Small Business Lessons from $100,000 Salt and Pepper Shaker

July 24, 2011


I am reading this fascinating book “The Last Lecture” by Randy Pausch, who used to be a professor in Computer Science at Carnegie Mellon University. The book is a compilation of his thoughts and experiences he delivered as a last lecture to the students after he found out that he had a terminal pancreatic cancer with only few months to live. It describes many of his experiences in life – from childhood to the end. I highly recommend this book for summer reading.
One of the interesting incidents he describes occurred during their family visit to Disney World when he was a 12 year old. In that he and his sister buy a salt and pepper shaker for $10 for their father with all of their pocket money. However, before they can give it to him he drops it on the ground and breaks it. Very disappointed, they go back to the store with little or no hope of getting a replacement. To their amazement and disbelief, however, the store employee happily gives them the replacement without any charge even though he explains that it was all his fault and Disney had nothing to do with it.
When his father hears the story he becomes a devoted fan of Disney. He continues to take not only his kids, but people from his volunteer group to Disneyland for many years, spending approximately $100,000 according to his estimate.
There are two important lessons to be learned for small business owners from this incident. First has to do with customer service and the other with employees.
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5 Additional Personality Traits Small Business Owners Need

July 10, 2011


In the previous post we discussed 5 personality traits small business owners must have to succeed in small business. To recap, they are – risk taker, decision maker, organized, delegator and responsible. Those who do not have these qualities should think long and hard about getting into small business or at least find a way to mitigate them.
We think there are 5 additional qualities small business owners need to become successful. In the following we describe what those qualities are and why they are important.
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Ductz – Champion of Customer Service and Marketing

June 15, 2011


If you have been a regular reader of this blog you know that we are strong proponent of customer service and “non-traditional” marketing to improve sales and customer loyalty. We strongly believe that by paying attention to customer service and marketing with emphasis on fundamentals of products and services you can not only significantly improve sales but do so with lower marketing budget.
We are always on the lookout for companies that follow this approach and came across one such company last month at a customer service seminar at IKEA in Canton, MI where I was presenting. I met Dayn Benson, who is Director of Operations at air duct cleaning and HVAC restoration franchise called DUCTZ. Ductz has garnered number of accolades and experienced rapid growth in a short time after being founded in 2002. It was ranked No. 1 in its category by Entrepreneur magazine’s recently released 30th Annual Franchise 500.
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15 Practical Ideas to Generate Buzz for Your Business

June 5, 2011


In the last post we talked about how buzz marketing can help small business owners stand out in the crowd and enable them to compete with large companies. Buzz marketing also helps lower marketing cost for small business owners because it costs less compared to traditional marketing avenues such as newspaper, radio or television.
The primary ingredients required to create buzz are buzz-worthy products, suspense, conversation and scarcity. In this post we provide you with practical tips you can use to generate buzz about your business. As you will see the key theme in each of these tips is doing something expected or even outrageous.
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Every Customer Contact is an Opportunity to Sell

May 29, 2011


I simply find it amazing and annoying to see how many companies make their customers wait on the phone when they call them for customer service. Customers could be calling them with a question on the product or make a suggestion for improvement or even place an order! Yet they have to wait listening to the repetitive message that reminds them how important their phone call is to them. Oh Really!!! Just imagine what is going on in customer’s mind, your mind during this time – “God save me from this misery. Bring some human soul I can talk to.”
Many businesses have sacrificed customer service in the name of efficiency and automation in the last 5 years. The so called advances in voice recognition have made matters even worse. Now it’s not just a matter of punching numbers on the phone keypad. The machine will interact with you as if it understands, or at least pretends to, all your questions – “Hello. I can help you find anything you are looking for today. What can I do for you?” My answer – “how about finding a human being somewhere in your company?”
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How many Lifetime Customers does Your Business have?

May 25, 2011


Companies like Verizon and AT&T have millions of customers who have been with them for many years. These companies spend a lot of money in acquiring new customers. For example, they give new customers subsidized phones in return for them signing a 2-year contract. Many customers continue to remain with the company after the initial 2-year contract term is over. The reason they can spend money to acquire new customers is because they have guaranteed return for at least the initial contract term. This is what Seth Godin is referring to when he talks about embracing this concept of lifetime customer value.
Most small businesses, however, do not have luxury of asking customers to sign up for a contract. They have to do hand-to-hand combat with their competitors one customer at a time every day. For proof, download a report from your POS system showing how many customers have not ordered in the last 90 days. You may be surprised to find that more than 70% of your total customers have not come back to your business in the last 90 days. And you are not alone. Most small businesses have far less repeat customers than what their owners would like to think.
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7 Steps to a Great Customer Service

May 22, 2011


A business cannot sustain competitive advantage for long time based on product and price alone. Competition eventually will find a way to beat you on that game. Competitive advantage built on customer service, however, cannot easily be copied. For proof look no further than Zappos.com. Here is an E-commerce company that sells shoes, of all the items, on the Internet. However, with a laser like focus on customer service it is selling a billion dollar worth of them annually!
After consulting with number of small business owners over past several years we have come up with a 7-step process that companies need to adopt to achieve the success enjoyed by Zappos. It will not be easy to follow these principles all the time and success will not come overnight. However, when you do master them you will have a lasting success that your competitors will find difficult to beat.
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List of Documents to Prepare for Business Sale

May 15, 2011


Opportunity favors those who are prepared to take advantage of it. This has been the consistent theme in the last several posts we have written on how to prepare your business for sale. We mentioned that you need to start planning for business at least one year in advance. In addition there are additional items you need to take care of as the time to list your business for sale approaches.
Your primary goal as a seller is to allay potential buyer’s biggest financial fears as well as other FUDs related to the operation of the business. It is only through proper planning and careful preparation that you can dispel buyer FUDs and make your business sale go faster and smoother. After all the longer it takes for the sale to go through the more chances of something going wrong and the sale falling through.
One of the most important aspect of getting prepared for the sale is compiling all the documents related to the business finances and operations.
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How do you overcome Buyer FUDs when selling your business

May 12, 2011

In the previous post we discussed two biggest fears your potential buyers have when they are considering purchase of your business. We showed how you can help buyers overcome these fears and make the sale of your small business go through quickly and smoothly.
In addition to the two fears related to business finances, there are other operational FUD (Fear, Uncertainty, Doubt) factors that buyers, particularly those who have not owned small business before, are likely to have. With proper planning you can help alleviate these FUDs and make the selling process go faster. After all, it is in your best interest to shorten the sale process as much as possible. The longer it takes for sale to complete the more chances of something going wrong and the sales falling through.
Based on our experience with both buying and selling business, we have come up with several questions that are likely to surface in buyer’s head when he is going through due diligence. The sections below document those questions along with our advice on how you can deal with them.
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What do you need to do 3 months prior to listing your business for sale

May 4, 2011


We mentioned in the previous post that selling a business is a long, arduous process. It is not uncommon to take more than a year to sell the business. In the post we showed items you need to take care of 1 year prior to putting your business for sale.
As the date of putting the business for sale approaches there are additional items you need to start working on. Just like selling your house, you need to get your business ready 3 months prior to listing date. The goal is to spruce up the image, both physical and virtual, of the business so that the buyer will find it attractive and worth paying for. You should also aim to remove the fear and uncertainty in buyers because this is the single most reason why many buyers are reluctant to sign on the dotted line at closing.
So, what actions do you need to take 3 months in advance? Here is a list of items we think are important based on our prior experience.
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