Free articles written by Mike...

• "10 Things Any Small Business Can Do To Kick Its Profitless Days In The Butt"
• The Case of the "Zombie Business"
• Help! I don't have any customers!
• "Advertising Doesn't Work"

"10 Things Any Small Business Can Do To Kick Its Profitless Days In The Butt"
By Michael S. Winicki

Sometimes when I have an afternoon to spare I go out and "snoop" a little. I'll drive to a nearby town and stop in to see how the local small businesses are doing. More often than not I'll open the door to a small business, take a few steps inside and then someone will toss an unenthused "hello" in my direction. If I'm really lucky they'll hit me with an less than enthusiastic "How may I help you" or the equally inspired "What are you looking for today?"

I would love to give them immediate sales training right then and teach them to quit the lame "Radio Shack customer chase", which I don't think Radio Shack does anymore due to the number of times it caused potential customers to "snap" at being harassed as soon as they entered the business- but that's for another time.

My purpose of stopping in is to see how business is… is business being done in small independently owned storefronts and service businesses any more? Obviously there is but you wouldn't know it by the number of small business owners I talk to. I've had the privilege of working with over 2,000 small businesses in my career and each one has been a unique and interesting experience. But in almost all cases I could within minutes tell from looking at the business and visiting with the owner or the staff that they were literally costing themselves dollars on a daily basis.

And while it's in vogue to blame the woes of small business on the big box retailers or the chains or the giant conglomerates the truth is it's the small business owners that are putting themselves out of business at an alarming rate.

I can give example after example of small businesses in areas just inundated with large competitors but continue to thrive. And while it maybe fun to criticize how local government is allowing another big chain into the area these business owners know their energy is better served by concentrating on what they can control and forget about all the rest of the nonsense going on around them.

So here are the 10 most common ways small businesses are killing themselves, from my point of view. I personally feel running a small business is more difficult than running a 500 employee operation and I have utmost respect for anyone that starts and runs their own business but the fact remain they are leaving a lot of money sitting on the table and if they don't get it a competitor will.

1. No one seems to take a "long view" of business. Their "future" is no further than their next payroll or next rent payment. I've quizzed dozens of successful small business owners and they in unison admit they do their best thinking when they're not involved in day-to-day nonsense but instead can steal away a couple hours to do nothing but "think". Every small business owner needs to spend at least two hours per week looking at his or her business from a point of view other than from behind his or her sales counter or office desk.
2. What happened to good manners? Not long ago I visited a small insurance agency. I walked in and approached the counter, before me were 5 desks, 2 on the left and 3 on the right. All the desks were facing me and all had a young lady sitting at their particular desk- facing me. No one got up. After an uncomfortable 30 seconds, someone gave me a gruff, "Hello" from the seat of her desk chair. Now I don't want a person "attacking me" as soon as I come through the door, but someone should at least get up and acknowledge that I'm a live human (well sort of). Remember this was an insurance agency; I wasn't there to get a free calendar. Please, just a smile and a friendly hello… and get your lazy butt out of the chair for God's sake! We may all poke fun at the Wal-mart "Greeters" but it's a heck of a lot better than grunting a fake "hello" at someone from across the room.
3. Clean this place up. Please run a vacuum now & then. Their just isn't any excuse to have papers stacked everywhere, to have layers of dust sitting on everything. And don't get me started on the shape of the bathroom I find in most small businesses.
4. Their advertising sucks. Small businesses seem to love "business card" type ads. You know the ones with the business name on top, some brilliant statement like, "In business since 1975" on line two with the address and phone number underneath. Pretty exciting huh? Yep, that's what the people that read those types of ads think.
5. Does anyone train his or her employees? There is a huge gap between big businesses and small businesses when it comes to training. Most big businesses have standard operating procedures or even a training manual. I've yet to see a training manual (even though I'm sure they are out there) for an independently owned small business.
6. Can you say, "joint-venture"? So many small businesses could benefit from doing joint ventures with other businesses that share a similar type customer. One business can do a direct mailer to their customers where they promote the products and services for their partner's business and then the partner can do the same thing for them. I have found joint ventures to be unbelievably profitable.
7. Just separate yourself. We marketers toss around the term "Unique Selling Proposition" all the time. But I've found only about 1 small business in 100 that can tell me in a short paragraph or less why I or any other consumer should deal with them as opposed to all the other choice we have in the market. All this takes is some thought as to what your target market is and what is the big benefit you give them as opposed to what your competitors can provide to the same target audience.
8. Treat your customers like dogs. If more small businesses treated their customers like the family dog then they would find a lot less of them migrating to the new superstore or franchise food business in town. People just want to be respected and acknowledged. This isn't rocket science but in the day-to-day whirlwind of running a small business, small business owners forget that. Many years ago I use to laugh when I heard a small business owner say, "This would be a great business if I didn't have to deal with the customers." Back then I thought it was funny. I don't see the humor in it anymore. Part of this is just staying in touch with your customer base. I don't know of any business that can't increase sales by using a quarterly newsletter mailed to their customer list- none!
9. Treat your employees as well as you treat your best customers. And while some small thinking owners don't believe that is a good thing I think many do "get it." Finding and keeping good people has never been harder, and it's only going to get worse. And the cost of training a new employee can be astronomical, not just in time and money but in relation to your customers not be comfortable with the new employee. We as consumers value "consistency" over everything else, you change employees and you risk your consistency especially if you do not have a formal training program in place. And if your business is not consistent in how it serves its customers then those customers will leave you at first opportunity- guaranteed.
10. Have an understanding of the numbers your bookkeeper or accountant spin off for you. Not long ago I had the painful experience of meeting with the owner of a small restaurant who had severe cash flow problems. The first place I looked at was the cost of goods, specifically what was the cost of the food to make the various dishes on the menu. Guess what? After a couple hours of breaking down costs we quickly determined that his food costs were a good 10% higher than what is normal for the industry. Ten freaking percent! Now this didn't occur overnight. Why didn't his accountant or bookkeeper raise a red flag over this? Well I know why. It's because most bookkeepers and accountants either don't understand the "rules of thumb" numbers for most businesses or they don't communicate the problems they see. I'm guessing it's more the second thing than it is the first. But it's deadly in either case.

So there you go, 10 reasons why small businesses in this country are behind the 8-ball and what they can do about it. Again, I haven't split the atom here. This stuff is all common sense or should be. But like an old successful businessperson told me one day many years ago, "Michael, common sense isn't so common". I tend to agree.

The Case of the "Zombie Business"
By Michael S. Winicki

Everyone knows about the dismal survival rates of new start-ups in this country. I don't think that's really debatable and it's not what I want to talk about.

What I want to talk about are all the "Zombie" businesses- those businesses that make it but don't "make it". These are the businesses that hang in the balance between living and dead. Sometimes they should be left to die and in others a bold move by the owner or manager could bring it back to life but usually fear is so rampant that this bold move is never undertaken… and consequently the business dies anyway.

Over the last twenty years I've seen two different flavors of zombie businesses. The first one should be familiar to anyone reading this column. You know the business. It's constantly late on it's payments or once in a while the friendly sales tax folks will stop by and pad-lock the front doors or the employee's checks bounce. I've known these businesses to be able to hang-on for several months to a few years before outside pressures finally put them out of their misery.

Most are burdened by a lack of a clear position in the market. They're scavengers. They feed off the excess. But without a clear position they're doomed to ultimate failure. Hey, it happens and the cause is almost always due to the owner or the manager not having a clear idea of who their customer really is and what's the best value they can provide the market. But I find the second type of "zombie" business to be far more disturbing.

These businesses are able to pay their bills on time. Their employee checks never bounce. They seem stable from all outward appearances BUT the owner never gets a big payday out of it. Many times, given the amount of hours they put in, end up making something that doesn't amount too much more than minimum wage. This can go on for years before the business is either closed or sold. And from my experience these businesses number at least in the hundreds of thousands if not millions.

And why is this type of business so easy for me to recognize? Because I was involved with one and off for several years. Back in my early 20's my parents and I started a small consumer electronics/home appliance store and while it grew for the first few years it eventually became a "zombie". We grew it to a point and with our lack of expertise at the time couldn't grow it any further. And there it stagnated for several years never fulfilling any of our dreams but it always did enough business to pay the bills. I can't tell you how painful it was to go through. But many out there reading this article know precisely what I'm talking about. And what makes it worse is even if you have the knowledge and skill to improve the situation you're too damn scared to do it. Please don't take that to be a crazy statement… let me explain.

When you're involved in a zombie business you're most likely petrified the wrong move will send you over the edge- closed doors, bankruptcy… every demon you can imagine goes through your mind. But what eventually happens is the worst thing possible- you do nothing. You freeze up and the business continues to stay exactly where it always has been. Honestly I've come to believe that out-right failure is better than trying to just maintain the status quo in a business like this if you aren't going to do something radical to change your fortunes.

We were caught in the position of having a line of home appliances that while respected nationally, were a distant 4th or 5th choice in our market. I can tell you from first hand experience being 4th or 5th in any market isn't big time fun. And I would do my best to re-position the business where I was 1st or 2nd. But that's the hand we were dealt and instead of doing something radical and changing our fortunes we froze "like deer in the headlights" and did nothing. And since that whole painful experience I've come to recognize these businesses very quickly- and they are all around us.

It's not just the independently started businesses either. I've come across many franchise owners that end up the same way. Zombie businesses come in all forms. And the only remedy I've found to wake up that zombie is intelligent, hard-hitting action. Usually involving a change of direction for the business and moving it away from direct competition into a niche where it has a chance to prosper. If you're stuck with a zombie business and aren't sure what to do then stand back and take an honest look at it form afar. Look for additional opportunities in the market. And if you can't do that honestly then get a consultant to take a look at it for you. The key is "honesty" and being honest with yourself as far as what opportunities do exist in the market. That's how zombie businesses are converted into profitable businesses once again. That's where it all begins and ends- honesty.

Help! I don't have any customers!
By Michael S. Winicki

Some of you might be laughing at that headline. Others know the feeling all too well. I've come across clients in this situation more times that I could count.

Typically it goes like this: The business can be running along fine for a long period of time and then everything goes "haywire". The reasons behind the "haywire" can be discussed another time, but for now we are looking at how can we turn this around- and quick!

They go hand in hand, a lack of customers and a bank account that is near zero. So say, you're just about broke. The business checking account is down to its last few hundred bucks and you may, may just have enough room left on your credit card to fill-up your gas tank one last time. What the heck do you do at this point?

I'm going to go out on a limb and make a few assumptions here. First, I am going to assume that whatever type of business this is that for one reason or another you have not been maintaining a customer database. Now if we had a customer database of some kind our job turning this mess around becomes much easier but in this case we have no database.

The second assumption I am going to make is that you aren't a wiz-bang when it comes to marketing. You barely understand it and you hate most of it because it costs you money and you never get a return from it, at least in your opinion.

Finally I'm going to assume you can turn your own negative attitude around- at least for a month while we try to infuse some cash flow into your operation. Just like the "typical" situation where a lack of customers = no money in the bank, the same can be said about its affect on the attitude of the business owner.

If their attitude is even slightly better that "sucks" then I'm shocked. But the last thing we can allow is for any new influx of customers coming through the door or calling on the phone to come in contact with a bitter person who in many instances blames (inaccurately of course) their putrid business situation on the patrons that have the power of digging this business owner out of their financial mess.

The bottom line is if you do not change your attitude, or least be able to fake it then you are not going to be able to pull this off. Just snap the key off in the lock and leave because it is over and you have given up.

The final thing I'm going to assume is that this business depends upon local traffic to keep the doors open. It can be retail or food service or a contractor of some type but it needs to draw people in from the surrounding area in order to make a go of it.

Let us get started saving this business…

First thing we are going to do is get one of those small portable sandwich board signs that can be placed outside during normal business hours. You would then put a captivating marketing message on each side of the sign. Please do not put something lame on it like "Open" or "Mike's Auto Repair." Instead go with "Burger, Fries $3.99 and get free drink!" or "Free estimates on air conditioning repairs."

Don't leave the same message on the sign for days on end either. If you can muster up enough creativity to create a different daily special then so much the better. And don't forget to bring the damn sign in at night! I'm still looking for one of mine!

This sign with plastic letters shouldn't cost you much more than $150 and it may be the best marketing investment you will ever make. Obviously the sign will only be as effective as the marketing message on it. But you can be sure about one thing; this sign will bring in business.

At some point you as a struggling business owner are going to need to learn marketing. Any poor performing business has marketing issues and to survive long-term you need to either figure this marketing thing out or get someone that can do it for you.

The second thing you are going to do is start a "door hanger" campaign. You know what door hangers are right? They are those small sheets of cardstock that you hang on the doorknob of an outside door. And they are one of the cheapest and best marketing tools you could ever use. You can get 1,000 blank door hangers for about $20 plus shipping. I did a quick search on the Internet and found many companies that could supply them.

Once you get them, you can create an offer or special of some type using simple word processing software and then print them off on your own computer system. The "fly" in the ointment with door hangers is getting them hung. I would either save the money and do it myself or hire a local kid or two to do it for you. Do as many as you can every week. Door hangers are great because in many parts of the country no one is using them and they do attract attention.

The final thing to do is create an inexpensive black and white two-sided business card. Just have your typical business card on one side and on the other put a compelling offer to visit your store or call on you for the service you provide. "Free" still works so do ignore the potential of using that word in your offer.

1,000 two-sided black and white business cards shouldn't cost you more than $40. And then you go what you are going to do? You and your relatives and friends are going to pass them out to anyone and everyone. And once those are gone you are going to print more. Got it?

There you go, a complete mini-marketing campaign that should not cost you more than $250 to get started. And you can see measurable results in a matter of days. Just keep repeating the process over and over until you reach a point where other and more costly marketing tools can be brought into play.

"Advertising Doesn't Work"
By Michael S. Winicki

If only I had a buck for every time I've heard that from some small business owner or manager. And it's not like it's a recent phenomenon either. I've been hearing that same old lament for close to 20 years now.

And I've yet to figure out why "advertising" works for people like "Staples", "Home Depot", "McDonalds", "Best Buy", "L.L. Bean" and millions more but it won't work for the locally owned shoe store down on "Main Street" USA (sarcastic smirk on face here). Strange huh?

So what's the problem? The problem is virtually all small businesses misstep when it comes to advertising. At the beginning they have no idea what "advertising" really is and how to use it to their best advantage. Many unrealistically think you can buy some ad space, slap your business name across the top; their address and phone number underneath and expect some sort of avalanche of business. Well folks, that's not how it works in the real world.

The new business owner spends some money, runs some ads introducing his or her business to the community and then in their opinion not much happens. There are just so many things sick and twisted with this perspective.

First, during all this the ad reps for the various newspapers and other media circle around the new business like hyenas that haven't eaten for a month- and for most, their approach is all wrong. Instead of "educating" they "sell" and in many cases quite hard so in no time at all the business owner develops a severe dislike (or even pardon the term "hatred") for ad reps.

Instead of taking the time to learn something about advertising the business owner "assumes" the ad reps and the various media do… fatal assumption on his or her part. Ad reps generally speaking don't have the expertise themselves or the time to "train" a business owner about advertising (I'll cover this topic a little more thoroughly in another article- the whole ad rep/business owner relationship is full of danger and unrealistic expectations).

The business owner needs to take the bull by the horns and study advertising. John Caples, "Tested Advertising Methods" is a great place to start. Jay Conrad Levinson's "Guerilla Marketing" series is a classic. My latest book, "Killer Techniques to Succeed with Newspaper, Magazine and Yellow Page Advertising" was written for the businessperson who doesn't understand what good advertising is and how to do it for him or herself.

And let me define what "good" advertising is. Good advertising is advertising that gives you the desired and realistic affect you want as the business owner. Let me qualify that a little. The desired affect maybe $10,000 worth of business created by a $50 ad and that just isn't realistic folks. I can tell you that many mail order people consider a successful ad to be one that sells enough products or services where the ad actually makes money for the business after the cost of the product and the ad are deducted. You just can't expect a $100 ad to create thousands of dollars worth of business, even though on occasion that can happen.

Let's be honest most business owners don't really know how much money any ad brings in do they? And it's because no one in the business tracks the response. They're so giddy that a potential customer walked through the door or called them on the phone that they're in rapture with the moment and never think to ask this potential customer, "How did you hear about me and my business?" So the net result being that the poor $100 ad, no matter how badly written and designed won't ever get the credit it deserves even if by miracle of miracles it manages to create some potential sales for the business.

And I won't get into the scenario where the ad brings in potential business but the person handling the potential customer blows it by not closing the sale properly or perhaps they didn't sound as friendly and helpful on the phone as they should have. I kid you not, when I say I know of instances where ads brought in business for someone but not one sale was closed to due the lack of sales skills by the person or persons handling those perspective customers. But of course the business owner won't blame the lack of sales skills for not sealing the deal but will instead say, "Advertising doesn't work"!

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