I have known since I was 11 years old that I would grow up to be an entrepreneur. As a kid, I owned a craft shop with my mom and sister where we made handmade items and sold them out of my folks' basement. Called Things-n-Stuff, it was a lot of fun and actually made a little bit of money -- mostly from family and friends but it was a great learning experience. During the summers I worked with the neighborhood kids and we had a "day camp" where we read, played (actually getting exercise) and did the kinds of things that kids don't do any more because they're too busy in front of computers, TVs and Gameboys.
As I grew older, I started babysitting and did things like deliver newspapers for contractor wages (50 cents an hour I think at one point!). Along with all these great efforts I worked as a library page, in a gift shop on the Indiana Toll Road, and in college in the Psych department. Of course, even there I typed term papers for other students and helped with editing. So, it's no surprise that after graduation from my Master's program (and while working on my PhD) I started my own business as an Administrative specialist -- becoming involved in incubators, referral groups and training programs for businesses long before they were the "THING" for businesses to do.
In the big city people were interested -- even excited -- about doing things to help support their companies; there was a sense of anticipation and looking to the future. People wanted their dreams to grow into reality. They had ideas and were willing to do whatever it took to get those dreams to come to fruition. The SBA has organizations throughout the country that were created to help these nascent businesses start, and prosper. The Women's Business Center in Springfield, VA was always buzzing with women -- young and old -- who were taking classes, networking, competing with business plan contests. There was always something going on. It was a great time for the world of entrepreneurs.
Now, however, back in small town midwestern USA, things are much different. Of course the economic environment over the last 8-10 years has not helped, but I feel a sense of fear; of desperation. People have lost their jobs. They've lost their customer base. They've lost their businesses. Money has been really hard to come by and people have retrenched. They seem to be looking for the pot of gold at the end of the rainbow; chances to get big buck referrals and meeting just the right person at networking events. The promise is there, hanging in the air -- if you do this, they will come. But I haven't seen Kevin Costner building the baseball field, and I don't believe that simply by hanging out one's shingle, that the work will be there.
It takes a long time, hard work and experience to get a business off the ground. Unless you're awfully lucky, just being in the right place at the right time, isn't going to get the business where you want it to be. You can make the best darn widget in the world, but unless you know how to market it, how to cost it out, how to maintain your books, and much more, you're eventually going to fall flat.
I think its very important to have those dreams -- to work towards getting that business off the ground with smooth sailing. But I also think that one must not put all their eggs in one basket. Understand that you need to network. You need to get and give referrals. You need to read, to study, to talk with others who have been there and done that before. It is a very hard, challenging existence, but if you can determine that what you provide is something that the people want, and if you can devote the time and energy to letting them know you can provide it, then you'll be well on your way to being an entrepreneur. Good luck!!!!!
Thursday, May 5, 2011
My Company Grew Too Fast -- and Went Out of Business
By Jim Picariello, CEO, Wise Acre Frozen Treats, Blue Hill, Maine
When I started Wise Acre Frozen Treats, no other company was making organic popsicles from unrefined sweeteners. Working out of a schoolhouse kitchen in March 2006, I developed my recipes using honey and maple syrup. A year and a half in, I brought on my first employee, and then it really took off from there.
By 2008, we had 15 employees, a 3,000-square-foot manufacturing facility, and distribution to all of the natural foods stores and many major supermarket chains on the East Coast. Then we landed a contract to distribute on the West Coast, too — but we never got the chance to fill all the orders. By the end of the year, we’d gone bankrupt and I was unemployed.
A meteoric rise ....
After our first year, opportunities started coming up really fast. We won the “Most Innovative Product” award out of more than 2,000 products at a large food show called Expo East. From there, we lined up a contract with a huge national distributor, United National Foods, and got freezer space in premier stores like Wegmans and Whole Foods.
Previously, we’d been filling orders for eight stores for a few hundred dollars each, but our first order from United National was something like $45,000 worth of product. It was a quantum leap.
The company’s progress was right in line with my business plan’s best-case scenario.
A run-in with the local billionaire .....
Once business took off, I knew I needed to raise more capital to cover our operating expenses, which included labor, equipment, ingredients, packaging materials, insurance, taxes, legal fees, design and marketing, as well the lease on our building.
Local bankers gave us $300,000, split between a regular loan and an equipment loan. We also received $200,000 from an investment firm. But because we had so many orders to fill, I knew we really needed about $1 million to keep us solvent.
We made a handshake deal for that amount with a local billionaire at the end of spring 2008. He told me, “I’ll be able to make this happen really quickly,” so I went back home and bought equipment — even though I didn’t have the money to pay for it.
Weeks later, the bottom fell out of the economy. Our would-be investor was all wrapped up in the stock market decline and pulled out of our deal. That was the beginning of the end.
Investor issues .....
There were five or six months when I was constantly doing a mad dash between running the company and meeting with potential investors. The investors would always say, “We’re looking for someone making $2 million in revenue.”
At that point, Wise Acre was making about $200,000. I’d ask them, “If we were making that much, why would I need you? I have a product that sells really well, no one else has it — what else do I need to do?”
They all said, “We’d like to see what you can do without our money first.”
It’s a chicken-and-egg thing: If you’re already really successful and you don’t really need the money, they’ll give it to you.
Why we failed ....
Our business plan indicated that it would be about two years from starting production to making a profit. But one of our biggest problems was that we didn’t raise the money we needed before we hit milestones like getting distribution throughout the East Coast. We went from eight stores to dozens, then hundreds, immediately. We were burning through about $30,000 a month at our peak, but we didn’t have the capital in place to back it up.
I also wish I’d hired people who were good at raising money. The people I did hire had good contacts, but they didn’t have the background or experience to effectively raise the funds we needed. Even in that economy, I could have raised the money if I’d had the right people on board from the start.
The aftermath .....
By the end of 2008, Wise Acre had gone out of business. Even though the orders were still coming in, we couldn’t pay our bills. The $300,000 bank loan was in my name, and I had to declare bankruptcy. Now the bank owns the product, the equipment and all of the trademarks.
To add insult to injury, I live in a remote area without many jobs, so I was unemployed for about a year. To go from being the boss of a big shop to being unemployed was really demoralizing. Now, thankfully, I have a professional job, but it’s not at the same level.
It was incredibly frustrating and depressing to have things end the way they did, but running my own company was a hell of an experience. It’s important to stand behind a product that you believe in. A lot of it is timing, and a lot of it is making your own luck.
Jim Picariello co-founded his first of three ventures at 25. He lives with his wife and two girls in Downeast Maine, where he does a comically bad kids’ magic show at Halloween, and dreams up wild business concepts he could launch while living in the middle of nowhere.
– As told to Kathryn Hawkins
When I started Wise Acre Frozen Treats, no other company was making organic popsicles from unrefined sweeteners. Working out of a schoolhouse kitchen in March 2006, I developed my recipes using honey and maple syrup. A year and a half in, I brought on my first employee, and then it really took off from there.
By 2008, we had 15 employees, a 3,000-square-foot manufacturing facility, and distribution to all of the natural foods stores and many major supermarket chains on the East Coast. Then we landed a contract to distribute on the West Coast, too — but we never got the chance to fill all the orders. By the end of the year, we’d gone bankrupt and I was unemployed.
A meteoric rise ....
After our first year, opportunities started coming up really fast. We won the “Most Innovative Product” award out of more than 2,000 products at a large food show called Expo East. From there, we lined up a contract with a huge national distributor, United National Foods, and got freezer space in premier stores like Wegmans and Whole Foods.
Previously, we’d been filling orders for eight stores for a few hundred dollars each, but our first order from United National was something like $45,000 worth of product. It was a quantum leap.
The company’s progress was right in line with my business plan’s best-case scenario.
A run-in with the local billionaire .....
Once business took off, I knew I needed to raise more capital to cover our operating expenses, which included labor, equipment, ingredients, packaging materials, insurance, taxes, legal fees, design and marketing, as well the lease on our building.
Local bankers gave us $300,000, split between a regular loan and an equipment loan. We also received $200,000 from an investment firm. But because we had so many orders to fill, I knew we really needed about $1 million to keep us solvent.
We made a handshake deal for that amount with a local billionaire at the end of spring 2008. He told me, “I’ll be able to make this happen really quickly,” so I went back home and bought equipment — even though I didn’t have the money to pay for it.
Weeks later, the bottom fell out of the economy. Our would-be investor was all wrapped up in the stock market decline and pulled out of our deal. That was the beginning of the end.
Investor issues .....
There were five or six months when I was constantly doing a mad dash between running the company and meeting with potential investors. The investors would always say, “We’re looking for someone making $2 million in revenue.”
At that point, Wise Acre was making about $200,000. I’d ask them, “If we were making that much, why would I need you? I have a product that sells really well, no one else has it — what else do I need to do?”
They all said, “We’d like to see what you can do without our money first.”
It’s a chicken-and-egg thing: If you’re already really successful and you don’t really need the money, they’ll give it to you.
Why we failed ....
Our business plan indicated that it would be about two years from starting production to making a profit. But one of our biggest problems was that we didn’t raise the money we needed before we hit milestones like getting distribution throughout the East Coast. We went from eight stores to dozens, then hundreds, immediately. We were burning through about $30,000 a month at our peak, but we didn’t have the capital in place to back it up.
I also wish I’d hired people who were good at raising money. The people I did hire had good contacts, but they didn’t have the background or experience to effectively raise the funds we needed. Even in that economy, I could have raised the money if I’d had the right people on board from the start.
The aftermath .....
By the end of 2008, Wise Acre had gone out of business. Even though the orders were still coming in, we couldn’t pay our bills. The $300,000 bank loan was in my name, and I had to declare bankruptcy. Now the bank owns the product, the equipment and all of the trademarks.
To add insult to injury, I live in a remote area without many jobs, so I was unemployed for about a year. To go from being the boss of a big shop to being unemployed was really demoralizing. Now, thankfully, I have a professional job, but it’s not at the same level.
It was incredibly frustrating and depressing to have things end the way they did, but running my own company was a hell of an experience. It’s important to stand behind a product that you believe in. A lot of it is timing, and a lot of it is making your own luck.
Jim Picariello co-founded his first of three ventures at 25. He lives with his wife and two girls in Downeast Maine, where he does a comically bad kids’ magic show at Halloween, and dreams up wild business concepts he could launch while living in the middle of nowhere.
– As told to Kathryn Hawkins
Monday, May 2, 2011
10 Ways to Differentiate Your Customer Service & Make Your Clients Actually Feel Valued
Every business owner and organization knows if they want to attract and retain more loyal customers, they need to provide high-quality customer service. That's why organizations today focus heavily on communicating how valuable their customers are to the organization. Now, the question is... How much do they truly value their customers?
Most of you probably had the experience of being a "valued" customer, yet you didn't feel valued at all! For example, you call a company for either customer service or to order one of their products and you enter into the electronic triage system only to be put on hold. You're told: please stay on the line, your call is important to us. Sometimes we dutifully follow the electronic request, and we wait, and even wait longer. Other times we hang up in pure frustration.
Or, have you been asked to complete a customer satisfaction questionnaire? Again, you are told that your comments are "very important to us". Really?
How maddening it is when you have taken the time to complete such surveys after receiving poor service, spelling out in detail what the issue was and why you were dissatisfied, only to receive no acknowledgement of your issue or concern?
Perception, as we have heard endless times, is reality. The reality here is that you won't go back or use them in the future. And likely, you will tell your friends!
We believe that providing excellent customer service should be an obsession.
Here Are Our Growth without Sabotage™ Tips That Will Help Your Organization Differentiate Your Customer Service
* Have a real, live person answer all of your calls. If you cannot have someone answer all your calls, subscribe to a voice message service and include a message that you will return all calls within one business day – and do it If it is late in the day, it can acceptable to wait till the next business morning. Remember, the message and perception in timing/promptness is, "you count"-- you are important and a priority to me.
* Return emails within one business day (two days maximum)
* Learn to be comfortable introducing yourself by your full name. When meeting in person, look at people directly in the eye, especially when you first meet them and insure you know how to give and reciprocate a firm handshake.
* Insure you clearly understand the customer or prospects need and priorities. Do this by listening sincerely and asking clarifying questions. Listen FIRST and actively listen more than you talk. Ask questions to clarify your understanding of your prospect's motivation to buy – but do so respectfully and carefully.
* Keep agreements you make to the prospect or the customer. When you say you will do something, do it when you said you would do it. Emergencies should be the only exception.
* Eliminate negative surprises for the customer. If there is a problem, acknowledge it quickly, apologize if appropriate and do your best to fix the problem to the customer's satisfaction.
* Always have your clients' and prospects' best interest in mind. Think of ways you can help them improve their needs to be in the forefront.
* Think of the long term sale. That means go slow, don't push now to sell or attempt to up-sell. Think of the longer-term relationship and resulting opportunities forthcoming.
* Warming- Flirting and fawning are forms of overselling (as well as demeaning) yourself. Realize how unprofessional and damaging these behaviors are with your customers and prospects.
* Warning - Don't expect the customer to understand that you are busy or short staffed. They won't and they shouldn't have to.
You may be thinking that this is obvious. Yes, indeed, it is not rocket science. While it may be obvious, the truth is that it is also frequently not practiced. And because it is not done well or consistently, it represents a key differentiator.
You need to capture the attention of your future customers and keep your current customers. Without consistent excellent customer care, customer loyalty is improbable, especially in this economy where buyers are more cautious. Now more than ever in business, we need to find ways to differentiate ourselves. We find that customer service is a simple yet powerful differentiating strategy.
Sara LaForest and Tony Kubica are management consultants with more than 50+ years of combined experience in helping organizations improve their business performance. They say, failing to improve customer service by showing your clients that you value them is just one way to sabotage your business growth. Get their complete "Self-Sabotage in Business White Paper" now at: KubicaLaforestConsulting.com
Most of you probably had the experience of being a "valued" customer, yet you didn't feel valued at all! For example, you call a company for either customer service or to order one of their products and you enter into the electronic triage system only to be put on hold. You're told: please stay on the line, your call is important to us. Sometimes we dutifully follow the electronic request, and we wait, and even wait longer. Other times we hang up in pure frustration.
Or, have you been asked to complete a customer satisfaction questionnaire? Again, you are told that your comments are "very important to us". Really?
How maddening it is when you have taken the time to complete such surveys after receiving poor service, spelling out in detail what the issue was and why you were dissatisfied, only to receive no acknowledgement of your issue or concern?
Perception, as we have heard endless times, is reality. The reality here is that you won't go back or use them in the future. And likely, you will tell your friends!
We believe that providing excellent customer service should be an obsession.
Here Are Our Growth without Sabotage™ Tips That Will Help Your Organization Differentiate Your Customer Service
* Have a real, live person answer all of your calls. If you cannot have someone answer all your calls, subscribe to a voice message service and include a message that you will return all calls within one business day – and do it If it is late in the day, it can acceptable to wait till the next business morning. Remember, the message and perception in timing/promptness is, "you count"-- you are important and a priority to me.
* Return emails within one business day (two days maximum)
* Learn to be comfortable introducing yourself by your full name. When meeting in person, look at people directly in the eye, especially when you first meet them and insure you know how to give and reciprocate a firm handshake.
* Insure you clearly understand the customer or prospects need and priorities. Do this by listening sincerely and asking clarifying questions. Listen FIRST and actively listen more than you talk. Ask questions to clarify your understanding of your prospect's motivation to buy – but do so respectfully and carefully.
* Keep agreements you make to the prospect or the customer. When you say you will do something, do it when you said you would do it. Emergencies should be the only exception.
* Eliminate negative surprises for the customer. If there is a problem, acknowledge it quickly, apologize if appropriate and do your best to fix the problem to the customer's satisfaction.
* Always have your clients' and prospects' best interest in mind. Think of ways you can help them improve their needs to be in the forefront.
* Think of the long term sale. That means go slow, don't push now to sell or attempt to up-sell. Think of the longer-term relationship and resulting opportunities forthcoming.
* Warming- Flirting and fawning are forms of overselling (as well as demeaning) yourself. Realize how unprofessional and damaging these behaviors are with your customers and prospects.
* Warning - Don't expect the customer to understand that you are busy or short staffed. They won't and they shouldn't have to.
You may be thinking that this is obvious. Yes, indeed, it is not rocket science. While it may be obvious, the truth is that it is also frequently not practiced. And because it is not done well or consistently, it represents a key differentiator.
You need to capture the attention of your future customers and keep your current customers. Without consistent excellent customer care, customer loyalty is improbable, especially in this economy where buyers are more cautious. Now more than ever in business, we need to find ways to differentiate ourselves. We find that customer service is a simple yet powerful differentiating strategy.
Sara LaForest and Tony Kubica are management consultants with more than 50+ years of combined experience in helping organizations improve their business performance. They say, failing to improve customer service by showing your clients that you value them is just one way to sabotage your business growth. Get their complete "Self-Sabotage in Business White Paper" now at: KubicaLaforestConsulting.com
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