Photo (CC) by USFWS Midwest Region, on Flickr

One of the challenges of a business is developing your team of employees.

Previous posts have discussed how to find and hire new employees (Hiring New Employees, Time to Hire, and Employees are Your Foundation are three examples).  The difficult part though is getting everyone to work together and focused on the end goal.

Business literature is full of thoughts, ideas and strategies on how you can achieve a solid team. And it has been that way for lots of years. Herzberg examined it at Lincoln Electric and other places. Thoughts on what motivates an employee and what might be considered hygiene factors or those that items that need to be there but they don’t make an employee motivated or happy were aspects he studied. Maslow, another management guru, suggested employees had a hierarchy of needs and that the lower needs have to be filled first before higher needs would be sought after. This thought fits well with Herzberg’s idea.

Since that time, there has been a continual stream of new ideas and theories in terms of effective personnel management. As the years have went by, getting the most out of your team has went through the idea of “directed and controlled” to today’s focus on “participatory management.” When I hear directed and controlled, I see a sheep dog working the sheep. Everyone is herded up and kept in a tight bunch and then put into the corral. We have largely left this idea behind and we should be glad.

Yet even the term management also seems out of place. You can manage your money but can you, or should you, manage your staff? You can also manage your store but deciding what to display and where to place a display is far different than not fully utilizing a resource with huge potential.

Recently I have read some articles that suggest building a team means to lead. That seems to be on the right track but, again, you may be out in front with no one behind you. In order to be an effective leader, you must have built trust and respect and have a shared vision and goal. 

To achieve this, the words guided and participatory come to mind. Those two terms suggest your input but encourages group participation in the steps to take and even the goal. This doesn’t mean giving up control; it is your business. However, the  harder and more often you push, the lower your team strength becomes. Participation not only means, however, employees involved in the discussion but you involved in the grunt work as well as the long-term planning.

We hear a lot how the millennial employee requires a different leadership style. I would argue that the style suggested today would have been welcomed for many years.

Your employees form a foundation for the business. Make that foundation solid through your effective guidance and daily interaction. And remember, your employees are learning not only by what you say but by what you do.

Photo (CC) by Ken Teegardin, on Flickr

Many small-business owners fear that an increase in prices will drive customers away.

This idea made the headlines in 2016 when New Jersey implemented a substantial gas tax increase making prices jump 10% or more overnight. Gas station owners were concerned that people will go somewhere else for cheaper prices or to other transportation alternatives.

While such a concern seems valid, research finds that moderate price increases are often perceived as more or less acceptable by consumers.

The case in New Jersey is less problematic for business owners as all businesses are faced with the same change. But what happens when you need to raise prices but your competition may not. Will people leave, our perception, or will they stay, quite often the reality.

First, you, the owner, must understand that it is not price alone but several factors that determine customer behavior in terms of where they shop. The first of these is how often we buy a product or service. The more often we buy something, the more likely it is that we will both recognize that the price has increased and perhaps have use considering a change.

Another factor is the cost of the item. Higher-priced items use a larger portion of our household income. This makes us, again, the more price conscious. Yet the type of item also comes into play. Sales of what might be considered vanity products will not see the drop in demand that other products might.

Price awareness also depends on how visible the price is to the consumer.  For this one, think about service stations and the billboards reflecting current prices. Price is highly visible and, because of that, we are more likely to be aware of increases, decreases and how you compare to your competitors.

Also, you must consider how other products can be interchangeable with yours. Gasoline is basically a commodity, meaning one brand is much like the next.

Things that help ensure your customers return to your store include habit. We tend to go where we have in the past.

Also, the customer thinks about the actual or perceived value of your brand. We all go to places where we like the service, the store, how we are treated, the feeling we get our money’s worth, etc. And we will continue to go back even though prices may not be as cheap as the store next door or the several stores we drive by to get to our favorite location.

Finally, there may be factors such as a desire to shop local or support small businesses can influence one’s reaction to a price increase.

All of these factors make it difficult to fully anticipate consumer reaction to price changes. And the good news is knowing price increases can be implemented.

So what can you do to make price adjustments less likely to send customers away?

• First, know why you are doing it and, when asked, have your thoughts gathered as to why you needed to make adjustments.
• Second, don’t surprise people especially if the increase will be significant in either dollars or percentages. Some owners even take advantage of it with a sale to encourage early buying. That can be a good idea but realize it will definitely impact your cash flow.
• Third, make regular adjustments. When people know you change your prices on a regular basis, the changes have less of an impact.
• Fourth, understand your own profit margins and what the data is telling you. Know what you need and how changes may affect your cash flow and revenue picture. This knowledge allows you to consider how, and even if, you implement a change.

As a small business owner, it’s important you not fear making a price adjustment. Pricing, it is said, is part science and part art. Mostly it’s knowing your customer.

Photo (CC) Dan Lacher, on Flickr

While you form the cornerstone of your business, employees make up the foundation.

As the owner, your name and personality are key to identifying and branding your business.

Yet, you are not always there to interact with each and every customer. Plus you can’t be an expert at all of the skills required to build and maintain a thriving business. And if those hurdles weren’t enough, there simply isn’t enough time in the day to get everything done.

So your business needs help from others, your employees, to form a strong foundation. That foundation is built on a cadre of well-trained, dedicated, and stable employees. These employees support the business by the work they do. They also will be your brand ambassadors as they go about life in general.

Finding such employees is difficult but not impossible. More and more human resource professionals are encouraging hiring for attitude and training for the specifics of the job.

My focus though for this article is not hiring the best people you can but in what goes on after they start as your employee.

Your employee program must start with recognizing your employees for what they can offer. Listen to them and encourage them to offer ideas and suggestions. Don’t forget to thank them and ensure they get recognition for their efforts.

Strong employees come from a solid development and growth program within your organization. Whether you have one or many employees or you simply have unpaid family members and friends who pitch in occasionally, each person needs training, support and guidance.

Such help does not come from a one-hour or one-day crash course done the day they step into your operation. You can talk but they can’t absorb it all. So you need to spread training out in bite-size chunks. And you need to fit it to their learning pace and style.

Your training process also cannot be a pile of manual or online training programs. Such materials is a good start and is great if they need to go back and look something up, but training needs to be interactive and it needs the human touch. That interaction time allows for questions and helps bring all the pieces together.

Finally, learning must be continuous, as current reminders, upcoming changes, and helping the employee to take on an expanded role.

As the employee starts, he or she needs a clear understanding of responsibilities. They also need the authority necessary to complete such responsibilities. If responsibilities and authority are not in balance, it is a pathway to frustration, a poor work environment and rapid turnover.

One key requirement is that new employees must see management as understanding of the work they do and even getting their hands dirty and working alongside them perhaps. Certainly, they look to management to set examples of the core standards of the company.

Your support is crucial. Perhaps you see a better way something could have been handled. The right time to handle that, however, is not in front of the customer. Support them at that moment. Then take the time and find a quiet place to work with the employee to reflect on what happened and what might have been done instead.

Finally, give praise. To do that means you need to be visible, watching and guiding every day.

To this point, I have not mentioned pay. It’s important to be strongly competitive but helping the employee feel valued can help you if you can’t be the salary leader.

Form your foundation can start with remembering what you wanted when you took your first job. Build that into your company. You are the cornerstone but you need a strong set of employees as your foundation.

Photo (CC) by Houstondwiphotos, on Flickr

At some point, you will need the support and expertise of an attorney as you operate your small business.

Often, though, owners delay adding that member to your business team. The thought is that you, the owner, will know when you need such help.

But that line of thought has two major issues. First, you may be making decisions now that are costing you money and will take more money to correct later.

For many small-business owners, the first time an attorney’s advice might be valuable is when selecting the business structure for your business. The attorney, along with your accountant, can outline the pros and cons for the various alternatives. Yet business owners often make that decision without any consultation.

Second, the time to look for an attorney is not when you are in legal trouble. Then you pick at attorney out of desperation and may not find the best fit for your business.

When looking for an attorney, you want to find one whose expertise and personality fit you and your business. Attorneys specialize. Thus, your attorney should be someone who has expertise and knowledge of assisting small-business owners such as you. In an ideal world, the attorney you select would have experience in your specific industry.

Finding such a person takes time. You need to determine who are your options. You can do this through an online search, networking, phone books and reference guides. Identify your needs and any specific questions that might arise.

This list of questions might indicate that, in addition to a general business attorney, you need a second member for your team with a specific set of skills, perhaps in trademarks, patents or international contract law. However, an attorney doing general business work is probably a good first step.

Then, like hiring an employee, you need to do interviews and reference checks. Who else do the attorneys work for and how do those clients feel about the services received?

Don’t hesitate to ask the attorneys about their charges and policy for response times. You want someone who will respond to you on a timely basis. This is a question to ask the candidates as well as other business owners as you do your reference checks.

The attorney you select will, you hope, be a team member for a long time. Bringing this person in early will help you make some early decisions and gets them grounded in your vision and goals.

Finding the right person will help build your bottom line.

Want to have a successful small business? Then build your network.

Comments like this are not uncommon. Good networking is one factor in building a successful, sustainable small-business. Both anecdotal information and research supports such claims.

We have written about it previously in this blog when discussing “Networking for Business Success.” Most articles, like this one, focus on why small-business owners should network and offer steps on doing it effectively.

Yet knowing you need to network and connecting with people at an initial meeting will bring you only a small part of the full value of networking.

The  full value of your network comes over time as you deepen relationships and begin to branch out as one connection leads to another.

I encouraged this long term effort in 2016 in the post, “Don’t Neglect Your Networks.” Now let me add some specific things you can do.

1. Reconnect immediately. This is true for two reasons. We will meet lots of people in our lives and also we forget. Send a thank-you. Remind them of who you are and what you do. Suggest a future meeting and perhaps even a topic or point of conversation. Email works well but a handwritten note will not be forgotten.
2. If you talked specifics in your first meeting, put some notes in your contact. People are encouraged to write notes after meeting people that first time, but that rarely happens in reality. So help both of you remember.
3. As time goes on, it is important to keep the connection. If you:
   • See their name in the paper, let them know
   • Find a news article of interest, pass it on
   • Note something new in your business or industry, share it
   • Find something or someone who might help them, give them the tip
4. Send along non-business information also. Perhaps they mentioned their interest in jazz and a group will be in your area performing, send them the information.
5. Meet on a somewhat regular basis. And while meeting just to reconnect is fine, think about a specific question or topic you might discuss.
6. Celebrate their successes and a note on holidays, birthdays, etc. is always appreciated.

Networking can be a powerful tool for your business. The more you work at it, the greater your returns.

Photo (CC) by Innovative Impact Media, on Flickr

Help? I am swamped.

So get an ad in the paper and get some employees, right?

Sorry, this isn’t the time. When you are overwhelmed is not the time you want to hire someone for several reasons.

First and foremost, you will rush the process. Steps will be skipped such as reference checking.

Second, you will speed up the process and maybe not get your advertisement into all of the right places or allow the position to remain open long enough to let candidates discover the opening, check out the possibility and get their paperwork in.

Also, you won’t have time to get your network in action to find and encouragement applicants.

Fourth, you are more likely to take someone who “sort of” meets the job duties instead of finding the best person for the job.

Finally, you probably won’t know exactly what you want the new person to do. And when you do have the person on board, you won’t have time to adequately train and mentor him or her.

So when is the right time to hire and how should an owner go about the process?

Determining the right time is tricky. The scenario outlined above certainly indicates reasons why you should not wait too long.

But as cash flow problems is one of the most common issues for small businesses, hiring someone too early will just increase the likelihood of it happening. You want to hire someone when that person will make money for the business. This can occur through increased production or sales most likely.

Also, as you consider hiring, you want to have all of the tasks the new person will perform part of the same skill set. Hiring a person to do what are really parts of two separate positions requiring two separate sets of skills doesn’t work. First, you have the problem of finding people with such unique backgrounds. Then there is the problem of getting the right balance in the work. The job mix in often controlled by what the person prefers to do versus what actually needs doing.

The need to hire can fill you with dread, higher costs, need for additional time spent managing, cash flow issues, hiring the wrong person, etc.

Don’t let the fears and unknowns stop you. It’s a great time. Your company is growing. Understand the issues, include it in your planning, and make it happen.

Photo (CC) Justin Grimes, on Flickr

Read anything offering marketing tips and you will be encouraged to learn who your customers are. You want to understand the demographic make-up as well as their likes and dislikes and, of course, what they buy.

Yet, so often that is the end of the effort.

Getting the data can be done with registration information, sales receipts, and even contest applications. You can also ask simple questions, “how can I help you?” or “did you find what you wanted?” It may also come from asking what they like about shopping in your store. And then there are short surveys, a comment box, online engagement polls, etc.

So getting the data is not usually the problem.

Yet, how often do we take the time to dig into the data and look for clues to help us run our business. Do you analyze what it means and then make changes on what you found. And do you remember to thank the customer and tell them what has been done because of their help. (I must take a moment of self-confession. I don’t do any of this as much as I should. Time to up my game.)

In my case, doing this blog allows a number of data points to be collected. One such effort is just looking at the number of people who engage with a blog post.

So I decided to look back on my 2016 blog posts for Small Business Survival. For this first effort, I simply wanted to find my top two posts based on the number of people who commented on them. Engagement could have also been likes but I felt people who commented where especially interested in the topic.

The results were:

1. Your Small Business Needs a Sign – https://smallbizsurvival.com/2016/07/your-small-business-needs-a-sign.html
2. Information Helps Your Small Business Succeed – https://smallbizsurvival.com/2016/06/information-helps-your-small-business-startup-succeed.html

This simple look at the data reinforces survey information that I first gathered in 1996 and at several other points in time. At a broad-brush level, marketing and startup information seem to be of greater interest.

If you look at the second article though, maybe the issue is more of a time management question. It’s important to go deeper than what a quick overview might suggest. This might be a time where additional information is needed – Is it time management that is the issue or do you have some specific startup questions or is it both?

Bottom line, data can move your business forward if (1) you take the time to analyze it; and (2) you act on what you heard.

Thanks for your blog comments, likes, and interactions. They help us focus on what you need. Keep them coming.

Photo by Glenn Muske

Late last year, I did a blog post looking at how clustering of competitors may have positive results (https://smallbizsurvival.com/2016/11/competition-and-clustering.html).

Recently I was asked about this idea in terms of small rural town cafes. If any of you have lived in the Great Plains region of the country, you know the towns and the cafes I am talking about. These restaurants are a crucial element in maintaining a viable community.

The question was in terms of competing with each other.

Let me outline the situation – Several small towns within a county have a cafe (one town has two). These cafés are open until mid-afternoon Monday through Saturday and closed on Sunday. Maybe once a month, the café may be open for a Sunday brunch/lunch. What often happens is cafes choose to be open on the same Sundays.

I was asked, based on my previous blog, was “is this a good thing?”

As we discussed the question, another piece of information arose. Sometimes a nonprofit will also have a benefit lunch at that same time, meaning more competition.

This question is a good example of where broad answers may not always apply in specific circumstances. I could argue that more opportunities would bring out a larger audience than might normally be expected. Now it would seem that the potential audience is being split as they decide which of two or more opportunities they will attend.

So the answer is an unknown. It’s probably unlikely that the entire audience for the two or more cafes and events that might be open on a Sunday would all go to the one open location. But would it increase the number of customers somewhat? Let’s think about this.

For some of the audience, it would be further to travel and time might also be a factor.

Also, people like being with other people they know and having conversation. Going to a place further away may limit such social interaction. That may be as much of a draw as the food.

Another way to look at the question is from a capacity stand point? Having a larger audience is fine but do these small cafes have the staff and the physical resources (seating space, kitchen space, kitchen equipment, etc.) to handle larger crowds?

And would the shift of audiences be a consistent thing? Such cafes have small margins. Cooking too much food and not having people show up would be hard on the bottom line.

And there is the other issue of not having enough food prepared. Since the capacity to quickly do more, even if the food is on the shelf, is limited, you may hurt future attendance not only for your café but for others in the group of these planned Sunday dinners (is it dinner or is it lunch – another question for another time).

Last, will it be possible to develop a cooperative plan? Owners have the right to do what they want. Experience may show that certain Sundays are better than others. From my perspective, it certainly wouldn’t hurt to try. And if there is a local tourism board or economic development group, they also might want to be involved. If other events were planned around this (rummage/flea markets; local food sales/food stands & farmers markets; sporting events), the potential market size just grows. Market it as the Sunday “comfort food” trail.

Just thinking about the question can be a great reason for the café owner to connect with his or her customers. Ask them what they think? Would they go to the other cafes? Would they encourage their friends and neighbors to also go? What would be the best way to market this plan if it should happen?

It would also encourage the owner to develop a schedule for themselves of when they will be open. People are a creature of habit so knowing when would help the owner and the market plan.

So does increased competition in this case translate into a better bottom line for the entities involved? We don’t know.

What we do know is that an exploration of the question would be a good thing in general. Plus whatever the answer is to that question should offer the owner guidance for his or her future direction.

Photo (CC) by John Eisenschenk, on Flickr

How often aren’t we told to “trust our gut?” You see this comment made often for people starting a small business or when small-business owners need to make an important decision.

Yet a recent article from Entrepreneur challenged this and indicated that this idea may be a myth.

So who do you believe? Which view point is correct?

Well from my perspective, both are correct. Let’s look first at a young business owner right out of college. Many of the questions this person will face are new. He or she has no history on which to draw. Decisions based on “your judgment” will probably average out close to 50/50 between ideas that worked and ideas that failed.

So how does our decision making ability get better? It happens because of two factors. First, our past history provides information useful in making future decisions. Second, we get better at evaluating a situation and weighing the likelihood of alternatives ideas succeeding. Decision-making process is therefore somewhat a learned skill.

So as we increase our knowledge base, however, our ability to “trust our own judgment” typically increases. Our past history base grows as to when we have made similar decisions. It may not be the exact same question but science has shown that we can pull bits and pieces from other decisions into a new situation. By using that knowledge, we find our decision-making improves.

So how does this long answer help you make decisions? It’s by understanding where you are at when making a crucial decision.

Yet, there are two caveats to this answer.

First, remember that we don’t have perfect memories. This affects us in two ways. We tend to remember the wins and not the losses. This allows us to view our decision making skills as better than what they actually are. Second, we may forget or discount some of the factors surrounding past decisions, information crucial to the final outcome.

The second caveat is how crucial is the decision. If I am trying to decide what appetizers to have for an open house, failure on my part will probably not have a large or long-lasting impact. But deciding on the products to carry for the Christmas season in a retail store, could make or break your business.

So should you trust your judgment? It depends.

I would leave you with one final thought. The old adage, two heads are better than one, is a good one to remember when making crucial decisions. Especially if that second head is a carefully selected mentor.

Photo by Glenn Muske

I am old enough to remember the line, “It’s a bird. It’s a plane” as part of the Superman comics and television show.

But I haven’t had a reason to think much about this line until I recently got my car serviced. My dealer has moved into a new building. It’s nice.

As you enter the waiting area, the attached picture shows you a new addition to the business.

My first thought was what a great service. But then I noticed the price lists and wondered if instead they were trying to create a new revenue line from what once a free cup of coffee.

And thus the line, only this time as a question, “it’s a service? No, it’s a revenue generator?” came to mind.

My mind also started wandering down the path that this was an attempt to make my oil change an “experience.”

As the consumer, you can see I was somewhat confused.

But as I continued to scan, my questions were answered. It’s a service for the patrons and a support service, in the form of the profits, to the community. You see that in the title and, if you could read it, a sign on the counter stating what charity is getting the proceeds this month.

So why bring this up?

Well for one thing, you don’t want your customer to be confused. Any time you change something in your business, it should be clear to your customer what the benefit is to them. Obviously in this case, I now can have something more than a plain cup of coffee. Plus there were some great looking baked goods to go along with it.

And it was nice to have someone there to help produce and serve this while I waited. It made the time go faster and, now that I know this, may be my breakfast on those mornings I go there.

But not only are they making it a more pleasant experience for me but they are supporting my community at the same time.

It is always important that the business knows exactly why they added this new service?  What is their goal? Without that, how will they ever know if they have met the goal? And how will they advertise it to their customers? Are they just keeping up with the competition?

In this case, they seem to have figured it out.  My only issue is that other than some of the initial marketing, I have not seen more marketing for this and I don’t see any reference to it on their web site. Plus I needed to put the dots together. It would be nice to have it spelled out for me along with the impact it has made.

So not only can they answer the question but they are telling me what is going on. Gave me something to think about while they provided me with quick, friendly service.

They certainly have added to the words, full service. How many miles before my next oil change?