14 November 2007

Bootstrapping Seminar Notes

I had the opportunity yesterday to go to a Bootstrapping seminar here in Bozeman that was hosted by the Tech Ranch. www.techranch.org I sat in a very condensed format, but they will be sending the seminar to some of the smaller communities around Montana as a full one day seminar that is free to attend and I think it will be a better format. The information is excellent and worth attending. Here's a condensed version of my notes from the day.

The bootstrapping mentality is about climbing stairs. You might identify the next few stairs on the flight, but your resources and time allocation will only be on getting to the next stair in your business. When you have achieved that stair, then you move on to the next stair. This keeps your business focused. For a very small or new business, the stairs might just be the next project, or client, or the sales goal for that month.

Sales in Your Business

Sales is the way to tell if you have something to sell and sales is also your market research.

Pre-sell a new product to your current clients. This can be done by asking, "If I offered X, would you be interested? Why or why not?" This can be done as part of your regular sales session and allows you to do market research with your strongest customer base - the customers you already have. When you introduce a new product it won't be a shot in the dark. You will know you can sell it.

Focus on niches, and grow incrimentally. Find a small area where you can make an incrimental value add.

Aquire cash, not assets.

Marketing Your Business

Get close to your customers and use your customers as a source of market research and product input.

Spend money ONLY on MEASURABLE forms of marketing. If you can't measure it, don't buy it. When you are little, you can't afford the luxury.

Do public relations for you business yourself. You need this plan, but execute it yourself. You send press releases, you join the chamber, you take someone out to dinner, you write articles. No one knows your business like you do, that's your biggest asset.

You don't have to be a lone wolf. Partner with other service providers. This allows your business to act bigger than it is, because you have a good supply chain and you know where to go for the services you need to provide. Photographers might think of a lab as their partner, but a partner could also be a payroll service, accountant, or mailing company. Outsourcing these activities might be a good idea if you are tight on time. Time is your most precious resource as a small business.

Hiring in Your Business

DO NOT HIRE FOR SKILLS, THEY CAN BE TAUGHT. Hire for personality, integrity, intelligence and initiative with an emphasis on sales.

Hire "Swiss Army Knives" that can sell. Get a cleaner that can sell. Get an accountant that can sell. Get a retoucher that can sell. If your people can sell your product to your customers, it doesn't matter what their primary job is, you won't have to worry where your payroll is comming from.

BEWARE of managers and sales people. Professionals have been indocrinated with some bad habits you probably don't want in your business. Selling doesn't have to be a high pressure numbers game. In small business, selling should always be about a relationship and great service.

On-board new people on a paid project basis first. "I'd like to hire you to do X, Y and Z projects. If I'm happy with your work there will be a place here for you." This allows you to actually see the production of a new person and experiment with their true fit within your business. Someone might walk into your business with a resume filled with retail experience, and they might turn out to be the most organized accountant your business has ever had. If you experiment, you will find the best place for them, they will be happy, and your business will run better.

Look for the hungry vs the experienced. If someone has three kids and a ton of bills, they will be more motivated than someone who has a tremendous amount of experience and no pressure. You want your people to come to work motivated, your business will do better.

Employees are either 'revenue generating' or 'cost generating.' Your business needs both types. One person could be in both categories depending on the areas that you have them working in. The trick is to keep you business balanced toward the revenue generating side. This will help keep you profitable.

Service in Your Business

Your sales team is your revenue center and your market research center along with being your customer service center. Don't give up this area unless you have a dynamo working for you. Keep a close connection an eye on this area if you do give it up, because the most valuable information comming into your business happens during sales sessions.

CROSS SELL, UP SELL and RETAIN (CUR) (We like dogs in Montana.)
Cross sell - sell them another product, consider discounting with the current purchase; for a photographer this would be selling a family session to the mother of the senior or a third generation session to a family.

Up Sell - Have desirable add ons that are not a part of your packages ANYWHERE. Have add ons at different price points.

Retain - Make sure your customer walks away happy. Thank them. Follow up with them. Mail to them. Ask for referrals.

How to perform great customer service cheaply:
Tackle problems quickly
Be proactive
Manage Expectations
Survey Routinely

Finance in Your Business

Cash is king. Your CASH FORCAST IS THE MOST IMPORTANT BUSINESS MEASURE THAT YOU PRODUCE. Most businesses just produce an accounts receivable and an accounts payable report. Those reports look backwards. A cash forecast is the month comming up. The only way you can produce one is to sit down and actively plan your business activities for the next month. This forces you to be actively working on and setting goals for your business. Your business will not grow at the rate you want it to grow unless you do this!

Manage you accounts recievable closely. Make sure you are getting paid for your work. Get to know your customer's account payable staff (be nice and friendly) so you will get paid more promptly.

Be cheap. Don't buy things you don't need. Aquire cash, not assests.

Nothing happens until somebody sells something.

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