Thursday, December 31, 2015

My six business predictions for 2016. Spoiler alert: no hashtags, squad goals or reality tv mentions

As a business advisor, I meet with around 125 business owners a year.  Some are long-term clients, others are project-specific for example, preparing for a business loan, and a few are one-time visits. 

Part of my job involves conducting detailed research, keeping current on business trends and indicators and being aware of issues that may impact my clients.

Should I start a business?
Reply Hazy, Try Again
One prediction that I can guarantee is that the first two weeks of January, we will get numerous calls and emails from someone that "has always wanted to start a business".

In many cases, we spend a lot of time educating callers about the reality of getting a business loan or starting a business. 

Based on my personal history, business climate and current client trends, here are six predictions I expect to see in 2016.

1. Mobile use is still a key factor (and increasing daily).

Forrester Research reports that over 50% of consumers in the U.S. alone are using mobile devices to go online.  From shopping and paying with an app, to reading and posting reviews, mobile is changing the way that we do business. 

Mobile device ownership has increased 30% in the past five years.  In 2011, 35% of Americans owned a mobile device;  it was 64% in 2015.

Read my earlier blog on why mobile is not a trend, it's a reality.  Another factor in mobile is getting found in search engines.  Local search tools and providing quality, fresh content will play a big part in this.

2. Customer experience is even more important than ever.


Customer experience.  Customer engagement. Customer Relationship Management (CRM).  
We hear these terms frequently, but what are you doing about it?  Do you reward your current customers? Do you have a customer database? Are you engaging with your customers on social media? How do you manage bad reviews? 

Today's customer wants more engagement than ever before.  They want to read online reviews, post reviews, have a 'relationship' on social media and interact online with other users.  Reviews can be especially influential, both positive and negative.

Nordstrom Rack User Generated Content
The online shopping experience will change as well. It is not enough to offer the lowest prices - someone will always be cheaper or faster.  

Retargeting, personalization and customer segmentation will become even more popular. Companies will be using detailed consumer data to target specific messages. 

For instance, those ads that show up in your Facebook feed after you were searching for new shoes are not an accident.  Get used to seeing even automated marketing systems sending personalized emails and texts to customers.

3. Buying a business could be more attractive than starting a business.



In the past year, we have seen a steady increase in clients seeking to purchase or sell a business. As the population continues to age, there will be more business owners wanting to sell out.  Many owners put off selling when the recession hit and are now ready to retire.  

What's an exit strategy?
ValuePlanGo.com (VPGo) provides some alarming estimates:
  • Up to 70% of current business owners plan to exit by 2020.  
  • 80% of these owners are not ready for an exit or sale.  
  • A third hope to sell, a third want a family member to buy the business and a third plan on closing and walking away.
VPGo continues on:
"The number of retiring business owners between now and 2020 will continue to accelerate.  But the number of potential buyers is actually falling.  In 2000, there were about two buyers for every one seller.  By 2018, it's only one potential buyer for every one seller. By 2025, sellers will outnumber their buyers." (valueplango.com)
What does this mean? 
For buyers: there could be some attractive business opportunities in the coming years. Industry experience can make the difference in a loan being approved and can help you learn if you even like the business.  

Buying a franchise can have some built in processes that can be attractive for a first-time business owner.  As always, do your homework. FranNet is just one helpful resource for learning about franchise ownership.

For sellers: don't wait.  Start preparing a 3-5 year plan for selling your business.  Some businesses want to reduce the tax burden and as such, claim numerous deductions and show a loss.  If this is the case though, who wants to purchase a business that operates at a loss? Finding a targeted buyer (valued employee, competitor) can yield almost double the sale amount compared to listing it with a business broker.

4. Borrowing is not going to be any easier.


I hope I am wrong on this one, but in light of two clients' recent loan declines, I don't see the lending climate changing much.  With 2016 being an election year, it tends to make banks nervous and as a result, can tighten lending requirements even further.  There are more alternative lenders and crowdfunding options than ever before, but I'd advise doing your homework before jumping in.  

Another client had a hard time coming up with the 10% down that the bank wanted to see on a $100,000 business purchase (and 10% is low; usually the lender will want to see 15-40% cash contribution for a start-up).  He said, "I'm just struggling with how a small business can ever get started with so much money needed down".  

Wrong!
A borrower needs to have adequate capital (CASH), good credit, money to contribute (not collateral), business experience and a realistic business plan to show adequate cash flow and a solid market. For more on this, here 's a good article from Inc. on why the bank won't loan you money for your business.

And I'll repeat this message again, there are generally not grants to start a business.  If I talk with a client and he or she is struggling to come up with the money to get a business license or develop a website, it raises serious red flags about the owner's readiness. 

5. Employee relations will be just as important as customer relationships



All employees are not created equal. Understanding generational differences is also important. Setting the stage prior to hiring your first employee will pay off in the long run. For example, defining what kind of owner you are, developing employee job descriptions and expectations, outlining employee benefits in a personnel manual and learning how to hire and fire employees. How much does it cost to keep disengaged employees on payroll?

Your employees can make or break your brand and in some cases, your business.

Image from Virgin HotelsVirgin Hotel launch in Chicago
Richard Branson regularly posts articles and quotes about how Virgin regards and treats employees.  

"Wholeheartedly believing that the strength of the brand is dependant (sic) on our employees, we send out hundreds of thank-you cards every year to members of the Virgin family", said Branson. "Without our amazing people Virgin would not be where it is today – and nor would I."


 
If you have read anything about millenials in the workplace, there are some common traits.  

They are computer savvy, many are not motivated by money and change jobs more frequently than Gen X and especially Baby Boomers.  It is not unusual to see a millenial's resume and notice that he or she has held four jobs in the last three years.  The boomer generation tended to stay at the same job until retirement; this is not the case anymore.  

Many business owners complain to me about bad employees yet they do not want to say anything because they don't like conflict.  Disengaged and toxic workers will bring down your workplace morale quickly if the owners do not address the behavior. You also run the risk of losing good employees to another job with a different employee culture.  

6. Social media will continue to evolve

Social media is not about selling, it is about building a relationship with your customer in an engaging, entertaining way. Invest in social media as part of your overall marketing plan.  

If you are just starting out, I suggest starting out with one or two social sites and dedicating regular time on a consistent basis. Personally, I have started unfollowing many Facebook businesses that post irregular, irrelevant content. I also recommend knowing your customers and where they 'hang out' online.  
leveragenewagemedia.com
 

Images and video will become more relevant.  Good, quality images can make or break a customer's experience to your Instagram or Facebook. For retail, hospitality or other industries that rely on visual, invest in a good camera or professional photographer.  

Looking ahead at 2016

Each of these predictions is worthy of a blog post by itself and there are surely other predictions and opinions.  It is important to be aware of trends as you make business decisions, but also look at your history and experience as you make goals for the next year. I don't know who said it, but one of my favorite quotes is, "You can't move forward if you're always looking back".  So here's to the new year!



Monday, December 14, 2015

Innovative company designs custom solutions for biotech, health and ag industries

Working with SBDC advisors on business strategies "frees up more time to invent"


By Hope Belli Tinney, Washington SBDC

SPOKANE, Wash. – It’s hard to classify the types of projects that roll out the door at Empire Technical Development in Spokane.

A few recent inventions include a temperature-controlled storage system for biological samples; a spray system mounted on an all-terrain vehicle for pollinating almond trees; and a machine to test the effectiveness of a cleaning solution on tile.

The company’s project portfolio is exceptionally diverse, especially considering most of the work is done by two partners and two employees in a 2,200-square-foot workshop.

“The whole philosophy behind the company is to build technology that is reliable and innovative,” said Peter Bean, CEO for Empire Technical Development (ETD). Not only do they know how to build things, but they enjoy thinking about how to build things better.

But one thing he and partner Maxwell Yardley hadn’t built before was a business from the ground up.

Local commitment, international reach

Peter Bean, left, and Maxwell Yardley of
Empire Technical Development
Early on Bean called Alan Stanford, a certified business advisor with the Washington Small Business Development Center (SBDC).

From the beginning, Stanford said, he was impressed with EDT’s engineering capabilities and potential for growth.

“They ‘MacGyver’ stuff together in their workshop to test out their theories without spending millions for stuff that doesn’t work,” he said.

EDT  is the kind of technology and manufacturing company that can have ripple effects in the region, he said: “EDT keeps local residents employed locally, and it has good reach into the international economy.”

Stanford is one of 29 SBDC business advisors across the state who provide one-on-one, confidential, no-cost advising to entrepreneurs who want to start, grow or transition a business. The Washington SBDC (http://wsbdc.org/) receives support from Washington State University, the U.S. Small Business Administration (SBA) and other institutions of higher education and economic development.

“I have the utmost respect for Alan’s experience and expertise,” Bean said, adding that their one-on-one meetings covered a variety of issues, including financing, marketing and capital.

International export advice, too

Although EDT had started on a shoestring budget, the company soon needed more capital to fund growth and development. Stanford guided them through the process to obtain an SBA loan and talked them through countless other decisions about how to structure the company and move ahead.

Since much of EDT’s business is international, the partners also met frequently with SBDC export advisor Vern Jenkins.

“There’s a huge, whole range of areas that these people are able to give advice on,” Bean said. “Those guys are very good at finding ideas that can help people like us.”

Having the resources of the SBDC network at their disposal meant Bean and his colleagues didn’t have to reinvent the wheel when it came to setting up business systems and growing their company. And that leaves more time for inventing other stuff.

“One of the things that differentiates us is that we have a pretty good engineering workshop right here in our office,” Bean said.

Elegant, economical solutions

Because they are a small shop, he said, they have the flexibility to experiment and try different approaches quickly, saving both time and money. Any given problem might have dozens of solutions, but EDT searches for the “elegant solution” that achieves maximum desired effect with minimal effort or resources.

That’s the challenge, he said, and it’s what makes the job fun.

“It’s just fun to create something,” Bean said. “We keep on building new toys.”

Those “toys” are often designed to solve difficult problems, particularly in the areas of biotechnology and agriculture.

From pollination to cold storage

For instance, the company recently built the ETD Cerinthus, an electrically powered, automated pollen distribution system for use when natural pollination is either inefficient or impossible.

The machine allows orchardists to spray pollen into trees at a variable rate without having to stop and refuel or stir the pollen to prevent blockages. For growers scrambling to compensate for a serious shortage of bees, for example, the device could literally save their harvest and their livelihood.

There is nothing very fancy about the pollinator, Bean said, except that it does what it needs to do with a minimum of fuss, bother and expense.

EDT also has created a system capable of storing many thousands of biological tissue samples at temperatures down to -80 degrees Celcius. It allows scientists and researchers to retrieve individual samples, or groups of samples, with variable search criteria.

“These systems are designed and tested at the facility here in Spokane before delivery to foreign research facilities, hospitals and medical universities,” said Jenkins, the SBDC export advisor who has been helping EDT find international sales targets.

Most of their clients right now are overseas, Bean said, but he’s hoping that as Spokane develops further as a regional center for healthcare and biotechnology, the local client base may grow as well.

Contacts:
Peter Bean, Empire Technical Development, 509-808-6050, peter@empirelabauto.com
Alan Stanford, Washington SBDC, 509-358-7892, alan.stanford@wsu.edu
Vern Jenkins, Washington SBDC, 509-358-7998, vern.jenkins@wsbdc.org



Monday, November 30, 2015

Spokane grass seed company grows locally and internationally with help from SBDC advisors

Planet Turf buys new building, gets line of credit, expands globally

By Hope Belli Tinney, Washington SBDC

SPOKANE, Wash. – More than 500 new golf courses opened in the United States in 1999, the year agronomist/turf grass consultant Jim Connolly launched Planet Turf in Spokane, Wash.

WSU alumnus Jim Connolly
and wife Amy of Planet Turf.
But seven years later, more than 500 courses closed due to the economic downturn. While the golf industry is still huge, for businesses involved in course construction – like Connolly’s was – it was time to shift gears or get out of the business altogether.

Connolly has a degree in agronomy from Washington State University and 36 years’ experience in the sports turf industry. He is a former U.S. Golf Association agronomist and has consulted for superintendents, owners and developers in 13 countries in golf course construction and environmental best management plans.

Shifting to product sales

Getting out of the business wasn’t really an option, so he decided to shift gears. With his wife and business partner Amy, Connolly planned to broaden the Planet Turf brand (http://planet-turf.com/) to deliver not just expertise to his clients, but seed, fertilizers and pesticides as well.

“Fertilizer, and other products, are only effective if you know when to apply them, how to apply them and understand the most effective method of application,” he said.

He had the scientific expertise and sales experience to realize his dream, but neither he nor Amy were business experts, so the shift to managing a sales company was potentially overwhelming. That’s where the Washington Small Business Development Center (SBDC) provided valuable assistance.

The Washington SBDC (http://wsbdc.org/) provides no-cost, one-to-one, confidential advising to small business owners who want to start, grow or transition their businesses. SBDC advising is supported by the U.S. Small Business Administration, Washington State University and other institutions of higher education and economic development.

Soil test database aids clients

Over the past five years, Connolly has worked with SBDC advisors Alan Stanford and Vern Jenkins to successfully build the manufacturing side of his company and build equity as well. The core products of Planet Turf include fertilizer, pesticides, grass seed and a variety of products for turf and ornamental maintenance.

Connolly has designed and sells unique fertilizer products that minimize negative effects on the environment.

“We have a database of over 2,000 soil test results and our advice to customers about building healthy soils and plants is why we stand out among our competition,” he said.

Planet Turf grass seed is grown in Washington and Oregon and most of the fertilizers are manufactured in Washington and Idaho. Turf products are shipped across the Pacific Northwest but also around the world, including Japan, Korea and even Mongolia.

Setting up efficient business systems

The shift from diagnosing soil challenges to providing products that address those challenges has allowed Connolly to grow his company from one employee to eight. In 2016, he will move operations to a new 10,000-square-foot facility in Spokane Valley.

The key, he said, was the hands-on advising he received from Stanford, who came to the SBDC after a 35-year career in banking, and Jenkins, one of two SBDC export specialists.
“They aren’t going to build it for you,” Connolly said, “but they can guide you, and I think guidance is what I needed – and still need.”

Connolly credits Stanford with helping him set up business systems so he can quickly and accurately monitor the health of his company. Cash flow was always a problem, for example, because expenses were constant but sales were cyclical.

Stanford’s expertise with financial statements helped Connolly put together a business plan and loan application that resulted in a $400,000 line of credit through Washington Trust Bank. That allowed him to continue to grow the business and post strong financial statements. So strong, he said, that when it was time to get a loan for a new warehouse, the application process was a snap.

Careful overseas expansion

Along with growing its domestic market, Planet Turf has also expanded internationally. Since 2009, export sales have more than doubled, Connolly said, though he plans to proceed cautiously overseas.

“Having the experience of Vern Jenkins on board to help with understanding the difficult business of exporting and dealing with foreign clients is a resource that is very valuable,” he said.

The SBDC “helped us get better,” he said. “Without that we could have been going awfully far down the wrong path – to the point of being unrecoverable.”

Instead, Planet Turf is strong and growing stronger. As any soils scientist can tell you, sometimes a little change can make a big difference.

Contacts:
James Connolly, Planet Turf, 509-951-0270, jim@jccturf.com
Alan Stanford, Washington SBDC adviser, 509-358-7892, alan.stanford@wsbdc.org
Vern Jenkins, Washington SBDC export specialist, 509-358-7998, vern.jenkins@wsbdc.org








Thursday, November 5, 2015

Fast food experience pays off for Central grad

Free advising helps young owner launch franchise ambitions in Olympia


By Hope Belli Tinney, Washington SBDC

OLYMPIA, Wash. – As a college senior in business administration, Myles Kirchmeier planned to start a business by his early 30s – the age his father was when he opened a heating and cooling company. But Mike Kirchmeier asked his son what he was waiting for: “All you have right now is time and energy,” he said. “Why not take the risk when you are young?”

A year after graduating from Central Washington University in Ellensburg, Myles Kirchmeier became boss at his Pita Pit franchise in Capital Mall in Olympia. His new five-year plan is to own three Pita Pit restaurants – and then perhaps diversify.

Getting the restaurant up and running has involved 90-hour work weeks. Kirchmeier has 12 employees and must stay on top of inventory, supply chain management, quality control, customer service, health and safety codes, accounting, payroll and a textbook index of other business-related issues.

“That’s what I majored in,” he said. “It’s crazy to see it in a theoretical way and then to see it in real life.”

Serious about health and business

Kirchmeier outside his
Olympia Pita Pit
Kirchmeier had become a fan of the healthy fast food offered at Pita Pit while he was a student at CWU. The first restaurant opened in Canada in 1995 and there are now 500 Pita Pits in 11 countries, including about a dozen in Washington state.

Initially he wanted to get financing on his own but, when banks refused to take him seriously, he was referred to Ron Nielsen, an advisor with the Washington Small Business Development Center (SBDC) in Lacey.

The Washington SBDC (https://wsbdc.org/) is a network of two dozen advisors providing confidential, no-cost advising to entrepreneurs who want to grow their businesses. The Washington SBDC has been hosted by Washington State University for more than 35 years. It receives federal funding from the U.S. Small Business Administration and additional state and local funding from other institutions of higher education and economic development.

Nielsen and Natalya Putt, his administrative assistant, have offices in the newly opened Center for Business and Innovation, a collaboration between South Puget Sound Community College and the Thurston County Economic Development Council. The center is on the SPSCC Lacey campus at 4220 6th Ave. SE.

Nielsen, who has owned three businesses over the past 30 years, was skeptical at first: “It’s good to have aspirations,” he said of Kirchmeier, “but you need to have a breadth of experience, too.”

Still, Nielsen had started his own first business at age 19, so he knew youth wasn’t a disqualifier.

“I quizzed him and gave him some pretty difficult homework to see if he was serious, and he really came through,” Nielsen said. “It was good work.”

Finishing school while starting a franchise

Kirchmeier spent the second half of his senior year at CWU finishing his coursework, working 30 hours a week at McDonalds and driving back and forth to Olympia twice a week to meet with Nielsen and Putt.

He was crazy busy, he said, but the drives back and forth didn’t seem arduous because he was enjoying himself: “It’s fun to sit down with someone who knows so much about business.”

For the most part, they worked on the business plan, especially standard financial statements.

“By the time we got done with his business plan, he had as much confidence as some of the seasoned veterans I’ve worked with,” Nielsen said.

Even with a rock solid business plan, Kirchmeier was getting nowhere in securing financing. After seeing the plan – and knowing his son – Mike Kirchmeier agreed to support a good investment. “He’s exceptionally driven; he always has been,” he said of his son.

Holidays at mall anticipated

The grand opening on June 15 was bigger than he expected, said Myles Kirchmeier, and business has hummed along since. With the holidays approaching, he figures business will continue to pick up – his high-visibility location at the mall will help – so he needs to be ready for it.

That’s one of the things the SBDC helped him understand, he said – that there would be seasonal ebbs and flows and he had to plan for them.

When people ask for advice, he said, “the SBDC is the first thing I bring up because they helped me so much. I would definitely recommend the SBDC to anyone who needs help with their business.”

Contacts:
Myles Kirchmeier, Pita Pit Olympia, 360-701-3462, mkirchmeier2@gmail.com
Ron Nielsen, Washington SBDC, 360-709-2050, rnielsen@spscc.edu

Friday, October 30, 2015

Loan declines are tough on everyone

Loan approvals are fun, aren't they?  You get to give the good news to your borrower that the loan was approved and he or she is going to realize their dream of owning or expanding their own business.

It is a great feeling to share the news.  When we hear our clients get approved, we want to high five a big "YES", and it does not even matter the size of the loan.

What about those that are declined?

It is tough to deliver the bad news that a business owner may face a tough stretch.
Or that he may not be able to expand until he pays down some debt.
Or the business may miss out on an opportunity and end up closing.
Or the entrepreneur may need to put plans on hold to gain some traction or other investment.

As business advisors, we share in your disappointment when a loan is declined. Our clients are usually pretty bummed out and in some cases, upset because they had invested so much time and energy into a loan application only to have it turned down.

Here is an interesting read on reasons businesses are turned down for loans.

While we know that all loans are not created equal and that some loans should not be approved, here are three things that might help in preparing your borrowers for the loan process:

1. Explain the loan process and timeline. 

We spend a lot of time educating our clients as to what a bank will expect and preparing them to apply for a loan.  In numerous cases, our clients do not realize how long a loan will take.  It is very helpful if you inform them what to expect, how the process works and especially how long an approval or denial will take.

To a borrower, the only thing more discouraging than a decline is to hear nothing at all.

2. Be realistic.  

Before the borrower applies and it is clear there is not enough capital or collateral, be up front and inform them what the bank expects.

I had a client that had received four declines when she first arrived.  She was trying to buy a franchise for around $200,000 and only had about $2,000 to contribute and no business experience. She was surprised when I explained that the declines were likely due to not having enough cash contribution and no business experience.  In this case, she did not understand the terminology that was noted in the decline letter.

If they get a quick denial, they may be unhappy, but will be thankful to you for saving them time in the long run.

3. Encourage without being overly optimistic.

Customer relationship management is vital to your bank. It is difficult to not share in a client's enthusiasm or want to cheer them on as they apply.  Some borrowers misinterpret encouragement for approval.  An honest and timely decline is good customer relations.

We have observed that our clients that have had a lot of positive reinforcement such as, "This is a great idea", "This looks like a slam dunk" are hit harder by a decline than those in which the banker was up front and cautious.

Every loan is not a good fit for every bank

Recently I had a client get approved for a loan to buy a business that he had been managing for six years.  The owner wanted to sell to him and I helped him with some cash flow projections.  He was a little shy on his cash contribution, and yet the bank was able to work with him and the seller on an alternative solution.  He finally got the details ironed out, but he said, "I'm just struggling with how a small business can ever get started with so much money needed down."

Economic conditions, business experience, cash and many other variables can impact a loan decision. We can all help by providing ongoing education and expectations about what it takes to start, run and expand a small business.










Forecast for Halloween: Rainy with a side of opportunity for retailers

Here's the latest from IBISWorld on this years' Halloween sales forecast.  While down 4.1% from the record sales in 2014, this year retailers are expected to pull in over $7 billion in holiday sales of costumes, candy, decorations and other fun items.

Trick or treat!  Enjoy this infographic from IBISWorld. Read the press release.

IBISWorld

Thursday, October 29, 2015

Four reasons mobile is not a trend anymore

Mobile isn't really that important, is it? Yes. Yes it is. End of post.  

Kidding aside, for the last three years one of the hottest trends in small business (any type, not just internet companies) and social media has been the importance of mobile. Whether it is having a website that is mobile responsive, or realizing that your customers are using mobile devices, mobile is kind of a big deal.  


Mobile is not a trend anymore. It is a complete transformation in the way we interact socially, engage with customers and conduct business.


Opinions vary, but here are my top four reasons mobile should not be ignored.


When did you last search on Page 2?

1. Search Results

Now it hits your website in the search engine. Websites that are not mobile responsive or optimized for mobile devices show up farther down on mobile searches. 

To make matters more competitive, Google has also changed the number of displayed search results from six to three.

Case in point. I recently conducted a website review for a client and the website is not mobile optimized.  

Search from desktop: site ranks #6. 
VS
Search from mobile phone. Site ranked #19 and was on page #2. (Ouch!)



2.  Customer experience.

Attention spans are shorter. Customers want to engage. Customers want a "an experience". Consumers will research online prior to making a purchase.  Online reviews like Yelp, TripAdvisor and Google local are studied prior to making a purchase. 

Kissmetrics has a great Infographic that shows how loading time can affect abandonment, user experience and ultimately, bottom line.  Customers are seeking a live action experience.  


I read recently that restaurants are experiencing longer table turns.  It is common now for patrons to first "check in" to a restaurant so their friends can see where they are.  They are texting and delay looking at a menu.  They could be tweeting about what to order.  Then when the food arrives, it is time for a selfie (probably not the first one) or group photo. And on and on.  


Small businesses cannot compete on price.  Customer engagement will be a game changer.


Customer experience also means that shoppers are able to 
quickly search, find and buy online.


3.  Knowing your customers' mobile habits.

Here are some startling statistics from the Pew Research Center about smartphone owners:
  • 64% of American adults now own a smartphone of some kind, up from 35% in the spring of 2011.
  • 68% use their phone to share pictures, videos or commentary about events happening in their community.
  • 46% of smartphone owners say they "Couldn't live without"
  • 97% used text messaging at least once over a one-week period
  • 85% of young adults ages 19-29 own smartphones.

Users are more comfortable purchasing on mobile devices than ever before. Previously, a consumer would research items or services online, then purchase on a desktop.  This has increased steadily and users will now research and purchase on a mobile device, in some cases a different device.


4.  Personalization

You may not recognize the topic as personalization, but anyone that has signed up for a free white paper, shopped online for shoes or left items in a shopping cart has been the recipient of this.  Personalization is another name for customer intelligence, marketing intelligence, segmentation and is relevant whether or not we are discussing mobile. Personalized messaging or targeted ads used to seem a little creepy, but now consumers are getting used to it.

From InternetRetailer.com
Some examples:
  • Text push notifications - reminders for appointments.
  • Personalized emails with a discount on an item you were shopping for, "You left this in your cart, still interested?"
  • Text alerts for flash sales or special offers.



Email still works for customer engagement

Email is not obsolete and can be an effective marketing tool. Email has long ranked as one of the most common activities that users take part in online since the desktop/laptop era, and it continues to play a prominent role in the mobile era as well. 

If you compare email and Facebook ad effectiveness for 1000 customers:

An e-newsletter typically sees about 12-19% open rate = 120 to 190 views.

For a regular business Facebook post (not sponsored posts), about 2% of your followers see your posts = 20 views.

What can a small business do to keep up?

Statistics aside, if your website or marketing materials are not optimized for mobile, it would be a good idea to re-evaluate your marketing efforts and advertising budget to consider a website upgrade.  A website should be viewed as an ongoing marketing expense, not just a one-time expense. Here are 10 more reasons to look into a mobile site. 

For starters, business owners can talk with its current web designer or seek a new web firm. There are many options available.  Some websites are so out-of-date that it is cheaper to have a new mobile site created than to upgrade a current antiquated site.  Start by getting three quotes and learning what questions to ask. 

As customer engagement becomes more important, a positive user experience can pay off in the long run.  If your customers are using mobile devices, can you better serve them?Does the cost of not upgrading a website outweigh the risk to losing customers? What's the value of a lifetime, satisfied customer to your business?

Overwhelmed? Call your business advisor to get help prioritizing.  The timing is perfect to budget for 2016.




Thursday, October 15, 2015

Longview business stays locked in with family

Daughter inherits business; improves systems, finds own style

By Hope Belli Tinney, Washington SBDC

LONGVIEW, Wash. – When Tabitha Beneke’s father died in 2012 and she inherited his locksmith business, the three long-time employees of Keys Plus faced several possible scenarios, none of them pretty.

Beneke, who lived 2,000 miles away and had no experience with locks or with running a small business, could simply close the business. She could look for a buyer, leaving the workers in limbo for months, and, not finding a buyer, close the business.

She could find a buyer who, looking to cut expenses, would fire one or all of the employees. Or she could keep the business, become an absentee owner, and make her workers’ lives miserable.

Remarkably, she kept the business and none of that happened. Three years later, she has added two new employees and the three employees she inherited are still present and thriving.

Employee confidence


Keys Plus employees
“She makes us feel valued,” said Jeri Humbyrd, office manager for 10 years. Rather than micromanage their work from afar, Humbyrd said, Beneke has encouraged them to be more independent and take initiative. Having that “freedom to flourish” has resulted in a more dynamic – and profitable – business, Humbyrd said.

Humbyrd and Tim Brown, a master locksmith and employee at Keys Plus Locksmiths (http://www.keyspluslocksmiths.com/) for 16 years, are so confident of their continued employment that they recently decided to start a family and buy a home together.

"This shop supports that family,” Beneke said recently. “That is huge to me. I love that I can help somebody’s life like that.”

Advising benefits passed down

She said Jerry Petrick, a certified business advisor with the Washington Small Business Development Center, has been key in not only keeping her father’s business afloat, but moving it forward. And the ripple effects of his expert small business advising are felt by her and her staff.

The Washington SBDC (http://wsbdc.org/) provides expert advising to small business owners who want to start, grow or transition a business. It receives support from the U.S. Small Business Administration and Washington State University and other institutions of higher education and economic development.

WSU has been the statewide host for the SBDC for more than 35 years. SBDC advising is provided at no cost to the client and is completely confidential.

“We are having a really great year,” Beneke said this fall. “We just keep doing better and better, but this year it’s been significant.”


Finding her own way

Humbyrd said getting updated business systems in place has freed up more time to focus on anticipating and meeting the needs of customers, including stocking a diverse inventory of classic and emerging technology.

Moving from struggling to sustainable is indeed significant, and it hasn’t been easy.

Beneke had never worked in her father’s business and knew next to nothing about how it operated when her father passed. The economy was still bad and seasoned business owners were struggling.

“At the time I got that shop, businesses were closing one after the other,” she said. She briefly considered closing Keys Plus or trying to sell, but then she began meeting with Petrick, who gave her hope that she could figure it out and make it work on her terms.

“I’m not much like my dad and I don’t do things his way,” she said, but with Petrick’s help she was able to implement changes over time that improved efficiency, improved the bottom line and improved employee morale. “I’m still surprised that my way is working,” she said.

Growing partnership

Beneke, who has a background in human resources, enjoys that aspect of the job, but she also has  taken on responsibility for implementing business systems and controls, handling social media and marketing and overseeing budget controls, all of which she can do from her home in Bloomington, Ill.

She also talks regularly with Petrick. As a first-time small business owner without a partner, she said, having access to a confidential business advisor is huge.

“He keeps me on my toes,” she said. “It’s almost like he holds me accountable for doing my job.”

In the first year or two they talked regularly, Beneke said, but now their meetings are less frequent, maybe three times a year.

“I send him quarterly reports and he always comes back with some great, challenging questions about where we are going,” she said.

Family inspiration

“It’s harder than I ever thought it would be,” she said, but seeing the business grow and her employees thrive is immensely satisfying – so satisfying that her 14-year-old daughter, Madison, has noticed and caught the small business entrepreneur bug.

When she and her classmates were asked what they wanted to do when they grew up, Madison answered proudly, “I am going to own a business one day.”

When she does, the SBDC will be there to help her along the way.

Contacts:
Tabitha Beneke, Keys Plus Locksmiths, 360-423-4443, keysplus@keyspluslocksmiths.com
Jerry Petrick, Washington SBDC, 360-578-5449, jerry.petrick@wsbdc.org

Tuesday, October 6, 2015

Yakima SBDC helps auto shop get loan for new building

By Hope Belli Tinney, Washington SBDC
YAKIMA, Wash. – Peek inside Auto Art and Collision Repair at closing time and it looks like the answer to a math problem: how many average-size automobiles can you fit into a 5,000-square-foot body shop?
A photo on the Facebook page (https://www.facebook.com/AutoArtandCollisionRepairLLC) shows a crazy quilt of cars parked bumper to bumper, with barely room to walk from one end of the shop to the other.
Auto-Art-web
Irma and Mike Philp of Auto Art and Collision Repair.
“When people used to say, ‘location, location, location,’ I never believed them,” said Irma Philp, who owns the business with her husband, Mike. Now she believes. 
After years of being down a side street and around the back, the business now commands a corner lot at a four-way stop. Potential customers can’t help but notice the new building at South 18th Street and East Mead Avenue.
The move cost them nearly a month of revenue, Irma said, but revenues are up 34 percent from last year.
“It’s been spectacular,” she said, and she and Mike already are making plans for a 2,000-square-foot expansion.
“We stand back sometimes and I tell (Mike), look how far we’ve gotten,” Irma said. Mike has made this happen, she said, but he responded, “We wouldn’t be where we are without both of us.”

Taxes, loans challenge young business

Mike started doing body work in high school, Irma said, and by 2004 opened his own shop. Irma worked for a competing auto body shop but was helping him out on the side – with insurance paperwork, sending out estimates or ordering parts – while they dated.
In 2007, things got serious: “He told me, ‘Quit your job and come work with me full-time or I’m going to have to hire someone,’” Irma said. “It was super scary. I told him, ‘You want me to quit the only guaranteed income we have.’”
Not only that, but the company owed nearly $30,000 in back taxes. Slowly, Irma said, they were able to pay the back taxes, get back on solid ground and start saving for the future.
But in 2009 their landlord raised the rent significantly, which heightened their motivation to find or build their own shop. Everyone they talked to said it was impossible to get money for new construction. Instead, they tried three times to get a commercial loan for an existing property – and failed.
Then Irma learned about the no-cost advising services offered by the Washington Small Business Development Center (SBDC) – a network of more than two dozen certified business advisors working in communities across the state to help small business owners start, grow or transition a business. The Washington SBDC (http://wsbdc.org/) receives support from Washington State University, the U.S. Small Business Administration (SBA) and other institutions of higher education and economic development.

Loan for land, new construction

Irma began meeting regularly with SBDC certified business advisor Linda Johnson at the Yakima SBDC office. When they talked about their inability to get a loan, Irma said, Johnson went through their financial statements with them and explained what the loan officers were looking for.
“Linda was able to tell us, ‘This is where you need to be,’” Irma said, and then help them chart a step-by-step plan to get there.
One day when Irma and Mike were expressing their frustration with existing properties—either they were in a poor location or they required extensive renovation or repair—Johnson asked if they’d ever thought about building their own shop. “Mike and I just looked at each other,” Irma said.
Then they jumped at the possibility and immediately set about finding property that would give them good visibility and fit their budget.
It took time, and additional assistance from Tom DiDomenico at Evergreen Business Capital, but in August 2013 the Philps were notified their SBA loan for land and new construction had been approved.

Busy location crowns accomplishment

New location at a visible, busy corner
The new location has made a huge difference to their bottom line, Irma said. They projected a 20 percent increase in revenue, but instead saw 34 percent. Their staff had increased from one employee to two, but now they have three and are working to hire two more.
The SBA loan for new construction catapulted their incremental progress into a huge leap, and borrowing that kind of money was scary, Irma said.
But by the time the loan came through they had been working with Johnson for a few years and were confident that, with her assistance, they could rise to the challenge.
“We are 35 years old and we never imagined this is where we would be” she said. “Sometimes we just think, ‘Wow, what an accomplishment.’”
Learn more about Auto Art and Collision Repair at http://www.mikesautoart.com/.

Contacts:
Irma Philp, Auto Art and Collision Repair, 509-248-7874, irma@mikesautoart.com
Linda Johnson, Washington SBDC in Yakima, 509-454-7612,linda.johnson@wsbdc.org