Does anyone really grasp how many decisions the average customer is making on a daily basis? Everything they do involves a decision right from breakfast to were they want to go on vacation. Their minds are constantly being called upon to make choices. But how many of those choices are they really prepared to make? And as I look around I see few businesses focused on helping customers make good decisions.

Sure they can easily decide what to have for breakfast, what to wear and how to spend free time. These shouldn’t be show stoppers. Other decisions like what kind of car to buy, whether to register for another pricey conference or how they want to cast their vote for president this year, take lots more thought.

Looking at things differently

Right now, I’m looking at things through the eyes of a customer. I’m in the process of remodeling my home. Room by room, wall by wall, I have to make thousands of decisions every single day. Many of these choices are close to permanent. Everyone looks to me for all the answers, “Where would you like this wall? How large do you want this door opening? What type of floor were you thinking about for the kitchen?” It just goes on and on…

I found myself in Lowes working up the kitchen cabinet plan for my new kitchen layout. As we’re working through pricing, I was given the price for cabinet installation. I was astounded. The installation cost was one-third of the price of the cabinets. This seemed extreme. I asked several times to make sure she hadn’t made a mistake with the quote, giving her plenty of time and opportunity to explain the reason. No explanation was given. There was no thought to helping customers make good decisions.

The following Saturday, I was in Home Depot with the kitchen design specialist. Finding cabinets I love, we talk finances. She quoted me the same price for installation as Lowes!

This could have been the answer

I asked why the price is so high. She explains the entire process including:

• conducting onsite measurements
• submitting them to the designer
• returning to remeasure to make sure the design will work
• ordering the cabinets
• an onsite check when cabinets are delivered to make sure they’re all there and not damaged
• installing them
• then measuring for the counter top
• providing a temporary counter top while I wait for the real thing
• then installing the finished counter top
• bracing it
• taking the temporary one away
• installation includes a 5 year guarantee

All of a sudden the price that seemed very high in Lowes appears to be a bargain in Home Depot. Same exact price, different sales techniques. I felt that she was schooled in helping customers make good decisions.

Why am I telling you this?

As entrepreneurs, I’m not sure we understand the challenge our clients face making so many important decisions. I think we need to find ways to make it easier for them to run their businesses and run their lives. We might consider adjusting our products, services, processes, and procedures to be more customer friendly.

Another good idea is to have explanations ready when customers have questions. A well-developed sales and pricing strategy should not be a mystery to employees. Armed with the “why” they could easily move a “shopper” to a “customer.”

Happiness sells

Considering the customers and striving to make them happy will give you the advantage. Don’t be afraid to scrap entire processes in favor of the customer experience. Those processes probably didn’t work for you anyway.

While we can’t force our clients to act in one way or another, we can focus on helping customers make good decisions.

Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative foregone (that is not chosen).

In other words, I didn’t do this and the result was that I wasn’t able to get that.

It’s confusing

People are a bit confused by this entire concept of opportunity costs. They don’t understand that there can actually be a loss without doing anything. But there clearly can be. Let me explain.

A print shop buys a low end computer. The computer is slow and inefficient. The amount of work it can produce is considerably less than a better computer. The sales people know that production is down and shy away from selling products that rely on that computer. The opportunity costs equal all the money that is lost because people aren’t able to buy products dependent on that computer.

Another example is education. All the money that is lost when a professional decides not to seek further schooling. Year after year lost wages compound. The opportunity costs associated with not continuing education are enormous.

Paying for knowledge almost always is much cheaper!

In my field, it’s the cost of the work a company wasn’t able to secure because they didn’t invest in professional help. People figure that they’ll save money by not spending on a consultant. Usually, they make costly mistakes that a consultant would have helped them avoid. The cost of the error is often more expensive then the consultant’s fees. Frequently these errors are not tax deductible, while the fees of a consultant usually are.

Doing it right the first time decreases expenses, instills confidence and increases revenue

It also takes a new business a long time to get organized. They might be confused about their product, proper pricing and their audience. You’d be surprised to know that many business owners actually are!  Pricing products or services “right” is imperative. If prices are too high a business won’t have customers, to low they won’t make a profit. Pricing is a very difficult task and bringing in an expert is a good idea.

Entrepreneurs sometimes don’t understand the product, when this happens they can’t sell it. They not only have the opportunity costs of the first line of sales but all future lost sales as well. The opportunity costs in this case could be astronomical. Possibly even the difference between success or failure.

So many costs

With all the fixed costs a business owner has to plan for and the variable expenses that always seem to crop up, it’s no wonder that people miss opportunity costs. These are hard to measure. They’re invisible and easily overlooked. And many people either ignore them or just assume they do not exist.

Here’s a way to look a bit more clearly at opportunity costs.

When making a decision, ask yourself the following questions:

• What is the ultimate goal that I am trying to reach?
• What resources do I need to reach my goals?
• What are my most viable resource options?
• Choose 2 or 3 of the best from the most viable list.
• What are the costs of each of the options available to me?
• What can I gain from each of the options?
• Which is going to bring me closer to my goal?
• What are the opportunity costs of not choosing the others?

When acknowledging and understanding opportunity costs, in relation to the over arching goals, a business owner can frequently create a strategy that incorporates a few of the viable options and get more of what they really want. Let’s face it, you can’t do everything at once, but you can work investments into a logical plan of action to reach even our loftiest goals.

With a firm understanding of the staggering price of opportunity costs, you won’t pay more that you have to.

“What’s your customer centric equation?” boomed Michael Coles, then CEO of Caribou Coffee, from the stage. A dynamic and gifted speaker, Coles presented this question as if everyone had one. I had no idea what he was talking about and glanced side to side to see if anyone else was as perplexed as me. If they were, there was no indication.

“P+E+S=Ef”

Now, he really had me. What was he talking about here? The answer, which may have been obvious to others but was news to me was:
Product+Environment + Service = Experience factor.

Here’s how he described it

• Product – The world’s best coffee
• Environment – Unpretentious, warm and welcoming
• Service – Anticipate the needs of the client, be excellent not average
• Experience factor – Make a connection, know their name, DNA, and act with a sense of urgency

He further claimed that all of the elements of this customer centric equation supported their goal, “Caribou Coffee an experience that makes the day better.”

He went on to explain that we must look at how things affect the customer.

Analyze

• What you do well
• What do you need to stop doing
• What will be your formula

Armed with this information, I decided it was time to write Saltar Solutions’ customer centric equation.

Af+ Bc + Mc = Eg

Focus + Brand creation + Message communication = Exponential growth

• Acute focus – Tuning out the noise long enough to concentrate on business
• Brand creation – A solid foundation on which to grow a successful business
• Message communication – A consistent message delivered via all channels
• Exponential growth – The result of strategic alliances of all other elements

Speaking directly to my clients desire to reach unbelievable heights: “Saltar Solutions – Because You’re Ready To SOAR!”

Like all math, it takes awhile to figure out what your customer centric equation is but it’s well worth your time. This exercise helps you figure out exactly what you are offering your client, what’s moving them towards a purchase and most importantly, why you?

5 x 260 = 1300

Price x Average number of workdays per year = Annual expense

The interesting thing about a #5.00 cup of coffee is that obviously there is something more than the product going on here. After all, how much does a cup of coffee really cost? Even when you add the frills of cream, spices, sweetener, etc, you still have a pretty high price for a cheap product. Then there’s the glam of walking around with a status symbol that tells the world you are able to spend five bucks on a 50 cent product. A company that can do this surely has something valuable to teach us entrepreneurs.

As you think about your equation, you might need a bit more insight. Here’s a bit more direction than Michael Coles gave us that day.

Explore

• What is motivating people to buy
• What problem are you or your product solving for them
• What emotional need are you filling for your client
• What are you doing differently from your competition

Now it’s your turn.

Grab a pen and paper and start writing. Don’t stop at the first try, keep hammering it down and honing in. You’ll come up with the perfect one if you stick with it.

What is your customer centric equation?

Please share it with us here. I’d love to see what you come up with and I’m sure that by sharing, you’ll help others figure their customer centric equation as well.

The 5 P Formula for Goal Attainment

I refer to the process as the 5 P Formula. This is an easy to use and simple system of setting and achieving goals.

Grab a pen and a notebook

Step #1. Write down 10 to 15 big goals, things you would like to accomplish in the next 1-5 years. These goals are to be written first thing in the morning and right before you turn out the light at night. It’s a good idea to keep a notebook at your bedside to make it easy.

• Positive – Write each statement in a positive form. Do not write a sentence that includes what you don’t want. This confuses the brain. If you are trying to avoid something turn your statement into a positive. For example, say you want to quit smoking. You would write “I am a non-smoker.”

• Possessive – Use phrases that include this terms: I have, I earn, I am etc.

• Present – Write statements that assume you have or have already accomplished your goal. (A trick you’ll read about later.)

• Precise – Keep it direct and to the point. Take the time to solidify your goals so you can get them in a sentence or max two.

• Powerful – Make the statements active, beware of writing statements that use passive voice.

Time to reflect

Step #2. After you jot your goals, you then look at each one on your list and ask yourself how. “How can I make this goal a reality?” It’s OK if you do not get the answer immediately. Just keep asking the same question. With a bit of practice, your brain will be automatically be supplying the answers to you.

Use pictures

Step #3. We all know they’re worth a thousand words but it seems they are even more valuable than that. Photos are a powerful motivator, by helping us achieve our goals more easily.

Our brain doesn’t know the difference between fantasy and reality. Placing a picture in front of us on a regular basis tricks the brain into believing we already have the image in the photo, sending our brain into overdrive to get that item. We’re tricking our brain into thinking that something has already taken place. Assuming that it exists, the brain actively seeks to make it a reality.

The 30 Day Challenge

Give the 5 P Formula a try for 30 days and you should experience so progress in the achievement of your goals. Good luck and keep us posted.

Color me amazed!

As I was reading today’s Washington Post interview with Joe Paterno, I was absolutely amazed at the lack of action on the part of so many people. I found their inability to be proactive in the face of such horrific circumstances, astounding. While reading this article, I shook my head at some of the quotes, wondering if Paterno was serious. Unfortunately, he was.

“I didn’t feel adequate.” Joe Paterno

This was his comment about having to deal with the report of sexual abuse of children. It seems that he had never had to deal with this issue before and didn’t know how to when it happened in 2002. He kicked it upstairs and decided to let them deal with it. The rest is history…

But then I started to think of this in relationship to business.

• How many times do business owners think that doing nothing is NOT a decision?
• How often do they stay a course, hoping that the situation will change and that things will improve on their own?
• Do they know what the right action is and avoid it?
• How many times do they rationalize their desires saying it’s best for the business, knowing that they are just being selfish?
• How often do they let someone else deal with something that they should have dealt with?
• Are they guilty of “just turning a blind eye” to something that could potentially destroy all those in it’s path?

Let’s face it these things happen all the time.

• And I’m here to say that doing nothing IS a decision. (They decided to ignore it and hope that it quickly and quietly disappeared. That seems to have been the MO at Penn State.) This rarely works and takes lots of energy that could be put to positive use.

• Staying the course is great if the course they are on is a good one. If they stay a course that is riddled with abuse and unethical behavior they’re headed for a disaster. Just a point of observation, things do not just work themselves out and believing so is just a fantasy.

“So I just did what I thought was best. I talked to people that I thought would be, if there was a problem, that would be following up on it.” Joe Paterno didn’t even seem to know if this was a problem or not?

• I believe people know the right action, they CHOOSE not to act on it. (No one in the world could tell me that those people at Penn State didn’t know what was right. Even if they hadn’t dealt with this before, they didn’t know it was wrong to let sexual abuse of children continue? Come on now…)

• People have an agenda. Every business owner needs to understand that is a fact and own up to theirs. The goal is to not make decisions that feed the ego and starve the business.

“I didn’t know exactly how to handle it and I was afraid to do something that might jeopardize what the university procedure was,” he said. “So I backed away and turned it over to some other people, people I thought would have a little more expertise than I did. It didn’t work out that way.”

• Business owners have a hard time dealing with everything but if something is so obviously wrong, it’s in their best interest to address the issue squarely.

Paterno said he told athletic director Tim Curley and school vice president Gary Schultz what he saw and left it in their hands to do the right thing.

• Are business owners so wrapped up in themselves that they are able to “turn a blind eye” to something as serious as this?

“I never heard of, of, rape and a man.”

Well, if you never heard of it, which I have a hard time believing, does that mean it doesn’t exist and didn’t happen to the little boys in the Penn State shower rooms?

A message to business owners.

Beware of these downfalls. We have seen many huge companies get caught in these traps and it has brought even the most mighty crashing down. It’s important to be true to yourself and do what you know is the right thing. Don’t leave up to others to do what you should do. Take control and do what needs to be done, you’ll be so happy you did.

Gone are the days of really dressing your best almost anywhere in America. We’ve become a society that has embraced  casual with vigor. Having evolved comfort to the point of what I fear is no return, many people don’t really understand how to dress anymore.

For those of us who work at home our business attire is really just a variety of the same thing… nightwear. No longer even as formal as casual Fridays, we’re now sleeping and working in the very same wardrobe. For those of you who are new to working at home, this post is for you.

The following are a few things to keep in mind when shopping to your new work clothes….

Comfort is key.

When working at home it’s really important to be as productive as possible. Long hours at the computer, struggling to meet the next deadline. The last thing in the world we want is a fussy outfit to content with.

No need to be fashion conscious

When it’s you, the dogs and a mountain of work, there’s no need to don the latest trends or sport the newest style.

Matching is optional

Mismatching is totally fine. Plaid, stripes, and polka dots mixed together, it’s all the same.

Robes, lounge wear and lingerie

Come on now, these are pushing the envelop. Have some decency. This is an office, ya know…

A truly smart person…

would design working jammies. Reversible, with matching slippers that didn’t look like your grandma left them but were still warm and cozy. With a pocket for the cell phone and comfortable headphones so you weren’t constantly either tangled in the cord or with your neck at that odd (and painful) angle. And didn’t scream pajamas so loudly because every once in awhile we lose track of time or forget we have an appointment and are scrambling to dress on the way to the door.

So what do you wear as you toil away in your home office?

Inquiring minds want to know…

I really don’t believe in procrastination!

But, I do believe in poor timing. The key to moving mountains is to do the right thing at the right time. The challenge that most of us face is that we don’t understand our own natural bio-rhythms well enough to make them work for us. For instance, we might not be up for a 7:00 am meeting with the boss!

For many of us procrastination is a very real trap.

Let me explain it this way. If I try to read in the morning I’ll immediately go back to sleep. Mornings are my time to rock the ideas that I’ve been thinking of all night long out on paper. I have a low in the afternoon that allows me to virtually pull great ideas from the universe.  Trying to write at night is close to impossible. Before I realized these natural flows of energy, I was out of sync and unhappy with my progress. My continuous pushing set me up to procrastinate which made me angry with myself. The cycle continued until I released one important thing, matching the activity with the mood and it’s bliss.  The good news is this is where real success lives.

Successful people do it differently

For almost as long as I can remember, I’ve been interested in how successful people do things. I know they do things differently than the not so successful masses. They have developed strategies, systems and habits that have allowed them to excel in at least one specific area. And it has paid off.

Here’s the shocker

One of things that I have noticed is that they don’t work all the time. They vary their activities and are present with what they are doing when they are doing it. They have developed an acute focus that has allowed them to concentrate on what they are doing and nothing else.

And my theory is…

They understand themselves better than the rest of us. I believe they use their bio-rhythms to improve concentration, increase focus and enhance performance. Often they’re not working harder at all, they’re actually working smarter.

If we understood ourselves better, we could do the same thing, right? Well it’s just not that easy. Figuring out your energy flows takes careful charting and analysis. Unfortunately, it’s important to chart long enough to see patterns. People need to also be able to analyze their feelings at different times of the day to get a true picture.

Here’s how to chart yourself.

Make a 14 day, 24 hour chart.

• Have space for what you are doing
• How you physically feel
• How you emotionally feel
• What you feel like doing

Consistency is the key here

If you consistently track this information, you’ll probably see some pretty surprising results. This will be black and white proof of why you have real problems with certain activities and why others are a breeze.

Now use this new knowledge to your advantage

As much as humanly possible, reschedule your work to fit your natural rhythms. Most of my readers are entrepreneurs, who have the power to make their own schedule. They’re in control, they can organize their calendar to meet their needs.

Just do it

You’ll be happy you did.

Let me know how it worked for you. I’m really curious about how this info has helped you understand yourself better and what was the affect. Thank you and remember it’s not procrastination, no matter what they say!

I think it’s about time to understand why we make some ideas happen and drop others like a hot potato. Of course, not all ideas are good ones and some clearly need to be abandoned as soon as possible. I’m not talking about the sooner forgotten the better ones here. Let them go. The ideas that I want to focus on here are the winners that you just let die on the vine. Waiting until they are no longer useful or have lost their edge, they become another failure in our mind and subtly demoralize us. We know we chase shiny objects but why aren’t we able to make these really good ideas become reality and benefit us?

Why not?

We might not follow through because we don’t see the benefit of making our ideas happen. If we could see a relationship between them and our success, surely we’d go the extra mile. Maybe we don’t know how to carry one of our own ideas to completion.

The following is a system for making more great ideas happen.

It all starts with an idea

Aside from nature, everything we see, all the products we use and objects we enjoy were once an idea. Even accidental inventions like Post-it notes and Scotch gard involved an idea. They just didn’t follow the usual path of concept to product.

What are the ideas that you’ve had for your business that you haven’t acted upon? Have you written them down or are they still floating around in your head?

• Grab a pen and paper
• Take a deep breath, let it out and take another
• Now write down the ideas that spring to mind
• Free flow and don’t censor or edit your ideas.

Ideas that are written down, “goals”, are more likely to become a reality.

Why turn the idea into a reality?

This is the “what’s in it for me?” phase. Come up with as many reasons as you can that this idea could benefit you. This is a numbers game. The more reasons you have, the higher your level of commitment to make it happen.

What would the outcome be?

We’re talking cause and effect here. If I do A, the result is B, C, and D, The better the outcome the more likely you are to go through all the trouble to transform your idea into a reality.

Admittedly, you can’t make all your good ideas happen. Choose your best bet, the one puts you closer to your ultimate goals or the one that might be easiest to obtain. Many successful entrepreneurs say they go with their gut and choose the one that feels right.

What are my costs?

There’s always a sacrifice. What are you going to have to give up to make your idea happen? Often it involves time, money or both. It’s important to be honest and realistic about what the costs are so your not blindsided when you have to give up nights, weekends AND your vacation to make your idea a reality.

Just go for it!

Whatever you do, do something. Make the decision and give yourself everything you need to succeed. You owe it to yourself invest in your dream and gamble on your own ideas.

GOOD LUCK!

Over Thanksgiving break, I redecorated my conference space. A much needed face lift. The walls are a rich golden sheen that highlight the artwork nicely and makes the furniture glow. I love being there and so do my clients.

Shutting out the world

The big news is I now have a door on the room that shuts out the world during our meetings and allows me to actually leave work at the end of the day. I’m amazed at the difference something as small as a door can make to my entire world.

Focus and control

Another interesting observation is that when I am in the conference room I work. There’s no hanging out in there or relaxing, when I’m there it’s for work. And I have less interruptions now. I enter, close the door and usually am not disturbed until I come out again. The door has become a barrier that has helped me control of my time and energy.

These are all changes that I’ve wanted to make since I bought the house 7 years ago. Now that I’ve made them, I have a new lease on life. My business is more solid then ever and is poised for an even higher level of success.

Getting organized has it’s bonuses

As I was organizing I found a list of goals that I had written out last year. I was shocked to see that I had accomplished them. I immediately felt a surge of positive energy run through me. All of a sudden, I felt strong and powerful. I felt I could accomplish anything. I felt like a super star!

I’m now convinced

I’m sure that the best way to set goals for the coming year is to review those from the current year.

Perpetual motion

One of the traits of entrepreneurs is the need to keep moving forward. We plow ahead with our eyes fixed steadily on the prize. By the time one goal is reached our eyes have already fixated on the next milestone. Often we never even give our achievement more than a moment’s notice as we plow towards the next thing. Because we are so future oriented, we feel like our lives are a series of uphill battles.

STOP!

Stop right now and grab a pen and paper and jot down the answers to the following questions.

Financially Speaking

How did you do financially? While some of us feel that we made lots of money others might be happy to keep their bills current. Whatever your successes, it’s time to celebrate them now.

Growth and learning

What did you learn? How did you grow and what was the result of your efforts?

Goals for 2011

What goals did you set for 2011 that you accomplished? What long range goals did you achieve? What opportunities came up that you were able to latch onto and run with?

If you get into the habit of periodically looking behind you, you’ll be able to see just how far you’ve come. You’ll use your accomplishments to fuel your growth. Instead of always feeling like you are behind the eight ball, you’ll feel like the super star you really are.

Strength and courage be with you

Let’s spend some quality time with this year before leaping into the next one. All that we need to know right now is here and taking a really close look will help you powerfully move into 2012. Don’t rush it, move forward with the courage and security that you need to make 2012 your best year yet.

Good luck in 2012!

We refer to a small business and think about an entrepreneur working alone or with a few people. That image is definitely spot on and your not alone. However, I think you might be as shocked as I was by the stats that I found on small businesses. So here’s how the Small Business Administration defines small businesses and home based businesses.

1. A small business is privately owned and operated.

2. In the USA, a small business has less than 500 employees in manufacturing or less than $7 million in annual receipts in non-manufacturing businesses. However, there seems to be industry-by-industry standards.  Maybe more important than the size standards might be the “Definitions” of a business.  It might prove interesting to visit the SBA website.

3. The census shows that 51.7 percent of all small businesses are home based as of 2010. Interestingly enough, these do not include businesses that are actually run out of a home office, but the work is done offsite, for example landscaping businesses, consulting firms that visit their clients and IT professionals that work at their customers offices. To be a home based business, according to them, 100% of the work needs to be done in the home. Considering this detail, there are many more home businesses.

4. Another interesting fact is that 80 percent of all new jobs are created by small business. Employment is on the rise in the small business sector. Good to know if one is job hunting.

5. If you’re a home based business you’re in good company. Here is a small list of businesses started at home:

Amazon
Apple Computer
Disney
Ford Motor Company
Google
Harley Davidson
Hershey’s
Hewlett Packard
Lotus Cars
Maglite
Mary Kay Cosmetics
Mattel
Yankee Candle Company

Many of the above list didn’t actually start at home, they were exiled to the garage. Google wasn’t even started in Lsrry Page’s or Sergey Brin’s  own garage, they borrowed one from Susan Wojcicki. Lotus Cars was started in a stable.

While there are many challenges to working from home, many people are able to overcome them to succeed beyond our wildest dreams. Others just support themselves and their families nicely.

The moral of the story

It doesn’t matter what a small business is or where it started. It’s where you end up that counts!

If you have any ideas or points to add, please don’t keep them to yourself. We’d all love to hear from you. Thanks.