5 Key Areas To Consider Early Each New Year

5 Key Business Areas To Considerby Steve Houston

With last year now in the rearview mirror and a new year stretching ahead, it’s a good time to assess where you just came from – and decide where you want to go – with your business.  Here are 5 key issues to review right now:

Business Plan.  Last year, did you get to do everything you wanted to in your business?  What helped you make it happen – or what kept you from accomplishing it? Do your business objectives still align with the markets you compete in?  Will those goals still help you take your business where you want it to go? If you aren’t sure, start with a broad view of it, break it down into specific, measurable pieces, and then make the needed adjustments as you move forward with it through the year.

Marketing Strategy.  The lifeblood of every business is effective marketing. The results your business gets will only be as good as how much you invest in it and the strategies you use. More options exist now than ever before – both online and offline – and it can be confusing for the typically hyper-busy company owner.  Focus on implementing proven foundational strategies like reputation management and video marketing first. Build on top of those as you go and you should see the kind of returns you want from your valuable marketing spend.

Human Capital and Automation.  Your people are what make your business run on a daily basis so treat them accordingly.  Help them keep their skills sharp by encouraging an environment of constant learning.  Make your team strong and competitive by rewarding true achievers, and don’t be reluctant to prune under-achievers; that’s how championship teams are built. Change is the only constant in business, as the old cliché goes, so show your commitment to it by nurturing creativity and flexibility in your corporate culture. Automate or eliminate as many low-value, repetitive tasks as you can, and reward excellence when you find it.

Expense Management.  “A billion here, a billion there, pretty soon you’re talking about real money,” a politician once famously said. Well, your business may not be spending billions of dollars, but a few hundred here and a few thousand there in unnecessary expenses can ruin your bottom line. Actively search for and eliminate waste wherever possible. Challenge your team to behave as if they themselves owned the business and had to authorize every expenditure. Expense management is everyone’s responsibility.

Finding Competitive Advantages.  Did you know the first type of business to implement a customer drive-up window wasn’t a fast food company? It was City Center Bank in 1928 in St. Louis, yet it wasn’t long before that simple model started being adopted by restaurant operators and other businesses nationwide. Look around. What are other industries doing? Do any of their methods offer potential competitive breakthroughs for your type of business? Sometimes it’s an existing idea, re-applied in a different market, which can give a company a new edge over its local competitors.

Paying attention to these 5 key issues now will help you take your business to the next level as you get further into this new opportunity-rich year.


How Positive Thinking Can Kill Your Business

By Steve Houston

EnronYou may remember Kenneth Lay, former chairman and CEO of Enron, the high-flying energy trading company that crashed and burned back in late 2001. 

That epic meltdown caused billions of dollars of investors’ money to disappear literally overnight and threw thousands of employees out on the street.  It led to the demise of the venerable 89 year-old accounting firm Arthur Andersen.  It also sent a serious shiver through our national economy just when it was trying to shake off the recession caused by the recent dot.com implosion.

Lay was famous during the glory days of Enron for being a fervent practitioner of the power of positive thinking ala Dr. Norman Vincent Peale, the leader of the positive thinking movement.  There was no problem so critical, no situation so dire that Ken couldn’t find the silver lining in it.

What he didn’t understand, though, was that no amount of positive (or wishful) thinking on his part could make all those questionable business decisions and illegal accounting practices sustainable for long.

Too many people today fall victim to the same siren song of the “power” of positive thinking.  Local bookstore shelves are crammed full with “feel good” books claiming that successful can be yours if you only dwell on positive thoughts and maintain a positive outlook.

Listen, I personally  believe in positive thinking.  Being positive is good for a number of reasons.  A positive attitude can provide much-needed encouragement.  Positive reinforcement is something we all need from time to time.  From a physiological standpoint, a positive frame of mind can even help release beneficial hormones called endorphins that lower blood pressure and act as natural painkillers.

The problem, though, is that an unwavering cheery outlook can prevent you from clearly seeing the truth.  Lay’s insistence on spinning everything in a positive light blinded him to the problems plaguing his company. 

In the end, his unfailing optimism became his undoing as reality finally outran optimism.  Convicted of conspiracy to commit securities and wire fraud in 2006, he died before he could be sentenced.

It’s a sad story but I think an instructive one.  We business owners and entrepreneurs can be particularly susceptible to the hucksters and con artists out there who prey on our sometimes starry-eyed optimism.  Even we can be our own worst enemies at times.

If you want your business to not only survive but thrive, here are some common-sense precautions you can take to prepare for the adversity that always lurks on our horizons:

  • Assume your best current source for new customers / clients / patients dries up and disappears without notice.  Take steps now to diversify your income streams and eliminate this fatal single point of failure.
  • Assume your customer’s / client’s / patient’s buying cycle is going to get longer, not shorter. Find creative ways to shorten it and make it frictionless for them to choose you to do business with.
  • Assume your top 3 business plans will fail, and have Plans D, E & F ready to implement at a moment’s notice.
  • Assume that a large unbudgeted capital expenditure, financial setback or legal challenge will unexpectedly pop up.
  • Assume that your operating cash flow will ebb more than flow and build in safeguards to keep the lights on and the employees paid.

Stop viewing sales and marketing expenses as a drain on your budget and focus on strategies that actually return a positive ROI.  View them instead as important investments a growing company must make.

Once you’ve anticipated these possibilities and made plans to handle them, only then can you feel comfortable looking forward, with true optimism, to achieving great success. 

What Business Are You Really In?

Figure out what business you're REALLY in and watch your profits soar!by Steve Houston

This is an important question every business owner, principal, or marketing executive should ask themselves early in the game, and you should consider it carefully from two different perspectives before answering.  The two correct answers – first from your client’s point of view, and then from your own perspective as a principal in your business – will probably turn out not to be what you thought they would be. 

These answers are vitally important to the success of any business.  Owners who gain a true understanding of these two issues and approach them accordingly will greatly increase their chances of not only succeeding but prospering within their specific business verticals.

Let’s look first at how clients view your company’s products and services.  Years ago, when asked what business his company was in, this is how Charles Revlon (of Revlon cosmetics fame) responded:

“In the factories we make perfume, but in the stores we sell hope.”

Revlon’s simple statement reveals some fundamental truths about marketing – truths that many business owners, marketing departments, and product developers to this day still don’t realize.  These truths strike directly at the heart of why your clients come to you, and what those clients are really buying.

It’s far too easy and not all that unusual for executives to view things myopically…to be product or service obsessed…to overly self-identify with the products and services they sell.  Shortsightedness like this is common in every type of business sector.

When you boil it all down, it doesn’t make much difference what products and services you’re selling.  What you’re really selling to your clients are intangibles.

Charles Revlon knew this and he also understood some key truths about the people he chose – yes, he chose – to be his customers:

  • People want to improve things, to make things better.  That desire is always there, even though some people will work hard to do it and many other people won’t.
  • When given the choice between being optimistic and pessimistic, most people choose optimism.
  • People do many things based on the hope that they’ll become happier, healthier, more loved, more secure, gain peace of mind, etc.  They join clubs, churches, start their own businesses, go on diets, enter into relationships, and more as they invest in hope, time and time again.

When you look through this prism and truly understand what your clients actually need, want and desire, you now have the most important keys with which to effectively market your business to them. 

This is the correct answer to the first question.  Now let’s ask the same question from a different perspective.  Mr. or Ms. Owner, what business are you – personally – really in?

You’re in the marketing business!  In fact, everyone in your company – directly or indirectly – is in the marketing business!

Your primary focus needs to be on the strategic role of acquiring, retaining, and maximizing the lifetime value of your clients.  It’s all about changing your perspective from being a tactical “doer” – making or selling certain goods and/or services in exchange for getting people to pay you for them – and focus instead on the activities that are going to improve the profitability of your business and help it grow.

In today’s business culture, this mind shift can be difficult for some to accomplish.  Go to any trade show or industry conference and people will tell you that they’re in the “(fill in the blank) business”, or that they “make the best widget out there today”.  They think of – and define – themselves as being a maker or doer of something, rather than as a marketer of something. 

However, in the real world, this view you have about your role in the business has critical ramifications for it.  It influences how you allocate your valuable time, energy, and capital. 

The value of just doing things is much less than the value of actively managing your company’s relationship with your clients – and managing it effectively through the same perspective that your clients view you.  Just as Charles Revlon did, you have the best insight into your clients’ inner needs and desires, so it’s incumbent upon you to handle, or at least direct, the strategic marketing of your business.

There is, of course, no substitute for doing – someone has to create the product or service, sell or lease it, ship or deliver it, etc.  Doing, so to speak, is a necessary evil of business.  There are plenty of talented, capable people out there who are perfectly suited for that role, and it’s easy to delegate those functions to them.  Most anyone can be a doer, but few people have the skills to handle, or can be entrusted with, THE most critical role in any business – marketing it.

All too often, most business owners view marketing as an afterthought or as an unnecessary expense, something to do if they have some time, energy or money left over at the end of the work day.  However, by focusing more on becoming a more effective marketer for your business and delegating the doing to others, you radically increase your business’s chances for success, growth and increasing your own personal wealth.

Ask any highly successful businessperson what one activity they spend the vast majority of their working time on, and invariably you’ll get a response similar to “Marketing my company”.  Because of your close proximity to your clients and your clear insight into exactly what you’re selling to them, this makes you the most logical choice to handle this critically important business function for your company.

You, of all people, are in THE best position to not only understand exactly what it is you’re selling, but who you’re selling it to.  This is where your true value lies.  Make an effort to work more ON your business than IN it. For the sake of your company, try to become a better marketer – and less of a maker or doer.

The Marketing Strategy Small Businesses Need To Avoid Being “Carfaxed”

by Steve Houston

How CarFax came to dominate the automobile industry is an amazing success story, and it’s particularly instructive since it also helps explain why this new marketing strategy small business must implement has become so critically important.  If you own or manage a company, read on because I’m going to tell you how to keep it from being “carfaxed” too…

When CarFax entered the auto market in 1984, they were very clever about how they did it.  Their business model was based on getting all the auto dealerships in the country to sign up for their monthly car-history tracking and reporting program.  But rather than market their service directly to the auto dealers, they positioned themselves as an expert in the market directly between the consumer and the auto dealer.

They spent hundreds of millions of dollars on advertising that taught auto shoppers to request a free CarFax report whenever they went shopping at a used automobile dealership.  Recognize their tagline?  “Just ask for the CarFax.”  You still hear it on TV today.  What they did, essentially, was establish a new standard for automobile buying in consumers’ minds – before you buy a vehicle, you need to get your free CarFax report on that vehicle from the dealer.  Consumers listened, learned, and embraced it, naturally, because it was a great service and it didn’t cost them a dime.

So when potential car customers started showing up at dealerships asking for their CarFax reports, auto dealers were confronted with a choice.  The dealers that didn’t subscribe to CarFax’s monthly service soon discovered that prospects coming to their dealerships didn’t trust them as much as the dealerships who did offer CarFax reports to potential buyers.

Guess which dealerships’ sales started to really soar?  That’s right – the ones who chose to give the free CarFax report to their prospects.

(Note: When your line of business is already widely viewed as being, shall we say, less than reputable, this really hits a nerve.)  Other auto dealers finally realized the deck was stacked against them and they started signing up in droves.  CarFax was officially born.

CarFax’s strategy allowed consumers to infer that dealerships who gave their customers CarFax reports were more reputable than those dealers who didn’t.

Today, Google, Yelp, Angie’s List, and hundreds of other online business directories are doing the same thing to you and your business, leveraging your customer reviews and online reputation instead.  This is the marketing strategy small business owners must understand.

A few years ago (and probably without your knowledge), each of these online business directories gave you a free webpage where anyone can go and write reviews about your company.  Good or bad, complimentary or critical, accurate or completely false, it doesn’t matter – your professional reputation is now being written online by your past customers.  Those reviews are also being seen by hundreds of prospects each month as they search online for companies like yours to do business with.

By encouraging customers to write reviews about businesses and publish them on their websites for everyone to read, Google attracts millions of visitors daily.  This serves two purposes – they provide a useful service that helps consumers choose between companies to either patronize or avoid, while earning billions of dollars each year from the advertising they sell on their webpages.  One unintended consequence of all this is that the demand for professional reputation marketing services also started to take off.

So what does this mean for your business? If you have any bad customer reviews posted about you online, hundreds of prospective customers every month see those reviews.  Most of them will choose not to give you their business and will instead give it to another company who has a better online reputation.

If your company has negative reviews written about it – or no reviews at all, and therefore has no reputation – you are not going to be viewed as trustworthy.  People will take their business elsewhere.

Business is based on trust and the marketing wizards at CarFax understood that almost 20 years ago.  Today, Google and a host of other online business directories are applying the same strategy to you, this time using only a slightly different twist.

And if you were like most business owners, you didn’t even know it is happening.

But now you do. Savvy business owners are beginning to realize they have to gain control of their online reputations.  To ignore the problem and simply leave it to chance is to invite disaster.  This is one marketing strategy small business owner can’t afford to ignore.

Managing your online reputation is not an easy thing to do, but when done correctly, it can be a particularly powerful form of marketing for your company.  “Reputation marketing” is a relatively new, highly specialized service that sprang up in response to this new requirement.  If business owners don’t have the technical knowledge, time, or inclination to do it themselves, an expert reputation marketing consultant can help clients:

  1. recover their tarnished reputation, if necessary
  2. build a 5-star online reputation that earns new customers’ trust and improves sales conversions
  3. market their business by leveraging the powerful “social proof” value of their 5-star reputation
  4. instill a “reputation-minded” culture within their organization to foster a high reputation “awareness”

Actively managing their companies’ online reputations is a new ballgame for most business owners, so you’re probably not the only one feeling overwhelmed by it all.  Reputation marketing solutions do exist but  you need to get started now before your competitors do.  Not next week.  Not tomorrow.


After all, there’s nothing more important to a business than having a trustworthy, rock-solid professional reputation.  Little CarFax taught the enormous used car industry this fundamental lesson.  Today, it’s Google, Angie’s List, Yelp and hundreds more business directories  that are, instead, defining the relationship between your business and thousands of prospective online customers.  The one marketing strategy small business needs to start working on is called reputation marketing, and the sooner they start, the better.

You’ve been warned.

(CarFax, Google, Yelp, and Angie’s List are all registered trademarks of their respective companies.)