What happens to small businesses after the Christmas Holiday???

Today's economy is a train wreck and unemployment is at unhealthy levels. To stack more bad news on-top of that, after Christmas and the holidays consumer spending will drop...Are you ready? February is usually one of the hardest hit months in the retail industry. So with that bad news you have two simple options as a small business owner: Fight or Flee.

If you are still reading this Blog you obviously have decided to FIGHT and that is the only option.

You are not alone in the fight. There are thousands of business owners facing the same threats, challenges and problems, but together we can overcome. We have power in numbers and can maneuver faster and react quicker than large corporations. This enables us to step up: deals, cross promotions, partnerships, grass-root marketing, etc a lot faster. To use an alpine climbing term: We are going to travel "Light and Fast". Light means to carry as little weight as possible and Fast is getting from bottom to the top of the mountain and back down as fast as possible with no fixed ropes or pre-established camps. The risk is higher because the margin for error is small. We are going to move light and fast as small businesses and our margin of error is tiny.

Here is some ideas for moving Light:

• Look at your employee's and find out which ones are not producing. Employee's should be hired in a small business to produce a final product, which should be used as thier measurement and evaluation. The product does not have to relate to money, but we like it to as much as possible. For example: One of my employee's has the role, within marketing, to establish as many community connections as possible that will allow one of our businesses to promote itself on-site. Through metrics we track employee performance and determine if they make us money or lose us money based on the number of business alliances and return. Do not have employee's that clock in and clock out, you are wasting money...get them producing.
  
• Another way to move light is to re-evaluate your vendor relationships. Several of the companies we have had the pleasure meeting had long-standing advertising relationships with magazines, radio, and other outlets. The relationships had been on auto-pilot for years and value was not being reciprocated by the vendor. In Marketing, always make sure when you sign an advertising deal that there is free benefits being added to the pot. Think very creatively about how to utilize the relationship to the absolute maximum and then negotiate an even better deal. Reevaluate all your relationships and shop around, you may saving big $$$$. Everyone is hurting in this economy and there are incredible deals to be made, you just need to ask.
  
• Alpine climbers take cutting weight extremely serious and will go as far as removing all the tags from all their clothing they plan to wear and even the draw-strings. So with that in mind, now look at your expenses and keep only what you need to survive. Look at the reality of owning a small business and cut out the luxury spending or anything of non-value. Many owners are inclined to cut marketing first; well how can you increase income with out getting in front of customers and driving them to your business. Carefully consider cuts and make sure they will not be the ones helping to drive in potential customers.

Here is some ideas for moving Fast:

• Leave your office once a day and visit 3 other businesses. Visit them to introduce yourself, put up fliers, establish relationships, etc. The point is, you need to get away from the confinement of your office walls and beat the streets. Get out an establish relationships that will lead to both parties making money. Is there a complimentary or cross-over business that you should be working with? Now is the time to act.
  
• Create an event for your customers and ask them to bring there families and other colleagues that may be interested in your business. Referrals are a huge way to get business fast because there is trust in recommendations. Ask all your vendors or colleagues for 3 referrals.
  
• Lastly, make phone calls. Call your current customers, just to check in and make sure they are happy with your products or service. Or cold call (that dirty word) new potential customers and try to establish relationships. The phone can be a highly effective communication tool and you need to learn to not be scared of picking it up. Call 3 new potentials and 3 existing customers per day. Should take 30 minutes at the most.

These are just a few of the things you can use to travel Fast and Light in the risky world of owning a small business. Here is one task for you after you are finished reading this Blog: Call one business and establish a system of cross promotion. You will be amazed at the success rate and willingness of other businesses needing to increase revenue too.

The reason you have bad employees is because of YOU!!!

Hiring our first group of employees was more or less a disaster. We as owners had a vague idea of what we thought needed to get done. How does an owner teach an employee how to do something when he is just learning the basics himself? It is difficult. The people we hired were smart, personable, and highly capable. However, there was a problem and it took us time to figure it out.

One of the biggest challenges in small business is the owner’s complete lack of understanding. They do not know what needs to happen on a daily, monthly, or quarterly basis in order for their business to thrive. We did not know all the things that needed to be done to create revenue. Over the years we figured out one thing that is constant. All positions in the company needed to produce something; a product, a report, a statistic, a spreadsheet—some material that represents work. Most small businesses hire just to fill spots. What is the point of hiring if that new employee will not benefit the production rate of your company? Every position must produce.

Basically, a great deal of thought must go into creating each task within the company and a way to measure that production. Once this variable is determined, it will be much easier to decide which candidate has the greatest potential in delivering that product with the least amount of supervision.

While Arm 2 - HR is one of the most important arms, it is also one of the toughest to manage because you are dealing directly with the employee body. You must quickly become adept at managing the social interactions between your employees and your customers. These relationships shape and mold the face of the company.

Once the business is up and running, it will succeed or fail on the strengths and weaknesses of the people within it. Your employees will embody the philosophy of you and your business, serving as a constant representation of all that you value in front of customers and vendors alike.

This Arm assembles and builds your in-house dream team of employees. While managers must organize and delegate responsibilities, staff members must be properly trained to perform their tasks. The HR Arm must have evaluation techniques, action plans, and proper feedback within the system in order to make personnel changes that will ultimately benefit the continued growth of the business.

There are six main topics to be covered when building an effective group of employees: hiring, training, communication, evaluation, motivation, and employee termination. No employee will ever run YOUR business the way you want 100% of the time! But what if you could get them as close to that 100% mark?

Lecturing at Harvard Business School

Recently, The Octopus Solution gave a lecture to a great group of international business students who attend the Harvard Business School. The lecture consisted of our background stories, the global impact on our businesses and successful strategies we have implemented. One of our key talking points was:

The Three Hearts

One of our main foundational systems of The Octopus Solution is The Three Hearts. Did you know that an octopus has three hearts? Each heart pumps bright blue blood to different parts of the body, constantly renewing oxygen and other nutrients vital to the survival of the octopus. In the same way, the three hearts within The Octopus Solution function together as one for the constant renewal of customers vital to the survival of the small business. These three hearts: the potential customer, the established customer, and the repeat customer, are responsible for pumping and renewing blood and oxygen through out the small business. Without a customer, regardless of location, funding, and staff, there is no business.

The Potential Customer: The first heart beats within External Marketing, where the potential customer is driven to the company through marketing efforts.

The Established Customer: The second heart beats within Sales, where the potential customer is turned into an established customer by closing them on your product or service.

The Repeat Customer: The third heart beats within Internal Marketing, where the established customer is turned into a repeat customer because he or she is highly satisfied.

These three hearts represent the source of life responsible for the survival and growth of your company. Therefore, your knowledge and understanding of customer flow must be mastered. Most business owners, as they should be, are fixated on driving customers in the door. Without a customer, as common sense would tell you, there is no sale and without a sale, you have no business. Unfortunately, most business owners forget that once they have a customer, they must focus the same amount of energy on keeping them as they did to initially attract them.

The better you are at creating repeat customers, the more successful your business will be in the long run. “Acquiring a customer costs five to ten times more than retaining one. Repeat customers spend, on average, 67% more. After 10 purchases a customer has referred as many as 7 other people.”

Bottom line: keeping customers satisfied will pay massive dividends in the end. Making sure customers come back means knowing exactly what they want. Consequently, the more you can profile the potential customer and established customer, the better chance you have at catering to the needs of a potential customer and maintaining the needs of a repeat customer.

Don't let running a business become a nightmare.

Starting a business can take you from zero to 180 miles per hour in the blink of an eye. Once you start speeding down the decision making path, it becomes more and more difficult to turn the wheel in another direction without time, money, and resources. Correcting a mistake wastes all three of these assets, which means making an effort to get things right the first time around is crucial. Whether you are starting a business or have owned one for 25 years and are now starting to implement The Octopus Solution, everything starts with planning and strategy. Making decisions that can make or break your company is one of the most challenging and exciting aspects of being a business owner; the freedom to do what you what!

Early in our careers as small business owners we ran our companies by the seat of our pants. When problems arose we dealt with them; when things didn’t work, we fixed them; and when money didn’t flow, we worked weeknights and weekends to boost revenue. Reacting to competition, customers, employees and all the other things that can jump out of the wood-work will get you no where fast. Instead of focusing on growth and expansion, you will be running from one problem to the next like a chicken with its head cut-off. If you have been through this frantic chase, you already know that it’s not fun. The Octopus Solution can help you avoid those nightmarish days that run swiftly into the deepest hours of the night.

Even thought we don’t prefer working seven days a week, we sometimes have no choice in the matter. Owning a small business is by no means a 9-5 job; it’s a lifestyle and one that you must be committed to in order to make it work—at least in the beginning stages. After you have our Success System dialed down, you will be able to remove yourself from running a reactionary business to running a business that more or less runs itself. We have removed ourselves and you can too.