November 02 02 SBC Small Business Newsletter

November 2, 2002

Table of Contents

Staff Article - 15 WAYS SMALL BUSINESSES GET INTO TROUBLE - PART 3
Guest Article - KEEPING YOUR BROCHURE OUT OF THE TRASH
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Staff Article

15 WAYS SMALL BUSINESSES GET INTO TROUBLE - PART 3
by: Cary Christian

In Parts 1 and 2 of this series, we reviewed five money problems and five strategic problems that explain how small businesses get into trouble. We're going to wrap up this series by looking at people problems.

Business organizations are inherently social organizations. There are relationships between employees and their bosses, employees and other employees, employees and customers, employees and vendors, the business and its outside consultants, and many other types of social interactions that can each cause problems of some sort. In fact, people problems may just be the most difficult type of problem to deal with.

It would be nice if we were all well-schooled in psychology and could avoid people problems by simply not hiring or associating with people that have the potential of causing problems. But that is unrealistic in many ways other than the obvious. You simply never know who might or might not be a problem individual under stress. No amount of psychological training is going to equip the small business owner to make such a determination and be 100 percent accurate.

There is also no way to know how effective an individual is going to be for an organization. A person may be nice, kind, polite, have a great educational background and a good work history, but just cannot function well in your organization. Is this the fault of the individual or the organization? How can you tell?

The stakes are high. More than a few small businesses have been ruined because the entrepreneur made poor decisions relative to the people he or she chose to associate with and how relationships with these individuals were maintained.

PEOPLE PROBLEMS

1. Failure to train employees properly.

Not all problems with people are related to personality. In fact, most problems that small businesses must face relate to the inability of the business to train employees for the tasks for which they are to be responsible.

There is a major difference here in the capabilities of large and small organizations. Large organizations generally have a formalized training structure in place for new hires. Small organizations generally rely on on-the-job training carried out by individuals who themselves have been poorly trained and thus are in no position to train anyone else.

Business is transacted by people. If the people who work for the business are poorly trained it will always reflect negatively on the bottom line. Always.

It is critical that new employee training be carried out by people who are both knowledgeable in the subject matter of the training and capable of training effectively. If no employees meet this criteria, then a trainer or trainers must be brought in from the outside.

Poorly trained employees create more problems than just errors in their work product. They also become a drain on morale and can create problems with other employees, customers and vendors.

2. Failure to appreciate the contributions of employees.

It is not uncommon for employees of small businesses to feel unappreciated. Larger organizations have structures in place to recognize employee achievements and are better able to reward outstanding efforts financially.

Small businesses make a number of mistakes in this area. Some examples are:

- Treating employees as though they are easily replaceable.
- Failure to provide reasonable benefits.
- Little or no recognition of outstanding accomplishments.
- Failure to respect the value of employees' time.
- Failure to ask for and respect employees' opinions.

Entrepreneurs sometimes treat employees like they are family, and this is generally a good thing. It can become a negative, however. People generally expect their families to help them out to the greatest extent possible while expecting little or nothing in return. They do it because they are family. Your employees will never BE family. They need more appreciation and recognition than family will ever need.

Employees are the life-blood of any business organization. It is critical that employees feel like they are part of the team, are respected, are well compensated, and that their efforts are truly appreciated by the owners. Small businesses who look at employment costs first when seeking to control or reduce expenses are making a mistake that can be deadly.

3. Hiring or trusting the wrong people.

I once knew a business that was doing well, employing about 15 people, making decent profits for the owners, and growing slowly every year. The owner decided he was ready to take the plunge and take the business to the next level.

He hired a man who was generally recognized as being one of the best sales organization builders in the business to open several new offices and introduce new product lines at all locations. The business quintupled in size within six months. New locations were opened in two other cities in the same state and total employees grew to in excess of 125. Everything looked good.

But . . . the owner had lost control. The new hire demanded the world and threatened to walk out if his demands were not met. They were met until one day the owner could stand it no more and told the man to get out. He did. And he took every employee he brought into the organization with him! His people collected the businesses' receivables and left it with the bills due to vendors. He opened competing businesses in each city using his former employer's own money to destroy him. And destroy him he did.

The owner of this small business actually knew that this man had done this very same thing to two other businesses before him. He hired him anyway because he thought he could control the situation.

The moral of the story? A small business needs to know who they are dealing with and refuse to let greed lead them down the path to destruction. Hiring or associating with people who are not VERIFIABLY trustworthy and honest, no matter how good the individual might be at his job, will always be mistake.

4. Creating an atmosphere of mistrust.

It is important that employees, customers, vendors and others that have relationships with a business trust the owners. I have seen situations where owners intentionally create an atmosphere of mistrust for purposes of control, but I won't address those situations because there is really nothing to say about them.

But in other cases, owners create an atmosphere of mistrust without meaning to. This can happen when an owner fails to recognize the contributions of employees and where owners fail to deliver on their promises whether they be promises made to employees, vendors or customers.

Vendors and customers will simply refuse to do business with an organization they can feel they can no longer trust. Employees will be constantly on the lookout for another job opportunity and job performance will suffer. Business results of operations suffers in direct proportion to this growth of mistrust.

Small business owners need to always be mindful of their actions and the consequences. For example, I know of one situation where the owners regularly pocket the cash from cash sales made by the business. The cash they take is properly accounted for in all ways but the employees do not necessarily know that.

Some employees think they are stealing from the business and cheating on their taxes. Some have even lodged complaints with taxing authorities, (anonymously, of course). All of this could be avoided by following simple procedures designed to eliminate the appearance of impropriety.

Bottom line? Sometimes owners tend to think of their business as an extension of their personal lives and personal checkbook and do things they would never think of doing if they were the CEO of a business they did not own. This always creates problems in some fashion. Small businesses must create procedures that build trust and operate in compliance with them.

Entrepreneurs must build the character of the organization. Businesses have a reputation just like individuals do and that reputation is key to continued success.

5. Hiring the wrong consultants.

Consultants can add a lot of value to a small business enterprise. Small businesses generally cannot afford Fortune 500 executives, so they should include in the budget funds for the best consultants available. The hourly fees may be scary, but the right consultant will be worth many times the amount of the fees charged.

Small businesses make a big mistake when they make it a practice to hire the cheapest accountants, attorneys and business advisors they can find. Consultants should be hired based on their experience level, their reputation, and what they can do for the business. The capabilities of the consultant should be matched with the project at hand. If the project is critical, the small business simply cannot afford not to hire the best.

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Small businesses are the fuel that runs the engines of commerce in every country throughout the world. Opportunities abound for small businesses that can operate on par with world class organizations. Avoiding the problems discussed in this article series is a good first step toward making your own organization world class.

Copyright (c) 2002

Guest Article

KEEPING YOUR BROCHURE OUT OF THE TRASH
by Cathy Kessler © 2002
http://www.kesslerva.com

Brochures are one of the most popular marketing tools. They have the potential to be highly effective. However, let me share a startling piece of information with you. It is estimated that over half of all brochures end up in the trash without ever being read. Considering the cost involved with printing brochures, it is important that every effort is made to gain the attention of the reader immediately and to provide information that will cause them to act.

There are several key elements to consider when planning your brochure. You may choose to use the following list of "do(s)" and "don't(s)" as a checklist during your next printing.

Do.

1) Create an innovative, interesting, and applicable cover for your brochure. If your business centers around allergy-relief products, you might consider placing a photo of a mother comforting her daughter as the child sneezes, or a man slumped over his desk with watery eyes in place of your company logo.

2) Use photos on your cover if at all possible. Photographs can be costly, but they are huge attention-getters. Visit "stock" photo sites such as www.photospin.com to find professionally taken pictures costing between $9.95 - $75.00. These types of sites offer a wide selection of photos for use at very reasonable prices.

3) Use full color on your cover. Why all the attention on the cover? It is the key to having your brochure read. If the cover does not catch the eye of your prospective client, the rest of the material will go unread. For this reason, spend the additional money and have your printer use full-color processing.

4) Use your copy space wisely. Most tri-fold brochures offer limited space for copy (text), so be sure to use that space wisely. Focus on benefits to the customer, use definitive calls-to-action, and leave at least one key piece of information out of the copy (such as the price or the size) so that the reader will be more likely to contact you.

Don't.

1) Print "homemade" brochures. Brochures that do not portray a highly professional image are received with a bit of skepticism. The low quality presentation of a homemade brochure immediately gives the impression that your business is of low quality, too.

2) Skimp on proofreading. This is without a doubt one of the most common errors novice marketers make. Typos, the misuse of words, and blatant grammatical errors are very damaging to your reputation. While most programs now offer a spell-check feature, these tools can't differentiate between words like your and you're, no and know, or peek and peak. Not to mention, their ability to check for mistakes in grammar is inadequate.

3) Try to close the sale from your brochure. Most brochures are simply not designed to take the customer through the buying process and to the point-of-purchase. That's not their purpose at all. Brochures are designed to give enough information to spark the interest of the readers and to cause them to ask questions and want further details. If you attempt to include every ounce of information about your product or service in your brochure, most likely it will be too crowded and overbearing to bring about positive results.

Concentrate on creating a brochure designed to do its job and present your company attractively. By enticing your prospects, and then providing excellent contact information, you will soon find that your brochure will open the door to many more sales.

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Cathy Kessler is a Certified Professional Virtual Assistant specializing in proofreading, copyediting, and research. Do you have books, ebooks, brochures, websites, articles, newsletters, or other documents that need to be proofread or researched? Visit http://www.kesslerva.com today for additional information, or contact Cathy directly at mailto:cathy@kesslerva.com .

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