In 2005 I left my job as a journalist at CNN to take a chance and co-found the company GoodSearch.com, whose mission is to allow everyday actions to help your favorite cause. About six months later, I was recruited by MSNBC to host its new program Your Business, which focuses on giving advice to small-business owners. For six years I’ve been incredibly fortunate to be able to travel around the country interviewing small-business owners about what they are doing to keep their companies on the right track and then apply what I learn to my own company.
GoodSearch began as a typical startup in my apartment in New York City. My brother, who is my co-founder, and I worked every waking hour, doing everything from writing copy to negotiating business-development deals to answering customer service emails. I cold-called organizations to tell them about the site. I asked my friends to sit down and evaluate our design, and I tested the commitment of my then-boyfriend (now husband) by having him listen to my elevator pitch over and over and over. Today more than 15 million people are using GoodSearch.
Our growth to this point was not a given. No company’s growth is. It takes a lot of hard work, determination, access and often blind faith. Over the next two months, I’ll share lessons I’ve learned from being a journalist, an entrepreneur and the author of the book It's Your Business: 183 Essential Tips that Will Transform Your Small Business. My goal is to help you reach your business goals. They’ll be different for each of you. Some of you will want to increase sales; some of you will want to increase conversion. Some of you may want a bigger social media following. Some of you may want to grow your staff. So prepare to take a look at your company, talk to your team and decide what one thing you want to focus on to get the business on track for growth. Once you have decided what that is, join the challenge and get started!
I’m thrilled to be your guide through the 2013 SUCCESS Start Small Win Big Challenge. I’ll give you steps to help move your business to a new level, and I’ll provide additional tips in my weekly blog at SUCCESS.com. But before we start, let me share some wisdom from none other than my own mother! I think I can. I think I can…
This is the refrain my mom, a very successful entrepreneur (against all odds, but I’ll go into that later), drummed into the minds of her four children. I am going to pass her philosophy down to you.
Do you remember the kids’ story The Little Engine That Could? It’s about a train that is stuck trying to get over the mountain to deliver toys and food to boys and girls on the other side. Lots of big engines pass by and refuse to help pull the train over. Then a little blue engine chugs up and, though she’s small and has never been over the hill before, offers to help. While saying “I think I can, I think I can… ” she does the unexpected and makes it all the way to the top of the mountain.
Yes, it’s a children’s book, but the message applies to all of us. In order for your company to be successful, it’s imperative that you believe it’s possible. When my mother started her company JOBTRAK, she was in her mid-40s and was a stay-at-home mom. While she volunteered a lot, she did not have a paying job. Her co-founder was my brother Ken, who had just graduated from college. This was hardly the dream team anyone would invest in. When they told people about their idea, they received a range of responses from, “This will never work” to “Good idea, but you’re not experienced enough to make it happen” to “Wow, good for you” from someone who simply did not want to be openly negative. My mom and Ken had faith in their ideas and in themselves, however. And that’s what gave them the fuel to continue to contact potential customers even after they had heard “no” more often than “yes.” It’s also what compelled them to keep working hard when many people didn’t think their company would make it.
But make it, it did. After running JOBTRAK for 13 years, my mom and brother sold the company to Monster.com in 2011. Of course, it takes much more than having faith in yourself and your idea to be successful. And when I write about believing in yourself, I don’t mean you have to believe you have all the answers or all the necessary skills to run your company. What I mean is you must believe that if you don’t have what you need, you will be smart and resourceful enough to find it. So when you are up at 2 a.m. worrying about some aspect of your business, instead of wasting time fretting about what you can’t do, go back to sleep. Then in the morning figure out what you need to put in place or whom to speak with in order to find a solution.
A few months ago I was on a panel with Susan Sobbott, president of American Express Open, and she said something so dead-on I wish I’d thought of it. She told the audience, “If you didn’t know how to swim and your baby fell into the pool, you would not stand on the side and think, Oh, I can’t do this. No, you would dive right in.” Well, that’s the way you need to think about your business. Learn what you don’t know.
Beyond that advice, I’m presenting four meaty steps that will lead you toward success. They touch on different parts of your business—accounting, strategy, marketing, sales and beyond.
1. Refine your elevator pitch.
Whether you are talking to a potential investor, partner, customer or employee, you should always be selling your company. But the things that will interest an investor are quite different from what would interest a job applicant, so arm yourself with different elevator pitches for different audiences. Investors want to know what you’re selling, but even more, they want to know how your company is going to make money for them. Instead of focusing completely on your product or service, focus on how your idea is going to generate earnings and gain traction. Customers want to know how they will benefit from your company. So identify a problem they’re experiencing and explain how you can solve it with your product or service. Job applicants want to know they’ll be in a challenging environment where they will be treated well and compensated fairly. So talk to them about the way you run your company as much as about what you sell. Once you have zeroed in on the message of each pitch, vary the lengths. David Rose, chairman emeritus of New York Angels, a consortium of angel investors, suggests you have a pitch prepared for every situation. Have pitches that fill 20 seconds, one minute, five minutes, 20 minutes and an hour. Then if you aren’t naturally a confident speaker (which many of us aren’t), practice them repeatedly. This is your task for Week One of the SUCCESS Challenge. I realize this may sound like a lot of work, but it could determine whether or not you pique the interest of someone who could really push your business forward. You don’t want to lose the chance to work with someone because you’re rambling on about the wrong aspects of your business.
2. Keep it simple.
Speaking of rambling, take this moment to look at all of your marketing materials and see whether you have boiled down your message to something easily digestible. On Your Business, we profiled the San Diego-based company Zingle, whose founder, Ford Blakely, told me that when he first launched, he made the common mistake of giving people too much information right from the start. Zingle provides the technology to enable people to text-message a takeout order to a restaurant so they don’t have to call in the order or wait in line once they get there. It’s that simple. But when Ford initially put together his marketing materials for customers of a local Subway sandwich shop, he made it seem much more complicated. He used a tiny font so he could fit a lot of information onto a small flier. He listed every benefit of the service, many of which didn’t concern customers. He focused on the technology behind his service instead of the simple message that if you use it, you don’t have to wait in line anymore. Ford said he forgot to take a step back and see his marketing materials the way a customer would see them. He was so anxious to share everything about his service that he didn’t realize too much information is akin to no information, because you immediately lose people’s interest. So whenever you put a message out there, test it on a few people who have no idea what you do. Do they understand what you are offering? If they don’t understand something, chances are others won’t either—and that will cost you customers. Ford ended up completely redesigning his brochures and fliers with a bigger font size. And instead of listing all the benefits of Zingle, they focused on one. The big headline was “Hate 2 Wait?”—which caught people’s attention as they stood in line waiting to order their lunches. Soon business started to grow.
3. Look at metrics.
At my company, we keep close watch on the metrics that drive our success. If any numbers dip, it’s a clear indication we need to pay attention to that part of our business to understand what we can do better. It’s imperative to pay attention to the right analytics. Eric Ries, best-selling author of The Lean Startup, says paying attention to the wrong indicators can steer you off track. Let’s say you have a children’s clothing store and notice only about half the people who enter will buy something. You want to increase the number of people who go from being browsers to buyers, otherwise known as your conversion rate. Finally, you spend money on a marketing campaign and that brings a lot of people into the store on a particular Saturday. Twice as many people visit your store that day, but still only half buy something. Revenue went up. But if you looked at your conversion, it stayed the same—50 percent. You learn that you didn’t reach your goal of increasing conversion, and your marketing campaign was a bust. So how do you figure out which metrics are important to you? Well, let’s work backward from your goal. Whatever the goal, what are the things you can do to help reach it? Keep in mind you want to do things that drive revenue (at the lowest cost)—things that give you the biggest return on your investment.
Once you figure that out, measure it! Here are examples of things you can measure:
• Traffic (whether to your website, your store or phone calls to your company).
• Conversion (how many of those visits/calls convert into sales).
• Repeat customers.
• Revenue per customer.
• Revenue per transaction.
• Revenue per type of customer (is there a particular market that does better for you than others?).
• Revenue per employee (based on your income, are you overstaffed or could you expand?).
If you have a website (and of course, you should), you can use a service such as Google analytics to clarify which parts of your site are performing best and are worth investing more time and/or money into.
4. Understand your finances.
We recently interviewed a business owner for Your Business who, when asked what her break-even point was, replied, “I have no idea.” When we asked about her expenses, she said she throws all her receipts in a big box. When we asked about revenue, she took a wild guess. While I would like to say this is completely atypical, I’ve seen this scenario more times than I can count. And it’s not completely surprising. Many of us go into business because we’re in love with our idea, not because we’re in love with income statements and balance sheets. But the only way to provide a clear growth path for your business is to understand your finances. As a start, try this advice from Jim Blasingame, founder and president of the Small Business Network, who suggests building a 12-month cash flow spreadsheet to track all incoming and outgoing funds. This gives you a picture of your cash situation during any given month. If you see a negative number as a total for a month, you’ll know to reduce expenses, increase revenue or find money elsewhere (perhaps a loan). During the recession, I spoke to many small-business owners who had to close their companies—not because business was terrible, but because they ran out of cash. You never want to be surprised by your cash situation. Once you nail down your cash flow, you can then work your other financial statements. Building a 12-month cash flow spreadsheet is your task for Week Four of the SUCCESS Challenge.
BONUS ADVICE: Share your priorities.
I’m going to leave you with one last suggestion for now (you can find others in my weekly SUCCESS.com blog and in a follow-up article next month). Once you set your goals for this contest, share that information with your entire staff. This gets everyone on the same page so people have a guideline to help them determine where to spend time and energy. Also, it’s much easier to get excited about your job when you understand the big picture. Even a seemingly mindless task can be fulfilling if you understand how it contributes to the overall mission of the company. Plus you have a better chance of succeeding when everyone works toward the same goal. I wish you all the best of luck with this challenge. So many of us get caught in the day-to-day of running our companies that we lose sight of the big picture. Here is your chance to evaluate things and figure out how to make them better. Visit the SUCCESS Facebook page, where you’ll find a community of folks working on the steps—last year the degree to which you supported one another was outstanding. I look forward to hearing about your progress!