Category: competition

Bethenny’s Dealmaking Rules

Bethenny Frankel’s one of my favorite entrepreneurs. Inc Magazine’s too.

Inc recently published her rules for dealmaking on new projects, which I thought were rather good. We’ve repeated them below, with some editorializing:

  1. Establish your own code; do you think the deal will be enjoyable for you? If not, think twice about it.
  2. Pick the partner that moves at your own pace. Have shared values and have partners that work at your own speed.
  3. Be upfront with your own flaws and weaknesses. Outline your own deficiencies in any negotiation. To which I’d add, all negotiations have got to be a win/win/win for everyone.
  4. Define what you will do, and what you won’t do. Self explanatory, but IMHO, when money starts flowing, misunderstandings proliferate if not in writing.
  5. Master the care and feeding of your partners. Again, self explanatory, and make sure you take their concerns into account. It’s not your way or the highway. Celebrate successes. IMHO, behind the scenes figure out what happened with failures.

The Cavalry is Coming?

This is a favorite phrase of my favorite TV host, Larry Kudlow, on his daily show on Fox Business.

But, for those of us in the small business community, what does it mean?

First, I think Larry would say that the House and the Senate revert to Republican control.

But, but, but, to use Larry’s favorite phrase, what does that mean? We’ve still got Biden in the White House.

I think we could say there will be a reduction in oil drilling impediments, which will lower gasoline and other petroleum costs, which will slowly take some of the pressure off those costs continuing to rise. Crude prices have dropped a bit in just a week after we announced a cessation of buying oil from Russia.

If you depend on your goods from China, as many retailers and drug companies do, you might continue to have problems; most of our clients have sourced formerly China-produced goods into other countries, such as Thailand, India and Mexico.

I think there will be some decrease in silly regulations, but Dems are still running the agencies such as FERC, EPA, OHSA and DHS that impact your business lives.

What will happen to the millions of unfilled jobs? I find that number rather illusory, since we did a hiring campaign for 12 security guards, and got all the positions filled in two weeks, albeit by offering a somewhat higher wage than others. We’ve written elsewhere of using Indeed and Zip Recruiter, and the fact that we thought the latter was better. There’s another online job board, Monster, from which I’ve received some solicitations to be President of this or that, and that seems to work for higher level positions.

But, you will probably see some unavoidable increases in your raw materials costs, or your service costs, which you might not be able to recoup through price increases, despite what the pundits say. We’ve also written in this blog about how you can mitigate price increases.

So, and we will probably update this blogpost down the road, as we’re updating the one on stagflation, as the way becomes more clear.

 

 

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Gotta Know Your Limitations

To paraphrase the Clint Eastwood movie, ‘A man’s gotta know his limitations’.

What does that mean for you, as an owner of a company?

It means don’t get ahead of your organization’s ability to execute what you want to do.

It’s fine to have buy-in from your organization on your plans (we recommend it), but you might task your organization with more than it can do in the time frame you’d like it done.

An example: in one of my companies, we were adding production capacity, expanding eastward in the United States, and adding English and Australian distributors, and I and my plating manager got the idea for a completely new metal coating process for our exhaust parts on a Friday afternoon.

We were also improving our shipping times, which required a fairly major commitment to more inventory.

I discussed the new pr my partner, who had blessed the idea previously but who had expressed valid concerns about going beyond our capacity, So Monday, I and my partner held an all hands meeting with my staff, front office and warehouse, as well as production. My CFO missed the meeting, but she would have asked me what additional strain I would be putting on our financial resources.

Frankly, I didn’t know, and I admitted as much. My name was on the building, but I discovered it was ok to not know something. At Wharton and Ford, you were expected to know the answers.

So, we kept implementing the other expansion plans, and I started the process of doing market research and actual testing of the parts in the worst climates where we had discrete distributors. I might have otherwise skipped the market research test because the initial response from a couple of key distributors was overwhelmingly positive.

We digested the plans already in the works, and then tested the parts in places like Seattle, Houston (for marine uses) and Denver. All positive.

The tests took about six months, during which time our competitors might have found out what we were up to, but they didn’t.

So, we stayed within our limitations, kept the financial wheels on the business and had a very successful product launch.

And the staff was happy, because they didn’t get pushed beyond their limits.

Financially, we added nearly 30% to our sales in a year in the middle of a recession, which we didn’t think we could do, but it worked.

Gotta know your limitations so you can exceed them

 

Market Positioning Oops: Lucid Motors

We see where Lucid Motors stock as hit a new low, amid problems in meeting its sales targets.

We think we know why: to us, the Lucid looks like current Lincoln MKZ models, with little differentiation on the part of the manufacturer on its products.

And the $75,000 Lucid might be $10-15k more expensive than an electric Lincoln when it arrives.

That’s not a good place to be in these days.

Going back to the drawing board to redesign the car is time consuming and expensive.

We suggest Lucid talk to Ford and make their car the electric Lincoln that we’re sure Ford has under development but probably not scheduled for launch for a couple of years.

Better to pivot and live to fight another day. Besides, Ford is a good place to work.

New for ’22

I got a seminar requrest for attendance from a webinar house a couple of days ago wanting me to attend a seminar on 5 things to be aware of in 2022.

Most of the five items had nothing to do with marketing or sales. One was people related, one was fixing processes, and one was leadership related. The other two didn’t even make my top of mind.

If you don’t improve marketing and fix sales, your company isn’t going to grow, your competitors might run over you and life won’t be as much fun.

Not that being an entrepreneur is a day at the beach.

We continue to see problems with websites, usually that they’re not locally focused, are hard to use, or the design isn’t too functional.

And it’s even happened to one client, sorry to say. His sales have gone down in one division because he hasn’t fixed that division’s website in two or three years, and I wasn’t too happy with the design the last time.

And he wants to sell the company. Potential purchasers will spot this website weakness a mile off.

So, another client, whose websites I like (he’s done three for me) is fixing the division’s website.

SO, NEW FOR ’22, FIX YOUR WEBSITE!

Why Should Anyone be Led By You?

The title of this post comes from a series of lectures that I and another Navy Captain, Fred Reis, did under the aegis of the Chief of Naval Operations, ADM Frank Kelso.

I was called in by Sen. John McCain’s office, who knew me and my civilian company leadership record, and wanted the two of us to try leadership theories on Navy Captains, many of whom had not evolved their leadership styles since the era of wooden ships and iron men (and proudly in some cases so stated to us).

Fred and I ultimately published a book called ‘Leadership Secrets’, and about 4,000 copies went out to all Commanding Officers in the Navy as well as many middle managers who the Navy thought had potential. It took us three two week tours, plus some admin support, to get it done, but ADM Kelso finally blessed the product and issued a CNO order implementing it.

In addition, we did a one week course for those who wanted more leadership training (including a few hardcore yellers and screamers) who got put in our leadership course, or who faced being cashiered from the Navy.

How these secrets apply to you, as a company owner, is that somewhere around 10 employees, folks might question your leadership qualities and ability, and the ability to demonstrate both is critical to your company going further.

In all honesty, you might decide at 10 employees that’s as large as you want to get, and your golf game needs more attention than your sales curve. Fair enough; I encounter people like you all the time. My Dad, who had started the Heinrich Company, was like this; he’d worked hard since he was 12 or so, and his company provided him and my mother a very nice lifestyle.

But, many owners want to do better by their employees, give them a vision and a career if they chose it.

For starters, you don’t have to keep all your employees happy all the time, but you do need to  listen to them.

If you listen rather than just issuing edicts, and your employees have the feeling that they’re being listened to, you’ll have happier employees, ones that stick around. It doesn’t make any difference if it’s the lowliest warehouse guy or gal, or the production line guy or gal, or your business partner, you should listen.

I often think, in retrospect, that I exercised my 51% ownership of the Heinrich Company too often, and probably had more employee turnover and poorer decisions as a result. We still achieved 25% compound growth rates, and nearly outstripped our financial resources, but we might have done better by listening more.

There are several leadership styles that you can use, such as the command and control (the old Navy model) where everything is written down in orders, to a more modern coaching style of leadership where decisions are reached by consensus.

Personally, I discovered that the command and control Navy way didn’t always work when I was a plane captain of a surveillance plane flying around over Viet Cong strongholds; There were a couple of times when the crew asked to talk over a decision and, after realizing that we had time to discuss it, we did.  And a couple of those people turned up in my commands years later when they found out I was leading a Navy Reserve unit.

You’ve got more time to make a decision on something than you realize. So, take some time. Look for opinions. Wander around on the production line or warehouse floor. Even Alan Mulally, the retired CEO of Ford, used to wander around the Ford production lines. And he was very well thought of by Ford’s rank and file. And he popped up at the Phoenix intro of the Ford Fusion, just talking to the inviteds, no big hoohaa.

Jim Farley, Ford’s current CEO, is much different. For openers, he’s a product guy, having come up through Lexus and Lincoln. But he also turned around Ford of Europe, so he’s got operational chops (no pun intended). And he races Fords of all kinds, which is really different. Farley driving the wheels off a Ford Mach E on the Dearborn test track is a sight. Another sight is Farley asking the Twitteratti of their opinion of a Mach E door handle.

But, both Mullaly and Farley share a common trait: they both work from consensus, although Farley showed a willingness to make major personnel cuts at Ford of Europe while revving up the product side.  Mullaly created the ‘One Ford’ vision to unite the warring units within Ford, which was a major leadership accomplishment, and I know heads rolled over that vision.

Farley and Mullaly also demonstrate a couple of other leadership tenets: leadership is doing the right things  while management is executing on the vision of right things.

We recommend the consensus form of leadership, as long as there’s time to build a consensus. In business, there usually is time, despite one of your sales reps yelling that you should have made a decision on ‘x’ yesterday.

As you become more confident as a leader, you’ll take the time you need to build your consensus and get the buy-in that you need to have successful decision, not just one made on the fly that no one is happy about.

When you have to make a decision, make it. As my wife would say, ‘Don’t sit on the pasture post’.

The key think once you make the decision is execution. You and your team need to execute, and be alert for signs of problems with the decision as you go along.

You might find that there’s a better decision, based on more complete information to be made down the road. Or, you might find that you were just flat wrong in the decision you made.

Don’t waste time agonizing about bad decisions, either. If a decision appears to be incorrect to you, talk to your team and find out what could be better. Don’t be hesitant to admit you were wrong.

You might be right, you might be wrong, but don’t be indecisive.

Lead, follow or get out of the way.

 

 

You’re Launched: Now What?

At this point, you’ve launched and you’re either profitable, or you have a plan to become profitable.

If you’re working on a plan to become profitable, you have to first make sure that you have enough money to last until you become cash flow positive.

For example, when a partner and I took over a restaurant from one of my clients because he’d run out of money, we had done a plan that would get him from where he was to profitability in about a year. However, the plan required about $150,000 of additional capital which, it turned out, he didn’t have. I and a partner did.

So, we assumed the lease staffed it the way that we thought it should be, and kept going. And, we lost about $150,000 before we became cash flow positive. But, we largely stayed on plan.

We had to redo our promotion plan, because we discovered that, with a tough location and a cuisine no one had heard of (Modern American) we had to really promote by word of mouth. However, our patrons loved us, and a couple of influential magazines loved us, so slowly traffic picked up.

We also discovered that our patrons thought of us as a supper club which was a concept that no restaurant in Maricopa county was doing, but we have a lot of Midwestern and Eastern transplants, it was a matter of getting the word to them. We did all sorts of promotions to get patrons in the door, because we knew once we did, that there was about a 75% chance that they’d return. And we really listened to what the patrons were saying, because we discovered that word of mouth really worked. Eventually we got word of mouth up to about 95%.

So, we sort of pivoted.

Seldom does your original plan go as planned.

So, you have to consider changing what you’re doing to some extent. Your customers will tell you what they think is good and not so good about what you’re doing.

Your employees will also tell you what could be done better, because they’re on the front lines, making product, serving customers, etc.

I have done in several businesses, and have urged my clients to do, listening sessions, which might be on Friday afternoon after the trucks have been loaded, or they might be on Sunday afternoon in your restaurant before you open for Sunday evening.

WHY SHOULD ANYONE BE LED BY YOU?

One of the things you discover in growing a business is how good a leader you are or aren’t.

You have to communicate your vision of where your business is going, and be prepared to take (hopefully) constructive criticism about what could be done better.

I and my business partners have always liked the concept of ‘management by walking around’ which was popularized by a management consultant named Tom Peters in the 1990s.

You can wander around your shop or warehouse floor, or your front counter, or, as I did on many nights, sit out in front of our restaurant and talk to passersby. It was a rather hokey, but very effective, tactic. It was so effective that a couple of our neighboring restaurants complained (there were four of us in a row, all different styles of food).

The tactic you might use is just taking orders from your customers for an afternoon a week. Or go to industry trade shows.

I wasn’t particularly good at running a business (you can find key people for that), but I have been very good at leading others to run segments of the business, figuring out market niches and how to exploit them.

HOW DID YOU HEAR ABOUT US?

This is a rather corny old practice, but it works, particularly for business-to-business companies.

This phrase is good because all of your people who are interacting with customers should be writing down on customer records how each customer heard about you, so you can determine  which of your promotional methods work.

Somewhere in your startup phase you should have put in a budget for promotion, which includes sales, magazines, coupons, whatever you had in your original plan.

Let’s assume that you planned for 10% of your sales to be spent on promotion of various types. You can measure the return on each promotion method by figuring out how much was spent and how many customers in produced. You should have positive results for all promotion vehicles, but some will be better than others, and gradually you’ll winnow out the less productive methods.

I’m always amazed at how many promotional sales people don’t have that information available.

Regardless of whether you’re business is retail or wholesale, these practices apply. I’ve used them in six different businesses and one civic organization, and they work.

ARE ALL CUSTOMERS GOOD CUSTOMERS?

In your startup phase, possibly.

However, as you grow, you will discover that some customers are literally more trouble than they’re worth.

Given the state of computer systems, and data mining, you can figure out how you’re doing on each customer.

If you have customer profiles on everyone, the challenge becomes how to weed out, say, the least profitable 10%. In our restaurant, after we became pretty strong in our execution, and our word of mouth was strong, our waitstaff would politely put a handwritten note in the check; I would back them in their decisions (this only happened a few times in three years).

If you are in a business to business situation, I’ve trained some of my clients’ counter people to put people on hold and then raise prices a little on them. If they complain, counter people can even suggest the competition as in ‘that’s the best we can do’. If you’re quoting for business, various prices will work.

You are not normally going ‘loose money on every item produced and make it up on volume’ (a famous aphorism that came out of a large automaker), although you might for a while getting to breakeven and positive cash flow.

People in Your Startup

The popular image of the startup entrepreneur is Jobs, Gates or the HP guys slaving away in their garage, or back bedroom,  lone wolfs, trying to get their businesses off the ground. They don’t hire people until the business is off the ground.

The reality today is  different. Startups write business plans, raise money and hire people in various disciplines to do functions like marketing and sales, finance and production.

Odds are you’ve worked with the people you’re launching with. And, presumably you’ve got non disclosures in place for all of them, once they have agreed to their compensation package.

You should strive for diversity, but more important, you want the best people you can find for the price you can pay. COVID status can be one of the screens when you’re interviewing people, but that’s about all it should be. The same with Critical Race Theory but, this topic should be avoided,  because it’s so highly charged politically, and you don’t make politics intruding into the workplace.

You do want your people to be socially responsible, which means in this context that they be proud of the company they work for, and your company not engage in socially irresponsible behavior, such as insider trading or overt or covert theft of competitive secrets.

As one of my clients once said, could you discuss your business idea in a cocktail party?

All the employees should be of good character, too, so they don’t engage in socially iresponsible acts, such as sexual harassments. You don’t need a lawsuit to sink your company as it’s getting started, or cost you dearly in legal fees.

Winnowing out bad behaviors, even in your startup, means that you should test your employees for these behaviors, and for Key Personnel Indicators (KPI) which cover teamwork, creativity and various other attributes.

Also, in the COVID era, where more people are working remotely, and probably will for some time yet, you need to test for independence. One of my clients now has 1/3 working from home, 1/3 working from an office, and 1/3 who go back and forth. This seems like a sensible model you can use.

You as the founder need to look inward, too, to ensure that you’re the leader that the company needs. I’ve worked for more than one startup where the founder wasn’t the best person to work for; the marketing positioning was generally sound, but the founder was just difficult to work for. You want to engender loyalty and trust, so you must have those attributes.

One of the areas that is frequently neglected in a startup among people is sales. Your salespeople, or persons should be able to sell effectively and ethically, and should be graduates of one of the sales academies, such as Sandler or Brian Tracy. They should have a proven record of closing deals, too (this is a trait that is often overlooked in sales)….it should be in excess of 25%..

If you have your product or service positioning right, and your promotion is right, sales ought to be relatively easy. You should have an idea of what your sales cycle (the time from sale to money collection looks like so you have enough money to fund sales.

We should also discuss how much space you will need. You will pay a premium if you lease a small space in, say, and Executive Center, but you don’t have much downside risk.

You should allow yourself growing room, but how much may take an educated guess. Your people should be able to help: when I entered manufacturing with one of my companies, I had no clue now much space I needed, but my production manager (and future business partner) did.

We always made sure that we leased from firms that had lots of different properties, because we regularly underestimated how much we would grow. Try to ensure that your lease has options to renew, and relocate. We moved twice in seven years, despite having allowed for growth (we thought) in each of our spaces.

If you need to raise money, you should base how much you need to raise on your worst case business plan (we have advocated doing a best case, a worst case, the odds of each happening, and that becomes the business plans and goals). But use the worst case to raise money, because you never know what might happen. It’s better to have too much money than too little.

As an example when we started the American School of Entrepreneurship, we did so using standard university classrooms we rented from University of Phoenix. It became apparent, with the advent of online delivery methods, that we could actually record the classes and the PowerPoint presentations, put them on a website and there was an international market awaiting. Home run for about three years, until Harvard, Stanford, Penn and Coursera caught on and ran over us.

We recovered our investment, but the change to online needed more capital. We are still discussing how we’re going to reinvent the School; all I will say is that it comes down to people.

So, in reading the last three posts to Entrepreneurial News, you’ve got everything you need to start a business!

 

Starting a Business Part Two: Customer Centricity

When you are thinking about starting a business, you have to go find customers.

You have to market research their buying habits, probably to a focus group to find out what, if anything their don’t like about the current offerings in the market, and generally embrace them.

You have to find out what media influences them to buy, if any (word of mouth still accounts for 70% of a customer’s decision to buy).

We have one client who  is extremely customer focused, and they can’t keep up with demand. Their clients keep giving them more work. It doesn’t hurt that they’re in a rapidly growing industry, either.

We call it end to end customer centricity. Everybody in the organization has as their number one priority to focus on the customer. No one says ‘that’s not my job’, even after you become larger. Everybody takes messages for everybody and everybody answers the phone and emails.

Since most of economic activity is retail, through shops or online stores, we are going to focus on promotion methods that we have found work for retail.

As we said in the past chapter, most businesses focus on price.

That’s not necessarily wrong, if that’s what your customer perceived competition is doing. However, and this is where most companies make a mistake, you should focus on the other promotion elements that seem to be important to customers, such as on time delivery, your ability and friendliness in chasing orders, and service after the sale, even years after the sale. Even service products that you didn’t sell, because that’s one method of finding out what customers like or don’t like about the competing product.

What does the design of your products look like? Kind of average? Again, what do customers think of your designs? Do you even know? Apple, for example, uses its cool designs and ease of use to justify higher than normal prices for its products, and it doesn’t get stuck in commodity hell. Apple also tends to hide its pricing by using bundles of its products with associated services, such as Apple Pay and Apple Wallet (but I have yet to see compelling reasons to put either one of them on my phone, but then I don’t want any of my bank information disclosed on anyone’s network. Just sayin’.

All the other computer makers (Dell, Samsung, Lenovo for example) compete on price on phones, or hide their pricing in deals. They’re sort of stuck in a zero sum game, or a game growing  the growth of the economy.

At the outset, you want to figure out how you’re going to grow at some multiple of overall economic growth.

And, at the outset, you need to ask your future customers if they want or need your product. Wants put you in the Apple camp, needs are less strong. If customers are indifferent to either a want or a need, then you might want to rethink your idea. You can also ask the prospective customers if there is a product out there that they would like to see you produce.

To give you an idea, in my first company we were struggling with polished chrome exhaust parts: although if we did it right, they looked beautiful, were expensive, prone to damage in production, and had a tendency to walk out the door. Our sales of them were doing well, because we were the low cost producer, but the problems persisted. So, we were noodling around these various  problems one Friday afternoon, and our chrome manager said he could do a nickel alloy at less cost that would have 80% of the appearance. So he produced a few parts, we shipped them to key distributors, and the response was off the charts good.

So, be thinking about what you could do that would be similarly disruptive. Your customers should view your product as a want or need, which will make your promotion job easier.

I’m continually surprised at how many companies don’t make it easy to do business with them, either because you can’t reach out and touch them by telephone or email. My wife and I went out to dinner recently at a fish restaurant we’d never seen before and found the prices reasonable and the food excellent. Despite being only two or three months in their location, the place was packed on a Saturday night. It seems like they’re doing most everything right by their customers. Interestingly, the restaurant chain is based in Ventura, not Phoenix.

Maybe you’ve got a bad location. My restaurant had a bad location, which we netralized through excellent word of mouth, but it took three years and $150,000 of losses to get there. Think how you can neutralize a bad location: The magic of the internet or delivery is one help, but poor delivery might mess up your service.

One of the things that I discovered when working for Ford, and still discover is the lack of customer focus by many of the Ford dealers. Ford can preach it, but it doesn’t mean the dealers will do it.

One of the things I’ve always done on my own companies, and frequently advised by CEO clients to do is call into their own companies and test their customer centricity and how easy it is to do business with their companies. The results are often eye opening.

If you are really customer focused, you should have very good word of mouth referrals, which should be about 70% of your business, maybe less in early years, or when you’re rapidly growing.

In the final analysis, your customers will tell you if you’re customer centric, as long as you ask them once in a while.

Starting a Business Part One

THE IDEA

The idea of starting a business can come from anywhere.

You might decide that you can do your profession better than the people you are currently working for, or you might have a completely different idea for a business.

Your business idea might involve manufacturring, or a service, or a combination of the two.

You might be offered the opportunity to buy your existing company, or another company in your industry, or  buy a business in a completely different industry.

Personally, I and my clients have gotten ideas for new businesses from all sorts of places,

All of us have thought of ideas in the shower, while cutting the grass, working out, or practically anywhere.

The key thing is that when you get an idea, you’ve got to research it: how big is the market, what’s the pricing look like, what unique role could you play, etc.

If your research is positive, then you need to take our Entrepreneur’s Questionnaire on our web site, www.thesolutionsforum.net, to see if you’re suited from entrepreneurship.

Back in the day, I used to research ideas using traditional methods, such a customer interviews, questionaires and focus groups. I originally started The Marketing Doctor (TM), we used all these methods.

We still recommend doing market research, and not just among your friends over drinks. Friendly research is important, but shouldn’t stop there. Now, things are much easier: you’ve got the internet.

The internet allows you to look over who is out there in your chosen industry, what sort of public presence they have, and probably what their customers think of the existing offerings.

All of these external research items will help you flesh out your idea, to see if it’s a good one.

You might also find that you’ve got to pivot away from your original idea, because it’s either not workable, or isn’t likely to get to the profits you want.

If your market research is positive, then you can move to the mini market plan, to flesh out the financial committment. You should plan on doing ‘steady state’ financial profit and loss, which will serve as a long term goal of where you want your business to be.

A word should be inserted here about social responsibility of your proposed business. Is it going to use recycled materials, does it use a lot of water, could you defend your business in front of the city council?

One could say that the mere idea of starting a business is socially responsible, because you’re employing other people (eventually). We have a ‘socially responsible’ checklist in our Freebies on our Solutions Forum.net website.

If the ‘steady state’ doesn’t yield the kind of profits you and or your investors want, they you’ve got to figure out how to get to your profit goal.

We have done business plans backwards from time to time, working backward from the profits desired through taxes, personnel required, materials required into the top line revenue.

At this point, you have to determine the mix of after service and original equipment revenues. You should have an idea about the mix of these revenues from your market research.

You should also know what your price points are from your market research, so that you can determine your unit volume.

If you know your unit volume, you can figure out the market share that you need to get over the area that you plan to sell.

Does this share make sense? Are your competitors large and entrenched? If they are, you’re going to need to raise your marketing and sales promotion expenses in order to pry customers away from the competition. And, prying them away might take longer and cost more than you had planned (it normally does).

If your idea is particularly revolutionary, the market research may not be entirely positive, because the market hasn’t seen anything like it, and customer perceptions are hard things to change (which means more money and time).

As an example, when we did market research for an existing restaurant concpt, it wasn’t positive: odd name, no clear selling proposition, poor location.

But, I and a partner thought we saw an opportunity, and we did, but it cost us $150,000 in losses before we got to profitability. While we sold the restaurant for a modest profit, it was less and took longer to realize than we had planned. But we got a lifetime of stories.

On the other hand, when I got the idea for Solutions Forum (while sweeping my driveway), we took out the domain name first, and then did the market research. I was already working for a national competitor, who had retained us to open the Arizona market.Research was positive and that was 17 years and about 50 companies ago. We were profitable the first year (having grown to 23 clients in groups the first year), and have had only one unprofitable year, 2020 because of COVID.

WHAT’S YOUR UNIQUE SELLING PROPOSITION?

When I originally moved to Arizona, I worked for a series of companies on a retainer basis developing their sales.

I discovered that the startups didn’t have a unique selling proposition (USP), or why a customer would buy from them as opposed to one of their competitors.  The USP would normally emerge from the initial sales calls, over about three months, and at a cost of $5-10,000.

The classic USP has four components: Price, Promotion, Service and Selection, not necessarily in that order of importance. We have found that  Post Sale Service is alsow a component of a good USP, and most companies ignore it.

You might also want to add ‘socially responsible business’ if you think it’s important to your customers.

‘Locally owned and sourced’ is also a part of a potential USP.

If you’re a really good wordsmith, you can incorporate all of these into a paragraph, which would be your mission statement.

But, all of these snazzy statements should resolve around one overriding tenet: customer centricity.

CUSTOMER CENTRICITY IS KEY

We can’t stress enough focusing on your customers needs and wants.

Most businesses focus on price, to the exclusion of everything else, but that’s only part of the story. Your customers will tell you what’s most important, if you give them a chance.

How many television ads to you see where all they talk about is price?

Far too many. Car dealers are the worst offenders, mainly because there are probably too many of them, especially for GM and Ford. The foreign automakers have been smarter about the number of dealers they need. These dealers generally use a geographic model….where’s the customer demand?.

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