At a meeting with a group of clients last week our presenter, my friend Hugh Blane, asked an interesting question – “Can every employee articulate your strategy and their role in accomplishing it?” The question stumped a few people and in a test phone call to one client’s company the manager receiving the call was a bit indecisive with the answer. It’s a good exercise to make sure employees, especially those who have customer contact, know the firm’s strategy and value proposition.
We have some house guests, a young couple from Ecuador, he having been an exchange student of ours a dozen years ago. On May 8 I showed them the front page of the Seattle Times and an article about how a survey showed the high cost of living is the number one thing people don’t like about the area (taking over the perennial top item, traffic). Cost of living really means the cost of housing.
She read the article, saw how home prices are going up about 15% a year and commented how people will be rich if this keeps happening. So I gave her a short lesson in economics.
- Just because the price goes up doesn’t mean it’s money you can spend.
- What goes up can go down, as we saw 10 years ago.
- When the home prices go up so do your property taxes. Ours went up about 15% this year.
- And, someone has to be able to pay the high prices and there’s a limited number of people who can afford the high-end homes (median home price in Seattle is $819,000 and on the Eastside it’s $943,000), especially if prices keep rising. Well-above market priced houses take a lot longer to sell in our neighborhood.
- If you sell, you have to find somewhere else to live (and unless you plan to move out of the area you’re paying a high price for a new place).
The above (especially the fourth point) applies to our everyday businesses also. The larger the size of the firms in your target market the fewer there are, i.e. you have a limited number of customers. According to Hoover’s (D&B) and NAICS.com only about:
- 4.5% of companies have sales greater than $2.5 million
- 3% of companies have sales greater than $5 million
- Less than 2% have sales greater than $10 million
In addition, about 90% of businesses do less than $500,000 in sales.
Bottom line, you have to know your market. It doesn’t matter if you’re selling widgets, advice, service, or anything else. I know in the buy-sell world it gets more competitive as the company and deal sizes get larger; just look at what’s going on in the Private Equity market where acquisition prices are getting ridiculously high.
When it’s competitive, it’s when service plays a big part. It’s where small business shouldthrive by being caring, nimble, and fast. The continually profitable companies recognize and do this.
“Say goodbye to your bank teller and your insurance agent” is the opening line of a just released Fast Company article titled, “AI Could Kill 2.5 Million Financial Jobs – And Save Banks $1 Trillion.”
Google just announced the launch of “Duplex,” an AI application that can call and make appointments for you with the party on the other end of the line thinking it’s a human. There’s a resume scanning program that can review 1,500 resumes an hour (good luck to job seekers trying to stand out in the crowd).
Fast Company based their article on research from the firm Autonomous that recently issued an 84-page report on this and predicts:
- Software agents (machines) will hold conversations with clients.
- AI will oversee the ever more complex regulations department with real-time oversight of the company’s actions.
- AI will determine credit risk, insurance underwriting, assess claims damage using machine vision, and select investments (don’t investment firms already use computers to time trades?).
Over half of what I do with/for my clients is advise, counsel, and provide quasi-therapy versus analytical work like spreadsheets, reviewing documents, etc. I think we’re a long way off from when machines can offer the “personal touch.”
Maybe they will replace some jobs like insurance agents or claims adjustors. But I wonder how many people will really want this. It, again, goes back to John Naisbitt’s statement about how the more high tech we get the more high touch we’ll need. Interesting times indeed.
“The use of life is to spend it for something that outlasts it.” Willam James
Ten and one-half years of owning an iPhone and a freak accident gave me my first broken screen. I had the phone in my jacket pocket, put it over the back of an office chair with a fancy metal design around the back, got out of the meeting, grabbed my phone, and found a beautiful design radiating up my screen.
Replacing an iPhone screen is not cheap. So I bought a tempered glass screen cover with a lifetime guarantee. Pretty cheap compared to this happening again. One could say it’s a form of insurance.
One could say many things we do in life are a form of insurance. We have our attorneys do things to keep us in compliance and out of trouble. Our accountants make sure the IRS or, heaven forbid, the State DOR doesn’t come after us. A good banker keeps you not track versus just lending money (to anybody).
And of course, people like me in an advisory business give our clients peace of mind, ask the right questions, let clients know when they have the right answers, etc.
The cost of a bad contract, erroneous taxes, or a bad business decision is huge. The cost of someone who’s seen the situation hundreds of times and knows what to do, and not do, is virtually priceless.
It’s why we all have businesses.
“If you don’t have a seat at the table, you’re probably on the menu.” Elizabeth Warren
My wife and I are big fans of the show Diners, Drive-ins, and Dives with Guy Feiri. In late 2017 there was a spin-off show, Guy’s Big Project, to find the host and concept for a new, similar, show showcasing certain types of restaurants (no spoiler alert, just that it’s a fun show with a surprising ending).
They started with 10-12 contestants and eliminated them over a number of episodes. When they got down to the final group they had them prepare a meal and present it to a group of celebrity chefs.
One of the contestants booked himself as being weird (and it seems he is a bit weird). What the chef judges didn’t like is how he “tried too hard” to be weird. Weirder than his normal.
There’s a lesson for all of us in this. You have to be yourself because when you try too hard you’re faking it and others will notice. It reeks of insincerity. You can’t be like your boss, father, mother, mentor, coach, or anybody else. Just because your boss wears ugly ties doesn’t mean you should.
Be yourself, it works.
“There are no traffic jams along the extra mile.” Roger Staubach
The New Year is a time of refreshing (and it seemed a lot of people kept refreshing the first week of January and then it got very busy the second week), out with the old, in with the new, etc. I’ve seen a few things questioning why it’s this way when for most people, what they do this week is similar to what they did before the holidays.
The answer for most of us is because it’s a new tax year. We record on an annual basis to pay the taxman. It often also means new initiatives, because it’s a new recording period.
My big change is realizing there are some areas in which I can add great value, but don’t have the bandwidth to help these people. Thus, I have a new employee who will take some office work away from me, get out in the community, and eventually take on client work.
When I say get out in the community I mean it. Recently I saw the following in a blog post by Alan Weiss:
According to Jonah Berger’s research (the author of Invisible Influence and Contagious) word-of-mouth is by far still the THE most important marketing dynamic, and only 7% of it is virtually viral. You read that correctly: All of the rest is personal and conversational in “real” life, not virtual… Stop hiding behind a keyboard and get out on the streets to meet with buyers. You don’t build relationships with a “return” key. You build them with a handshake.
No matter what business you’re in, electronic outreach is fine, but it won’t get you much in the way of long-term clients/customers. As I preach to my clients, and tell students in my class at the local SBA office, when you do the things you’re supposed to do (meet people), good things happen. And it’s the good things that are memorable and make us appreciate what we do.
“Try as often as possible to do something you’ll remember, because memories make us rich.” Vic Ketchman
I just received a notice on my phone from the Wall Street Journal saying the federal deficit this year will be $984 billion.
I majored in Economics (undergrad and grad school), my program was primarily monetarist professors (versus Keynesians), monetarist meaning Milton Friedman was a hero (as were low deficits).
There is nothing wrong with deficits, especially in a strong country like the US, and also when times are tough. But this high a deficit when times are great makes no sense. This is when we should be running surpluses, like we did in the 1990’s.
It’s like our businesses or households. There’s a time for debt (mortgage, car, line of credit, new equipment, etc.) but it’s also important to save. We don’t want to leave our children with (personal) debt and we shouldn’t leave them with government debt either.
My conclusion is, it doesn’t matter which party is in control, when in power they all spend like money grows on trees.
What interesting times we live in, as people in every generation have said. What spurs this thought is the New York Times coming out in a favor of a Trump administration program (after going on a long vendetta against anything Trump, which they still do).
The Times wrote in favor of the administration’s plan to increase apprenticeship programs in the trades. It goes to show no matter how much you can’t stand someone it doesn’t mean everything they do or say doesn’t have value.
I have clients who worry they won’t be able to grow if they can’t find qualified people, who can pass a drug and background check. Business buyers have passed on deals because the seller informed them about how tough it was to find more (good) workers. This is in electrical, HVAC, roofing, trucking, and other industries.
Add qualified labor to the crisis list a notch below opioids, homelessness, and poverty and realize if apprentice programs are successful it will reduce the previously mentioned problems. While having a different focus, it’s one reason my Rotary club and I have sponsored a dozen overseas projects putting technology in schools and sewing centers around the island of Antigua. The better educated we are the better the economy will be, whether it’s tech, the trades, or anything else.
At the annual conference for the Society for the Advancement of Consulting I once again heard about how speed matters, i.e. have urgency. Also, how in this fast-moving world 6-12 months is a long time (meaning it’s ridiculous to have a five-year plan and projections), and why it benefits the client to get things done sooner versus later.
Well, let’s tell that to the government. A client had a visit from a government agency 2.5 year ago and jut two weeks ago got a letter saying how they needed to change a few things. Two and one-half years to get out a letter. If this stuff was so important wouldn’t you think they’d want it corrected then not now?
Makes you wonder, doesn’t it?
On September 20, I’ll be again volunteering to teach my class, “Dynamically Growing a Consulting Business” at the local SBA/SCORE office. It’s always an opportunity to remind myself the things I’m recommending to the students are the things I should be always doing myself, especially to enjoy what you’re doing.
Last week in a newsletter from Alan Weiss he wrote how he always asks coaching clients, “Are you having fun?” And, how many of them don’t like that because they think if you’re hard-charging up the corporate ladder or running your business it’s work not fun.
But it better be fun. On page one of my book, Buying A Business That Makes You Rich, I cover the top nine reasons people in audiences give me on why they want to be in business for themselves (whether it’s buy, start, or get a franchise). Then I tell them the number one reason should be to have FUN, which is mentioned maybe 2% of the time.
When business is good, it’s always more fun. When there are challenges they are at least your challenges and you control how to deal with them. But being in control doesn’t mean you are by yourself on the decision-making island.
As the video below covers, you do better with an advisory board or board of directors (or a business coach). Being in business can be lonely, that’s why there are scores of roundtable groups, coaches, and advisory boards. Use the one most appropriate for you.
“No matter how dirty your past is, your future is still spotless.” Drake