Every election year brings uncertainty to the business community. This one is no exception. Small business owners are feeling some anxiety over what President Obama’s policies could mean for their future. Tune out the naysayers and get back to work. Regardless of who occupies the White House, entrepreneurial small business owners will have to rely on who we’ve always relied on to be successful: ourselves, our employees, and our customers.
Whoever heads up our government has only a minimal impact on the small businesses that form the backbone of our nation. Now your job is simple: stay focused on the creativity, hard work, and proven business practices that keep the entrepreneurial engine humming along. From Reagan through Clinton, and through both Bushes, we learned a lot about what makes a small business successful. We learned the hard way and the best way: by experience. I am convinced that any company that has a good product or service and gets the basics right will thrive.
Embrace the advantages of being small. While small companies, especially start-ups, tend to be undercapitalized and (relatively) unknown, they also have some big advantages over larger competitors. They tend to be more nimble and flexible instead of being mired in bureaucracy. Since they don’t have big siloed departments, they can communicate faster. They’re less risk-averse. All of this allows them to turn on a dime in response to market changes and customer demands. Think creatively about marketing. You don’t have to spend a lot of money. Back in 1986 when Barefoot was founded, we pioneered what we called “worthy cause marketing” (WCM). We partnered with nonprofit organizations (NPOs) that believed in the same causes they believed in—specifically, environmentalism and civil rights.
Find good people. Make great people. Of course you need to hire well. That means finding people who are not only qualified, but who have foundational qualities you can build upon. To get the best out of your people, find out what they excel at. Then, redesign their jobs to fit those skills. Ask others to pick up the aspects of the former job that still need to be done. You might be surprised at the positive response. Don’t put the square peg in the round hole. Build a square hole. Use performance-based compensation. Most compensation plans are based on an hourly rate, which is paying for attendance, not necessarily production. Consider offering bonuses based on sales, cost reductions, and customer retention. In other words, give them a financial reason to help the team perform.
Grow your business by sharing the wealth. Henry Ford used to say he’d rather have 1 percent of what a hundred others made working for him than 100 percent of what he made by himself.
With the ideal compensation system, non-producers can’t afford to work for you, and producers can’t afford to leave. Some business owners want to have it all, but in the process, cut off the very folks they need to get what they want. Sharing the wealth allows you to reduce turnover, attract go-getters, and motivate people to produce even more. Best of all, increased profit is ‘found money’—it really costs you nothing. Just make sure the payment is tied into profitability, and not based solely on ‘growth.’ You are paying too much for labor when you pay for ‘attendance’ alone. It’s their production you really want, because that is where your profits come from.
Don’t treat information as currency. Do whatever you can to engage everyone and keep the information free-flowing. Be transparent about challenges and ask the entire staff for solutions. It can also help to link compensation to overall performance. At Barefoot, we made sure all people were getting bonuses on sales, which meant that sharing information and ideas was good for everybody’s paycheck. Respecting the intellect of your human resources, giving them a financial reason to work as a team, and sharing your challenges can avoid hardening of the information arteries.
Listen to your salespeople. Without them, there is no company. Run everything by your salespeople that affects your product and its image. Before you allow a change or “improvement” to the product or the package, check with the folks who have to actually make the sale, overcome the objections, and talk directly to the decision makers and the end users. When folks are hired, present them with an info-graphic that follows the money trail backwards from the customer through the distribution system, through the marketing and sales system, through the supply and production system, and winds up in their pockets. It may seem obvious, but it can be forgotten as your company gets larger.
Company culture has a direct bearing on the survival and growth of a company. This starts from the top and permeates throughout an organization. Barefoot’s culture was based on two overarching principles: generosity and permission. Its use of worthy cause marketing gave employees a level of satisfaction that went far beyond making a sale—they got to make a difference. The original Barefoot culture was based on the most comprehensive definition of customer service. Imagine a company that, through worthy cause promotions, encouraged customers to go into specific retail establishments to buy their brand. Imagine a company that viewed its displays as retail entertainment, adding color, fun, and theme sets for the enjoyment of its customers! This is the ultimate in customer service to your retailer, your end user, and to your community.
Governments cannot create. It’s just not their job. They can make things easier or more difficult (and often, the policies they put in place could be argued to work either way), but they cannot build something new and exciting and inspiring. That’s our job—and we should focus on it instead of worrying about things we can’t control.
