Empowering Small Business

What it Takes to be a Great Customer

Harvard Business School professor John Quelch writes a regular marketing blog called Marketing Know-How, and recently published a blog post on "How to be a Customer."

Quelch notes that marketing, as we practice it, is almost exclusively focused on how to identify, find, attract and sell customers. But what if we turn the equation around and look at if from the customer perspective? What do customers need to do to be better customers (than other customers) in the eyes of the seller? Would their interaction with sellers improve, and could they actually be the variable factor in creating a more positive customer experience?

Instead of looking at how to take advantage of a selling system or working from a self-oriented customer approach, Quelch gives the following guidance on behaviors that can elevate any customer's "game," change a one-sided dynamic to a mutual customer and seller win-win, and transform the entire buying experience - for everyone:

1. Be Demanding: Inform the seller politely that you have offer options and will seek out more than one bid. Get references as any trustworthy supplier will have them and gladly supply them.  Negotiate and get clear terms, in a positive manner.
2. Be Respectful: Be professional in all your dealings and communications and approach all situations from a straightforward and positive perspective. Be polite, respectful. Don't be late and waste something else's time.
3. Be Reliable: Don't keep a salesperson or vendor waiting if they are arrived for an meeting with you on time. Pay in a timely fashion, according to terms. Don't ask for freebies that weren't a part of a term sheet.
4. Be Surprising: Reward good work - leave a tip if that is the situation. Pay a little more or pick up some cost if a seller's work or product exceeds expectations.
5. Be Engaging: A smart customer differentiates herself be engaging with the seller, striking up a connection that goes beyond the immediate transaction. Acknowledge and treat the seller as an equal, and see how you can play a role beyond just being a "buyer."

Check out John Quelch's blog, and join his online discussion at Harvard Business Online.

Shivonne Byrne, Innuity CMO

Kauffman Foundation's Top Ten Tools for Entrepreneurs

The Kauffman Foundation (a leading foundation for entrepreneurship) eVenturing website just published a very useful checklist and toolkit for helping entrepreneurs set-up, manage and improve core operational processes. Titled the "Top Ten Tools and Templates for Entrepreneurs," this offering provides practical agreements, models, samples, and worksheets to guide entrepreneurs through starting up and growing their businesses to profitability.

Listed below are the tools most viewed by entrepreneurs over the last year:

• Sample Buy-Sell Agreement: Outlines the concepts and language needed to understand how to set-up a Limited Liability Corporation (LLC)
• Daily Forecasting Cash Flow Model: Provides a sample cash-flow spreadsheet designed to monitor business cash flow on a daily process.
• Due Diligence Checklist: Lists information needed to effectively negotiate a company sale or its purchase.
• Sale Compensation Tool: A spreadsheet tool that the shows the core components of a sales compensation plan, including business development goals, total bonuses and commissions, and sales compensation payment schedules.
• Sample Balance Sheet: This tool uses a sample balance sheet for a one-year-old business and provides a line-by-line explanation of the most common categories used to report the value of a company's assets, liability, and equity.
• Partnering Proposition Worksheet: A worksheet that demonstrates how to facilitate recruitment of strategic partners by establishing processes from first call to deal close.
• Incentive Compensation for Sales Executives: A sample sales compensation plan that illustrates how to keep tract of quotas by department and per representative, commission accelerators, payouts and reporting.
• Sample Multi-Shareholder Agreement: A sample buy-sell agreement appropriate for companies with multiple shareholders.
• Business Strategy Worksheet: A process-based tool to set business strategy and evaluate that strategy against overall growth plans.
• Sample Job Ad: A sample advertisement to recruit a top executive.

Shivonne Byrne, Innuity CMO

Gender Effect on Start-up Business Owners

In my last post, I summarized the key differences found between men and women entrepreneurs in a new study conducted by Erin Kepler and Scott Shane, professors of entrepreneurial studies at Case Western Reserve University, and commissioned by the Small Business Administration.

The study found that when variable factors were controlled and taken into consideration there is little difference between men and women entrepreneurs in terms of effort and performance. However, there were notable differences between men and women in the types of businesses they found. Male start-up small business owners found "significantly more technologically intensive businesses than female entrepreneurs; businesses that will lose their competitive advantage more quickly; and businesses that have a less geographically localized customer base."

In terms of motivation to start their own businesses, men and women demonstrated significantly different motivations including that men are more likely to start a business for big financial gains, as well a significant percentage believe that building a start-up businesses is more important than time with their families.  Male entrepreneurs were significantly more likely than women to equate business owners with being community leaders, and possibly are driven by this potential recognition to actually become entrepreneurs. Men also had significantly greater expectations for overall business start-up outcomes than women.

Conversely, both women and men had equal self-confidence in their abilities and capacities to drive the organizing processes involved with starting up a business. Additionally, no evidence was found between genders in their perceptions of the difficulties in driving business operations.

The study also discovered interesting and significant differences between male and female entrepreneurs not found in previous literature, with one difference being "opportunity identification." Men were significantly more likely to find "business opportunities through research; to believe that the existence of new business opportunities depends on action; and to report that they gather a lot of new information in the process of identifying their business opportunities."

One final, and potentially concerning, fact is that men are twice as likely as women to start businesses, which may be attributable to the different characteristics of male and female entrepreneurs noted.

Shivonne Byrne, Innuity CMO

Equaling the Entrepreneurial Playing Field Between Men and Women

"Are Male & Female Entrepreneurs Really That Different?"

According to this new study just released and commissioned by the Small Business Administration’s Office of Advocacy and conducted by Erin Kepler and Scott Shane, both professors of entrepreneurial studies at Case Western Reserve University, an entrepreneur’s gender by itself does not impact a new venture’s performance when other variable factors are controlled and taken into consideration.

However, there are indeed specific variable factors such as different expectations, motivation for starting a business, types of businesses, and advancement opportunities sought that affect each gender differently, and when taken into consideration, they impact the success outcomes of a new venture.

Going into the process of starting a new venture, the differences seen among men and women small business owners include :

v Men had more business experience prior to opening the business and had higher expectations for outcomes of the new venture

v Women entrepreneurs had a larger average household size

v The educational backgrounds of male and female entrepreneurs were similar

v Women were less likely than men to purchase their business

v Women were more likely to have positive revenues

v Men were more likely to own an employer firm

v Female owners were more likely to prefer low risk/return businesses

v Men spent a little more time on their new businesses than women

v Male owners were more likely to start a business to make money, had higher expectations for their business, and did more research to identify business opportunities

v Male entrepreneurs were more likely to start technologically oriented businesses, businesses that lose their competitive advantage more quickly, and businesses that have a less geographically localized customer base

v Male owners spent more effort searching for business opportunities

v Differences between women and men concerning size of venture and hours invested are explained by control variables such as prior start-up and industry experience

The purpose of this study was to gain a deeper understanding about the differences and similarities between female and male entrepreneurs and contribute to the literature informing public policy in this arena. In addition to showing that there is no evidence for gender effect on new venture performance when preferences, motivation and expectations are controlled, the study provides necessary information to policy makers regarding whether or how to assist female entrepreneurs in overcoming specific structural hurdles.

My next blog post will dive deeper into the main findings of this study.

Shivonne Byrne, Innuity CMO

Small Business Online Spending to Exceed $70 Billion by 2012

JupiterResearch just released a new report, "US Online Small Business Market Category Forecast, 2007- 2012," that predicts that total online expenditures by small businesses is growing at a rapid rate - with online spending expected to top $70 billion by year 2012, up from $47 billion in 2006.

Online spending growth is anticipated to come via overall growth in the number of total small businesses, rather than via significant increases in small business online buyer penetration which is already at a mature 71 percent.

JupiterResearch analysts see retailers continuing to promote the online channel because of its better margins and projects growing competition among online retailers for small business spending - leading to more promotions and incentives to drive higher online conversion rates.

The report posits that small businesses will continue to buy online for such value proposition reasons as convenience, better prices, or greater/wider variety. Jupiter predicts that "as relationships with online suppliers mature, small businesses are likely to provide them with a greater portion of their business."

JupiterResearch provides unbiased research, analysis and advice, backed by proprietary data, to help companies profit from the impact of the Internet and emerging consumer technologies on their business.

Shivonne Byrne, Innuity CMO

Proven POS Life Cycle Management Services

Innuity's Point-of-Sale Life Cycle Management services provides retail and hospitality customers proven, end-to-end POS services that many successful businesses - such as Jamba Juice, Peet's Coffee, and Red Robin - have counted on for years.

With all the many varied aspects that go into setting-up and operating a successful point-of-sale system, businesses need to be able to rely on a team of POS experts that have the expertise and know-how to help at every step along the way. From ensuring that customers select the right system for their business, getting that system implemented, and offering well-tested training and support, Innuity's POS team works diligently with our customers so they get the most of their investments.

Innuity's POS Life Cycle Management Services include:

(1) Infrastructure Consulting Services

• Site Surveys
• Project management and documentation
• Technology assessments
• Pricing and availability

(2) National Installations

• Order management and tracking
• Equipment staging
• Quality control
• Logistics, shipping and tracking

(3) Training and Support

• Ongoing 24X7, on call support center
• On-demand online training for general managers, managers, servers and bartenders

For more information, call 866.783.0806.

Shivonne Byrne, Innuity CMO

Inc. & Clinton Foundation Expand Mentoring Program for Entrepreneurs

Last Friday at the Inc. 500 Conference in Chicago, former President Bill Clinton announced a joint initiative between the William J. Clinton Foundation and Inc. to expand an inner-city mentorship program to entrepreneurs across the nation.

Named The Inner City Entrepreneur Initiative, the mentorship program brings together inner-city business owners with successful entrepreneurs for the purpose of sponsoring professional growth, building professional networks, and sharing lessons learned in the trenches. Each mentor and entrepreneur team will work together over the course of a year on developing business and growth strategies relevant to the entrepreneur's operations.

This program originally kicked off in 2006 as a pilot program with entrepreneurs in Harlem and the Bronx, and because of its successes The Clinton Foundation and Inc. will be launching the program in other major U.S. cities including Atlanta, Boston, Chicago, Los Angeles, New York, Oakland, Philadelphia, and Pittsburgh.

Clinton believes that with the right type of mentoring, entrepreneurs working together can "help transform their local economies" and see this type of B-2-B giving (and giving in general) as being a key microtrend that can have significant and positive impact on major societal and business challenges.

Shivonne Byrne, Innuity CMO

Think Small

Mark Penn, CEO of PR firm Burson-Marsteller and Hilary Clinton's chief strategist and pollster, has just released his new book - "Microtrends: The Small Forces Behind Tomorrow's Big Changes" - which makes a data-driven case for how small movements have the greatest potential today for creating societal change.

As the man who identified the "Soccer Moms" pivotal swing audience in Bill Clinton's 1996 presidential campaign, Penn is credited for being able to spot and isolate small trends or patterns of behavior in the environment - which he dubs as "microtrends." His book credits these new, just emerging microtrends  as having the potential to shape our future and society. 

He gives numerous examples: With so much teen crime we aren't seeing that the youth audience group is succeeding in life as never before. With so much attention on the political power of large religious groups, we find it difficult to grasp that it is the newer, more narrowly focused religious sects that are the fastest-growing.

As technology may have enabled, individuals have more choices today than at any other time in human history and the reasons and patterns for eventual end choices have never been more difficult to predict. But the ability to identify small groups and communities of like-minded people, and communicate effectively with them, is indeed today's primary challenge for marketers and politicians. Mass marketing and mass communications is dead in terms of real impact.

Utilizing "some of the best data available" Penn identifies more than 70 microtrends in business, religion, leisure, politics and family life that are quickly changing the way we work and live. A few of them include:

* People are retiring but continuing to work
* Teens are turning to knitting
* Geeks are becoming the most sociable people around
* Women are driving technology
* Dads are older than ever and spending more times with kids than in the past

To really know what's emerging "out there" Penn says we need "magnifying glasses and microscopes not the naked eye and an eloquent tongue" - and that equates to analyzing markets/audiences with polls, surveys, and statistics. His real point is that there are hundreds of "Americas" now for marketers and politicians to contend with, comprised of untold niches of people loosely or tightly joined together by common interests and beliefs, and we ignore them at our peril.

Shivonne Byrne, Innuity CMO

Unfilled Job Openings "Very High" for Small Businesses

Although the U.S. Labor Department reported today an overall job-market downturn in the corporate world, small businesses are in a completely different boat. According to a survey done last month by the National Federation of Independent Businesses, and out today, 25% of small business owners said they have unfilled job openings - a very high percentage response to this research question from a historical perspective.

In fact, 14% of small business owners said that locating and hiring qualified labor is their No. 1 business problem and 85% of the total respondent group said that they are finding few or no qualified applicants for open positions. For small businesses then, there is a "tight labor market," according to NFIB chief economist William Dunkelberg.

Why are smaller businesses, with employees 50-20 employees or less, having such difficulties recruiting employees for open jobs when the overall labor market is experiencing the opposite problem in terms of overall job loss. According to Jim Hopkins, USA Today, "people don't want to work for small companies because they doubt they'll get the same pay, benefits, job security and career advancement" more readily available to them at larger, more corporate-like enterprises.

Shivonne Byrne, Innuity CMO

Small Businesses Cautiously Optimistic Despite Economic Challenges

Visa just released their "Small Business Spend Insights" study that reports that nearly half of the small business owners surveyed expect an increase in profit, revenue, and cash flow over the next six months while expressing concerns about rising energy, rent, and mortgage costs.

In terms of specific breakdowns, almost half (44%) of these small business owners expect an increase in revenues over the next six months, with only 13% expecting a decrease. 40% of these owners expect an increase in profits over the next six months, while only 22% anticipate lower profits for this period. In terms of borrowing, only 19% expect to borrow money to enhance cash flow over the next six months.

This optimism is muted by recognition of rising costs. Energy in particular is a big issue, with 72% of the survey participants expecting energy increases over the next six moths. Additionally, 23% of small business owners are projecting rent and mortgage cost increases in the next six months.

Attracting new customers is still on the hot list for some, with 23% of small business owners concerned about adding to their customer base.

These attitudes are impacting cash outlays for small business owners, with 58% expecting to slow large capital investments and 41% slowing small capital investments. Visa assumes that these adjustments in slowing down capital outlays will allow small businesses to fund investments in their most pressing business challenges such as finding new customers.

Shivonne Byrne, Innuity CMO