biggest costs has been the amount of time Mr. Exarcos and his team have had to devote to hiring. “There’s plenty of talent out there, but there’s a big filtering process in trying to find the people who will fit into our culture,” he said.

Part of the problem is that ClassOne is in Decatur, Ga., just outside of Atlanta, while the semiconductor-savvy engineers and managers it needs are mostly in Silicon Valley, Texas and North Carolina. That means the company has to fly top candidates in — typically four for each position — with each candidate getting up to a full day’s worth of interviewing from Mr. Exarcos and others at the company. “We’ve got a fast-paced environment here, and we need to be sure the people we hire can multitask to the nth degree,” he said. “They’ve got to be the kind of person who’s quick to jump into other people’s projects to help out. We just can’t get a sense of that from a résumé or a phone call.”

In the past, that led to a routine of sifting through about 50 or so résumés for an open position, followed by a half-hour phone conversation between perhaps 10 of the second-round candidates and four ClassOne managers, all to figure out which candidates would get flown in. But last month ClassOne started asking all candidates who make it through the résumé screening to run through a sort of online questionnaire that requires a mix of video, oral and written responses. That questionnaire was put together by ClassOne through a service called ZuzuHire. “It replaces the phone interview and tells us a lot more about the candidates than a phone call could,” Mr. Exarcos said. “Now we not only find out what they sound like, we can see how they communicate, and how they can write.”

ZuzuHire charges from $20 to $200 a month, depending on how many positions you’re trying to fill through the service. (You can try it free for one position.) ClassOne would probably be able to make do with the $80-per-month level of service, a cost that the company doesn’t find hard to justify. Besides the significant savings in manager time from not having the round of phone calls, Mr. Exarcos said the better sense of chemistry that the ZuzuHire interviews provide have enabled the company to cut down its fly-in sessions to only two candidates — an even bigger savings in time and a halving of travel costs. But the real bottom-line impact is in ending up with a better hire, he added. “Getting a better sense of the candidate is more important than the time and money savings.”

Meanwhile, I get a lot of public relations pitches, but one stood out recently. It was an e-mail note with a link to a Web page and video clip that the sender had thrown together in a couple of minutes while sitting in a coffee shop. In the clip, the pitcher, Shane Mac, told me briefly in a breezy way why he thought readers would be interested in his new service, Hello There. What Hello There does, of course, is let you do what Mr. Mac did — pitch a prospect by quickly setting up a Web page and video clip aimed at a single recipient. Hey, the approach got my attention! Maybe it would work for someone you’re trying to turn into a prospect.

Mr. Mac has mostly developed the service to allow people to pitch prospective employers. (In that form, the service is available here.) But he recognized that it might have a role in sales, so he’s making it available in both forms. I could see how the personal video sales pitch might catch on. On the other hand, it might be that the first few you get seem charmingly novel, and the next 8,000 have you beefing up your spam filters. Apparently, there aren’t many companies using Hello There for sales just yet, so I can’t give you any good examples. But if any of you see your way to giving the personal video pitch a go, please post a comment telling us how it worked, or drop me a note. And I’d be eager to hear about your favorite high-tech hiring tools, too.

You can follow David H. Freedman on Twitter and on Facebook.

Article source: http://feeds.nytimes.com/click.phdo?i=d9a3834958aca1a466a3d59df7ec5e91

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You’re the Boss: This Week in Small Business: The Shutdown and the Showdown

April 11, 2011 by Leave a Comment

Dashboard

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

NO SHUTDOWN Congress finally funds the 2011 budget. Of course, if these guys can get together, why shouldn’t our politicians?

BUT THERE WILL BE ANOTHER SHOWDOWN The G.O.P.’s Paul Ryan presents a budget with  trillions in cuts. Scott Grannis thinks Rep. Ryan’s vision of reform “may not be perfect, but it is bold, brave, and a big breath of fresh air.” Business Insider thinks the proposal cuts look pretty impressive, and some in Congress put it on the fast track. Meanwhile, Jake Berliner, of think tank NDN thinks Rep. Ryan lives in a magical world: “Forget about the immorality of his budget for a moment, (well, don’t, it’s pretty appalling) the fact is that Ryan’s budget offers no real path to economic growth, other than fudged numbers from the Heritage Foundation, and a questionable, slash-and-burn approach to deficit reduction.” The Center on Budget and Policy Priorities calls the proposal “cowardly.”

SLIPS AND DIPS Global manufacturing slips. The World Bank reports a dip in most commodity prices. But more and more retailers succumb to the pressure to raise prices to account for higher commodity costs. The good news is that March retail sales are up. Jeffrey Saut explains why he’s bullish about America’s future. A survey says that Japan and oil are dampening the spirits of small businesses. Mark Perry reports increases in rail, temporary help and air traffic. John Cleese issues a terror alert.

OVER 50,000 HIRED (TODAY) Nathaniel Cahners Hindman asks if the new businesses created since the downturn began will help the economy? Joe Light of The Wall Street Journal says that company sites beat online job boards and social media for job seekers. McDonald’s will hire 50,000 people — in one day. For those of us looking for college grads, a study says the best place to find them is on LinkedIn. For those of us looking for oddballs I suggest looking no further than WorldCon 2011. Career Builder reports that the hiring outlook is the strongest in three years.

AN E-MAIL BREACH Investors are worried about Cisco. MSNBC’s Bob Sullivan explains what’s behind last week’s Epsilon e-mail breach and how it affects us. Yahoo creates a Web site dedicated to the royal wedding. Steve Kehro explains how to commercialize your Facebook fan base: “When guided properly by a community manager, (fans) can quickly develop into brand evangelists. This works best when brands have a storehouse of interactive creative assets to accompany user-generated content and peer-to-peer dialogue. And, the best part is this can be done effectively with a relatively low amount of overhead.”

NEW MARKETING BUZZWORDS Heidi Cohen explains what we need to know about QR Codes. Amber Naslund explains how she “PWNS” her in box. Some feel that the new trend in press releases is humor: “When Groupon disclosed its $950 million round of financing in January, it issued a press release headlined ‘Groupon Raises, Like, A Billion Dollars.’” Fred Sexton, a marketing blogger, thinks Charlie Sheen could be the craziest marketer of all time.

THE END OF SOCIAL MEDIA? Social media marketing campaigns disappoint both Pepsi and Burger King and Jonathan Salem Baskin, a brand strategist, has a reasonable suggestion: “(Companies) need to discover new ways to do the old things that still matter: Offer products and services that someone truly needs, admitting that you want to sell stuff to them, and then properly serving them after they’ve given you their business.” Jim Lastinger thinks that Facebook is in decline: “If you’ve been using Facebook since the beginning, then you’re more likely to see it becoming increasingly meaningless, which is a sad, but predictable, evolution. Back when Facebook was new it was actually exciting to check your stream and see what was happening because the friends that you had were people that you actually wanted to keep in touch with. Twenty Facebook friends in 2005 is worth about 250 Facebook friends today.” Go-Daddy’s social media efforts also fail.

FINALLY! Repeal of the detested 1099 regulation has been passed by the Senate and awaits the president’s signature.

FIGHTING THE MAN Business groups and legal observers nationwide are closely monitoring a small family-owned California company caught up in a potentially precedent-setting foreign bribery trial. Builders and fire officials in Florida spar over a sprinkler rule. The National Federation of Independent Business in Florida vows to hold lawmakers to their promises.

OPPORTUNITIES A Chinese luxury Web site is looking for products to sell after getting a $20 million investment. More TV viewers are cutting the cord. Retailers take note: 25 percent of shopping conversations are posted online from consumers while they are shopping in your store. Ever wonder why sales of Coke to Jewish people increase this time of year? Ucilia Wang reports that utilities will have to change “as more home and business owners install solar panels, wind turbines and other electricity- and heat-generating equipment.” An enterprising guy figures out how to suck coins from vending machines. The online table booking business is taking off. FounderLY introduces an open platform for sharing start-up stories. Some small businesses are looking across the border to expand.

WHEN THE GOING GETS TOUGH The Small Business Administration extends its real estate program through 2012. Dun Bradstreet is offering free credit-building advice this month. According to a new study, 75 percent of  banking fraud on small and midsize business this past year occurred online. Scott Shane tells the government “next time you do a bailout, do a better job with small business.” As for me, next recession I’m going into the pet business. Jim Basey, chairman and chief executive of Centennial Bank in Denver explains why small banks are good for small business — as long as we don’t bank on a Friday.

GOVERNORS, BIG AND SMALL Iowa’s governor intends to ease rules for small businesses. To generate more small-business jobs in her state, especially in potentially lucrative fields like technology, a New York senator lists a series of legislative steps she is introducing or co-sponsoring. Somebody’s aiming at small-business owners in Colorado for a scam. The Kauffman Foundation lists the six states with the highest start-up rates. And wait a second — this child actually got to be governor of New Jersey for a day?

IN PRAISE OF OLD PEOPLE Jodi Glickman gives some advice on leading older employees. For example: “Be confident. Your first task is to come from a place of strength when talking to your (older) employees or your team. Start with what you know. Speak with conviction. Give those you manage a clear sense of where you’re headed with any new project or client. Assume that your ideas are good ones until you hear otherwise.” Take heed — because if you don’t manage your old people properly, they may shut down your country’s access to the Internet.

COMPETITION USA Today introduces the 2011 Small Business Challenge. Ernst Young is putting a call out for some entrepreneurial winning women. Hewlett-Packard offers 10,000 ways to build your business — and $10,000, too.

LEADERSHIP Victoria Livschitz explains how she shattered the glass ceiling. A Wall Street Journal report explains why some people get so much done on so little sleep. Google’s Larry Page spends $900 million his first day as chief executive.

TAXES Time is running out to claim $1.1 billion in 2007 tax refunds.

NEW PRODUCTS A new iPhone app counts your calories when you take a picture of your next meal. Richard Branson’s next venture is under water. Google is creating $100 million of original content for its YouTube channels.

THIS WEEK’S AWARDS

BEST REASON TO QUIT THE INTERNET Julien Smith, a blogger, explains why: “Our brains are not wired to be made happy by the Internet. Our emotions, like fear and joy, are based in a primal understanding of the world. This is something we can’t escape. Saying the Web is important to your life is like saying that television is important. It might be social, sure, but it’s still media. It can help connect but it also divides in a very fundamental way. Touching a screen isn’t the same as touching a person. The best stuff happens outside the Web. Outside is new and frightening, not comfortable.”

BEST REASON NOT TO TRUST THE MEDIA How can you trust anyone who falls for this April Fool’s joke?

BEST EXAMPLE OF OUR SHALLOW SOCIETY The Economist says it’s not about the clothes you wear — it’s about the label: “In (one) experiment, volunteers watched one of two videos of the same man being interviewed for a job. In one, his shirt had a logo; in the other, it did not. The logo led observers to rate the man as more suitable for the job, and even earned him a 9 percent higher salary recommendation.”

THIS WEEK’S QUESTION: Does the way people dress affect your decision to buy, sell or hire? I know it can affect mine.

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://feeds.nytimes.com/click.phdo?i=329d07c018e1f2ef31600fbcbb8003ae

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You’re the Boss: Senate Repeals Reporting Rule

April 6, 2011 by Leave a Comment

The Agenda

On Tuesday Senate Democrats conceded defeat in the battle of how to pay for repealing the expanded 1099 reporting provision that passed last year as part of the Affordable Care Act but which many small-business owners consider burdensome. In voting to approve the bill, the Senate agreed to adopt a House Republican measure that Democrats viewed as an effort to undermine their health care law. Nonetheless, the bill passed the Senate by a lopsided 87 to 12 — with most Democrats voting in favor. Shortly after the vote, the White House signaled that President Obama would sign the repeal.

The bill also repeals a second new 1099 requirement directed at landlords that helped pay for the small-business jobs act. To pay for these repeals, the House measure takes aim at subsidies that low- and middle-income people will receive to purchase health insurance under the new law. Those subsidies are tax credits paid in advance and based on income reported in prior years. Taxpayers who earn more than anticipated — and so receive a bigger subsidy than they’re entitled to — must return at least some of that overpayment to the government. The bill increases the amount of excess subsidy that many taxpayers who earn more than twice the federal poverty level would have to pay back — and those earning between four and five times the federal poverty level would have to pay all of it back.

Democrats called this a tax increase on the middle class, and Senator Robert Menendez of New Jersey offered an amendment to delay the repeal until the effects of the offsetting measure could be studied. But that amendment received only 41 votes, all from Democrats, far short of the 60 needed to pass.

Initially, the White House declared its opposition to the House offset. But it stopped short of threatening a veto, and today the White House said in a statement it was “pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses.”

Article source: http://feeds.nytimes.com/click.phdo?i=470c91e58564b68686f3060e25cb1641

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