Inc.com

How To Pick A Franchise

Scott Gerber — Fri, 25 May 2012 15:45:41 -0400

Key pointers from Omar Soliman, co-founder of College Hunks Hauling Junk, and Scott Gerber, founder of the Young Entrepreneur Council.

6 Hot Restaurant Trends for Start-ups

Erin Kim — Fri, 25 May 2012 15:10:38 -0400

What's sizzling on diners' plates this year? The National Restaurant Association put together a list after surveying almost 1,800 of the country's best chefs. Here's are the trends they're cooking up.

The bad news is that consumer taste buds are fickle and are continuously evolving. The good news? No one said your menu must be a stagnant document. Starting a restaurant featuring the latest food craze can be lucrative (think Jamba Juice or Pinkberry) and might just have staying power. The National Restaurant Association put together the What's Hot in 2012 list, after surveying almost 1,800 chefs in the country. Check out these ideas for what you should cook up this year.

The top two slots of this survey go to locally sourced and produced foods: meats, seafood, and produce. "People are more interested in what's on their plate and where it comes from," says the National Restaurant Association's Annika Stensson. "So it's not just eating to satisfy hunger, it's also an interest in what you actually ingest." Manhattan's Bell Book & Candle takes this to an extreme: The restaurant uses a pulley to bring its produce from its rooftop garden to the kitchen.

Those with food allergies may find it easier to eat out now, as 75% of chefs have indicated catering to these needs as the No. 7 trend this year. "It's not just a preference," Stensson says. "It can be a medical condition, so being in the hospitality business, we want to make sure our guests are happy, and that they have a safe and enjoyable meal." Chicago's Vinci even offers an entire gluten-free menu, from appetizers to desserts.

Of course local foods are in style, but locally produced alcohol is also gaining traction—and restaurants that serve local wine and beer feeling the boost. This movement is gaining so much traction that there are even statewide events featuring the best local spirits. Virginia announced March as the Wine & Dine Month, encouraging visitors and residents alike to drink wine produce locally.

Sustainable seafood—which has to do with how the fish are caught—and less-traditional fish, such as Branzino and Arctic Char, are making waves on menus this year. Tataki, a sustainable sushi bar, opened up in 2008 in San Francisco, selling only responsibly sourced and environmentally friendly seafood. The restaurant also participates in the Monterey Bay Aquarium Seafood Watch's Cooking for Solutions event, which invites restaurants and celebrity chefs to speak about how to protect the ocean.

Meals on wheels have been around for a while, but more and more chefs are now recognizing opening a food truck as a solid business venture. In fact, 61% of those surveyed by the National Restaurant Association said they would consider launching a food truck. Stensson says adopting this method is a good way to break into the industry because it's far less expensive than a full brick-and-mortar operation. It's not just for newbies, though: Consider Luke's Lobster, which has expanded to five locations in just three years. And now it's not just the lobster that's on a roll: Luke's latest location is a fully mobile truck.

The American palette has been exposed to ethnic food for several decades now—in fact, "certain cuisines have been around for so long, they're not considered ethnic anymore," Stensson says. This year, the survey identified Peruvian, Southeast Asian, and very specific regional flavors—think, Szechuan or Cantonese, for example—as hot items. Read more about the full-service restaurant industry as part of Inc.'s 2012 Best Industries for Starting a Business coverage. —Erin Kim

12 Online PR Blunders to Avoid

Young Entrepreneur Council — Fri, 25 May 2012 14:14:00 -0400

Do you Facebook during happy hour? Retweet without doing your research? You could cause a huge PR mess. Young entrepreneurs share their best tips for promoting your company with care.

The Young Entrepreneur Council asked 12 successful young entrepreneurs to note one way that their online activity can lead to unforgivable public relations mistakes. Here are their best answers.

1. What's the Update?

When you launched your website, you probably wrote a bunch of sections such as "About Us," "Contact," etc. Don't forget to check back on those later on and make updates as necessary. Reporters make mistakes as it is--the last thing you need is for them to be getting outdated information on your company from your own website and then putting that in an article.
--Stephanie Kaplan, Her Campus Media

2. Hands Off Our Social Media!

While delegating or outsourcing social media isn't entirely problematic, entrepreneurs should always be abreast of what's being said and done on behalf of the company. Google Alerts and social media tools make it easy to stay on top of the company's digital footprint. Entrepreneurs are responsible--no matter what.
--Lisa Nicole Bell, Inspired Life Media Group

3. Retweet With Care

While it's easy to retweet articles or messages, doing so without care can lead to PR gaffes. Retweets can be viewed as endorsements, so all entrepreneurs should make sure that they take a few moments to review anything they intend to share with their followers. Do fact-check and ensure that you identify with the message and messager before you click RT.
--Doreen Bloch, Poshly

4. Don't Overshare Anywhere

Your Twitter, your Facebook, your blog are all places where journalists might look to connect with you. Make sure that your privacy settings are up to date on Facebook and you're not oversharing information on your other public facing social networks that might turn off a journalist.
--Nathan Lustig, Entrustet

5. Mass Email Blasts Are Bad

Don't buy a list of journalists' email addresses and send out a mass email to everyone. Don't add journalists to mailing lists without their permission. Don't send the same email to every journalist. If you can't at least customize a template to each person you email, you're only going to get minimal coverage at best. At worst, your emails will get sent straight to spam.
--Thursday Bram, Hyper Modern Consulting

6. Alcohol and Social Media Don't Mix

The simple mistake that all entrepreneurs must avoid is alcohol influenced social media communication. It may be tempting, but avoid the 2 a.m. tweets about your evening experiences. They can come back to haunt you.
--John Hall, Digital Talent Agents

7. Cut the Crap!

Don't BS reporters. Any publication worth anything will do its research and poke holes in your story. Just be honest and transparent. Authenticity is an incredibly valuable trait these days.
--Brent Beshore, AdVentures

8. Mixing Business and Pleasure

If you run a digital company (or any company that has a strong online presence), everything you do online represents your company. Your personal life becomes subjected to the same scrutiny as your professional one. Act accordingly.
--Yael Cohen, Fuck Cancer

9. Always Take the High Road

Don't ever talk negatively about your competitors, especially on social media platforms. What you may think is private could get picked up by a reporter and become an embarrassment to both your company and yourself.
--Steven Le Vine, Grapevine PR

10. Do What You Say You're Going To Do

Plans change, timelines shift, but overall, I think the more you can stick to what you say you're going to do, the better. Whether that means following up with journalists, or publishing your blog/newsletter on a regular basis, or even releasing your next product on time. Being timely shows that you're committed.
--Nathalie Lussier, Nathalie Lussier Media

11. Know the Power You're Dealing With

You can pay a lot of money to have a PR company craft your messaging, but they're all operating with the same bit of knowledge--you have no control over your message once it sets sail. Be careful, calculated and aware of all risks when crafting your message. Otherwise, it might come back to bite you.
--Christopher Kelly, Sentry Centers

12. Be Constantly Authentic

Companies need to be as authentic as possible in their communications. People trust and build relationships with those who tell the truth. If you mislead or indulge too much and people find out, you'll become untrustworthy by definition. Don't hide the truth, because the Internet finds a way to make the real truth public--with or without your endorsement.
--Lucas Sommer, Audimated

VCs Are Partners, Not Bosses

Mark Peter Davis — Fri, 25 May 2012 12:25:12 -0400

What's up with the superiority complex exhibited by both venture capitalists and entrepreneurs?

A shiver goes down my spine when I hear a venture capitalist refer to a portfolio company as "my" company, or a CEO who runs one of those portfolio companies as "my" CEO. The implicit suggestion is that VCs are kings and founders are lowly grunts who exist only to humbly serve the capital-holding masters. Ugh.

This condescension goes both ways. It's not uncommon for a founder to poo-poo the importance of investors suggesting financiers don't know how to oversee start-up operations day-to-day.

As both an entrepreneur and a venture capitalist, I deeply believe that these stereotypes are not only wrong, but also foolish.

As a VC, I understand why VCs might claim seniority. After all, VCs typically join the boards of the companies they invest in, and boards have the ability to fire CEOs. So, in that way, start-up CEOs work for VCs. In addition, VCs often have the contractual rights to control a company's destiny, especially if they hold preferred equity. VCs might be able to veto a company sale, or the issuance of any new security.

That said, entrepreneurs can easily point to another set of facts that suggest they are the rulers of start-up land:

Founders typically own far more of a start-up's stock than any single investor.
They often represent half or more of the board, meaning that they're the real bosses of their CEO-selves, and equal to investors in the board capacity.
And, founders usually have the loyalty of the start-up's team.

Truth is, when you home in on the complex relationships between founders and investors, it's difficult to untangle who is actually the boss. Each party holds different types of power in different situations--to protect both from risks inherent to each role.

Perceptions of seniority or subordination by either party are just that, perceptions. They don't typically impact how a company is managed. The reality is that investors and operators are partners in a venture. They're each contributing different skills, with different rights in order to achieve a common objective: creation of shareholder value.

In the end, of course entrepreneurs don't want to be insulted or talked down to by their investors. And, investors look for entrepreneurs to respect their input and support their objectives.

Get More People to 'Like' You: 3 Tips

Kevin Daum — Fri, 25 May 2012 12:20:34 -0400

Have Twitter and Facebook become too noisy and useless for meaningful interaction? Here are three tips for taking better advantage of social media opportunities.

I am not for a moment suggesting that you are unpopular. In fact, it actually appears that many people, even those with large social media followings have difficulty being "liked." Happily, social media makes it relatively easy today to engage others and even easier to measure how others engage with you. The flip side is we can no longer optimistically speculate on our efficacy.

For example, in my recent column about shameless self-promotion I invited people to promote themselves in the comments and attract "likes" in hopes of winning a free copy of my latest book. The response was overwhelming and underwhelming at the same time.

I am pleased to say that we had thousands of page views and over 1,000 social media hits. Here are some actual numbers.

As of the posting of this column:

1,041 people viewed the funny video

485 tweeted the column

351 re-tweeted a separate bit.ly link

346 Shared the column on LinkedIn

170 people "liked" it on Facebook

37 People gave it a Google +1

This is a respectable showing for a short article on a busy website. But the real interesting data comes from the comments. Despite encouragement for self-promotion among you many entrepreneurs and marketers, only 35 people, or less than 1% of viewers actually pitched in a comment. Those 35 pitches garnered only 20 "likes" in total. In fact only 14 pitches received any "likes" and only 5 pitches got more than 1.

Megan Torrance, Pam Aungst, Thyra Dehaven and Dave Kerpen all received just 2 "likes." Fascinating, since social media expert Dave Kerpen is the author of The New York Times Best Seller Likeable and tweeted the column at least twice to his more than 22,600 followers.

Congrats to the winner (and my personal favorite), Roxanna Elden who grabbed the top spot with a mere five "likes." All five shameless self-promoters will get free books as promised and you should check out their links.

So what does this apathy of engagement tell us? Are Twitter and Facebook now over-saturated and nearly useless for stimulating activity due to too much noise as Seth Godin implies? Perhaps the medium is not to blame as much as the people using it.

Were the pitches uninteresting? Maybe. Some were better than others and many of the promoters could learn how to engage their audience with more empathy. But at least they engaged... a bit. I assume that the 35 people who pitched have friends, family and co-workers. Why pitch, then fail to engage the people they speak to everyday to simply "like" their post, or spread the word.

Ironically, one author/entrepreneur I admire, even joked about promoting his book on my Facebook page and then never commented on the column even after encouragement. The brutal truth is that I find these results somewhat pathetic. Why spend time using communication tools if you won't communicate in a thoughtful manner?

So you don't waste your time or that of your community, here are three tips for maximizing the energy and effort you give to social media.

1. Slow Down

We move so fast trying to tweet, comment and "like," we forget that we are communicating. To be meaningful, take social media action with meaning. Be choosy when you "like" or comment, and take just a few more moments to communicate with a reason, and some personality. I personally love re-tweets in my twitter feed that include the tweeter's own take on my articles, and I'm sure their followers do as well.

2. Pay Attention to Detail

The contest in my last column had some complexity to it, but it certainly wasn't rocket science. More and more, marketers are trying to get you to engage. They have to provide value and make it fun. But you lose if you only participate halfway. Early promoters in my last column would have had thousands of views if they had followed the specific instructions of promoting themselves for "Likes" rather than just hoping the column would get them attention. Plus, in all my columns I include often humorous and interesting learning in my hyperlinks. Those who read them had an advantage in getting more exposure.

3. Think it through

If you invest time in social media, you need to think about why you do it and what value you add to the conversation. Are you improving people's lives? Are you stimulating thought, or simply creating noise? What actions should be taken by friends and followers once you "like," tweet, or post? Why would they bother? How can you make your communication awesome instead of just another boring post?

It's presumptive, expecting people to give time and mental energy to a "Thumbs Up" button or even 140 characters. But I work hard to follow these precepts whenever I am communicating with my readers, friends, and followers. Because like me, ultimately I just want you to be "liked."

Defining Your Role as Chief Cultural Officer

Karl Stark and Bill Stewart — Fri, 25 May 2012 12:13:28 -0400

As the founder you may hand over some duties to various leadership teams but make sure the cultural fabric of your company still represents your values.

As our company has moved through various growth milestones, we've struggled to redefine our leadership style and reinforce our culture. It seems that many of the big, important things, like the company's mission and values, manifest themselves in the seemingly small things, like holiday and vacation policy.

We wrote about this in a recent article entitled, When Core Values and New Ideas Collide. Many of you who have navigated companies through various growth paths, have experienced similar challenges, and were kind enough to share your thoughts with us via email.

A few readers spoke about the challenges of nurturing new leaders after the founders have stepped away, and allowing them to focus on important growth issues rather than petty operational policies.

"When people join from big companies they want to have a sense of control to feel secure, powerful and needed in their new jobs and also they need to prove to themselves and the management of the company that they are bringing value to the company by regulating, de-regulating, cutting costs and promising to increase revenue or efficiency. A founder needs to manage their insecurities and their need to perform and prove." – Salim

"No one will do things the way you do. When one creates a trust, that new entity can either continue with some or all of the grantor's mindset or it can be handed over to allow others to run it as the rest of the world would – making it indistinguishable from a general muck of others." – Robert

We agree that it is important to give new executives a platform to provide meaningful leadership. If this platform is not focused on growth and results, it manifests itself in less meaningful policies like holidays and vacation. It's also important to give new leaders real authority and reinforce that authority through broad communication and actions. But, the founders can often play a critical role by defining the cultural boundaries. These cultural norms maintain "growth mode" rather than allowing the company to morph into a larger bureaucracy.

The bottom line is that, as the company grows, the CEO needs to focus on the big issues - namely, building a team that is going to sustain growth. In many cases, this means that the CEO needs to be the Chief Cultural Officer, or someone who maintains and reinforces focus on what truly matters to the company. In our company, the number of holiday and vacation days has little impact on our success. I would guess that's the case at your company as well.

In fact, we've found that if you hire A-level players and focus them on creating results that contribute to the company's growth, you don't really need to micro-manage their time off. In contrast, strict management of effort-based priorities, rather than results-based priorities, distracts the team's focus from what really matters: driving value growth.

It's been a learning experience for us, and as a result, we've redoubled our efforts on driving focus on our core values and reinforcing our culture.

We encourage you to share your thoughts and experiences with us. Send us an email at karlandbill@avondalestrategicpartners.com.

Uh-Oh: Customer Service Matters More Now

Hollis Thomases — Fri, 25 May 2012 11:05:09 -0400

In the era of social media, your customers are less forgiving than ever--and more vocal. Are you prepared?

So you've embraced social media for your business. You might have even gone about it like this:

You have a grand social media plan that involves building a community, engaging stakeholders in your brand, and servicing your clients and prospects where they're now spending their time.
You set up all kinds of social media accounts, taking the time to find the right user name and build out your profiles.
You assigned responsibility for these accounts to an individual or group of individuals. You may even have created a new position and hire for this role; or perhaps you think it's even better to outsource it.
You started cranking away by generating new content, engaging with your consumers and attempting to measure how all of this social media effort affects your bottom line.

That's all great in theory, but as history and research has already proven: Just because you set yourself up to deliver service to your customers digitally doesn't mean that you've actually built a better mousetrap.

Social Media Raises the Bar

The recent Global Customer Service Barometer study conducted by American Express tells it best: "Social media raises the stakes for customer service." The good news: Social media savvy consumers who are happy with a company's customer service say they'd spend 21% more with those companies (compared with an average consumer, who'd only spend 13% more).

But here's the downside: 83% of social media savvy consumers have also walked away from an intended purchase because of poor customer service, compared with just 55% of the general population.

Social media savvy consumers also tell more people about both good and bad customer service experiences than ordinary consumers. And yet more than 61% of Americans feel companies have not increased their focus on providing better service–and are, in fact, getting worse at it.

For Americans who have used social media for customer service, American Express identifies these "Social Top 5" activities:

50% seek an actual response from a company about a service
48% praise a company for a great service experience
47% share information about a customer service experience with a wider audience
46% vent frustration about a poor service experience
43% ask other users how to have better service experiences

It's Easy to Look Bad on Social Media

Little mistakes are all too easy for the social media newcomer. Perhaps in your haste to get social, you set up a Facebook brand page but didn't make it publicly accessible; or placed social media icons on your website but drove people to an empty page.

These kinds of faux pas only make you look sloppy and stupid, particularly in the mind of your more social media savvy customers; you don't want to turn them off permanently. Worse still, these customers may share your hapless ways with their social media connections, thereby amplifying your problem–all without ever having had direct contact with you!

Bad customer service can be as benign as not paying attention to your social media mentions and comments (good or bad): Users like to feel like someone's minding the shop, so to speak. The tardy response can also create problems for your public image.

Any of these scenarios can quickly morph into a publicly visible customer service complaint.

And then there are the social media horror stories. The bigger the brand, the greater the likelihood for social "tattling," because who doesn't like to see a giant brand goof up these days?

No Excuses

Look at all the ways you can initiate or deliver customer service online:

Live chat
Twitter
Facebook
LinkedIn
Toll-free number
A website form
Email
Comment on blog

With all these options, ultimately, you really cannot make excuses for delivering poor customer service in the digital space. But when you get it right, the praise you receive will be worth it.

Your Story Is Your Marketing Strategy

Vanessa Merit Nornberg — Fri, 25 May 2012 10:15:59 -0400

Even small businesses can create powerful, meaningful, sincere branding messages.

Companies are always trying to create the perfect marketing tools--tools that will make brand history, generate buzz for products, and earn those products an unshakeable spot in customer's lives. Large companies have the luxury of throwing thousands of advertising dollars into marketing budgets, but small companies rarely can. I have found that the most powerful marketing device a small company can develop is its story.

Here's what I mean:

Tell your company's story.

Everyone likes to know the story behind the story, especially when there is an underdog or a hero involved. I was recently talking to the owner of a collections agency who told me he started his business because another company bought the one he was working for, and asked him to let go of most of the team. Rather than doing that, he himself quit and started his own company, brought the entire team over to his new venture, and successfully avoided firing many people. Learning his story helped me see the kinder side of a business that otherwise seemed heartless, and I immediately felt myself rooting for the owner.

Tell your product's story.

At a trade show this weekend, I stopped by the booth of a Japanese company that makes very traditional Japanese-style screens to decorate and divide rooms. As someone who loves clean modern lines, this type of product is not something I would usually look at closely. So what made me stop? The company had recreated its workshop space at the trade show, and brought in a traditional Japanese artisan to the booth, to demonstrate how it constructed its product. The intricacy of the piece was astounding and the craftsmanship was fascinating. It made the product beautiful in a way I never would have noticed had the owners not told me the story of how it was made.

Tell your personal story.

If you have a service-based business, your personal story and why you do what you do are not only great attention grabbers, but can also be striking testimony about your expertise. The real estate agent who helped my husband and I find our apartment was a successful psychologist before becoming a real estate agent--and she points that out in the literature she provides to prospective clients, because she knows that buying or selling a home can be a difficult and emotional experience. She sells herself as a consummate negotiator and an understanding counselor to illustrate how she will get her client through the sale in good financial--and mental--condition. Out of hundreds of agents we could have chosen, she got our business.

Tell your customer how to get involved in your story.

Engaging your customers in your story can be just as valuable as engaging them with your product. There is an independent bookstore around the corner from my house with shelves I have often browsed. I had rarely bought a book there, until the shop posted a sign on the door that implored customers--who enjoy being able to shop locally and want the bookstore to be able to keep its doors open--to support independent bookstores by purchasing from them. Now I make myself buy something every time I go to the shop--even if I don't really need it.

The next time you set out to win over customers, think beyond the bullet points of your product. As Lewis Schiff of the Inc. Business Owner's Council once told me: "Facts get recorded; stories get remembered."

5 Things to Un-Learn From School

Jeff Haden — Fri, 25 May 2012 10:03:09 -0400

You spent a lot of time getting an education. But if you want to make it as an entrepreneur, it's time to forget some of what you learned.

You spent a lot of years in school. You learned a lot.

Some of what you learned you need to un-learn as soon as possible. Here are five key attitudes you should adopt instead:

1. If you only do what you're told, you'll excel.

I know. School was hard.

But not that hard.

If you did what you were told--go to class, do the reading, turn in assignments on time, etc.--you could get As. Initiative was not required and, in fact, was often frowned on.

Now--whether you work for someone else or run your own business--doing what you're told makes you average. Not superior, not excellent... just average.

To be above average, or to achieve better than average results, you must do two things:

Do what others are willing to do, and do it better, and

Do what others aren't willing to do

Otherwise, you're just average.

2. Being micro-managed is to be expected.

Sure, you felt overly-controlled in school: Dates, timelines, rules... not to mention the seemingly arbitrary policies and nonsensical assignments. You saw graduation as the day you would finally have more freedom.

Nope.

In school you paid people to criticize, direct, and at times micro-manage you. Now you're the one getting paid... yet you somehow don't feel it's fair that investors, partners, or customers can dictate what you do, sometimes down to the smallest detail?

Don't expect someone to trust you to perform a task or service–and give you money to perform that service–until you've proven you can be trusted to perform that service.

Then, once you've proven your skills, if you still feel micro-managed it's your responsibility to change the situation. Communicate before you are communicated to. Answer questions before questions are asked. Demonstrate your value before you are asked to prove your value.

No one wants to micro-manage you. They have better things to do with their time.

If you're being micro-managed it's probably because you need to be.

3. Your time off is the highlight of the year.

You may have forgotten your mom's birthday, but I'll bet you knew the exact day every semester ended and the start and end of Spring Break. And you lived for snow days.

So it only makes sense to see weekends and vacations as the highlight of your working year, right?

Actually, no: If you feel you endure the workweek just to get to the payoff of the weekend, you're in the wrong business. Find work you enjoy; then you won't see time off as a chance to finally do something fun but as a chance to do something else fun.

While you'll never love everything you do in your professional life, you should enjoy the majority of it.

Otherwise you're not living–you're just working.

4. Getting criticized means you failed.

Here's another pay/paid dichotomy. In college you paid professors to critique your work.

So now that you are the one getting paid, why is it unfair for someone--like a customer, investor, or key partner–to critique your work?

It's not.

When you get negative feedback, see it as an opportunity. Think, "Wow, I didn't realize I wasn't doing that right. I didn't realize I wasn't doing that as well as I could."

Criticism is a chance to learn--and this time you're getting paid to learn.

Never complain when someone pays you to learn.

5. Success is based on toeing the line.

Say you disagreed with a professor's point of view on a particular point. You may even have been right... but the only way to get an A in the class was to parrot the professor's take on the subject. Except in rare cases, confirming and following the rules was everything.

In business, conforming only ensures that you will achieve the same results as other people.

If you want to achieve different results you'll have to think and act differently. Do your homework, think critically, and don't be afraid to create your own path.

But don't be different just for the sake of being different. Be different because it's who you are and what you believe... and because it will get you where you want to go, with your integrity and your sense of self intact.

Stay Home This Weekend (Vacation's a Bummer)

Eric Markowitz — Fri, 25 May 2012 09:52:52 -0400

Vacations make you happy, right? Er, not really. Recent studies confirm that getaways don't make you a happier person.

The commonly accepted cure for a stressful week or month at work is a jaunt to the beach, or, if you can afford it, a multiple-week vacation to somewhere exotic. The expression "I need a vacation" has been hammered into our corporate lexicon so much that, almost without thinking, a vacation is an accepted means to achieving balance and happiness.

But science seems to say otherwise.

A recent study in the journal Applied Research in Quality of Life surveyed 1,530 Dutch individuals about how happy vacations made them. Of the group, nearly 1,000 took vacations, and the rest didn't, to serve as controls for the experiment. The researchers sent them surveys before and after their vacations to judge their happiness. The result?

"Generally, there is no difference between vacationers' and non-vacationers' post-trip happiness," the authors of the report concluded. "Vacationers reported a higher degree of pre-trip happiness, compared to non-vacationers, possibly because they are anticipating their holiday. Only a very relaxed holiday trip boosts vacationers’ happiness further after return."

"Vacations do make people happy," the author of the report told The New York Times last year. "But we found people who are anticipating holiday trips show signs of increased happiness, and afterward there is hardly an effect."

There's two interesting points there: First, the "net happiness" left in a traveler is the same as someone who didn't travel at all. But almost more fascinating is the idea that planning the trip is more enjoyable than the trip itself.

The implications for travelers are clear enough: "Take your time planning the vacation," notes John M. Grohol, a psychiatrist and founder of Psychcentral.com. "This may be the most enjoyable part of the trip for many, as you can imagine all the things you plan on experiencing."

Another study, from the University of Surrey, came to similar ho-hum conclusion: Taking vacations does not cause "individuals to feel any worse off than before traveling," but its authors couldn't prove the opposite either, that vacations actually made people happier.

Even if vacation does provide momentary breaks in stress, it's a short term measure to ameliorate serious lifestyle and personal strains. A paper from two researchers at Tel Aviv University titled "The Impact of Job Stress and Vacation on Burnout and Absenteeism," came to the conclusion that "Vacation alleviated perceived job stress and burnout as predicted." But in just four weeks, prevacation levels of burnout returned.

Still, vacations are necessary, even if they don't lead to long-term happiness. There are two other reasons, scientifically, vacations are necessary. First, they let you think more clearly.

Jonah Lehrer, the author of Frontal Cortex, a blog for Wired, spent years studying how people come up with good ideas—or, in other words, the "aha" moment.

"What these scientists argue is that when you're really focused on the outside world [or on your business] that's where your consciousness is," he explains. "But when we're a little bored and a lot relaxed, we turn the spotlight of attention inward, and that makes us much more likely to hear this obscure circuit of cells, which makes it possible to get the insight in the first place."

And, scientifically, vacations seem likely to make you healthier.

As we reported last year, the Framingham Heart Study studied women's health over the course of 20 years and found that women who took only one vacation every six years were nearly eight times more likely to develop coronary heart disease. Another study reported by The New York Times in 2008 found that men who did not take a vacation at least once a year had a "21 percent higher risk of death from all causes and were 32 percent more likely to die of a heart attack."

It's Time to Raise Your Prices

Erik Sherman — Fri, 25 May 2012 09:36:00 -0400

Need to make more money from your customers? Here's why a price hike might be your best option.

Internet music company Pandora is one of those businesses that can do well in the stock market just by not doing as badly as people expect. Revenue grew 58%, as was announced Wednesday, but losses more than doubled year-over-year. Now, most entrepreneurs don't have to worry about keeping stock prices up, but there's an important lesson to learn from Pandora's roller coaster: Sometimes you need to face the music and ask customers to pay more.

Why Pandora Is in the Red

The ongoing problem for Pandora is that even as it grows, with the active audience increasing 53% year over year, so do the music royalties it must pay. As a result, its quarterly earnings reports have shown a constant flow of red ink.

When the cost to provide goods or services is too high, you lose money. You have two choices: decrease costs or increase revenue. General and administrative costs are 12.6% of revenue. Marketing is nearly 30%--on the high side--but the company is trying to grow its revenue base. Product development (R&D) is 5.1%. That's just under 48%.

The real problem for Pandora is the cost of licensing music. The combination of cost of revenue and content acquisition expenses are 77.7% of its gross revenue. That's one brutal ratio and the key place to lower costs. Except, Pandora already negotiates with the board that sets royalty rates.

If it's not coming out of expenses, it has to get added into revenue. Add enough dollars into the till through higher prices and Pandora could take care of the acquisition expenses (assuming that they remain fixed) and still pay the other expenses, which now become a smaller percentage of revenue.

The Argument for a Price Hike

That's where the lesson comes in. Companies and entrepreneurs are often afraid to raise their rates, particularly if they perceive that they set them too low in the first place. There's that nagging question of whether people actually do like your product or service that much.

Why assume that they don't? I can't speak for other Pandora subscribers, for example, but the $36 annual fee is trivial. I could easily justify paying more to continue to get the music that I want. Price elasticity is a real economic principle, and there are times that consumer sensitivity won't allow you to charge more than a given amount.

But this isn't an absolute question. Yes, raising prices might drive away some customers, but that is fine if you bring in enough extra revenue from others to more than make up the gap. Have you noticed that a company like Starbucks will occasionally raise prices? It probably loses some customers but on the whole makes more money.

Instead of assuming that people won't pay more, why not do some investigation? Run a survey. Talk to your customers and see how price sensitive they seem to be. Try introducing a more expensive product line and watch the response. Raise prices in a particular promotion or at one location to gauge the reaction.

Do some testing and questioning and you may find that the only person afraid of higher prices is you.

Dear Graduates: Push the Boundaries

Jeff Bussgang — Fri, 25 May 2012 09:24:04 -0400

As the class of 2012 heads into the real world, here's a reminder: Never be satisfied with the status quo.

This time of year is full of commencement ceremonies across the country. In honor of this year's crop of graduates, the class of 2012, I've been thinking about one pithy lesson that I might convey to them as they enter the adult world.

My inspiration comes from a book I read recently called This I Believe, a collection of essays from famous and not-so-famous people who summarize their life lessons in a brief vignette. It was inspired by a radio program by Edward R. Murrow in the 1950s. Recently, it was revived by PBS and compiled into a well-done book.

So in that vein, here is my simple lesson to this year's grads: Push the boundaries. Why? Because boundaries are there to be challenged.

And because conventional wisdom is just that, conventional. You don't want to settle for living a conventional life within a conventional world. This lesson was hammered into my mind by my father, a Holocaust survivor who never saw a line he didn't try to skip, an inefficiency he couldn't stamp out, or a unjustice he didn't try to undo.

Conventional wisdom is just that, conventional. Great entrepreneurs see boundaries as challenges. They take great pleasure in tweaking the status quo and rethinking decades of assumptions.

One of his favorite phrases is, "Don't assume anything." In other words, don't take for granted core assumptions--whether in tackling a math problem or a life problem. Instead, test them and try to stretch them to their limits, and beyond.

My father would rail against the injustice of those would seek to benefit from old rules in an unfair manner. I still bump into residents of my home town who remember his repeated crusades against the local cable monopoly as a town meeting member in the 1970s and 1980s.

My dad was inspired to become an entrepreneur because of this life philosophy. Great entrepreneurs see boundaries as challenges. They take great pleasure in tweaking the status quo and rethinking decades of assumptions. And they incorporate this philosophy into their personal and professional narrative as they pursue new products and services that disrupt existing markets.

My 12-year-old son lives this mantra to the hilt (I wonder if entrepreneurship has genetic roots?). He questions every rule, every boundary with a probing, "Why?" I love him for it, despite the fact that it makes parenting a challenge. And I know someday, like this year's crops of graduates who push the boundaries, it will put him in a position to change the world.

So, dear graduates of your various institutions, remember this lesson. A lesson that scores of entrepreneurs and world-changers have learned before you.

Ethically, morally, appropriately...push the boundaries. We'll all be better for it.

"Any fool can make a rule, and every fool will mind it." -Henry David Thoreau

How Flat Is Too Flat?

Jessica Stillman — Fri, 25 May 2012 09:12:30 -0400

Tearing down hierarchies may be all the rage in business at the moment, but recent research suggests more traditional power dynamics can boost productivity.

The coolest bosses these days have all left their corner offices behind to work in a bullpen or cubicle where they can interact on an ad hoc basis with members of their teams. Status and respect may never go out of style, but naked power and traditional hierarchies are currently pretty unfashionable in some sectors of the business world. Collaboration and "flat teams" are the new office cool.

For some veterans of the Dilbert-style corporate realities of the past, that's a relief. Author Alexandra Levit, for instance, recently blogged about receiving an email from "a 45-year-old who was thrilled that after more than 20 years in corporate America, he was at last working in a so-called 'open environment.' No more offices, no more cubicles." But can this mania for tearing down walls and flattening business structures go too far?

Yes, suggests new research out of Columbia Business School. The series of studies tested the effects of power hierarchies on team productivity by creating teams with either a mixed propensity towards leadership--in one case some participants were primed to feel powerful by thinking of a time they wielded power over others while others subjects were asked to envision a time they were bossed around before joining the group--or teams made up entirely of hard charging leadership types or participants primed for a meeker, go along, get along approach. In another experiment, rather than prime participants for particular roles, testosterone levels were used as a marker of which study subjects were inclined towards dominating power structures and which less interested in leading.

So did traditional groups of both alpha types and more compliant members do better or worse than groups where everyone was hard charging or everyone was laid back when asked to complete cooperative tasks? The Wall Street Journal's Ideas Market blog sums up the findings:

Groups of participants with varied testosterone levels were better at the cooperative task than groups made up solely of high-testosterone or low-testosterone individuals. The high-testosterone group bickered more--no surprise--which provides a partial explanation for its inefficient work. But, more broadly, hierarchies create defined roles, the authors said, which is helpful in carrying out productivity-based tasks that demand "interdependence."

The importance of defined roles in effective collaboration isn't unique to this study. Well known business pundit Tammy Erickson has also looked into the importance of clearly defined roles in collaboration and concluded they are beneficial to getting stuff done. "Our research has shown that… collaboration improves when the roles of individual team members are clearly defined and well understood--in fact, when individuals feel their role is bounded in ways that allow them to do a significant portion of their work independently. Without such clarity, team members are likely to waste energy negotiating roles or protecting turf, rather than focusing on the task," she has written.

So in other words, if clear hierarchies keep teams from wasting time negotiating roles and battling for turf than they can actually help them get more done more quickly. Though this shouldn't be taken as an endorsement for overbearing alpha male chest beating or deference to authority over good sense, flat it seems, isn't always best. But be warned, traditional power structures aren't a panacea either--especially for creative tasks.

"Creative endeavors would be a different matter… in such cases hierarchies have been shown to prevent some people from speaking up," reports the WSJ, which quotes one of the researchers, Richard Ronay. "It's not a clean picture--that hierarchy is always good or bad. It depends on the type of task,” he says.

Flat teams: do you love them, hate them or have mixed feelings?

8 Etiquette Rules for a Business Lunch

Eliza Browning — Fri, 25 May 2012 09:08:37 -0400

Amid technology overload, face-to-face interactions are even more important. Follow these rules to make sure lunch meetings are both fun and productive.

Back in the days of Mad Men, the business lunch was essential. Offers were made, partnerships formed, and deals were closed daily over lunchtime martinis.

For the most part, that type of midday meeting is long gone. But with today's communication technology overload, the face-to-face business lunch is still an important way to build relationships--and is perhaps even more valuable today than it was 50 years ago. (It's just less likely to include three martinis and a glass of port.)

Follow these simple rules to make a business lunch both productive and enjoyable:

Get the Invitation Right

Lunch with a client, potential business partner or new colleague can often be more productive than an office meeting. Getting out of the office and off the phone creates an environment more conducive to relaxing and candid conversation.

When inviting someone to lunch, be respectful of his or her time and position. If inviting a superior you don't know well, don't risk being presumptuous--you might opt for suggesting coffee instead.

Who Chooses the Spot?

If you're inviting, offer up some suggestions and let your guests pick. If they don't care, it's on you. But make sure to be careful and anticipate their preferences. You don't want to bring a vegetarian to a steakhouse. If inviting someone to discuss next year's budget cuts, best to skip the meal at the most expensive restaurant in town. If your guest choses the place, don't forget to compliment her on the choice.

Time & Place

Get there early. Always know the set-up of the restaurant and make sure both the venue and your table are right for your objective.

One of my colleagues swears by this rule. If it's a celebratory or casual lunch with people he knows well, he gets a table in a central area, closer to the bar, where it's typically more boisterous. If it's a serious conversation and he wants to get something accomplished, he opts for a quiet table in the corner.

When to Talk Business

On the golf course, the common rule of thumb is not to get down to business before the fourth hole. At the table, it's a bit more ambiguous.

My advice: If you're having a social conversation, don't bring up business until you have received your drinks and ordered your meals. Then, when business talk commences, frame the conversation around your guest. Ask about her business, what she's working on and where she needs help.

This will give you a clear understanding of context and provide a natural segue into explaining how you and your company might be of assistance.

Speaking of Drinks...

Sorry, Don Draper--if you're taking clients to lunch and your company is paying, you should probably skip the alcohol. But if your client wants to imbibe, let him order a drink. A good rule of thumb is to let your guests order first, so they're not inhibited by your choice.

Handling the Bill

There is an art to handling the bill. You want to be graceful about it. When the check arrives, be nimble and reach for it swiftly--but keep looking your clients in the eye if they're speaking.

By all means, don't stare at the line items with anything like shock or horror. That said, if there's an error with the bill, excuse yourself to talk to the waiter separately without making your guest feel uncomfortable.

And when it's time to pay, act naturally: Don't disrupt the conversation, but make eye contact with the waiter so that he picks up your credit card quickly.

Turn Off Your Phone

You may already know how I feel about this, but I'll say it again: Turn off your phone. Now is not the time to be checking your incoming email or texting your colleague. I've seen some people pick up their phones between courses instead of talking to others at the table. Just don't.

Finally ... Have Fun

Be yourself! There is a reason you're not in the office. You can accomplish quite a lot with business lunches, but you shouldn't lose sight of why they work so well: When people can relax and have a good time, they're more likely to open up, making it easier to strengthen a business relationship.

5 Things You Won't Learn in B-School

Scott Steinberg — Fri, 25 May 2012 09:00:00 -0400

There are certain hard knocks you just can't get in a classroom.

While many entrepreneurs boast college degrees and MBAs, most will readily admit that the hard knocks received from starting their own businesses were infinitely more valuable. Here are five lessons you won't learn in a classroom:

There is no such thing as failure.

Businesses can go bankrupt and unsold products can pile up in the warehouse, but every venture is a potential learning experience. Investors get skittish and bail at the 11th hour? You'll know how to better choose strategic partners and negotiate deals going forward. Couldn't successfully expand into Europe? Use the insights gained into international distribution to craft a more viable strategy next time. Clients indifferent to your sales pitch? Maybe you're trying to solve the wrong problem.

Such learning may seem expensive, but ignorance is costlier still. Knowledge gained through failure is directly applicable to future ventures. So try, fail, and try again until you get it right. Just remember: Only a fool makes the same mistake twice.

"No" doesn't mean "no"—just "no... for now."

When exploring new market opportunities or pitching potential clients, remember that situations change. Just because your approach or offer doesn't make sense to a potential customer or partner now doesn't mean that it won't later on. Markets and strategies evolve, internal stakeholders come and go, and enterprises' needs constantly change. Never be afraid to pick up the phone for a follow-up, especially if situations have shifted in your firm's favor.

Knock politely on many doors—and don't be afraid to crawl in an open window.

Ask 50 people at the same business the exact same question and you're guaranteed to get just as many different answers. A single corporate division may include numerous executives, so it's important to find the one individual whose sphere of influence directly overlaps with your inquiry. Don't be afraid to go up the chain and call a high-level decision maker: At worst, they'll ignore the query or say no; at best, they'll direct you straight to the proper point of contact.

Optimism is no substitute for customers.

Customer conversion rates can be shockingly low for many new ventures. So plan conservatively. Be cautious with prices. Fight your naturally optimistic outlook.

Cash is king—don't let yourself get crowned.

Big contracts and high-profile deals look good on paper, but when push comes to shove, all that matters is leverage. To get and hold onto leverage, you need money in the bank to comfortably meet payroll and expenses while waging legal battles or self-funding new growth. Despite signing on the dotted line, clients and partners may choose to disrespect agreements or contracts out of need, malice, or simply as a negotiating tactic. Know that if your cash flow dries up, you won't have any room to negotiate.

Making the Perfect Hire

Alan Ying — Fri, 25 May 2012 08:45:01 -0400

What happened when I decided to ignore educational pedigree and big-company experience.

As a venture capitalist I meet lots of bootstrapped companies. As their core team expands, most face the same hiring dilemma. They need the in-the-trenches, get-things-done types who fit the culture and can eventually be managers, maybe even strategists. This challenge reminds me of a lesson from early in my career, fondly remembered as, “Look for Lincoln.”

At my first company, “Arthur” was our grey-haired adult supervision, an invaluable steadying force during the roller coaster of growth. One day when we were going through resumes, he told me about Lincoln, an applicant for a sales position in his long-ago first company.

Lincoln was a local community college grad short on work experience. Arthur gave him an interview because his cover letter detailed a work plan for the sales region. Lincoln had figured out customer buying cycles and pain points, and presented an original way to build the funnel. In the interview, he laid out a management plan for the sales force.

Compared to the Big Name College Alum and Serial Big Company Salespersons competing for the same position, Lincoln was off the charts on positive, no-excuses, creative energy.

Lincoln quickly became a top individual performer on inside and field sales, then a manager, and then a senior executive covering revenue, marketing, and products. Lincoln was a huge part of the successful exit for Arthur’s business years later.

Mine was a high profile startup with millions of dollars behind us, so we had over 50 qualified applicants for a single position. As Arthur and I rummaged through resumes, I tried something new: I ignored academic pedigree and work experience.

Instead I screened for people who made the effort to say something interesting about the position, our business, or our market. I looked for well-researched, original, memo-worthy notes that made me think.

Exactly four candidates made that effort: a serial mid-level job-hopper, a recently grad from a local college, an Ivy League MBA, and a mid-career changer from another industry. When they came in for interviews, I asked each of them to teach me the details of their analyses and plans. That was where “Lincoln” shined - everyone else fell apart after I pulled off the wrapping paper.

My “Lincoln” started out installing our enterprise software system. Eventually, he took over all of implementation, then support, then custom services, and even pre-sales engineering. By the time we sold the business he had almost half of my 100+ staff reporting into him.

I’ve used my “Lincoln Experience” in evaluating everyone from senior executives in public companies to CEOs of portfolio businesses to founders of startups. Here are a few guidelines I keep in mind:

1. Attitude trumps resume. Some people may have both, but if it’s one or the other, attitude is the most consistent indicator of future results.

2. Trust but verify. People can fake the right attitude... initially. Create a deliverable that shows how that attitude translates into results, and dig to see if it’s for real.

3. Make the hole fit the peg. Of course you need to start with the person fitting the job. After they prove success, find ways to make the next job fit the person, rather than vice versa.

Hiring the right person is hard in any size business, but the stakes are higher in early stage growth businesses. Drilling for attitude is the surest way to find gold.

By the way-- my first Lincoln? He was the mid-career changer from another industry.

Social Media Tips From the White House

Caitlin Berens — Fri, 25 May 2012 08:45:00 -0400

The White House brand is comprised of far more than glossy photos of smiling officials. Here's how democracy is spread, social media style.

It's no longer a question of whether social media is worth your time, but what form of social media is most worth your time. At least that's the message that came across at the social media forum at National Small Business Week in Washington, D.C.

"Social media is good news to small business," says Karen Mills, administrator of the Small Business Administration. "It levels the playing field." But there's more to the White House brand than, say, distributing pictures of a smiling president.

Sarah Bernard oversees social media efforts for the White House. As the deputy director for the Office of Digital Strategy, Bernard is a voice of authority on the ever-changing ecosystem. "The White House loves social media," she says.

But the White House digital team doesn't waste time picking favorites; instead, it hones in on making its message hit the right targets. Bernard's advice for making a social-media strategy for your business: "Don't program around the tools--they're always changing. Focus on your objectives."

Want that success, recognition, and credibility? Here's how to emulate the social media success of the White House:

Make modern updates to the classics.

The Fireside Chats made famous by former president Franklin D. Roosevelt were tremendous in reach, but, they're so 1933. Though President Obama does have a weekly radio address, the White House team has given his outreach efforts a 2012 update. In fact, the President had his first Google Plus "Hangout" in January, where he answered live questions via group video chat. President Obama has also chimed into to answer questions on Facebook and Twitter during town halls. Think: "What are you doing now that could be updated?" Bernard asks. According to the deputy director, just about any existing model of engagement can be updated, scaled, or made more efficient by social media. The White House team always keeps the brand at the forefront of their minds, but Bernard encourages trying something new. "There is always some room to experiment, and social media gives us that chance."

Don't just inform. Focus on engagement.

The White House doesn't just use social media as a way to inform the public, but to engage with them as well—meaningfully. Bernard encourages keeping the participation bar low so that it's easy for people to join in on the discussion. But just because it's via social media doesn't mean the conversation has to be lighthearted or limited to small talk. In fact, when the debate over pay roll tax was going on in December, Bernard utilized social media to gain public opinions on the matter. The team takes in the feedback, and responds. "Could you have more meaningful engagement via social media? I would say yes." Bernard says. "I would think about what your objectives are and keep the participation bar as low as possible and feel free to experiment. "

Think about the bigger, longer term, picture.

"We are very cognisant of the White House brand," Bernard says. Notice she said "the White House brand," not "the Obama brand." Yes, Barack Obama is the current president, and many of the social media efforts reflect that. However, change will come, both in the White House and in your company, so know your brand and build the brand. Don't solely focus on the person at the top. Bernard also aims to be transparent, both through honest messages and asset distribution, such as the White House's active photostream on Flickr. According to Bernard, the digital strategy team works to open up the White House to the public, enabling citizens to peer into what's going on behind the scenes and also to engage with the White House and provide feedback.

Broadcast the basics, but really amplify the big, broad ideas.

A top priority at the White House is to amplify what the president is saying and doing, as well as inform the public about ever-changing policies across the U.S. "We're always trying to raise awareness," Bernard says. Back in December there was a big debate going on about payroll tax. Social media platforms were utilized as a way to keep the public informed. "Social media allows us to engage with the American people," she says.

How to Handle Pushy Customers

Tom Searcy — Fri, 25 May 2012 08:17:21 -0400

Don't let your company get backed into a corner by a cascade of demands. Here's how to strike a deal that satisfies everyone.

I watched this interchange at a friend's house between a mom and a 4-year-old child:

"Sweetie, it's not time for cookies.
"Sweetie, leave the cookie jar alone.
"Sweetie, I mean it, I don't want you eating a cookie right now.
"Sweetie, please put that cookie back.
"Sweetie, don't take a bite of that cookie, or mommy is going to be cross.
"Ok sweetie, just that one, but no more ..."

I'm no child specialist–but I think almost everyone can agree that this is not a successful way to change behaviors in our children. Common sense tells us that in raising your children and creating effective relationships, you need to:

Set clear boundaries
Be consistent
Mean what you say
Have direct and logical consequences

When we're talking about kids, this all seems obvious. But I often see companies managing (or, rather, mismanaging) pushy customers the same way. They cajole, try to delay or deflect, even threaten, but then finally concede. And what happens next time? Two cookies.

There's a better way to handle the situation. Here's what to do.

1. Set expectations.

Too often, pushy customers keep pushing because the lines are not clear enough. You can be service-oriented while at the same time being very specific about what you can and cannot do. Set the expectation up front.

2. Reset expectations at each interaction.

When a pushy customer asks for something unreasonable, outside of an agreement or even impossible, it is your responsibility to re-assert the original expectations. The old adage applies: If you give someone an inch, they'll take a mile. Obviously, even a 4-year-old can figure out how to take advantage.

3. Aim for parity when going outside of the original understanding.

There are times that you will need to make concessions to appease or serve a pushy customer. However, if all you do is what they ask when they have pushed back, you will have trained them to push harder.

Instead, ask for a concession from them as a part of the interaction–maybe a rush charge, or a limit to the number of unpaid revisions, or a volume purchase thresholds for free shipping. They will learn that simple bullying does not change the agreement.

4. Don't threaten.

Threatening a client takes you down a dangerous road. Instead of working through a point of friction you have now elevated this to a power struggle, causing long-term damage to the relationship.

Customers believe that they have power because they have the money, so they will begin to either threaten back or plot to replace your services–eventually if not sooner. You want to avoid that. So rather than raising threats, seek instead to offer trade-offs and options.

5. Keep records.

This is about clarity and accuracy, as well as protecting yourself. In the future, when the event is less clear in your memory, you want to be able to return all interested parties to the agreements, expectations and tradeoffs.

Pushy customers can be managed, but if you do not set the standard with a firm and fair hand, you might as well just hand them the plate of cookies–and a stool for easier access later.

How Twitter & Texting Saved Writing

Geoffrey James — Fri, 25 May 2012 08:14:58 -0400

The end of literacy as we know it? Get over yourself. These popular tools force people to write more clearly and concisely.

The way some people talk about Twitter and texting, you'd think that the tools meant the end of literacy as we know it.

For example, Google the phrase "Why I Hate Twitter" and you'll get more than 38,000 hits. Here's a typical complaint:

Twitter and texting are killing the English language. English is a beautiful and complex language ... but our quick-hit communication culture is turning the language of Shakespeare (as the French call it) into a bunch of random symbols.

I couldn't disagree more. In my opinion, forcing writers to encapsulate messages into short sentences is the best thing that's happened to writing–well, at least to business writing–in centuries.

The problem with most business writing isn't that it's too short; it's that people stuff documents with biz-blab, jargon, abstractions, weasel words, circumlocutions, misdirections, butt-covers, meaningless adjectives, and just plain old fluff.

Bloated verbiage was a problem in the days of the typed memo, too, but the fact that you had to physically copy that memo (and then schlep the copies around) formed at least some curb on logorrhea: People actually tried to write short memos, if only to get them to fit on one page.

Web-Enabled Wordiness

All of that changed with email and the Internet. Since it's easier to write 1,000 words carelessly than to write 100 words carefully, business communications have gotten longer, more tedious and more boring every year.

To make matters worse, thousand of hare-brained pundits keeping egging people on by sprouting nonsense about "information" being a "resource."

Yeah, well, water is a resource, too, but you can still drown in it, and when it's polluted with garbage, it stinks.

I actually believe it's a wonderful thing to force people encapsulate what they've got to say into 140 characters. Such restrictions force people to think about what's really important.

When was the last time you saw a tweet from anyone with an ounce of brains that wasted 16 characters on a piece of verbal idiocy like "state-of-the-art"?

Misguided Complaints

Another common complaint about tweeting and texting is that they encourage abbreviations. For example, here's the same blogger quoted above:

There are too many weird symbols and abbreviations in Tweets....Something like "RT @leepender hates #Twitter #rant #moron" just looks like a jumble to me, but that's the way most Tweets look ... The long-forgotten "at" sign made a stunning comeback about 20 years or so ago thanks to email, but now it preens around all over Twitter as if it has been one of our favorite punctuation marks for generations.

I'm sorry, but the above viewpoint is profoundly misguided.

Far from being an innovation, the use of abbreviations to compress thoughts is thousands of years old. Before the invention of printing, abbreviations like "@" and "&" abounded in handwritten manuscripts. (The ampersand comes from "et", Latin for "and.")

As for hash tags (those # symbols), they're just another way of indexing–neither more nor less intrusive than footnotes, page numbers or any other method of categorizing communications.

More importantly, using abbreviations and hash tags, like the word limitation, tends to force writers to consider what they're really writing about and shorten it into as small a space as possible.

Smiley Overload?

Another much maligned aspect of Twitter and texting are pervasive use of emoticons, or "smileys." Many people absolutely loathe them and certainly many consider them unprofessional.

Once again, I disagree. The ability to inject emotional color into a sentence or paragraph using only two or three characters is incredibly valuable when it comes to communicating clearly.

Consider: How many stupid misunderstandings have occurred in the business world because a reader didn't realize that the writer was trying to be funny? Words are subject to shades of interpretation; a smile (or a smiley) is universal.

So there you have it. As a writer who has to read plenty of business communications for a living, I'm overjoyed that Twitter and texting have become popular. They're saving me time by forcing people to write stuff that's quicker to read and easier to understand.

Like this post? If so , sign up for the free Sales Source newsletter.

Steve Jobs Had to Wait to Get Into This Restaurant

Erin Kim — Fri, 25 May 2012 00:50:00 -0400

Trendy San Francisco restaurant flour + water has droves of foodies lining up for locally sourced and hyperlocal cuisine.

On any given night, the line of salivating customers waiting to get into flour + water, one of San Francisco's trendiest Mission District restaurants, can stretch out the door and around the corner. The queue hums with excitement and anticipation. The menu doesn't feature rare beluga caviar or bird's-nest soup; no, it's locally grown asparagus and hand-rolled strozzapretti that have everyone abuzz. And if you want in, neither having a big name—even Steve Jobs wasn't allowed to just walk in—nor a reservation may eliminate the typical two-hour wait to be seated.

Three years and several accolades since its launch, flour + water has touched on a trend that is taking the restaurant industry by storm: locally grown and produced foods. According to the National Restaurant Association, 72 percent of adults say they are more likely to visit a restaurant that offers locally produced food, while 83 percent of fine-dining restauranteurs and 71 percent of casual-dining operators report that their customers are more interested in locally sourced menu items now than they were just two years ago.

That explains why more than 50 percent of fine-dining restaurants feature locally sourced food and wine on their menus. Another market research firm, Mintel, reports that interest in where food comes from will drive the food industry this year.

When David Steele, David White, and chef Thomas McNaughton opened flour + water in May 2009, they agreed that a menu featuring only locally sourced food was imperative. That's because if the sustainable-is-chic, organic-everything, locavore movement has an epicenter, it's the San Francisco Bay Area, with its produce-friendly year-round warm climate, and culinary icons who have paved the way—including Thomas Keller and Alice Waters, who now grows gardens of organic vegetable in schoolyards.

So the flour + water trio set out to make a statement by fostering close relationships with local farmers and livestock producers, who make several shipments to the establishment each day.

"We fancy ourselves a neighborhood restaurant over and above an internationally known restaurant," says Steele.

To take it a step further, flour + water boasts hyperlocal menu items. Hyperlocal refers to produce grown on site by a commercial establishment, either for use in a menu or to be sold directly to the consumer. The restaurant has a 450-square-foot rooftop garden that provides about 5 percent of the vegetables used in its dishes, including carrots, herbs, and spinach.

Another reason to have your own rooftop garden: bees. The Italian eatery keeps a hive of bees to shine a spotlight on the importance of the insects' role in the maintenance of agriculture. The bees don't just create, ahem, buzz; they also produce honey that is used by the restaurant's chefs.

The chefs, committed to the cause, also go foraging three or four times a week around the San Francisco Bay Area, looking for wild plants to incorporate into their dishes. "It's the ultimate local, right?" says Steele. "It's a way for the chefs to stay connected to the earth, and it makes the process of putting food in front of people a more three-dimensional experience."

Steele had designs on opening a restaurant for seven years—even drafting a business plan—before the opportunity presented itself. The key was finding the right partners. Working on Wall Street for 20 years, Steele was savvy enough to realize that he needed partners that had experience in running a restaurant and cooking. He found the rest of his trifecta in White, who handles operations, and McNaughton, the executive chef.

"My theory was, you put three people together from different perspectives to have a symbiotic partnership,” he explains. That formula worked; Steele says the restaurant has been profitable from Day 1.

Steele funded 50 percent of the $600,000 needed to start up, while nine other investors provided the rest. Last year, the restaurant earned $3.2 million in revenue and 7 percent profitability.

As local and organic is solidifying its place in the mainstream and is growing as a culinary movement, so is this business. The partners opened Central Kitchen—a full-service restaurant—on May 10, and they will open Salumeria (an Italian delicatessen) at the end of the month. Both are located in the same building, only one block away from flour + water. Central Kitchen seats 49 guests, has a rooftop garden, and also houses bees. Salumeria will sell a variety of homemade products, including pastas by the pound, olive oil, and pickles.

"The new restaurant, Central Kitchen, will not just be a continuation of our philosophy of the hyperlocal, sustainable, seasonal, and neighborhood ethos, but we’re actually going even further beyond that," Steele says.

Hot Industry: Full-Service Restaurants

Erin Kim — Fri, 25 May 2012 00:00:11 -0400

The restaurant industry will employ 12.9 million people this year, representing 10% of the total U.S. workforce, and making it one of the best industries for starting a business in this year.

Why it's hot:

Think about it: What's for dinner? Not takeout. Not fast food. And definitely not a homemade meal.

Instead, the subtle hand of the economic recovery is inspiring Americans to pull up a chair at a neighborhood sit-down restaurant. In 2009, revenue earned by full-service restaurants declined by 6.8%, reflective of consumers' having less disposable income (and therefore showing preference for fast-food restaurants or eating at home), says Nima Samadi, senior analyst at IBISWorld, a market research organization specializing in long-range forecasting of industries and business environments.

Restaurants in this segment of the industry "were the first to feel the pinch and the last to feel the recovery," Samadi says.

Barriers to entry:

Although the full-service restaurant industry is ripe for growth, Samadi notes a saturated market as a big barrier to entry.

Another barrier: the significant day-to-day costs associated with running the business. According to Sageworks, a financial information company that provides industry data, the cost of sales, including inventory, direct labor, material, and other costs directly associated with the generation of revenue, will eat up nearly 41% of sales revenue.

Samadi says success can also be contingent on familiarity with the day-to-day operations. "Especially with full-service (restaurants), the failure rates are pretty high for people that start a restaurant without any prior restaurant experience, or if they don't hire someone that has the prior experience," he says. "I think expertise plays a pretty large role, and it's a pretty good indicator of success."

Fastest growing segment:

Need ideas for what kind of restaurant to start? Healthy eating continues to be popular, as well as offering locally sourced and locally grown foods, according to the National Restaurant Association's "What's Hot in 2012" survey. Technomic, a food-service research and consulting firm, says the biggest trend for 2012 will be meals with a twist—whether comfort food with an ethnic spin or surprising tweaks to sandwiches. So go ahead, dig in.

Growth potential:

Industry sales-revenue has slowly recovered, growing 1.6% in 2010 and 2.8% in 2011, and it is projected to increase 4.5% this year and 5.5% in 2013. The National Restaurant Association expects the entire restaurant industry, not just full-service restaurants, in 2012 to book $632 billion in revenue and to employ 12.9 million. That would be a slight increase from 2011, and represent 10% of the U.S. work force. Plus, as the economy improves, Samadi says, restaurants should benefit from lower unemployment rates and higher levels of disposable income.

See more Business Opportunities by Industry in 2012.

Reputation Without Character Is Worthless

John Baldoni — Thu, 24 May 2012 16:02:05 -0400

The saga of Jamie Dimon at JP Morgan Chase raises questions about the value of a good reputation.

Reputation is something every leader possesses. What he does with it matters to the organization.

Case in point: Jamie Dimon, CEO of JP Morgan Chase. The reason he has so far survived the derivative trading episode that cost his company over $2.5 billion and may cost twice that, is his reputation. He is the last lion standing from the heady pre-2008 financial meltdown days. His reputation for integrity, until now, has been beyond reproach.

That reputation is taking a hit with new reporting by The Wall Street Journal that reveals that Dimon knew all about the derivative trading model but was negligent in supervising it. In fairness it was not his job to supervise the details, but the question arises: Should he have been more engaged? Hindsight is 20/20 and the answer would seem to be yes.

His reputation also is not enhanced by his sense of entitlement. Dimon stood down the shareholders and was allowed to keep his dual job as chairman and CEO. Worse, he was allowed to keep his $23 million bonus from last year. To me, that dings his reputation--but worse it affects our perception of his character.

"Character is like a tree and reputation like a shadow," wrote Abraham Lincoln. "The shadow is what we think of it; the tree is the real thing." Character is what a person is; reputation is how he seems. It is therefore perception that can be interpreted or manipulated in different ways.

That said, a leader needs to think about his reputation but it is ultimately his character that matters more. While we like to think of character as what is inside--the individual's moral compass--for a leader, character is the outward projection of those beliefs. In other words, it is one thing to stand on integrity; it is another to act upon it.

Leaders need to act on character. "The big lesson I learned: Don't get complacent despite a successful track record," Dimon told the Journal. "No one or no unit gets a free pass." One senior JP Morgan Chase executive has lost her job over the derivative trading blunder. Shareholders are suing JP Morgan and the FBI is investigating the company. But for now it looks like Dimon has escaped everything except bad press.

Escaping consequence is a failure of character. I view it as a sign of duplicity; it says the rules apply to everyone but me. One reason that employees fail to look up to those at the top is the double standard they perceive. They know that if they committed a big mistake it would cost them their careers. When the big boss stumbles not only does he keep his job, he also keeps his bonus.

Every mistake does not require retribution. Failures of judgment are human, must be treated as such, and weighed in the context of overall contribution to the welfare of the organization. But when the person at the top is not held accountable, questions arise.

"Men of integrity, by their very existence, rekindle the belief that as a people we can live above the level of moral squalor," wrote John W. Gardner, author, educator, and public servant. "We need that belief; a cynical community is a corrupt community."

So when integrity is trumped by circumstance people lose faith in their leaders.

Cynicism may prevail on Wall Street but it cannot be allowed to permeate Main Street nor any other street where men and women of character do their best to lead themselves and their organizations.

Squeeze 25 Hours Into a Day

Scott Gerber — Thu, 24 May 2012 15:05:32 -0400

Increase your productivity. Get yourself in the zone. Tips from Pamela Slim, author of Escape from Cubicle Nation, and Scott Gerber, founder of the Young Entrepreneur Council.

Becoming Obama's Go-To Lunch Spot

Bill Murphy, Jr. — Thu, 24 May 2012 14:34:59 -0400

Here's how a pair of Washington, D.C., restaurant entrepreneurs earned a visit from President Barack Obama during National Small Business Week.

The White House thinks this sandwich shop is the greatest thing since sliced bread.

Well, at least during National Small Business Week it appeared to. If you've ever wondered how to get the U.S. government to talk up your business, take a lesson from Taylor Gourmet.

When the SBA wanted to kick off National Small Business Week and highlight President Obama's small business legislative agenda, the first event was a presidential meeting with a handful of small business owners at Taylor Gourmet, a Washington, D.C., sandwich shop about two miles from the White House.

My office is just a couple of blocks from the local chain's original location, and I've eaten more than a few hoagies there over the years. So, when I heard SBA Administrator Karen Mills talking about the president's visit and how an SBA official had convinced its owners to apply for an SBA loan to finance an expansion, I have to admit I smiled.

The guys behind Taylor Gourmet are Casey Patten, 32, and David Mazzen, 35, friends from Philadelphia who bought an old row house in a dicey Washington, D.C., neighborhood in 2006. The area of town, H Street NE, had been devastated by riots in 1968, and was only just starting to see signs of revitalization. The house itself had apparently been used as a crack den at one point.

"When we pulled up the carpets there was blood on the floor," Patten told me. "When the shades were drawn that's when they were packaging crack. When they rolled up people came to buy it."

But now, that neighborhood, not far from the U.S. Capitol, is turning around, and Taylor Gourmet, which Patten told me launched in their row house only after their first-floor tenant refused to renew a lease, is now a great success.

Obama dropped by Patten and Mazzen's third location, which was financed with an SBA-backed loan. The president bought a 12-inch Spruce Street hoagie--roast turkey, prosciutto, roasted red peppers and sharp provolone--and also picked up "an assortment of sandwiches" for a lunch with congressional leaders, a White House official later said. (Part of the store's schtick is its Philly theme; the bread is trucked in from Philadelphia every morning, and all of the sandwiches are named after its streets.)

Patten said the visit came about as a result of his ongoing relationship with the head of the Washington, D.C., local SBA office, who had originally walked in off the street while touring the area in 2008. It was in that first meeting that they talked about the idea of applying for the SBA loan.

Since then, Patten and Mazzen have opened two more shops. They're currently working on opening a sixth store—and employs 110 people.

Grooveshark's Near-Death Experience

Chris BeierDaniel Wolfman and — Thu, 24 May 2012 12:55:55 -0400

Grooveshark founder Sam Tarantino wanted to reinvent the music business. But in the wake of the 2008 financial crisis, funding was quickly drying up, and he had to tell his employees.

Balancing the Work-Life Equation

Shazi Visram — Thu, 24 May 2012 12:15:50 -0400

These three tips will help you manage the time you spend doing work and living life.

I am a nerd. A cool nerd mind you, but a nerd. I always have been. I care about what I do. I love brainstorming, creating, and coming up with new ideas. But these ideas don't automatically convert themselves into tangibles. That takes work. So, when I came up with the idea for Happy Family, I worked. All of the time (and I still do).

In fact, I'm pretty sure that the only reason my husband, Joe, and I made it through the first years of Happy Family is because he essentially worked with me...for free. Date night was often spent in my kitchen--equipped with a blender--pureeing odd mixes like spinach, pears, and mangoes...which would eventually become one of Happy Baby's top sellers, Grrreat Greeens. And this was okay with Joe! I mean, the guy's good-looking, enthusiastic, unpaid labor, and testing out baby food recipes--what's better? I could have my cake and eat it, too. Work was my life. The rest was just details. And I was happy with that.

When you start a business, you immediately give up that precious little thing called time. At first, it doesn't matter to you. You're passionate about your idea, and making that idea a reality is your number one priority. Because I'm a nerd, I like to think of it as a simple, well-calculated mathematical equation:

Time (t) = Work (w) + Life (L)

L = 0

∴ t = w

But give it a few years and some key life changes (getting married and having a baby, for example), and BAM! All of a sudden, the equation changes:

Time (t) = Work (w) + Life (L)

and

L = Marriage (m) + Baby (b)

∴ t = w + m + b

Even if the changes were well-planned, everyone has a moment where the reality of this change blindsides them. And unlike theoretical algebra, you can't just subtract (m) and (b) and have everything be A-OK. Instead, you have to work with the fact that you now have more than one priority but the same amount of time, and you are craving that thing you've always heard about but never believed in: balancing the work/life equation.

I've got to be honest with you: I'm a nerd, but I'm not a Mathlete. As simple as it seems, I haven't yet figured out the solution. I'm still a walking imbalanced equation, but here are the top three things I've been doing to help balance it out when the nanny calls in sick, Joe has the stomach flu, Zane, my son, has decided that sleep is not something he will sample tonight, and I have to get out the board agenda, an investor update, and edits to a new set of package design iterations. This scenario was very real two weeks ago. So, what do you do? Take a deep breath. Then:

1. I ask for help.

Whether it's personal help with the baby (call Joe, my mother-in-law, or a friend), or it's professional help (learning how to delegate responsibility to employees--really, you can't do it all), learning how to ask for help when you're overwhelmed is hugely important in re-creating a sense of balance. Besides, in my experience, I've found that people really do love to help--all you have to do is ask.

2. I schedule one hour a week for myself.

I actually put this in a physical calendar. It is a block of "Shazi Time," and I treat this appointment with myself as if it is just as important as a meeting with a big investor or potential customer. This "me" time keeps me grounded, and feeling grounded makes me a better mother and a more effective CEO; and it allows me to pause and see the bigger picture.

3. Speaking of the bigger picture, when work and life are in conflict, I take a step back and prioritize the two issues at hand.

What is more important for me, my company, and my family in the long run? Sometimes the answer is work, and sometimes the answer is life, but by forcing myself to take a step back and think about the potential outcomes of my decision to do (a) instead of (b), I am able to reclaim some of that balance that is so often lost in the whirlwind of decisions I'm faced with on a daily basis.

How to Lead Your Company Through Change

Geil Browning — Thu, 24 May 2012 11:40:22 -0400

Your employees will react differently to change. However they feel about a new situation, you can help all of them adjust.

Charles Darwin said: "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."

The business world is just like the natural world. In 30 years of leadership training, I have seen giant companies that were considered invulnerable turn into dead dinosaurs. I've seen small start-ups with bright ideas fail to navigate sharp turns ahead. And I've seen companies survive, even when confronted with problems beyond their control, because leaders adapted and stayed one step ahead.

Things never stay the same, so the ability to lead in times of change is vital. We often resist change because it takes us out of our comfort zone, but change can be exciting, healthy, and profitable.

There is no bigger change for an entrepreneur than being bought out. You, like the founders of Ben & Jerry's Homemade, may someday be faced with the biggest question of all: stay independent, or sell?

In 1978, Ben Cohen and Jerry Greenfield opened for business in a renovated old gas station. With no business plan, they learned banks were reluctant to lend hippies money, and bootstrapped it, sleeping on top of the freezers and eating leftover sundaes for dinner. "When you're the boss, you have no one to blame but yourself," said Ben Cohen recalled in The Guru Guide to Entrepreneurship.

Sales took off, but in the winter, business plummeted. Ben and Jerry innovated by continuing to make ice cream, packing it into pints, and selling it to local restaurants and grocers. They vowed if they were still in business, they would give everyone a free cone on their one-year anniversary. As it turned out, they were still in business, they gave out those free cones–and Ben & Jerry's still does.

It's a miracle that two men with so little conventional business knowledge could build an ice cream empire. They opened the first of many franchise companies in Vermont, the first of many Ben & Jerry's stores out-of-state, the first of many out of the country. They developed the first of a long and ever-changing list of quirky flavors.

They eventually realized they were no longer "ice cream guys" but "business guys." They decided to create a company they could be proud of. "We decided to redefine the bottom line," Ben said, in the Guru Guide. "We measured our success not just by how much money we made, but by how much we contributed to the community."

For the next 20 years, Ben & Jerry's kept innovating. They also kept that culture, ensured employees were happy and continually produced unmistakable marketing. But by 1997, Ben had innovated himself out of a job. He stepped down as CEO so someone with more business experience could take over. But both Ben and Jerry remained active with the company and, with another partner, held majority ownership.

By 2000, they had two major buyout offers–from Unilever and Dreyer's–on the table, and a decision: stay or sell. Change was unavoidable. No one was happy. Employees were fearful. Franchise owners were appalled. Fans of Ben & Jerry's ice cream held demonstrations and rallies.

As they navigate change is the crucial time when I typically notice people's natural "tendencies" rise. How they respond to change depends on their unique behavioral attributes. Of course they react according to personal levels of expressiveness or assertiveness, but flexibility is the characteristic that matters most. Among the population as a whole, my research shows, 33% will be open-minded, 33% can go either way, and 33% will prefer to keep things the same.

A good leader will:

Mobilize the 33% who naturally welcome change to keep them excited and positive, and enlist them as change allies.
Persuade the 33% who are on the fence about the brilliant solution that will benefit everyone.
Prove to the 33% who resist change that the situation is not as terrible as they fear by showing the many ways in which change is necessary and beneficial.

Eventually, Ben and Jerry agreed to sell the company. The press release noted: "Ben & Jerry's Homemade, Inc., and Unilever have agreed to a unique and ground-breaking combination in which [the companies] will join forces to create an even more dynamic, socially positive ice cream business with global reach."

As people navigate a big change, any flexible behavior (or lack of it) works in conjunction with thinking styles.

Analytical brains will want to know if the best financial decision is being made. In this case, Ben & Jerry's was acquired by Unilever for $326 million, and the buyout assured that key initiatives would be financed and shareholders rewarded.

People with a structural preference think: "If it ain't broke, don't fix it." They need reassurance that the new company will not ruin good products. As it happened, under the terms of the buyout, Unilever agreed not to alter the way the ice cream was made.

Social thinkers worry about their fellow employees as well as corporate social responsibility. They were relieved when Unilever promised to protect Ben & Jerry's employees.

Conceptual staffers want to know that coming change will not dampen innovation. Fortunately for those impacted by the Ben & Jerry's sale, "the deal seems to pave the way for Ben & Jerry's to continue its maverick ways," noted The New York Times.

Help for U.S. Entrepreneurs in Japan

Laura Smoliar — Thu, 24 May 2012 10:40:26 -0400

A new business incubator in Tokyo caters not only to Japanese start-ups but to foreigners looking to do business in Japan.

Few things are less certain than bringing your start-up overseas. I managed to do it thanks to a very special network of friends and business associates in Japan, but not everyone has that network on tap.

A new incubator called Venture Generation is an attempt to make the transition a bit easier for companies that are looking to do business in Japan. Venture Generation nurtures domestic Japanese companies as well as overseas companies looking to get a foothold.

“Venture Generation is not your typical incubator, in the style seen in the U.S.,” says founder and Chief Mentor Jeff Char. No equity stakes are taken in the companies, and companies don’t enter and exit with a class. This means you don’t get booted before you are ready, but rather are self-paced.

Venture Generation is not typical of Japanese incubators, either, which usually focus on simply providing physical space. Going beyond space, and focusing on building an ecosystem, is the critical dimension that sets Venture Generation apart, according to Professor Richard Dasher, Director of Stanford’s US-Asia Technology Management Center.

Venture Generation now boasts 80 advisors, including investors and veteran entrepreneurs, who are tied into its ecosystem and show up regularly at the incubator. It also has founder Jeff Char, a successful serial entrepreneur and attorney from Silicon Valley, who is now working in Japan. While most of Venture Generation’s companies are tech and software-focused, the incubator also hosts GleicoDonut, which delivers donuts to offices much the way medicine used to be delivered in Japan.

Venture Generation provides lots of services to entrepreneurs, but as someone who’s been a foreigner entering the Japanese market, these are the ones I see as the most crucial:

Introductions. In Japan, as in most places, introductions are everything. This is especially true if you’re an unknown foreigner. I was hitting a wall before Jeff Char made a key introduction to someone who understood the value of my company’s technology. Japan is highly networked, especially in the technology field, and I quickly learned that an introduction to one person often cascaded into many others that were extremely helpful.

Cultural understanding. You’ve got to learn the basics of introductions and meeting etiquette, as well as how to get through a meal without totally embarrassing yourself. There are books and seminars, which are great if you have time, or you can get a short tutorial from someone who knows the common gaffes foreigners often make. There is nothing worse than watching someone on your team do something terribly insulting to the person you are trying to build bridges with, like dog-earing their business card (ouch!) or even writing on it.

Advice on local business practices. Beyond the basic cultural differences, there are differences in business practices. You may find them completely baffling without a good local mentor. Your prospective customers may find you equally baffling. I learned this when trying to explain a standard Silicon Valley term sheet for equity investment to Japanese investors. Guess what? It wasn’t standard in Japan! Be prepared to explain things and to work through creative solutions if you expect to get a deal done.

Venture Generation goes well beyond these three services, by providing a landing pad and the company of fellow entrepreneurs. For foreigners coming into Japan to set up shop, this is a wonderful opportunity to participate in an entrepreneurial ecosystem. I hope the model will be replicated elsewhere around the globe.

Would You Let Your Employees Job Hunt?

Jessica Stillman — Thu, 24 May 2012 10:31:18 -0400

Employers should relax their grip on their talent every three years, giving employees a significant break to reset expectations, argues one human relations expert.

Your employees are your greatest asset. Plus, hiring is an expensive hassle, so of course you do everything in your power to make sure your team sticks around for as long as possible. That makes perfect sense on the surface, but one HR pro suggests your tight embrace of your employees may actually not be in your best interest, at least not if you keep it up indefinitely.

Better to give your team a little periodic breathing room, Andy Porter, VP of HR at Merrimack Pharmaceuticals, recently opined on recruiting blog Fistful of Talent. What does that mean in practice? Giving your employees a "free agency period" every three years in which you allow or even encourage them to get out there and see what's available in the wider job market.

Are you insane, you might reply to Porter. But he's ready to reply to the skepticism of bosses. "Right about now some of you probably think this is a stupid idea--why in the world would a company want to encourage an employee to look elsewhere?" writes Porter. "Well, first off, I have a news flash for you--your employees are already looking for new jobs from time to time, just under the radar and with none of the potential benefits of an 'open' process," he answers.

It's not just simply that your employees will look anyway that motivates Porter's suggestion though. He also feels that having a thorough knowledge of what else is out there (or the relative lack thereof) makes for better employees. He offers three reasons, all from the perspective of the employee but which clearly show why business owners might want to get on board with the idea as well:

Your Current Job May Begin to Look Much Better. All of us have complained about our current jobs at different times--too much of this, not enough of that, or I'm ready for something more. But the funny thing is once you go out and interview with another company you’ll often view you current job in a whole new (often positive light). Turns out the grass isn’t always greener.
Your Skills Have Changed. Three years is enough time for an employee to have learned and mastered a new set of skills. In fact, depending on your industry, three years of experience can have a significant positive impact on your compensation. Marketable skills = more $. On the other hand, if an employee’s skills have declined or haven’t kept pace with new advances in the marketplace, a company should have the right to adjust compensation accordingly.
Motivation. If an employee knows that every three years they’ll have an opportunity to test the market value of their skills there’s a higher likelihood they’ll make the investment to learn something new. This goes both ways--if a company knows that it runs the risk of losing top talent every three years I’d be willing to bet they would make a greater investment in professional development.

The idea of a free agency period every three years might sound strange to the cool, controlled logic of business, but people aren't simply logical creatures. We're often ruled by our emotions, and given this reality, Porter's proposal makes some sense. We have a tendency to romanticize what we see from a distance. We get in ruts. We fail to see the value of those around us. Over time, we take situations and people for granted and our level of effort slips (just ask marriage counselors). By regularly injecting uncertainty in the relationship between employer and employee, aren't we more likely to weigh the advantages and disadvantages of the connection with fresh eyes and try harder to maintain it?

Do you think Porter's proposal has merit?

How to Find Your Most Valuable Customer

Ron Burley — Thu, 24 May 2012 10:20:24 -0400

You know that shopper who just loves your products? Bad news: She can't help you improve your business.

Your most valuable customer isn't the guy who pats you on the back. Your most valuable customer is that disenchanted and disheartened soul that chose your product and then concluded that even your support center couldn't solve his problem.

He can tell you, as no one else can, where you are utterly failing. Unfortunately, you might never hear from him unless you seek him out–and are then willing to hear what he has to say.

Smart entrepreneurs realize the importance of customer feedback when building a new business. User surveys can provide valuable insights, but they often don't reach those customers you need to hear from the most--the least satisfied and most disappointed. Those folks aren't going to take the time to fill out a form or stand still for a survey to help you fix your business. They've moved on.

In order to find out where they've moved on to, and why, you'll likely have to gather some data on your own. Start with these steps.

Identify

Luckily, locating your most disenchanted customers usually isn't that difficult; just ask your support team. They'll know who they are, and might even describe them (off the record) as "pains" or "wackos." Get their numbers. Find a quiet place. Get ready to hear some criticism. Be prepared to learn some important information that may do wonders for your bottom line as you get a chance to repair problems you didn't even know you had.

Engage

Disenchanted customers really don't want to hear from customer service. However, they will likely take a call from the chief executive of the company.

And once you have them on the phone, you'll need to remember that those angry customers didn't start out that way. At some time in the past, each of them made an affirmative decision to purchase your product or service–they believed in your company and your offering. Only later did they discover a problem.

Your goal is to find out what happened, and why, so that you can fix it. As you call them, keep that in mind. They were in love with you--or at least liked you enough to give you their money. Now, they're like jilted exes--wondering what they ever saw in you and not really wanting to give you the time of day.

Act

Failing the customer almost always falls into one of three categories: The product was truly faulty, the documentation was incorrect, or customer expectations weren't properly managed. Most customer service departments really only know how to deal with the first two.

Unfortunately, the customer who falls through the cracks is most likely to be in the third category. Managing expectations is something that needed to be done by the sales or marketing team, and is very difficult to repair in hindsight.

On the other hand, if you can identify where your marketing or sales presentation failed the customer, it can be among the easiest problems to fix–and will help you prevent any number of similar situations in the future.

And you get all that for the price of a phone call–and a few minutes of your time.

Out of 6 TechCrunch Finalists, the Winner Is...

Eric Markowitz — Thu, 24 May 2012 10:05:00 -0400

Hundreds have been eliminated from the competition. Of the six start-ups that remain at TechCrunch Disrupt--social search, a digital guitar, and more--who takes the prize money?

The TechCrunch Disrupt final event culmintates in what's known as "The Battlefield," a series of company pitches that vie for top honors at the annual TechCrunch conference. At stake is $50,000 and the coveted "Disrupt Cup." But more importantly, a win at Disrupt earns a company instant credibility among the upper echelon of tech investors, entrepreneurs, and start-up influencers. Last year, GetAround took home the Disrupt Cup, the cash, and has since raised more than $5 million.

Hundreds of start-ups applied, but only six made it to the final cut on Wednesday evening. The compition was stiff, but the judges were stiffer. The six companies presented their pitches and answered questions to a panel of household names (well, in the tech world, at least). The judges included Michael Arrington (TechCrunch), Roelof Botha (Sequoia Capital), Chi-hua Chien (Kleiner Perkins), Chris Dixon (Hunch), Marissa Mayer (Google), Fred Wilson (Union Square Ventures), and Eric Eldon, editor of TechCrunch. As the judges took the stage, Ned Desmond, COO of TechCrunch, announced the competitors.

"It's the moment of truth," he said.

Here's a look at the six companies that competed for the Disrupt Cup. Scroll to the bottom for the winner.

Babelverse

As its name suggests, Babelverse deals in languages. The app is a real-time voice translation service, powered by a "global community of human interpreters." By crowdsourcing both professional and amateur interpreters for a per minute fee (that ranges between $0.20 to $1.00), users can log on, find a translator immediately, and begin a conversation with someone who speaks another language. Right now, the network includes about 3,000 translators, but its founder, Josef Dunne, believes it has the potential to scale. "This can be a revolution in personal communication," he said.

Ark

Thirty percent of search is people-related, which got the founders of Ark thinking: What if there was a social network that allowed users to search for people across all social networks. Essentially, Ark aggregates and scrapes user data from LinkedIn and Facebook and allows for more specific search queries, such as one for finding all your Facebook friends who work at Google in New York who have birthdays in June. The site already has 15,000 private beta users, and $4.5 million in funding.

gTar

Like so many great hardware start-ups before them, gTar was born out of a garage. Founder Idan Beck wanted to create an instrument that would make learning music easy and fun. He developed the gTar, a digital guitar that integrates with an iPhone. It instructs its players with LCD lights, which illuminate the correct strings to play. The company posted the product on Kickstar, retaling at $450, has already raised $190,000 in two days.

Sunglass.io

Design software is convoluted, expensive, and difficult to use. Born out of an MIT graduate dorm room, Sunglass is "design without boundaries," one of the first services that allows for real-time collaborative designing. The company has raised $1.7 million in funding and hopes to disrupt how industrial designers assemble and collaborate on projects.

Open Garden

Say you're in an airport with your family. You've just purchased Internet access at a steep price, and now your wife and two kids want to get online on their devices as well. With Open Garden, whose motto is "Internet Everywhere," your family members can download the company's app and essentially hi-jack your computer's internet for free. The app already has more than 1,000,000 installs with virtually no marketing effort. Open Garden runs on your computer's background, and finds the best connection automatically with little or no setup.

And the winner is...

UberConference

Typical conference calls are, well, pretty annoying. You don't know who is talking, you can't mute loud participants, and you can't directly record the call. UberConference solves these problems. Led by Google Venture's entrepreneur-in-residence Craig Walker, UberConference has a host of features that makes conference calling not just easy, but fun. There's even an "ear muff" feature to mute certain people's phones when secrets are being told.

Be Rich or Be Happy: Which Would You Choose?

Jeff Haden — Thu, 24 May 2012 09:45:00 -0400

Sorry, entrepreneurs: You're not likely to achieve both. Here's why.

The stereotype of an entrepreneur is a person who starts a business—any business—in order to get rich. In reality that is seldom the case: Most entrepreneurs start their small business to follow a passion, do what they love, and live a dream.

But what if you want to do what you love and get rich? Without the right approach, it's often impossible to accomplish both goals.

The problem lies in scale.

Say you've always dreamed of being a chef, so you open a 25-table restaurant. You get to do what you love, but in simple terms the prices you can charge and the number of meals you can serve naturally caps the financial returns possible.

You can be successful—but only to a point.

And you might be perfectly fine with that, as long as you view success as getting paid to do what you love. (Which is, of course, an awesome definition of success.)

The same is true if you're a service provider and especially if you're a one-person shop. Revenues are limited by time and rate: The number of clients you can serve and the level of fees you can charge. In simple terms, capacity and price limits your earnings. Once you hit those inherent caps, the only way to generate more income is to expand: Add more locations, add employees, add to your investment... add more of everything.

And then you get to do less of what you love. More of your time will be spent working on your business, not working in it. I know: Every business expert says to be successful you must work on your business, not in it—but unless what you love is running a business, you won't be as happy.

Say you're a contractor and cabinetmaker, like my grandfather was: He loved working with wood, so generating more revenue meant spending a lot less time in the shop and a lot more time with his employees and customers. (To get his woodworking "fix" he resorted to spending Sundays in his shop, which, as you can guess, went over really well at home.)

Say you love landscaping, you dream of starting a landscaping business, and want to make $300,000 a year. According to salary survey sites the average owner/operator of a landscaping business earns somewhere between $30,000 and $85,000 a year.

Of course that's just an estimate. Certainly some owners make less, and some make a lot more, but absent a unique approach your income will probably fall somewhere within that range. (Achieving out-of-norm results in any field requires taking out-of-norm actions.)

Say you hit the top end of that estimate. $85,000 is a great income, but it's also well short of your $300,000 target. Unless you're in a densely populated area and also land a number of commercial accounts, to reach your income goal you'll need to establish multiple locations in multiple markets.

Either way, you'll get to do a lot less landscape design and implementation than you originally hoped since your primary focus will need to be on growing and running the business—not on designing, installing, and maintaining amazing landscapes.

That leaves you with a choice: Do more of what you love and earn less than you hoped... or scale up and do less of what you love in order to make more money.

Only in rare cases do entrepreneurs get to have it both ways.

So take a step back and think about your goals.

If you will enjoy the satisfaction of doing what you love and will be satisfied with the income you can realistically expect to earn, then scale doesn't matter. Live your dream and work in your business.

But if the income potential of doing what you love won't be sufficient, create a plan that allows you to scale your business. Set your financial target and work on your business to build a company of sufficient scale to achieve that target.

Either choice is great—as long as it's the choice that works best for you.

Ad Smackdown: Facebook vs. Google

Erik Sherman — Thu, 24 May 2012 09:25:00 -0400

If you're still betting on display ads, here's where to go for more bang for your buck.

Trying to decide between Facebook and Google display advertising campaigns? Some information compiled by WordStream from a variety of sources suggests that if you're looking for cost effectiveness, Google offers more bang for your buck—for now.

Some of the differences in reported performance are enormous. A caveat: WordStream has an interest in the outcome, as it sells services and tools specifically for use with Google AdWords. Another caveat is that some of the data is old. That said, let's look at some of the numbers.

Click-through rate

This number comes from a study by social marketing tool vendor Webtrends and is based on data from more than 11,000 ads that ran in 2009 and 2010. The click-through rate, a critical number for display advertisers, dropped from 0.063% in 2009 to 0.051% in 2010.

According to WordStream, that compares with an average banner ad click-through rate of 0.1% in the U.S. and a 0.4% rate for Google's display ad network between the end of 2010 and first half of 2011, according to pay-per-click marketing consultancy Periscopix. Google rates are almost eight times higher than Facebook's.

Of course, Google's rates may have dropped and Facebook's might have climbed. But that is one hefty difference to overcome.

Prices

TBG Technology, which offers Facebook ad campaign management, noted in April that Facebook click-through rates dropped in the U.S. (and more than half of Facebook's revenue comes from North America) even as the cost per thousand impressions rates jumped sharply to 23%.

Combined with the click-through rates, Facebook's ads get more costly while becoming less effective in key markets.

Reach

According to comScore numbers from October 2011 that WordStream quotes, Facebook reaches an estimated 51% of all Internet users. Google reaches 90%.

That said, although Google seems a better bet at the moment, there's a question of why that might be. Are Facebook users so turned off by marketing that they simply won't ever respond, or is it a matter of advertisers still needing to learn how to use the medium? Perhaps Facebook needs to investigate new ad formats, or maybe marketers have to learn how to entice a social audience rather than simply trying to sell it.

If you shift toward Google, it still makes sense to experiment and find ways to use this new type of medium. Even if it doesn't offer a practical increase in business today, eventually you will have to make peace with the concept.

Give a Great Product Demo: 5 Rules

Geoffrey James — Thu, 24 May 2012 09:08:47 -0400

How to give a demonstration that helps convince a customer to actually buy the product.

There is almost nothing more powerful than a great product demonstration.

When done correctly, a demo allows the customer to see and feel how things will be better if they buy (and worse if they don't).

Use these rules to make certain your product demos move the sale forward.

1. Customize your demo.

Every customer is unique, so every demo should be uniquely matched to that customer. Before you demonstrate a product, do your research. Check the customer's SEC filings, press releases, conference proceedings, annual reports, published interviews, and so forth to understand the context of the demonstration.

Also gather some specific information about the people or group who'll be viewing the demo. Then change the data and the contents to match.

2. Tell the customer's story.

A product demonstration should never be a tour of a product's features and functions. Instead, it should tell the customer's story, with the product playing a key role. For example, suppose you're demonstrating a software product that helps companies better control their inventory of parts.

Here are two typical approaches:

Ineffective: "On our top menu, we can open inventory files, save inventory files, set inventory preferences, and convert inventory files from the manufacturing database. Next is the edit menu, where we can copy, cut, paste, and insert records into the inventory files, which works with any inventory record in any standard format. On the next menu ..."
Effective: "Imagine that a call comes in from the factory floor. They've almost run out of parts and will shut down if they don't get more soon. You query the system (like so ...), which locates any excess inventory at other plants and key suppliers. You select a new source with a point and click (like so ...), and the system sends shipping orders so that the parts arrive tomorrow."

3. Rehearse, rehearse, rehearse.

Demos are much more difficult than presentations–because in a demo, you must simultaneously focus on the customer, the effect the demonstration is having on the customer, and the mechanics of the demonstration. So it's utter madness to try to give a demonstration without rehearsing it at least three times.

You'd be amazed how many sales reps think they can wing it when it comes to demonstrations. The result is always a disaster.

4. Test everything beforehand.

A bungled demo tells the customer, at a visceral level, that either:

You didn't adequately prepare, in which case buying from you is probably a mistake;
The product is a piece of crap that fails even under the most forgiving of circumstances;
Both of the above.

Never give a demonstration without a dry run, preferably at the very location where you'll be giving the demonstration. Never assume that the equipment available at a customer site or conference facility will work.

And always have a backup plan, with some other sales-oriented activity that can fill the gap if something goes wrong.

5. After the demo, close the deal.

Because "seeing is believing," there is no better time than after a successful demo to close a sale or ask for the next step, such as a meeting with a decision-maker. So when you demo, you must ask something that will move the sale forward.

If you don't do this, it implies that either the demo was a dud or product isn't worth buying in the first place.

The above is adapted from my recently published book, Business to Business Selling.

Do Typos Matter?

Rene Shimada Siegel — Thu, 24 May 2012 08:46:21 -0400

In an age of tiny keyboards and emoticons, you may think typos don't matter. Not so, according to someone who's been addressed as Mr. Renay Seagull.

In the era of tiny keyboards and social media, flying thumbs and emoticons, English majors everywhere are having conniption fits. Typos are inevitable, but do they really matter? For business leaders and entrepreneurs, the answer is Yes. Hell yes.

Bad grammar and typos might be amusing on signs and restaurant menus, but they’re an entirely different matter coming from a business professional like you. Leaders need to communicate with clarity and authority, regardless of industry or keyboard size. Sloppy typing skills dilute your message, and, at worst, seriously diminish your credibility.

Any personal communication such as mass e-mail, letters, slide presentations, articles or other marketing materials must always be reviewed for grammar and typos. There’s nothing like slogging through hundreds of e-mails and coming upon a subject line that says, “Coonecting through George.” Without opening the message, I’ve already formed an opinion about the sender -- and it isn’t good. In this case, the sender was applying for an open position on my team. You can guess how that turned out.

Want to get a customer or prospect’s attention? Spell their name incorrectly. Nothing says, “We don’t care about you,” like a misspelled company or recipient name. From someone who has seen every possible spelling of Rene Siegel, including Mr. Renay Seagull, let me tell you, Hell yes, it matters. That’s not a typo. That’s just wrong.

Are there exceptions? You bet. Texting, Skyping, instant messages and Facebook comments are rife with hastily written typos -- and that’s ok. But you can still try to keep messages succinct and spelled correctly. Auto-correct and screen glare work at odds with deadlines to derail a well-intended response. Typing full-length emails on a tiny smartphone is never easy, so if the message is important, you might want to wait and use a full-sized keyboard.

What can you do to minimize typos in your personal communication?

Read it out loud. When my fingers are flying and I’m cranking out e-mail, there are times when my fingers don’t catch up to my brain. Words like “from” turn into “form” and won’t be caught by spell-checkers. They leave a sloppy impression with the reader. Take a minute to read your draft out loud, which will help catch any words that shouldn’t be there or any that should.

Borrow another pair of eyes. If it’s important, if you’re tired or in a rush--especially if you’re in a rush-- ask someone else to read what you wrote. If I’m sending a critical e-mail, creating something that will been seen by many, or if I’m dealing with a prickly situation, I want to make sure I’m typo-free so that my authentic message comes through.

Separate social media from the rest of your writing. Remember there’s a time and place for TTYL, :-) and cr8tv wrtg. Birthday wishes and comments about weekend adventures don’t fall into the same category as business communications.

You can set the standard for your company by writing in a way that shows you care about quality, professionalism and clear communication. How you communicate speaks just as loudly as the actual content of your message. Regardless of technology trends and busy schedules, a few extra seconds can reinforce a great personal brand.

How to Score a Job at a Tech Start-up

Jon Gelberg — Thu, 24 May 2012 08:44:00 -0400

Can you handle long hours, low pay, and impossibly high expectations? The start-up life might be for you. Here's how to break in.

Dear college graduates,

Looking for work at large, established companies? Going that route means you'll start your career as a cog in a well-oiled machine. You will go through formal training, have relatively few real responsibilities at the outset, and, if you're lucky, maybe progress ever-so-slowly up the corporate ladder.

For most people, this is a safe and comfortable way to start their work lives.

On the other hand, if you have the stomach to work in an entrepreneurial environment—which may mean below-market wages, impossibly high expectations, and more than a few sleepless nights—you open the door to an exciting and wild ride, not to mention invaluable work experience. Most start-ups fail, but the ones that succeed can take off quickly and profoundly.

I've seen both sides of this equation. Three of the companies I worked for opened their doors in the 1800s and will probably be around another hundred years or more. I have worked at three start-ups, too, and know just how insane and fun that ride can be. If the latter sounds more like your kind of challenge, read on for tips on how to get a job at a start-up.

Only Work for a Start-up You Love

Working at a start-up will eat up virtually all of your waking hours (and reduce your sleeping hours). If you are going to be at a job like that, the only way to thrive is if you love what the company does and where it is going, and the company culture suits you. So do the research.

There are dozens of resources to find start-ups. Some of my favorites include Crunchbase, Mashable, and LinkedIn. Another great place to look: the job boards on venture capitalists' websites, like this one at Sequoia Capital. That way you know the start-up has received a VC's seal of approval as well as at least one round of funding.

Web-stalk the Start-up

Learn everything you can about the company. A company search on LinkedIn, for example, will show you who is working at the company and if they're hiring.

By googling the company (including "news" and "blog" searches), you can get an idea for what impact the company has made and where there are issues. See what is working. Figure out where the company needs help and what you have to offer.

Arm Yourself With Marketable Skills

Once you start applying for jobs, companies are going to Web-stalk you—so make sure they find something worthwhile.

If you are not blogging already, blog. If you are not actively participating in groups relating to the industry you wish to work in, then dive in.
If you are not up to speed in the industry, then read every blog and every publication you can find serving that industry.
If you are not active on LinkedIn, Facebook, Twitter, Pinterest, Google+, then get moving!
Add a skill: Every start-up needs people who understand analytics, email marketing, search engine optimization, social media marketing, and coding.

Get the Interview

It should come as no surprise that for every great job at a start-up, there are hundreds of applications. To stand out from the crowd, you first need to be the right person for the job (education, experience, skills, etc.) and then you need to find a way to get the attention of the people who will make the hiring decisions.

This can take creativity, research, and a great deal of work. Some successful tactics I've seen have included slideshow/PowerPoint presentations, and attendance at seminars and classes with the people who are hiring. One of my personal favorites is a tactic Alec Brownstein tried: He invested a handful of dollars in Google advertising and targeted CEOs who google their own names. At a cost of $6, he advertised on the names of five CEOs, got four job interviews, and two job offers.

Of course, there's no substitute for offline networking. Look for start-up events on Eventbrite. Go to meet-ups such as Graham Lawlor's Ultra Light Startups in New York City, which attract entrepreneurs, investors, and wannabe start-up employees.

Nail the Interview

When you get that call or email telling you that you've got the interview, then go back to my advice on doing your research and do it again... on steroids. Learn everything you can about the company's people, culture, customers, and competitors.

Most importantly, be yourself. Don't be afraid to challenge your interviewer or point out things you'd do differently. When you work at a start-up, the people you work with are the people you'll be dealing with for most of your waking hours. You want to honestly assess whether or not you want to work with these people. Conversely, they need to see if you are the person they want to mentor, train, and oversee. Neither can happen unless you present yourself as the person your truly are.

Land a start-up job? Drop me a note in the comments and tell me what worked.

Selling Your Business? Protect Your Confidentiality

Mike Handelsman — Wed, 23 May 2012 20:41:13 -0400

Balancing buyer questions and retaining your business' confidentiality can be tricky. Laying out a plan can help set what information you can release and when.

Once you start marketing your business, your business sale will be about all you can think about. Here's some important advice: As much as possible, keep your thoughts to yourself.

Confidentiality is absolutely essential in successful small business sales.

It's important for reaching your own exit goals. And it's important for the success of your business post-sale, especially if you provide seller financing and agree to receive some of the purchase price in the form of future payments from the buyer.

Letting the word leak out prematurely is harmful in a number of ways:

Customers, competitors, creditors and employees become hesitant when a business is for sale, often triggering reactions that can weaken your business momentum and therefore its value.
Prospective buyers become hesitant about purchasing a business if they feel sensitive information has been divulged to others.
Telling even close confidants can launch an unintentional gossip chain. If each person tells only one other trusted friend or relative, news of your sale intentions can spread far and quickly, especially if word gets out among competitors, employees, or others in your industry.

To protect your business and your sale hopes, take the following actions.

Step 1. Advertise your business using blind ads and listings.

Don't share your personal or business name until you've qualified prospective buyers and obtained their confidentiality commitments. And certainly don't announce your name in for-sale ads.
Advertise the nature and strength of your business instead of its name. For example: PROFITABLE PALM SPRINGS FLORIST WITH LONG-TERM ESTABLISHED CUSTOMER BASE FOR SALE.
Direct responses to an address that doesn't reveal your personal or business identity. When placing ads in traditional media, use media-provided P.O. Box or e-mail options that allow you to maintain confidentiality and - a big time-saving bonus - to follow up only with prospects you decide are qualified to buy your business. When using online business-for-sale sites, use the sites' identity-protecting features.

Step 2. Pre-qualify buyers before sharing sensitive information.

If you feel awkward about asking a prospective buyer for financial and business background information before divulging your business name, you're not alone. But realize this:

Qualified buyers expect you to screen buyers before sharing sensitive information.
Qualified buyers care about the privacy of your business information because they want to know that the business they're buying has carefully protected its trade secrets and financial information.
Qualified buyers are serious shoppers and they're ready with the information necessary to take the next steps.

According to business brokers, nine out of ten respondents to business-for-sale ads aren't qualified to make the purchase. That's why pre-qualification is so important. The sooner you learn who can and can't buy your business, the better - both for you and for your ultimate buyer.

An effective way to pre-qualify prospects is to describe your business and response requirements in a way that helps unqualified buyers opt themselves out.

By describing the size of your business and your purchase price, and then by asking interested parties to respond by describing their purchase capabilities, you stand a good chance of hearing only from those who, in fact, are qualified to buy your business.

In every ad you place, in print or online, ask interested parties to respond with information that describes:

What they're seeking from a business purchase
Their purchase timeline
A description of their related business experience
Their interest in and ability to buy your business

You can cover this request in one sentence: Please respond describing your related business background, the type and size business you seek, your investment capability and your interest in this business.

Step 3. Create an inquiry response system that shares information confidentially and in phases.

You don't need to tell a buyer everything at once. In fact, revealing too much information in your ads can give away your identity even when you're careful not to share your business name.
The following chart provides an example of when and how to phase your information delivery.

Delivery Stage

Included Information

Confidentiality Request

Business-for-sale ads

Brief description of business type, strength, size and price.

Online listing can be set up to request confidentiality. Example: Before releasing further details, the party offering this business for sale requires a signed confidentiality agreement.

Brokers require interested parties to provide financial capability and non-disclosure agreements before receiving additional information.

Request for interested parties to respond by describing purchase intentions and qualifications.

Request for responses to a blind P.O. Box, email address, or media collection point that doesn't reveal your business or personal name.

Phone or email replies to qualified ad respondents

Personal introduction and additional information that doesn't reveal sensitive information or business name.

Share additional business information only in return for buyer information and only in general terms.

Probe/confirm interest, financial capability, purchase interests, timeline.

Offer to email or fax your brief selling memo summary but with any references to your business identity removed.

If interest and capability is high, request a personal meeting before sharing more information.

Initial personal meeting, held in person unless distance requires a phone meeting.

Reconfirm prospect interest and capability. After guaranteeing confidentiality, share your selling memo to be read during the meeting.

Meet off-site to protect identity of your business - likely in your broker's, accountant's or attorney's office. Reconfirm serious interest and request signatures on a mutual confidentiality agreement prepared or reviewed in advance by your attorney.

Delivery of selling memo

See “Preparing an effective selling memo” for a complete list of contents.

Share selling memo only after receiving a signed confidentiality agreement and only to be read during the meeting unless you're extremely confident about the buyer's interest/capability. Otherwise, release only the memo summary.

Due Diligence

Reveal financial records and business operations.

Release a copy of your selling memo, with each page numbered (#1, for example) so they can be traced to the buyer's copy should they later be copied or circulated.

Reveal only after receiving the buyer's formal letter of intent to purchase your business.

Step 4. Prepare for maintaining confidentiality.

To maintain privacy throughout the selling process, take these steps:

Have a confidentiality agreement ready for presentation to serious, qualified buyers. Use our sample provided below, a sample that your broker (if you use one) provides, purchase one from a form shop or site, or work with your attorney, who should review the form you plan to use even if he or she doesn't produce it for you. Be sure to include a clause that ensures mutual confidentiality and an expiration date that allows the confidentiality assurance to expire, usually after two years.
Establish a private email account for use exclusively with prospective buyers. Otherwise, you risk tipping off employees and causing concern within your business. Instead, invite buyers to send a confidential email to a non-business address, which you set up exclusively for the purpose of business sale communications. Don't use your personal name, as it's too easily traceable, but rather create an address that disguises who you are. For example, landscapingoffer@gmail.com or even a lineup of random letters and numbers.
Direct calls to a non-business phone number, and be sure to answer the phone or offer a voicemail message that conveys appropriate greetings to business buyers. Keep in mind that your home phone may not be appropriate here, as employees, vendors or competitors who know you personally might recognize your phone number or your identity on your answering machine.
Even with a signed confidentiality agreement, until you have a letter of intent or a buyer's offer in hand, don't share proprietary processes, trade secrets, client lists, or financial details about your business. Your sale offering likely listed annual revenues and owner's cash flow, along with asking price. Don't share further financial details until the prospective buyer has demonstrated clear ability to purchase and pledged to maintain confidentiality.
Be prepared for questions from employees and associates, who may suspect your sale intentions. You can be truthful without spilling the beans. You can say you're developing an exit plan to ensure future stability for your business; you can say you're talking to potential partners or successors without out-and-out announcing they'll be replacing you near-term. If people ask, "Are you thinking about selling," you can follow the suggestion of Appraiser Glen Cooper and answer, "Sure, I'll always talk to someone who wants to buy me out! Did you bring your checkbook?"

In next week’s installment of “Selling Your Small Business” we’ll go help you decide which marketing option is right for you.

Increase Your Retail Foot Traffic

Scott Gerber — Wed, 23 May 2012 16:10:48 -0400

Tips on how to generate customer interest from Cyriac Roeding, co-founder of Shopkick, and Scott Gerber, founder of the Young Entrepreneur Council.

You Can Compete with Free--and Win

Frank Addante — Wed, 23 May 2012 13:00:50 -0400

A good product is always more important than the free alternative, even when you sell yo-yo upgrades.

I recently visited a colleague at home, where I met his 10-year-old son. When prompted by his dad, the boy--Arian--told me about the yo-yo business he had founded with a classmate.

Arian and his partner offer services to repair and upgrade yo-yos for tricks with new parts like extra-long string and inner-gear modifications. With great pride, Arian boasted that he made $13 his very first day in business. Then he told me that business had gotten tougher. "Some kid is trying to screw us," he elaborated.

Arian's shop now has a new competitor that offers similar yo-yo services for free. The boy's father, my colleague, was quick to exclaim, "He was Googled!" The dad was, of course, alluding to Google's frequently-used strategy to make available free services in otherwise paid markets to rattle competition and gain market share for advertising-supported products.

Having built multiple businesses that compete with "free," I was absolutely fascinated by the conversation with the boy. I asked the young entrepreneur how he's managing to compete with this free alternative. Arian was quick to say that his competitor is "only offering this service to become popular" and that his competitor's sales pitch is that "his parents are rich so he could afford to do it for free."

So, to combat that position, Arian said he and his partner were highlighting that they offer higher-quality work and, aside from doing strong work for customers, don't have any ulterior, hidden motivations. Arian also told me that his competitor bought a $95 yo-yo and therefore, doesn't understand the needs of an average customer who buys a lower-priced yo-yo. While Arian had had to modify his offering and pitch, it seemed that business was doing just fine.

Arian's dad told me that his other son, Arian's brother, forked over the money so Arian could buy inventory and parts. So, in a matter of weeks, this 10-year-old entrepreneur found a market (yo-yo owners), identified a need he could serve (fixing and upgrading yo-yos), secured an investor (his brother), and is now facing competitive pressure from a new market entrant. Indeed, the fundamentals of most businesses are the same as this: identify market pain, provide a superior solution, compete, modify strategy to adjust to the market, and repeat.

The biggest lesson I learned here was about competing with "free." Many markets have free alternatives. If companies were not able to compete with free, Microsoft would have been crushed by Linux, Oracle by MySQL, and the dot-com boom would have wiped out half of the world's brick and mortar economy. Cable TV or satellite radio wouldn't exist. And, yes, while services like Napster offered consumers the ability to download free music, Apple came along years later with iTunes and charged a fee per download. Today, Apple is the most valuable technology company in the world.

In the end, the best product wins. Focus on building a truly great product and offer it to your customers with great service to back it up. People have proven time and time again that they'll choose (and pay for) a better product over a free one, whether a yo-yo upgrade or a digital Jefferson Airplane album.

Biggest Hiring Mistake You'll Ever Make

Jeff Haden — Wed, 23 May 2012 12:35:58 -0400

Let a good one get away? That's a bad mistake but not the worst. Here's the one that trumps all the rest.

We've all hired people we just knew would be superstars... who turned out to be duds.

And we've all passed on people who turned out to be superstars at another company. (If you're like me, you regret the ones you let get away more than the ones you had to let go.)

Big mistakes? Sure—but not the biggest hiring mistake. Here's the biggest hiring mistake you can make:

Failing to follow up with and provide closure to every person who applies for a job.

Unfortunately it's a mistake most companies make. "According to our research, approximately 94% of the people who apply for a job don't get closure," says John Younger, founder and CEO of Accolo, a cloud recruiting solutions provider. "And we've yet to meet a job seeker, hiring manager, recruiter, or company who feels that figure is off."

Why is failing to follow up with job seekers such a huge mistake?

One, it's incredibly rude. Say you pay me a compliment and instead of saying "thank you," I just turn and walk away. You'd feel a little bit pissed and a whole lot hurt, right?

So why is it okay when a person pays your business the highest compliment of all—by saying they would like to work for you and therefore spend more time with you than they do with their family—for you to ignore them and never respond?

Two, there are definite business repercussions. A friend of John's is the COO for a global retailer with over 100,000 employees. He spoke to someone who had applied for a job at one of the retailer's locations, and she said she was so upset by the way she was ignored that she would never shop there again.

"The company received approximately 3.5 million job applications a year," John says. "By not providing closure, how many customers - some of them huge fans of the brand, since most people want to work for a company they like—did they lose?"

The same principle extends to a small business in a small town. Say I apply for a job at your company. I'm excited. I'm hopeful. I want to work for you. I tell my friends I applied.

You don't respond. I'm in limbo until, eventually, I realize you never will.

My friends ask how it turned out. I tell them I never heard from you—not even a perfunctory, "Thanks, but no thanks."

Now what happens to the perception of your company? Of course you'll never know, because unlike customers who have a problem with your products or services, I won't complain. My friends won't complain.

We won't complain to you—but I promise we'll complain about you.

Before you post your next opening, determine how you will close the loop with everyone who responds or applies.

Maybe you'll use an automated hiring and notification system like the ones Accolo provides. Maybe you'll do it manually.

How you close the loop doesn't matter—as long as you are unfailingly prompt, courteous, and respectful.

Deciding which tools or processes to use isn't as important as deciding that you will always respond to every single person who wants to work for you.

They've hung themselves out there, professionally and emotionally, by applying—so never leave them hanging.

Inc.com

How To Pick A Franchise

Advertisement:

6 Hot Restaurant Trends for Start-ups

12 Online PR Blunders to Avoid

VCs Are Partners, Not Bosses

Get More People to 'Like' You: 3 Tips

Defining Your Role as Chief Cultural Officer

Uh-Oh: Customer Service Matters More Now

Your Story Is Your Marketing Strategy

5 Things to Un-Learn From School

Stay Home This Weekend (Vacation's a Bummer)

Advertisement:

It's Time to Raise Your Prices

Dear Graduates: Push the Boundaries

How Flat Is Too Flat?

8 Etiquette Rules for a Business Lunch

5 Things You Won't Learn in B-School

Making the Perfect Hire

Social Media Tips From the White House

How to Handle Pushy Customers

How Twitter & Texting Saved Writing

Steve Jobs Had to Wait to Get Into This Restaurant

Hot Industry: Full-Service Restaurants

Reputation Without Character Is Worthless

Advertisement:

Squeeze 25 Hours Into a Day

Becoming Obama's Go-To Lunch Spot

Grooveshark's Near-Death Experience

Balancing the Work-Life Equation

How to Lead Your Company Through Change

Help for U.S. Entrepreneurs in Japan

Would You Let Your Employees Job Hunt?

How to Find Your Most Valuable Customer

Out of 6 TechCrunch Finalists, the Winner Is...

Advertisement:

Be Rich or Be Happy: Which Would You Choose?

Ad Smackdown: Facebook vs. Google

Give a Great Product Demo: 5 Rules

Do Typos Matter?

How to Score a Job at a Tech Start-up

Selling Your Business? Protect Your Confidentiality

Increase Your Retail Foot Traffic

You Can Compete with Free--and Win

Biggest Hiring Mistake You'll Ever Make