Had a beautiful day: My MBA students graduated today.

Less than 2% of the people who start college ever get a Master’s of Business Administration degree, and I get to impart some of the knowledge I’ve acquired. These graduating students make me very proud to be part of the process.

Over the last few years, I’ve taught about 400 MBA students, and found out that three-fourths of them want to start their own business, either for-profit but, in many cases, not-for-profit. Of course, my heart is with entrepreneurs, so I encourage it. But for those who want to make the difference in large corporations, I encourage them to follow their heart and to take charge of their careers.

Getting an MBA gives these people a leg up in the world of business, in companies large and small. However, there are millions of successful small business owners who do not have an MBA. They bring different skills to the to the firm, but need to learn many of the same lessons one way or another.

So my hat my comes off to all of you who continue to keep working and struggling to make a difference.

Steve

The top 3% of people Seek Problems: Their goal is to be the BEST

The next 18% of people Solve Problems. Their goal is to Achieve.

The next 55% of people Hide from Problems. Their goal is to make it through the day. These are average people.

Bottom 24% of people ARE the problem. Their goal is to take from others and get something for nothing.

Characteristics of a 3 percenter

• Confident, good self-image
• Admit mistakes, not sensitive to criticism
• Speak and write well
• Understand self
• Persuasive, understand motives of others
• Goal Oriented
• Low need for approval, but give approval easily
• Decisive, but disciplined
• High energy and drive
• Humble

Just saw a short YouTube video about Success from Richard Saint John at a TED conference.

Here’s a recap of what it takes to be successful:

1. Passion - love what you do

2. Work - it’s never easy

3. Focus - you can’t do it all

4. Skills - get better at what you want to do

5. Push - yourself

6. Ideas - stand out by taking what you learn and repurposing

7. Serve - add value to others

8. Persist - keep getting up until you reach your goal

This is a URL to the video

http://bit.ly/AFksc

The economy is in a tailspin. People aren’t spending. Companies are going bankrupt. This recession has no end in sight.

Those headlines are true. Times are tough. But you still need to get business. That means you need to still market and sell.

If you can afford it, there are great bargains in advertising. Times are just as bad for companies that live off advertising than for others. In fact, advertisers may have it worse than many other industries.

You can advertise in almost any medium, print, radio, television, for a fraction of what it cost only a couple years ago. Using advertising you still stay on the minds of people, even if they are not buying nearly as much as they did before.  It still may be a smart move because once the economy does improve and people begin spending like before, you are on their mind and they will think of you first.

Many small business owners, however, don’t have enough saved up to advertise. But they still need to market if they expect to sell.  Here are some less expensive ways to market - I say less expensive because what you don’t spend in dollars you spend in time:

1. Network, network, network.  Make sure you meet lots of people and they know what you do.

2. Pick up the telephone and call. Even if your current and prospective customers aren’t buying yet, make sure you keep up the relationship so they will keep you in mind when things turn around. Ask if they can refer you to someone who may be buying.

3. Social marketing is all the rage: Facebook, LinkedIn, Twitter and others are all the rage right now. They are turning other forms of communication on their heads. Do you understand them? Do you use them?

4. Make sure your website is current and easy to use. Find ways to get people to it - there are lots of inexpensive ways to do that.

There are lots more, but these should get you started….

Steve

In times of historic change, it’s instructive to look at some facts:
• The stock market is down 50 percent.
• Banks are in trouble and have curtailed lending.
• Commentators predict widespread industrial bankruptcies.
• Unemployment is rising fast.
• Interest rates are volatile.

It all sounds familiar. But those headlines aren’t from today. They’re from 1974. Doomsayers foresaw disaster 35 years ago, predicting hundreds of corporate bankruptcies.

Mike Milken writes the facts above in an article to show things may be bad, but they will inevitably bounce back.

Are you going to be ready when they do?  Is your small business prepared, to take advantage. What are you doing to get by, and what will you do when the times get better.

Will it still be around when the economy recovers? If in doubt, you definitely want to read the 8 Survival Secrets posted earlier in this blog.

To read all of the Article by Mike Milken, go here: http://www.mikemilken.com/invitation.taf

Steve

I was at Home Depot today, the first time in months, and was shocked. The parking lot was practically empty!

I’ve gone to this particular Home Depot for about ten years and used to hate that parking lot because there were so many decrepit trucks with stuff falling off them - I was always afraid that I would run over a nail or something. That was not a problem today, a sure sign of the economic conditions around here.

I’ve been pretty insulated from the economy lately, spending entirely too much time over the last few months writing my new book in my home office and the library. Sometimes to take a break from writing, I’d go to my favorite coffee shop in a very upscale area. It used to be surrounded by upscale specialty stores, most of which are now gone. Unfortunately, they did not change with the times.

Not every industry is suffering, of course. The grocery stores still have pretty full parking lots, medium priced restaurants are still booked on weekends, and McDonald’s just had a record quarter. Apparently people still have to eat.

Housing is a different issue. The housing industry kept the rest of the economy strong for years, but got stretched too far. When if finally fell, weaknesses in the rest of the economy were also blamed on it.

But people still need places to live. Foreclosures are painful to individuals, both emotionally and financially. But a balance to the overall economy is coming, and with it the housing market. Many foreclosures have now been purchased, so I expect new owners to be fixing up their new acquisitions in the near future. There is a huge demand building up for repairs and remodeling, but people are waiting until they feel more secure before getting it done. As long as contractors can hang on until then, they will be fine.

How about your industry, is there a huge demand building?

If so, just hang in there a bit longer.

But if there is not a huge demand building, you’d better start looking for some new opportunities that are getting ready to bloom.

Steve

By the way, for some secrets on how to locate those opportunities, check out the 8 Small Business Survival Secrets on this blog.

Walt spent the next few days trying to identify the various cycles that affected his business. He looked at the national and local economies, as well as the industries his clients were in. While it was not all bad news, it was obvious that it could be months before he could expect lucrative contracts from his former clients.

At their next meetings, he explained this all to Helen. She was impressed at how calm his composure remained, “You’re able to take bad news much better now than when we first met, a couple months ago.”

Walt thought about that before replying, “Both mentally and emotionally, I am in a much better place than before. I was especially stressed because I had no way to deal with the changes. I felt like I had no options. At least now I’ve got a long list of things to do.”

Then his demeanor changed. “The question is whether I have the right stuff to make it through more storms in the future. I’m wondering if I should start looking for a ‘real job,’ as some of my friends and relatives are suggesting. I’m meeting more and more business owners who just could not make it. I might never be successful at it.”

“It sounds as if you are at a fork in the road, Walt. This is as good a time as any to make the decision of whether to keep being your own boss, with all the pitfalls and dangers associated with that, or whether it is time to become an employee again. If you are going to get out, do it while you still have some resources.”

“The problem is, Helen, I really don’t want to get out. Do you think I have what it takes to make it?”

Helen cocked her head, “Your ability to succeed as a small business owner depends on how much you are willing to fight. Lots of people want to have their own business, but only a fraction is willing to sacrifice and struggle enough to become successful.”

“I am willing to fight, Helen. Now that I’ve had my own business and have been my own boss, I can’t imagine going back as an employee again. Just the thought of it makes me depressed. I really want to make it!”

“Good. The great football coach, Vince Lombardi, once told his players, ‘Winning isn’t everything, but wanting to win is.’ It’s going to be an uphill battle, but persistence can overcome a lot of other shortcomings.”

Walt said, “Of course, I assume there is some chance that I will actually reach my dream goals.”

“You can, if you work hard enough. Persistence is important, since three-fourths of all the companies started this year will not be around in five years.

“That’s some pep talk you’re giving me, Helen.”

“The news is not actually as bad as all that. Some companies merge and others were just short term ventures. Still, a lot fail, probably 50% or more.

“So there is still only a 50:50 chance I will be successful?” Walt realized.

“With any one venture, yes. But the total number of successful ventures is increasing by a million or more each year in the US. What that really means is: After their first setback, a lot of those founders learned their lessons, licked their wounds, then rolled up their sleeves and started another venture.”

“Really? That many of them found a way to make it after a failure?”

“That’s right, Walt. All the successful entrepreneurs I’ve known have learned their business the hard way. Many of them started 2 or 3 businesses before finding the right combination of factors to become successful. I’ve never met an entrepreneur who was a natural success. In fact, that was probably a major reason for their success, finding ways to be successful, and discovering traps that need to be avoided.”

Walt thought a moment. “That’s a much better story. I like any kind of reassurance that I can make it.”

“It’s not easy,” Helen warned. “It takes a lot of fortitude to keep getting up in the morning, realizing it will be another day of learning hard lessons.”

“Well, I’m in the learning mode. But I wonder if it is worth trying to grow under these economic conditions.”

Helen hesitated. “It seems pretty tough, doesn’t it? Yet a wealthy entrepreneur once told me that more millionaires were created during the Great Depression than any other period in our nation’s history.”

Walt’s eyes widened. “During the Great Depression? How did they do it?”

“Many of them had money saved up, so they could buy businesses for pennies on the dollar. But others had no money and still became household names. One grandfather started selling fried chicken at his gas station. Colonel Sanders called it Kentucky Fried Chicken. In 1939, Bill Hewlett and Dave Packard started their business with only $538. And there are thousands of others who saw opportunities while others were despairing.”

“Wow. I thought most of the stories were like Steinbeck’s Grapes of Wrath,” Walt exclaimed.

“No,” Helen shook her head. “While there were millions of people seriously affected by the depression, many still kept their eyes open for opportunities. Speaking of opportunities, did you know that the word Crisis in Chinese is actually two symbols together? One is danger, the other is opportunity.”

“My company is still in crisis, and I hope there are real opportunities. I know I am still in danger of losing lots of money.”

Helen sympathized, “I’d recommend you always have three exit plans, one for regular growth of your business, a second in case it takes off like a rocket, and a third in case it begins to sink and needs to be abandoned. If you don’t see this venture making a good profit, shutting it down is a solid business decision.”

“Man, I hate to do that. I’ve already invested so much time and money.”

“Well you’ve learned a lot of lessons. Remember, long-term success comes to those who keep trying.”

“Keep on trying. That sounds like something my mother used to tell me. And she also said, When the going gets tough, the tough get going.”

Helen nodded her head, in agreement. “Disraeli said ‘There is no education like adversity.’ Small business owners do well by remembering it’s the journey, not the destination. Then, you can look behind you and see how far you actually have come. That helps you get psyched up for the next part of your journey.”

“I guess I’ve still got some big decisions to make,” sighed Walt.

Helen waited a moment before changing the topic, “I’ve got something else to tell you: This is our last meeting for a while. For almost a year I have been developing relationships with some influential businesses, and I just closed contracts with two of them. They will be taking all of my time for the next few months, including a lot of travel.”

“What? You’re leaving me?” was Walt’s initial reaction.

“But I think you are well on your way to major successes, Walt. I know you’ll press on.”

Then Helen rustled around in her bag, brought out a notebook. She searched through it, looking for something between the pages. Finally, she found a folded sheet of paper and handed it to him.

Walt carefully unfolded the paper that she had obviously been carrying for years, and found some words of wisdom. “Wow!” was all he had to say after reading it “Can I write this down?”

“No. You can have it! I have had it quite a while and I’ve got a copy. I got this one from my mentor. After you have become successful, you can give it to someone else who needs it.”

Then, with a quick hug, she was gone. Walt sat back down and looked over the list…

8 Inspirational Quotations for Success

1. Winning isn’t everything, but wanting to win is — Vince Lombardi

2. Happy are those who dream dreams and are ready to pay the price to make them come true — Leon J. Suenes

3. Every artist was first an amateur — Ralph Waldo Emerson

4. Misfortunes often sharpen the genius. — Ovid

5. Our greatest glory is not in never falling but in rising every time we fall. — Confucius

6. There is no education like adversity — Benjamin Disraeli

7. Fractures well cured make us more strong. — Ralph Waldo Emerson

8. “Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.” — Calvin Coolidge

After a week of setting up a marketing plan, Walt was ready for a break. He arrived at the cafe early so he would be ready for his upcoming conversation with Helen.

“I put together a marketing plan, Helen, but every time I think about implementing some part of it, I realize how many other things I have to do. I didn’t realize how difficult it would be to market my business!”

Helen laughed. “You’ve had a week and it’s not done?”

“Hmmm. Do you think I overestimated how much I could get done?” he asked facetiously.

“Now you can begin to appreciate how much time and effort can go into marketing. Then, even with huge budgets, returns are not guaranteed.”

“What I didn’t understand was how many things have to fit together to get a good marketing plan.”

“Join the club. Marketing is one of those things that we all have to learn, usually the hard way. Of course, the more you do it, the easier it becomes,” she encouraged. “All of the time you are spending is an investment so you’ll be ready for the next business cycle.”

“Business cycle?” Walt realized he was about to find out about one more Survival Secret.

“I’m sure you know, Walt, that everything goes through cycles,” Helen began. “In fact, knowing it comes in cycles is a major secret to maintaining a successful business over the long term. Economic cycles are great while going up, but everything that goes up must come down.”

Walt let out a big sigh. “I started my business on an up-cycle a few years ago, and success seemed so easy. You know how they say a rising tide lifts all ships. I was riding the tide!”

“Next time it will probably help to remember that the opposite is also true: A falling tide causes all ships to drop. Helen warned, “The higher and longer the up cycle is, the lower and longer the down-cycle will be.”

Letting out a deep breath, he sounded like a deflating balloon.

Helen nodded compassionately, and went on. “There are economic cycles, industrial cycles, and even individual business cycles. For instance, the United States seems to go through an economic recession cycle every eight to ten years.”

“Well it was good for me over the last few years, whatever it was,” Walt noted. “I thought everything was going great. Even when I saw the national economy start to soften, our local economy still seemed to be doing great.”

“Depending on where you live and what industries are near by, the local economy may lead the cycle, or can follow it. A lot of times state and local governments are a year or two behind the economic cycle because they only budget for the upcoming year, based on information that will be a year old by the time the budget is implemented. So if there is a lot of government spending in your area, it can prop up the local economy for a while. Then again, after much of the rest of the economy has recovered from a recession or such, it could be a year or so behind before they catch up.”

“That makes sense,” Walt agreed.

“Another very important factor to watch is the industry you are in. For instance, the high technology industry tends to go in cycles of 15 years or so. For a few years, whole sections of technology industries seem to stagnate. Then something will happen to some part of the technology industry and it begins to grow stratospherically. Many people predict the dawn of a new age and see no end in sight. In actuality, the industry can’t keep up with the hype, and people who have invested heavily expecting continued strong growth are suddenly in trouble as reality hits.”

Walt noted he had fallen into that trap before.

Helen kept on, “Just as importantly, companies operate in cycles, too. There are a lot of things that go on during the life cycle of a company, but I’ll keep it simple and highlight the Startup, Growth, Mature, and Renewal or Decline phases.

Walt opened to a fresh sheet of paper and started writing, while Helen explained, “The startup phase is where you need money to establish the company but have a limited amount coming in. The Growth phase of the business’s life cycle is when orders accelerate. In many cases, workers are spending most of their time and resources just filling orders that it pushes the infrastructure of the company to its limit.”

“I guess my company was in the ‘Growth’ part of my life cycle,” Walt observed. “It was kind of crazy, but it sure felt good.”

“Maybe, but businesses that are not been built strong enough can suffer terribly if they encounter stormy seas.”

Walt sighed. “I hate it when that happens.”

“If a company makes it to the Mature phase, it actually has a strong foundation and can take some hits without being too damaged. However, after a while, the company must either Renew itself or it will Decline, and may self-destruct.”

“I haven’t made it to the Mature stage yet, but I still need to “Renew” my business,” Walt acknowledged.

“Look for indicators of where your market is going, up or down. Read trade magazines and talk to people in the know. If you can get an early indication of where your market is going, you can be prepared. For instance, an indicator of the national economy could be the financial services industry, of which the stock market is part. When investors feel confident, they will start investing more, including in the stock market. Additional investments give larger companies confidence to spend more, which in turn helps other companies get more revenue and also spend more.”

“Well, I did pay attention to the news, trying to predict how long the good times would go on.”

“The news is only one source, and not even a particularly good one. Headlines are intended to play on people’s emotions, which in turn gets them to read more. Therefore, they tend to be either euphoric or predict doom and gloom. You need to be constantly reading everything and listening to many knowledgeable people if you are going to predict what is going to happen.”

“Okay, Helen. Let me get this straight. Each business, including mine, has a number of cycles that affect it, including the world economy, the local economy, the industry, and even its own internal ups and downs.”

“That’s right,” Helen answered.

“How can a business survive if the world is so unpredictable?” wondered Walt aloud.

Helen explained, “It’s really not as hard as it seems. Fortunately, when businesses plan for any one cycle, they are actually setting up a survival plan that covers many cycles. If you continually try to predict how the business environment will change over the next three months to a year, you will notice the changes that many people miss. Then, you will have contingency plans in place for when orders dry up.”

He thought about that for a few moments, then added, “And while I’ve got extra time on my hands due to lack or orders, I’d be looking out for signs that some people will be buying, and set up a means to target them.”

“Right on, Walt.”

“I think I understand your cycle theory, now, Helen. But I don’t see how it helps me now. My business is barely hanging on.”

“If nothing else, you can keep an eye on companies that are on opposite cycles. We talked about them a couple weeks ago. If you can identify some of those companies, you can try to market to them. Even when things are going well, you should be keeping that in mind as a way to identify customers when things start to peak, as you now know they will.

“Hmmmm,” Walt pondered. “If I had been paying attention, I would have seen that the economic slowdown that started months ago was going to affect my clients, I could have been preparing for a slowdown in orders, and looked for customers who were going to do well in the changing marketplace.”

“That is correct. Even if you could not find the right client mix, you would have known not make many purchases on credit unless they were absolutely necessary. And you would be in a much stronger position now.”

“So, if I understand this, when things were going particularly well, I should have started preparing for the worst?” Walt asked.

“Absolutely correct. Andy Grove, one of Intel’s founders says, ‘Only the paranoid survive.’ Warren Buffet uses a general rule, ‘Be fearful when others are greedy, and be greedy when others are fearful.’ In other words, if everyone says that times are good, prepare for the worst. If everyone says that times are terrible, prepare to ride the wave of prosperity.”

“Wait a second, Helen. I think you are telling me two things - to prepare for boom times, but at the same time to hunker down.”

“That’s right. But with the proper mindset and planning, you’ll be able to weather the future storms and be ready to sell like crazy when the environment is right.”

Walt thought a minute, then asked, “Do you, by any chance, have any cheat sheets I can use that will help me make better sense of all these business and economic cycles?”

Helen reached into her bag and pulled out a sheet of paper, replying “You are getting to know me so well.”

8 Points To Riding out the Cyclical Nature of Business

1. Determine where the national economy is going: Up, down or steady.

2. See how the local economy is being affected.

3. Find out if your particular industry is growing, stable, retracting.

4. Decide if you in the startup, growth, mature, renewal or decline phases of company.

5. Look for indicators of where things are going. Never use only one source, and try to not pay attention to the headlines at all.

6. Based on the above information, make an action plan for the next 3, 6 & 12 months.

7. Identify clients who are in opposite cycles so you can always have strong prospects in your pipeline.

8. Be a little paranoid, always keep some resources in reserve.

Helen had already ordered before Walt arrived. As he got settled, she remarked, “When I get a chance, I like to sit here and take a breath.”

“I know what you mean. Sometimes I find it very difficult to take even a few minutes to relax,” Walt disclosed. “Any time I can just sit back is something special these days.” They ruminated about the burden of running their own businesses while waiting for Walt’s coffee.

Then, Walt showed her the new descriptions and benefits of his products which he had used to identify several groups of prospective clients who would still use his products in this economy.

“Walt, these look great! You did a lot of good work here,” Helen said with sincerity and encouragement in her voice.

“But I still need to find a way to reach them. I know you aren’t big on marketing to large groups, so I will aim just at this smaller segment. I’m thinking of having some brochures designed and printed, buying a list of names, mail the brochures, then having a telemarketer follow up. What do you think?”

Helen hesitated before replying. “That is pretty ambitious. What kind of budget do you have?”

Walt smiled. “I knew you’d ask that question. Even though I don’t have much money, as soon as this economy improves, I want to be in a position to leapfrog back into the game. As the old saying goes, ‘The early bird gets the worm‘.”

Helen countered, “The early bird may get the first worm, but it also meets the dangers first, and could become the first casualty. There are plenty of worms out there. What happens if things don’t improve for quite a while, Walt?”

“You mean up to six months?” Walt asked hopefully. “I hope it doesn’t take that long.”

“It could be years,” Helen warned.

“There’s no way it could be years!”Walt protested. “I can’t afford to market that long, unless sales start pouring in.”

“No, you probably can’t afford a broad media campaign for very long,” Helen agreed.

“Then what do you suggest?” Walt asked.

“You’ve done a good job of identifying potential clients, but you haven’t tested whether your assumptions are accurate or not. That is a lot like shooting in the dark - using money instead of ammunition.”

“Helen, I’ve got a list of about 100 to 200 potential clients who need my products. Once I get in touch with them, the rest should be easy. How hard can it be?”

As the words were coming out of his mouth, Walt wished he could retract them. Sure enough, Helen immediately called him on it. “If it is so easy, why do larger companies have marketing departments and pay marketing consultants?”

Walt put his hands up in surrender. “I take it back. It may not be that easy.”

“So let me see your marketing plan,” Helen commanded.

Walt wrinkled his brow at the same time his mouth was forming a frown. The result was a wrinkled grimace. After a few moments his face relaxed slightly. When Helen didn’t fill in the silence that had enveloped them, he shook his head slightly, took a sip of his coffee, and finally sat back in his chair.

“This may be hard to believe, Helen, but I don’t have a marketing plan.”

After his face had shown such anguish, the reply was so calm, that Helen couldn’t help but laugh. “I’ll bet most small companies don’t have a marketing plan, Walt, and that is one of the reasons they suffer. Without a plan, much of your marketing efforts will be wasted. You will probably spend a lot of money without getting the results you need. How did you market in the past?”

“I knew some of my clients before I even started; they gave me referrals, and others I got through word of mouth. I don’t have a lot of experience marketing, period.”

“Then you have three major obstacles to overcome in addition to the normal marketing issues,” Helen explained. “First, you are trying to reach a new group of customers that you don’t have prior experience with. You don’t even know what their hot buttons are for sure. Second, you have very limited experience marketing, so you have a steep learning curve. In this case, that means ‘expensive.’ And third, the economic conditions we are facing probably mean that sales cycles are much longer than normal.”

Walt looked at her, “You don’t make it seem too easy, Helen.”

“It’s not easy, but with a clear, concise marketing plan, you can focus all of your energies toward one goal. Consider using a magnifying glass to set a twig on fire. You can do it on a sunny day, but only if you have focused the light of the sun on one spot. After it catches fire, you can try to make it bigger, but you need to ignite that twig first.”

“How do I ignite that twig?”

“Identify the first twig, in this case, the first potential client.”

“Only one? But I’ve already got it narrowed down to a couple hundred prospective clients. Why do I have to narrow it more?” Walt demanded.

“You’ve got a limited budget and limited resources. Don’t squander them trying to reach everyone on your list. Narrowing it down to one customer makes it readily apparent that your plan will work, or not. This is new to you. You will be making mistakes. Accept that. Then make inexpensive mistakes that you can afford and you’ll still have resources to use what you’ll have learned to effectively reach other groups.”

“Okay. Let’s assume I will begin with ABC, Inc.”

“Who will make the buying decision in that organization?”

He grimaced, and then decided to go to the top: “The CEO.”

“Your next step is to find a simple, effective message. You can look at the benefits you’ve drawn up over the last week and see which one of them will get your target to ask for more information.”

Walt was dutifully taking notes.

“Next, you can decide on how you will get your message to the prospective client. What is the best way to reach that customer?”

“As I mentioned earlier, I plan to have brochures printed and mailed, then follow up with a telephone call.”

“That is a form of traditional advertising. Don’t forget about the Internet or networking.”

Walt thought about it. “But I thought that traditional advertising was still the most effective?”

“Marketing technology is changing. Until a few years ago, the primary marketing method was traditional advertising. That includes direct mail, Yellow Pages, newspapers, magazines, radio and, the king, television. It is generally expensive, because lots of companies are competing for relatively few spots to reach their audience. The biggest budgets got the biggest bang.”

“Isn’t that the way it still is?”

“Yes and no. The biggest budgets may get more bang in traditional media, but the skyrocketing number of choices where buyers can get information has changed the playing field. Years ago there were three television stations available, now there are hundreds. There are now more magazines available than ever before. And the Internet has taken choice to a whole new level. As a result, marketing is in flux. Much of what we understood last year has changed this year. The Internet is still changing so rapidly, that businesses large and small are still catching up.

“I do have a web site, Helen. Maybe I should be doing Internet marketing instead.”

“Having a web site is important, but is just a beginning. To do Internet marketing, you need to draw people to your site. There are lots of ways to do that, some expensive, some cheap…”

“And some are free,” Walt added.

“Not really. No matter what you do, you’ll be spending time or money to develop any sort of campaign. There are lots of providers who will sell services to you, including web advertising, search engine optimization techniques, blogs, and much more. “

“How about social media? I’ve started to dabble in that.”

“Social Media is a broad, encompassing category that includes content, experiential media, mobile networks, and a wide realm of services. People are constantly looking for new ways to connect. In fact, when they are looking for solutions to problems or for things to buy, they frequently ask others electronically for advice. Like I said, the marketing landscape is in flux, and will be for years.”

“The Internet has gotten complicated and I’ll have to budget an adequate amount of time and money. Is there any way to market my product on a shoe string?”

“Actually there is. Although it is time-intensive, it is inexpensive money-wise. Yet it is probably the most effective way of selling yourself: Networking.”

Walt grimaced. “Have I told you I’m shy, and don’t like networking events?”

“Most people don’t, at least initially. Once you get used to it, you will be fine. Just remember that the key to true business networking is the establishment of a mutually beneficial relationship. The most important skill for effective business networking is listening; focusing on how you can help the person you are listening to rather than on how he or she can help you. Any idea how you can network with the CEO of ABC, Inc?”

“I wonder if I have any friends that know her?” thought Walt.

“Once you do connect, your job is to get those people to ask for more information on you and your products. How will they get that information? Will it be by calling you on the telephone, writing to you, going to your web site, or what?” she grilled him.

“I do a LOT of my research over the Internet these days, and I assume that is how most people would do it. I have a web site, as you know, but it needs some work.”

“Does it paint an accurate picture of you and your products?” she pushed. “Does it have testimonials from former clients? Is your best product highlighted?”

“The best way to make sure you are on the right track is to look at your marketing material through your clients’ eyes,” Helen coached. “Pretend you are a client in the buying process. What would you want to know about you and your product?”

“Okay, I can do that. I’ve already been looking at other people’s web sites to see what they’ve done.

“Good job. Don’t forget to have other people look at your website. It never hurts to have another set of eyes looking at it. I was talking to a marketer who specializes in branding. After her new website was up and running, someone mentioned that her brand logo was nowhere to be found. Boy, was she embarrassed.”

Walt retorted, “I’ll bet she was. I’ve made mistakes like that before and I’m sure I’ll make them again.”

“We all have, Walt. The secret, of course, is to keep away from costly mistakes. Fixing website mistakes is usually straightforward and simple. But correcting a mistake on 2,000 brochures can get expensive.”

“I see your point, Helen.”

“By the way, what is your budget?” was her next question.

“How much do I need?” was Walt’s reply.

“Unless you have almost unlimited funds, that is the wrong question. Of course, this is the way many entrepreneurs go about deciding how much to spend. They take a stab at what they think an effective program will be, and then they implement it, then they find out it costs much more than they estimated.”

“There’s a common saying in packing for vacations, ‘Pack early, then take out half the clothes but carry twice as much money.’ The same is true for marketing, cut your expectations in half, and expect to cost twice as much.”

“That doesn’t sound like I can do too much, then,” Walt complained. “I really need to get going.”

“I’d recommend you get going but start small, and measure, measure, measure.”

“Measure results?” Walt questioned.

Measure as much as you can. Measure how much it costs for each stage of the program. Measure how many people were reached and actually looked at the material. Measure the amount of business that was generated by any particular program.

“Okay.

That’s right. Here are some steps to setting up an effective marketing plan. Then she handed Walt a folded piece of paper. “Does the same time next week work?”

Walt told her, “Absolutely!”

After she left Yellow Wood, Walt unfolded the paper to see what she had written about marketing.

8 Tips for Effective Marketing in Tough Times

1. Design a coordinated marketing plan.

2. Narrow your target, initially to one client.

3. Settle on the simplest message to will attract attention.

4. Determine the outgoing medium - Traditional advertising, Internet, or Networking.

5. Set up a system for prospective clients to find out more about you and your products.

6. Look at everything through the eyes of your customers.

7. Use a budget - then assume it will cost twice as much and take twice as long as your budget.

8. Measure, measure, measure.

As Walt waited for Helen at Yellow Wood, he looked at the various antiques on the walls and thought of the people and skills it took to make them.

During times of economic upheaval, did those craftspeople suffer, or did they find a way to get past it until things stabilized again? Where did they get advice? Did they only have stories passed down generation to generation, or did they have mentors, like Helen, who showed them an easier way?

By the time Helen joined him, he had developed both an admiration for the efforts of the business people from previous generations and a jealousy of working in a less complicated time.

Once she had settled and received her tea, he started, “I called a few customers. Unfortunately, they still don’t need my products and what they do need I can’t offer with any confidence.”

“It is great that you made the calls, Walt. I know it is not the best news, but it is still information you can use. Do you think it is valid for all of your customers, or just a small subset?”

“I’m afraid a majority of my customers would be in the same boat - or should I say in the same raft floating down a river…”

“Either phrase probably would fit,” Helen speculated. “So, what are you planning to do now?”

“I’m hoping you have a secret that will give me some options.”

Helen assured him, “My old mentor did have a few words of wisdom. Are you ready to hear them?”

Walt opened his notepad and put his pen at the ready, “All set!”

——–

“If your old customers aren’t in a position to buy any more, you’ll have to get new customers,” Helen began.

Walt interrupted, “I thought you said I shouldn’t be looking for new customers?”

Helen corrected him, “I said you should try to sell to your old customers first. Getting new customers is expensive. Even so, you’ll constantly need some new customers to make up for the attrition of old ones.”

“I guess that is what you said,” Walt conceded. “Where can I find new clients?”

Helen held up her hand. “Before we do that, let’s take a look at exactly what they would be buying. You need to clearly define what it is you are selling.”

“I think what I offer is pretty clear,” Walt was confused.

“To whom? New people who don’t know you?”

Walt thought about that a moment, “Okay, let me try. I sell peace of mind. Once they people deal with me, they know they are working with the best. And I offer a money-back guarantee to prove it.”

“But, Walt, that could be used by most people to sell just about everything: Tires, brakes, a bicycle, plumbing, or architecture. It is not about what they are buying.

“But it is about me? Isn’t that important?” he asked.

“At some point it will be important, but not yet. Right now people want to know what you are selling. What do you sell? Food? Furniture? Cars?”

“You know I have quite a number of things. How much can I narrow it down and still show I offer many things?”

“Define your top one or two products, the ones you want to be known for. Once you have your top products, find a central theme that will separate you from your competition. Insurance agents offer similar products, but specialize to stand out from others selling similar products. They want to be known for consumer or commercial, home or auto or health. What is a difference your products make?”

Walt practiced until Helen felt he was on the right track.

“Okay, let’s move on a bit. What are the benefits people get from your products?”

Walt’s confident look returned, “I’ve got this one! People who work with me get the benefit of honest, reliable service.”

Helen’s pained look spoke volumes.

“What? What’s wrong with that,” Walt demanded.

“How do they use that honest, reliable service? Do they eat it, communicate with it, or what? At all times, and especially during trying times, people are only going to give you money if they get something out of it. What do they get?”

“But once I say what my product is, don’t they already know? If I sold used cars, they’d know I provide transportation.”

“Then why are there different automobile dealerships across the street from one other? Different people are looking for different benefits,” Helen emphasized. “There are a number of different reasons that people buy cars, particular cars. One group wants status and will buy the fanciest car they can in order to make a statement. Another set wants reliability so they won’t have to worry about maintenance issues.”

Walt nodded and added, “I had a cousin who just bought a car for her family. She was interested in getting a car with the best safety record. Then, come to think of it, I had a neighbor who was very concerned gas prices would go up. He wanted a car that got great gas mileage. But don’t most people want cars that have all those features: reliability, safety, good gas mileage and looks good?”

“Sure, they do. But generally one thing will stand out in a buyer’s mind. If all the benefits are listed, they will just become confused. For instance, if you were trying to sell a high-performance car and told people it also gets very high gas-mileage, you would confuse them since people do not associate high-performance with fuel efficiency.”

“I think I get it. If I claim too many benefits, people will think I am just bragging and probably won’t be able to deliver.”

“I couldn’t have put it better myself,” Helen agreed. “Now it’s time for the acid test. Would potential clients really be willing to spend money on the benefits you are claiming in this economy? Be brutal. Picture yourself in your client’s shoes without enough time or money available. Would you be willing to purchase based on what you’ve said your benefits are?”

“It’s easy to picture myself in that condition,” Walt wryly smiled. “I’m only going to spend money on things I really need, or will increase my revenue or decrease costs.”

“That’s probably right. If you aren’t coming up with strong enough benefits, dig deeper. Break your products apart to try to find more specific reasons for people to buy. Then, determine the top 1-2 factors that would make a difference to your prospective clients. On the first pass, most people generalize the benefits that they offer, so you need to dig deeper, get more specific, find new thing to brag about.”

“Give me an example.”

Helen continued, “Break each of the benefits down into individual components. If you think increasing revenue or decreasing costs is important, then you’d better find a way to make that one of your benefits. For instance, if you had a lawn maintenance service, what benefit could convince potential clients going through economic difficulties to hire you?”

Walt thought about it for a bit, then said, “I will help you keep your lawn looking good for a reasonable price.”

“I’m not sure that would convince me. But if you told me that letting my lawn turn into a field of dry hay would eventually cost me thousands of dollars, that would certainly get my attention.”

Once you’ve got that new list of benefits, you need to make a new, detailed list of people who may buy them. Who NEEDS those benefits enough to give you money?” Helen asked. “By name would be best. Otherwise, what are the characteristics they share?”

“Why so exact?”

“Many people generalize which prospective customers can use their products, so they end up with a huge list. Narrow it down to just a few people who can validate the assumptions you made about the benefits. If you were correct, you should get fairly positive responses when you contact them.”

“And if it is not too positive?” Walt asked rhetorically.

“You’ll get a cold shoulder,” was Helen’s reply. “You can start by looking at your current and past clients. What are their common characteristics? What sets them apart from other potential clients? What are their job titles? What geographic areas do the live and work in? What is it about your product that interests them?”

Walt was scribbling furiously.

Helen continued, “If you’re looking for people who are similar to the people you already do your best business with, find out where they meet, either professionally or socially. Go there and meet them.

“Perhaps they’re in the same industry. You already know the industry, so you have a pretty good shot at getting some clients.” Helen told him. “Once you’ve identified the characteristics that matter, think of whom you already know who match those characteristics.”

“Of course, the sale could be easier to prospective clients who are not hunkered down. They would be more open to listening to your benefits.”

Walt stopped writing at that. “I thought everyone was hunkered down these days. Am I wrong?”

Helen nodded, “Yes, you are wrong this time. There are lots of people who don’t feel desperate. Since many of your customers are in the same industry, and that industry is in trouble, you probably should be looking for clients in industries that are still doing well.”

“Still doing well?” Walt agreed. “There are industries doing well?”

“Sure. Let’s continue your example of the automobile industry,” Helen suggested. “When lots of people are buying new cars due to high salaries and competitive car prices, auto part stores and repair shops have lower sales volume. Rather than fix cars, people buy new ones. But when auto sales slump, people keep their cars longer. Therefore, auto parts and repair shops do quite well.

“So you are suggesting that when times are good for automobile dealers, frequently auto parts stores and repair shops suffer, and vice versa.”

Then it hit him: “If I can find some different types if customers, ones who are still doing well in this economy, I would have customers who can still buy my products.”

“Now I expect you to keep your eyes open for those clients who are on different cycles to be ready for downturns BEFORE they occur,” Helen mentored. “Look around. Most people are still spending money. Instead of eating a casserole at home, they will go to a moderately priced restaurant on occasion. They may not be spending extravagantly, but they are spending.”

“I have noticed that most of the restaurant parking lots seem full on Friday and Saturday nights,” Walt acknowledged.

“As you observe those who work in areas that are not as affected by the economy, try to find out what would interest them in your products. Don’t assume they are driven the same as the others. Make a concerted effort to find the fit between their needs and the benefits you can offer.”

“But how do I do that?” Walt queried.

“You need to ask.”

“Ask who?”

“Ask everybody. Ask your customers, your friends, your colleagues. Most of us don’t let others know we’re looking for new business. As a result, a huge resource is being ignored.”

Walt sat up, with a slightly confused look on his face. “What do you mean?”

Helen continued. “I mean, we all know to ask current customers for referrals and leads, right? But what about vendors?” Helen asked. “Who is closer to what’s going on in your industry than someone trying to sell to it? Have you talked with your vendors about what they’re noticing? What do they know about current buying patterns?”

“Hmm, I hadn’t considered suppliers, but it makes sense,” Walt agreed.

“And don’t stop there,” Helen said. “You belong to a couple of networking groups. Try them. And, the next time you talk with your friends, ask them how they’d describe a good customer for you.”

“Well, I usually don’t bring up ‘shop talk’ with my friends.”

“Your close friends want you to succeed,” Helen pointed out. “They know people, and they know people who know other people. It’s the ‘six degrees of separation’ idea, except that in the business world the next new customer is usually closer than that. It could be as close as one degree of separation. That is, the person you ask could very well know someone who needs your products.”

Walt finished writing, “ask everyone” on his paper, sat back and sipped from his now cold coffee. “Anything else?”

Helen nodded. “I want to make sure that you understand it is your responsibility to find new ways to solving your problems. Looking for new customers is a perfect opportunity for you to find new ways to do things. This is your business, your life. You need to be constantly looking for new ways to solve the issues that will constantly be coming up.”

“Oh, you mean ‘Think outside of the box’?” Walt asked.

“That’s right. All entrepreneurs need to go beyond what is familiar,” Helen continued. “Even during our conversation, you’ve probably eliminated several groups in your head based on previous assumptions. You’ve got to continually challenge those assumptions to make sure you are not eliminating potentially great customers.”

Helen checked her watch. “I need to move on. This has been a great conversation, Walt! In fact, it’s reminded me of a few things I need to do for myself. Same time next week?”

Walt nodded, a bit lost in thought of how he could think outside the box he’d made.

Helen got half way to the door, before she remembered something. She came back, fumbling through her bag. “I forgot to give you this little list I made. Here it is.”

With that, she was gone.

8 Ways to Find New Clients

1. Redefine your products for people who don’t know you.

2. Clearly specify the benefits customers will get after they buy your product.

3. Ensure the benefits are strong enough for people to open their pocket books in this economy? If not, dig deeper for more important benefits.

4. Describe customers willing to buy your products now.

5. Determine groups not adversely affected by this economy.

6. Separate those factors that would appeal to them.

7. Ask, ask, ask.

8. Think outside the box, beyond the comfortable and familiar

That evening, Walt took out the business plan he had written three years ago. Within a few minutes the memories of the hard work getting it written became clear. But as he read through it, he was surprised to see how different the reality of his business had been compared with what he expected at the time.

He really had learned a lot and adapted to what his clients wanted over the years. The business model he had been using for several years was very different from the business plan originally drafted.

And now, the business climate is so different from anything he had dealt with on his own before, he was ill-prepared to accurately forecast how his business needed to change to survive.

Before long, he had to the plan down. At that point it felt like he was in a small raft being tossed about by swift currents in a raging river without any oars for control. He was on the verge of being overturned into the cold, dark, muddy waters of reality.

The next day he ignored the plan on his desk, even “accidentally” dropping papers to hide it.

On the third day, he realized he had to work on it before his next meeting with Helen, so retrieved it from under the bills that still needed to be paid, opened it up, and started revising it.

Eventually, he had revised the plan to where the business had been before this economic mess began. At that point he was minimally confident enough to start planning for the future.

The evening before his meeting with Helen, the plan offered him some hope of survival. It finally felt like he had at least a small paddle as the river of life carried him toward an unknown destination at much to fast a clip.

—–

“Here is my new model, Helen,” he began. “I have to admit that I’m not convinced it still fits for this economy, but at least I can see some pros and cons to the different options you mentioned last week.”

“Good job, Walt.”

“Part of my problem is that my old clients, the easiest to reach, have cut back their spending. Is there something I am missing?”

Helen explained, “That is a major secret to surviving today’s conditions.”

Survival Secret 4 - Offer New Products to Customers

“What customers buy during times of uncertainty is very different from what they buy during good times, ” Helen explained. “When people feel confident, they buy all sorts of things for all sorts of reasons, some strong and some flimsy. But when they lose confidence and feel their standard of living is in danger, they immediately cut back discretionary spending and ‘hunker down’ until their confidence returns.

“Hunker down?”

“That is a slang term for getting down and stop doing anything that is not completely necessary for survival. People hunker down when major storms hit, riding it out until the weather clears. They also hunker down when economic storms hit and stop spending on anything unnecessary. Of course, they still need items such as food, water, clothing, housing and security.”

“My products are not on that list,” Walt pointed out. “So how could I reach people who are hunkered down?”

“You probably have to expand your product line to things they still need, Walt.”

“Expand my product line. Sell new things? But I’m not even selling too many of my old ones,” Walt grumbled while he waited to hear more gems of wisdom.

“That is true. But your old offerings were based on the previous economic conditions, when people were confident and companies are growing. With people hunkered down, they aren’t buying your old products, so your job is to find products that people are need to buy, and are willing to buy from you.”

“But if they are not buying what I’m selling now, what makes you think I can entice them to buy something different from me,” Walt wondered.

“This survival secret is offering products that people still want to buy, even when they are not completely secure financially,” Helen announced. “Since your current customers are the least expensive people to get to buy again, you can offer them products they still want to buy. What can you offer them that they need?”

Walt pondered that aloud, “What do my customers need? What can I provide?”

After a few minutes, Walt admitted he was stumped. “Maybe I’m not thinking deep enough, but I just can’t se where my products will help them survive.”

Helen nodded, and put forward an alternative, “You can also introduce new products. What can you offer your current customers that will help them in times like this?”

“Okay, I see what you mean. I just thought you wanted me to look at what I am doing now.”

“Your job is to find out what your customers are still willing to buy. You know them better than you know any other potential customers. So tell me, what do they need?” Helen demanded.

Walt tried, but just couldn’t think of anything.

“The easiest way to find out what those products are is by asking them,” Helen patiently explained.

“You mean I should call them up, admit that I want to find out what they need so I can provide it?”

“Something like that. Of course, if you are too direct, people may feel you are either pressuring them or you don’t know what you are talking about. I find it easier to have a pleasant conversation, no sales pressure, and keep my ears open. As people let their guard down, they are much more likely to tell you what is really bothering them,” Helen explained.

“Geez, Helen. I’m really not that good at keeping in touch, even with my brothers and sisters. I’m not sure I can talk to my customers, many of who aren’t much more than total strangers, never mind have long social-type conversations. I already know you are really, really good at it. But me, I’m just too new at it.”

She smiled at his admission. “Well, there is another way. Of course, you will be admitting some weakness in front of you clients, but it still works.”

“And what might that be?” Walt was grasping for anything that wouldn’t make him have long drawn out conversations with his clients.

“Admit that you need help. Ask them to help you,” Helen proposed.

“Ask my customers for help….” Walt mulled that one over. “Whay would they want to help me?”

“People love to help other people. They just can’t help it. And once they realize you are listening to them, they want to help you become successful, because it mean their own ideas are making a difference.”

“Well that is an interesting theory….” Walt was dubious.

“You can give it a try. When you are talking to people, work into the conversation that you are looking to improve your services and want their input. See how that works,” Helen suggested

“I’m sure they will give their opinion, good and bad. But I don’t see how it will get them to tell me what they need.”

Helen elaborated “If your customers feel you are actually listening to them, they will want to help. They will feel they are making a difference. Everyone wants to make a difference, and they know their own needs best. If you listen carefully and ask open ended questions, they will tell you a lot about their needs.”

“Of course, I’m not suggesting you come back to them a couple days later and try to sell them what you learn. If you do, they will feel you are taking advantage of them,” Helen cautioned. “Instead, let them know you are taking their advice and are offering their suggested products to other customers.”

“That makes sense, so far,” Walt conceded. “But that assumes that what one customer recommends is valid for all my other customers.”

“You need to judge how valid it is. In any case, you’ll still have better information than before.” After a short pause, she went on, “You have been dealing with some of these customers for several years. You have enough information that you can trust your own instincts, too.”

“My instincts haven’t been working too well lately,” Walt replied ruefully.

“Just because you haven’t experienced some things doesn’t mean you should discount the things you have experienced. Trust your gut with things. Here’s an exercise for you: Sit at home, or in the park, or wherever works best for you, and think about your clients. What are their needs? What do they need to buy? Write it down, in pencil if you’d like, then ask some of them. That way you get to test your assumptions. If you are right, they’ll think you are a genius.”

“And if I’m wrong, they’ll think I’m an idiot?” he countered.

“Probably not. They’ll think you are trying and will probably try to help you.”

“Do you think so?”

Helen smiled and relaxed her posture. “Maybe I’ve been lucky so far. But even when I’m wrong, my clients are impressed that I’m trying to foresee their needs. A lot of times they don’t have the answers but still give me information that gets me on the right track.”

Walt relaxed along with her, leaning back in the booth and taking a break from the notes he had been scribbling. After a sip of coffee, he picked up the notes and read through them. “So far, you’ve suggested that I ask my clients what they want. If I don’t get enough information, I should use my intuition about what they probably want, and test it by asking them. What do I do if they still don’t want to pay for what they need? I guess I could negotiate new prices for them…”

Helen cautioned, “Offering price concessions can easily backfire. I’m someone who believes you should set your price fairly and only change it if you find out it is unreasonable. I’ve seen too many people who have offered to lower their price and still lose the business. I have found there are much better ways to get past the price issue.”

Walt perked up at that. Many of his clients had suggested that lowering prices on products would be the best way for them to buy.

Helen saw his interest and suggested, “Maybe you can to expand your product line.”

Walt’s eyes widened a little. “Product line? I never thought of having a product line before.”

“You most certainly do,” Helen replied, “and that product line was for different times. Perhaps you can establish a product at a price point customers feel they can still afford.”

“I don’t see how I can provide the same level of service, or even the same quality product, that I have before at a lower price,” Walt countered.

She explained, “Fortunately, at a lower price point, people do not expect the same quality product or service. They are willing to trade them off for a price they consider more reasonable.”

“Are you sure?” Walt questioned

Helen smiled, understanding this is a new concept to people who have heard for years that quality is the most important aspect of continued sales. “Have you heard of the Tiffany Effect? Even during times of economic crisis, many people still want to buy jewelry, either for themselves or as gifts. When they go to a high end jewelry store, such as Tiffany’s, they will look at the expensive jewelry but buy the lower priced ones. If they are embarrassed to buy inexpensive jewelry at an expensive store, they may go to a department store to shop. The ones caught in the middle are the local high end jewelry stores, which may see their sales drop off dramatically. The secret local jewelers need, and you can use too, is to make sure their potential customers know they have a variety of products available. As long as customers come into the store, there is a high potential they will buy. And once they buy, not only will the owners be getting revenue, but the customers may come back again and again. And, of course, those same customers ar an excellent sources of referrals.”

After a pause to contemplate the concept, Walt started. “Let me get this straight. Since my customers are in some tough times, they probably won’t spend as much, but they still want to buy?”

“That’s right. You have some products they still want, even need, even during tough times. What can you do to produce the Tiffany Effect? What can you offer that will meet their immediate needs less expensively than a long-term solution?”

Walt pondered that suggestion for a couple minutes, “I’m going to have to think about that for a bit before can think of anything.”

Helen nodded, “Of course. There are other things you can do, too. For instance, can you offer them ways to update what they bought before.”

“What do you mean?”

“Over the last several years, you sold customers your products. Do those need some sort of update? Is there something you can do to make the products more useful to them? Even high quality knives need sharpening occasionally. Helen speculated, “There is probably something you can do that will ’sharpen’ your product and make it more useful for your customers.”

“Hmmm. I hadn’t thought of that before.”

As Walt pondered that possibility, Helen continued, “Years ago, my father used to have a business selling Addressograph machines. When times were good, lots of business came in. But when times got tough, he had to sell something different: preventative maintenance. Customers could not afford to go without their machines for long, and Addressograph machines were finicky. Inevitably, several customers would need maintenance or repairs on the same day, each in different cities, so one or two had to go days without being able to properly address mail. On those days, my dad could easily explain how regular preventative maintenance would keep the machines going longer. And, as a further benefit, those customers who were on a maintenance contract were put to the top of the list if things still went awry.”

“Good story, Helen, but some of my clients claim they can’t buy today because they don’t have cash on hand to pay. Unless they free up some money, they too strapped. Any suggestions for that?”

“That’s the next part of my father’s story,” Helen beamed.

“Oops, sorry. Please continue.” Walt was slightly embarrassed.

“There are lots of things to balance in a time like this. One of the biggest is cash-flow. That is true for everyone, including your clients. If you can, make it easy for your clients to say ‘yes’ to buying from you. There may be terms you can accept that will make it easy on your clients’ cash-flow. For instance, when money got a bit tighter, my father actually offered more terms than when times were good. Customers were able to get the service they needed with cash they could spare at the time. The cost would be the same over the long run, but he allowed them to space it out longer.”

Walt thought that over for a minute, but his face was holding a frown. “I’m afraid my clients are going to be out of business before they can pay me. So I’d be wasting my efforts and not be any further ahead.”

Helen agreed, “That’s a real possibility, and another reason to market to your current clients. You know them and have an idea if they are hunkering down or they are struggling to survive. In my father’s case, he would take enough money up front to make sure he didn’t lose money. He would service equipment on credit, so if the clients went under, he lost some of his time and gas money, but nothing out of his wallet. He wouldn’t sell equipment on credit during these times because he would have too much hanging out if customers went out of business. Because he continued to work with them during the rough times, he could tell from changes in attitude which companies were in trouble and which ones were just being conservative.”

“That is something I don’t get to feel when I’m working at my home office, especially if I’m not even talking to them.” Walt realized that some of his actions, or inactions, could be preventing him from making solid decisions about which clients were really in a position to buy.

“‘I’ve kept away from credit because of the risk.” Walt went on, a bit of doubt showing in his voice.

“Which makes sense. As long as people are willing to pay your prices up front, why take the chance. But if they’re not…” Helen stopped in mid-sentence.

“But if they’re not willing to pay up front, I can look at other payment practices, if it helps get their business,” Walt finished her sentence.

“It is not for everyone, that is for sure. But sometimes I think you may be missing an opportunity, Walt.”

“I know I must be missing lots of opportunities,” Walt retorted. I’m sure there are some right in front of me that I’m ignoring.”

“I’ll point out one right now,” Helen remarked. ” Take a look around, Walt. Do you see how many people are here in Yellow Wood? That is a sign that people are still spending some money. But remember when the owner mentioned that her revenue dropped quite a bit since the recession hit this area. The number of people was similar but customers have cut back spending, such as ordering drip coffee instead of cappuccinos.”

He knew his mentor was trying to make an important point, but all he could utter was, “I don’t think I get it.”

“People are willing to spend a little if it will help them feel good. People come here to work rather than at home because it makes them feel good. People are still buying birthday presents and going out to eat because they are willing to spend some money on things that make them feel better, to forget about the economy for a while.”

When Walt still looked a bit confused, she asked point blank, “Can you offer any inexpensive products that will help people feel like they are still successful, like they are still in the game?”

“Um….I never thought about something like that,” Walt said, taken aback that he should offer “feel-good” items in addition to his very practical portfolio of products.

Helen explained, “You know your customers. You know what they need. You need to now look and see if there are things you can offer that they don’t “need,” but would like to have in order to make themselves happy. Many people think practically about their products. There is also a charming side of people that is much more emotional, and impractical, that really helps them get through tough periods. If you can help them get through this period, they are very likely to reward you by spending more, hopefully much more, when their particular situation improves. So think about it.”

Looking at her watch, “Look at the time. Okay, I looked at what I had last night and put them together to make this little list. Consider this your homework, to be done before we meet again. Same time next week?”

Walt nodded in assent as he took the list. He was trying to read it over to make sure he understood what was on it while he still had a chance to ask questions, but when he looked up she was already striding purposefully out the door.

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8 Ways to Offer New Products to your customers

1. List those items/services that you KNOW your customers need?

2. Confirm your list by getting input from your customers.

3. What are the items/service you can offer that will meet some their immediate needs inexpensively?

4. What lower priced products that complement what they bought before, such as small add-ons, services, updates, support or training.

5. What can you offer that will increase your range of products, and add different price points

6. Can you offer maintenance agreements or repairs to what they already have?

7. Can you offer them terms, such as lease or payment terms. Remember to keep the risk down, don’t offer more than you can afford to absorb.

8. What are some “feel good” products you can offer?

When Walt arrived at Yellow Wood, Helen was already sitting in a booth with a cup of tea, talking to a woman.

“Walt, I’d like you to meet Lauren, the owner here.”

Walt shook her hand and said, “At least you seem to be doing great in this economy.”

Lauren looked around, as if she hadn’t noticed all the people sitting at the tables, working on laptops or chatting. Then she murmured, “Looks can be deceiving. We have had a significant drop in revenue over the last few month. Even though the number of orders had been fairly steady, the amount of each order is only a fraction of what it was before. People who used to order dessert are going without it now. Others are ordering drip coffee instead of cappuccinos.”

Walt was taken aback. “Wow. I guess I was just looking at the obvious signs. Will you be able to survive.”

Lauren gave him a wry smile, “Yes, we’ll get by for now. We’re not paying much rent, and we’ve found other ways to cut costs. But there will be no Hawaiian vacation or anything like that for a while.”

Then she turned to his mentor and said, “Thanks again , Helen. I know I can always get solid advice from you.” Then, with a wave to Walt, she was off.

After Walt ordered some coffee and got settled, Helen asked, “How did your week go, Walt?”

“The good news is that I made few phone calls, and nobody hung up on me.”

Helen’s face lit up while he talked. “You talked to your old clients? Many owners dread doing that, so find any excuse they can to keep from making the call.”

Walt admitted, “That was me, too. But you convinced me of the importance of keeping my current customers. The bad news is that nobody seems to be ready to buy anything right now. I got the same story again and again: They are afraid to make ANY purchases that are not absolutely necessary until they are sure the economy is on the mend.”

Walt’s voice took on a worried tone as he relayed this information. “Several of them told me they don’t have any idea when they will be ready to buy. This quarter? Next quarter? Next year? At this point, I’m not sure I even have a viable business,” he conceded.

Helen nodded, “Then now is a good time to discuss the Survival Secret Number Three:

Survival Secret 3 - Revise Your Business Model

“If you can’t sell products to your current and past clients,” Helen began. “Take a close look at your business model. Is it still valid?”

“My business model? What do you mean by ‘model’?” Walt asked.

“Your business model is the method of doing business, how you add value to customers and create revenue,” Helen explained. “It’s the foundation on which you run your business.”

“Do you mean like a building foundation, what a house sits on?”

“Absolutely correct. If your house is on a solid foundation, it can last for many, many years. If the foundation is weak, some strong winds or flooding can quickly destroy a solid house.”

Walt pondered that analogy. “So if we compare what is going on in the economy around here, that is like strong winds and rains. Although the conditions are only temporary, if my house, my company, is built on a crappy foundation, it could fall apart quickly under the right conditions.”

Going on, he muttered, “I’ve built my company on a crappy foundation.”

Helen peered over the top of her glasses at him, “Don’t jump to conclusions. Let’s see if your business model is strong enough to get through this storm, or whether it needs to be repaired.”

“Or whether I need to completely abandon it and start all over,” he finished for her.

“One thing at a time, Walt. Don’t assume the ship is sinking just because you see a little water below the deck.”

She paused the conversation by taking a sip of her tea. When she felt he was back on the same wavelength she went on, “You started with the idea that certain people would buy your product, that you could deliver that product and you would make money doing it. Is that right?”

“I guess that was my thinking in a nutshell,” Walt replied. “I spent more time on it than that, of course, and even developed a business plan, although I haven’t really looked at it in three years. After I wrote it, I started delivering, and I’ve been too busy to update it.”

“At least you have a business plan,” Helen replied. “Many, perhaps even most, small businesses are started without a written plan at all. Since you have one, it will make this Survival Secret easier to implement. We can use your business plan as the start of the business model you are using now. Take out your plan, dust it off, and look it over.

“It probably has dust on it, all right,” was his response.

“You should be looking at your business model at least every six months or so. That way, you will see flaws in your model or the underlying assumptions before you enter dangerous conditions.”

After another pause, she continued, “It’s a lot like riding a raft down a river with your family.”

That metaphor took Walt by surprise. He mulled it over, then smiled at some memories. “I did go rafting with my family a couple of years ago. And I’m sure ready to do something fun again!”

Helen pointed out, “And it would be fun, if nothing out of the ordinary happened. But what if things aren’t as calm as you thought. What if you did not notice some potential dangers when planning the trip?”

“I was very well prepared that trip, thank you very much,” Walt defended. “I’d checked the maps, read guidebooks, and talked to people who had done it before.”

“I’m sure you did, Walt. But unexpected things still happen. What if a dam had been built since the guidebooks were published. Or perhaps, over the winter a rockslide may have caused rapids to form where it had been calm before. Maybe in the last couple days a rainstorm flooded a tributary, and major whirlpool has developed where enters the river.”

“Well, of course I can’t plan for everything,” Walt argued. “If I didn’t take any chances, I’d never get out of the house.”

“But you were not very prepared for the potential dangers in the business environment.”

“How could I have been? They caught me completely by surprise.”

“Let’s use the rafting example. Your family’s life is in your hands. Do you just go drifting down the river, falling asleep with the gentle splashing of the waves? Or, are you constantly looking ahead for danger?”

“A little of both I guess. If I don’t see any danger ahead, I tend to relax.”

Helen replied, “That’s good. You can relax while the foreseeable future is calm. But every time you go around a bend of that river, you should be looking for conditions that are different than you expected. If you are not being proactive, you won’t see the tell tale signs of danger, ones that should be obvious a mile away.”

“And if I am looking, I can take action early,” Walt was catching on. “I can get to the side of the river before getting to those dangerous conditions. But what if I still have to continue down the river, to get to my destination.”

“You can do it one of two ways: Just keep going to stay on schedule, which could get you tossed around in the rapids, your equipment lost, your leg broken, or worse. Alternatively, keeping your eyes open for changing conditions, you can adjust your schedule and get prepared. Moving to the bank of the river, you can wait and observe. Maybe you can scout out the best route between the rocks. Maybe you could ask others what they know of the best route. You might even find a road nearby which goes around the rapids, so you can finish your leisurely journey. The important point is that you will be entering the dangerous areas much more prepared than if you are caught by surprise.”

“I see what you mean, but I’m not sure I get the connection.”

“In the Midwest, people learn to read the weather. They can tell from the sky whether a tornado is likely to be nearby. In Hawaii, they know how to tell if a tsunami is coming. This is how they survive terrible conditions. In business, you need to be just as vigilant, all the time.”

“And a periodic review of my business model can do that?”

“You betcha! When you put your business plan together, three years ago, you made a lot of assumptions. Now you’ve got working knowledge, so you can replace many of those assumptions with facts, based on your experience.”

“I can do that,” Walt allowed. “I can update it based on all I’ve learned. But the economy has changed a lot since then, so how valid could my revised model be?”

Helen instructed, “Update it with what you know about doing business in this economy. You will be using some facts, then making more assumptions about what you think will be happening in the next couple of months.”

“Ugh. I hate making too many assumptions. You know what they say when you assume,” Walt joked.

“Yes, I do,” Helen said, smiling. “But you need to make assumptions to have some idea what the future will be like. Don’t be overly optimistic, but make assumptions. Of course, you will want to validate those assumptions as soon as you can. At that point, you can update your model again and keep moving forward.”

“What about people who never wrote a business plan, Helen?”

“Have you heard the one: ‘Failing to plan’ is a close cousin to ‘planning to fail.’ It’s like taking a raft down a river without even looking at a good map.”

“But I know a number of successful business owners who claim they’ve never had a business plan,” Walt challenged.

“Some people are very good at observing events and seeing change before most people, even if they aren’t good at writing plans. Others are lucky, for a while. But the world is constantly changing, and luck can change without notice. So I always recommend trying to figure out what will happen in the future, and finding ways to take advantage of it. Even if it doesn’t occur exactly as you expect, the process will pay off.”

“But my plan obviously had some major defects in it, Helen, or I wouldn’t be in the predicament. It may not be worth the time to redo my plan, my business model. Maybe I should just spend more on marketing and find new clients.”

She nodded, and started, “That could be flushing away good money in areas that won’t pay off. Take time for planning. Don’t take my word for it. How about President Dwight Eisenhower. When he was the supreme allied commander in Europe during World War 2, General Dwight Eisenhower? He is famous for saying, ‘In preparing for battle I have always found that plans are useless, but planning is indispensable.’ In other words, once the battle begins, many of the assumptions the plans are based on will be wrong. However, During the planning process, participants are forced to think about many different scenarios, they are able to make excellent decisions when the situation changes.”

“Okay, okay, okay,” Walt conceded with a smile. “I was planning to do it anyway. I just wanted to hear what else you had to say. So once I update my business plan, what else to I have to do to validate it?” was Walt’s next question.

“Validating your business model is bringing together your knowledge, your products, your customers and their buying habits, and the niche of the economy you have chosen as your market. Putting them all together, you need to ask the question, do they still make sense today?”

“What are my choices if the model doesn’t make sense today?”

Looking straight at him, Helen explained, “Then make some changes. If your current clients are not buying what you are selling, then you can determine what they will buy. Remember, the easiest clients to sell to are people who have already bought from you. The next option is to find new clients for your current offering of products. If that doesn’t work, then you need to find new products AND new clients. The rest of the model is how to actually accomplish all this and make money.

“But if they aren’t ready to buy what I sell now, what makes you think they will buy anything else,” Walt questioned. “Many of the ones I’ve talked to seem to have tightened their wallets so much, they won’t be able to buy for quite a while.”

“Even in times of recession, people and companies still need to buy things to be productive. If your old products are not longer in demand, what products are?”

“Well…..,” Walt started very slowly.

After a couple moments of silence, Helen continued, “Let’s take a look at what your clients needs. Write a few things down: What do your clients need now, whether you sell it or not.”

Walt thought of two key clients, picturing them in his mind. Then he thought of what they did, what their lives were like, and what products they probably still needed to keep going.

Watching him jot down a couple things, she now got him to focus a little more. “Now, write down a couple things they probably can use, and that you provide.”

Making a mental list of his company’s inventory, in a few minutes he was able to list a few more items on his paper.

“I guess you are right,” Walt admitted. “There still are things they probably will need, and I can supply them.”

“Good. Now that you’ve got a list, remember these are people who don’t know you. They may already have other vendors or have some other reason for not buying from you.”

“That’s true,” Walt said confidently. “I guess I’ll have to be a better salesman than ever before.”

“If that works, great. If not, then locate another road to go down: find new customers who still need your products, even in this economy.”

Walt noted that she did not share his enthusiasm about his sales ability, but he let that pass. “That sounds like a great idea, Helen. I’m an expert and have great products. Spending more on marketing could really get the word out.”

Helen’s tilted her head at that statement and asked, “Just who will you market to? What are the names of the people you are targeting.”

“I don’t know their names yet, of course. I’m just starting.”

“How will you get their names?”

“Let’s see now, I’ll just….” After a pause, Walt asserted, “I guess I’ll have to do some sort of mass marketing, targeting anyone that might be interested.”

“That sounds expensive.” Helen kept the heat on, “How are you going to pay for that.”

Walt’s face fell as the reality of the issue hit him, again. “It may not be such a great idea after all.”

“That’s why I want you to concentrate on old customers first. New customers are expensive to reach. They may be well worth it, especially if you can identify exactly who is willing to buy your product now. But mass marketing is a huge gamble at this point.”

“Then what is a good way to find new customers?”

Helen changed the subject. “Let’s put that aside for the moment. I want to go through a third option you should consider, as long as you are revisiting your business model. This one is the riskiest: Selling new products to new clients.”

“Well, I was thinking that this may be the time to start something new. I’ve got a couple of ideas that should be great”

Helen cocked an eyebrow at that comment. “Let’s see now, you are an expert in what you do, you’ve got clients that like you and your products, and you think it will be easier to sell something different to people who have never heard about you?”

Walt shook his head, as if shaking out cobwebs. “You have an interesting way of getting your point across, you know. I meant I was thinking of exploring a couple new things.”

Helen nodded. “I’ve known my share of people who made that decision, based on the same amount of information. These same people were astounded that they were out of business before too long, even in a good economy,” Helen explained.

Let’s look at the basics of your business model and the four different directions you can go. First, you can continue selling your products to the same customers. That has the highest chance of success. In that case, you only need to tweak your business model for today’s realities.”

“Okay, Option A.” Walt was writing it down.

“A bit more risky is trying to sell new products to your current customers. They know you but may not want to buy those products from you.”

“Option B,” Walt said, scribbling notes. “What is option C?”

“You already know your products well, and what customers want with them. So you can use that reputation and try to find new customers. New customers can be expensive to recruit, so the main risk is in money spent trying to reach them.”

“Got it.” Glancing up as he continued to write, “And next?”

“Most risky of all is selling new products to new clients.”

“If that’s the most risky, why would I even consider it?” Walt demanded.

“Because to possible rewards might make the risk well worth it. For instance, ten to twenty years ago, if you were selling desks to offices that had a lot of staff, you could make a pretty good living. Each person working in an office needed some sort of desk, from executive to stenographer.

“As people reduced spending on desks due to economic changes, you could still go to the same clients who trusted you before and offer discounts and other incentives to continue to getting their business. ”

Walt interjected, “Like wooing your clients, huh?”

“That’s right. A second choice would be to go to the same customers and convince them to buy cubicles, a new technology, to save space and money. They would certainly listen to you because they know and trust you.”

“Selling new products to the same customers,” nodded Walt.

“A third option is to branch out to smaller offices. As an expert with years in the desk industry, you could take a quick look at the layout and tell them exactly what they could use that would be efficient and cost effective.”

“Selling same products to new customers,” Walt observed.

“The fourth, and riskiest option would be to try to sell cubicles to small offices. While possible to convince them to change to cubicles, the cost efficiencies would not be there and it would be a very rough sell.”

“That’s for sure. I’d be out of business pretty soon if I tried to sell those new products to new customers. Not much reward in that story,” Walt concluded.

Helen shook her head, “Unless you saw that the world was downsizing. If you saw small businesses moving rapidly to computers, you could provide computer desks with printer shelves, allowing small businesses to downsize and save a lot of money on office rent. Then you could do very well, indeed.”

“Okay, I see your point. Only if I see a great opportunity should I try to sell new products to new clients.”

“That’s right. And that is the purpose of reexamining your business model: Does it still make sense?”

“Yes,” he said, “And only change what needs to be changed.”

“Just keep in mind the main object of looking at your business model is NOT to make changes. The main reason is to simply take a fresh look at your business.”

“But if I see new opportunities?”

“You don’t want to jump at new opportunities. New opportunities are usually much harder to than they initially appear. What you want to do is take a slow, hard look at how you can make your business model better. Keep your eyes open, but your reactions slow.”

“Walt, let’s meet at the same time next week. I’ve got to run to my other appointment now, but here are steps I use to look at my business model on a regular basis,” and Helen handed him a sheet of paper as she picked up her bag to leave.

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8 Steps to Validate Your Business Model

1. Accurately assess your current business. What are you selling? Who is buying. Does it still make sense in today’s conditions?

2. What is working? (This step is very important)

3. What is not working? Would minor changes fix these issues?

4. Will your customers continue to buy your products for the foreseeable future? If not, what would they buy?

5. Are there other high potential customers who need your products? Are they relatively easy to reach, like low hanging fruit?

6. Talk to your customers. Confirm your answers to the above questions.

7. Are there new opportunities you should be taking advantage of? List as many as you can. Then analyze how easy it would be to get new products to new customers.

8. Make a decision of how your business should operate moving forward from here,then make it work!

Walt was seated in Yellow Wood before Helen arrived, with financial papers at the ready.

Once she sat down and ordered, Walt explained, “My situation is not as bad as I feared. I can cut a fair amount of expenses from my business, but not enough to last until this economy strengthens, I’m afraid. So, on Saturday, I just came out and told my family that business was way down and we needed to cut our family budget. Our standard of living was going to have to change. I expected tears or panic, but nobody was particularly surprised, which surprised me. Since we could still stay in the house and continue with most of the things that we had before, they accepted it and moved on - in less than half an hour. After all my worrying, it was pretty anti-climactic,” Walt admitted.

Helen asked, “How do you feel this week, compared to last week?”

“Last week, I was in a panic. This week I’m ready to roll up my sleeves and get to work.”

“Then let’s do it!” Helen agreed.

Survival Secret 2 - Hang On To Your Customers

Helen began, “Now that you have tackled your costs, let’s look at you revenue. What are you doing to protect your revenue?”

“Well, I am doing every thing I can to stay in business. But what do you mean by protect my revenue?” Walt asked, a bit confused.

Helen explained, “By protect, I mean hanging on to as many of your current customers as you possibly can. What are you doing to encourage them to start buying from you again.”

“The problem is that most of my clients are not calling,” Walt explained. “I need to get out there more and get new customers. I’m not sure what the most cost-effective way to do that would be.”

“Do you know that it costs about five times as much to get a new customer as it does to keep an old one.” Helen paused to let that sink in. “Ignoring old clients means higher costs to get new clients for probably less, revenue, which equates to a smaller profit. Can you afford that now?”

“Of course not,” Walt replied. Then under his breath, “That’s why I need to get advice from you!” Afraid he had said it too loud, he apologized, “I’m sorry, Helen, you just threw me a curve here, and I’m a little jumpy.”

Helen just looked at him, so Walt continued, “Okay, I’m open to what you have to say.”

Helen tried again. “Getting new customers takes a lot of time or money, or both. You are in a pretty severe cash flow problem, from what you are saying, so the sooner and cheaper you get some revenue in, the sooner you can get past this problem. Your past and present customers already know you, have done business with you, and may be open to doing business now, if you offer them the right value. Tell me what you know about them,” she directed.

“I know that they are not buying from me. In fact, most of them are not buying from other people either. They’ve been hit hard by this change in the economy. That’s why I need to find new customers - and I need to get them cheaply.”

Helen reminded him, “Keep in mind that the same economic conditions that are affecting your current customers are also affecting the new customers you are trying to reach. That makes it even more difficult, and more expensive, to convince new people to buy from you.”

“I forgot about that,” Walt admitted.

“Then let’s focus on people who have already purchased from you,” the experienced entrepreneur said as she steered the conversation back.

“How do you keep in touch with them?”

“I really haven’t,” Walt replied sheepishly. “Until recently, I’ve been so busy that I haven’t had time to touch base with them. I’m waiting for them to call me.”

The look he got said it all. “Of course, I could call them,” Walt allowed, sheepishly. “I’m sure you can explain to me how much better my business would be if I had taken that time. But what can I do now?”

“Woo them,” was Helen’s reply

“Woo them?” Walt was taken aback. “Woo them? Like asking them out on a date?”

“More like treating them very, very special. Like they are the most important customers in the world because, to you, they probably are. These are the people who can keep your business going until the economy improves. These are the people who can send referrals your way,” Helen explained. “But they can only help you if they remember you. So, you need to contact them.”

“But what should I say when I haven’t talked to them in months?”

Helen answered the question with a question, “What do you have for a customer relationship management system?”

“A what?”

“You know, some sort of system you use to keep track of the last time you contacted a client, their birthdays, what products they bought?”

“I’ve got it in my head…” Walt replied hopefully.

“You need a system. Professional sales people call it a Contact Relationship Management system, or CRM for short. Many of the computer calendars and address books have adequate features built in. Up until a few years ago, I still used a paper and pen for my CRM. Once my list got too big, I had to go electronic. Whatever you choose, find something to help you maintain a relationship with you customers.”

“I guess the address book on my computer will do for now. So I guess I can get started and call customers. But the ones I haven’t talked to in a long time…?”

“I assume you have friends and family members that you can’t keep up with regularly. How do you start conversations them after a long time?”

“I feel guilty, of course, but then they sometimes feel guilty, too. So in a minute or two we get past the awkwardness. But what about business associates,” Walt wondered.

“If you treat customers like friends, you’ll be okay,” Helen assured him. “Ask them how they are doing. People love to talk about themselves, as long as the listener is genuinely interested in listening. In other words, this is not a sales call. This is a call to rekindle a relationship with very important people. If you make it about yourself, they probably don’t have time for it. If you make it about them, they will find a way to make time. If not now, then soon.”

“Are you sure they will want to hear from me?”

Helen explained, “As long as you have not alienated them somehow, most people would be delighted to hear from you. The hard part is just picking up the phone.”

“True. But even if I do, how will asking about their lives get me more business?”

“They know you are not just calling to hear about their lives, they know you need business, too.”

“Sometimes people act like I am a bill collector or something. What do I do then?” he inquired.

“People are very busy, and when they haven’t heard from you in a long time, they are suspicious that you are only interested in their check book. So you need to put them at ease,” Helen explained

“But I always feel like I am bothering people when I call them,” was Walt’s next objection.

“Then make sure you are not bothering them. Ask them if now is a convenient time to talk. If not, find a more convenient time. If they agree to a time, chances are they will talk to you at that time.”

“But even then, I’m afraid I will be bothering them. I know I hate to talk to sales people, unless I really need something,” he countered.

“Most sales people want to discuss themselves and their products, and you don’t even enter into their equation, except to give them money. If you are interested in your customers, how they are doing and how the economy is affecting their business, you will find they are quite open. Heck, you can even ask how their last vacation went. Just keep the conversation focused on them. People love to talk about themselves.”

“I have trouble doing that small talk stuff. I tend to want to get straight to the point,” Walt disclosed.

Helen nodded. “You can, of course, take the dangerous path and start talking about your products.”

“Dangerous? Why is that dangerous?” Walt’s queried.

“It’s dangerous because they find out you are only looking to make a sale. In that case, they will frequently write you off. For instance, if you say you are really calling to let them know about a special you are running, they can easily say they don’t need any and end the conversation. You will have squandered a very important opportunity to have them think of you as more than a sales person or a vendor.”

“I see your point,” Walt acknowledged. “I’m just not used to having to be personal with business people.”

“Maybe, but really taking an interest in your clients is very important for business owners,” Helen reiterated. “You depend on these people, and need them to like you. Talk about things that are important to them. You may not want to be best friends with all your customers, but you’ve got to be some sort of friend to most of them. Then they want to do business with you. They will tell you ahead of times what opportunities will be coming.”

“I guess you are right,” Walt agreed. “But when do I discuss my products?”

“Not on the first sales call. If you don’t want to talk about non-work items, you could ask them if any issues came up with your product since the last time you talked. Then see what you can do to resolve them. Even spending some time on the telephone doing some troubleshooting will get your foot in the door for some repeat business and some referrals.” Helen assured him.

“But I need to make a series of calls?” Walt asked, knowing the answer.

“That’s right. The secret is to get customers willing or want to take your calls, even if they aren’t going to buy,” Helen confirmed. “The more you are on their mind, the more likely they will think of you when situations come up in which your services would be helpful. Sometimes those services are for others, and you can get referrals. Once you have a referral, you frequently get the sale.”

“How do I get more referrals, Helen?”

“How about Referral Program? You could give the person giving you the referral some recognition, such as cash, discounts, points, or whatever.”

“But won’t people be insulted if I offer them money in return for referring me to their friends?”

“Again, you need to be subtle. A lot of people are willing to give your name out, if the subject comes up. What you need is to get people to give you names of people they know who probably need your product, and let you use their name. Some are more willing if they get something in return. Others, however, do not want a reward for themselves, but prefer their referral got a discount. Keep that in mind that different rewards motivated different people.”

“Okay, I’ll be subtle. What else, Helen?”

“Write up a script for your calls. I have to admit that I don’t always think that fast on my feet. If I have a script for the phone call, then I am not phased if the answer machine comes on, or if someone else answers the phone, or if they sound grouchy when they answer.”

“Does it get any easier?”

Helen smiled. “Yes, it gets easier the more I do it. But I still like to keep my scripts handy. When something gets me off track, I refer to my script to get me back. In your case, you’ll need a series of scripts because you’ll use for the first call, another for the second, third and so forth.”

“But don’t scripts sound mechanical and forced,” Walt asked.

“Not if you practice them. Write one then practice it. If it doesn’t sound like the natural you, change it until it does. Then practice, practice, practice. The more you practice, the more natural it sounds. It may be be counterintuitive, but the more you practice the more sincere and spontaneous you will sound.”

“I should have taken theater in high school,” Walt muttered. “Okay, I’ve got it: Practice until I sound sincere. What else can I do, Helen?”

“After you’ve reestablished a relationship with your customers, you can go over the items in your checklist.”

That puzzled Walt. “Checklist? What checklist?”

“The one you are going to make, of course,” Helen explained. “Make a checklist to further enhance your relationship, as well as understanding your clients’ needs. This will help not only with the clients you are talking to at the time, but the rest of your clients, and new prospective clients. Here’s one I’ve used in the past when touching base with customers,” Helen said as she handed him a folded sheet of paper. “I’ve got to run. This block of time works well for me, Walt, if you want to meet here next week.”

“I’ve already got it on my calendar, Helen. I was hoping it would work for you.”

As she walked away, Walt opened the envelope and saw her checklist.

8 Ways to Reconnect With Customers

1. Create a system to keep in contact with customers on a regular basis. This is your “customer relationship management” system, or CRM as it is known in the sales world. It can be formal, with specialized software, or it can be simple.

2. Develop a script, then pick up the phone and call. Include an intro about why you are calling. “I personally wanted to call because…” Sound successful, and people will want to work with you.

3. Get personal - make it about them. “How is your business doing?” or “How can we help grow your business?” are examples of questions that show you are interested in their issues, not just your own.

4. Discover what their needs are today, and show how your product will help meet some of their needs After they realize you can meet their needs, you can ask who your competitors are, in their mind.

5. Find out how your business could change to help them. Ask questions like: “What would you like us to do differently?”

6. Find out how your product has been working for them. “How can we improve?” “What is the best thing I sell?” “Have you thought about changing or updating your products?”

7. Offer a Referral Reward Program. Make it in both directions, one that gives referrals to the customers, too.

8. Set up a repeat buyer program, such as a reduced price for two or more things purchased at the same time,and Reward Cards for points and discounts or Senior Citizen Appreciation Days for retail.
?

“Get back to that pile of papers on your kitchen table and make a list of all the places where you have been spending money,” Helen directed. “Look at both your business and personal expenses. Even making a concise list of your monthly expenditures is a major start to taking back control.”

“I don’t think that is going to help,” Walt said, sounding defeated.

“It’s the first step,” Helen explained. “You are going to have to cut your expenses drastically, if things are as bad as you say. So you might as well see what those expenses are. Go through your papers with a fine tooth comb and identify every expense you can.”

“But I’m too far over my head,” Walt tried.

But Helen came back with, “How much over your head are you? What are your average monthly expenses on business supplies?”

“They vary a lot, month to month, so I’m not sure,” Walt admitted.

“Then, how much do you spend on lattes and other minor expenses that aren’t an absolute requirement of your business during the month?”

Walt had to acknowledge that he wasn’t keeping close tabs on his expenses.

“And how much can your family cut back before they are seriously impacted?” Helen went on.

“I’m not really sure how much we spend on things.”

“My point exactly,” Helen gestured with her hands. “As a small business owner, you are responsible for making the decisions that can keep the company alive, or kill it. You don’t let other people make most of your business decisions, do you?”

“No. I want to make my own decisions.”

“Then take control of your expenses, too,” Helen commanded. “And keep your family in the loop, too.”

Walt swallowed hard at that, then said, “I guess you are right. I’ve been afraid to tell my family how bad things are right now. But keeping it to myself is eating me up inside.”

“I am not surprised. As you discuss it, be prepared for some shocked reactions on your family’s part. After all, while you have had weeks to digest it, they may be taken completely unaware. It will take away some control that they thought they had. But after a little bit, they will be ready to help make the situation better, too, ” Helen said confidently.

“You’re right,” Walt said, a bit morosely. “But what if I can’t find enough expenses to cut. What then? I suppose I have to declare bankruptcy…”

“Aren’t you being a bit overdramatic?” Helen pointed out. “After all, last Wednesday was the first time you even realized you were in trouble. At this point you don’t even know how heavy a burden you have to carry. Some clients are still writing you checks. And you may have a lot of minor expenses you can cut, ones you didn’t even notice before. Having a latte or two during the day seems pretty minor, but what would happen if you brewed some coffee at home, put it in a thermos, and used that instead. Would that be a huge tradeoff to save ten or twenty dollars every week?”

“No, it wouldn’t be too bad. I could certainly survive on that,” Walt agreed. “But it reminds me of the way my parents and grandparents scrimped on so many things. They worked but had to go without anything extra. They had to cut coupons and shop the sales and do anything else to bring us up. But I want my children to have it easier, not to have suffer.”

“That sounds pretty noble,” Helen agreed. “But you still seem to have come out all right, in spite of your parents bringing you up without too many luxuries. You have been very successful in your career. You even started a business that did great for three years. Cutting coupons didn’t seem to traumatize you when you were growing up. In fact, it may have been one of the unknown secrets to your personal success.”

“Cutting coupons was not a secret to my success,” Walt argued.

“Then you may have just been lucky,” Helen countered.

Walt’s expression showed his surprise. Obviously he hadn’t considered that before.

“This downturn we are going through now is very, very normal,” Helen said, turning the conversation to current economic conditions.

“Normal! I’ve never seen anything this bad before,” Walt snorted.

“In that case, you must have been on a salary in past downturns that affected your industry,” Helen guessed. “And you didn’t lose your job because of the economy.”

“I did have a pretty secure job in the last couple of market dips. And I wish I was still there now,” Walt said sadly.

“To those of us who had a business, what you call a market dip seemed like an impassable abyss. Each was very dangerous for us. We prayed that our business could make it through to the next economy upturn. And we know plenty of businesses that could not hold on any more - they just plummeted into the abyss…”

“I … I guess I never paid attention,” he answered, feeling a bit guilty.

“Those of us who survived saw a pattern. A few years of good times were almost always followed by a wild downhill ride. We know they are coming, but we never know when. We just hope we have taken enough precautions to keep from getting pushed over the edge.”

Walt’s looked confused. “So you knew this was coming?”

“Sure, it only took me one time of getting smacked to understand the reality of economic ups and downs. Before then, I thought the best way to grow a business was to borrow money and buy things on credit while times were good. Oh, yeah, that’s what the lenders want you to think,” Helen said, almost angrily.

Then she continued softly, the sudden change got Walt’s full attention: “Now I try to follow what Thomas Jefferson said two hundred years ago, ‘Never spend your money before you have earned it.’”

“Where was he when I was buying stuff?” Walt wondered out loud. “Then I wouldn’t have gotten myself into this much trouble.”

“Once you are out of trouble, I hope you remember and heed his saying,” Helen went on.

“If I can get myself out of trouble,” corrected Walt.

“You’ll probably get past the issues you are in now, but it will be painful. I don’t know of any easy ways for people to get out of debt while, at the same time, learning not to do it again,” Helen warned.

“I can take a little pain, but I’m not sure even where to go from here. If my cash flow is as out of whack as I think, what can I do?”

Helen looked serious as she explained, “Cutting costs is only the first step. You need to find some free cash, too. For example, “Do any of your customers owe you money?”

“I have a few that do,” Walt shrugged.

“Then call them up. Let them know they are behind. You don’t need to let them know why you are calling now, but just calling is an easy way to get your invoice to the top of the pile to be paid. How about your creditors? Are you getting a good interest rate or are you paying a high rate?” was Helen’s next question.

“Well, they are not the best, but I didn’t worry too much about them.”

“Call them up, too,” Helen suggested. “See if you can negotiate lower interest rates. They may be having trouble getting people with good credit to borrow. Don’t get behind on payments if you can possibly help it, since lenders want to immediately raise your payments as high as they can when you do, since that signifies you are an increased risk. When call them, you may not want to tell them you are experiencing financial difficulties, because that also may give the impression you are an added risk. As long as you act like you DON’T need the credit, they will frequently be negotiable with lower rates to keep you as a customer.”

“How about the equipment I bought on credit. Would they be negotiable?” Walt asked.

“Of course they will. You have the equipment, and all they have is an IOU. Give them a call and see what they are willing to negotiate, such as an extended payment plan or a lowered interest rate.” was Helen’s suggestion.

“Okay, I’ll give it a shot,” Walt said hopefully. “Any more thoughts?”

“I’ve got a little cheat sheet that I use when things start to get tight, financially.” She opened up a spiral-bound notebook from her bag and took out a folded sheet of paper. Checking to make sure it was the correct one, she handed it to him.

Before Walt got a chance to look through it, she told him, “Unfortunately, I have to run to a meeting on the other side of town. I put you on my schedule to meet here again next week. Will that work for you?”

“Sure. Thanks! That would be great. ”

“See you then,” and she walked off.

Suddenly Walt realized he had better check his calendar, since he had committed Helen’s time. He had one appointment that conflicted with next week’s meeting, but the meeting with Helen was bound to be much more important. So he rescheduled it.

Then he looked at the sheet of paper she had given him and read:

8 Tips to Getting Control of your Finances

1. Make a list of all expenses, personal and financial

2. Ruthlessly eliminate everything not absolutely necessary.

3. Make a list of all recurring bills and debts to understand how much money you will need, and when.

4. Keep a journal of all ordinary expenses for several weeks, preferably a month to see where your “hidden expenses” are. Include items such as newspapers, beverages and snacks, cost of meetings, and miles driven.

5. Call all customers who owe you money and remind them that payments are due.

6. Call lenders to get best rates available. Many would much rather extend payments rather than take a chance of getting no payment at all.

7. Look at the services you require and find less expensive ways to get the same service, or reduced services if that would work for you. including telecom, electric, and insurance.

8. Call your current service providers for their best rates. They will frequently offer better rates if you stay with them. And they may be able to further reduce costs by bundling several products together.

Walt finally couldn’t put it off any longer, he had to call his Virtual Executive Assistant and break the news to her.

After Sherry answered, he got right to the point, saying: “I need to cut back on the work you are doing for me. I know we agreed to at least 10 hours per week, but I don’t have any more work for now. I hope you understand.”

“Of course I do, Walt,” Sherry replied. “I have other small businesses who have also cut costs. In fact, I had to let one of my own part-time contractors go. Fortunately, he was in his last year at the university and needed extra time to study.”

“Thanks for understanding,” Walt said, relieved she had taken it so well.

“But Walt,” Sherry went on, “I thought your business was doing very well. Other small businesses have been hit hard during this industry downturn. Your business, on the other hand, has customers from different industries. So, I assumed you had a recession proof business.”

After a pause, Walt explained, “Many people still need what I offer, Sherry, but everyone seems to be cutting back. One customer said she will not be reordering. Two more said they are waiting much longer between orders, and one is not even returning my calls.”

When Sherry didn’t say anything, he continued: “To make matters worse, I stupidly assumed people would keep buying in spite of changes to the economy, so I made some major expenditures over the last few months. Prices were so good that I just couldn’t pass them up. If I only knew then what I know now.”

“Don’t be too hard on yourself,” Sherry tried to console him. “Lots of very smart people were also fooled.”

“It really doesn’t matter, Sherry. My business, my life, seems ready to come crashing down if I don’t get myself out of the hole I’ve dug. I have no idea what to do. I may have to declare bankruptcy if things don’t turn around soon,” Walt lamented.

“Who are you talking to about this type of decision, Walt?” Sherry asked, very concerned about how Walt sounded. “Do you have a business coach? How about a group of entrepreneurs you meet with? If not, who do you discuss your business decisions with?”

“My business has been going great since I started three years ago, so I haven’t needed a business coach. I’ve been so busy that I’ve been pretty isolated from other business owners. In fact, it seems that my family and my customers are the only people I’ve been talking to. To be honest, it’s been pretty lonely, but doable. Until now…”

“Walt. I’ve got another good client, Helen, who lives near you. She is very successful entrepreneur who is doing even better these days, in spite of these trying economic times. I’m going to call her today and see if she can meet with you.”

“I’m not sure what it will do,” Walt replied to the offer, “but I’m certainly willing to talk if you think that could help.”

—

Helen was in her home office when Sherry called.

“Sherry, I’m so glad you called. I am going to send you another proposal I need you to clean up, you know, doing your magic that makes me look good. And I’ll need it in two days…”

“Sure, Helen. I’m putting the finishing touches on that other project. But the main reason I called is to ask a favor: Another client of mine is going through some difficult times and needs someone to talk to. Of course I thought of you.”

Helen looked around office and sighed. Three piles of paper were propped on the edge of her desk. The cat was lying on the potentially important papers of her inbox. And she knew the morning’s mail would bring more paperwork that would need tending to.

“Sherry, are you positive I can’t get you to come to my office and straighten it out? I’m flying to Omaha tomorrow morning and would love to have it ship shape when I get back.”

With a laugh, Sherry replied, “I’d be glad to drive the three hours to get to you, as long as you find a way to get here, from Omaha, to to pick up my kids from school and get them to their afternoon activities.”

“I guess I’m doomed then,” Helen concluded. “Okay. Tell me about this client of yours. Man or woman?”

“It’s a man. His name is Walt. I’ve been doing Virtual Executive Assistant work for him for about a year, and he seems like a great guy. I’ve never met him because he lives in your city, but he is always accommodating to my schedule, clear about what he wants, and always pays on time. In other words, a great client for me.”

“Then what’s the problem?”

“He was doing great, but this economic upheaval, especially in your city, really surprised him. When I talked to him a little while ago, he was panicked about clients pulling back their contracts. He sounded so different that I’m concerned about him. When I asked him, he seemed to have nobody to talk to. You can relate to what he’s going through!”

Helen looked around the office one more time and vowed to hire someone to straighten out her filing system. If nothing else, it would make her accountant happy.

Sighing one more time, she said, “You’ll owe me for this, Sherry.”

“How about if I get that proposal done this afternoon.”

“I was thinking more about your coming here and cleaning out my office,” Helen replied, knowing she would only hear Sherry’s laughter as an answer.

—-

Helen had started her own business thirteen years ago, having worked as an employee for much too long, as she told it. Her timing was perfect, the products and services she provided were just becoming popular, and necessary for many. She quickly built a company that was noticed by the movers and shakers in the city. In less than three years, she was nominated for “Entrepreneur of the Year” in the local business journal.

Unfortunately, she didn’t recognize the turbulent times that would occur just as many competitors for her products were entering the market. A year after her nomination, Helen almost went bankrupt.

That was a dark time. She could not find any way out of the predicament she had put herself into. She felt like such a failure. If not for the support of friends and family, it could have been catastrophic.

During this era (it certainly felt like many years), Helen was introduced to a successful business owner who eventually became her mentor. This entrepreneur taught her many survival secrets, such as anticipating shifts in the economy, adjusting financial expectations and how to work ON the business instead of just IN the business. The only thing he asked in return was for her to pass on her knowledge to others who needed it.

Starting Out

Walt had never been to the cafe that Helen had suggested, although he had been to this part of town many times.

Traffic had been moving briskly, so he arrived fifteen minutes early to the light and airy setting. The atmosphere inside Yellow Wood Coffee and Tea was informal, which probably accounted for the variety of people he observed sitting and chatting and working at the well spaced tables. Some men and women looked as if they were taking a break from high-powered corporate meetings, others looked like students. Judging from the baby strollers, some parents were obviously meeting other parents. Walt noted the ones who probably worked out of their homes, judging from their casual clothes but intense concentration on laptops while shuffling through papers.

All in all, he decided it made a very comfortable meeting place. The staff was attentive, but not bothered by those people who stayed on for hours, judging by the empty coffee cups strewn among some papers as people worked on.

Walt ordered some coffee and waited for Helen to arrive, as patiently as someone in his predicament could be.

—

He was lost in thought when a tap on his shoulder startled him. A confident woman smiled down at him. “Walt?” she asked.

Walt jumped to his feet. “Helen?” They shook hands, and sat. “What can I get you?” motioning for the waitress who was already on the way over.

Walt and Helen chatted for a few minutes, mostly about Sherry and how much she helped each of them.

Once her tea had cooled enough to drink, Helen took a sip and asked, “What can I do for you, Walt?”

“That is an excellent question. Sherry asked me to meet with you, so here I am.”

“Sherry is not particularly impressed with a lot of her clients, but you must have made the grade, Walt. She seemed worried about you and hoped that somehow I could help, but wasn’t too clear about what that would be.”

“Wow. I didn’t know Sherry was ‘impressed’ with me. I just know she wanted me to listen to your advice, assuming it’s not too late for my business. I would appreciate anything you have to offer.”

Helen nodded and explained, “I don’t know much about your particular business; my business model is very different. However, I have been in business for over ten years and seen a lot of businesses come and go. Somehow I’ve managed to survive.”

Her confidence spoke volumes about the wisdom she had gained from both her mentor and from running her own enterprise. Sherry had talked very highly about her, so Walt decided it would be a smart move if he could get her to mentor him. He proposed, “You probably have plenty of experience I should listen to. Unfortunately, I don’t have money at this point to pay you.”

“No money required. I’m not a Business Coach as such, although I do believe in the profession. Business Coaches help a lot of companies stay out of trouble.”

He breathed a sigh of relief as Helen continued, “I learned the 8 Business Survival Secrets from a mentor who wouldn’t take money, but insisted that I pass them on to deserving people. If you are willing to share your business issues with me, I’m willing to offer some advice. Of course, if I don’t think you are putting in the effort necessary, I’ll bow out.”

Walt assured her, “I am very serious right now. If your Secrets will help me, I will put in whatever it takes to survive.”

“Then let’s get started. Tell me about your situation”

—————————–

Walt explained that his business had done well for several years. He loved his small company, loved being his own boss, and knew in his heart that he was still destined to bring his company to prosperity. Walt’s success gave him confidence, so he made some large purchases on credit.

Then the economy started to shift, his positive cash flow dried up, and he had to start dipping into his savings. He had fallen victim to a variety of issues, including financial commitments, changing customer expectations, reduced budgets for his products, without much hope for near term improvements.

“For a while, I just ignored the problem, hoping it would go away,” Walt explained. “But when I had trouble meeting my bills, I realized I had to do something. Last Wednesday afternoon, I took all my bills and financial information, laid them out on my kitchen table, and started going through them. Within and hour, I realized things were worse than I thought. Just about the time I heard the bell in the hall strike four o’clock, it felt like the end of the world was arriving. I had shortness of breath, pounding pulse, and a bunch of adrenaline made me want to flee - but I had no place to go.”

“You certainly have that moment clearly inscribed in your memory,” Helen noted.

“Since then I haven’t been able to sleep well, and don’t know what to do,” Walt admitted. “I know I should do something, but my brain doesn’t seem to be able to make decisions right now, except for the decision to panic. I consider myself pretty cool and calm under pressure, but I don’t know how to handle this.”

He was close to tears as he finished - which embarrassed him, but he had rarely spoken honestly about the condition of his company.

Helen, however, gave him very little time to recover. She asked pointed questions to clarify the issues. Then she concluded, “Your business finances are so out of whack, they are affecting your whole life. No wonder you feel like you have no control.” Helen explained, “You were making decisions based on what you thought was correct, but now realize you were relying on erroneous information. It seems to me that the first step is to take back some control.”

“How can I do that?” Walt asked.

“By making decisions that will protect your future,” she replied.

This is from our good friend, Harvey Smith, a fabulous business coach in North Carolina:

“FEAR is an acronym for: Forgetting Everything’s All Right”- Abraham Hicks

Yikes!

We see 401K’s diminishing, job markets shrinking, and countless companies closing their doors.

Keep in mind: ups and downs, ebbs and flows, chaos and clarity are part of the natural balance. Our planet’s seas rise and rage, mountains erupt, calm winds become turbulent tornadoes. Our economy is fluid and will turn around. It is part of the cycle of life. Balance will be restored.

Keep breathing.
This is not the time to let fear or scarcity paralyze us. This is not the time for delay, depression or denial. Right now, it is your responsibility to create forward movement in your life.

Here are 6 practical suggestions for staying positive:

1. Build a support system.
Get into the world. Don’t hibernate or isolate. Instead, relate!
Identify those people who will be there in times of need (personally and professionally)
Surround yourself with people who have a ‘can do’ philosophy.

2. Do something nice for yourself.
Update your competencies.
Unclutter your home and office.
Find ways to build your self-esteem.

3. Affirm your abundance
Know what makes you special. Start each day by acknowledging a small success i.e., something you feel proud about.

4. Identify what you want.
Then ask yourself, “What do I need to do in order to achieve it?”
Start by taking small steps toward what it is you want.

5. Find positive inspiration daily.
Here are 2 great sites with FREE wisdom:
www.tut.com Michael Losier’s one-of-a-kind humor.
www.scienceofgettingrichnow.com test drive the concepts of abundance. Open the link, scroll down and the site pop-up will offer you 17 days of Golden Nuggets from the teachings of Wallace Wattles.

6. Turn Downtime into Uptime
If you are out of work, consider this time a gift. Open it. explore it. Enjoy it. You deserve it!

You can reach Business Coach Harvey Smith at harvey@carolinabusinesscoach.com

Many small business owners are struggling to find new contacts for building their businesses. Unfortunately, most of them are looking in the same old familiar places. As a result, of course, they keep coming up with the same old things. How frustrating.

There are plenty of sources for new contacts for you, but you have to do a little work to find them. After all, if there weren’t some work involved, everyone would already be doing it, right? But notice that we said “a little work,” not a huge amount of work. You can do it!

One more thing: You need to get out there in the world for find these sources. Yes, not only do you have to do a little work, you have to leave the comforts of familiar surroundings. But face it, new contacts aren’t lining up at your door.

OK, a little work and some going out into the world. Wouldn’t it be great if you knew where to look? Now you’re at the easy part. Finding new contacts for your business isn’t rocket science. In fact, you can locate many, many new sources using three very old-fashioned tools:

1. The phone book
2. The newspaper
3. The public library.

Yes, old-fashioned, but very powerful if you know how to use them. Let’s look at each one.

Tool 1: The phone book

Do you have any idea how many business organizations are active in your local area? Get out the phone book and look in the yellow pages under these headings:

• Associations
• Business and Trade Organizations
• Chambers of Commerce
• Professional Organizations

You’ll be amazed how many organizations are in your area, some of which may be of interest to you. Find out when they meet and go to a meeting or two. You won’t have to join—just say you’re looking into joining and want to talk with a few members about their experiences.

There is an organization for every profession, trade, and industry. Even if you think you already know all the ones particular to your business, check the listings again. New organizations pop up, and they’re delighted to talk with people interested in them.

Go beyond business-oriented organizations because all of us have other interests. Depending on your personal interests and experiences, you might also consider listings under these headings:

• Clubs
• Fraternal Organizations
• Labor Organizations
• Political Organizations
• Religious Organizations
• Veterans and Military Organizations
• Youth Organizations and Centers

As the old saying goes: “Birds of a feather flock together.” People with similar interests congregate. They get to know each other easily because their shared interest creates a bridge between them. That bridge can allow you to connect professionally as well as personally.

When you find some organizations that seem appealing, contact them one by one. You need to allocate your time well, and going to 15 meetings in two weeks isn’t a good use of your time or your energy. Pick one or two now, then another couple in a month or so.

Remember that for each new contact you make you will need time to follow up. So many small business owners jump into the whole lake of nearby organizations, meet others once, and then disappear from view. Instead, dip your toe into a pond—even a puddle—so you can have the opportunity to follow through.

While you’re looking for organizations, consider a local chapter of Toastmasters. People join Toastmasters to learn and polish their skills for public speaking. The majority of members are business professionals, so a local chapter may be a good place for your search.

In addition to combing the yellow pages, you’ll also want to comb through local newspapers.

Be sure to read about the public library as a tool.

Tool 2: The newspaper

Newspapers are withering and dying, right? Not really.

With the collapse in advertising, most large, daily newspapers are struggling to stay afloat. All of us have seen the decrease in pages, and it is easy to conclude that newspapers are not useful for finding new contacts. Wrong.

As every publisher knows, businesses always need a way to get in front of potential customers. While major newspapers are struggling, many small, local publications are doing just fine. As the saying goes, “It’s all local.” Think about it. You do your business with people you know, like, and trust—locally. Even when you interact with a large company, it’s often through a smaller local branch.

The small, local publications address a strong demand for people to know what’s going on nearby. Most of these papers are free to readers and many of them are mailed out regularly. Unlike the general circulation papers with their one-size-fits-all approach, these smaller publications are more focused on specific markets in particular ZIP codes.

Get and read through some local newspapers. Notice the advertisers, some of whom could be prospects for you. All of them are looking for new business—that’s why they’re advertising. What might you offer that could help them reach and satisfy their customers more effectively? If these companies have money to spend on advertising, they have money to spend on building their businesses. Maybe they could send some your way.

Depending on which neighborhood a particular publication targets—and narrow, ZIP-code targeting is the norm, not the exception–you might consider advertising your business. Do you have information that would be valuable to readers? You might consider writing a column, which could position you as an expert in your field.

Regardless of their size and market, nearly all newspapers have calendar listings of events of interest. Most business sections publish a weekly calendar of local meetings and networking events. Check with the papers in your area to learn which days they publish their calendars. Get copies and comb through the listings to find meetings that may be good places for you to make contact with potential customers. Go to some of these meetings and connect with new prospects.

Want to save some money and read these papers for free? Consider going to the public library, which has amazing resources you can use.

Be sure to read about the phone book as a tool.

When was the last time you went to the library? So many of us prefer the comfy, plush chairs and latte-laden café style of the chain bookstores that we’ve forgotten what a treasure trove the public library has to offer.

You may need to go to a main branch rather than a neighborhood branch, but start nearby and work your way from there. When you get to the library, ask for the “reference librarian.” Main branches usually have separate, reference sections with their own experts on hand. Reference librarians are amazing databases on legs. They have a fantastic ability to find exactly what you need to look through. Use them. They love being helpful-it’s what they live for.

Your local library has volumes of reference works that list associations, publications, and other resources that can help you find new places for contacts. Just ask the reference librarian to guide you.

It is important, however, that you create some parameters to give the librarians. “I’m looking for all the association in the area” isn’t as useful as “I would like to see listing of every business-related organization in this area. The librarians will know exactly where to look.

The reference books have rich information for each listing, which usually includes contact information. Before you go, call the library and ask for the hours the reference librarian is on duty. So many cities and counties have trimmed hours of library service, so you’ll want to check before going.

When you do go, block out a few hours to comb through the books. Remember to bring ample paper for making notes—reference works cannot be checked out. Some libraries allow pages to be photocopied, but you often need exact change, so bring plenty of dimes and quarters with you.

In addition to reference books, most libraries have subscriptions to database services that can simplify the search work for you. These subscriptions are very expensive—well beyond what small business owners can afford—so you really should take advantage of what your public library can offer you.

Do you have a library card? If not, get one.

Though you really should make a visit to the building so you get a full sense of what resources are available, you don’t want to spend day after day after day combing through large books with small print.

Many library systems have made their card catalogs available online, but you’ll need a library card number to access them. Remember those databases we mentioned earlier? They’re usually available online too! From the comfort of your desk, any time of day or night, you can search the databases for listing. Again, you’ll need a library card for access.

Is there a public college nearby? You might look into using the library there, too. Surprisingly, many public colleges allow public entrance. You won’t be able to check out anything unless you’re enrolled, and you probably won’t be able to access the databases from home, but you may be able to get in and look around. Also, college libraries are usually open longer than public libraries. Check with the college.

See? A little work and some time spent out of the house and office, but there are treasure chests of information available that can help you find new contacts—people your competition is too lazy to find!

Be sure to read about the other two tools: The phone book and the newspaper.

It seems there’s only doom and gloom in the news right now. Let’s remember that even tough times provide great business opportunities.

Here’s what one owner did:

Paul had been planning to open a new restaurant in downtown Danville. But the only spot in the area was off the street, behind a building. However, it did have direct access from the parking lot accessible from the next street.

Everything was still a go in mid-2008, but then the economy really soured. True, people still need to eat, but “everybody” is watching discretionary spending. It seemed like a bad time to start a new restaurant.

Paul rethought his idea.

Instead of the full restaurant he originally wanted to open, he opened a small café, but with a kitchen equipped to handle a large volume of take-out orders.

Why?

People still need to eat, and rather than “splurge” by going to a restaurant, they can get the same food and take it home! The place is a hit, and customers don’t feel they’re spending money recklessly.

And how did he get out the word about his slightly out-of-the-way business? Simple! Offer free dinner for two to every hair stylist within a half mile! Who’s more likely to talk with busy people than a hair stylist?

Here’s what another owner did:

Betty wondered what to do. She and Bob own a paint store but Betty’s real passion is painting on canvas—oils and watercolors—and not on walls. Because more people are staying put in their homes and deciding to repaint rather than move or do an expensive remodel, business at the store was good. However, traffic at the gallery where Betty showed her art was almost absent.

What can an artist do in a situation like this?

Simple! Bring the paintings into the paint store. With her great sense of color, Betty had already done small mockups of painted walls and various trims. She put a small table with one, a chair with another, all to give a sense of how the new colors might look in customers’ homes.

Then Betty took the next step.

She mounted her own paintings in the displays. She soon found more interest in the displays. Customers paused longer to look at the colors. The paintings made the wall and trim colors more appealing. Paint sales started to pick up.

So far, so good. The next step was the best.

Customers started asking about the paintings. A few of them wanted to buy the paintings, which led Betty to make up a full-color catalog of all her paintings. What’s more, customers turned to her for advice on color selection, and many who came in to buy a color for the wall left with colors for the wall, baseboards, windows, and doors!

Better still, Betty sold some of the paintings she displayed or catalogued—a perfect marriage of business and art!

See? Even tough times can be good times.

So what will be YOUR success story in 2009? Let us know–we love success stories! And by sharing your story, you’ll help build the entire business community, and that will turn the economy around faster than anything!

Here’s to your success!

Tom Leal

Most of us—and I’m including myself—are so focused on getting things done and producing results that we end up with huge To-Do lists and not enough time to do everything. Sound familiar?

We’re too busy trying to do everything and we lose sight of where we’re going because we aren’t really paying attention to what we’re doing in the moment.

Research indicates that taking time out of the day—no matter how much there is to do or how pressed for time we are—and doing nothing is actually the best way to get more time from that day.

Sounds like a contradiction, but it really does work. I’ve tried it myself and I was amazed by the results.

Whenever we get busy and think of checking off items on the To-Do list, we’re not spending time being in the moment. As a result, we often work against our best interests. We are swallowed up or overwhelmed by all there is to do, and we easily lose sight of what’s truly important.

With small business owners, it is essential that we give ourselves a “Nothing Break” each day, and as little as 10 minutes is all it takes. After 10 minutes of doing nothing, you’ll have a clearer mind, a fresher perspective, and renewed energy. Doesn’t that sound wonderful?

But the 10-minute “Nothing Break” won’t work unless you truly do absolutely nothing. Close out noises and distractions. Turn off the phone. Get away from your desk and go somewhere free from interruptions. Think “sense deprivation” here. You want nothing to see, hear, smell, or feel that could take your attention away from . . .

Nothing.

On your Nothing Break, sit comfortably. Stop thinking! Stop writing those action items in your head, rehearsing the next phone call, revising the letter on your desk. Just. Do. Nothing.

Right now, you’re probably hearing a little voice in your head telling you, “Nothing? Is this guy serious? That’s impossible!”

That little voice is the “mental hamster” each of us carries in our brains. That being inside us that is running endlessly on a little treadmill, always busy busy busy but never getting anywhere. Sound like a typical day for you? It was for me until I got off the treadmill with my own Nothing Break.

Getting off the hamster treadmill in my mind gave me the space to just BE—in the present. When the timer rang, I felt so relaxed—10 minutes felt like an hour! But the big surprise came when I walked back to my office and sat at my desk.

Amazingly, I was clear on exactly what I had to do that moment, what was truly important for me to work on. And I found I had more energy than before my Nothing Break. With more energy, of course I was even more productive and took less time to get through that “enormous” pile of things to do.

And I got through that pile partly because I threw out some of the things I thought were important. My Nothing Break gave me clarity to see how some things on my list were not as important as I had originally thought. Some of the items really were others’ responsibilities—the word “delegate” comes in here. But an even bigger surprise to me was the things that should never have been on the list in the first place!

Filling up our To-Do list makes us look busy and thus important, but that’s an illusion. What matters most is not what we still have left to do. What matters most is what we actually have accomplished and how important it was. Sure, I can fill my time doing many, many things, but if they don’t matter to the success of my business, where’s the value?

So here’s a challenge to you for the New Year: Schedule a Nothing Break for every day. OK, maybe we skip a day here and there. I admit I don’t always remember or allow myself time for my Nothing Break, despite the fact that I know how valuable it is.

Hey, reaching perfection is as unachievable as completing everything on the old To-Do list. Focus on progress, not perfection. Cut yourself some slack for being human. Humans forget now and then.

So schedule an appointment in your planner. Go ahead, do it right now! Block out the 10 minutes you’ll need for your Nothing Break. When the scheduled time comes up, honor that appointment. It’s an investment in yourself—your success and your sanity.

And after your Nothing Break, download our “Top 10 Time Tips.” No, don’t do it now, take your Nothing Break instead, and download it later.

Here’s to your best year ever!

Tom Leal

This year, we’ve seen significant changes in how small business owners approach things.

Our survey of small business owners shows that it’s no longer a matter of “business as usual.” The survey validated our thoughts about what business owners should do, based on what we saw before the economic meltdown escalated. The matrix we presented in October reflects new strategies owners can use to build their businesses.

We’ve noticed another trend, picking up steam this November. It’s a trend especially good for small business owners: Taking personal responsibility.

While it’s obvious that a business owner would be responsible, the reality has been something else. Until recently, people were being cautious with their money, patiently waiting for something to happen or for someone to do something. Meanwhile, some owners laid plans for what they would do differently in the new year.

Yes, business owners need to tighten their spending right now. But that reluctance had less many owners to put their plans on hold until someone else changed something.

A few owners realized that waiting to act was exactly the wrong move. No one else is going to make the economy better for you. No one else is going to solve the problems you’re facing. And no one else is going to implement your new plans. YOU are the only person who can act on behalf of your company, and you have to act despite everything that’s happening.

Take responsibility for what you CAN do. Act on those new plans you have, implement new strategies and tactics, and keep your business on track. When the economy does begin to rebound–and it WILL rebound, though nobody knows when–everyone who waited will have to scramble to restart and catch up.

By taking responsibility NOW, you give yourself an advantage. With the rebound, you’ll be in a lead position–not a follow or, even worse, a lagging-behind position.

Check out the links in this blog entry. Contact us to find out more about what you can do–NOW–to take responsibility and move your business forward.

Here are some notes from our teleconference of October 23, 2008:

Economic down times always challenge small businesses. In general, few companies can continue with “business as usual.” But these down times also present opportunities—for owners willing to look at the situation from a different angle.

From our work with small business owners, we’ve found owners using four basic strategies to cope with tough times. We can look at “Product”—which is everything they offer to customers—and at “Customers.” Then for each, we can look at Current and New versions to form four core strategies.

Product-Customer Grid

For a fuller explanation of this grid, click here.

• Current Product/Current Customer—The first strategy is to continue doing more of the same: focus on what you are doing now. Business owners are comfortable doing what they already know, so they just do more of it. They make more phone calls, attend more meetings, talk with more people, and so on.

Example: Art dealers have discovered that people are moving their money away from stocks and investing it in art that is likely to appreciate. While new-car dealers are facing a collapse of their business, car repair companies are doing very well because people are holding on to their cars longer. They’re taking care of them to avoid having to sink more money into new purchases. Also, much of the health care industry is doing well because the public’s need for good medical services is not diminishing. An aging population would indicate a steady, even growing, demand for health services.

However, for most businesses today, “more of the same” is not going to be as effective as in previous down times. Thus, we’re seeing fewer owners using this strategy.

• New Product/New Customer—This strategy takes the company in a new direction with a new product aimed at different audience. It is the riskiest strategy because owners need to sell what they aren’t familiar with and attract a market they’re not accustomed to working with.

Example: Mortgage brokers are suffering with the collapse of the housing market. One broker adapted by rethinking his business. Before, he would line up prospective borrowers, match them to products offered by lenders, then work with the lenders to approve new loans and get commissions from the lenders. Now, he represents homeowners who are struggling to keep up with their mortgages. He goes to the individual lenders and negotiates new payment schedules. Rather than be paid a commission from the lenders, he works for a flat fee paid by the borrowers.

This broker was able to switch to a new business because he was able to leverage his previous experience. Given the current economic conditions, this strategy seems too risky for most small businesses to consider.

This leaves us with the other two strategies, each relying on one current and one new factor.

• Current Product/New Customers—This strategy focuses on attracting people who don’t know about you. When times were good, you may have been too busy to look for new customers. Now you have to address these questions: Where are these new customers? How can you get in front of them?

Example: A massage therapist cross-promotes with beauty salon owners, health food stores, sports injury facilities. Customers of these businesses are good prospects for massage. The massage therapist recommends a facial from a salon, and the salon owner recommends a massage to complement the facial.

• New Product/Current Customers—This strategy is about finding new ways to please the customers you have. What else would they buy from you? How else can your expertise help them?

Example: An executive coach forms a checklist or program of “best practices” gathered from interviews with CEOs who have made changes in their companies. She uses this knowledge while working with her other clients, helping them achieve success. Next, she sets up peer groups of her clients so CEOs can meet with each other to hear first hand what each is doing and get new ideas for addressing their challenges.

How might these strategies work for your business? Choose one and put it into place this week. Post what you’re doing here and share it with others!

Recently, we conducted a survey of small business owners to find out what they are doing to weather the economic storm. You can read a preliminary report here.

Perhaps you’ve already applied one of these strategies to your business. What worked? Let others know by posting a note here.

What else are you doing to cope with the changes that are happening? What builds business for one, builds business for everyone! Check this blog to see what others are doing.

Tom Leal

During October 2008, 8 Secrets Group conducted an online survey of small business owners to determine what affect the economy has had on their businesses.

Here are the actual questions, and the compiled responses, rounded for clarity.

How has this economic climate affected your business?
Everyone surveyed had been affected in some way by the economic client, although none of the respondents has been "severely" affected by it.
90% had minor to significant slowdowns.
10% actually showed improvement

How are you coping personally with additional stresses due to the economy?
70% Cutting back on all expenses
60% Borrowing more
30% Working More
30% Losing Sleep
10% No significant change

What are you doing to improve your business in this economic climate?
80% Networking more
70% marketing more
60% Working with others to assist
10% hiring sales people
Several made comments about "intensifying service on top clients" Others are checking in more with client, discussing needs and fears.

How long have you been in business?
Average time in business - 6.7 years
Only 10% less than one year
30% 2-5 years
30% 5-10 years
30% over ten years

What resources would you need to increase your business over the next few months?
More money for marketing
More networking events
More government programs
More information and tips to grow my business
More time more warm client leads
Ways of creating international cash flow

Please note that this survey was not scientifically validated.

We’re hearing so much bad news. Consumers are scared and they have cut their spending. Many fear losing their jobs or their savings as the economy collapses.

Lending is at a standstill. Even folks with good credit are having trouble getting loans. The federal bailout? That money will take a while to make its way into the credit system. Businesses are feeling the pinch, of course, and many small businesses owners feel stuck. Running a small business is like riding a wild rollercoaster!

Tough economic times are ideal for planning the next growth cycle. That’s right! Savvy small business owners are doing exactly that. This is the ideal time to rethink your business several key areas.

There are three critical steps you can take NOW to ensure you turn this down time into productive, business-building activity:
1. Hang on for the ride!
2. Find the positive
3. Pull your team together

In previous bad economic times, we’ve seen successful business owners rely on these three tools. We’ve even used them ourselves, so we know they work! Here was ways you can rethink what you’re doing.

1. Hang on for the ride!
Business runs on cycles, up and down at regular intervals. Sometimes, it feels like a scary, roller coaster ride. But even at the amusement park, the same rule applies: For every fast drop down, there’s a slow, upward climb toward growth, learning, and higher performance.

Successful business owners know about cycles and they plan with cycles in mind. In a down time, the winners are working on what they’ll be doing as things improve. Recognize we’re on another “thrill part” of the roller coaster and ride it!

2. Find the positive.
Remember that old song, “You’ve got to ac-cen-tuate the positive, e-li-minate the negative, latch on to the affirmative, don’t mess with Mr. In-Between”?

In tough times, it’s easy to find others complaining about their lousy luck. Well, “misery loves company” because it means nobody has to do anything about it! Instead, you want to find and meet with other professionals who are doing well, trying new things, and have positive outlooks. These people will inspire and motivate you to do your best.

We know plenty of small business owners who have found ways to grow their companies, even in these times.

3. Pull your team together.
Success is not a do-it-yourself project. Success takes the involvement and cooperation of friends, colleagues, and loved ones. So many owners are sitting on the sidelines waiting for things to get better before they do anything. When things do improve–and they will–those who waited will have to play catch-up with those owners whose success teams planned and acted during the down time.

Do you have a “success team” of people that can help you? If so, meet with the team and brainstorm new approaches.

If you don’t have a success team, start one! This is not the time to wait for someone else to act. You need to take charge of the direction of your business. Gather a few, trusted individuals whose experiences are pertinent to your effort and who are willing to work with you.

Now is the time to have others help you identify new opportunities, both immediate and long term. Is there something people need today that you could be offering? Just as importantly, look to the future. Where are things going to be in a few years? How can you take advantage of that situation now?

When building a success team, consider adding a business coach to your team. A coach can significantly reduce the time it takes you to get past obstacles and get where you want to be in your business. Also, a coach can hold you accountable. So many of us let ourselves slide on commitments, simply because our intentions are good. A coach will keep you on track and bring a great return on investment.

- - -

Ready to get started?

Many professional associations and business coaches offer reasonably-priced workshops that are especially helpful because these individuals stay on top of what small businesses need the most. Check out your local chamber, for example. Check out our upcoming teleconference.

It’s up to you—plan and act now so you can take advantage of what’s happening, or wait until things seem better and then play catch up. You know which choice successful business owners will make. So, make that choice!

Here’s to your success!

Tom Leal

Small business owners too often try to sell to everyone in hopes that someone, anyone, will buy. These owners market their products very broadly, only to be disappointed with the return on their marketing efforts.

They need to focus on those who actually NEED their product. It is too time-consuming and expensive to market products widely. There are better, less expensive and more effective ways that really work.

The world has changed from the days of Madison Avenue when mass merchandising really worked. Today, people have choices of what they want to pay attention to and have honed their skills at ignoring everything else.

Gone are the days when there were only three television channels, one family telephone, and all mail was delivered by the post man. First, telephone answering machines allowed people to decide who they wanted to talk to. Cable television brought 25, 50, 100, and now 400 or more channels to choose from. “Clickers” became a household word defining a new necessity. Today, if nothing is interesting on those 400 channels of television, we can just browse the Internet for hours, watching only what we want. We trash email by the hundreds if we don’t know who is sending them. These and other technologies increased our ability to ignore anything that we don’t need, right now.

As Seth Godin’s book “The Purple Cow” points out, marketing to the masses used to work. Many people hope it still does, no matter how much evidence there is to the contrary. Unless you have tons of money to spend, focus on those people who NEED your products. Forget about those others who can might be able to use your product. You won’t antagonize them by ignoring them — they are too busy to notice.

WHO NEEDS YOUR PRODUCT

Identify the ones who need your product and find ways to market directly to them. It takes some effort and some probing, but it is ultimately much more effective than a mass campaign.

If you market ONLY to those who need your product, you won’t have to convince people that they should buy. Once you reach them and inform them of your products, the sale is straightforward — they are already interested. Of course, they take into consideration price, convenience and other products, but they are looking for your product so you don’t have to bombard them to get their attention.

How do you find out who needs your offerings? Ask your current customers why they buy from you. The answers will probably surprise you. Concentrate your efforts on people who have similar characteristics.

For instance, if you open a children’s dance studio in an area that does not have another nearby, there are parents with school age children that will NEED your dance studio, since it will be more convenient for dropping off and picking up their children.

Concentrating on local parents by mailing a post card or advertising in the neighborhood weekly newspaper will be affordable and effective. Advertising to a wider audience in regional newspapers or cable televison will probably dilute your message — and your bank account.

FOCUS FOCUS FOCUS

In real estate the key words are Location, Location, Location. In small business, it is all about focus. Focus on those who NEED your products. Your marketing efforts will go much further.

Steve

Have you lost prospective customers without knowing why. Do they promise to call back but you never hear from them again?

Recently, my wife and I interviewed a service provider that a friend referred to us, which should have led to an easy sale. We met at his office, and the business owner spent 40 minutes talking about himself, his experiences and even his family. Then he spent the next half hour explaining why two products he had would be perfect for us. At no time did he ask about what we were looking for.

He did a great job selling his services to himself. Unfortunately, he was not the prospective customer. If he didn’t listen to us while he was trying to get our business, can you imagine what would happen once he had our money.

When you are selling to a prospect, unless you are very, very careful, you could be guilty of some of these same transgressions. I know I have been.

• Do you spend more time listening or talking during the sales meeting?
• Do you spend more time observing or talking about your product or service?
• Are you trying to find out the wants and needs of your prospects, short term and long term, or are you too interested in selling your product?

If you meet with prospects but something just doesn’t “click,” I recommend you follow up with them to solicit honest feedback. Occasionally that call will rekindle a prospect, but it will almost always get you some excellent information on how you could have done things differently.

There are plenty of mistakes to make out there. Why make the same one again and again?

Steve

If you have been in business for a while, are you happy with the results? Or could you be expecting too much, too soon?

Do you need an overnight success, or are you in it for the long haul?

Small business owners would do well to understand that most business success takes years to reach, not months. Yes, we’ve all read about “overnight successes,” those people who start a business and almost immediately become profitable beyond all expectation. Tom and I even know a few of them

What the headlines don’t explain is that in almost all cases, the successful business was not the founder’s first business. Or even the second. Maybe not even the third.

The founders of most “overnight successes” had started several businesses before their successful one. Each startup became a learning experience–sometimes painful–that taught them how to become more successful next time. Then, when the right opportunity came along, they were in a position to take advantage of all the factors necessary to make a huge success. Until then, even with the same opportunity, these entrepreneurs would not have understood the fine points to become highly successful.

Measuring the success of a startup is better compared to finishing marathon than winning a 100-yard dash. It takes a huge investment of time, effort and guts getting a company up and running and becoming successful.Unless you’ve already started and run a successful business for several years, there are huge learning curves that need to be scaled before “success” occurs. Great opportunities, great ideas, even great products take time to get to market, to get known, to get improved, and finally get a lot of them sold for a profit.

Like fine wines, many businesses take years to reach maturity. That is a combination of owner knowledge, product development, market acceptance, and many more factors. The overnight success is extremely rare.

Few entrepreneurs are able to start a business early in their career. They work for other, more established companies to build up their skill set. At some point, they decide to break out on their own - frequently in their 40s when they have developed skills that are beyond what the position they currently occupy. As successful business people, they know a lot, and can easily make it on their own.

Or so they think. They sometimes painfully learn that they still have a lot to learn. It took 20 years to build their skills for their old job, and learning an entirely new skillset is not done overnight. As one experienced entrepreneur once told me, “Don’t quit your day job before your new company is standing on its own.” Of course, I promptly ignored that advice and plowed right into my new venture, learning many new lessons the hard way. It took years of work to become successful.

Like running a marathon, early on it seems easy. Hopefully you get some early successes, you pass some people, you feel healthy: You are on your way!

A bit later, after the early exhilaration wears off, you get the realization that there is a long way to go before you can really claim being successful. There are a lot of hurdles and a lot of frustrations to get past before the finish line. Most people will wish they spent more time preparing, most will wonder at some time what they were thinking when they decided to start. And many will have to drop out before the finish line. But those who do make it to the finish are among the “best of the best.”

So keep in mind, having a company that makes it to the five year mark is very successful indeed. This year over four million companies will be started, and only one million will still be around in five years. Of course, many owners from those other three million will go on and start another more successful business, so don’t be too sad.

While we don’t suggest shutting down a business that does not reach superstar status quickly, doing so is a business strategy employed by some “serial entrepreneurs.” The majority of people who start a business, on the other hand, want to make their companies successful over the long run. Great opportunities, great ideas, even great products take time to perfect, to get to market, to become known, to get sold, to be improved, and finally to make it to the big time.

So, unless you have the resources to start up multiple times until you find the right combination for success, you probably should run your business like you would run a marathon: reserve your resources, find your pace, and keep moving.

We’re here cheering for you!

Steve

Over and over, small business owners ask themselves this question. Each day, it seems, the headlines give us one more piece of bad news:

• Americans Cut Back Sharply on Spending
• Weak Holiday Results Feed Disappointment
• Layoffs Put Thousands Out of Work

These frequent doom-and-gloom announcements can shake your self-confidence in your ability to weather the storm and stay afloat long enough until the economy picks up again—whenever that might be.

The economy always has its ups and downs and each industry has its own particular, normal cycle. It’s essential for small businesses to have the ability to stay afloat during these regularly occurring downtimes.

We found that many small business owners react to a downturn with one of these three strategies:

1. Cut back
2. Stay the course
3. Grab anything I can get

1. Cut back
If your business is a victim of a downward economy, it may make sense to eliminate all but the most important expenses. Some business owners also cut back some products and focus on the most popular ones. This strategy is an important survival technique if sales fall off due to conditions outside the company. But it also removes many of the things that help the company grow. When the economy does pick up again—as it will, in time—customers may go elsewhere.

2. Stay the course
This strategy is similar to the first one, but instead of eliminating overhead and expenses, the company maintains the status quo, neither cutting the spending nor increasing it.

Staying the course usually leads to stale revenues. Sales don’t increase. Too often, they actually drop because the company isn’t using a growth-oriented strategy.

3. Grab anything they can get
In tough times, there is always the strong temptation to grab a sale—any sale—as long as it brings in some money. When the economy seems to be tanking and money is tight, it’s hard to say “No” to a possible sale or a potential client.

However, going after any sale can be exactly the wrong move. There are costs to any sale, and when owners go after just any sale, they end up taking on business that costs them more than it’s worth.

Another negative aspect of going for any sale is that owners often let down their standards to close the deal. Loyal customers perceive the lower quality in service or goods and back off.

What’s needed is a completely different approach.

While each of these three options may seem to do something to keep the wolves at bay, the fact is none will make a positive, long-term difference. About 75% of small businesses don’t make it to five years, partly because they don’t know how to use the challenging times to their advantage.

Here’s an approach we’ve seen work in all economic conditions and is critical to a company’s chances of survival.

The approach: Invest in the future.

What? Money is tight right now, and the economy is sliding down. Why should small business owners invest right now?

We’re talking about investing time and effort to look at where the market is going rather than where it is now. What is it your customers are willing to keep paying for now? What will they want next year? The customer is always a moving target. Needs and wants shift along with the ups and downs of the economy. Rather than see the drop in spending as a threat toyouir survival, we can see it as an opportunity to identify new demands byyouir customers.

Talk with your customers. What do they need now, even in tough times. Where do they see themselves in a year or two? What will they need?

When you gather this information, ask yourself: How can match my products to what my customers will need in the future?

Cutting back, staying the course, or going for anything you can are NOT focused on the future and where your customers are going. They focus on the PAST and rarely serve as good strategies for moving forward.

To survive today’s challenges, you must focus on the future and invest more time and energy in meeting future demands with exactly the right product for your customer.