Do you have to be a Jerk to Succeed in Small Business?

October 27, 2012


All successful business people are jerks to some degree, right? Steve Jobs, one of the most brilliant and successful entrepreneurs, who is liked (worshiped) by many had personality that many of us would not be able to stand. He fired quarter of the team working on next generation computer called Lisa because they were not “A-players”. He even refused to pay the share of bonus he and his partner, Steve Wozniak, had received after laboring for 4 grueling days to meet the deadline to produce a prototype.
These and the stories of other successful people may make us think that the only way to succeed in entrepreneurship or in small business is to be a jerk and screw people of their fair share. But is that a fair assessment? Were they successful because they were jerks or is there more than what meets your eyes?
[Read more…]

Filed Under: Management Tagged With:

Do’s and Don’ts of Small Business Credit

October 20, 2012


If you have not paid much attention to business credit the time to do it is now. For small business owners, business credit is like a lifeline, an insurance against unexpected expenses that might come out of nowhere. Business credit gives you peace of mind with the knowledge that you will not have to scramble to borrow money on a short notice to meet emergency financial obligation.
Look no further than what Ford did before the great recession of 2009 hit the world. Ford had established a huge line of credit by mortgaging pretty much everything they had, including their namesake blue logo! When recession did arise and all the banks shut their doors to business loans Ford could borrow from the line of credit and continue investing for the future. When both, GM and Chrysler, filed for bankruptcy protection, Ford was not only able to avoid it, but position itself to take advantage of upturn.
[Read more…]

Filed Under: Finance Tagged With: , ,

Who Makes Better Small Business Manager – Internal or External Candidate?

October 13, 2012


My previous two posts on hiring a manager for small business received interesting feedback from the readers. Some made arguments both for internal promotion, while others said external candidate is the best choice. To recap, the first post focused on why you should promote a manager from inside . I believe this is the best course of action when small businesses need to fill in the manager vacancy. However, there is a case to be made for hiring an outsider as laid out in the second post based on suggestions received from the readers.
It appears which candidate will be a better choice depends on your particular situation – what state the business is and how the newly hired manager fits in that situation. Instead of looking at this choice in black and white, you need to take a step back and look at your needs and see how the manager will help you fulfill them. So here are my thoughts on when to hire each type of candidate.
[Read more…]

Filed Under: Employees, Management Tagged With:

The Case for Hiring an Outside Manager in Small Business

October 6, 2012


My previous post on the biggest mistake of hiring a manager from outside generated considerable interest and feedback. The feedback covered both pros and cons of hiring a manager from outside for small businesses. While many agreed with my assessment that hiring an outside manager is a big mistake, several others raised valid points on the flip side. Those points do have merit and worth mentioning here to be fair.
The drawbacks of hiring an internal candidate has mostly to do with the internal competition / conflict between the manager who gets promoted and others that are not, along with the fact that internal candidate is not likely to bring fresh perspective. In this post I will attempt to summarize the pitfalls that arise when your business does not bring an outsider for the manager job, but instead chooses to promote an internal candidate.
[Read more…]

Filed Under: Employees, Management Tagged With:

The Biggest Hiring Mistake – Hiring a Manager from Outside

September 29, 2012


In earlier post on best practices when hiring a manager I mentioned that the small business owners should first try find an internal candidate and promote someone who is already working with you when you need to hire a manager. The feedback we received on the post as well as discussions with other small business owners has validated this practice. The reason is obvious. Any mistake made in hiring a manager will hurt your business for a long time. The best example of why this is the case can be seen in the difference in last 10 years in the performance of America’s two storied technology companies.
Look at the stock performance of IBM and HP. While IBM has experienced tremendous growth in those 10 years HP has gone in exactly the opposite direction. One of the factors that has contributed to this divergence is the way they have hired CEOs. IBM has had only 2 CEOs in the last 10 years. Not only that, they were both promoted from within and were groomed for several years prior to that. On the flip side, HP has gone through 5 CEOs since 1999 – all of who were hired from outside. I believe this is the primary reason why both companies are where they are. Let me explain the reasons why internal candidate is your best choice when hiring a manager.
[Read more…]

Filed Under: Employees Tagged With: ,

7 Qualities of a Good Small Business Manager

September 21, 2012


One of the most important decisions you will make as a small business owner is hiring a manager to take care of day-to-day operations of your business. This is the person who will be running the show for better or worse. Hiring a bad manager can hurt your business in a number of ways. The customers will walk away. The employees will complain and leave. The reputation of your business will decline beyond repair. In the end, the business will become a mess that can take long time to recover, if at all.
That is why it is imperative to pay careful attention and take time in hiring manager. I discussed best practices in hiring a manager in earlier post. I mentioned that you need to consider personal qualities of the potential hire – even more than the skills. So what are those qualities you need to look for when hiring a manager?
[Read more…]

Filed Under: Employees, Management Tagged With: ,

5 Reasons Your Sales are not Growing

September 14, 2012


Many small business owners focus on wrong actions to grow their sales. They have been led to believe by the marketing folks that you have to spend money (on advertising) to make money. What else would you expect to hear from marketing? After all, it is in the best interest of those marketing people to say that. While I don’t dispute the impact of marketing and advertising on sales, I do believe that it has been overhyped. In my opinion, you need to focus on the fundamentals and other low-cost actions before you spend money on marketing.
For any business sales is a function of three business drivers – target customer market, products and customer service. Pick the right target market, develop products they would die for and deliver them with excellent customer service. Viola!! You are guaranteed to see results in terms of higher sales and profits. I know this is easier said than done, but you can take baby steps towards that goal by first understanding what you are not doing right and making incremental corrections. Here are my observations in terms of 5 actions small business owners are taking that leads to sub-optimal sales.
[Read more…]

Filed Under: Customers, Sales Tagged With: ,

7 Best Practices in Hiring a Small Business Manager

September 8, 2012


Manager is probably the most important person for small businesses, after you. He is the one who manages day-to-day operations when you are not around, ensures that employees perform their job and is responsible for customer satisfaction. Yet many small business owners rush to hire managers without doing sufficient due diligence and end up regretting their decision afterwards and paying price in terms of business decline.
It is true that not every business needs a full-time manager, however in many situations it is a necessity for various reasons. For example, if you are running an absentee business manager is the one who will run the show. In some cases, business operating hours are more than you can provide yourself. Or you may just want to focus on high-priority strategic items and let the manager take care of operations. No matter what your reason is for hiring a manager the best practices described here will help you hire a manager who will help you grow your business.
[Read more…]

Filed Under: Employees, Management Tagged With: ,

Sell your Business Fast by Following these Best Practices

August 28, 2012


In my non-scientific estimate every one month delay after you have put the business up for sale reduces the price you will get by about 0.5%. For a business worth $100,000 this translates to a loss of approx $500 every month! In addition, the delay in completing the sale can not only result in deterioration of the business, but you can start losing important employees and customers if they get a hint that you are planning to sell the business. That’s why it is imperative for the business owners to complete the sale as quickly as possible after you have decided to sell it.
Now, selling the business is an inherently complex and time consuming process. It is not uncommon to find businesses that have been on the market for 6 months before the sale is complete. However, with little planning and preparation it is possible to reduce this time. Read on to find out how.
[Read more…]

Filed Under: Management, Sellers Tagged With: ,

How to Manage Franchise Relationship to your Benefit

August 25, 2012


Franchisee and franchisor have long held love-hate relationship. They know that they both need each other to be successful, but at the same time, they are constantly disagreeing and fighting over number of issues. While healthy debate and disagreements are beneficial, constant fighting over trivial issues can sap energy out of both franchisee and the franchisor.
For this reason many franchisees feel they should just venture on their own rather than dealing with the tyranny of franchisor. This could be a mistake, however. There are number of benefits of owning a franchise as opposed to running an independent business. As a franchisee, you need to develop a symbiotic relationship with the franchisor and focus on what you want to get out of it. The key is to understand and follow the rules of the game and develop a playbook that will make you a winner. Follow these guidelines when developing the playbook.
[Read more…]

Filed Under: Buyers, Management, Strategy Tagged With: , ,