Tuesday, November 17, 2015

What I know for sure about running a small business in the Pool, Spa and/or Pond space.

Today I am feeling philosophical. This blog post covers what I've learned as an entrepreneur that I am 100% confident is true.  It is applicable to any small business or in a broader sense, life in general. Certainly, the leisure water market is the primary laboratory where I learned what I know, but there were other venues too, including software, home decor products and raising four sons.

Unless you are Oprah, it might sound arrogant to say you know anything for sure. Let me assure you, many of these lessons I've had to learn over and over again.  I humbly confess, many of these facts were not easy for me to accept and much of this knowledge came at a very high price. Like most people, I don't always do what I know I should do and it dangles out there as what I would call, a goal.  Hopefully, if some of my observations are things you aren't sure about yet, my personal experience will clarify it for you.  

Entrepreneurs by nature are more likely to test assumptions and less likely to take advice from others. I'm no different. I've been resistant to conventional wisdom all my life and usually have to experience things firsthand before I accept it. It is a good news/bad news thing, the very traits that drive you to develop your own independent business can be your achilles heal. People who will run through walls, need to be very determined. Determined is very close to stubborn. Stubborn is not far from bull-headed which is closely related to closed minded, once under sail. I'm not saying change your nature, don't, somebody has to burn the boats on the shore but be aware of your weaknesses.

1)  Don't try and do everything yourself.  Sure, you can do it exactly the way you like it done, it won't get screwed up, you can do it faster or cheaper and you remain in control but eventually, there is too much to do and the things that are most important for you to be doing won't get the priority they need. Learn to delegate and free yourself to see the forest through the trees.

2)  Hire great people. This might the most important lesson of all. You will not meet a successful small business person who doesn't acknowledge that the key to his/her success is the team they assembled. If you do meet that person and they don't admit that, you are dealing with an egomaniac who is lying to himself.  

3) This would seem like common sense but it isn't something I've always done and I should have. If someone isn't working out, if an employee doesn't seem able to do their job well, if somebody violates your trust, if you are trying to "fix", motivate or change someone's bad attitude, STOP. Cut bait and move on. Could you be a better boss and inspire people more? Is there always something you could be doing to help this person to perform better, be happier, more appreciative? Sure. Of course. But it is never the right call. It will never be what it should be and that goes back to number 2 - Hire great people. The opportunity cost of having a less than great performer on your team is way too high. And it goes way beyond just that job. It impacts the whole team. Cut bait. 

4) Trust but verify. Have checks and balances built into your processes. Have inventory controls. You don't have to run your business like a diamond mine but you can't afford to leave everything to trust alone. Over the years, we've had long time trusted employees we thought were family steal from the company. People get addicted, develop gambling or financial problems, or just aren't who you think they are. A few years back, the topic came up at a social event and I heard 6 different small business people recount their stories. You could hear in their voices that the money hurt of course but not as much as the betrayal. I wish this was uncommon but it isn't. My advice applies to everyone at every level in every department, accounting, warehouse, sales people, managers, VPs and drivers . . . everyone at every level needs to have checks and balances. Bake in systems and procedures like random audits in order to catch problems early on. Don't leave the company vulnerable. A camera system with audio accessible from your iPad or phone is less than you might think and helps protect against theft but also captures any work injuries or situations that could result in a lawsuit. People behave differently knowing that they are on camera.

5) Another obvious truth but one I personally took a long time to accept, is that you have to choose not to dwell on negative thoughts but to focus on positive ones. It is a very deliberate decision. Why did it take me so long to see the correlation between positive thinking and outcomes? I'm not sure. Maybe because I thought it sounded like new age bullshit? It isn't. Truly believing in your mission, passionately sharing the good news with co-workers, suppliers and customers, envisioning success and inspiring your team to do the same, is the basis of Leadership. Can your business function without it? Maybe. Would it perform better with it? Yep. Is everyone happier with this mindset? Yes.

6) While small business people are "Question Authority" types by nature, there is one Authority you should NEVER mess with. I'm talking about "The Man", the Tax Man to be exact. Endowed with unlimited power and the ability to destroy your life's work and whatever you may earn in the future, you simply can't afford to run afoul of this adversary. And their power grows daily. You're supposed to 1099 your Landlord now (even if a corp), CRTs on all business transactions over $10K and so on. My Grandfather Cray who was a very experienced Entrepreneur used to say, pay them just a little more than you owe and pray they leave you alone. Believe me, if Eugene was intimidated by the power of the state, we should all be. Take care of Uncle Sam.

 7) The best way to decide how to handle anything, is to apply the "Golden Rule." Sometimes people are confused about what that means. An important clause in the rule is, "if you were in their shoes." In other words, you don't just think, "How would I want to be treated?" You think, "How would I want to be treated, if I were in that situation?" For example, a customer owes you money. I've owed people money before and like most folks, I like to be treated fairly, with respect and understanding. And that is how we approach collections at Advantage. Now, if person makes a commitment to send a check and doesn't honor their word, I think, "How would I want to be treated if I had lied to somebody?" Well, I would hope the person would explain what they are going to do next if the bill isn't paid immediately, accept my sincere apology graciously and give me an opportunity to do the right thing. And if I didn't pay the bill then, my expectation is that they would send my account to an attorney for collection and report me to D&B or whatever. The Golden Rule, is simply accepting that out of fairness, the same rules should apply to all. I don't get one set of rules and everyone else another. There is no decision I can think of that can't be made applying this code of ethics.  To be clear, like most of my advice, the "Golden Rule" standard is something I aspire to but sometimes fall short of. It is a goal. 

8) Anvils fly out of the sky on a regular basis when you run your own business.  Of course, the ones you didn't see coming are the ones that hurt the most, as you didn't have time to brace yourself. What can you do about it? Not much. I wrote about this in a previous post. Get good insurance. A good broker will advise you on what type of coverage is best and work with you to find something you can afford. It isn't a luxury.  Nobody likes to think about bad scenarios and as small business owners we are hard wired for risk. But some risks are just too high. I hope you are never sued, an accident never happens or the fire sprinkler never activates but in the event it does, you are going to need a carrier that covers the legal defense (doesn't burn it out of the limits), responds quickly with a professional crisis management team and covers the actual cost of you continuing to operate.  A fly by night insurer will charge less but they won't deliver what you will need. Don't be a cheapskate on insurance. 

I could go on and on. And maybe I will, next time. I made a commitment to write two blog posts a month for a while to see how well it works. When I was young, I wrote an advice column for teenagers. Guess I've always been full of opinions! If you are an entrepreneur in need of advice, ask me a question in the comment section or email me and I'll give you my two cents. I'm not an accountant, an investment expert or a lawyer and I don't play one on TV. My response will be based on whatever my personal experience has taught me. My last piece of advice is this; keep your sense of humor. There will be times when laughter is all you've got and it will be enough. 

Written by:
Lyann Courant
CEO, Advantage Manufacturing.
Feel free to share and reprint as long as you attribute it to us. Thanks.

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