Small Business Week – May 23-29, 2010

One of my greatest blessings in life is to be surrounded by smart, creative and driven people. No one exemplifies these qualities more than my colleague at Laughlin Associates, Vice President of Marketing and Sales, Meghan Cole. For over 10 years Meghan has overseen all of the elements used by Laughlin to reach out to our clients and to the world at large. She has visited with hundreds, if not thousands, of business owners and come to understand the issues that affect them. She is a pleasure to work with and learn from. To that end, I share with you a message from my friend, Meghan Cole. – AY

“To avoid failure, do nothing, say nothing, be nothing.” – Unknown

Did you know that May 23-29, 2010 is Small Business Week? This is your special week and you should take a moment to reflect and congratulate yourself on what you’ve accomplished. Many people have the dream but it takes a certain individual to turn that dream into a reality.

So what does a week dedicated to Small Business Owners mean to you?  Probably not much in the big scheme of things.  You don’t get to take the week off, nobody’ going to throw you a parade  and  your employees aren’t going to thank you for their jobs.   But that’s ok, you wouldn’t be in business for yourself if you relied on other peoples accolades.

At Laughlin Associates, we understand the hard work and dedication it takes to start and grow a business. In 1972 we were founded by one person who saw an opportunity, took the risk and put his entrepreneurial spirit to the test. Since that time we’ve had the great pleasure to assist over 79,000 small businesses feel the same joy and excitement that comes launching a new venture.

Well, we just couldn’t let this important week go by without saying congratulations and giving you a special gift. Click on the link and receive a complimentary copy of “Eat That Frog,” authored by Brian Tracy.  Brian Tracy is a world-renowned expert on time management. He has delivered time management seminars to more than 250,000 people.  His audio program on time management, How to Master Your Time is the bestselling program of its kind in the world, in multiple languages.

This accessible book contains a series of practical, proven, effective techniques that every person can use to focus on their most important tasks, stop procrastinating and get more things done faster than ever before, everything a business owner needs.

Thank you to all the small business owners who are driving the economy. Thank you to all those entrepreneurs who took the leap and continue to strive for greater success. You truly are the backbone of America. – Meghan Cole

Is Your Business Seeing Spring?

Springtime is weird. One minute it is blue skies, sunny and warm. The flowers bloom and colorful birds fill the landscape outside my window. The next thing I know the skies are filled with black clouds. The winds blow and the rain and hail pound against the same window that, only moments before, was so filled with light. It occurred to me this morning that this spring time weather mix is a good analogy for the current business climate.

Most of us were, in the not too distant past, enjoying a pleasant run of good luck. If you are like me you probably thought you were pretty smart to have gotten yourself into such a good position.  A lot of us made money because the real estate boom was driving the availability of liquid cash up. Everyone was buying, selling, and borrowing. It seemed real property prices knew no logical bounds (nor did most banks) and much of the nation reveled in blissful wealth. I’m not sure who decided to unveil the man behind the curtain, but he was revealed and the whole party came to a crashing halt.  That brought us to where we are now.

Today the media is reporting that the worst is over and that the economy is on the mend. This may be true, but where I live in Portland, Oregon (unemployment approx. 11%) things are still pretty bleak. At Laughlin, the storm has encouraged us to make some adjustments in the way we reach out to prospective customers to try to combat the obvious changes taking place all around us. The cool thing is that these adjustments have led us to innovation and new partnerships. Just as the spring always follows winter, these adjustments have begun to show signs of growth. May’s flowers are beginning to bloom and the field’s crops are beginning to show themselves. If it hadn’t been for the challenges we have been facing through the winter of “The Great Recession”, we might not have looked around at new ways of doing things and thus the potentially greater harvest that we are looking forward to now.

Yes, spring is weird, but it is also a time that makes us feel alive. The strangeness of pouring rain falling from what appears to be a clearing sky always is surprising but always fun to see and that is what seems to be happening right now as I look out my window.

Building a Solid Foundation: 4 Questions Every Business Owner Should Ask

I just attended a really great summit at the Flamingo Resort in Las Vegas. It was presented by eCommerce Merchants, the premier industry association for online retailers. In attendance were senior executives from the all over the web including eBay, Amazon, Overstock.com and hundreds of stand alone online shopping platforms.

I was there at the invitation of the eCommerce Merchants Board of Directors. A member of that board, David Hardin (he owns Shoetime, one of the biggest shoe sellers on the web) had attended the Laughlin Associates seminar last month in Las Vegas. At that time he told me that his industry desperately needed what Laughlin was teaching and asked me to come attend the summit. Boy, am I glad that I did. First let me say that I was blown away by the level of cooperation, support, and sharing of “secrets” that I observed among this group. They seemed to really want to help each other grow. They believe that brick and mortar is fading and that digital distribution will soon eclipse the old tried and true.  That the local mall is on its way out and that Amazon and its competitors are taking charge of the online capitalistic party. These folks make a pretty good argument and are willing to overlook their own competitiveness for a few days in order to help ensure that this dream of online, retail supremacy come to fruition.

I got the chance to visit with dozens of the key players at the event and the primary issue relayed to me from these industry leaders didn’t come as a surprise at all. They said that many e-commerce sellers had started out working from their kitchen table and that even the companies that had become super-successful sellers hadn’t ever done the foundational work to make their enterprise into a real business.

Four questions they (and all business owners) should ask themselves:

• Is my business operated as a Corporation or LLC?
• Have I issued stock?
• Do I hold regular, formal board meetings?
• Do I memorialize important resolutions?

Without doing this work the owners of these companies would never be able to truly develop, protect, grow, and eventually sell or pass down the business that they had built.

These web entrepreneurs have fallen into a trap that many small business owners find themselves in. They are really good at doing some sort of job. They hang out their shingle and start doing that job for themselves instead of for an employer. They become successful. Everything is rosy until they are challenged. Maybe it’s an audit, maybe a lawsuit, maybe a partnership or marriage breaking up. Whatever the situation, the person who was doing great at doing what they did great was now in hot water. They might even lose everything they had built and all because they didn’t build the business on a solid foundation.

It doesn’t matter which industry you are in. In every case you, as a small business person, must do smart things to look out for your business. There is no outside Board of Directors looking over your shoulder. No attorney, CPA, or consultant that is going to push you to do the work that is required to survive. Don’t leave it to others to hold your hand through the boring but necessary issues that you must deal with in order to defend yourself if your business is ever challenged. I just met hundreds of smart people who are doing big sales in cyberspace. Most of them admit that they need to do better at building their foundation. So now, be honest; what kind of foundation is your house built upon?

Failing Forward

My first “grown-up” business was in the cellular telephone industry. (We didn’t call it “wireless” back then). I got in early, opening up in 1986. It was fun to be part of an industry that was new and technical and whose products carried some cache. I went from working out of my parent’s basement, to a small office in a converted house and eventually into space in an industrial park. I needed to move to the industrial park in order to open a repair and installation shop. (Back then you got phones fixed in your home town. They were not disposable as they are now).

As the business grew so did my business opportunities. I partnered with other companies, making them re-sellers using our agent number. We started advertising more and more heavily in the local newspapers. We had 6 full time and several part time sales people as well as clerical staff working from our office and had three technicians in the shop. We bought the latest and greatest diagnostic equipment and began repairing and installing phones and other consumer electronics for many of the biggest retailers in the Portland, Oregon area. Business was good.

All of this success came within a fairly short time period. I was young and excited and thought I had the world by the tail. I got a nicer car and bought my wife a loaded Jeep Cherokee in which we installed all kinds of electronic gadgets. We bought a larger home and began taking a few little trips. I even bought a set of custom golf clubs and I don’t even like to golf. Yes, things were really going well. Then one day I was invited to a meeting at the corporate offices of the cellular carrier. They spent some time telling us about how the market was changing, how technology growth was exploding and about their expansion plans. It all sounded great. Then they dropped the bomb. They would be fundamentally changing the way they paid for new client enrollment (read-how they paid commissions). The new plan made it virtually impossible for a company organized as I was to maintain consistent cash flow. As a matter of fact, their new commission plan was aimed at attracting “Big Box” stores that would, within a few months, start using cell phones as loss leaders in their advertising programs. “Come in and buy a new couch and get a free cellular phone!”

My head was spinning. I didn’t know what to do. But we were debt free and had some money in the bank and had lines of credit and I figured I could adapt. While many other companies similar to mine were closing their doors, I was trying to get cheaper prices on phones by committing to larger volume orders. I was hiring more people for the shop in hopes of fixing all the broken “free” phones that a furniture store would have no way of handling. As sales revenue shrunk I began borrowing from my credit lines to manage cash flow. Then I started to use personal cash and credit to cover payables. I couldn’t afford to compete on price with the big chains and so I couldn’t move the phones accumulating in my warehouse. Before long I was hundreds of thousands of dollars in debt and was sinking fast. My wife and I turned in the keys to the Jeep to the bank and eventually sold the service shop to a competitor. I was broke, in debt and feeling hopeless. Finally we closed up shop for good.

There is no specific happy ending to this chapter of my life. I had made rookie mistakes and ended up paying a high price for them and it took effort to clean up the financial mess I had made. So why do I tell this story? I want you know that it is OK to struggle. It is alright to take chances. It is understandable to set your mind on a goal only to find that it was the wrong goal to reach for. In short, it is OK to fail. Why? Because each attempt, including the failed ones, brings invaluable insights and education. You won’t catch me making the same mistakes twice because I have learned through my experience what works and what doesn’t and that is worth a lot.

If you choose to go into business for yourself, you have to do it with gusto. You can’t afford to go after your dream half heartedly. No matter that you won’t always be right. The point is to keep dreaming and reasoning and striving to build something. You must be willing to do the hard work. These characteristics make you different from others around you. You are a pioneer. That means you will have to leave the comfort of the masses and make serious sacrifices to reach your “Promised Land”, but at the end of the journey you will gain the rewards earned by taking risks. Don’t let set backs get you down. One of the best things I have learned along my life’s path is this, when things go wrong, as they often will, always make sure that when you fail, you fail forward.