Why Your Business Should Consider an Email Newsletter

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Email NewsletterEmail newsletters have been around a long time.  There’s a simple reason for that: they work.  99% of email users check their inboxes every day (some up to 20X a day!).  58% of consumers check their emails first thing in the morning.  So why should your business consider a regular email newsletter?  We’ll tell you!

Expertise and Thought Leadership

You know a lot about different aspects of your business and industry.  You can talk about issues that are timely or on frequently asked questions that you’d like to elaborate more on.  A newsletter allows you to be seen as an authority on a certain subject or set of subjects and this can open up opportunities both locally and elsewhere.  It also builds up customer goodwill as people love to learn about things they care about.

Remember too that not everyone buys on first, second, or even third glance.  Think about email newsletters as one more part of a drip campaign of consumer education.

Collaboration

As much as you might know about your business and industry, there are plenty of subjects where you might need an assist.  That’s where you might feature a vendor, a business, a local resource, etc.  An email newsletter isn’t just for your business: it’s a chance for you to share your business’ social capital strategically.  On the other side of things, a large and engaged email list is something that is attractive to potential collaborators.

Awareness

We know businesses who say every time they send an email newsletter they get at least one sale.  This often happens when nothing in the email newsletter said anything about the particular service or product that the customer ended up buying.  What happened was the email served as a reminder.  The email hits the inbox and the customer remembers, “Oh yeah, I need to call them about X.”  

Marketing

While the obvious marketing might be to the customers you already have, the hidden power of an email newsletter is in the “forward” button.  Your customers likely know other customers like themselves who don’t yet know you.  When those potential customers hear about you via a forward from a trusted friend, they will give it more attention than they would a cold email.  

Furthermore, email marketing, unlike many other types of marketing, can be closely tracked by open rate, click-throughs, etc.  Given the costs of most email newsletter programs, it’s likely to be among the least expensive types of marketing you do in any sector.

This is to say nothing of what an engaged email list can mean to your business valuation when it comes time to sell.  It’s one of those intangible assets that you can’t suddenly build up during a due diligence period.  It’s something you have to build over years.  

So start now.

Convinced that you need a newsletter but aren’t sure where to start?  We know some people who can help you put one together and a plan to send one regularly.  Give us a call and we can connect you!

Should Your Business Consider a Four Day Workweek?

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Should Your Business Consider a Four Day Workweek?One of the benefits of the global upheaval caused by the pandemic has been the willingness of many businesses to try out working arrangements – like remote work – that they would never have previously considered.  An idea that has started to get some attention (they even have a dedicated website spawned from a book) is a four day workweek.  This idea isn’t right for every business, but every business should at least examine the idea.

Historical Workweeks

In 1890, the US government estimated that a full-time worker in manufacturing worked an average of 100 hours a week.  By 1926 this started to change, but not due to great empathy for the working class, but because Henry Ford had instituted a 40-hour workweek at his factories, guessing (correctly) that this would give more leisure time to his workers who might then opt to buy cars that they could use in that off time.  Other companies and sectors followed suit, and thus we had a 40 hour workweek that some consider a “given” but is not even 100 years old.

So too whenever companies consider raising prices on a product, they examine how many customers they might lose at the new price point.  If that is financially counterbalanced by the number of customers who will stay on at the higher price point, then there’s at least some merit to make the change, just on a financial level.

So too, when considering a four day work week, the thinking cannot be to simply put 40 hours into four days, instead.  The thought has to be to reduce the expected number of working hours.  This obviously means an implied raise for both hourly and salaried workers.  What can employers expect to get for that investment?

Counterintuitive Improvements

One thing they can rightfully expect is a massive jump in productivity.  An oft-cited study is one done at Microsoft Japan, in 2019 (before the pandemic) in which productivity jumped 40% and employees took 25% fewer days off during the same time period.  It doesn’t take complicated mathematical modeling to prove that if you reduce your work week by 20% (going to a four day week) but get a 40% jump in productivity, you’ve realized a massive gain.  Even if your company were to only achieve half of Microsoft’s results, you’d still be at the same level of productivity across fewer days.

This correlates with the fact that of the ten most productive countries in the world (the US recently fell out of the top ten in several versions of that index) only two of them have average workweeks of more than 30 hours (Ireland and Switzerland).  While it is an accepted truth in the US that the greater the number of hours worked, the greater the productivity, the statistics simply don’t back that up.

The Microsoft Japan study is also particularly interesting given that it was conducted in a country that has an actual word – karoshi – for death by overwork.  It doesn’t take peer-reviewed studies to show what common sense would point to: a shorter work week means:

  • More help for parents who want to spend time with their children (which leads to a more balanced and diverse workforce)
  • A recruiting edge among new hires
  • A cost savings on utilities and energy for almost 10% of the year for companies that operate in-office (the same Microsoft study showed an electricity savings of 23% and showed printing down by almost 60%)

How to Evaluate If This is Right For Your Business

As we noted above, this isn’t right for every business, but every business should examine whether it might make sense for them.  Key questions to ask:

  • Do employees want it? (just because employees don’t ask for it doesn’t mean they wouldn’t be open to it)
  • What day of the week would it be? (Mondays and Fridays may be key days for your company, so those might not necessarily be the best days)
  • How would we test/implement it? (a trial period, as Microsoft Japan did, allows everyone to “try before they buy”)

Tips for Success

The companies that have successfully moved to a four day week consistently do the following:

  1. They limit the length and frequency of meetings (something even five day workweek companies would benefit from)
  2. They allow undisturbed “deep work” blocks for their team members
  3. They are smart about technology use (people aren’t expected to respond to emails sent at 9pm on Saturday night)

A reminder that this is a non-starter if you’re simply trying to compress 40 hours into four days instead of five.  Not only will this fail to produce the same effects of the studies cited above, but you’re likely to have a detrimental effect on your team.  You have to think the way that Henry Ford did: fewer hours at work means more hours of personal life, and those workers with more personal time tend to be more productive during the fewer hours of work time.  Even better, you can test this theory before committing to it as a permanent change for your company.

One of the most important assets in a business sale is your team.  If you’re wondering how to make sure they stay on during a transition, we’ve got some tips and ideas to help you with that.  Give us a call!

Rebrand or Brand Refresh?

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Rebrand or Brand Refresh?One of the most important intangible assets that cannot be altered when you take your business to market is your brand.  Making sure that your brand has the right voice/look/feel is a process that takes months, then years.  That’s why those business owners who know they want to sell in the near future should examine whether their brand needs a refresh or a rebrand in order to add value when it comes time to finally list their business for sale.

Know the Differences

Refresh

A refresh is often thought of as a makeover or a new paint job.  This new look can include one or more of the following:

  • A different color palette
  • A new font
  • A new logo
  • A slogan update

All of these will lead to new marketing materials.  A brand refresh is generally not considered risky and will only involve moderate costs.

Rebrand

If a refresh is a new paint job, think of a rebrand as a complete tear-down and rebuild from the ground up.  All of the elements of a brand refresh are at play, but in all likelihood a logo is the minimum change that will happen.  The brand name itself doesn’t have to change, but in many cases it does.

While the ideal is to rebrand on your own terms, sometimes companies have to rebrand reactively, as in the cases of bad publicity or copyright/trademark infringement.

Why Make a Change?

The reasons for rebranding and refreshing often overlap.  They include:

  • A feeling of being outdated
  • A change in business strategy/growth in a new direction
  • A change in business audience
  • Growth in competition
  • Current marketing is stagnant
  • A lack of consistency with current branding

With mergers and acquisitions, often a rebrand is required so as not to confuse the pre-existing customers of the formerly independent companies.

Which to Choose?

The cost of time and money for a rebrand is significantly more than for a brand refresh.  Unlike with a refresh, with a rebrand you will need to go back and rebuild from scratch your:

  • Brand voice
  • Brand manifesto
  • Brand story

Whether you choose a rebrand or a refresh you will need to deliberate with your team and do your research.  What do other companies in your industry look like/have for slogans?  How will you stand apart?

More often than not, the arguments your team will make for “why change” will guide you as to whether you should do a brand refresh instead of a rebrand (and vice versa).

Brand Refresh Examples

Brand refresh examples happen with great velocity at tech companies and are most frequently recognized by users who see that a favorite app suddenly has a different appearance after a software update.  Examples include Paypal (new logo), Instagram (new color palette), and Uber (new font).   

Many app users are typically unfazed when they see a logo refresh, as they are trying to use a service, not contemplate the appropriateness of the design.  But as with a new hairstyle, with few exceptions, they often quickly get used to it as “normal.”

Rebranding Examples

Successful rebranding examples abound.  Years ago Old Spice, using a series of funny ads featuring Terry Crews, moved from being the staid brand that your father or grandfather used to being the choice of a new generation.  More recently Dunkin’ Donuts capitalized on the runaway success of its coffee to become simply Dunkin’.

A local Kansas City rebranding example that was both proactive but also dealt with trademark issues was Oklahoma Joe’s becoming Joe’s Kansas City.  The restaurant did a good job of explaining why the change occurred and nothing really changed business-wise (though people did keep calling it Oklahoma Joe’s for a while).

Another, more traumatic rebrand occurred some years ago when the then-Kansas City Wizards became Sporting Kansas City.  The new name reflected the aspirations of the owners to enter the global stage of soccer.  While the name caused plenty of resentment among the small hard core of Wizards fans, the rebranding brought in so many new fans that the protesting majority was drowned out, and before long, many didn’t even remember that the team was ever named anything else.

An example of a rebrand that was so traumatic that it only lasted 6 days after being shelved happened in 2010 when Gap spent $100M on a rebrand that was so poor that it was entirely rejected.  But a year later an even more disastrous rebrand was axed before it was even launched: Netflix’s launch of “Qwixster.”  The story was memorable enough to be turned into a case study at Yale.

Are you contemplating a brand refresh or entire rebrand?  We know great creatives who can help you.  Give us a call and we can connect you.

5 Basic Value Drivers for Your Business

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5 Basic Value Drivers for Your BusinessWhen we talk to potential clients about listing their businesses with us, we speak about value drivers early in the process.  Often these value drivers are aspects of the business that have been developing over many years so they aren’t things that can be scrubbed or tweaked over a period of weeks or months to add some “curb appeal.”  The more time that you spend developing these five basic value drivers for your business now, the more you will be able to ask for that business in the future.

1. Market Position

How much of the market share does your business own?  The relevance of this number will, in part, depend on whether you are a local, regional, national, or international business.  But it will also indicate the potential for growth.  

You don’t have to be number one to be valuable.  For years Avis took advantage of being #2 in the rental car industry to drive an advertising campaign: “We Try Harder.”  

While business buyers like to see some potential to grow a market position, even if you are in the #1 spot, you’ll leave money on the table come sale time if you don’t develop some of those potential markets yourself.

2. Brand Name

As with market position, the quality of your brand name is related to the relationship of your brand to your market.  A classic example in our home market of Kansas City was the iconic “Oklahoma Joe’s” restaurants.  One of the locations was in a gas station and Anthony Bourdain famously listed it as one of the “places to eat before you die.”

Because of a business buyout between the original partners of Oklahoma Joe’s, a decision was made to change the names of the Kansas City locations to Joe’s Kansas City Bar-B-Que.  Because the brand had built a following based on the quality of their ingredients and because the new name wasn’t that different, the business continued on just as well under the new name, and for some years after people still called it “Oklahoma Joe’s” the way that people called the Willis Tower the Sears Tower.

Business buyers like to see strong, recognizable brand names with proper legal protections when necessary.  Make sure that your brand does the quality of your products and services justice.

3. Customer Lists

When it comes to customer data, there’s no such thing as “too much information.”  You should have a CRM (customer relationship manager) that collects as much information as you can about your customers.  You should also be communicating with them in a regular manner so that they are used to receiving information from you (and forwarding it to potential customers).

Business buyers are always more interested in customer lists that are current and customers that are kept in contact with regularly.  Take the time to communicate with your customers on a regular basis.

4. Barrier to Entry

Some businesses require extensive accreditation and others have high capital requirements.  But many businesses just have the regular barrier to entry: a willingness to work hard.  

If your business doesn’t have a high barrier to entry, you can deliver your service so desirable that you create a preference in the marketplace and erect a de facto barrier.  Jimmy John’s did this years ago with their “freaky fast” delivery promise.  Most people did not realize that Jimmy John’s had done this by carefully mapping their delivery areas, accounting for roads and traffic patterns, in order to be able to deliver this service.  They then raised the bar in a cutthroat industry as satisfied customers began to turn to them more often than to the competition who did not offer “freaky fast” service.

What barrier to entry can you create by excelling in an aspect of your product/service delivery?

5. Proprietary Anything

Related to barriers to entry are proprietary methods.  We are familiar with KFC’s special blend of herbs and spices and Coke’s “secret formula” but some businesses today use proprietary software or processes to catapult them into strong positions.

In addition to being popular with customers (when executed well), proprietary aspects of your business give employees a point of pride: it’s always great to work at a business that has that something extra.

Do you do something that none of your other competitors do?  If you haven’t leaned into that and communicated that to your team and customers, you’re missing a chance to drive the value of your business.

Are you unhappy with your business’s position in any one of these categories and want to improve?  We can offer advice and resources to help you do just that.  Give us a call!

Should You Have Business Interruption Insurance?

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Should You Have Business Interruption Insurance?After the early days of Covid, those businesses with physical locations which did not have business interruption insurance may have benefited from government programs which helped with payroll, for example.  Now, as some court rulings have come down and insurance policies have been modified to account for previously unheard-of events like “stay at home” orders that lasted months, it might be a good time to explore this coverage for your business.

What is Business Interruption Insurance?

In brief, business interruption insurance is income and expense replacement for a business until it can re-open.  It is perfect for retail businesses that are physically customer-facing, like restaurants, salons, and movie theaters.  It’s most often used by businesses with 100 or fewer employees and with $5M or less in annual revenue.  

Those businesses that work remotely or can easily work remotely might still consider Contingent Business Interruption insurance, which envisions your vendors being affected by interruptions, even if you are not.  This form of insurance will cover the product and service suppliers that deliver to you and sometimes even covers second-tier suppliers.  

What Triggers Payout?

Most policies envision events that render your business unable to open to the public, like:

  • Fire damage
  • Damage from wind or falling objects
  • Lightning 
  • Theft
  • Riots and vandalism

The last item, riots and vandalism, can sometimes be specifically excluded.  Additionally, riders can sometimes be added to cover losses due to suspension of utilities, flooding, earthquakes, and mudslides.  There is also coverage if the civil authority prevents people from entering your premises.

If your insurer agrees to pay, it will be during what is called the “restoration period,” which starts when the damage was incurred and ends when the property is repaired and once again accessible to the public.  Some insurers impose a 48-72 hour waiting period before the restoration period even begins.

That said, even if your policy is set to expire during a restoration period, the payouts will not be affected.

What Costs Are Covered?

There are two items insurers will consider when paying out your policy:

Net Income (what would your business have made if it had been open during the restoration period?)

Operating Expenses, including:

    1. Rent
    2. Payroll
    3. Taxes
    4. Loan payments
    5. Some general operating expenses
    6. Move to a temporary location and any equipment needed to set up there

What Does It Cost?

The three key elements of determining the price of your policy, apart from special riders, are:

  • Your Industry
  • The number of employees you have
  • Amount of coverage you want

What Happened With Covid?

Well there isn’t a single answer here.  In some cases the courts have sided with the insurers and in other cases with businesses.  For a frame of reference, one can look to 9/11.  When President Bush spoke of an “act of war” some days after the attacks, he used a word that is often specifically excluded in policies: war.  This led to a lot of wrangling in courts.

A closer analogue to the shutdowns many experienced in 2020 was the case that United Airlines filed against its insurer after 9/11: the airline wanted compensation for the fact that Reagan National Airport was closed and hence United could not operate their flights.  United lost the case in part because the building was not closed for reasons of physical damage.  

On the other side of the coin, business owners in Michigan won a case regarding Covid related to imposed curfews from the governor.  The courts agreed that this triggered the reference to “civil authority” we spoke about above.  People were prohibited from entering these businesses due to a curfew and hence insurers in this case were obliged to pay.

On top of these court cases, at least ten states have introduced legislation to retroactively include coverage for Covid in business interruption policies in their states.  If those laws pass there will certainly be court challenges from the insurers, and it may be years before it gets sorted out.

In the meantime, you might use this time period to revisit whether business interruption insurance makes sense for your business.  If there’s one enduring lesson all businesses have taken from the pandemic, it’s to prepare for the unexpected.

Need some references to companies that offer good business interruption policies?  We are happy to share some.  Give us a call!

What is the Entrepreneurial Operating System (EOS)?

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Entrepreneurial Operating SystemAs entrepreneurs build their businesses they often have to figure out not just how to keep track of everything that is going on in the day-to-day, but also have a solid grasp on long-term planning.  Some find this balance, but many do not.  The Entrepreneurial Operating System (EOS) is an answer to this dilemma: it’s a set of concepts and tools to help entrepreneurs consistently get what they want out of their businesses.

Origins

EOS is outlined in Gino Wickman’s landmark book Traction.  We obviously can’t explain every part of the system in this article, but we can look at the broad outlines.  There are six categories that Wickman thinks every business should master:

  • Vision – where are we going and how are we going to get there?  Does everyone know the answer to those questions?
  • People – are the right players in the right places?  Do we have A-players or warm bodies?
  • Data – what story do the numbers tell us?  Does everyone who should have access to relevant numbers have access to them?
  • Issues – what are we consistently working on both short and long term?   How are we tracking them towards completion?
  • Process – do we have documentation for all we do?  Do we have a process for updating that documentation?
  • Traction – do we have focus, discipline, and accountability in the management team?  

Compartmentalize

One of the most cited aspects of EOS is how issues are dealt with.  Wickman proposes four different boxes:

  1. Goals  These are items that must be achieved in the next twelve months.  There should be no fewer than three but no more than seven of these.  Less is more.  They will be reviewed and assessed annually.
  2. Rocks  These are items to achieve in the next three months.  As with goals, you are looking at 3-7 items.  These will, unsurprisingly, be reviewed and assessed quarterly.
  3. Issues  This is subdivided into two parts:
    • Items to be dealt with in the medium term (will take more than 90 days)
    • Items to be dealt with in the short term (will take fewer than 90 days)
      Issues can be reviewed and assessed on a monthly basis.
  4. To-Do  These are items that must be dealt with in the next seven days and should be reviewed every week for completion.

Traction

Busy entrepreneurs can get stuck in firefighting or in simple list-conquering mode.  While fighting fires and smashing your to-do lists are part of running a business, they aren’t coherent and sustainable practices that can run a business long-term.

Business owners who want to implement EOS have to face up to three things if the deployment of it is to be successful:

  • Change is hard but necessary – even if things are not going well, people often prefer the chaos they know.  Make sure you get buy-in from your team about moving to a better system of accountability, and one that isn’t dependent on personality but on metrics.
  • Expectations can’t be met if they aren’t defined – part of why so many businesses thrive on EOS is because the management team is better acquainted with long-term and short-term numbers so that they can focus on what’s important to hit them.
  • Creativity and energy should be deployed where they are most needed – Wickman says to “systematize the predictable so that you can humanize the exceptional.”  You want to use the talent of your team members (and yourself) where it can really take the company to the next level, and that can’t happen when you’re just attacking to-do lists and fighting fires.

Do you feel like you’re just fighting endless fires?  Check out Wickman’s free tools here.  If you want some help with those fires and how to build a better business, we can help with that.  Give us a call!

Social Media Basics for Your Business

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Social MediaIf you are of a certain age, just hearing the phrase “social media” can cause you stress.  “Social media for business” is even worse.  The phrase represents so much that seems hard to understand!  We remember the good old predictable days of yellow pages, flyers, direct mail: the simpler world.  But you don’t build a business by living in the past, but by adapting to the present.  And while you may not have grown up with social media, just like old media, it’s just one more way to get in front of new customers.  Once you get used to it, it can become an ally, not something to fear.

Stats Don’t Lie

There are currently 3.78B social media users worldwide.

Among US adults alone, 84% of those aged 18-29, 81% of those aged 30-49, 73% of those aged 60-64, and 45% of those over 65 are active social media users, spending an average of 2.5 hours per day on various platforms.

People use these social networks to keep up with friends, but they also use them to do research, shop, and do business.

The Conversation is Happening

Chances are the conversation about your business is already happening on the Internet, whether you are participating or not.  Reviews on Yelp or Google or Facebook don’t need your permission to be posted.  In fact, to respond to them as the business, you need to claim and create accounts.  Do you really want a conversation about your business happening without your being able to contribute to that conversation?

Step 0?  Claim your Google My Business, Yelp, and Facebook Business listings, if you haven’t already.  Fill out the profiles as completely as possible, with relevant keywords, photos, and services offered.

Start with a Plan

Once you’ve knocked out Step 0, think about what you want to achieve on social media.  Do you want to:

  • Be in touch with existing clients
  • Meet new clients
  • Do research for future products/services
  • Learn about trends in your industry
  • Network

Or maybe, all of the above?  It’s all possible.  You just need to make a plan.  That plan starts with picking where you will be interacting.

Pick your platforms

It’s silly to try to win on every platform.

  • LinkedIn is the world’s biggest B2B platform
  • Twitter features a lot of decision makers who enjoy interacting
  • Instagram and Pinterest are perfect for businesses that have products and services with curbside appeal
  • Facebook and Nextdoor offer global and local social networks with everything from cat videos to questions like “Does anyone know a fill-in-you-business-here?”  They also offer lucrative and wildly successful paid advertising opportunities

Pick one, maybe two platforms to start and learn their rhythms.  How and when do people post?  What are they posting about?  Add value yourself by adding to the conversation via insightful articles or conversation starters about topics in your industry.

Be consistent.  It’s better to interact once a week consistently than to interact five days in a row and then go dark for a week.

Learn

Depending on the platform you’re going to be spending your time on, you’re going to be running into people and brands that are part of every facet of your business.  Keep your eyes and ears open to see what customers are asking for, what your vendors are interested in, what your competition is bragging about.  It’s all free information…for those paying attention.

Iterate

If you haven’t interacted on social media as your business before there’s going to be a learning curve.  Be patient with yourself and be willing to ask questions.  You’ll find that there are an enormous number of people out there willing to assist if you ask for help in the right way.  

Go for quality over quantity in your postings and interactions.  See what’s working and keep that, dump what isn’t.  Keep tweaking to refine and improve.  

It’s not hard to continue to get business from the channels you are comfortable with and know well.  But when you start to get business from a channel you’re only beginning to understand, then you can see the potential for what happens when you’ve gotten just a bit better.  And that’s what interacting consistently will do for you: get you better, until you’re no longer stressed out by hearing “social media for business” but are excited about the possibilities.

Even better?  When it’s time to sell your business, you’re going to augment your valuation by the goodwill generated on the platforms you participate on via your consistent habits.  That’s not money you want to leave on the table, especially when the corresponding time investment is so small in comparison.

We aren’t social media gurus but we happen to know some great people who are.  If you need help getting your social media strategy up and running we’d be happy to connect you.  Give us a call!

7 Reasons Your Business Should Create a Podcast

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PodcastIn 2020 more than 100M Americans listened to a podcast at least once a month.  While some of that might be attributed to staying at home more, that number was the culmination of a 54% growth in popularity of the medium over the preceding three years.  39% of small business owners listen to podcasts, and of them, 65% listen weekly.  Podcasting continues to grow in popularity, and like any platform, it can be used to benefit your business.

1. A podcast provides effective, persistent, low-cost marketing

There are all sorts of ways to get your business in front of potential customers.  They can vary in cost and most of them disappear after you have finished paying for them.  But podcasts (like blogs) are persistent.  They show up in relevant search results for your business and will be searchable for a long time to come.

While the low-hanging fruit of a podcast is interviewing current clients and vendors and other inspiring people in your orbit, a well-known technique is to invite a potential client onto a podcast.  By inviting such a person to share his/her expertise, you also give that person an opportunity to know you better and potentially do business with you in the future.

2. A podcast increases your authority and number of opportunities

While “podcast host” doesn’t quite have the cachet of “author” it does indicate you’re someone who is comfortable chatting with almost anyone and as a result, you’ll have a chance to meet and talk to people you might not otherwise have been introduced to.  Your friends and colleagues will start identifying potential good guests for you.

3. A podcast improves your brand associations

Hosting a podcast gives you the opportunity to demonstrate credibility to people who may have never heard of you before without giving away all the “secret sauce” your company has.  You can be helpful to people who would not have become clients but who can refer you to people who would be.  By being generous with your knowledge, you’ll often find generosity in return.

4. A podcast is straightforward to start and maintain

Many of us grew up in a “radio” era and so we take some of those associations (expensive equipment, professional studio) and overlay those onto our expectations for podcasts.  This is simply not the case.  If you have a computer, a decent microphone, a quiet place to record, and podcasting software, you’ve got everything you need to get started.  Of those, the only two you might need to obtain are a microphone (very good ones can be had for $100) and podcasting software (prices vary between $5-$25/month).  

If someone on your team can’t be tasked with editing the audio and typing up some show notes, there are plenty of freelancers who can do that for you at very reasonable rates.

5. A podcast can fit into your schedule

Whether you choose to do an interview or monologue style podcast, you simply need to set aside some time to jot down some notes on what you’re going to speak on and then the time to record.  If you don’t have any margin in your business life to do that, there are bigger problems looming than the ability to create a podcast.

6. A podcast accustoms you to public speaking

We don’t all have frequent opportunities to speak in public.  Podcasting, like Toastmasters, provides you with practice.  You’ll find yourself cutting out “ums” and “ahs” when you hear them played back to yourself, and you’ll find your listening and questioning skills improving as you interact with different guests.

7.  A podcast is a chance for you to have fun

All things considered, people prefer to do business with those they know, like, and trust.  A podcast gives you the chance to put a human face on your business, and, when appropriate, “let your hair down” a bit.  You’ll be surprised how much fun you can have (and how much value you can add to others) once you get started.

If you still need some encouragement getting started on a podcast, we can refer you to a few people we know who are doing well with it.  You might even get on their podcasts!  Give us a call.

Responding to Customer Reviews

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Did you know that almost 80% of people say that they trust online reviews as much as personal recommendations from friends and family? Or that 94% of consumers say that good or bad reviews have been instrumental in helping them make decisions on whether to patronize a business?  While at first those statistics might sound astonishing, the reality is that online reviews are a major part of how both businesses and consumers make decisions these days.  That means it’s a vital part of building a business you plan to sell, and an important component of any business that a buyer might be interested in.

Good, Bad, or Ugly, Always Respond

Responding to Customer ReviewsYou can’t control what people say in reviews, but you can control how you respond.  In fact, a good response to a bad review might be precisely what encourages someone to do business with you.  But not responding at all means that the reviewer has had the last word.  Let’s examine some principles behind responding to good and bad reviews.

Bad Reviews

It’s never easy to see your business taken to the woodshed, much less in a public way via an online review.  But what we’ve seen all too often is an emotional response from owners.  This is, obviously, not the way to do things.  Of course business is emotional and you hate to see your business, and by implication, yourself, attacked.  But an emotional response will only fan the flames.  

Firstly, assess and evaluate the feedback internally with your team.  Find out “your side of the story” and see if you genuinely failed, if the customer is acting completely irrationally, or somewhere in between.  Once you have the facts, respond, as rapidly as you can, publicly.  

In that public response, make sure to show that you are interested in having a one-on-one conversation.  Aspects of your public response can include:

  • Asking questions
  • Acknowledging mistakes
  • Empathizing
  • Offering multiple solutions

Standards of service are so low these days that any sort of ownership and desire to “make it right” from companies are applauded by even angry reviewers, and we can tell you of multiple business owners who have discovered a brand ambassador that began his journey with the company as an angry reviewer.  

Once you’ve had a conversation with the reviewer and had a chance to make things right, ask them to update their review, or write a new one if the platform doesn’t allow for updates.  

Good Reviews

While everyone loves getting a pat on the back, too often we see business owners taking these for granted and not reacting with the same urgency as they would to a bad review.  Any reviewer has taken time out of his/her day to talk about your business.  Respect that.  

Just as you would with a negative review, check with your team to see if there’s any “inside knowledge” that would make your response more authentic.  When you do respond, lead with gratitude and further, ask if you can add further value, in a way that makes sense for your company and services.

Most importantly, be willing to ask for a referral.  Customer goodwill is on a high after a positive review: it’s the perfect time to ask if there is a friend or a family member of that customer you can serve as well.

The conversation about your business is happening on the Internet every hour of every day of every week of every year.  Don’t let it be a one-sided conversation.  Let potential customers see one more aspect of your business: the way that you respond to praise.  And criticism.

We’re pretty proud of our customer reviews.  If you’d like to be one of them, give us a call to see if we can help you with a buying or selling transaction.

Don’t Forget about Working Capital

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Don't Forget about Working CapitalWith any purchase in life, if there’s a large item at the bottom of the bill that you don’t see coming that makes your grand total larger than you expect, you’re generally not pleased.  When you are talking about business transactions, working capital is precisely one of those “didn’t think about that” amounts that buyers don’t realize is a necessary part of running a business after a transaction is completed and should definitely be on their minds as they move towards closing on a sale.

Definition

In this particular case, the textbook definition of working capital isn’t helpful.  That’s because it’s defined as your current assets minus your current liabilities.  The other unhelpful definition, which is used by too many systems-less business owners, is “the business checking account balance.”  The proper way to think about working capital is the amount of money you need to keep the business going: paying for your overhead and your staff and a little extra.  

Factors

Working capital needs are going to vary based on the type of business.  Think, for example, about the seasonal fireworks stands or Christmas tree businesses.  They have a lot of their working capital essentially tied up in inventory that needs to sell over a period of a few weeks.  Their working capital needs are much higher than, for example, a training business that collects all of the payment upfront and then uses those funds over a period of weeks or months to pay for the resources needed to complete that training.  

When calculating your working capital needs, the four categories you need to explore are:

  • Receivables (when do you get paid)
  • Payables (when do you pay your vendors and staff)
  • Inventory (how much do you have in stock and how quickly does it turn over)
  • Time (how do the three previous categories interact)

How to Obtain It

On some larger deals working capital can be negotiated into the transactions, with the buyer taking on some of the payables in exchange for some of the receivables and cash.  On many Main Street transactions, however, like the ones we handle here at Apex, we simply counsel our buyers to make sure that they have the working capital in place, whether that’s by setting aside some additional capital or by getting a line of credit or a combination of the two.  

Communication with the seller is key here and when it comes to working capital, you’re never going to get penalized for having too much of it to start off…but too little, and you’ll have the worst kind of problems imaginable.

Growth

So far we have been talking about working capital as a means to sustain a business.  But what about if, like most buyers, you want to grow a business?  Well, you’re going to need more.  Where can you obtain that working capital?

  • From your retained earnings.  This is the easiest place to find the funds.
  • From a line of credit or crowdfunding.  This needs time to get set up (having a bank relationship or preparing the proper paperwork for an offering) so you’ll want to do it before you need it.
  • Alternative financing.  This is typically used if you can’t find other means of financing, but it should be considered against the profits you are hoping to gain in growth, as this is the most expensive form of financing out there.

This is also another conversation that can be had with the seller.  “If you had more money to grow the business, where would you deploy it?” and the natural follow-up, “How much do you think that would cost?”  The seller wants you to succeed: it’s part of the motivation behind the transaction.  However, to err on the side of safety, when it comes to working capital, always remember to add at least 20% onto any estimate they give.  If you have some extra, again, that’s better than not having enough.

Do you have questions about whether you have the right amount of working capital in your business or are you considering buying a business and want help calculating how much working capital you’ll need?  We’re here to help.