Monday, August 13, 2012

“It will never happen here…”

imageThis article was written by Robin Noah, SCORE Orange County Management Counselor

Crisis management, small business failure, business turnaround, and other similar terms are not popular topics in the business world. Terms such as these rank very low on the search engine popularity lists. Failure to thrive is something that few business owners, small or large, want to talk about.

Consider that business failure statistics tell us that over 5 million businesses shut down every year; most of these because they did not include crisis management in their business planning – addressing safety issues or other areas of concern specific to their industry..

Part of crisis management is preparing for things that we hope will never happen. One of the worst possibilities is an employee or a customer becoming violent. The thought of this happening is almost too terrible to imagine, but you need to be prepared.

David Deakins, director of Massey University's Centre for Small and Medium Enterprise Research found that a company’s vulnerability increased if a crisis was caused by natural disaster, rather than an internal issue. The survey also found that a written plan did not necessarily make the company more resilient, experience in dealing with the consequences of a crisis was more important.

Having a plan to manage disaster and crisis will identify those areas or occurrences where planned action is the best approach. No company is too small for a crisis. From bankruptcy to disgruntled customers or employees seeking revenge, even the smaller companies should be prepared to handle and manage a crisis.

Your best bet is to develop a crisis management plan that includes emergency notification procedures, assessment of the immediate safety of the workplace, proper notification to those in danger, process for investigation of the incident, resources, handling the media and other situations that are exclusive to your company.

The company should also have continuity plans that in addition to crisis and disasters identifies threats and impacts and ensures that the company is able to withstand the disruption that a full-fledged crisis can inflict.

Don’t wait, don’t hesitate. Plan the best strategy that can get you out of a crisis… and …be well prepared for any unforeseen event that may come your way.

Is Selling Evil?

This article was written by Joe Polish in Success Magazine, July 2012, reprinted by permission

Mention “selling” to some people, and it automatically conjures up a guy in a cheap suit trying to pressure them into buying something they clearly don’t want. Selling is greedy… selling is corrupt… selling is manipulative, these people think.

As entrepreneurs, business owners, salespeople and/or marketers, we face this stereotype daily. Sometimes our audience is so ingrained to think selling is bad that they’ve already said “no” before we get a chance to sell them on anything.

Why Does Selling Get a Bad Rap?

My favorite definition of selling comes from a very successful, brilliant friend of mine, Dan Sullivan. (See Sullivan’s recent Modern Marketing column at I love the way he defines it: “Selling is getting someone intellectually engaged in a future result that is good for them and getting them to emotionally commit to take action to achieve that result.”

With that definition in mind, look back at the past 100 years. How many breakthroughs would have been made without selling?

Martin Luther King Jr. got people intellectually engaged in a future result that got people to commit to take action. So did Mother Teresa and JFK. So did Henry Ford and Steve Jobs.

But then again, so did Hitler.

Hitler got people intellectually and emotionally engaged in a future result that murdered people.

Yes, that was inarguably evil, but does that make selling evil? On a much lighter note, what about the nightmare of a salesperson with his foot planted in your doorway, pouring on the pressure and not taking “no” for an answer? Does that make selling evil?

Selling took place on all accounts. The only variable in these equations was whether the person doing the selling offered a future result that was good for all the parties who were involved.

Let’s look at this, because it’s profound. Sullivan’s definition of selling, again, is “getting someone intellectually engaged in a future result that is good for them.”

Remove the words “good for them” from that definition of selling, and what do you have? A parameter that allows the abuse of salesmanship.

But put the “good for them” back into that definition, and suddenly selling becomes something beneficial. Selling is helpful. Selling is progressive. Selling is helping to create a better future.

The Oxygen of Our Economy

Think about this: Just because the air outside sometimes gets polluted with allergens and makes people sneeze, should people give up on breathing? Is the logical conclusion that suddenly oxygen is evil?


Yet, when someone says, “Selling is evil,” it makes about as much sense as saying, “Oxygen is evil.”

You can’t survive without oxygen; likewise, no business can survive without selling. No free economy can survive without sales. Selling is the “oxygen” that infuses life into it all.

Are there people who contaminate good salesmanship with sleazy tactics? Yes. Are there people who use selling, or the “engagement” of others, for selfish purposes? Yes. Are there people out there using manipulation to rip off people? Yes.

But should those “pollutants” have the right to mar the whole reputation of selling? No way.

Changing Perceptions

So what is the problem with selling? It’s the association many people have with it. “I went to a car lot, and some slick guy talked me into something I didn’t want.”

That means your job as a “salesperson” is to change these associations, alter these perceptions. Because perception is reality.

How do you do this?

Through your sales and marketing, of course.

When you approach your market to sell, remember: People love to be sold, but they hate to be pressured. So out with the hype, arm-twisting and high pressure, and in with the proven formula that turns “selling” into a great experience for all parties involved and provides:

1. Education.

2. Benefits.

3. Value.

How do you feel when you are in an environment where someone is educating you and offering you something you really want? You don’t even perceive it as being sold; it’s enjoyable… even fun.

This is the selling environment you need to create to be successful in a skeptical, cynical marketplace.

The Power of Education

Good salespeople have always used education to gain trust and build rapport with their market.

Be it cars, electronics, plumbing or carpet cleaning… a crackerjack salesperson knows that educating prospects on the ins and outs of products and services is the quickest path to a sale.

Is there a course in college on how your DVD player works? Or how your washing machine operates? Or the construction and care of your sofa? No. That’s an education you get from excellent salespeople.

Through the proven means of direct mail, the Internet, and the power of video and print, today you have the chance to be an education-based salesperson to your market… even while you sleep.

Here is the secret to being super-successful at marketing and dispelling the “evils” of selling: Build rapport, educate, help, teach and give your prospects something of value before you ever even ask for a sale. Follow this recipe, and your prospects will actually enjoy the process of being sold.

Good vs. Evil?

Imagine that a prospect just came across an ad that screams “hype.” It’s got the usual muddle of pictures and the “we are the best because blah, blah, blah... ” copy in it. What does he or she do? Although this ad is not exactly evil, it doesn’t provide anything that is good for the prospect, either. So it probably gets tossed aside. Another stinker of an ad, another selling stereotype perpetuated.

Now imagine if it had gone this way: Prospects come across an ad that catches their attention because it “speaks” about benefits to them. It simply gives them all the information they need to make a good buying decision and even offers them a free, no-pressure, no-obligation sample so they can test out the product/service/relationship. Prospects perceive this experience to be good for them. The client enjoys being “sold.”

The same principles can apply in face-to-face selling, too. A salesperson who approaches with genuine interest and questions, offers valuable information, and creates a good rapport provides a much better experience than the one who swoops in with the classic high-pressure lines and hard closes.

Always aim for that future result to be a good one but also keep the process of reaching that result (i.e., your sales and marketing) in the best interest of your prospect, and you will never, ever be identified with the evils of selling.

And to the naysayers who are anti-sales, I ask: What would this world look like if someone didn’t sell and market? Where would the jobs be with no selling? Where would the entrepreneurs be? Where would the small businesses be? We would live in a dictatorship or communism. That’s not the world I want to live in.

The irony is that the people who talk trash about selling and marketing are selling their ideas to you. But the real paradox is that they don’t realize that everything that exists in the world (that they benefit from)—from light bulbs to chairs to cars to music to the food we eat—exists because of selling.

Selling is the oxygen of our economy. Salespeople are the saviors of commerce. And selling… or getting people to engage in a future result that is good for them… is the path to progress.

Is It Time to Ditch Your Bank?

From Los Angeles Times, Business Section, July 17 2012, reprinted by permission

There's a love-hate relationship between entrepreneurs and banks. In fact, one in four small businesses changed banks in the last four years, according to a survey out this week from the National Small Business Association.

The two most popular reasons for making a move are feeling "mistreated" by a bank and seeking better financing options, according to the report from the Washington, D.C.-based small business advocacy group. In particular, small business owners are least impressed with big banks. Of those small businesses that work with big banks, only 14 percent reported the services and finance offerings as "excellent." At the same time, 43 percent of respondents who work with community banks and 38 percent who use credit unions rate their respective banks as excellent in the same areas.

To be sure, it's a hassle to switch banks, but sometimes it is worth it. Here are three signs you need to make a change:

1. Abrupt changes in financing terms. "If their credit line gets cut or interest rates rise unexpectedly, I think that is pretty telling," says John Paglia, a professor at Pepperdine University's business school. Almost one in four business owners have seen the terms on their loan become worse in the past year, according to the NSBA survey. Some were given no reason, while others were told their business had become more risky or banking standards had been raised. Meanwhile, 29 percent of survey respondents reported having their available line of credit reduced in the last four years.

Whether you're securing a loan or line of credit, be sure to read all of the fine print, keeping an eagle eye for language suggesting the bank can change your loan terms based on "changing market risk," or other vagaries, Paglia warns.

2. Your bank can't keep up with you. "If the bank doesn't have what you need at the next stage of your growth, then you need to look elsewhere," says Bob Seiwert, head of the American Bankers Association's Center for Commercial Lending and Business Ranking. For example, every bank has a cap on what they can lend out at any one time and a limit on what they can lend out to any one firm. "If you need a lot more money than that banker is comfortable lending to any one business," says Seiwert, "that is a sign that you have outgrown your bank" You may also need additional financial services as your business evolves.

3. Your banker doesn't talk to you. "Not all business owners are financially savvy from the day they open their doors," says Terry Jorde, the Senior Executive Vice President and Chief of Staff at the Independent Community Bankers of America. You deserve a banker that is willing to sit down with you, talk to you, listen to your business plan, and really learn about the business you are running. The banker "should be there to guide them through the process," Jorde says. And if you have to continually "re-educate" your bank about your business, she says that is a pretty good indication that you should be looking for another bank.

Once you have decided that your current bank is no longer serving your needs, talk to other businesses in your community about which bank they use, adds Paglia. If you are looking for a smaller bank, the BankLocally website has a zip-code look-up for community banks.

Does Your Home Business Need Insurance?

This article was written by Carol Tice, in Entrepreneur Magazine, August 10, 2012, reprinted by permission

Driving to clients' homes always made Brandi Greygor nervous. As the owner of Sassy Mama Boutique, Greygor often drove as much as $10,000 in women-and-kids' clothing and accessories to home parties and exhibition halls. She would set up merchandise, which then sat overnight unattended before an event took place.

Greygor wasn't so worried about a dismal sale. She had no business insurance, and if a child were injured using one of her toys or a shopper was hurt, she could be sued for health-care costs. Also, if anything went wrong – if, say, merchandise were damaged, lost or stolen -- Sassy Mama would face a big loss.

"That $10,000 of wholesale merchandise is $20,000 to $30,000 of income, if I were to lose that," says Greygor, who is based in Union, Ky. Her 1-year-old home-based business was uninsured for more than nine months until April, when her worries about her risks led her to purchase insurance coverage.

Sassy Mama's story is a common one. Sixty percent of home-based businesses lack adequate business insurance, according to the Independent Insurance Agents & Brokers of America, based in Alexandria, Va.
One reason owners forgo insurance is confusion over what may be already covered by a homeowner's or a renter's policy. But most home-business owners have little or no coverage from their homeowner's policy. What's more, if you file a homeowner's (or renter's) claim for losses sustained by a previously undisclosed home-based business, your insurer may refuse to cover it or cancel your policy, says Ryan Hanley, an insurance agent at Murray Group Insurance Services in Albany, N.Y. At best, you might receive a small reimbursement.

"People do not realize that if the UPS guy comes to your door with a business package in his hand and slips and hurts himself, there is no coverage for that injury in their homeowner's policy," Hanley says.

If you’re doing business at home, you’re smart to have insurance. The amount of your sales doesn’t matter. The amount of loss you could face should something go wrong is what counts.

So how can an entrepreneur protect a home-based business? Start by insuring your business right away. You can choose from one or more of these three basic types of insurance, depending on your business's complexity and type.

1. Rider to a homeowner's or renter's insurance policy
The most inexpensive home-based business insurance is an add-on or rider that expands a homeowner's or renter's policy to cover the company. The cost of such a rider is minimal -- perhaps $100 a year -- but it generally provides about $2,500 of additional coverage, says Loretta Worters, vice president of the Insurance Information Institute in New York City, an industry trade group and information clearinghouse.

This type of insurance may be appropriate for a one-person business without a lot of valuable equipment or many business-related visitors, and unlikely to suffer a major loss if unable to operate for a while as a result of fire or another disaster. Such coverage may work, for example, for an accountant who works at home preparing customers' taxes and delivers the returns via email, Hanley says. But it could leave a home-based business owner on the hook for costs such as a large medical bill for that injured UPS man.

2. In-home business policy
An in-home policy covers a broader spectrum of contingencies, including loss of critical documents or theft of funds being taken to the bank for deposit. An in-home policy, issued by a home insurer or a specialty firm, usually is a plan against injury or theft covering as many as three employees, Worters says. Rates typically run from $250 to $500 and the plans can cover as much as $10,000 in losses.

Most serious home-based business owners may want to consider picking up at least an in-home policy, says Rebekah Marshall, multiproduct insurance manager at the National Federation of Independent Business. "This covers business equipment and liability [for injury]," she says. "That's important if people are coming in and out."
3. Business owner's policy
Entrepreneurs who need more than $10,000 of coverage should pay for a business owner's policy. This comprehensive policy is what brick-and-mortar retailers, among other businesses, use, Marshall says.

Circumstances usually covered by this type of plan include damage to or loss of business equipment and other assets, liability for customer injuries, loss of critical records, malpractice or professional liability claims, and loss of income or a business interruption in the case of a power outage or a natural disaster. Such a policy might also protect you when driving a personal vehicle for business purposes.

This insurance protects against a higher amount of loss than a homeowner’s policy rider or an in-home business policy. Videographer Logan Hale, owner of 2-year-old Your Little Film in Los Angeles, paid about $500 for a $2 million business owner’s policy to cover his $25,000 of equipment against breakdown, theft or damage. His plan also covers loss or damage to home movies sent to him by customers, as well as injury or property damage inside a client's home or public venues. He shopped around a bit before Los Angeles-based Farmers Insurance agent Rodney Pyle found a specialized policy for videographers, he says.

"As I started increasingly going into people’s homes to shoot, it really pushed me to say ‘2011 is about getting covered,' " he says. “Now I feel so much safer, knowing I'm not putting my family at risk for a possible lawsuit."
As your company grows, it may require additional coverage not covered by a business owner's policy, Marshall says, such as life insurance, workers' compensation, and business-vehicle insurance. But for most small businesses, the business owner's policy can provide a suitable basic safety net.

Business owner's policy "is an investment in the business you should make if you're serious about what you're doing," Marshall says.

Greygor is relieved that Sassy Mama is now covered by the business owner's policy she purchased in April, especially the protections in case a customer is harmed by a product, she says. Like Hale's, her policy has $2 million worth of coverage.

"I'm a mom," she says, "and I wouldn't ever want to be looking at another mom and saying I don't have enough coverage for [her] injured child to be taken care of."

Learn more about insuring your home business through these resources from the Insurance Information Institute.