Friday, December 30, 2005

Amex finds entrepreneurs happy in their work -- but not much more

An interesting press release came out of American Express Canada five days before Christmas.

(That, by the way, is a good time to publish a news release if it’s not newsworthy. If it’s important, you might prefer to release it at a time when the intended audience is likely to notice it.)

Amex interviewed 500 entrepreneurs across the country in a “state of small business” survey. I couldn’t see any new information, but some decent insights for those trying to understand this market.

The main conclusion: Entrepreneurs work more than 55 hours a week, they spend weekends catching up on paperwork, they take minimal vacation time and endure severe stress. Yet they wouldn't trade what they do for a steadier (and probably easier) job working for someone else.

“Even dealing with daily problems and obstacles like staffing and employee issues brings its own set of rewards as they see it being part of the process of creating something worthwhile for themselves and their family.”

What Motivates Them?

"Sitting back and watching the world go by isn't part of a small business owner's make-up, says Donna Lue-Atkinson, Amex’s Director of Small Business Services. “These Canadians are squeezing more out of life than just the day-to-day routine. They've taken a passion for an interest or idea and turned it into a rewarding venture."

While some say they started their own business to strike it rich (28%), most are strongly inspired by internal drivers like pride of achievement and personal satisfaction (87%). They say the reward for all their worries and hard work is rooted in being able to make a living doing something that gets them charged every day.

Only 8% said they started their own business because they were out of work (8%). In contrast, 83% said they have valuable skills that can be put to better use if they're calling the shots rather than taking orders from someone else.”

"Lonely and Isolated"

Amex’s research confirmed my theory that many business owners feel lonely and isolated -- "especially in the early days as many make the adjustment from a busy corporate environment to being the only one on the work site or in the office. Generally, it isn't until a few years after start-up that they have the money and resources to have regular staff on the payroll."

This is a key point for marketers to understand. The camaraderie that many managers and executives find at work is not shared by many entrepreneurs – who have no peers in their organization, and rarely have time to pursue professional development outside of work.

For outstanding entrepreneurs, organizations such as YPO have always made a difference – but only a small percentage of business owners ever get involved in such peer-based information sharing.

"Small business owners are definitely saying this isn't a road for the faint of heart," says Lue-Atkinson. "Particularly, their experiences are very different compared to those who have the relative security of corporate life to fall back on - we know we'll have a pay cheque at the end of the week, draw a pension when we retire and have a health package if we get sick. Small business owners don't have the same safety net. Because of that, they're a very unique market in terms of their motivators and needs."

A few notes on Amex’s release: It’s hard to find it on their website. They certainly didn’t post it in their “small business” section (which is all about their credit cards). You have to go into the Site Map, which is called “Site Help”, and click on “Latest News,” which takes you to a Canada Newswire mini-site. Even then, all you get is the press release, which doesn't contain much more information than I've summed up here. There’s no background stats for those who want more information, and nothing about what this adds up to.

Presumably the marketers at Amex got other information for their own use out of the survey – but they offer no hint how they are using these insights to serve small business better.

Which may be why they dumped it into the marketplace on the 20th of December.

Friday, December 23, 2005

Seven Simple Rules

For your holiday treat, here’s a fun look at selling to small biz.

The source: PROFIT Magazine’s back-page humour column, which chronicles the adventures and opinions of archetypal entrepreneur Cumulo Nimbus (sort of the Bob Newhart of small business owners).

In June 2005, Cumulo offered Seven Simple Rules for Selling to Small Business. Some are more serious than others, but he makes good points that all marketers should keep in mind.

Here are Cumulo’s Seven Rules.

* Don't call us "Small Business." No matter what the stats say, my business is not small — it's the third largest manufacturer in our industry in the entire city of Slug Flats. A small business is the guy who prowls our neighbourhood with his pickup, offering to take down old TV antennas for cash.

* Never call us "SMBs" or "SMEs" (at least not to our faces). You say that it means small and medium-sized businesses or enterprises. I say it sounds like you're selling to a Smurf.

* If you're selling technology, don't drown me in jargon. Every time I buy a computer, all I hear is chipsets and megs and RAMs till I'm Big Blue in the face. Why not just tell me what this model can do that the others can't? Tell me how this technology makes life easier for me.

* Don't talk down to me. Just because I don't understand your new product doesn't make me an idiot. (The way your reps explain things, I'm not sure they understand it either.)

* Ask me how often I want to hear from you. So you've renamed one of your products and painted it blue; that doesn't mean I want to know about it.

* Give me experts I can talk to. I don't care if your call centre is in Moncton or Mumbai, so long as they can really help me.

* Don't make me feel like a deadbeat if I ask for a lower price. When business owners spend money, there's a reason they treat it like it's their own.

If you enjoy print-based business sitcoms (and who doesn’t?), you can peruse other Cumulo columns here.

Happy holidays!

Thursday, December 22, 2005

“I’ll be rude if I have to be” -- Inside the entrepreneurial mind

The most precious thing any entrepreneur has (or sells) is time. So if you wonder why I am always arguing for clear, impactful messages when communicating with entrepreneurs, it’s because these busy business owners will only give you seconds to make your point. If you haven’t sold them at a glance, you’re done.

So here’s Exhibit A.

Bob Parsons is a U.S. entrepreneur who founded fast-growing Internet Net registry In a recent post on his blog (Nov. 17), he wrote about the constant need to protect his time against “all sorts of ‘time grabbers’ that vie for our attention.”

Here (condensed for your convenience) are a few of his “not so polite” time-saving tips.

* "If a stranger calls me they better get right to the point. “I insist that if someone is calling me and I don’t know them, that they immediately get to the point with what they want. If I have someone on the line and they start rambling and simply talking about who they are, I will chime in that they have 30 seconds to get to the point. If they don’t immediately get to the point, I hang up.

* Once they get to the point, if it’s something I’m not interested in, I will simply say, “I’m not interested,” and immediately hang up.”

* If the person on the other line does not have something of immediate interest to you, you owe them nothing.

* I particularly dislike calls from boiler rooms promoting bad investments.Often, I will simply hang up on these without saying anything. Other times I simply say – before hanging up — “when I’m ready to trust my money to a complete stranger, I’ll give you a call.”

* Hanging up quickly allows you to avoid time-wasting calls. The most important thing to remember is to say you can’t help, be polite, say you have to go and then hang up.

* Do not allow yourself to get drawn into listening to an endless stream of dialogue that doesn’t interest you… Sitting there listening won’t get your job done.

* When customers call, they are doing me a favor. By calling me the customers are giving me inside information as to what might be wrong with my business, and letting me know what I can do to make it better. So I always pay attention to these calls.

* If someone wants me to return a call, I've got to know what they want. If someone just leaves a name and phone number and I don’t know who they are and what they want, I will never return the phone call.

*For me to return any call, the message has to be understandable, it has to be of immediate interest to me and it has to be something that I want.

* Email is another place where you can save a bundle of time. I expect any email I open to be both brief and to the point. If it's not both, unless it deals with a subject that interests me, I immediately hit the delete key.

* Some of the things I appreciate are subject lines that give me an idea what the email is about, formatted paragraphs of two to four short sentences — nothing wastes more time than trying to decipher a huge unformatted blob of text — and no more than a screen of text. Basically if an email needs more than 5 to 10 seconds of my time it gets deleted mostly unread.

* It's really all about taking charge of your schedule. Some readers after going through this article will think I’m rude. I understand that. When it comes to protecting my time I like to be polite, but it’s not a requirement for me – I’ll be rude if I have to be.

* All of us need to be jealous of our time – we have so little of it. If protecting my time means being short and to the point, then so be it. It will be me who enjoys the extra time I have available later. I will have earned it."

Rick's Note: I like the forceful language of entitlement that Bob uses. “It’s all about me.” “I’ve earned it.” A lot of people may be uncomfortable sounding like that, but I find this attitude reflects that of a lot of successful entrepreneurs.
Ignore it at your peril.

Tuesday, December 20, 2005

What makes entrepreneurs tick?

To sell to business owners, you need to know what makes them tick.

Fortunately, Canada's major banks love to survey small business and share the results in order to prove how "in touch" they are.

Here are some of the results of a recent RBC survey that found that women entrepreneurs are often motivated less by money and more by personal priorities.

"Canadian women are starting more businesses than ever before, but for a majority of Canada's current and aspiring women entrepreneurs, the desire to own their own business may be less about the money and more about personal priorities.

"According to an RBC survey conducted by Ipsos-Reid, while 36% of men planning to open a business plan to do so to become wealthy, only 23%of women planning to open a business do so for the same reason. As well, access to a more flexible working schedule is a greater motivator for women entrepreneurs (63%) than men (51%).

"However, the majority of women and men entrepreneurs (69% and 64% respectively) seem to be equally driven by a love for what they do or hope to do.

"Women in Canada are turning to self-employment and pursuing their career dreams at unprecedented levels," said Kris Depencier, RBC Royal Bank's national manager, Small Business. "Since 1981 the number of women entrepreneurs has increased by over 200%. For a large portion of these women, building a business is not only a labour of love, but also a way to balance work and family obligations."

Thursday, December 15, 2005

The first lesson of marketing

The first lesson you learn in marketing should be that nobody cares about you or what you sell.

If you want someone to pay attention to you, you have to earn their attention -- and then maybe later their respect.

It's amazing to me how many marketers don't get it. They think that if they advertise a product or a URL, prospects are going to eagerly devour every word, or flock to their website to learn all they can.

Things don't work that way. Not because people don't like you, but because they are too busy.
Researchers claim people today are bombarded with 3,000 advertising messages a day. How many, honestly, do you have time to proactively explore?

OK, every marketer will say they already know that. So why don't they act that way?

Why do we continue to see ads with reverse type (which actively discourages reading)? Why do so many advertisers talk on and on about themselves and not the needs of their customers? How do they expect prospects to read 400 words of copy on a page when they haven't yet established a value proposition?

These are general observations that apply to any market. But the entrepreneurial market doubles this challenge.

These are the most distracted, time-short people you'll ever know. They have disciplined themselves to always get to the point. And they have zilch respect for people who don't understand the importance of their time.

The rules of communication are clear. Show that you understand your market before seeking to be understood.

Wednesday, December 14, 2005

What Women Entrepreneurs Want

Reprinted from my Canadian Entrepreneur blog,
Nov. 07, 2005

To sell to a specific market, you need to understand those people's needs. To help smallbiz marketers understand the problems facing entrepreneurs, here's a column I wrote last month about the problems discussed by some of Canada's top women business owners.

Today I moderated a roundtable discussion among seven distinguished women entrepreneurs. They all rank on PROFIT’s 2005 list of Canada’s Top Women Entrepreneurs, and were tremendously successful and articulate.

Nonetheless, the goal at the W100 Idea Exchange, held at the Vaughan Estate in Toronto, was to discuss the challenges these entrepreneurs are currently facing. Graciously, they each came up with one or two.

Here’s a sampling of the issues they are facing, and the solutions offered by their peers.

1. One business owner asked for help improving the margins in her business. Suggestions included raising prices, hiring consultants to cut costs, and selling the company’s real-estate assets. When the entrepreneur said she was reluctant to raise prices, another participant said her company raised prices 15% last year. When it received no complaints, it raised them again.

2. One participant complained about the high cost of buying custom end-to-end management software. Several entrepreneurs said they had found it cheaper to hire their own IT staff to produce home-made solutions where the mass-market packages leave off. Another said she actually asks competitors for advice on topics like this, as they understand her needs best.

3. “I need help finding, contracting and keeping sales people,” said another entrepreneur. “’Good sales people’ is becoming an oxymoron.”

Among the suggestions from the table: Ask more process-oriented questions in the interview to better understand a sales candidate’s abilities and experience; revise commission structures to better reward desired behaviour; offer better training to encourage good people to stay; hire two or three salespeople at a time to reduce training costs and hope that at least one makes the grade.

4. One entrepreneur said her business is ‘plateauing,’ and competitors are eating into her margins. What should she do? Did she need an exit strategy?

One peer picked up on the real problem: “Are you bored with the business?” The table offered several solutions, such as delegating the parts of her job she doesn’t like, or investing in new startups to give her the growth fix she seems to crave. She seemed pretty happy with the feedback.

For more on PROFIT’s W100 list, click here.

How NOT to market to small business

Strange “special feature” in yesterday’s National Post [Nov. 21]. Roynat Capital took out an ad that wrapped around the business section to salute the winners of the Ernst & Young Entrepreneur of the Year awards program.

Instead of telling us anything intelligent about the winners, this 1.5-page supplement showed us black-tie pictures of some of the winners and their spouses – along with a lot of sponsors (the publisher of the National Post got in there somehow).

The pictures were taken at the unveiling event, held in Ottawa, um, Nov. 3. The text identified the various winners, but actually spent more time talking up the sponsors (look! there’s the publisher of the Post again!).

So here are my questions:
Why is Roynat paying to promote the National Post and Ernst & Young?
Why were the entrepreneurs short-changed in an ad that was supposedly a tribute to them?
Why did it take so long (nearly three weeks!) to recognize these winners?
Why is there nothing in this ad addressing the needs of Roynat’s customers?
And why is this newsprint wraparound called “Special Feature to National Post / Presented by Roynat Capital” instead of just being called an ad?

I have nothing against Roynat. In fact, I appreciate that it is one of the most aggressive supporters of small business in the Canadian marketplace. I just don’t understand why it pisses so much advertising money down the drain.

This “feature” ends with a full-page Roynat ad much like those it has been running every week in the Post. These ads showcase boring, nearly unreadable profiles of supposedly interesting Canadian companies. I actually complained about these ads recently to a Roynat exec, because I think they are the exact antithesis of anything that will help, inform or impress an entrepreneur.

To get entrepreneurs to read this profile, it should be short and punchy, with lots of color and personality, and end with the entrepreneur’s best experience and advice. Entrepreneurs don’t care about your company, they want to know what you know that can help them.

Instead, Roynat runs a 900-word profile, with lots of unnecessary history and product detail. No subheads, no boldface, no sidebars to break up the tedious columns of copy. And no advice, no lessons. Which means this is all about him (the profiled entrepreneur), and not about you (the person reading the ad). Which makes for bad advertising, no matter how much they spend.

The executive agreed with me. But he wasn’t in marketing, so he wasn’t about to rock the boat.

Originally printed in Canadian Entrepreneur, Nov. 22, 2005

This post generated one Comment:
Donna Papacosta said...
Amen, Rick! It's amazing how many companies waste their money on piffle like this.For the sake of small biz everywhere, I hope they listen to you. ;-)

Tuesday, December 13, 2005

The Growing Clout of Small Business

There are encouraging signs that entrepreneurship is on the march again.

In good times, everyone gets excited about working on Bay Street or going to work for big companies. But when shocks appear – and this summer’s oil price spike was an 8.8 on the Richter scale of business confidence – people get nervous about the prospects for big, dumb corporations, and they look again to the opportunity and security afforded by small business.

A few weeks ago, RBC Financial produced a survey that found more than a million Canadians are thinking of starting up a new business.

At the same time, a Scotiabank survey found 90% of Canadian entrepreneurs believe their business will perform as well or better one year from now than it does today. "It's encouraging to the business community on the whole that small business owners are generally enthusiastic about the potential for increased earnings," noted Diane Giard, Scotia’s VP of small business banking.

A CIBC World Markets study estimates 80,000 Canadians will become small business owners this year, swelling the national total to 2.5 million. Even better, says CIBC, "nearly one in four Canadians say they will be self-employed at some point in the next five years."

And today, I got an e-newsletter from VISA promoting discounts for small business (itself an indicator of the market’s clout) – and several articles geared to entrepreneurs (altho’ they’re a bit dull).

In one story, writer Chuck Davies quotes CFIB economist Ted Mallett musing about the positive forces behind today's startups."We know that two thirds to three quarters of people who enter self-employment do so for positive reasons, they go in with their eyes wide open. It's part of their plan,” says Mallett. “The rest do it because they're forced into it, either because they haven't been able to find paid employment opportunities or because they've been laid off or downsized."

Mallett also notes suppliers’ growing interest in the small-business market. "Banks and financial institutions have realized that small business owners are a very profitable segment for them. A startup may not have much to go on, but the fact that the person starting it up is 45 years old, has finished a mid-level career, has a nice amount of equity in their home, is driven and has a good credit record – this person is going to be very profitable for a bank if treated right."

Mallett sees other suppliers joining the trend. In particular, providers of information technology are starting to realize “they've got to target a class of business that's considerably smaller than the ones they've been used to dealing with," he says. "That means their solutions and their pricing models have to be different."

In fact, yesterday the Globe ran an article saying more telecom firms are viewing small business as a market segment worthy of its own products and dedicated strategies. This isn’t new (anyone remember – but it seems a broader initiative than we’ve seen before.

In future posts, we'll see how they do.

First Post!

Welcome to Canada's only blog devoted to Selling to Small Business.

As former editor and publisher of PROFIT Magazine, and a longtime entrepreneur, I've created this blog to deal with one of my pet peeves - the lousy ways most businesses market to small and medium-sized business.

There seems to be a huge gap between marketers and the resource-challenged, time-stressed business people they're trying to reach. So the aim of this blog is to close that gap. When bigger businesses truly understand smaller ones, the benefits accrue equally to both.

If you're interested in small business, don't forget to check out my main blog, Canadian Entrepreneur, which deals with all things entrepreneurial. Some early posts in this blog will be reprints from Canadian Entrepreneur, but we'll get to the new stuff as fast as we can!