5 Tips for Women to Become Leaders

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You may not be a member of the female persuasion, but chances are you know someone who is.  Here’s a link to an excellent article by Anita Bruzzese who writes regularly for Gannett.  She recently interviewed Joanna Barsh and Susie Cranston, authors of How Remarkable Women Lead.

This is something all managers should know.  Not only can men apply the tips, with some minor modifications, to their own careers, but then can be used to mentor female staff and help them reach their goals, which is a win-win for you as well.

Here’s the “Reader’s Digest” version of the 5 traits shared by successful female leaders:

  1. They believe their jobs have meaning.
  2. They confront life in a constructive way.
  3. They work at building connections.
  4. They put aside their own fears to make things happen.
  5. They find the source of their energy.

Check out Anita’s post and you might decide to buy the book for yourself, for your female staff, or for anyone in your life who is looking to build their career.  While you’re on Anita’s site, be sure to check out her other excellent posts.

101 Small Business Mistakes

There’s an interesting post at American Express Open Small Business by Gregory Go, with the above title.  While you (hopefully) haven’t made all 101 of them, we’ve all made some of them.  Of course, the key is to learn from our mistakes (and others’) and move on.

The post is broken down into five categories:

  1. Startup
  2. Product
  3. Sales and Marketing
  4. Operations
  5. Big Picture

Check out the article and thanks to American Express for providing such good information.  Thanks, too, to several people who posted a link on twitter, including:

@PXAbstraction

@btushar

@octobermigrate

@federated_media

@msaleem

@annescarlett

@jenbenz

@ConversationAge

@lizstrauss

and several others.  If you’re not using twitter as a source of business information, you’re missing an awful lot.

Retailing-Some Good News

Under the title, Retail Industry Group Predicts Small Rise in Holiday Sales, Sandra M. Jones writes in the Chicago Tribune that The International Council of Shopping Centers is predicting a small rise in holiday sales over last year.

While the percentage is small, it’s still an increase and the fact that an industry group is offering a glimmer of hope for the fourth quarter is good news. In a world where the media is constantly offering self-fulfilling prophesies of gloom and doom we’ll take what we can get.

MTS certainly doesn’t have the resources to conduct an in-depth survey of consumer trends.  I can tell you that nobody I know has canceled Christmas this year. I’ve always found that those who are enthusiastic about the celebration of Christmas, Hanukkah, or any of the other year-end holidays will find a way.

I’m also hearing from my retailing friends that business may not be great, but it is good.  What the pundits fail to mention is that these surveys almost always lean heavily toward the big box stores.  Even 1,000 independent retailers whose sales are up can’t offset one big chain whose sales are down.  At the end of the day, all you really care about is a survey of one business—yours.

Retail Business “Killers”

Today I want to point you to an article called “The Top Five ‘Killers’ of Retail Businesses” from the Retail Owners’ Institute.  You have to keep in mind that the ROI is a group focused on the financial aspects of retailing.  Consequently their “Top 5″ don’t include things like marketing, salesmanship, customer service or any number of other things that would appear on my list.  In fact, the article begins with this rather remarkable statement”  Hint: (Declining Sales’ is NOT One of them!)

Again, these guys are in the business of counting retail beans so their list focuses on the financial.  With that disclaimer, here are their “Top 5”:

5.  Out of Control Growth

4.  Out-of-Control Expenses

3.  Failing to Manage Gross Margins

2.  Out-of-Control Inventory

1.  Being Out of Cash

Like I said, from the bean-counter’s perspective there isn’t much to argue with here.  There’s no doubt that if you run out of cash, you’re most likely out of business.  Read the original article to see ROI’s comments on each business killer for some good insights.

It’s a good article but, in my humble opinion, it misses some very important elements of a successful retail business.  Even the most devout bean-counter should be willing to admit that until you bring the beans in through the front door, the rest is just academic.

Escape from Cubicle Nation

http://www.escapefromcubiclenation.com/

For a long time I’ve been a fan of Pamela Slim and her blog, Escape From Cubicle Nation.  The topic, as the name implies, is breaking free from the corporate world and starting your own business.  While Mining the Store is primarily aimed at those of you who have already made that move, there’s still a lot to be learned from Pamela’s blog. As a fellow entrepreneur, her posts are always interesting and well worth the time.

Pamela recently released a new book called, surprisingly enough, Escape From Cubicle Nation.  I haven’t read the book myself but my friend Krishna De has done an interview with Pamela on her Biz Growth Live  podcast.

You can download a free chapter of the book at the Escape web site.  Check it out!

Small Business Decisions

What to do?  What to do? From the time we get up until we go to bed at night, life is a series of decisions.  In fact, we make our first decision of the day, whether to get up or not, even before we get out of bed.  As the day goes by, and the week, and the month, and the years, decisions have a tendency to build on one another.

For example, if we decide not to get out of bed, that decision will have a major impact on the rest of the day.  Depending on our calendar and our level of responsibility, that one decision could have consequences that extend far into the future.  And, of course, our decisions often affect others.

Millions of words have been written and spoken about various methods of making decisions.  Whether you use the Ben Franklin line down the middle of a sheet of paper method, or if you’re a “flip a coin” kind of guy/gal, your decision methodology is very personal and may change depending on the importance of the decision or even the day of the week.

This may be one of those “do as I say, not as I do” moments, but my suggestion to you is that you use the “Nike” decision model:  Just Do It!

Sometimes we make the decision not to make a decision, and that’s usually the worst decision of all.  Don’t get me wrong.  You shouldn’t spend huge amounts of money on a whim.  You probably shouldn’t marry the first girl you ever date.   (Although there are very successful marriages that are the exception to this rule.)  You probably shouldn’t buy the first house you look at, or the first car.

But the length of time it takes to make a decision should be proportional to it’s magnitude.  Prioritization is the key.  Whether or not to take on a new line of merchandise or to add a new service is a decision that shouldn’t be taken lightly.  Invest the proper amount of time in the process, but don’t agonize over it.  Weigh the facts.  What’s the best possible outcome?  What’s the worst that could happen?  Does the potential gain outweigh the potential loss?  Once you have the facts, and possibly some input from your trusted advisers, Just Do It!

If  it’s a good idea, you delay the beneficial results by waiting.  If it’s a bad idea, the sooner you go ahead, the more time you’ll have to recover.  In many cases, delaying a decision may let someone else decide for you.  That’s never good.

Then watch the results.  If it’s working, pat yourself on the back and move on.  If it’s not.  Cut your losses. Pat yourself on the back for trying something new. Then move on.  If that new line of widgets is just sitting there on the shelf, it’s time for another decision.  Find a way to move them out.  Get as much of your investment back as you can.  Then  spend it on something else!

Decisions, decisions, decisions.

Multiple Channels of Distribution

This may get a bit long, so I apologize in advance, but it’s a complicated issue.

I’ve been following a discussion on another forum on the subject of multiple channels of distribution.  Here’s the gist of the conversation.  A company who manufactures consumer goods in the United States offers two protected lines to independent retailers.  There are restricted dealer territories for each line and Internet advertising is prohibited.  The company does not sell to mass merchants.

However the manufacturer does market its products through other channels which normally don’t interfere with their indy retailers.  Products for these other channels are cosmetically different from the retail product.  Only lower-end items are sold through the other channels, with the more expensive top-of-the-line reserved exclusively for the indy dealers.

The question is, should the manufacturer be selling through these other channels?

Disclaimer:  I used to work for the manufacturer in question, albeit in another division.  I have had this discussion/argument many times, both with dealers and within the company.  Since I no longer work there, I believe I can shed some impartial light on this issue.

hammerYou don’t have to be a rocket scientist to figure out what product I’m talking about, but to keep the blog industry-neutral, we’ll say the product is hammers.  I’ll admit I know very little about hammers except that they’re used to drive nails and that you hold onto the handle and hit the nail with the other end.

First, it’s very difficult to be a supplier exclusively to independent retailers and any manufacturer deserves a lot of credit for trying to do it.  Face it, one order from a big box chain can account for more units than hundreds of indy dealer orders.  Considering the fixed costs of manufacturing, either domestic or off-shore, the chain store numbers are hard to ignore, especially if you want to keep your work force employed and make a decent return on your investment.

On the other hand, it’s very costly to do business with most chains.  The low prices they brag about are usually made possible by their predatory purchasing, payment, and return policies.  If a vendor isn’t careful, he may end up paying dearly for the privelege of having his product stocked on the big boxes’ shelves.  More than one manufacturer has gone broke trying to do business with the big guys.

So, if a company makes the decision to stay out of the chains, how does it generate enough volume to keep the factory running?  One way is through multiple channels of distribution which don’t include the Marts and Depots.

not a hammerLet’s say I’m a manufacturer and I produce a line of hammers that I only sell to independent hardware stores.  I have a full line of these consumer tools including claw hammers, ball peen hammers, and others.  I’ll call this the Alpha Homeowner line.  Within the Alpha line I offer a basic assortment and a deluxe, gold-plated assortment.

To keep production going I also sell a line of professional hammers through industrial supply houses that sell directly to carpenters and other professionals.  I call this the Beta Builder Line.  It has all the same type of hammers, but they’re cosmetically different from the Alpha line.  I don’t offer the gold-plated line-up to this channel.

The problem is that consumers (and builders) are very savvy today.  It’s fairly common knowledge in the tool community that Alpha and Beta are made in the same factory.  It doesn’t happen often, but once in a while, a carpenter will come into one of my retail dealers with questions about  his Alpha hammer.  Some dealers will take it in stride, answer the questions, and maybe sell the customer other merchandise.  Others will be highly offended that they missed a hammer sale, refuse to help the customer, and raise heck with me for selling his “competition.”

The dealer’s suggestion to me is that I stop selling in these other channels.  He argues that with less competition he’ll sell more Alpha hammers, making up for the loss of sales of the Beta line.  But will he?

If I stop selling the supply houses, they’re just going to find another supplier.  Typically, the supply house’s customers don’t shop in hardware stores.  And, consumers usually don’t shop in the supply house either.  So, I lose the business from the secondary channel and gain no sales in my primary channel.

So, putting on my small business hat, should I, an independendent retailer, buy from a manufacturer whose products are available trrough other channels?  I’d say the answer is “yes” with qualifications.  Of course, the big qualification is whether I can make money selling the line.  Or better yet, can I make more money selling that line versus something else?

The Alpha hammer may be available through the supply house, maybe at a local auto parts store, and a few other places.  I may lose an occasional sale.  But, looking at the big picture, is it a profitable line for me, day in and day out?  Is it a quality product?  Do I get support from the manufacturer?  If the answer is yes, then I’d say you’ve got yourself a good line.

Taking off my indy hat and putting my manufacturer hat back on, there’s another 500 pound gorilla in the room that often doesn’t get talked about.  More than three fourths of my retail dealers carry another line of hammers.  They want to offer their customers a choice.  Of course, I have enough hammers in my line between the regular items and the gold-plated series, but the majority of my dealers still devote 1/2 their hammer shelf space to another brand.

All of my competitors do sell the big box stores.  Yet, more than 75% of my customers still sell their lines.  While I give my dealers a protected territory and keep my line 90% competition-free, these dealers still carry other lines.

If my dealers gave me the same protection that I give them, I wouldn’t need the other channels.  Of course, that might mean adding additional models and features, and possibly spending more money on advertising.  It’s really a Catch 22.

In the end, wearing both hats, or no hat at all, I have to say that this whole issue comes down to profitability of the line and to manufacturers and dealers working together.  Both sides have to ask each other (and themselves) how can we reach an agreement that lets both of us make a reasonable profit?  Dealers, do you really need that second line?  Manufacturers, what can you do to make the second line unnecessary?  How can we make this a win/win situation?

In a tough economy, the manufacturer has a responsibility to satisfy all of its stakeholders and keep everyone working.  I say “kudos” to any company who can do that without getting in bed with the big boxes.

Retailers have the same responsibility to themselves and their staff.  Again, I say “kudos” to those of you who can do that and support quality manufacturers who do their best to support you.

Buy American-How Can We Help?

There’s an interesting article at Embarq.com reporting on the “Buy China” rules that Bejing has imposed on government-funded stimulus projects.  China has instituted the rules, similar to the “Buy American” provisions of our own stimulus package.  It doesn’t take a degree in political science to expect other countries, especially China, to retaliate against US policies that encourage the large-scale purchase of domestic goods.  In fact, both China and the United States already  have “buy domestic” rules in place for all government purchases.

In reality, there are enough loopholes in the American laws to allow the purchase of imports in many, if not most cases.  Given the usual price difference between American-made and Chinese-made goods, it would seem that Washington’s “Buy American” rules have less teeth than Bejing’s policy, especially with the Chinese governments financial support of its domestic manufacturers.

Let’s be honest.  Washington is not the answer to shoring up domestic manufacturing. China, and other countries, may retaliate against any government “Buy American” initiative.  The real answer to the problem lies with you and me. As consumers, we should do our homework and buy domestic products whenever possible.  As business owners, we must offer our customers an American-made option whenever possible.

You may think that domestic products are more expensive to buy, and in many cases you’re correct.  But when you consider the total cost of ownership, American-made merchandise has the edge, more often than not. The $5.00 Chinese widget you buy from Wally World may have a usable life measured in months while its American-made $10.00 counterpart’s life is measured in years.  Our landfills are full of “bargains” that were manufactured in the People’s Republic and other third-world countries.

While government-imposed “Buy American” regulations may prompt retaliation from foreign governments, you and I deciding to buy domestically-produced products, on our own, for the right reasons, isn’t likely to inspire the same response.  Let the market choose higher-quality American-made goods and offshore competitors will be forced to increase their quality in order to compete.  On a level-playing-field our manufacturers will win every time.

Here’s something that bothers me. I’m no expert on international economics, or military materiel, but I’m surprised that no one else seems to be talking about this.  When the Japanese attacked Pearl Harbor, the United States was ill-prepared to fight a world war on two fronts, especially with the massive destruction of our Pacific fleet.  We won the war because we were able to quickly convert domestic manufacturing to build ships, airplanes, tanks, guns, and other necessary military equipment.

While the men went off to fight, Rosie the Riveter stayed at home making the tools to wage war.  It was an American team effort that led to total victory in Japan and Europe.  Hopefully there will never be another World War, but it’s always a possibility.

If such a conflict were to break out, where would we turn for the tools of war?  Would we buy planes from China?  Would we expect Italian-owned Chrysler to convert from auto manufacturing to building military vehicles?  Would Toyota and Nissan be willing to build tanks and humvees in their US plants?  Or would we rely on American factories that make toasters and coffee pots to product the necessary guns and ammunition?

Hopefully there will never be another large-scale military conflict, but with North Korea threatening to fire a nuclear missile aimed at Hawaii, we have to be prepared.

We can’t be paranoid, but it’s definitely something to think about every time you shop for a new car or pick up anything marked “Made in China.”

Small Business Imperatives

Charles Brad Reynolds, a Warwick Business School MBA candidate asked the following question on LinkedIn.

What do you see as the top 5 innovations that businesses can access, cost-effectively, today that will be imperative for survival and profit maximization in the future.

My vote goes to
1.) Internet facilities for communication, marketing and purchase ordering
2.) Online and electronic banking facilities
3.) Lean Thinking concepts and practices
4.) Business use technologies (laptops, mobile phones, blackberries)
5.) Expanding network (customers, competitors, labour, suppliers, civil, etc)

What do you see as being the top innovations that businesses should be more actively trying to leverage or develop for the future.

There were a number of good answers, many of them focused on the internet and new technology.  Here’s my answer:

“I’m going to take a slightly different approach. You may or may not consider these “innovations” since they’re hardly new. But since they may be overlooked in favor of the latest electronic “toy”, their use can be considered innovative and they’re definitely going to be imperative tomorrow.

1. Relationships. If you’re going to stand out, then you must have strong relationships with your customers and other business partners.

2. Communications. Here’s where the “toys” come in. Facebook, LinkedIn, Twitter, and others. Use them IF they help your business.

3. Empowerment. Unless you want to work yourself to death, you have to have people working for you that you trust and you must give them everything they need to excel, including the ability to make mistakes.

4. Knowledge. Never before have your customers had access to knowledge as they do today. You MUST stay ahead of them or be left behind.

5. Customer Service. This is really a combination of the other four. Find out what your customers want and let them know that you have it. Empower your people to give the customer what she wants and then get out of their way.

I personally have nothing against MBA’s (well, maybe I do.  But that’s a topic for another day.) but, there’s a lot more to running a small business than the things they teach you in B-School.

Treat people the way you’d like to be treated and you’ll have a sound foundation, regardless of the tools you use to get there.

Small Business Retailing–Setting Store Hours

The idea for this post comes from another private forum I follow and a discussion about when an independent retailer should be open.   By their nature, many indie retailers are one or two man (woman) operations.  That means store hours = working hours.  It’s only natural to want and need some time off so a lot of small retail businesses are open limited evening and weekend hours, the very time when most consumers want to shop.

My first job (back when dinosaurs roamed the earth) was at a local clothing store.  We were open Monday and Friday until 9:00, and Tuesday-Thursday and Saturday until 6:00.  That was the norm.  There were no alternatives.  Everybody closed at 6:00 during the week.  The only exception was between Thanksgiving and Christmas when we were open M-F until 9:00.  Those were the days.

Make no mistake, on-line shopping and big-box stores that never close are spoiling consumers.  They can shop at any hour of the day and night.  They should have enough sense to know that you’re not going to be there for them at 3:00 am, but they do expect you to have store hours that are convenient for them.

It’s easy for me to sit here in my pjs and pontificate about how many hours you should work. So I’m linking to this article by Bob and Susan Negen. That way you can be mad at them instead of me.   Still, you know I can’t resist throwing in my two cents.

I do disagree with Bob and Susan on one point. Unless you’re running a church or a pharmacy, I don’t think anyone should work on Sunday. (Or whatever your Sabath happens to be) Otherwise, if you’re going to compete, you have to set your store hours for your customers’ convenience.  Here in St. Louis one of the last surviving independent appliance retailers refuses to be open on Sunday.  It’s part of his advertising.   “Shop us every day but Sunday.”  He’s outlasted most of his competition.

With a few exceptions, people who can afford your top-of-the-line product work during the day. If they decide to shop for a whatever you sell chances are very good that  they’re not going to take off work. They’re going to shop in the evening after dinner or on Saturday. Unless they’re incredibly loyal to your store, they’re going to go somewhere else if they find that you’re not open when they need you. Worse, when your product comes up in conversation, they’re going to tell their friends not to go to your store because “you’re never open.”  (If you’re not there when they need you, in their minds you’re never open.)

I know how hard retail is. I know you get tired and need some time off. The solution is to hire someone to fill in when you’re not there. How many high-end widgets do you have to sell to pay for one part-time employee for a few hours per week? You have to do your own math and make the call.

Remember, I’m not here to sell you more merchandise. If I were a vendor I’d want you to be open 24/7 so you never miss a sale.  (Which makes you wonder why Chrysler and GM are eliminating dealers, but that’s another story.)   I just want to see you succeed in business and in your personal life. If you have limited store hours and you’re happy with your income, then keep doing what you’re doing. You’ve found the right combination for you. But if you want to increase your income and reduce your hours at the same time, then hiring additional help is the way to go.

The name of the game is customer service. But your most important customers are your spouse and kids (and grandkids). They’re the reason you’re in business in the first place.