Sunday, March 24, 2013

Improve Your Business by Improving Your Business Relationships

I don't watch a lot of television but over the years I have watched four series that surprisingly have a lot in common despite their different topics.  Gordon Ramsey’s “Kitchen Nightmares” and the short-lived “Hotel Hell” involve Gordon sweeping in to try to save businesses (on “Kitchen Nightmares”: locally-owned restaurants, and on “Hotel Hell”: inns and B&Bs) from financial ruin.  Cesar Millan’s “Dog Whisperer” has Cesar sweeping in to try to train dog owners on how to properly own dogs.  And “Nanny 911” has a team of nannies sweeping in to teach parents how to parent.

Obviously all four shows are very different, but the message is exactly the same.  To be a successful business owner/dog owner/parent: you need to be open to instruction on how to create a positive, structured environment so that your customers/employees/pets/kids can thrive.  Watching these series it becomes quite apparent that the business owners/dog owners/parents who are obstinately stuck in the delusion that they know what they are doing while inflicting misery on their customers/employees/pets/kids end up in failure.
So let me sum this up to you, small business owner: Just because you’re the boss doesn’t mean you're right.  It's the business owner who knows there is always room for improvement that will set the right tone for success.

Here are a few guidelines to help you along.
Strive For Loyal Customers
A loyal customer base determines the health of your business.  Why? Because it costs you a lot less time/money/energy to keep a customer than it does to entice new customers.

Improving your customer service reduces customer turnover, decreases your overhead, increases your fan base, and provides opportunities for you to sell more and up-sell regardless of whether your company provides products, services or both.
Loyal customers express their enthusiastic commitment to your brand in ways that are a tremendous asset.  Never underestimate the power of word of mouth for your business: both positive and negative.  No matter how many marketing options there are, nothing beats the opinion of a trusted peer.

Loyal customers continue to increasingly purchase with you.  They refer your business to others.  They are invested in your business and want it to succeed.

So, How Do I Gain A Loyal Customer Base?
(image courtesy of the

 The answer is simple: Happy (Loyal) Employees = Happy (Loyal) Customers

Just like my four reality television examples, it is up to you to create a positive, structured environment where both staff and customers know what to expect. It is up to you to infuse enthusiasm and pride into your business environment.  Let's talk about how to do this.

Who Has the Greatest Effect on the Success of Your Business?
Don't assume it is you.  More often than not, business owners or managers are not as involved in the day-to-day operations as they think they are and as they should be.  Who are your customers interacting with the most? Those are the team members who are going to have the greatest impact on the success or failure of your business.

Your customers are going to align their opinion of your business with the opinion of your front line employees.  If your front line employees are presenting a negative perspective to your customers then don't be surprised if customer retention is low. 
Happy Employees are employees who “drink the Kool-Aid”.  They believe in your brand and have an emotional investment.  They feel successful and fulfilled in their role (and so they are successful) in your business.  Because of their enthusiasm and devotion, they are credible in the eyes of the customer.  Happy employees want your business to flourish.  They work together as a team and are willing to weather setbacks such as our economic downturn because they are committed.

Don't underestimate the power of loyal, happy employees.  Their loyalty and happiness breeds loyal, happy customers. 
Your Staff
Your front line employees are your customers' principal point of contact.  You must ensure that the customer experience is all it should be-and more.  To ensure this, be sure you have:

-hired a team that reflects your brand's mission and has the skillset you value and need
-developed and communicated a succinct standard of operating procedures and rules

-trained your staff and made it clear these procedures and rules are to be followed or there will be consequences
-designed a concise program to monitor client retention, and develop an incentive system to reward team members for their good work

Never underestimate the power of clear communication and proper training.  Once you have established a team of trustworthy, well-trained staff, empower front line employees with the means to manage customer relationship issues right when they arise.  Because time lapse can be a major factor in customer dissatisfaction, employees should be allowed to tackle problems as they occur. 
Even if you are a small business with a limited budget, you can still create incentive programs for your staff members that will encourage them.  Remember a happy, loyal staff means happy, loyal customers.

One major sign of a failing business is an unhappy staff.  Employee turnover and disheartened, disgruntled employees indicate you are not doing what you should to value and compensate them fairly.
You want your team to feel appreciated, even if you can only afford to do so on primarily a psychological level.  Think of perks you can provide, ways you can offer them rewards for their hard work that won't break the bank.  In actuality most of us are invested in the work we do because we find it rewarding.  Financial rewards play second fiddle to a feeling of accomplishment.  If you have orchestrated an environment of clear expectations and communication, and make it clear how much you value both your team and your customers, you are going to have a successful business.

Are you Listening?                                                                                                                                              Happy employees and customers know their feedback is heard and their input is valued, so they feel encouraged to share ideas about how the business can improve while offering to do what they can to implement those ideas. 
Does your team feel safe communicating with you?  Do they feel you will hear their input and concerns?  Do your customers feel their feedback is valued?  Do both your team and your customers have a welcome investment in the well-being of your company?  If not, then it is high time to get off your high horse. 

And just so you know: Listening means acting on staff input and customer feedback immediately, even if that means simply acknowledging that they have been heard.  You can let them know solutions to problems are being carefully considered.  And new business practices-if deemed necessary-should be implemented within a timely manner to demonstrate employees/customers are a valuable component of your business.
Have a Piece of Humble Pie
Having been in various writers groups over the years I notice there is always at least one person who gets their feathers ruffled anytime a group member attempts to give feedback on their writing. Just like the business owners/dog owners/parents of the reality shows I mentioned in the beginning, I always know these writers are never going to reach their desired success.  They insist on keeping their ears closed out of a misguided sense of pride and sentimentality.  If they would simply step back from their “baby”, hear what the fellow writers have to say, and recognize the positive motivation behind providing feedback, they could fully develop and flourish.

The same goes for business owners.  Yes, I know this business is your baby; that you have poured all your savings into it and sacrificed your personal life to make it happen.  But being too closely involved tints your perspective.  Allow others who don't have as much at stake to assess your business and be open to what they have to say.
No one has all the answers, all the solutions.  You will find floundering businesses tend to be led by owners/managers that are in one way or another denying their shortcomings (either through bullying staff and customers alike or by keeping their head in the sand or in the clouds or both).

These days through the internet businesses have instant access to what customers are saying about them (on Facebook, Twitter, Yelp, and the like).  Treat these reviews as opportunities for learning and making changes as needed.  Remember, someone devoted their personal time and energy to posting this, so respect their input.  You should also have a clearly marked way in which both staff members (monthly meetings, for example) and customers (an email address or an old fashioned suggestion box) can provide feedback.
Confidence versus Dictatorship
Remember a team needs a leader who can instill confidence while not storming about like a dictator.  That is not confidence; that is overcompensation for insecurity. And an insecure leader is just as ineffective as a totalitarian bully.  Hearing negative input about your business may rattle you a bit.  But keep in mind it isn't personal when it's professional. Using this feedback to make positive change starts with you and trickles down the chain of command-starting with the front line employees. 

Share the Power                                                                                                                                                  Let your staff know you need them and that your success is not possible without them. Your reaction to that statement may be, “Well, duh.” but when was the last time you accurately communicated this to your employees?  Don't assume they know.  Empower your team by sharing your mission with them and remind them that everything they do has a direct effect on the customer. 
It is amazing to me how often I will go into a business as a consultant and quickly learn (most often from the staff and not the owner) that no one knows what exactly they are supposed to be doing.  Sure, they may have a job title and a general idea of what that entails, but have you ever spelled out for them what their duties are?  More importantly, have you communicated what their role in the customer experience is?  Think of it as a crop share: you are giving this person an acre of your land.  Were you specific about how they should nurture the ground, what they should grow?  Did you provide them with the tools they needed to plant and grow successfully?  Did you review operating procedures, empowering them to immediately handle issues as they arise?  In other words, is this person confident in the tasks laid before him?  Is he secure in his role?  Does he feel invested in the acre he is in charge of? Does he know that his success affects the success of the entire enterprise?

Set Realistic Targets for Your Business
Time to do a bit of investigative research.

How is your business' performance in relation to your industry?
How does your business' performance compare to your competitors?

How are you doing due to or despite the culture (external circumstances such as economy and community)?
Once you have researched the answers to these questions you can then map-ideally with input from your team and your customers-a successful path for your business.  It is important to be realistic in your goals.  Setting insurmountable projections for your business creates a tone of disappointment, and disappointment breeds discontent.  You want to enhance that positive, structured environment with goals that encourage your team and engage your customers.

In Summary                                                                                                                                                              I know I've put a lot on your plate.  You may be realizing you have much to address about your attitude and the environment of your business in order to turn it around.  An apology is a good place to start. Call a staff meeting.  Tell your employees you are sorry for the way things have been going and that you want to change.  Invite feedback and input.  Work as a team to figure out how to implement these new ideas.  Then go to your customers.  Write them a letter telling them you want to provide the best service possible in your industry.  Ask them to tell you how you can improve.
Customers and Staff who feel you genuinely seek to please them, whose expectations are exceeded by your efforts, are more likely to commit to your brand.

 For More Reading  

Friday, March 8, 2013

Are You Ready for the Next Level? Gaining Mindfulness About Your Finances

This month the Focusing Series offered a workshop called Bookkeeping & Deductions & Taxes, Oh My! with local CPA, Kathleen Robey in the hopes of demystifying the financial aspect of managing one’s business. Anyone who operates a small business will tell you a good portion of their time goes to handling the administrative aspects of their company, which includes accounting.

For many years I handled my taxes in addition to handling taxes for other small businesses. However, as things at home became progressively more complicated-for a long while my husband and I both operated our own respective businesses-I felt it was better to hand the reins over to the professionals so I’ve had an accountant for well over a decade.

However hiring an accountant does not absolve you from managing your finances, even if you are a creative entrepreneur. There is a misnomer out there that artists don’t have what it takes to handle the more serious elements of their career. Their heads are just too “up in the clouds” to be organized, focused, or detail-oriented. Part of my mission for this blog and for my work as an educator and a creative coach is to dispel this myth. I feel, if one is given the right tools and information, one can easily be successful, even at tackling the components of business that they feel less comfortable with.

It amazes me when artists admit that they don’t pay attention to their finances: what is going out (how much they are spending to support and maintain their creative endeavors) and what is coming in (how much they are earning). Even if you know your artistic pursuits will never be full-time (because for one reason or another you simply can’t devote the time/money/energy it would take to make it your career) you should at least have a solid idea of how well you are doing.

Maintaining an awareness or mindfulness around the financial aspect of your creativity is beneficial (actually everything you do in life should be approached with intention). It will help you make wiser decisions about how you spend your money. It will help you determine how to price your work. And it will help you decide-beyond your money investment-how much time and energy you need to invest in your art.

Here are a few simple tips for developing that knowledge and managing the finances of your business:

How do you spend your money?
It is far too easy to get carried away when it comes to spending money on your business. I find the main purchase that gets artists in trouble is art supplies. There are countless amazing and beautiful materials with unlimited possibilities and before you know it, you find your studio is stuffed to the gills with paints, beads, fabric, paper, yarn, etc. Or all of the above!

My accountant brought me back to reality a few years ago when he phoned to say either I had to start turning a profit or my art was not going to be considered anything more than a hobby.

If you want to keep your artistic pursuits as a hobby, that’s fine. But just know that means you cannot deduct any of your art-related purchases from your taxes.

And you may be shortchanging yourself. If you have never taken a closer look at your creative endeavors you might not realize this is something worth investing more time/money/energy into.

Start keeping records of what you purchase for your art. If you are already beyond the basics then also keep track of what you spend on managing your business in general. Obviously this will vary from person to person, but here’s in part what I record for tax purposes.

Mileage driven for all art-related events and supplies
Advertising (printed materials, online marketing, etc..)
Membership Fees (for co-ops, art associations, etc..)
Legal & Professional Fees
Office Expenses (business supplies)
Art Supplies & Materials
Art Event Expenses (entry fees, supplies for art shows)
Website Costs
Shipping & Postage
Online commerce fees (Ebay, Etsy, Copious, and the like)
Education and Art Retreat Fees
Art Competitions
Art and Business Meetings

Utilities: if you use a portion of your home as a work/studio space, you can deduct a percentage of your utility bills.

I think you will find that when you start paying attention to what you are spending you will make better decisions on what you spend. After my accountant told me I had to turn a profit I began rethinking spending-especially when it came to art supplies. Whenever I was tempted I would remind myself I still had plenty of supplies at my studio and that I really didn’t need anything new in order to create something new. As a result, my company showed a small profit that year, and I am proud to say that profit has grown ever since.

I am amazed when artists say they have no idea how much they spend on supplies specifically as I think having this information is key to figuring out what to charge for your art. So, if for no other reason, start maintaining records of what you buy and how much you are spending. Aim to spend less on your supplies than you are bringing in from sales.

How much are you earning?
Being a professional means providing stellar customer service, just like any business. This means, in part, supplying a paid receipt, invoice or statement for a sale. And this will help you keep track of what you are earning as an artist.

Again, you may decide you never want to elevate your art beyond being a hobby, but you could be selling yourself short if you don’t recognize how successful your art sales actually are. Discovering how much income you are bringing in may give you the incentive you need to take your art a lot more seriously.

Tracking my sales allows me to know what products sell best and whether or not my prices are working for me.

What tools to use for accounting:
Whatever technique works best for you is fine. I used to file all receipts away in an accordion file and then add them up at the end of the year, but this can be overwhelming during tax season. These days I maintain a spreadsheet of my monthly expenses (some of which I listed above). You can use a normal Excel spreadsheet or many prefer the all-in-one place convenience of Google. Google is like having an office online. By signing up for a Gmail account you then have access to a free email address, free calendar and organizer, Google Drive, etc. Google Drive has a spreadsheet template you can use to track expenses.

In the past couple of years I have moved away from filing to a paperless office. I began using QuickBooks which allows me to manage my accounting easily. Simply enter the numbers and then toss the paper trail. QuickBooks can be purchased as software or one can use their online option. Etsy sellers can use for free-another online accounting software. There are a lot of options out there.

I hope you find this post helpful. Some of you may be pleasantly surprised when you take the time to record your income and your expenditures as an artist. Perhaps it will shed light on the fact you should be making your hobby into a career.

Here is a helpful link to Etsy's blog on how to create an annual budget: