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October 21, 2012October 21, 2012

Entrepreneurial Lessons from Your First Job

We have all had one. A first job. Someone looked you in the eye and said, “You are hired!” The decision confirms they trusted you to represent their business. They were willing to invest in you, train you, teach you how to earn a paycheck.

Your confidence swells with the first yes. Your stride is more brisk, your smile broadens. You did it! You are accepted, wanted and needed. Someone recognizes you for being a contributor. Then, the apprehension begins. What if they don’t like me? What happens if I make a mistake? Can I do this job? The overwhelming reality of being responsible of earning a wage is measured by the sudden onset of nervous excitement.

Many of the emotions and fears of starting your first job are similar to starting your first business. Entrepreneurs have to balance the adrenaline associated with being in complete control with the reality that businesses fail. Lingering in the bravado are facts from the Small Business Administration (SBA) that nearly a third of businesses fail within the first two years. Reverting to your confidence that says “just do it” because you are different and better, you focus on the statistical favor that you do have a 66% chance you will make it.

The first time you do anything is valuable experience. Recalling what you learned at your first job is an excellent way to apply past experience to a new first – starting your own business. Here are some tips to take from your first job that are nuggets of wisdom to apply to your startup venture:

1. Embrace the Fear of Failing – You have an option to be paralyzed in fear or embrace the opportunity that if you try, you may succeed. We all know examples of the person who tried over and over again, failing countless times before they finally made it! They never quit. Using the knowledge of each failure, big or small, prepare yourself for the possibility of next time.

2. Take Pride in Your Work – Others are counting on you to help them. Any business is defined by satisfying a need. If they need you, take satisfaction in your ability to help. In the early stage of a new business, people will flock to those that are confident in what they deliver. Uncertainty creates worrisome customers, or even worse, potential customers who never buy.

3. Always Be Learning – You are glowing green at your first job. You are a blank slate. Your training is the groundwork for how you will perform. Soaking up expertise from those that proceeded you is smart business. What you don’t know today, can propel your business to the next level. Find expertise. Be a knowledge consumer.

4. Businesses Reward Hard Work – As you master the skills necessary to do your first job and do it well, you soon learn that businesses reward performance. Promotions and raises are given to those that work hard and do more than their peers. Your customers will reward you for your hard work. Their loyalty is associated to your ability to outperform your competition.

5. Listening Skills are Important – Listening to your customers in your first job and in your first business is elementary. Your customer is paramount to delivering products and services that meet the customer’s needs. Failing to listen increases your odds of an unhappy customer. Unhappy customers tell others of their experience. Listening improves potential for high customer satisfaction.

6. Time Management is Critical – There are no rewards for showing up late or missing work. One of the most important skills acquired in the first job is how to manage your time. You soon learn there are no acceptable excuses. Juggling priorities becomes primary to your success. Owning a business depends on the genius of multitasking. You will work harder and that means you have to work smarter to get the job done.

7. Handling Money Builds Trust – When you take money for any product or service, you are now accepting the currency of trust. You are expected to provide equal or greater value in the exchange of cash for goods. Exceeding expectations builds credibility. Manage others money with the same respect you demand from those that manage yours.

The knowledge acquired from a first job is fundamental to a startup. How you apply that knowledge and skill will often result in similar or better experience as an entrepreneur. The mistakes are lessons of how to do something different. The successes are foundations to build upon.

Challenge yourself to reflect on your first job. What was the best lesson learned on your first job? Can you instill this in your values, culture and standards as a business owner today?

Nothing is a waste of time if you use the experience wisely. ~Auguste Rodin

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

July 22, 2012

Ready to Hand Over the Keys to Your Business?

Who is Ready to Drive Your Business Forward?

Business owners can easily be consumed by the short term activities of day-to-day operations. Sole focus on immediate outcomes exposes any business to long-term financial risks.

Every business leader needs to mitigate risks associated to being the one in charge. The value of a business is built upon the sustainability of the operating plan, with or without it’s leader. As an owner or CEO, have you asked yourself the “what if” question? Are you fully prepared to hand over the keys to your business today?

You may have imagined that some day you will be transitioning your leadership to a partner, an investor, the next in line or even family member. You may see your fabulous retirement life through the eyes of selling your business in multiples above your investment. In order to realize your dream, you need to spend time and commit resources to adequately prepare for a favorable transition. When? Now.

Succession planning is critical to an effective transition. Achieving optimal outcomes in transitioning a sustainable business requires years of preparation. How confident are you in handing over control of your business to your successors today? A successful transition plan gives the new leaders a complete operating manual. They need to be adequately prepared to operate the business day one. They need to be able to take your business forward to protect your investment and to benefit your employees, stakeholders, customers and partners.

Some owners avoid planning for the end of the business because of the time it takes away from working “in” the business right now. The lack of preparedness puts your business value at risk. It is never too early to prepare for an exit. Whether you are a small owner-operated business, mid-market company or family-owned enterprise, you need a definitive succession plan. It should be part of your standard business.

Here are some tips on how to start your succession planning:

1. Document company processes and procedures. Everyone is not replaceable. Unfortunately, when a person leaves the business they take institutional knowledge. Key personnel that do not document their knowledge or share it with their direct reports, cost your business long-term and expose you to great risk. This includes the owners and founders. You can mitigate that risk by making sure every employee documents their processes and procedures. Start with key roles. This is not a job description, it is a “how to” operating manual for every role in your company.

2. Review your wealth preservation strategies with your advisors. Meet regularly with your personal and professional financial team members to analyze your current situation and review your short and long term goals. Be “in the know” at all times of where your business stands financially. Use strategy and growth advisors to help you pivot the business, so that you can exceed your goals. Update your business evaluations annually.

3. Build a culture of knowledge sharing. Create internal social exchanges and information sharing networks. Use your company meetings to have one department or key player provide a highlight of their role and what it means to the business. Reward employees for creatives ways they educate others. Commit one hour a week per employee for education and cross-training.

4. Host quarterly strategy updates with key personnel. Spend time with your “next generation” of leaders to share business plans, KPIs, lessons learned and company strategies. They are the future leaders of your business and they may be executing your business plan. Keep no secrets. Share your wealth of knowledge. Sharing keeps people engaged and actively participating in achieving business goals.

5. Reward excellence in execution. Find opportunities to reward performance for those that take initiative and demonstrate they are prepared to lead. A business full of up and coming leaders, results in sustainability.

Exit planning helps you increase the value of your business today and in the future. Investors and bankers should ask to see your succession plan. As you plan your beginning, you need to plan for the end. Make your investment of time and energy pay off more than you imagined. Plan today to realize a profitable, rewarding and fulfilling end.

Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

July 15, 2012

A Bad Sales Hire Can Crush a Small Business

The decision to bring a sales person into your business is the most important decision you make as a business owner. Financially, it can be very rewarding or it can be devastating to your bottom-line. The reality is that your hiring decision can propel you to mega-success, crush your business or land you somewhere in the middle.

There is no absolute science in making good hiring decisions. Know your associated real and opportunity costs of making a bad hire. Calculate the risks of the person not working out before you sign the offer letter. Will your business survive making a bad hire? How soon will you need to pivot if performance is substandard?

Based on the financial risk assessment, you can qualify whether you should invest in a professional resource or hiring profile tool to reduce the risk. In other words, decide if you will pay now or potentially pay later.

What else can you do to protect your long-term financial security as a business owner and make an informed decision about hiring a sales person?

Ask candidates questions related to sales activities. Don’t focus on their industry knowledge. Industry knowledge is trainable. You don’t need a nurturer or relationships person. You need a sales person that will ask for money! It is the secret skill that will bring revenue in the door. There are two types of sales people: hunters and closers. In the beginning, you will need someone who is good at both. They will cold call, with or without leads, and they will ask for the close. These are “rare birds”. Ask questions about the candidates history with sales cycles, average size of deal, average daily cold calls, number of customers sold each year, and presentation-to-close ratios. These are all indicators of past performance and predictors of future success. When a resume lists awards for exceeding quota, that does not tell you what they sold in the past is going to translate. You want to know what they did to exceed quota. What activities made them successful?

Invest in training and sales support materials. Basic training materials should be product feature and benefit lists, industry keyword definitions, product overviews, competitive analysis, market positioning statements and scripts of common objections and how to overcome them. Utilize your team of in-house experts to train your sales people. Set up daily Q&A sessions with product engineers, marketers, customer service personnel and anyone else that touches the customer. Share all the secrets, good and bad. The more knowledge and access to experts the sales person has the better prepared they will be to overcome objections. The first two weeks of any new sales hire should include at least two hours a day training and practice calls.

Set sales quotes and activities quotas. An experienced sales person may only close 1-2 deals per year, with an average deal size of $2 million. You need to clearly outline your expectations and what you will inspect regarding number of calls, meetings, presentations, proposals and closes. Assigning the closing numbers without understanding how many calls that might take will cost you severely. You must know, for example, 500 calls or 20 face-to-face meetings may result in five closed deals at an average sale of $10,000. If this doesn’t meet your expectations, adjust accordingly. Then measure the number of calls to see if you are on pace each week. Early indicators will provide you the opportunity to pivot quickly.

Know your exit strategy. What is the maximum time you can invest in a bad hire? The answer can not be zero, because every hire has inherent risk. If it is 90 days, then have a very specific plan with measurable key performance indicators (KPIs) that you can inspect every week. You only have 13 weeks to determine if you will terminate employment or keep on staff. Sales people are used to 90-day probationary periods. You should have inspection points with planned exit strategies at 6 weeks, 90 days and 180 days. Cut sooner and learn from your mistakes. A year-long bad hire could close down your business if you are not well capitalized and depend on this new hire’s revenue to sustain your business.

Identify the characteristics that could be a threat or high risk to your business. Character matters as much as sales skills. You need to adequately assess the “fit” of this person in your business. You are handing over the keys to your future. Can you trust this person? Is this a person you would take with you to all your important meetings? Does this person dream big? Are they kind, friendly and positive? Will your customers like this person? If you can afford a hiring assessment by a professional, with tools that can define their character and skills, it will be worth the investment and potentially save you from making a big mistake.

Do your homework. Never, ever skip reference checking. Dig deep! Ask community and business people that might know the person, look at their LinkedIn connections and recommendations. Reference and background checks are as important as due diligence when buying a business. You will be writing substantial checks to this person on a promise. They will be creating your business first impression. Reduce the risk by learning from other’s experience. Again, it may be in your best interest to hire someone to do your reference checking to get a complete picture.

Finally, use your gut. Do they represent you? Your professional and personal instincts will serve you well. A bad hire can scar you and make you timid in making a future decision. Know that it can take four or five hires to find a rock star. An early success in hiring a sales person is rare, so have a backup plan.

Sales people can make or break a business. Know your upside and downside when hiring a sales person to promote your business.

Jamie Glass, CMO and President of Artful Thinkers. Creative. Strategic. Results.

July 8, 2012

Who Makes the First Impression for Your Business?

business building handshake — Who Greets Your Potential Customers?

First impressions for your business are made by people that open doors, make cold calls, attend networking meetings and answer your phone. They are delivered by your marketing communications like social media and websites. How confident are you that your potential clients are greeted warmly and with a direct invitation to do business?

Years ago businesses paid someone to sit at a front lobby desk and answer every inbound call and greet every walk-in appointment. The receptionist qualifications were measured by friendliness, service-orientation and attentive disposition. The standard phone greeting of this time was “Thank you for calling, how can I help you?”

When is the last time were greeted this way? Today we are often met with automated attendants and empty lobbies. Some businesses have completely eliminated any dedicated space to a welcome station and filled it with another cubical. My impression is that first impressions are not a priority for this business. The decision that customer experience may be too costly to employ a dedicated person, may be costing you business.

It is not difficult to think back to a bad first impression. I recall three in the past weeks. One top restaurant asked me to wait outside in 110 degrees because they did not open for four minutes, yet the door was unlocked. Another restaurant hostess asked me to stand until my party arrived even though every table was empty. A technology company, which had a sitting place upon entry, left me for 20 minutes while employees stared at me. Not one person asked why I was there or if I needed help. I remember all of these first impressions, vividly.

Noted in a recent New York Times article Praise Is Fleeting, but Brickbats We Recall, “Bad emotions, bad parents and bad feedback have more impact than good ones. Bad impressions and bad stereotypes are quicker to form and more resistant to disconfirmation than good ones.” Sited from Roy F. Baumeister, a professor of social psychology at Florida State University in a journal article he co-authored in 2001, “Bad Is Stronger Than Good.”

How your employees are greeting the public, networking, making introductions, and opening doors for others is a direct reflection of hiring skills, company culture and leadership. Business owners, CEOs and managers own the customer experience. Every employee is responsible for making a positive first impression. How are you reinforcing how positive first impressions are made in your business?

Customer experience is a financial decision in business, unless revenues are low on the priority list. Reputation management is critical and costly. A bad review is hard to overcome. You can’t erase the Internet or someone’s memory. People use others professional and personal experiences as a reason to buy or not buy. Bad experiences are viral, whether online, through social media, on sites that track reputations or by word-of-mouth. Once word is out, it is permanent. You own it!

Every experience starts with the greeting. Take time to review how your potential and existing customers are greeted today. This applies whether you are selling B2B or B2C, for every industry, in a building or online. Use “secret shoppers” and have them rate how inviting, caring, and enthusiastic they were welcomed to do business with you.

Customer service is a pillar to good business. Customer experience starts when the phone is picked up, the door is unlocked or a web site is visited. We may not all have the luxury of hanging up a flashing “Welcome to Fabulous Las Vegas” sign to greet everyone. We do have the luxury to manage and train our messengers to provide an outstanding first impression.

Invest in your greeting. Define, train, test and continually reinforce how you want to insure a positive first impression. It your opportunity to create a long-term valuable relationship with your customer.

Jamie Glass, CMO and President of Artful Thinkers, a sales and marketing consulting company.