Be honest with yourself. You're not perfect. Maybe you feel lost in the jumble of bookkeeping or the sales calls you make are garnering only a few new projects. Whatever. Every successful entrepreneur has a weak spot. It's your business's Achilles' heel.
This is not some terrible admission. Most entrepreneurs started their ventures based on several superior skills. Running a successful business requires you to learn more. But no matter how much you learn, you need to recognize your deficiencies and reach out for help.
Call it a case of watching too many makeover shows on The Learning Channel. We decided to help massage some tender Achilles' heels by pairing entrepreneurs with experts. Five business owners agreed to bare their souls. Five experts offered free consultations.
The results will educate you. Although the businesses run across a variety of industries, their problems will be familiar to any entrepreneur: growing your sales, improving your distribution, ramping up marketing, motivating employees and managing cash flow. The experts offered the entrepreneurs fresh ideas. Their insights should help you begin the process of addressing your own Achilles' heel.
The Entrepreneur: Stephanie Anne; Stephanie Anne; Dallas
The Expert: Arthur St. Onge; St. Onge Co.; York, Pennsylvania
The Problem: Distributing high-quality furniture
Stephanie Anne's eponymous company produces high-quality children's furniture--furniture a parent would want to pass on to a child. It's been a huge hit in Dallas and Houston, where she runs two stores--so much so that she's added a catalog and Web site to accommodate customers outside the area. Stephanie Anne, 34, now ships about $3 million in products each year from her warehouse.
That's where the problems begin. Stephanie Anne's customers are well-off mothers expecting their first child. Anyone who's had a child knows first-time parents want everything perfect. That means no scuff marks on the crib--especially when it costs $995 to $2,100. Locally, Stephanie Anne can count on people she trusts, but how can she guarantee someone unloading changing tables in a far-off city will treat the goods with kid gloves?
Stephanie Anne ships most of her goods with Bekins Van Lines, but it hasn't been willing to assume liability for delivery. Distribution expert Art St. Onge offers a few solutions.
First, he suggests partnering with a local firm that has comparable needs. The Container Store, also based in Dallas, has a similar business model and shipping situation. It may be willing to offer some transportation ideas or a partnership to share transportation and defray costs.
Another option is to find a way to reduce delivery damages. "Get a packaging consultant involved," St. Onge advises. "See if you can't come up with a packaging system Bekins agrees they'll take responsibility for."
Marketing can help, too. St. Onge recommends Stephanie Anne bombard one region--say, the Northeast--with catalogs so she can consolidate shipments and cut costs. She may even be able to handle shipping herself.
St. Onge also says Stephanie Anne should look up a local Council of Logistics Management chapter. "Make a presentation at their monthly meeting," he says. By providing good fodder, Stephanie Anne would get an opportunity to brainstorm with experts.
Increasing Sales & Marketing a New Product
The Entrepreneur: Ken Hobbs; Jel Inc.; Sacramento, California
The Expert: Joseph Riggio; JS Riggio International; Mahwah, New Jersey
The Problem: Increasing sales
Jel Inc. is thriving. In seven years, it has grown to $3 million in sales providing Internet professional services to companies like Saturn and Genentech. But co-owners Ken Hobbs and Jon Lee recognize their scavenging approach to sales--acquiring competitors and sorting out their good clients--can't last.
"What's challenged us most is new business sales," says Hobbs, 33. "We don't have much of a marketing effort."
Hobbs admits Jel's Web site isn't the sharpest. That bothers sales consultant Joseph Riggio. "You have an integral relationship between your product and media," he says. A Web site is as important to a Net business as the services. Riggio recommends dedicating someone to keeping it fresh--immediately. (The site has been overhauled since the evaluation.)
Riggio also discerns problems with the firm's telemarketing. It gets Jel in the door just 5 percent of the time--a figure he says should be 20 to 25 percent. He wants the company to adopt a more aggressive script. ("Would you talk to us if I could save you 50 percent on your Web hosting?") When Hobbs is skeptical, Riggio points out the obvious: "You're already losing 95 percent of the calls you're making," he says. "How worse could it be?"
The script he describes is blunt yet subtle. Most important, however, it's the initial element in a sales barrage that includes follow-up letters, phone calls, brochures, and a capabilities CD-ROM to ensure Jel contacts prospects six times before giving up on them.
Riggio also wants the firm to brand itself. He urges Hobbs to find an industry niche. The Saturn account gives Jel credibility in the auto industry. Why not advertise in a trade magazine targeting dealerships? Trade ads cost as little as $1,000 per month and can put Jel's name in front of decision-makers.
Finally, Riggio wants Jel to use its big accounts to garner more business; not necessarily directly, but through contacts. That requires building client relationships through lunches, dinners or golf outings. "Ask them who they can direct you to," he says. "I've found that this altruistic streak in major accounts is enormous if you know how to tap into it. They get pleasure from the power of position."
Says Riggio, "One of the world's rules of super salespeople is that he who asks, gets."
The Entrepreneur: Robert Schiff; Photowow.com; Los Angeles
The Expert: Elisabeth Teal; Baylor University; Waco, Texas
The Problem: Marketing an unknown product
When Robert Schiff moved to Los Angeles, the artwork from his old home in Florida didn't work in his new space. He looked around for a large piece of art, but nothing fit. Worse, what if he moved again? He didn't want to spend a fortune on art that might not fit later homes. Then he spied an article about a large-format inkjet printer. He instantly realized an opportunity.
The business born of that idea is now 5 years old. Photowow.com has two retail stores, employs 25 people, and reached $1 million in sales in 2002. But Schiff, 39, finds it difficult to describe what his company does. People who see prints of customers' children rendered in Andy Warhol-esque pop montages love them. But most people haven't seen them. Schiff needs to figure out how to get his message out.
Baylor University assistant professor of management and entrepreneurship Elisabeth Teal sees some options Schiff hasn't taken advantage of. Photowow aggressively prices its product. The 42-inch format runs $425. That's a tidy sum, but he's selling it to customers one at a time.
"I'd broaden it to the commercial market," Teal says. Perhaps targeting franchises that want to have pictures of their founders in every store. University bookstores could sell prints of campus landmarks to students and alumni. Corporations might want a print of the home office in each branch office. Such pieces would be more profitable, because the one-time front-end costs get spread over reprints.
Teal also wants Schiff to think of alternative ways to reach his market. Photographers and photo refinishing shops can make referrals. And party and event planners are the keys to major events like weddings, where prints can be a focal point as well as a gift.
Finally, Teal suggests Schiff reorganize his Web site. She'd like to see the designs grouped (say, "Warhol-inspired" or "Lichtenstein-like") so customers don't get overwhelmed.
Motivating Workers & a Cash Flow Crunch
The Entrepreneur: Rob Gelphman; Gelphman Associates; San Jose, California
The Expert: Arlene Vernon; HRx Inc.; Eden Prairie, Minnesota
The Problem: Motivating workers
In the throes of the technology slump, publicist Rob Gelphman finds high-tech clients aren't biting on proposals. That's leading to some lethargic workers at his Silicon Valley PR agency. "Everybody's very frustrated," he says. "They don't want to go the extra mile." Another hurdle Gelphman, 44, faces in lighting workers' fires is that they all telecommute.
Arlene Vernon sees the problem as one of motivating. The workers need to be committed. She suggests one-on-one meetings with each worker to probe their interests and desire.
One solution for motivating workers is to hold a companywide brainstorming session. Vernon recommends that Gelphman fly in his one worker who lives in St. Louis and bring everybody together face-to-face to discuss companies the agency should target.
"You want it to be their idea," Vernon says. Extrinsic motivations are also important, so she wants Gelphman to establish a bonus system that rewards employees for landing new clients.
The bonus program can also encourage workers to put articles they write for Public Relations Society of America publications under the Gelphman name ("Jane Doe is a senior counselor at Gelphman Associates"). This re-establishes their link to the firm, while reinforcing the company's brand within the community.
Most important, however, Vernon asks Gelphman to re-examine his hands-off management style. While he feels it gives his seasoned pros the breathing space they deserve, it doesn't leave them with any backup. They may want support with difficult clients. "You're not managing the employee," Vernon notes, "you're managing the client and the account."
The Entrepreneur: Joe Donnelly; Donnelly Display Inc.; Farmingdale, New York
The Expert: Howard Van Auken; Pappajohn Center for Entrepreneurship, Iowa State University; Ames, Iowa
The Problem: A cash-flow crunch
Over the past 10 years, Joe Donnelly and his wife, Linda, have become a classic success story manufacturing hangers that display names of stores or lines of clothing. They also produce mannequin parts--torsos that display sweaters, rather than entire bodies.
In the past year, however, Donnelly has been cash-starved as vendors have cut back on terms, including five that represent 70 percent of his purchases. They're citing the slack economy. Donnelly's customers, however, won't speed their payments. That's leaving him with a nasty cash crunch.
Howard Van Auken understands the problem intimately. He ran a family business before becoming a professor. Van Auken feels that the business's family nature could be the trump card. The Donnellys invite their customers to barbecues at their home as part of their marketing. They could benefit by using the same approach with suppliers. "If you do this relationship-building with the vendor, they may show flexibility," he says.
The Donnellys moved into a new 15,000-square-foot facility a year ago to accommodate growth that never came. Van Auken suggests trying to lease out the space currently not being used as a way of increasing income.
He also fires off several suggestions Donnelly has already tried. Factoring accounts receivable? Factors charge too much because the firm does less than $3 million in business, says Donnelly, 35. Offering discounts for early payment? Customers don't see a 3 percent discount as worth the hassle. Adding a line of credit? Already done.
Van Auken then suggests getting creative. He proposes that Donnelly use a corporate credit card to extend his company's float by 30 days and examine his production process for ways to improve it. "If you could save a day, you could get your receivables a day earlier," Van Auken says.
Finally, he suggests that Donnelly just find time to plan. "When I ran a business, I didn't have time to think, to talk to people, to get contingency plans," he says. "I sometimes found it's good to get away."
Donnelly and the rest of our entrepreneurs only had an hour on the phone with these consultants. Hopefully that gave them a chance to ponder some new ideas--and taught you a thing or two along the way.