Beta reader comments from around the world

Here are comments by some of my beta readers to be found on the back cover:

“There is such an incredible wealth of wisdom in this book – and it’s possible to just dip into a chapter (character) at a time. I loved the conversational, story-telling style, which is often funny and so very true. As a business owner/entrepreneur of many years, I can totally identify with and vouch for what Michael best has to say.”   – SYLVIA MALINOWSKI – Small business owner & business coach. Somerset West, South Africa.

“Really refreshing to read a down to earth observation of what it’s like to run and survive the obstacles of small business.” – GORDON ROBB – Investment banker & small business owner. Oakville, Ontario.

“This book is highly consumable, easily digestible . . . it will resonate with anyone thinking about going into business. The tone is one of a learned pal chatting about his experiences with you over a coffee . . . Michael Best is right there beside the reader the whole way and that is probably my favourite characteristic and perhaps most importantly too, it’s a fun read.” NEIL GARDNER – Founder and President – Systematiq Inc. Calgary, Canada.

“It’s clever, concrete, funny and fresh! If you’re thinking of starting a small business, or if you’re already there, this is the book for you. It contains all the practical advice you’ll ever need.” NATALIE CONYER – Writer & Editor. Sydney, Australia.

Excerpt from Character 28: Competitor

Let’s return to our broad-brush definition of “competitor” and focus on this part of it: “a company in the same industry who offers a similar product or service.” Interpreted too broadly, this can be misleading. Much depends on what we assume “same industry” and “similar products or service” mean.

In the case of “same industry” you wouldn’t think of, say, a coffee shop or café as being in competition with a supermarket. But on Fourth Street, Calgary, where I lived, five coffee shops and cafés in as many blocks sell pastries in competition with each other and the local supermarket bakery. A literal interpretation of “same industry” doesn’t necessarily suggest a coffee shop and a supermarket as competitors, but clearly in this case they are, as portions of their otherwise disparate businesses overlap.

“Similar product or service” might make you think of competing clothing retailers. After all, they all sell clothes. But H&M isn’t in competition with the Salvation Army Thrift Store. In this case, “similar product or service” doesn’t place all retailers in the same marketplace.

It’s necessary to identify your actual competitors. If you don’t do this, you could end up like an errant coonhound wasting your time barking up the wrong tree at the wrong quarry while the quarry you should be watching sneaks up and bites you in the butt.

Excerpt from Character 24: Franchisor

Just as he’s pondering whether he has what it takes to conquer this mountain, an apparition—one that could easily have been created by J.K. Rowling—appears and makes Mr. Wannabe a very tempting offer. The apparition says that for a small fee (nothing is for nothing even in fantasies), it can transport him over Mount Start-Up and deliver him straight to a business of his own in the village of Business Bliss. Mr. Wannabe is very tempted, but hesitates as he wonders: Is this too good to be true? Could I be rushing in where angels fear to tread? And who is the apparition? 

Back in the real world, we know that Mr. Wannabe’s apparition is a franchisor—a franchisor who, for a fee, promises avoidance of most of the blood, sweat and tears associated with independent start-ups. And in the real world, seldom is anything in business as cut and dried as it may first appear. This is particularly true of franchising, which brings with it special elements that demand clarification and understanding. And the first thing to understand is that franchising is different from independent small-business ownership in that the franchisor exercises influence through a franchise agreement.

So who is this franchisor?

Excerpt from Character 32: Website Host

This character should be on every small-business owner’s contact list. Regrettably, this isn’t the case. Nowadays, the cost of setting up a presentable website can start at under a hundred dollars. Reliable hosting can cost as little as twenty dollars a month. In spite of this, about 40 percent of small businesses still have no presence on the web. But enough tut-tutting about a discouraging statistic for now. We’re here to discuss an important character—the Website Host. For the sake of convenience, let’s think of this host as an individual, even if it’s a big corporation.

Website hosts, just like any other service providers, aren’t all cut from the same cloth. Selecting one isn’t as simple as surfing the internet and picking a name—the digital equivalent of of throwing a dart at a list. Different options come with different offerings and vastly different price tags. It’s therefore important to consider your web hosting options while keeping needs and costs in balance. You don’t want to subscribe to an inadequate service , but you also don’t want to pay for more than you need.

Excerpt from Character 5: Financier

“This Wednesdays’s Lotto 6/49 jackpot is twelve million dollars. What would you do with Twelve million dollars?” asks a smarmy male voice. An animated female voice replies, “Maybe I’ll open my own business . . .”

I reach for the car radio’s Off button. Sheer nonsense. I don’t know a single small-business owner who would endure the daily grind if he or she were sitting on twelve million dollars. In any case, I need silence to contemplate the concept of lotteries as a source of business funding. It’s something that hadn’t crossed my mind until a moment ago. I’m intrigued—not because I’d consider the proposition seriously (the odds of winning this particular lottery jackpot are about 1 in 14 million), but because of what this lottery commercial seems to confirm about the financing of a small business.

It’s safe to assume that the lottery organization’s advertising agency did its homework. And it’s also safe to assume advertisers don’t record the first dialogue that comes to mind; surely they conduct research and then write the commercial’s script for the widest appeal? And I’ll bet the research confirmed what a lot of small-business owners and would-be owners have known for a long time—many people dream of running their own businesses but lack the cash.

 

Excerpt from Character 6: Family Member

One hesitates to write about a family member in the way one hesitates to prod a bear with a pointed stick—neither is going to like it and both will let you know this in no uncertain terms. Family-member business relationships are common in the small-business community, though. They cannot be omitted from a book about the characters who can make or break your business. I knew that I wanted to share my own experiences while addressing this topic—I’ve attempted going into business with both my brother and brother-in-law. But I hesitated to write about it (think bear and pointed stick). Then Ms. Lamott gave me the green light. She told her TED audience: “If you don’t know where to start, remember that every single thing that happened to you is yours, and you get to tell it. If people wanted you to write more warmly about them, they should’ve behaved better.”

Excerpt from Character 8: Director

Only a tiny minority of small businesses appoint outside directors, but pinning down a number is difficult. Business literature largely ignores the topic, and even sources such as the Canadian Federation of Independent Business and Statistics Canada — which can usually tell you anything you need to know about small business — offer no insight. The closest I came to a number is the 5 percent suggested by a 2014 Forbes article entitled “Outside Board Members Bring Needed Experience and Perspective to your Company.”

The article speculates that small business owners don’t appoint outside directors because the owners think they’re smart enough, they think it’s too expensive, or they think it would constrain their decision-making abilities. I can buy these reasons, but I’d add that many small business owners probably haven’t given the matter much thought. I didn’t. Of course I now know that I should have. Twenty-twenty hindsight is cruel in its clarity. However, you can avoid this future frustration by not repeating my oversight. If your small business is one of the 95 percent, now might be a good time to consider whether it could benefit from the appointment of an outside director. And if now isn’t the right time, the circumstance of your business could change (e.g., as a result of growth or expansion into a new field), so you may want to keep this discussion in mind.

Excerpt from Character 7: Significant Other

“Have a great day. I hope that meeting doesn’t drag on too long this afternoon, but if it does don’t sweat it. Just let me know and I’ll delay putting dinner into the oven. Oh, and where’s your laundry slip? I’ll pick it up for you on my way home from work.”

The front door is being held open for you. With key fob in hand and both arms embracing the paperwork that kept you up until two this morning, you step out into the cool pre-dawn air. It’s barely six thirty. Most of the houses on the street are still in darkness, as usual.

As you press the unlock button on the fob you suddenly remember that thing you’d stored in the back of your mind. You’ve been trying to recall it since you dragged yourself out of bed. Even as you gulped down the coffee and devoured the bacon and eggs that had been cooked for you it was lurking out of reach . . .

“Oh damn! I’m out of gas!”

It’s okay, I filled up last night,” says the voice at the door. “Love you!”

How could a small business owner possibly hope for better understanding and support? You’re free to tackle the day without worrying about how irregular hours and other typical small business issues are affecting the home front.

This person at the door is your significant other – a significant other not engaged in your business.

In the previous chapter we discussed family members engaged in your small business, including significant others. But an unengaged significant other is quite different from an engaged significant other – the former’s impact isn’t really obvious. This person is a presence beyond the spotlight, rather like a ghost hovering in the shadows. Unfortunately, this ghost is not always a supportive one. In some cases it may even be a poltergeist, but more on this shortly.

Excerpt from Character 9: Mentor

A mentor’s three essential qualities

The first two of three essential qualities a small business mentor must have are obvious: knowledge and experience. They’re so obvious we don’t need to explore them here. The third is not so obvious, but it’s certainly essential.

The third quality stems from a presumption that small business mentoring is free of charge—a presumption I wholeheartedly endorse. Those who are experienced must share knowledge with those who are inexperienced. This is how civilization advances. If the sharing can be done without charge, so much the better.

I’m of course referring to one-on-one, informal knowledge sharing, not to institutionalized mass education (schools, colleges and universities). I’m also not referring to directors, consultants, and coaches, who share knowledge as a full-time profession. I’m referring to no-charge small business mentoring, which is not a profession but a commitment. It is a commitment that necessitates the third essential quality of a mentor: generosity.

Excerpt from Character 26: Graphic Artist

Graphic artist sketchSmall businesses face this choice when trying to promote themselves and their services and products—words or images or both? I’m suggesting that in many circumstances, images (or perhaps images accompanied by some wording) will do a much better job. This shouldn’t come as news to anyone; after all, how often have you heard the old expression “A picture is worth a thousand words”? And, by the way, wouldn’t it make a great tag line for all graphic artists?

Clearly I’m of the opinion that a graphic artist is an indispensable resource for most small businesses (we’ll discuss the few exceptions later). And it’s not only because of the picture-and-thousand-words thing, but also because of another phenomenon in day-to-day business—avoidance of reading whenever possible.

 

Pictures in, paragraphs out

I experienced the people-will-avoid-reading-whenever-possible phenomenon over and over again after I first became aware of it while working for a major oil company, a number of years before becoming a small business owner.

Excerpt from Character 21: Customer

Book customer drawing blog sizeA myth dressed as a mantra

It’s one of the business world’s most common mantras: “The customer is always right.”

It’s also nonsense.

The customer is not always right. Far from it. This slogan-turned-mantra was apparently popularized over one hundred years ago by renowned retailers such as Harry Gordon Selfridge, John Wanamaker, and Marshall Field. To be fair, these gentlemen couldn’t have anticipated that their slogan—intended to positively influence the attitude of retail employees—would be interpreted by some customers as an endowment of infallibility.

This apparent infallibility and the often-repeated reminder that the customer pays the wages have subtly contributed to some customers’ presuming that they have the right to speak and behave as badly as they please.

I wonder how Messrs. Selfridge, Wanamaker, and Field would have reacted to the YouTube clip of the lady beating a takeout box on the counter of a restaurant to emphasize that she had been expecting red, not green, peppers on her kebab. The entire restaurant (and possibly people out in the parking lot) was treated to her berating the startled restaurant employees: “DON’T YOU KNOW THAT THE CUSTOMER IS ALWAYS RIGHT?”

 

Excerpt from Character 36: Acquirer

Acquirer sketch resizedA bag of money

Meet the character many small business owners have in mind from the day their business opens—the person who’s one day going to take it over and send them on their way with a bag of money.

This is the acquirer.

The only reason for shunning the acquirer would be an exit strategy of bolting the doors and walking away—no muss, no fuss, no bag. If that’s your plan, it doesn’t necessarily follow that you should skip the rest of this chapter. Stay with me for a while yet and perhaps you’ll be persuaded to consider a more rewarding alternative: building your business with an eventual sale in mind.

 

Excerpt from Character 27: Online Media Developer

Book web online media developer blog sizeOnline media developers come in many guises including the neighbour’s kid, your geeky niece, or retired Uncle Fred with too much time on his hands. These enthusiastic amateurs are not, however, the online developers I have in mind for you. I’m talking about qualified, competent, professional social media developers who may work independently or be employed by a firm.

There are many areas in which thrifty, budget-conscious small business owners will try to get away with the cheapest option possible, but this must not be one of them. Cheap, particularly as in free from Uncle Fred, can turn out to be costly in terms of wasted time and business image damage.

 

Excerpt from Character 31: Business Author

What if a stranger suddenly popped up out of nowhere and made you an offer almost too good to be true?

“I can share a ton of wisdom and experience you can use to improve your business in every respect. I can promise you big ideas, small ideas, exciting ideas—stuff you’d likely never even think about. And the best part is that I’m willing to share this treasure trove of invaluable information for virtually no cost. All you have to do is give me some of the time you currently waste watching TV and surfing the Internet.”

As a scam-wary small business owner, you’d probably be skeptical: “Oh yeah? Who are you and where’s the catch?”

The stranger, not at all deterred by your skepticism, replies, “There’s no catch. I’m the embodiment of every business author who has ever written, and will ever write, a business book or article. The gift I’m offering is guaranteed to benefit you and your business. You just have to make the effort to become a habitual reader of business books, articles, and posts.”

 

 

Excerpt from Character 23: Courier

Courier sketch resizedI don’t think most small business owners give much thought to how a courier can impact the impression customers have of their business. I didn’t—until a customer made me.

In the early days we used a courier company for local deliveries within about a 150-kilometre radius of one of our warehouses. Each day they’d pick up our parcels in a van and take them back to their warehouse, where they’d be sorted by route and placed on the appropriate van and then delivered the next day. What more could you want from a courier service? Well, there was something that hadn’t crossed my mind until I received a phone call from the owner of one of our bigger customers.

Excerpt from Character 22: Trucker

Trucker sketch resizedIf the driver is a long-haul trucker, the tractor part of the rig will have a sleeper berth (living quarters) complete with bed, fridge, TV, air conditioner, microwave, and other home comforts. I once met a long-haul trucker whose sleeper berth included a bed for the Jack Russell terrier that accompanied him on all his trips. Truckers—men and women alike—tend to be tough, no-nonsense individuals; essential traits for coping with the demands of the job. But they are also highly skilled individuals, as you will know if you’ve ever seen a trucker handling a big rig in heavy traffic or backing up to a loading dock with the precision of a seamstress threading a needle.

My business dealt with truckers extensively for both incoming and outgoing shipments. If—as is often the case—their service is vital to your small business’s operations, manage the relationship carefully. Trucking is a complex business prone to problems that can directly affect your business. When it all runs smoothly and shipments arrive on time and intact, it’s a good day. When urgently required shipments are delayed, go astray, or are damaged, it’s a bad one. Managing the relationship carefully helps to keep this kind of bad day to a minimum.

Excerpt from Character 18: Maintenance Technician

Maintenence Person sketch resizedEmergency maintenance is required when a malfunctioning asset threatens to cause costly damage or impede operations. One good example is a restaurant freezer malfunctioning while stocked with expensive food. Another is something that happened to my business late one winter’s night in Calgary, when the outside temperature hovered around minus thirty-five degrees Celsius. We had to momentarily open the loading dock’s big overhead door, and then it jammed and wouldn’t shut when a spring snapped. Cold air began swirling into the warehouse packed with expensive freeze-sensitive emulsions.

Equipment failures like these happen in spite of routine maintenance programs—it’s just a fact of life that there are no guarantees. However, the impact of an event requiring emergency maintenance can be minimized by a simple measure: a list of emergency contact numbers. Fortunately we had the door maintenance company’s twenty-four-hour emergency number on a sticker right on the door. A hastily assembled wall of cardboard boxes, a cranked-up gas furnace, and the door maintenance person’s prompt response saved the inventory from freezing.

Excerpt from Character 15: Company Clown

Book clown sketch resizedNow, almost four hundred years later, we still discuss and study laughter, not so much to understand its impact on human health (it’s generally accepted to be beneficial), but to understand why it’s beneficial because neuroscientists still aren’t sure what happens in our brains when we laugh.

Regardless of the science behind laughter, I’m an enthusiastic advocate of humour in the workplace. And it’s not just about occasional laughter—it’s much broader than that. It’s about a culture of humour; it’s about creating an atmosphere in which the natural inclination to indulge in humour is encouraged; it’s about balancing fun and profit.

Excerpt from Character 34: Travel Agent

Book travel agent artsy resizedThe time excuse        

I can’t explain why I believed I had no time for an annual vacation, particularly in the earlier years, which are often the toughest in the life of a business. Ironically, it’s during this time that you most need the vacation you believe you can’t take.

My problem might have been the affliction from which many small business owners suffer—the belief that my business couldn’t operate without my presence and would simply unravel if I weren’t there to hold it together. It’s utter nonsense of course. It might be perfectly valid to believe that your employees can’t run the business as well as you can, but believing that they can’t do it well enough to avoid disaster for, say, two weeks is ridiculous (in most circumstances).

If you can’t take two weeks off because you and only you can run the day-to-day activities of the business, and you also can’t close the business for two weeks, you’re in the wrong business. You should get out. You can’t live a healthy life this way—it will eventually break you and your business.

You absolutely must make the time for at least a two-week vacation at least once a year. And when you do take a vacation, never, ever do what I did on my first family vacation as a business owner and call in a couple of times a day—paranoia does little more than annoy everyone around you.

Excerpt from Character 35: Graffiti Artist

From minor to profound

A real-life graffiti artist’s writing on the wall is quite often profane and unworthy of attention. By contrast, our metaphorical graffiti artist’s writing on the wall is always worthy of your small business’s attention. Some messages warn of impending doom while others point to profitable opportunities. They also range in significance from minor to profound, and ignoring any of these messages could have consequences. However, I’m going to discuss the effects of ignoring the profound ones here.

By profound, I mean serious enough to make or break a small business—the type of writing on the wall you can’t afford to ignore. In some cases where businesses collapsed, the writing on the wall would have been visible to even the most willingly blind. On the other hand, we’ll never know how some small businesses might have blossomed had they seized the opportunities mentioned in the messages. It has always been this way—some consider the writing and react while others suffer the consequences of embodying the old proverb: “None so blind as those who will not see.”

Excerpt from Chapter 8: Insurance Broker

Usually the broker’s service doesn’t cost you a penny—he or she is remunerated by the insurance company with whom your business is placed. But therein lies a potential conflict of interest and further reason to select carefully. You want to trust that your broker will not put his or her commission before your risks when recommending an insurer. In any case, even after a very careful selection process, you should still assume full responsibility for your insurance portfolio. Make sure that you understand every aspect of it and ask questions when you don’t.

Review your policies annually as a matter of routine. In my experience, some brokers left to their own devices can be less than diligent about monitoring your file, particularly if you’re a small pony in his or her client stable of big, valuable thoroughbreds. I’ve known some to simply renew an existing policy without even a cursory review, year after year. Typically, a policy is written, the monthly debit order is set up for the premium, and then tends to become one of those out-of-sight-out-of-mind matters that, all good intentions notwithstanding, you never get around to visiting. The problem is that a small business’s circumstances can change over time and insurance coverage can be found wanting when disaster strikes.

 

Excerpt from Character 29: Trade Show Manager

Book Show Manager sketchTwo purposes, one destination

It’s been about a half hour since takeoff. Drinks have been served. The flimsy little fold-down tray can’t accommodate both a plastic glass of chardonnay and a paperback, so she closes the book and puts it on the vacant seat between them. She stares out the window. There’s nothing to see, but she’s not looking, she’s fretting. God, I hope that missing crate turns up. If it’s not one thing it’s another. What’s the point of sending two people ahead if they can’t set up? Last year it was—

“LA home for you?”

She turns to look at him. She’s not surprised at the overture. He’s been looking like he wanted to strike up a conversation ever since they boarded. Why can’t people on planes just mind their own damn business?

“No,” she says. “I’m actually going to Long Beach for a trade show.”

“Really?” he says, his face lighting up. “Me too!”

“The screen printing show?” she asks, knowing Long Beach is the venue for all sorts of trade shows.

“Yes,” he says. “I have to buy a new press and some other smaller stuff. I’ve never been before but I figured it would save me a lot of time and hassle if I could see and compare a few machines all in the same place at the same time. What about you? Also looking to buy something?”

“No, we’re exhibiting. My company manufactures adhesives and cleaning chemicals. I’ve done the show for about six years now. Works out great for us.”

“How so?”

“Well, every year we find new prospects and usually end up turning most of them into customers.”

“You do any other marketing?” he asks, intrigued by her apparent enthusiasm for the show.

“Oh yes, we still do the usual stuff like flyers, email blasts, and phone calls. We’ve tried cold-calling prospects too, but we’re a small company and that takes a lot of time and the returns aren’t great. So shows make more sense for us.”

“Maybe I should be thinking of exhibiting . . . is this is a good one?”

“Usually. And it should be another good one this year if the freakin’ truck driver gets my crate there . . . But yes, it’s really well managed.”

 

Excerpt from Character 32: Fishing Friend

Fishing friend sketchHarbouring regrets is unhealthy—I get that. But if I were allowed to harbour one regret, it would be that I didn’t routinely schedule whole days off from my business for recreation. That’s where the fishing friend comes in: a character who embodies a commitment to time off from your small business. I now know that one day a week away from my business would’ve alleviated a lot of accumulated stress.

Working excessively can become a bad habit, even to the degree that you feel guilty if you’re not at the office or staring at a spreadsheet on your computer. And I can’t claim that those days when I worked when I should have been spending time with my fishing friend (or family and Jack Russell terriers) were productive. In fact, my presence on those days didn’t do me or my business any good.

You may have no interest in fishing at all, but that’s not the point. You can have a cycling friend, hiking friend, skiing friend, running friend, swimming friend, sailing friend, boating friend, mountain-climbing friend, dog-enthusiast friend, and so on and so on. If the activity involves the outdoors, so much the better. But you have to commit to a designated day—no excuses.

Excerpt from Character 33: Healthcare Professional

Many people view small business ownership as a stress-free, fun existence based on encounters with smiling receptionists, cheerful customer service representatives, or chatty technicians. Who can blame these people for not realizing that the facade of smiling faces can conceal financial worries, long hours, illness, and a fistful of other stress-inducing circumstances?

These situations in small businesses can be more dangerous to an owner’s health than similar situations in big businesses. Big businesses offer paid-for employee assistance programs and other resources that a small business owner might not have access to. Small business owners are very much on their own in times of crisis, and that’s when a healthcare professional becomes an important resource.

My own experience with business-related stress, the suicide deaths of three small-business associates, and the near suicide death of another all underscored the necessity to include a healthcare professional as a character in this book. In the context of this chapter, “healthcare professional” includes any healthcare professional appropriate to the malady—general practitioners, specialists, psychiatrists, chiropractors, ophthalmologists, and so forth.

 

Excerpt from Character 10: Janitor

Janitor sketchUnfortunately for this company, a benchmark for screen printing ink manufacturers had been established in my mind months before when I attended a similar meeting at an ink factory near Atlanta. The contrast couldn’t have been starker. There were no ink stains on the carpet in the reception area, and the brightly lit conference room with its highly polished table and black leather boardroom chairs resembled that of a high-end law firm or a Fortune 500 head office. Everything about the company spoke of professionalism and quality. And it should come as no surprise that as time went by, I found the quality of their products and business style matched my favourable impression of their premises.

Back in Toronto, as you might have anticipated, the meeting did not go well. Their products lacked quality and their business conduct lacked finesse as much as their premises lacked a janitor. Any possibility of our doing business together perished right there in that janitor-free zone.

 

Excerpt from Character 9: Alarm Technician

Alarm person drawing resizedIf ever a proverb applied to small business and alarm systems, it’s the one about the futility of shutting the stable door after the horse has bolted. To invoke another old expression, I wish I had a dollar for every time I heard about a small business calling an alarm technician for the first time the day after a burglary.

An alarm system is a necessity rather than a luxury unless, unlike most small businesses, your business is located in a crime-free area. Not only can it provide an immediate response to a break and enter, but also, merely having it is enough to discourage break and enter attempts.

I had alarms installed in both our branches and not once in more than twenty years did we have a break and enter, whereas neighbouring small businesses without alarm systems were burglarized a number of times.

Is an alarm enough at your location?

While an alarm alone was sufficient in the areas where my branches were located, it’s often necessary to supplement an alarm with other security measures. I have visited businesses in high-crime areas where alarms were just part of overall security systems that included iron bars over all accessible windows; steel doors; security gates over doors; steel shutters; barbed- and razor-wire fences; electrified fences; closed-circuit television cameras; and guard dogs. On a recent visit to South Africa, I saw attached to a gate a large photograph of an angry German shepherd with glaring eyes and exposed canines above a caption that read, “He can make it to the gate in three seconds. Can you?” In a burglar’s shoes I would be inclined to move on.

 

Excerpt from Character 13: Employee

Employee male sketchWhen you hear former small business owners say that this is the character they miss the least, what they’re really saying is that employee management is not a walk in the park.

Employees are idiosyncratic creatures, and when we pour all those idiosyncrasies into a small business like ingredients into a blender, most of the time we cross our fingers and hope for the best. Well, therein lies the average small business owner’s problem. It requires more than luck to select the right ingredients and blend them the right way to produce a palatable mixture—it requires skill.

Show me a small business owner complaining about employee problems, as many incessantly do, and I’ll show you a small business owner lacking employee-management skills. Many owners gamble with this important aspect of their businesses by settling for seat-of-the-pants employee management rather than acquiring the skills or help to properly hire, train, manage, and fire. Successful employee management is a critical aspect of managing for success. Consider the existence of human resource departments in big companies, usually led by a highly paid VP—clear recognition of the complexity and importance of employee management.

So what is a small business owner with limited resources to do? For most, a full-time human resource specialist is out of the question. Therefore, the owner must often fill the role ordinarily performed by an entire HR department in a big company, from recruiter to VP. And there’s not much choice in the matter because I don’t believe it’s possible to manage a small business’s staff effectively without a reasonable level of employee management skills. The question is, where do you gain that skill?

Excerpt from Character 19: Supplier

Supplier sketchThe daily challenges most small business owners face are numerous and varied in a Jack-of-all-trades kind of way. One minute you’re resolving an irate customer’s problem and the next refereeing a difference of opinion between two employees. You’re the owner. You’re the go-to person when issues escalate and the last thing you need is for supply issues to escalate to where they need your attention—by that point, disruption of supply might be imminent. And what a small business needs from its suppliers is stability and reliability so that it may in turn offer stability and reliability to its customers.

But supply disruptions can happen for any number of reasons—manufacturing and delivery delays, inventory shortages, import paperwork errors, erroneous or incomplete deliveries, and defective products, to name just some of the common examples. Then there is the age-old overdue payment reason. Suppliers like to be paid on time and will readily withhold delivery to reinforce this point.

The degree to which supplier problems constitute a headache for you depends upon the degree to which your small business relies upon a particular supplier. This brings us to an important consideration: whenever possible, before choosing to do business with a supplier, weigh the make-or-break effect it can have on your small business. Select thoughtfully.

My small business was tied to just a single supplier for each of about a half-dozen product types. This was due partly to the nature of the textile screen printing industry, which has a limited number of competitive manufacturers, and partly to my belief that brand monogamy would foster a closer relationship with suppliers and lead to advantages not enjoyed by brand polygamists—in retrospect, a decision I now regret. The rewards for supplier monogamy did not materialize. Instead, my business relied heavily on those few suppliers when a broader range of alternatives would have given us a greater variety of prices and quality options and hence greater market-penetration potential.

If you’re going to inextricably bind the future of your small business to the future of a single supplier and its brand, consider the pros and cons very carefully. It could be a double-edged sword.

Excerpt from Character 4: Lawyer

Lawyer sketchOn the day of the hearing David and I were seated in awkward silence in a courtroom awaiting the judge’s arrival. The judge entered, introduced herself, settled down behind an elevated bench and stared down at us over the top of reading glasses perched on the tip of her nose. She explained how she would listen to our respective positions and then give us each a frank opinion as to the strengths and weaknesses of our cases.

David told her that I had refused to pay for a piece of equipment that was in perfect working order when it was shipped from his factory. He said I had claimed the equipment was malfunctioning but that he had fulfilled his obligation under the terms of his warranty by sending replacement parts. The judge questioned him about the terms of his warranty and then asked if he had documentation to offer as evidence. He handed her a manila folder that appeared to contain nothing more than copies of invoices—just two or three pages.

She briefly looked at his documents and then turned her attention to me, asking for any documentation I could offer in evidence.

I handed over a three-ring binder about an inch and a half thick containing a copy of every document relevant to the transaction: all rough notes, transcripts of telephone conversations, letters, fax documents, emails, bills from the electrician, shipping bills, photographs of burnt-out dryer parts, and, most importantly, all the documents to and from my lawyers. Every document was filed by date and was numbered and recorded and indexed at the front of the binder. I was not the most attentive accounting student the University of Cape Town had ever seen, but one piece of advice from an auditing professor has always stuck with me: “Prepare your files in a manner a judge will understand.”

As I explained how my customer and I had been inconvenienced by the malfunctioning dryer and how it had caused expenses and loss of revenue, she leafed through my binder. Eventually she again turned her attention to David. What is it about a judge’s gown and glasses perched on the tip of a nose that is so intimidating?

“Mr. Brookes,” she said, “I don’t believe your warranty has any relevance in this matter.” She went on to explain that it was a case of not fulfilling a contractual obligation to deliver a properly functioning piece of equipment. She said that she believed that if he chose to go ahead with the suit he would be doing so with a very weak case. She suggested that he settle right away and avoid the almost certain possibility of incurring heavy costs. “As I leaf through Mr. Best’s binder I repeatedly see the name of one of the most expensive law firms in the country. I don’t think you’ll want to pay their trial bills.”

David decided to take the judge’s advice and agreed to a settlement that included undertakings to withdraw his claim, arrange to ship the dryer back to his factory at his expense, refund me for the electrician’s bills, and refund the travel and accommodation expenses I had incurred for flying halfway across the country to attend the hearing.

The fourfold lesson for any small business owner caught up in a similar situation is simply this: don’t launch spurious lawsuits, fight back vigorously if you’re the victim of a spurious lawsuit, prepare properly, and work with a good lawyer in a good firm.

Excerpt from Character 16: Virtual Assistant

Blind faith is not a good data-management strategy when working with a virtual assistant, particularly when the data may be sensitive. You risk exposure during transmission and after the assistant receives it.

Exposure during transmission can be addressed by digital security measures to thwart hackers and other digital miscreants. The greater risk lies in placing your sensitive data in the hands of a recipient you haven’t met working in an environment you haven’t seen. You may have no reason to doubt his or her integrity, just as I had no reason to doubt my virtual assistant, but even then it would still be imprudent to throw caution to the wind.

While your virtual assistant may be the paragon of integrity, what if the person in the next cubicle has a grudge against the agency or your virtual assistant and exercises it by misappropriating your sensitive data? Your pricing or other financial data might turn up in your competitors’ inboxes. Far-fetched, you think? Not unless you’re absolutely confident of the agency’s security measures. And how are you going to know that from thirteen thousand kilometers away?

In addition to covert exposure of your sensitive data, you should be concerned about overt exposure. Haven’t we all accidentally pushed the wrong button at some time or another and sent something to where we shouldn’t have sent it? It’s possible that your virtual assistant may have built-in measures to prevent accidental mishandling of your data, but do you want to take that chance?

So does this mean that security concerns negate the benefits of engaging a virtual assistant? Not at all! If the work involves sensitive data there are precautions you can take.

Excerpt from Character 11: Neighbour

The degree to which this type of business neighbour can be detrimental ranges from merely irritating to seriously destructive. Such neighbours could break your small business if, in a worst-case scenario, by their presence or behavior, they discouraged customers from visiting your premises or doing business with you.

Here’s an extreme example. Close your eyes. Picture a strip mall with a children’s toy store wedged between two adult entertainment stores with titivating window displays. Do you see any minivans packed to the gills with wide-eyed youngsters and their parents or grandparents driving up? No, I don’t either.

A less extreme but real example is a small flooring company I know, which is located alongside a convenience store. For about an hour every afternoon on school days, flooring company customers have to pick their way through a hoard of unruly high school students blocking the entrance to the company’s showroom. The students are convenience store customers and, typical of that age group, they like to ”hang out.”

To make matters worse, after the crowd disperses, the flooring company staff have to pick up food wrappers and other litter dropped in front of the showroom. The convenience store owner is sympathetic enough but he, personally, is not the problem. The problem is that the nature of his business is problematic to his neighbour. All the solutions tried so far have focused on eliciting cooperation from the students but, not surprisingly, all have failed. And nobody could reasonably expect the convenience store owner to discourage what amounts to a daily business boon.

Excerpt from Character 17: Computer Tech

Computer tech sketchYour small business will generally have access to one of three computer technician resources, depending where you’re located—there may be exceptions in some countries and small towns. The choice lies between sole practitioners, companies consisting of a staff of technicians (most are small, with ten or fewer staff), and nationwide franchises with multiple offices, marked cars, and logo-embroidered golf shirts.

The advantage of hiring multi-technician computer service companies over sole practitioners is that the former’s technicians have likely been tested for competence during the hiring process. When you engage a sole practitioner, the competence checking falls on your shoulders. In the end, however, it all comes down to the individual technician’s competence, regardless of whether he or she is a sole practitioner or an employee of a service.

Being able to communicate technical matters in plain language is also a welcome attribute in your computer technician. Tim was one such technician whose expertise we were fortunate to have for a few years. He had a knack for explaining complex technical issues in plain English. When we were switching our operating system from MS-DOS to Windows, programs operating on the old and the new operating systems clashed and caused each other to malfunction.

Instead of the usual techno-talk about bits, bytes, and binary numbers, Tim likened the clashing of programs to the two of us trying to leave the room by the same doorway at the same time—neither of us would be able to move. In the context of what we were experiencing, his comparison helped us understand the issue better. And sure enough, once all programs were operating on Windows, everyone came and went through the doorway in an orderly fashion, one at a time, and without further clashes.

A few years later, another technician demonstrated a similar ability to explain technical matters in plain English—perhaps plainer than I had bargained for. We were making a major upgrade to a program on the server, and it had come down to one final press of a button. Neil, the technician in question, had spent a number of hours getting us to that point and, as he stood poised for that final press, he wanted me to understand that, once done, there was no reversing the process: “You know that we can’t cram the shit back in the horse?”

In addition to being a plain speaker, Neil was also a very competent technician and it turned out that there was no need to cause the horse any discomfort.

Excerpt from Character 7: Landlord

Landlord skecthWhen the time comes to negotiate or renew a lease, not all landlords will approach it with the take-it-or-leave-it attitude Graham and Andrea experienced. Much depends upon circumstances such as prevailing vacancy rates in the area and the general economic outlook, among a host of other influencing factors.

I was about to sit down to negotiate the renewal of our main office lease with Jim, the property manager of the building. I’d heard that the landlord was aiming for an increase I considered to be higher than market value, and certainly higher than I anticipated accepting.

A lease negotiation can be like a game of poker, with each party trying to guess at the other’s cards before showing its own. I had minimised the guessing by advanced knowledge of the proposed rent increase. I also knew we were regarded as a desirable tenant and guessed that Jim wouldn’t want to add to the existing unleased bays in the complex.

About ten minutes before he was due to arrive for the meeting, I had an idea that, in retrospect, and in all modesty, was not only fun but a stroke of genius. I found a manila folder and filled it with an assortment of colourful brochures, price lists, and sundry promotional material we had lying about the office. I then wrote “PREMISES SEARCH” on the cover of the folder in black marker pen and placed it on the far end of the meeting room table, where it was out of reach but close enough for the title to be read.

By the end of the meeting during which Jim darted furtive glances at the manila folder, we had agreed on a very modest rent increase in line with what I regarded as fair. In addition, he agreed to my request for new carpeting at no charge. Amusing, stroke of genius, or manipulative, call it what you will—the manila folder of assorted screen printing pamphlets did its job.

Excerpt from Character 12: Burglar

Burglar sketchYour business is a target

This character is a regrettable reality with whom a small business owner is bound to cross paths—in some cases, repeatedly.

I’ve chosen the burglar to represent an entire class of characters with the same objective in mind: ill-gotten gain at the expense of a small business.

Unpleasant as it is to contemplate that your business is a target for unsavoury characters lurking out there with evil intent, you cannot afford to stick your head in the sand. You absolutely need to understand the extent and potential sources of the threats, and then you must take the appropriate countermeasures.

 

Shapes, sizes and disguises

The burglar’s gang of cohorts includes a wide range of characters in various shapes, sizes and disguises, from mindless and desperate shoplifters to technically sophisticated and ruthless hackers, and an assortment of characters in between. And all are intent on victimizing your small business.

They might be employees, customers or strangers; they might be dressed in three-piece business suits or ragged jeans and T-shirts; they might intrude in person, by phone, or online; they might be beautiful, ugly or faceless; they might be rude, crude, or charming; they might be armed or disarming; and they might brazenly appear in broad daylight or skulk about after dark. There is neither a stereotypical burglar nor a prerequisite for this occupation other than perhaps a psychopathic personality.

Excerpt from Character 14: Company Pet

JRT for bookOne such visitor was a consultant who occasionally tested for methane emissions in all the units in our industrial park. (There had once been a dump close by, and although the area had been reclaimed for baseball fields, there was still apparent concern about migrating methane gas.) He wore an electronic gadget on his back about the size of a day-hiker’s backpack. Attached to the gadget was a rubber hose, which was in turn attached to a hollow wand about the size and length of a walking stick. At the end of the wand was a rubber cup the size of a teacup that emitted a sniffing noise as the machine drew air through it. In Ryley’s defence, the consultant did look a bit abnormal, particularly when waving the sniffing wand about.

Their first encounter set the tone for all subsequent visits. Ryley was woken from a deep sleep in the sunbeam by a sniffing noise and a rubber cup inches from his nose. The rubber cup instantly suffered the same fate as a veterinarian’s stethoscope that was once suddenly and unexpectedly pressed to Ryley’s chest. In both cases, he did what Jack Russell’s instinctively do. He shook the rubber “rodent” fiercely to break its neck while clamping down with powerful jaws until he could be persuaded it was dead. If you’ve ever tried to persuade a Jack Russell terrier to release something firmly clamped in its powerful jaws before it believes that the quarry is ‘dead’, you’ll know there are few endeavours more pointless.

This type of behaviour would probably not be tolerated in big companies where the pets-at-work concept has recently become fashionable. Typical of big companies, some have issued policies and procedures to govern pets at work, and while that might seem too bureaucratic for the taste of most small businesses, discretion still has to be exercised. A total laissez-faire alternative is not a good idea either.

Some visitors will be afraid of dogs, some visitors won’t like cats, and some visitors will be allergic to certain animals. Few people can conduct business with a dog slobbering all over them or a cat strolling around on the meeting room table. If any of these visitors are customers or potential customers, the company pet could be bad for business.

The company pet isn’t going to exercise discretion around visitors; you have to do it.

Excerpt from Character 3: Accountant

The vexing issue of discounting

Any accountant in public practice can tell you about small business owners who make decisions on everyday business matters influenced more by what everyone else is doing rather than by the impact the decision will have on their businesses in their peculiar circumstances. For instance, a close and equally troublesome relative of pricing is discounting. It’s a strategy commonly used to boost sales for any number of reasons.

Discounting can be quite useful in dealing with inventory situations such as overstocking or redundancy. Quite often in these situations, the investment was lost when the product was bought, so any cash one can recover is a bonus. It’s certainly not an ideal solution, but recovering some cash is better than having the product occupy space while it ages—unless you’re a wine merchant.

Businesses run into trouble with discounting though when using it as a volume-boosting strategy. Typically, small business owners don’t properly analyze their discounting schemes and, as a result, these schemes can be more harmful than helpful. If the necessary financial acumen does not exist in-house, then the strategy should be discussed with an accountant or someone with similar insight into the effects of discount tampering. I saw a classic example of the potential consequences of thoughtless discounting in my own business, thanks to Andrew.

Excerpt from Character 2: Banker

Banker sketchIf you’ve not yet experienced business banking, you might be wondering whether it’s an exaggeration to suggest that bankers and small business owners dwell in different worlds. Be assured, it’s not. Bankers live in a nine-to-five bureaucratic world of policies and procedures, conservative risk management, suits and silk blouses, plush carpeting and furnishings, a guaranteed cheque at the end of the month, and, with some luck, a fat bonus cheque at the end of the year. That’s Mars.

Small business owners live in a world of long days, risk taking, sleepless nights worrying about making payroll, staff problems, customer retention, late shipments, and overdue receivables. That’s Venus.

Under these circumstances, small business owners should not expect bankers to see their world as they see it. Lack of familiarity militates against proper understanding. I audited close to a hundred small businesses, some repeatedly over a period of years, and valued close to twenty during the public accounting and consulting part of my career. As a result, I can assure you that while I spent more time and effort trying to understand these small businesses than any banker ever would, it takes a lot more than an audit or a valuation to come close to understanding a particular small business as well as its owner. Anne Michaels, author of The Winter Vault, in commenting on another author’s work, wrote that “nothing is known until it is held: in our hands, in our mind, or in our heart.”

If it’s unreasonable to expect your banker to know your business as well as you do, it’s equally unreasonable to expect him or her to understand your challenges and needs as well as you do and, therefore, to be as optimistic as you. That might be why loan officers are not on many small business Christmas card lists.

Excerpt from Character 1: Partner

Partners resizedPicture yourself in a cottage in the woods. The sound of the lake lapping the sandy shore drifts in through the screen door on the warm, loamy forest air. A chipmunk scurries about on the wooden deck and beyond that, a solitary fisherman sits in a small aluminum rowing boat on the lake hoping for a rainbow trout for supper. Both will soon move on, leaving you to pursue your purpose in absolute peace and without distraction.

This is the type of setting helpful to contemplating the partnership decision: a decision that could have a profound impact on both your personal life and business life; a decision best reached by a completely frank discussion between you and your inner self.

You’ve bandied about your business model exhaustively, and all that remains is to decide whether you’re going to go it alone or enter into a partnership. It makes no difference if yours is a new business about to be launched or an existing business at a crossroad—the decision requires the same degree of contemplation. Should you retain full ownership and hire the expertise and raise the capital you may not have, or should you trade away partial ownership and control to a partner or partners in exchange for expertise and capital?

This decision should not be made lightly. Unfortunately, it often is. In my experience, most people enter small business partnerships not thinking beyond the assumption that they can make more money in a partnership than alone. Much of what needs to be considered though has nothing to do with numbers and money. Commonly overlooked in business decisions of all kinds, including the question about whether or not to enter into a partnership, are the all-important “emotional” considerations. We’ll explore some of them in a moment.