Thanks!

Winter in Austin is pretty amazing.  Most mornings greet us with clear blue skies, gentle breezes and temperatures that stay in the flawless zone. 

I celebrate this perfection by doing a series of daily outdoor exercises.  

Yesterday was no exception.  Dressed in my usual attire, house key safely pined to the inside of my jacket, cross trainers securely laced and fully hydrated; I push into my first movements.  I’m not a hundred yards from my front door before I trip over an unseen crack in the sidewalk.  The good news is that I catch myself before I completely fall on my face.  

It all stays rather ordinary yet invigorating until I come face-to-face with a Mini Cooper who obviously is more concerned with turning on red than making sure he doesn't cream me in the process.  I hit the hood of the car right before his bumper makes contact with my leg.    

Given these near misses in one “uneventful” morning of exercise makes me wonder how many narrow escapes I dodge daily.  How many times are the cute little angels that perch on my shoulder called into action to circumvent some situation that could become tomorrow’s news.  Probably hundreds. . .if not thousands. 

And that's why customer service is so important. 

How many “near misses” do you have a day?  How many times is there a gap in communication or a goof in delivery to say nothing of the times we think we’re on target when we’re sadly not even close? 

And yet our clients and customers give us the benefit of the doubt.  They stick with us with all our imperfection never keeping score, staying loyal to the brand. 

Certainly great customer service is a way to enhance the level of customer satisfaction before, during and after a purchase. 

But it’s also an acknowledgement and an apology.   The process of going above and beyond to service our clients is a gesture that admits to our imperfections and communicates a sincere appreciation of their loyalty and allegiance.                

Profit? What Profit

It’s amazing the number of people who come to me for business or focus plans who haven’t given much thought to how their business makes a profit.    

Amazing but not surprising. 

To succeed in business, you have to have a genuine interest in profitability and most of us don’t.  We have an interest in product and how to promote that product.  Oftentimes promotion will be confused with profitability.  What gets little attention and sometimes even less strategy is the conversation around costs and what remains after they are paid.  

The good news is that you don’t need to be a math whiz to either find the profitability in your business or if it’s not there, create a profitable business model.  What you do need at a minimum is good accounting software (to track margins, net profit, accounts payable and receivables, etc.) and a small business accountant that’s willing to work with you and answer your questions.

But more importantly you need to develop a desire for all of this stuff. 

So many of us feel uncomfortable and lack self-confidence with regards to financial matters.  We’re unbelievably creative around advertising and promotion but lack that same enthusiasm for developing the components that lead to profitability.  I understand our complicated relationship to money, but it’s odd when we all say that making money is an important component in our businesses. 

Continue to look at what motivates you financially.  Explore your values and beliefs around money and how to develop a healthy interest in both tracking it and increasing it. 

And in the meantime here’s a book that’s helpful.           

Wearing Labels

I have a thing about labels. 

Not the type stitched onto the inside shirt collar or the one embroidered on the poorly place butt pocket on jeans.

 I’m talking about the label I give myself based on circumstances.   I have a tendency to first make them up, try then on for size and then wear them while perfecting the part.

For instance when my ex-husband and I divorced, I gave myself the label “single mother” to my eight-year-old twin boys.  When I then decided to reopen Penny’s Pastries in Austin after our move from Washington DC, “single mother” + “struggling small business owner” seemed fitting.    

Just recently when we decided to put my mother in a nursing home, I became “daughter who puts her mother in a nursing home.”   I’m sure you can image what that looked like.. .oodles of guilt and shame.  

Sometimes it’s a different type of label. 

When I closed for the business at Southwest Airlines I became, “fearless woman who knows how to close big accounts.”  And when I decided to open my consultancy I morphed into, “wise woman who’s ready to share her experience.” 

What labels have you given yourself?  Are you aware of them. . .and how are they working for you?? 

Mind Tools

“One of the fastest ways to come face-to-face with your personal issues, weaknesses and overall character flaws is to open a small business.”  Or at least that’s what my friend Wilbert says.  I couldn’t agree more.

So for every business book or blog I read, I spend an equal amount of time (or more) on me.  I’m always diving deep looking for the values and beliefs that shape my behavior and direct my activity. 

This leads me to my friend and transformational coach Evelyn Talmadge, who I think is a genius.  With a great sense of humor and unbelievable insight she performs her work with what appears to be intuition and incredible listening skills.  Evelyn makes it seem easy.  However I’m her friend so I know the many hours she spends in instructional classes, workshops and seminars perfecting her craft and integrating innovative concepts that lead to permanent transformation.

Just recently I had three almost back-to-back sessions with Evelyn at her cozy Goalsmiths office.  I requested the sessions because I’d recognized a pattern that created barriers in my business and personal life.

My pattern looked something like this.  I’d have either a brilliant new business idea or something that could alter my personal life.  Excited, creative and focused I’d take this fabulous idea, develop a plan and start the work necessary to make it materialize. 

But somewhere along the way I’d become aware of an inner voice, dripping with caution warning me I was becoming “overly excited” and that it would be smart to “slow down.”  The voice would seem so logical, so authoritative that I would be mindful of and heed the warning.   

Accordingly, my activity would become tentative and perfectionistic.  My initial excitement would be replaced with doubt, leading to the simplest tasks taking forever.  Forward momentum would be lost or delayed, stalling the project.   

Combining my desire for change with Evelyn’s technology I was able to understand my destructive pattern, the probable origin, the long held belief that was holding it in place and my curious cycle of crazy distraction. 

I’m now about a week since my last session and I’m happy to report I've made an almost seamless slide into behavior that better supports me and moves me gently in my desired direction. 

Moral of the story. . .

Being a small business owner is not easy (I know - HUGE understatement!)  One of the best ways to make business easier and (interestingly enough) more profitable is to study both business basics and at the same time deepen your understanding of your fears, faults, motives and moods.  

You and your business will benefit.  

Cost of Goods Sold

Tis the season to think turkey and table settings or trimming the tree. 

Love, love, love all of that but I have to admit I quickly process the whole turkey thing while lingering on a critical business concept; Cost of Goods Sold (aka: COGS.)

logo from my bakery days. . . 

 I blame this whole COGS obsession on owning bakeries for so many years.  Not understanding our COGS (especially when production was high during the holidays) could likely be the difference between making money or working for very little. 

So here we go. If you’re a product-centered company, the direct cost attributable to the production of goods sold, is considered COGS.  The direct cost usually includes four components:

ü  Material cost

ü  Labor cost

ü  Packaging costs

ü  Distribution cost

Notice the word DIRECT comes up a lot when having a COGS conversation.  For instance COGS is not about your marketing expense – it is only direct costs.  To determine COGS ask yourself, “could I create this product and take it to market without this cost?”  If the answer is “no” then it is a direct cost and should be consider in your COGS equation. 

Granted, this is basic business start-up information.  However, I have talked to and advised tons of entrepreneurs both in my roll at BiGAUSTIN and  with my business MARGIN. 

My experience tells me that even veteran entrepreneurs – those in business for several years, do not calculate COGS correctly.  And I totally get it – I was part of that group for years - so absolutely no judgment from me. 

But it is important.  Take the time to work the spreadsheets that will tell you what you spend for each donut, piece of jewelry, knitted sweater, etc., etc. you create for sale. 

And btw are YOU making the donuts, jewelry, sweaters, etc.??  If so add YOU to the equation.  And don’t make the mistake of telling yourself that you’re having so much fun you can wait to be paid and thereby omit the labor dollars in your equation.  As soon as you have the flu and can’t produce the product, you’ll need to replace your labor with paid labor.  Remember you’re building a business – so always count the labor dollars. 

And just as another point of reference in our conversation on COGS there are two ways to look at COGS.  One is from an inventory perspective, the other from a COSTING and PLANNING perspective.  Our discussion today is all about costing and planning.    

Here’s an article that might be helpful.         

When Clarity meets Focus

Tony Robbins talks (repeatedly) about being “in state” and the rituals that support getting there.  The whole purpose of course around being “in state” is to create the mindset that supports the work that’s needed for you to create your desired outcome. 

Just recently my friend sent me a Tony Robbins link that made me think of my own ritualistic habits that create an energetic state of mind for the work ahead. 

Thinking of the work ahead brought up the importance of staying really clear with regards to what I want to create and what I want to convey.  That’s the bull’s-eye for me; remembering what I want to create today, tomorrow; five years from today or tomorrow.          

Which brings me to Made to Stick written by Chip Heath and his brother Dan. Published about five years ago it remains one of my favorite business books because its discussions and theories are fresh, creative, logical and useful. 

The brother discuss a  concept that has helped me save time, money and continues to keep me on target when my mind strays into that dangerous territory of monkey mind.   

If you have the book I urge you to reread Chapter 1 and then integrate it into your life.  If you don’t have the book here’s a quick summary.  It’s all about a notion called Commander’s Intent (CI).

According to the authors, Commander’s Intent is a military term that is a “crisp, plain-talk statement.”  You arrive at this intent by asking yourself two simple, but focused questions:

If we do nothing else during tomorrow’s mission, we must _____________________.

The single most important thing that we must do tomorrow is _____________________. 

It’s all about taking the time to find the essential kernel of your idea to communicate the message and make it memorable. 

But for me it’s even more powerful.  When I’m that clear of purpose, when I live my Commander’s Intent, when I’m not acting from any extraneous voices, I deliver and continue to make quick progress toward growing my business to increased profitability while maintaining flexibility and fun.                 

        

Backwards 

I have a start-up business that’s all about cocoa.   And like most start-ups we’re (we’re a team of three) all over the place as we attempt to find the model for the business. 

Under the best of circumstances businesses are started because the entrepreneur witnesses a problem or identifies a perceived need in the marketplace.  With creativity the entrepreneur brings solution to that problem by introducing a new product or service. 

I don’t know the percentage of businesses that start with the above mentioned “problem, solution equation” but my guess is most do not start this way at all. 

Instead a large percentage of us come at business ownership from an entirely different direction; passion. We have a hobby (making jewelry,) or specific training (web design,) and excitedly decide to start a business because a friend mentioned our jewelry was pretty, our web design creative. Once the business cards have been developed and the website is live we start looking around for customers.   Did anybody tell us they needed more jewelry or a new website?? 

It’s a dangerous trap (and oftentimes a costly one too) but that trap was our cup of cocoa. 

Conceding to all that we fell victim to our own foodie passion, the good news in this story is that my partners and I have been in business long enough to know that is it not prudent to execute (AKA:  spend lots of money) on a product idea that doesn't have a business model. 

And there’s even more good news.  After more Saturday afternoons that I care to count we gave our cocoa a name (Cocoa Project) and a model.  See the results of our effort at  cocoa projects