Business Lunch: Food Wine

Shouldn’t wine always go with food? That seems to be an obvious question, but wine is not always presented or produced with that goal in mind. Sure, varietal and terroir are important, but wine making for the express interest of pairing with specific food? Lettie Teague’s latest post in the Wall Street Journal, “The World’s Best Food Wines,” made me think twice about how to value wine. And it made me think even harder about valuing products and services sold by businesses.

The article talks about how Italian wines are bright with acidity and have an edge of bitterness, both complimentary with food. It also talks about the fact that the Italians make wines to go well with food. Drinking the wine with food is the end goal. I love this focus.

When I think of Italians drinking wine, I think of a Tuscan landscape with a family around a dinner table with wine. It’s a cultural mindset. Applying this to a business concept, is your business focused in the sense that it offers a product or service that fits naturally within your customers’ lifestyles? What are those lifestyles anyways, and are there any constraints against them? It’s a shift in thinking, but how much easier would it be to market your business if there was a seamless fit?

Photo courtesy of the Wall Street Journal.

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Business Lunch: Beans

Beans. Last week PepsiCo announced that its participation with Enterprise EthioPEA (USAID press release), an initiative that aims to dramatically increase chickpea production in Ethiopia to improve both the economic and nutritional security in the country. PepsiCo also has a vested interest in the project that goes beyond just helping Ethiopians; the company wants more of a chickpea supply for its products, including its Sabra hummus product.

As PepsiCo receives relentless attacks for profiting on sugary drinks claimed to contribute to obesity in our country, it’s a no brainer that it decided to invest in a mutually beneficial initiative to improve its ‘healthy’ products revenue. This partnership improves the Ethiopian food inventory and agricultural practices while increasing PepsiCo’s short and long term financial goals.

Shrinking the scale and applying this program to small business, think of the mentorship and coaching opportunities between employers and employees. What’s the ‘chickpea solution’ to provide a mutually beneficial relationship that improves employee skill-sets and productivity while increasing revenue potential?

Photo courtesy of Daily Perricone.

Price Matters

For all the statements about product mix and customer service, in this economy, price matters. And for small businesses, price really matters. Customer culture these days encompasses all forms of comparing, contrasting, searching online, hemming-and-hawing, and pretty much analyzing a purchase to death sometimes. What to do?

Well, doing research can help get your bearings. Research what your competition is doing. Research the worth of changing prices. Also, try taking the focus off pricing and research options beyond price changes to improve your margins or consumer behavior. Here are a few resources for each:

Researching your competition:

• From an Inc. article on writing a business plan, “Most people set prices based on what their competition does, which is a big mistake. The key is to focus on how much you want and where you want to be.”
• “10 Tips on How to Research Your Competition” and “How to Conduct Competitive Research,” Inc.
• “Inflations Pressures Grow on Main Street,” CNN Money

Researching the worth of changing prices.

• “How to Avoid Falling into a Price War by Focusing on Value, ” Small Business Association
• “Competing on Price is Bad for Small Businesses,” Understanding eCommerce
• “5 Ways to Win on Price,” Small Business Trends

Researching other options beyond changing prices.

• “Forget Competition it’s Time for Co-petition,” Small Business Association
• “Five Steps for Small Business Owners to Reduce Operating Expenses,” PR News Wire
• “6 Tips to Improve Your Gross Margin,” More Business

These resources should help you to gauge where your business stands on price and how much that rank matters. In the end, you’ll likely understand your business much more thoroughly, which isn’t a bad thing either. Because your pricing contributes to your business’ brand, it’s important to know your reasoning behind it – and your reasoning behind changing prices if that’s the route you wish to go.

Photo courtesy of Mediabistro.

Introducing Business Lunch: Canal House

I’ll admit, I’ve been away a bit. As I say to all bloggers (and blogging hopefuls), maintaining a blog is the biggest challenge to having one. Regardless, it feels good to be back. I have great ideas, I’ve been inspired by great minds, and I’m eager to share them with you.

In this post, I introduce ‘Business Lunch,’ a new category of posts as part of my blog. As with everyone, we’re all busy, but eager for information in a short format. This post series does that. I was inspired by a blogging series by the Canal House ladies who provide an almost daily dialogue on what they eat for lunch. My tastebuds not only flair upon knowing what Christopher Hirsheimer and Melissa Hamilton make for lunch each day, but my mind is continually impressed with their discipline to practice and hone their culinary craft. And that’s just it, the opportunity to finesse a strength is key.

So with this Business Lunch series, I’ll include frequent tidbits of information that apply to small business interests and business professionals in short form. (You might also be interested in my Spotlight on Business series highlighting the success strategies of noted businesses, stay tuned for new spotlights coming up.)

Like a fresh ripe tomato with a bit of mayonnaise on crusty bread, sometimes the most successful pairings work best in a simplistic form. Cheers to lunch and information sharing ahead.

Photo courtesy of the Canal House.

Setting the Stage

I recently attended an event at which two very prominent and successful executives had the opportunity to speak with a group of young adventure seeking and career aspiring individuals – I am just that individual. The tough part about developing a career is that it often times can’t be planned. I was once told that a “career” is something you look back upon in hindsight. That perspective makes sense, but knowing that tangential circumstances are what presented the open doors for many successful people to walk through doesn’t give me the confidence to charge forward. What does make sense is that everything I do sets the stage for what’s next to come. And with that frame of mind, I have a lot of props at my fingertips, and I have a lot more to go out and build.

I also realized that I am on the stage. I am, and have been, acting out my song and dance – I might as well make each and every act fun right? (Enter the cast of Glee here.) I have been perceiving my life in the future for as long as I can remember, forgoing the value of what was happening in the present moment; the crowd will never give an applause if there wasn’t a show to begin with. It’s time to bring out the jazz hands and enjoy the spotlight!

What does this all mean for business? As a business owner, you have fans, you have an audience, you have customers who are watching your song and dance right now. You wouldn’t have started your business unless you had the props to do so, and in doing so, you’ve likely developed a few more to further your story line and enhance your performance.

Strategic planning is a fantastic exercise, but it’s only worthwhile if you are capable of acting out the day-to-day successfully. Take the time to cultivate your identity and camaraderie, and the magnetic qualities that excite your employees and attract your customers. Your passion, creativity, and tenacity brought you to your entrepreneurial success. But it’s your existing operations that provide a daily report card for you to constantly tweak so that you can continually engage your customers. Do a S.W.O.T. analysis, set S.M.A.R.T. goals, but use them as a guide. You’ll never achieve the end result if you don’t take that first step and nurture the process.

Be the lead in your own life, draw a crowd to your business, and bask in the limelight on your own stage. You’ve got gumption and the cameras are rolling, make it a great scene.

Photo courtesy of Un-Cabaret.

Social Networks and Baby Boomers

I recently read this article, “Social Networks Are Not Just for the Young,” in The Chronicle of Philanthropy. What made me even more interested in the fact that people older than 50 years of age were using social networks, more than before, was how the article presented the information. The article closed out with the following:

“What does this mean for nonprofit groups? For groups that appeal to older supporters, it means that they can no longer assume that their supporters aren’t using social networks. For other organizations, it might be time to experiment with messages and conversations that are likely to engage older people—and to make sure that they aren’t using language tailored to young adults.”

Consider how this data is applied – such as in the nonprofit world. Reaching out to an organization’s membership requires a strategy beyond a simple e-mail here and there. Social networks provide the capability of having a presence where people already spend their time; why not engage your demographic in your cause at the same time?

Facebook continues to be the most visited site for social networking across the ages (see this great chart), but that doesn’t mean that you shouldn’t discount the social media network suite of Facebook, Twitter, and LinkedIn. With a tactical communication strategy that supports your goals, each medium can enhance your ability for reaching your demographic. What this Pew Internet & American Life Project survey presents is the opportunity available to organizations for revised marketing tactics and community engagement vehicles. Baby Boomers are just one demographic leaping into the mix, consider your target audience and capture their attention!

Photo courtesy of Netsocializing.

Accounts Receivable Riskiness

Sales growth is only part of the equation when thinking about expanding your business; getting paid is the obvious other priority (and it just might be the biggest one). After all, if you’re not able to collect on your accounts receivables, it’s pretty hard to pay employees, manage operational expenses, or even consider planning for the future.

I’ve previously written about “Ensuring Customer Payment” and the importance of due diligence on a business owner’s part for following up with customers and making transactions more seamless. But have you ever analyzed the diversity of your ‘accounts receivable risk?’

OPEN Forum recently posted an article about accounts receivable risk and determining your accounts receivable concentration risk ratio. This ratio basically maps out who owes you what, and how much each value is relative to everyone else. It’s a great exercise for both economics geeks and, well, the rest of us who just want to get paid. Because accounts receivable risk refers to the likelihood that a particular customer becomes unable to pay what they owe, the goal is to have a ratio that is less concentrated so that your business is not dependent on the impact of one company failing to pay. (Check out the formula for calculating your business’ concentration ratio here.)

Reducing your concentration ratio is the next step.  This can happen by selling more to new customers or incentivizing your largest customers to pay faster through discounts for early payments or other benefits.  If you have leverage with your customers, you can also mitigate the risk of non-payment by acquiring credit insurance or using accounts receivable factoring companies to purchase your receivables in order to give you immediate capital. Although, factoring companies only give you a percentage of your accounts receivables, the capital inflow to your company is immediate and this type of small business financing can give you the jolt that is needed to kick-start your company.

At the end of the day, it always comes down to money. With the right information at hand, you’ll know which accounts need more hand-holding than others – and hopefully, a few tips for how to influence faster payment at the start.

Photo courtesy of Breakmould.

The Food Truck Business Model

It’s an understatement to say that food trucks are all the rage because it’s literally a “movement.” And really, this isn’t surprising as small businesses and entrepreneurial start-ups are thriving in this economy. Food trucks are the epitome of small, mobile, adaptable businesses going after their target markets.

Notably, a GPS-oriented Food Truck App launched this spring, debuted by the company that leased Kogi BBQ its first truck and helped kick off the nouveau food truck craze. Roy Choi of Kogi BBQ is also one of Food and Wine‘s Top Chefs of 2010 (check out his business tips). Additionally, the Food Network is premiering its new show Food Trucks later this summer on August 15, 2010. So it’s already been a big year for food trucks! And as cities across the county take pride in their favorites, this national sensation not only bolsters the local economy, tourists flock toward them too.

So what does it take to run a food truck? Well, the biggest seller for jumping into the market is mobility and a somewhat lower initial capital investment – over a brick-and-mortar restaurant. But as every entrepreneur will tell you, it’s easy to run after tangents that spider off of an original business model, that is if you have one. Inc.com posted an informative article about “How to Open a Successful Food Truck,” which also included a number of operational considerations such as city permits, insurance, and parking fees. New York Magazine also published an article on “How to Start Your Own Food Truck,” noting start-up operating costs and acquiring/retrofitting a truck as significant measures to acknowledge.

Probably one of the most influential contributors to the making of a successful food truck culture in any city are the street vendor licensing and permitting requirements. The Seattle Times recently posted an article in its Retail Report about how the Mayor plans to recommend street food rule changes to the City Council. “Street Vendors” are even qualified as a characteristic of a thriving business district by the Seattle Office of Economic Development. Yet, a number of strict regulations imposed in the 1980’s have limited Seattle’s street food scene to a minimal number of trucks and a battalion of hot dog, popcorn, and espresso vendors. Check out the main changes being proposed here. There’s a mixed emotion for the relaxed rules, given the potential for increased business competition. And there may be a few learning opportunities from Portland’s street food scene.

Regardless, food truck entrepreneurs have mastered the use social media to create consumer demand and a loyal following. They’re experts at building relationships and communities of fans – who wouldn’t want to discover their tricks? (See Mashable‘s video and Forbes‘ article.)

In Seattle we’re fortunate to have a wealth of fresh, local, and creative food – it will be interesting to see how a bigger food truck scene reflects this. And with our successful farmers market culture, I wonder if the mobile CSAs of New York City will make their move West – will truck farming be the next movement?

Photo courtesy of ibeginz.

The World Cup Brand Battle

The World Cup started this past Friday, and even if you’re not a die hard soccer fan, it’s hard not to get swept up in the excitement. Brackets have been filled out, even if by only gauging your affinity for team mascots, the South African vuvuzela trumpets are humming, and fans across the world are watching games in unison. I have to admit, it’s pretty powerful to think that a single sport can unite the world with such overwhelming fanaticism – bandwagon or not, I’ve jumped.

And like any great business, there are a few that have leaped at the chance to build brand awareness in front of the astronomical volume of people watching each game. Adidas is one of the official sponsors of the World Cup, but you may have guessed that Nike was instead by its sheer amount of brand development – it’s not. The Nielson Company just released a study which revealed that Nike was more frequently linked to the World Cup than any of the tournament’s official partners and sponsors via online blogs, message boards and social networking sites. The study also stated that there were twice as many references to Nike in online English-language messages related to the World Cup than to Adidas.

Fast Company also had a great article on the study and about Nike’s World Cup campaign, and most notably its “Write the Future” ad. Interestingly enough, Adidas, which is outfitting 12 of the teams, compared to Nike’s 9, can only muster 14.4% of the “official and competitor buzz” as Nielsen has it, compared to Nike’s 30.2%. To see what the buzz is all about, see Neilson’s piece on the topics driving the World Cup conversation.

So what does this mean for small business? Well, for starters, it’s obvious that sponsorship is only one avenue of getting your brand in front of potential consumers. More than ever now, there are opportunities to create a conversation and build brand awareness online – and through mediums that are much less expensive than sponsorship. Nielsen’s executive vice president of digital strategy Pete Balackshaw even said that the study showed that compelling, savvy marketing can establish a similar consumer connection without having to write that expensive sponsorship check. Nike spent an estimated $10 million to make its World Cup ad, but you don’t have to!

One of the biggest challenges to starting a social media campaign is getting started – and then maintaining your presence. I’ve listed a few articles below for a little inspiration and clarity. Write your future and build your brand creatively!

• 5 Ways Small Businesses Can Avoid Social Media Panic.
• How Small Businesses Are Using Social Media for Real Results.
• 30 Valuable Lessons Learned Using Social Media for Small Business.
• The 10 Stages of Social Media Business Integration.
• Why Small Businesses Shouldn’t Take Social Media for Granted.

Video courtesy of Nike Football/YouTube.

Hiring and Recruiting

In this economy, it’s great to hear that manufacturing and service service sector companies are expected to add to their payrolls at a much higher rate in June 2010 than they did in June 2009, according to a recent survey by SHRM. The survey also indicated that small business hiring also grew in May 2010. In fact, a Small Business Administration economist even mentioned that small businesses are adding workers as net job losses in the economy as a whole persist. In the aggregate, we’re not seeing dramatic changes, but we’re at least seeing changes in a positive direction.

As with any business, especially a small one, recruiting and hiring the right people for your business is crucial. I’ve previously written about the “Science of Hiring,” particularly the costs associated with a bad hire. Knowing when to hire and how to go about doing so is just as important as picking the right candidate for the job. Growing your workforce  is an investment, so it makes sense to have a tactical approach to hiring.

Knowing when to hire is key. The idea that a new employee will offset your workload and generate new revenue for your business is surely enticing, but it comes at a cost. Thus, it’s important to hire when your cash flow is positive and when you have a cash management process that minimizes the worry associated with cash shortages. Aside from an employee’s regular pay, you’ll need to consider several costs related to employment. Often times, these costs amount to 30-40% of the employees base pay:

• Federal and State payroll taxes – including Social Security/FICA, Medicare, unemployment, and workers compensation.
• Employee benefits – such as health insurance, retirement savings plans, life insurance, and long term disability insurance.
• Cash-flow projections associated with your employee’s pay periods.
• Employee workspace and computer system use.
• Hiring and training costs.

Know what position you want to fill. It’s worth stopping to think, “do I really need to hire someone?” Many services can be outsourced or done by free-lancers; this work may include accounting, manufacturing, website design, marketing and public relations. Deciding what tasks to outsource and what to hire an employee for may come down to whether the work lies within your business’ core areas of strength and whether that function is needed on a regular basis. Choosing a position to hire is not just about offloading chores, it’s a decision about the path of your business’ growth.

Know what to expect from your new hire. Before you advertise for help, sit down and write a job description. Job descriptions are communication tools, set yourself up for a great working relationship by being able to clearly articulate the job to all applicants. This document presents an excellent guide for developing effective job descriptions.