Business by Day’s 5-Minute Podcast is for entrepreneurs, business owners, managers, and leaders. We save you time by presenting short, valuable episodes of lessons learned in over 25 years of entrepreneurial business success. We’ll talk about getting started, building an organization, finance, sales, values, leadership, exit strategies -- how to build a performance organization. These lessons are real, proven, and I’m still using them today. Subscribe, stick around, and let’s grow YOUR business!
They All Think You’re Rich
You know, it can be really lonely at the top. When you’re the business owner and the CEO, one of the constant things that you’re going to run into is…
THEY ALL THINK YOU'RE RICH.
Who’s they? Everybody from bankers, to lawyers, to your own CPA firm, to employees that want loans, to sales people that want you to upgrade different systems. Even family members will kind of expect you to pick up the tab because you’re the business owner. It’s really, really a tough thing.
- Bankers - I have had bankers to whom I’ve said “you know, we’ve had a 12-year relationship but I’m still going to shop your rates every single year or every other year just to make sure that you’re giving me good, competitive rates on my loans.”
- Attorneys - There are ton of attorneys out there and they also have competition. Don’t be afraid to shop your attorney and just let them know “I’ve got to check other rates to make sure you’re competitive.”
- CPA Firms - I once had a CPA firm for my telecom company and our annual reviewed financial statements got up to about $22,000 just for the annual review which I thought was crazy. When I shopped around, I found two other CPA firms that were willing to do the same thing. They were smaller firms, and although they didn’t have the long-term relationship with me that the other one did, one was at $8,000 and one was at $12,000, so I saved myself $10,000 just by shopping around.
- Employees - I had an employee, a sales person, and we had a disagreement over a commission structure. He then decided to file a complaint with the labor board after he had quit the company. I had to go into the labor board, he told his side and I told my side. It turned out that the labor board sided with him saying I was wrong and I ended up having to pay a fine of $10,000 to him for this commission dispute. It was very interesting because when I came back to the office, my HR person at that time said “well, you’ve gotta feel really good about paying only $10,000 it could have been a lot more than that.” And I told this person “don’t ever tell me that again. I’d feel much better if you were paying the $10,000.”
The perception is that when you’re a company owner, you must be rich. A friend of mine who owns his own company had a judge in a U.S. court of law tell him , “well, you’re a business owner, you can afford it” after a judgement ruled against him. He couldn’t believe his ears!
People have no idea how much money your company makes. Here's why. They see a gross sales number, for example a $100,000 sale that may only net your company 3% or 4% on the bottom line, but… they don’t realize that. They just see a $100,000 sale and they think “WOW! That’s a $100,000, that’s a lot of money!” They don’t understand the difference between sales and profits. So, this is just a reminder for you...If you’re the business owner, they will all think you're rich.
So, why do I bring this up?
1 - Because you need to be aware of this. You will constantly have to be on guard for people over charging you. Interestingly enough, often times it’s the vendors that have been around the longest that do this. They get lazy, they get complacent, they take advantage of the long term relationship and know you’re buddy-buddy. What you end up finding out is that they’re charging you the highest prices in town. Be aware of how the world sees you now.
2 - Learn how to say NO, a lot.
3 - You’re going to have employees come to you that want to borrow money. This is always an uncomfortable thing. If you’ve got the cash and want to loan them the money and you're a compassionate and caring person and that’s part of your nature, then do it. But, I would always say to document it and document the payback plan and have them sign it. In fact, make them do the doc
On-board Correctly for Best Results
Hey listen, when you’re looking to bring people into the business and you’re thinking of hiring a new employee, STOP. Before you even run an ad, or before you even start looking or passing the word around that you need somebody, I really, really encourage you to sit down and make a list of responsibilities and tasks that this person will do for you.
This will give you a good idea of a few important things:
* How to title the ad
* The type of person that you’re looking for
* Where that person fits into your into your business
This way, you know that making the decision to hire somebody is a really, really good one. You can get rid of things that take up a lot of your time that maybe you’re not an expert at and this allows you to focus more on building your business and doing the things that you’re really great at and that’s all good. But...on-boarding someone quickly and effectively is so, so important. So, let’s talk about a few things.
First of all, there’s a big difference between Abdication and Delegation. I’m a big fan of delegation and I’ll tell you that abdication doesn’t work so get your mind set around that. If you have a list of tasks and you’re going bring somebody in to do them, many people think that’s going to save a 100% of the time that they spent doing those tasks and that it’s going to free them up a 100% of that time. Maybe its 3 hours a week, or maybe its 5 hours a week that you’re looking for a part-time person for example. That’s not necessarily true. I always tell people, it’s going save them about 80-90% of that time. The 10-20% of that time that it’s not going to save them, is the time that’s going to be used to manage and communicate with this new person on your team. So, just be clear about that.
Secondly, really knowing what that person is going to do when they come in to your business is crucial. So, once you get your job description done and you’ve run your ads, you’re then going to go through the process of sorting through the resumes and applications. You’re going to look for the typical spelling errors and people who don’t really seem to fit the bill. You can tell A LOT from those resumes and those inquiries. You can tell how long they’ve been in a particular job or position, how much experience they have, where they’ve worked, and if they've hopped around a lot. There are a lot of things that you look for in a resume. But the reason that we get into the interview process, and this is also a key thing, is that you need to hire people who you can work with and who are going to do business the way you want it done and that goes back to your values.
I’ve written a blog post on values and why it’s so important to document them as a sort of a theme and a culture that you’re going build throughout your company as you grow. So get your values statement out when you start interviewing, get your job description out and when those people come in, you’re going to talk to them about their work experience and their history. But you’re also going to talk about the values of the business. See if they fit with your organization’s culture and values and if they are going to be the kind of worker that will fit in well with you and your other people.
More on how important it is to communicate your values.
When you start on-boarding that person and bringing them in to your culture and your company, it is so, so important that you sit down and spend the time and invest this time upfront.
1. Go through the job description and bullet by bullet by bullet let that person know exactly how and when all resources are available, and address the individual items that need to get done. Chances are, you’ve been doing it yourself and you have a very specific method for each of these items.
2. In this meeting, that person should document
A New Course for Entrepreneurs
Hi my wonderful subscribing peeps I have 2 questions, and I'm asking for your feedback.
As I was sitting down to write another blog post today, or maybe two, I had a different idea, and I'm asking for your opinion. That's right. You. To just reply back, email me directly at firstname.lastname@example.org, or post a comment on the site.
First, the blog posts. I had 5 ideas.
1. How to Sell Your Business. From the moment you decide, what to do, who to involve, how to market it, the cost of a broker, and so on.
2. They All Think You're Rich. When you're the business owner, everyone thinks you're rich. Customers, employees, bankers, lawyers. Because you don't often see yourself through others' eyes. Understanding how people see you, and avoiding abusive situations.
3. How to Work a Trade Show or Convention. Hint #1: It's NOT about handing out as many of your cards as possible. Strategy and Tactics. How to measure success.
4. Working with a Constant State of Urgency. Overwhelmed. Feeling Guilty. Multi-tasking. What to do about it and tips on how to manage (and feel good about) it all. Productivity hacks, and how to know when enough's enough.
5. Onboarding People Quickly and Effectively. Maximizing the effectiveness of those first few meetings with a new employee. Getting them up and running quickly, and disrupting you the least.
Does one resonate with you? (That's question #1.)
MY DIFFERENT IDEA!!
I'm thinking about building a ground-up business-building course for entrepreneurs. Modules in different categories, high-value, affordable price, delivered over time. Videos, perhaps, and checklists, tools, or workbooks. And a private Facebook group or website where people can engage and help each other, and where I’ll chime in often with advice and additional resources.
Foundation: When my buddy Frank and I spoke a couple years ago about blogging, he told me that when he left corporate life and decided to start his own company, he was looking for just one book that had all the basics on starting and running a business. Neither of us could think of one. That's when I started this business brain dump of mine called BusinessbyDay.com!
In this course, I'd teach my "Self-Built Way". How to start up, finance it, hire people, sales and marketing, operations and systems, documentation, management, customer interaction, expense management, downsizing, lawsuits - you name it.
What do you think? (That's question #2, AND I'm asking for your opinion.)
Would you be interested? How long should the videos go? How long should the course go? I am, of course, open to your ideas and suggestions.
As always, should you need to reach me on other business issues or have questions, please feel free to do so. Meanwhile, thanks in advance should you choose to give me some feedback.
Make it a great day!
book an appointment with me here -- > meetme.so/RickDay
5 Countries in April!
Well, ok, COUNTING my home country of the USA.
Yep, Spring Break with my kids in Mexico, followed by a week-long all-adult scuba trip in the Philippines, then to Macau for 2 days, Hong Kong for a day, and back home.
I had some time to reflect, especially on the scuba trip, where I had no access to TV, WiFi, or mobile phone. We were completely cut off - which is rare and was very nice.
I did do a couple selfie videos reflecting on different business situations when I was in Macau.
Here, I'm admiring these old buildings as I realize they are yesterday's luxury, and their view has been completely cut off by progress.
And this one on global brands and the importance of keeping YOUR brand strong.
And in Hong Kong, I was SO lucky to connect with Ip Sang, an old business buddy of mine, and I was completely jazzed on how alive that city is. Check it out here.
In the Philippines, I was reminded how 3rd world it is there - undoubtedly partially due to corrupt government over the last 40 or so years, starting with Mr. Marcos. Such a kind, warm, friendly people there, with beautiful natural resources and a strong work ethic. And they just don't have the results. It's really too bad.
In Macau and Hong Kong, I was really taken with the speed and intensity of the place. Macau's gambling revenue last year was SEVEN times that of Las Vegas! And Hong Kong remains one of the most amazing cities on the planet, with 40-50 story buildings going up, surrounded by BAMBOO scaffolding. What a rich history in both cities! And I only saw ONE old man begging. No homeless, no beggars, no panhandlers.
So I'm back in business-building mode, and have a couple seats in my Accelerate 120 Class, if you're serious about building your business. And I have an exciting brand re-vamp being done in May, and I'm really excited about it.
In the meantime, if you have business questions or issues, don't hesitate to reach out!
Make it a great day!
How to Build a REAL Referral Program to Grow Sales
Marketing efforts: social media, cold calling, website, print ads, SEO, email newsletter, direct mail – you’re doing it all! But are you leveraging your customer base to grow your business?
If I had a dollar for all the businesses and entrepreneurs who’ve told me that “word-of-mouth” is their best source of new business, I’d be a rich man!
But how can you systematize this? How can you make it better, and more predictable?
The first thing I will say is that it’s a referral program – emphasis on PROGRAM. That means “system”. It has to be well thought-out, designed, implemented, and maintained.
It takes effort on a consistent basis. Yes, you have to work at it. But as I’ve said 100 times about marketing, “there’s no silver bullet.” So, add this to your business development efforts.
Here are some thoughts on how to get started, and how to maintain it over the longer term.
* Who are your customers? Understand their demographics, why they buy from you, and what they appreciate about doing business with you.
* Where are they active online? What else do they buy? What other products are similar to yours, but don’t directly compete?
* Where else might they shop around town? Local merchants or dealerships?
* Can you engage customers directly to refer prospects to you? Sure! Do you ask for 1 or 2 referrals every time you provide a service or product? Make it a habit.
* Are there salespeople who sell other related products or services you could network with?
The easiest way to get referral business? Ask!
Long ago, I bought a VW Jetta from my local Volkswagen dealer. On my birthday for the next several years, I would get a hand-written birthday card from Phil, the sales rep. In my birthday card, he would include two business cards, and would ask me to come see him or hand the business cards out to two of my buddies who were in the market for a car. Would I oblige? Of course I did.
Referral programs can benefit other businesses too.
I remember a neighbor who was an insurance agent. You know - cars, houses, life, etc. One of his clients was a guy who owned a restaurant whose specialty was home-baked pies. My neighbor Ralph went to his client, and got some gift certificates for pies, and would give those to people who referred him business AND to the new clients. Here’s the kicker – the restaurant owner didn’t charge Ralph until the coupon was redeemed! Everybody wins, local business is supported, and no money is wasted on coupons that are never redeemed – like so many gift cards get wasted today. It was just smart.
If you look, you will find sales reps at other businesses similar to, but not competing with, your company, who will want to network with you. Think about what else your customer is likely to buy, and pick a few good people to refer clients to. If you sell yachts, for example, you might network with high-end auto dealers or charter airline sales reps. My advice: pick 1 or 2 and stop by regularly to see them and keep the fire burning. Keep their brochures on your desk and ask them to do the same to help each other out.
Regarding payouts or finder’s fees: keep it simple. I much prefer a 1-time finder’s fee (like first month’s revenue for a new consulting client) to a recurring payment. It keeps it simple to calculate, and you’re not having to account for it every month. Keep it simple!
OK, so you have an online business – an e-commerce site. Even better! There are SO many options, and they’re easy to automate:
* Both parties benefit: referring customer and new client.
* Discounts to referring customers by giving them a code to give to others.
* Gamification - let your customers earn points for a cool prize or special recognition.
* Let them compete for who brings in the most new referrals.
* Think outside the box and keep it fun!
One of the Toughest Hires You’ll Make
From my experience, one of the toughest positions to fill in your small-to-medium business is for VP of Sales, or Sales Manager. I’ve done it wrong. THREE times!
If you’ve grown your business from the ground up, then you’ve personally filled the sales role and then you’ve supervised salespeople you hired, so you’ve effectively been the sales manager. But now your business is successful and the demands on your time are even greater, so you’ve made the decision to put a Sales Manager in place. Good for you!
Your first thought is you’ll have one of your existing sales reps – maybe your most senior one – fill this role. Not so fast.
A Sales Manager needs a completely different skill set than a salesperson. A Sales Manager must lead, teach, and coach. Just because a salesperson can sell well, doesn’t mean they’ll make a good manager. And, in fact, you may be hurting your top line revenue by trying this move.
So, you look outside.
Where I’ve had the biggest trouble hiring that VP of Sales has been that they’re either (a.) too strict and businesslike, or (b.) too friendly and soft. It takes a balance between these two extremes, and that’s tough to find.
One guy I hired had a good work history and seemed like he really knew what he was doing. He had a grasp of the numbers, of sales metrics, management tools, and of how he would guide the team strategically. Problem? Nobody liked him. He had a hard time connecting with people and because he didn’t take time to understand who his reps were and what goals they had, he never earned their respect. Ultimately it didn’t work. I had to let him go.
Once I hired a guy I immediately liked. He was funny, easy to talk with, approachable, and he too had a good work history and seemed like he really knew what he was doing. He knew how to develop relationships with the reps, dug deep into what motivated them and what their goals were, and really got to know them. He was almost the opposite of the first guy.
Problem? He became so close to them that confrontation and accountability was extremely uncomfortable for him. When I, as the CEO, came after him on the forecast and sales team performance, he’d explain to the reps that the CEO was on a rampage and that they needed to get the numbers up. Doing this, he destroyed his own credibility and authority. It was all my fault that he had to be tough. In the end, he invalidated his own authority. He had to go.
So, how’s it done right? What type of person best fills this role?
Lucky for me, one of my best buddies has been in Sales Management for over 20 years in the technology space working with some amazing companies in that industry. So I called Rich and asked him what he thought had made him so successful over the years. We had a great conversation and he told me it really comes down to FOUR THINGS a person must do well to succeed as a Sales Manager / Sales Leader.
* Always be Recruiting. As a salesperson, you always need a full funnel of opportunities. As a sales manager, you always need a funnel of potential new salespeople. This person must network well and always have their eyes open for sales candidates to help them grow the business.
* Ability to “onboard” quickly. Once you’ve made that new sales hire, your main goal is to get them producing as quickly as possible. This person will have an awesome process for indoctrinating their new salespeople into the company, training them on the products and sales tools, and getting them into the field quickly and effectively.
* A great coach. A great Sales Manager must also be a good leader. She must get to know her reps. And, she must be able to see the big picture from an executive level, look ahead, plan accordingly, and then translate all of that into individual responsibilities and goals for th
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