family business


Sunday, August 10th, 2008

Crazy Little Ideas

Hello, Music City! Last weekend, we had the pleasure of attending the Boom Your Business seminar in Nashville hosted by Wizards of Ads partners. While the edges were a little rough in places because it was the first-time ever, Amy and I came home with two notebooks filled with opportunities for our customers.

We learned from Michele Miller, author of The Soccer Mom Myth, about the dangers of stereotyping female consumers.

David Young talked about the 6-steps of online conversion. David is a Persuasion Architect and teacher who also taught about persona based marketing. The Meet Ms. Jones analysis from Amy Lively and our marketing partners at R&A Marketing are already likely to be the best 1-2 punch in persona writing in the United States.

Peter Nevland from Spoken Groove rocked our world with his wonderful mix of fun, funky, and faithfulness. Peter challenged the room to be unafraid of crazy little ideas. Hopefully he’ll do a young writers workshop at our daughter’s school this year; our Midwest customers will not want to miss it when he does.

Tom Wanek, one of the newer partners, explained how biological signaling theory can be translated into our retail showrooms: simply stated, the combination of what you say and what you do signals customers what to expect or cause confusion when your words and your actions conflict (I talk about this as personal experience in the May 29 post, “Quicksand.”) Tom is a smart retail mind. You should begin to follow him.

Clay Campbell from Kentucky Opry brought down the house with his authenticity. His daytime job is writing books and helping small business owners achieve their wildest dreams. His new book, “12 Steps to A Better Website” is fantastic. Many ideas to improve our client’s sites will come from Clay’s work.

These are just 5 of the 14 presenters. The others were equally great.

In family-owned retail, the competition continues to stiffen. The Lively Merchant and R&A Marketing are constantly studying inside and outside our industry expertise to bring you the best ideas from around the world.

Stay tuned.

This fall, R&A Marketing will host a whirlwind 1-day no-holds barred seminar on small business marketing. Our customers already testify to the benefits of being in relationship, but we want a whole new audience for the day. Details will be posted here later, or contact us for more information. I know it will knock your socks off.

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Monday, August 4th, 2008

Nickels & Dimes:

Have you ever been told by your boss that you’re not allowed to wait on customers because, “You don’t have enough sense!”?

Many careers begin slowly. “Why should I pay you to learn the business?” was the mantra at one man’s first job. Being a young 21 year-old and the son of a farmer, the salesman worked for the first three months for free.

After six years of failing to satisfy his simpleton boss in Watertown, New York, he desperately wanted to be his “own man.” He had closely watched the merchandising techniques of his boss. He felt he had a breakthrough model idea. After bumming $300, on February 22, 1879 this budding retailer opened his first store in Utica.

Two weeks later it closed. Failure!

This wanna-be businessman would have none of it. In April 1879 he attempted to open a second store. This time he picked Lancaster, Pennsylvania. He tweaked his merchandising strategy and decided to bring on his brother to help. The brothers decided to double their price point assortment. They decided to merchandise at five cents as well as ten cents.

The Woolworth brothers incorporated and united the 586 stores they had opened under this format, then they built the world’s tallest building. It stood an amazing 792 feet and they paid for all $13,500,000 of it in cash.

Would you believe they hired the original employer and made him a partner?

117 years later, on August 4, 1997, the company announced it would close its 400 remaining locations. This marked the end of an American icon and wiped out $1,000,000,000 (yeah, billion) in variety store sales in one day.

Interestingly, this company continues to operate today under a new corporate name and a new stable of brands. You know them as Foot Locker and Champs Sports.

Sometimes a trip down memory lane brings important historical failures to light, and sometimes it’s just nostalgic.

It is our hope your independent family business still stands for something real. Today’s customer demands it.

We are here to help. Would you like to try?

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Wednesday, July 30th, 2008

Furniture Fairy can’t protect your family

The Las Vegas furniture market is filled with great product introductions and a record number of retailers looking to fend off the summer blues. I was nicely surprised to NOT hear people complaining about how difficult business is. While it is clear things are tough, solutions come from engaging in each opportunity.

Two different stories from market will work nicely to differentiate you from everyone else in your market. One is exciting and positive and the other should scare the crap out of each of us.

First is the opportunity to partner with HGTV to become the preferred home furnishing retailer in your market. In case you are not aware, HGTV is far and away the most respected brand for women looking to decorate their homes. You can learn more by visiting HGTV/NHFA Preferred Retailer Program Details or by contacting me for the details.

The second story catching my eyes and ears deals with the safety of your Ms. Joneses. Amazingly, 33% of the leather product coming from Guangzhou Has Unsafe Formaldehyde Levels resulting in an 11 year old girl being hospitalized.

I quickly connected the dots between these two stories, have you? Being a preferred HGTV retailer gives you creditability with Ms. Jones. Being a preferred retailer provides you a platform to let your local market know the dangers of buying leather from this Provence in China. You can be an authority and a family watch dog in one fell-swoop.

We will gladly help you write persuasive copy. Your story will stand head and shoulders above the product and price nincompoops in your market. If you win the hearts of your customer their pocketbook will follow.

Want some help?

PS- I don’t know about you, but this China story reminds me of a great exchange from Tommy Boy.

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Monday, July 28th, 2008

Business Unusual:

This evening seems simply surreal. I’m in Las Vegas preparing to speak to a number of independent furniture store owners at World Market Center.

Generational transfer is the topic of the presentation. While reviewing notes it was striking to re-read the results of the watershed Raymond Institute report on family business planning.

Here are three percentages on the same subject that show a real lack of understanding; 19% of family business participants have not completed any estate planning other than writing a will; only 37% have written a strategic plan; and over 60% are very positive about their company’s future.

These small percentages combined with the pie-in-the-sky “very positive” outlook seem fitting for Sin City. The gamble these business leaders are taking is mind boggling. It’s about as funny as Wayne Brady in “Making It Up.” You’ve got to be %@#* me!

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Tuesday, July 22nd, 2008

Sticks and stones will NOT break bones, but words CAN really hurt you

Words really do matter in advertising.

  • Advertising written well will cause the reader or listener to take abrupt and unexpected changes in direction.
  • Advertising should align with what really touches the customer, moving them and their hearts with meaning.
  • Advertising should clarify how your store answers their felt need for status, power, money, fame, and relationships.
  • Advertising should position the customer emotionally as restless, irritable, anxious, or discontented with their current situation. The deeper the writer can make the customer question thier current situation, the easier the job of selling your solution will be.
  • Advertising needs to take the customer on a journey. Journeys can be upward to the gates of heaven, or spiraling downward toward the gates of hell. Either way, movement in the customer’s mind has taken place.
  • Advertising should move you beyond black & white, or good & evil, or helpful & harmful. Copywriting should move the customer to a decision.

Don’t waste your valuable paid advertising time telling customers about your business. Instead, explain to them how you understand their lives and needs. When you have proven you understand, you’ll be granted the opportunity; when you are granted the opportunity, you’ll need to be sure you are ready; if you are ready, you’ll often win a customer for life.

If you weren’t ready, the plastic, fake, happytalk message about your fun, fast, family, friendly advertising wouldn’t have mattered a plug nickel anyway.

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Monday, July 21st, 2008

Rite of Passage

For the first half of our life, passages are fairly easily marked. We go to school, get a job, find a mate, raise a family and contribute to our community.

But a strange thing happens on the way to the finish line. The built in “life detector” begins to ask why are we here, and what is this all for. Questions begin to form. We wonder about retirement-from what, to what? How will we cope with maintaining health in an aging body? We question our ability to mentor younger people, begin to experience the loss of loved ones, and face the eventual certainty of our own mortality.

Big questions, huh?

Passageways, not aging, are on my mind.

Retailers are presented with rites of passage daily. How do I get the sales staff to move? How do I get more cash in the bank account? How do I get rid of excess inventory? These are all questions that require movement from where you are to where you want to be (or at least a step in the right direction).

Your rites of passage will take you over thresholds and through gates. A threshold is something we cross, a place we tread, turn, twist, and flail. Thresholds often mentally move us to the brink of something. A gate, on the other hand, is a passageway into sacred ground, or holy land, or a place of protection, testing, and/or spiritual depth.

Fear neither. Go through both. Move From Success to Significance.

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Friday, July 18th, 2008

Are you kidding me? 2,630,000 hits in .07 seconds

“Jack of all trades, master of none” turns up more than 2 ½ million hits with a Google search. The phrase is the title of a book, a CD, a blog, a TV sitcom, and I’m certain a number of other things.

Thinking about this old standby as it relates to small independent family business owners led me to the realization that being a jack of all trades is nothing to brag about. Remember the second half of the saying: “master of none.”

Haven’t you often wondered why you always feel one step ahead of the customer, the bill collector, the janitor, and one step behind a good night’s rest?

You should read The Technician’s Addiction. Any addict will tell you the cold turkey method of habit changing is painful at best, and deadly at its worst. The same is true for those addicted to small business ownership.

I know because I’m recovering daily from the illness.

Might I suggest you check yourself into recovery and let the game of life come to you?

Constant work in the trenches doesn’t make you a real business owner; it makes you, as the story goes, a dull-boy (or girl!)

What’s the boldest, most frightening move that a business owner can make? It is to stop being the “answer guy.”

It’s time to realize that in order to do necessary strategic work, you’ll have to break your addiction. Addicts often spend weeks away from the office, focused completely on resolving life’s most important problems.

I’ll bet that after you go through the DT’s of withdraw, you’ll realize your employees’ potential, be able to embrace your financial challenges, have a clear vision of your market, re-define productivity, and know for the first time in a long time the business you are really in.

Sometimes quickly, sometimes slowly these promises are being fulfilled among us every day.

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Thursday, July 10th, 2008

Soil and seed can be like the chicken or the egg.

What do you make of this? A farmer planted seed. As he scattered the seed, some of it fell on the road, and birds ate it. Some fell in the gravel; it sprouted quickly but didn’t put down roots, so when the sun came up it withered just as quickly. Some fell in the weeds; as it came up, it was strangled by the weeds. Some fell on good earth, and produced a harvest beyond his wildest dreams. This famous parable explains one of the most important laws of the universe. This parable holds true in baseball, marriage, advertising, and certainly business in general.

The story is typically known as “The Parable of the Sower.” But don’t you also believe it could be called “The Parable of the Soils.” As the story is being interpreted there is an emphasis the different kinds of soils and how differently they receive the seed, which seems to be a law of the universe.

In business I’ve seen the truth of the story played out again and again. Sowing the good news, people have received the exact same message in such different ways. Some reject it without a second thought. Some are excited, but soon lose their enthusiasm. Others respond with genuine interest, but their attachments to this world soon strangle their commitment. And then there are still others who hear, believe, and live a life others only imagine for themselves.

Perhaps the most crucial ingredient of good soil is openness to the laws of the universe, genuine desire for goodness and a willingness to do the right things in your life. Such openness comes as we recognize our need for God, and as we respond to the pull of God’s Spirit on our hearts.

So I’m wondering what kind of soil is your company and what kind of soil are you? Has your soil condition changed? Business conditions sure have. Is your business and your life producing the fruit?

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Saturday, June 28th, 2008

Poker, Furniture, and Life…

From the 1998 Matt Damon and Ed Norton movie “Rounders,” about the underground poker world of Boston, we can take to heart one of the best business quotes of all time: “A lion survives by being a lion and a mouse by being a mouse.”

It seems lately during almost every conversation this quote jumps to the sketchpad of my mind. Why? Because many independent business owners, feeling the pressure of the difficult economy, are flailing around looking for the miracle cure to what they believe ails them.

Joey Knish, the movie’s card-shark philosopher, was trying to explain to Mike McDermott (Damon’s character) that the only way to win at cards and in life is to be who you were designed to be.

You didn’t become the dumbest person in the world overnight just because your sales are down. However, the flip side of this coin means you probably weren’t the smartest person during your last growth cycle. Growth comes from somewhere outside of your control, but that is another post (one I’m looking forward to writing.)

Assuming you haven’t changed policy, procedure, product, or promotion of your company just before business got tough, I for one will say, “It must be some outside forces causing this decline.” Great. It’s not your fault. But the bank, your employees and your customers still want what they want and expect you to continue to deliver it.

Which leads me to what I believe is the single biggest problem facing independent retailers all of all types: inventory control. Inventory management in the furniture business (my area of expertise) is so out-of-whack that many store owners and merchandise managers have apparently forgotten the old adage that cash is king.

I know dealers who are over-inventoried by more than 20%, who have decided to cut their advertising, turn off some of their showroom lights and lay-off employees rather than do whatever it takes to reduce this inventory!

When offered consulting services that will cost $10-20k over a twelve month period of time focused exclusively on trading $275,000 of excess inventory for the same amount in cash, I’m told, “We can’t afford it.”

Back to Rounders. Knish explained to Mike, “In a heads up match, the size of your stack is almost as important as the quality of your cards.” This lesson could easily be rephrased, “The size of your cash reserves is more important than the size of your inventory.”

A little more sage advice from Rounders is this, “Throw in your cards the moment you know they can’t win…fold the hand.” For those of you who ARE NOT GOING OUT OF BUSINESS, I would tell you not to lay down and get you head beat in during this downturn! If you’ve decided this isn’t worth the work, then contact me to discuss how to get the most out of your going out of business sale.

The last bit of advice from Rounders comes from a conversation between the two lead characters, Mike and Worm, as they discuss the fallacy of a lifetime, that is, “People insist on calling it luck.” Winning at cards or making money at retail is almost never about luck!

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Saturday, June 14th, 2008

Cultural Code

What is culture? How does it play out in family business?

A culture can be defined by four foundational stones. They are artifacts, perspectives, values, and assumptions (Schein 1985, Dyer 1986) and on these, researchers agree.

I’m wondering how you may view your family’s and your bisiness’s cultural code? Family units are built upon these same principles and the family business is often an extension of the family themselves.

Artifacts are the physical, tangible part of culture including layout of your store, staff dress, company logo, jargon, stories, myths, and ceremonies- might I know you by your uniform, or your lunch parties? Perspectives are the rules that govern decision making. They might be defined as how your employees act when your back is turned. Without question these perspectives are driven by the family manager in charge; however, perspectives are best explained as “group think,” the normal way specific problems will be handled. Examples of perspective are training for new hires, new product launches, performance appraisals, raises, and how they are implemented. The third cultural component is values. Values are different than perspectives because they are not situational. Values are broader, for example, we provide good customer service, or don’t cheat people, or we never question authority. The final level of culture that was uncovered by this research is assumptions. Assumptions lay the foundation upon which the other areas are built. To me, assumption makes me think of the lens of a microscope which is used to improve the focus on an object as you’re trying to get closer to discover its makeup.

Think closely about your company’s four stones. I’m pretty confident if you’ll take the time you’ll begin to see clearly this research is right. Artifacts, perspectives, values, and assumptions play a huge role in how your family business gets things done on a daily basis.

If ordered differently these four cultural stones will produce different types of family leadership. You should also consider a belief of mine, that the strength and focus of the family will also shape these foundational stones. Gibb Dyer’s research team found there are four basic types of family business cultures resulting from the “cultural code” produced by interaction of these four stones. The types of culture are laissez-faire, paternal, professional, and participative. (In a future post I’ll clarify each of these types.)

“Why does this matter?” you might be thinking. Culture and leadership types will be very big keys to your successful transition as you consider the future of your family firm and begin to look toward the time of generational transfer. Thinking about more than this week’s promotion, inventory levels, electric bills, and cash flow will result in a transition where more assets are kept among the family. If you believe business transfer is simply you deciding which one of your family members you’ll allow to buy a controlling amount the company stock, I’m afraid you’ll be very disappointed in the results.

If you decide you would like to have personal conversations about this subject don’t hesitate to contact me.

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