Mike Michalowicz's Blog, page 94

Episode 23: Pricing and Profitability With Matthew Perosi

Show Summary

Matthew Perosi, Chief Thinker at Sapphire Collaborative, joins Episode 23 of the Profit First Podcast. Matthew shares his story of when his company went into financial struggle and how he turned it around to become a profitable success.

 

Our Guest

Matthew Perosi is an internet analyst who examines existing and emerging technologies and figures out if they will be useful for business marketing; then acts as an individual consultant for people who want their business correctly positioned online for the future.

Matthew Perosi is an experienced entrepreneur, internet marketing consultant and mobile marketing consultant, SEO expert, educator and website developer. Founder of the Jeweler Website Advisory Group where all of his research provides scalpel sharp marketing and training for retail jewelry store owners and e-tail jewelry stores

During any face to face or telephone conversation Matthew freely offers innovative solutions for almost any internet marketing strategy as well as continually sharing his business experience and recommendations beyond the internet.

Matthew is the technical writer for the Retail Jewelry Magazine, and can often been seen speaking at trade shows like JA, MJSA, and JCK. His has also been found teaching jewelry photography at special events held at FIT in New York City.

 

Show Quotes 

The most difficult thing was realizing how to correctly price ourselves. It took us several years to realize our mistake that got our company into financial trouble. We were offering inexpensive websites and including consulting services… but we weren’t getting paid or compensated for any of the consulting work.

As the recession began we dipped into the line of credit to pay our regular bills, and only used the money that our customers were paying to pay our employees. We got to the point where we had to lay off everyone other than myself (Matt) and my business partner. Suddenly two of us were doing the work of 5 employees.

I went through every service that we were offering and completely re engineered all the software we were using, as well as creating new software that was easy to use. This allowed employees to manage more clients – which helped turn our company around.

Best tip to profitability: Kill the ego. Admit to yourself that you don’t know everything.

If you want to sell your business, figure out how you want to tap into the next generation of customers and how to turn your own pricing around.

When you seek the advice of someone, ask in return what has been their experience doing it. If they tell you they failed or they haven’t done it yet, don’t listen to them. If they’ve been successful and they say “don’t do it”, that’s the person you want to listen to.

 

Show Links

Matthew’s Websites:

Press Release & Speaker site: http://www.perosi.com

Blog: http://www.jwag.biz/nuggets

Coaching Company site: http://www.sapphirecollaborative.com

 

Show Sponsors

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Start Your New Employees Off The Right Way

Hiring and training new employees is not only time-consuming, but is also costly. That’s why, when you bring someone aboard, you should be doing all you can to make it a great start. First impressions go a long way, and if you can get that new hire off to a great start, you will have a much greater chance of having them stick around.

Here are some ways that can help you get your new employees off to a great start:

Celebrate their arrival. Most employers have a going-away party, but you need to have a welcome party! This will help set the tone, make them feel special, and give everyone a chance to meet the new team member.

Advance notice. Let them know ahead of time if there is anything they should be aware of, such as where to park, your smoking policy, or how to dress. This can help prevent uncomfortable situations from arising.

Be prepared. Before they start work, have all the paperwork done. The first day should be about meeting people and getting integrated, not doing paperwork. You should also have the materials in place that they will need to do their job, like business cards.

Be there. Greet them as soon as they come in. Then start taking them around for a tour and to meet people. And, in addition to being there, make sure you greet the person by name, and act as if you were eagerly awaiting their arrival. The new employee will not feel very valued if they walk in and have to explain who they are and why they are there.

Heads up. Let the new employee know what to expect that day. It is weird enough, starting a new job, but when you add not knowing what to expect, all day, it can make matters worse. Let them know how you see the day playing out.

Time matters. Especially on the first day, try to avoid keeping them late. As it is, they have taken in a lot and will need some time to decompress. The last thing they need is to have to put in extra time when they are just starting.

Pair up. Trying pairing up the new employee with someone who knows the company well and is a good role model within your business. That way, there will be a dedicated person they can go to, when they have questions. And that buddy can also try to help them feel more at ease, along the way.

Go easy. Especially on the first day, avoid information overload. Too much information given to the new employee at once will just overwhelm them. On the first day, keep it simple. You will have plenty of time later for loading your new employee up with information. But the first day is not the time for it.

Follow up. At the end of the first day, or week, ask the new employee for feedback to see how they feel about the position, how they are settling in, whether there is anything they need, etc.

 

Settling In

One of the most important things you can do, to get employees off to a great start, is to give them the proper training they need to do the job you have hired them to do. Many people leave positions because they feel they are not receiving the proper training, which can make someone feel overwhelmed and stressed out.

The more you can do to welcome the employee and make them feel comfortable, the better start they will experience. And that’s a good thing for both your new employee and your business! From giving them a company shirt or hat to throwing a pizza party lunch for their first day, there are many things you can do to help get the ball rolling in a successful direction.

How To Handle Having Too Much To Do

Are you feeling overwhelmed? Maybe you’re having a panic attack, or a sudden desire to curl up under your desk in a fetal position and cry. Now what? First, recognize it is ok… overwhelm happens. There are millions of people across America right now crying in the restroom or screaming like little girls behind their closed office doors. It doesn’t have to be like this. You can lose that overwhelmed feeling without a prescription. It just takes a pad of paper and a pen. Let’s take action to get your overwhelm fixed.

1. Create a list. Write down (on paper) everything you need to do. This is critical, because a big part of overwhelm is the mental energy of constantly thinking of all the things you need to do. Once you’ve written it all down, it will release the need to remember, and the fear of forgetting, and a huge chunk of the stress will go away.

2. Next, look for “combo packs”— are there any tasks that can be done simultaneously or more efficiently if they are grouped? Maybe you can write all your emails and make all your phone calls at the same time. What about filing and mail? Make the first group by putting the number 1 next to each item that can be grouped together. Then make the next group and put a number 2 next to each item in that group. Keep repeating until the entire grouping is down. Now put a number next to each remaining items. This will tell you how many real actions you need to take. This often gives you even more relief since there is less to do then when you first wrote everything down.

3. Put a dollar sign next to anything that will result in income for you in the next 30 days. You can prioritize by date, amount of money, the likelihood a client will fire you, time it will take to complete the task or whatever other criteria will ensure you tackle the right project first.

4. Put a smiley face next to anything that is for a client or prospect. Note some things will have both a dollar sign and a smiley face.

5. Put a star next to anything that is due today. Some things will have a smiley face, a dollar sign and a star—like a Vegas slot machine, only without the bells and quarter slots. Start here… do these tasks or jobs first. I guarantee crossing them off the list will ease your overwhelm levels immediately.

6. When you start with the smiley, dollar, and star tasks, if there are other things in that group, do them too.

7. Next, do the dollar sign and star combo items, since this is stuff that will bring you money and keep your business alive so you have an office to scream in from time to time.

8. Next on your list are the smiley sign and stars tasks, since this is client stuff.

9. Next is not stars, believe it or not. This is urgent stuff but not important (it doesn’t impact your income or your clients), so your job here is to delay these items. Make the call or email to get you more time, do whatever you can do delay them.

10. Next do the dollar signs. Then next do the smiley faces. Then do the stars. And then do the rest of the list.

See? Your overwhelm levels have just dropped significantly and you’re back on track. You may not feel like you can kick back with a beer and a bag of chips just yet, but you’re getting closer.

How to Have Your Team Fix It Fast When Sh*t Hits the Fan

Have you ever seen the “Apollo 13” movie? If you have, you know what I’m talking about when I say that it really hit the fan in that movie! After they set out on a mission to the moon, an explosion changed everything, leaving the crew with no oxygen. But given the tools, power, and time frame, they were able to fix it fast, and the rest, as we know, is history!

One of the most memorable scenes in that movie is when the NASA director says, “This could be the worst disaster NASA’s ever faced,” and Ed Harris’s character replies by calmly saying, “With all due respect, sir, I believe this is gonna be our finest hour.” While the scenarios and problems may differ, this same attitude can, and should, be applied to unforeseen problems that happen in your own business.

Here is how you can effectively handle a big problem and get your team to fix it fast:

Clarity.

Explain the problem, being sure to give absolute clarity to the objective that must be accomplished. You will need to really spell it out and cover all bases, as some people may not be able to think of even the basics during high-stress situations.

Empower.

It is important that you empower the team to make critical decisions. If you are micromanaging at this point, you will only hamper things. They need to know that you believe in them to get the job done, and that the power is in their hands to do what they need to in order to make it happen.

Time frame.

People usually work better when they know what the time frame is, so be clear about what needs to be accomplished and by when.

Benefit.

Let your crew know the benefit of solving the problem. This way, they can see the clear picture of why it is important to the company. If they know the benefits to the company, they may also see how it benefits them and their job.

Food and drink.

Let’s be honest, nothing is more distracting than trying to work while you are hungry. You can easily prevent the headaches, distractions and crankiness that come as a result of being hungry by keeping a steady stream of food and drink delivered to your team as they are tacking the problem at hand.

Appreciation.

You’ll want to express appreciation for your team’s commitment to fixing the problem, both while they are working on it and after they are finished. This is the time that you want to focus on having an attitude of gratitude.

Reward.

Once the problem has been resolved, always reward the folks who worked so hard to fix it. Give them well-deserved time off, or some other form of recognition.

There is a really good chance that your team can fix most, if not all, of the problems that come their way. And your job of being an effective leader is to get out of the way and let them do it. But before you do that, you need to make sure they have the things they need in order to pull it off. Given the right information, equipment and time frame, along with being empowered, the outlook is good that they will do it to your satisfaction.

Problems are bound to arise in your business, even really big ones. But being prepared, by knowing what to do, can help ensure that your team can see it through to a successful outcome. Even the biggest problem doesn’t have to become a disaster you face; it can actually turn out to be your team’s finest hour!

Weirdos Wanted!

Next time someone calls you weird, revel in it.

It’s the weirdos who are different. It’s the weirdos who challenge the norm.  It is the weirdos who realize the foundation of success comes from the courage of being yourself unabashedly.

The world celebrates the weirdos and often pays them handsomely in the process. Here’s to being weird.

Episode 22: Engineering and Industry Domination With Kurt Shafer

Show Summary

Kurt Shafer, CEO of Invisco, joins Episode 22 of the Profit First Podcast. Kurt shares his story of how an inventor came to dominate the industry.

 

Our Guest

Graduated BSEE University of Southern California 1965

Field Engineer for Bendix, Magnavox, Harris.

Sales Representative for National Semiconductor, International Rectifier, Unitrode, Philips,

Harris, Intel, and others

Invented first commercial web cam software, SnapNSend, in 1995

Installed first whole house fan in 2008 and sold kits on EBay.

Invented first attic mounted 30 inch belt drive fan in 2009.

Trademarked “Ultimate Cooling Machine” in 2010.

Invented first automatic speed control for whole house fans in 2013.

Became first US firm to enter Australian market for whole house fans in 2013.

 

Show Quotes

The internet makes everyone (Big and small) look the same.

Consumers notice different and there is an appeal to something different.

 

Show Links

Kurt’s Website: http://invisco.com/

Kurt’s other website: http://wholehousefanguy.com/

Kurt Shafer on Twitter: @kurtshafer1

Kurt Shafer on LinkedIn

Show Sponsors

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Are You Using The Strategy That Puts You In Front?

During my freshman year of high school I played football. I sucked.

I sat the bench for every game and was effectively a human punching bag at practice. I was too skinny and too weak to tackle other players. I couldn’t take them down, no matter how hard I tried. That was until I found the magic of tripping. When I went to make a tackle, if got my feet tangled up with theirs they would go down. It worked like a charm. I could finally make tackles. But there was just one, not-so-little, problem… tripping is illegal.

You see, when it comes to sports there are rules. Rules that all players must abide by, otherwise they will be penalized or removed from the game. Rules are everywhere, not just sports. Laws, unspoken rules, guidelines – are all rules.

We live under so many rules and laws, that we start to believe there are rules for everything – that there are unbreakable rules even when not a single one exists. As a result, many an entrepreneur falls into the trap of believing their industry works the way it does because of rules. They believe their industry has rules that can’t be broken. They are wrong. Successful entrepreneurs know that “breaking” these non-existent rules is in fact the key to success.

Case in point, Tina Pennington and Mandy Williams, better known as Red & Black (hint: their hair color has a little something to do with it), are breaking the established rules of book publishing and marketing. Red & Black set out to bust every rule publishers & authors play by – and through their process created a way that is making their brand stand out. Big time.

After choosing the route of self-publishing Red & Black elected to skip the book distribution juggernauts of Amazon and Barnes & Noble and instead used RR Donnelley to both print and distribute the book. (They did it in 2009. Harper Collins announced a similar arrangement in 2011.) To establish instant credibility, they struck a deal with Neiman Marcus. Crazy, right?!?! Crazy like a fox. Neiman Marcus, which really doesn’t sell books, launched theirs. And now their book, “What I Learned About Life When My Husband Got Fired!” was getting lots of attention. The book sitting in the hands of mannequins in the window didn’t hurt either.

Instead of cold calling, or emailing, or snail mailing key influencers who could provide critical guidance, Red & Black wrote one-off press releases. A clever “dummy” press release using their father’s original last name (Weinberg), attempted to get the attention of Bob Weinstein – “Weinberg Sisters Want to Meet Weinstein Brothers.” Guess what? They did.

Instead of focusing on marketing to individuals, when asked to develop and teach a financial literacy program for KIPP Houston High School they stopped all marketing. Now their book is a state-approved textbook, which will result in book sales for years to come. Genius!

So, what’s the lesson? Think backwards! To find where the opportunities are, watch what others are doing and more importantly what they are not doing. Next evaluate your end objectives and goals, and figure out your strategy backwards. Start at the end, work your way back and leverage every single opportunity that the “rule followers” are not following.

Pulling this off does require one key ingredient that Black shared with me. When I asked her, “What is the key to executing a rule breaking strategy?” She responded, “Chutzpah.“

Breaking rules where rules actually exist, gets you nowhere. You’ll get benched (or become a human punching bag.) But where rules don’t exist, your commitment to break the rules is exactly what will bring you success. Get out there and get to breaking the rules. And don’t forget to bring your chutzpah. You’ll need lots of it.

You Are Never Going To Make Enough Money; Here’s Why

Yes, you read that right. I’m here to break the bad news to you. You aren’t ever going to make enough money! You simply can’t ever make enough money. It’s the trap of entrepreneurship. But understanding the reasons for it, and knowing the alternative to what you should pursue, can help spare you a lot of time, stress and chasing.

You’ll never make enough money because, as you climb the mountain of financial success, you can see farther and farther. And what you see is that there are many other mountains that are way taller, and people are climbing on them. So, no matter how good a job you do at getting to the top of the mountain, you will still feel as though you haven’t reached the top, and you may just drive yourself crazy by continuously trying to reach the highest summit.

Here are some of the reasons why you aren’t ever going to make enough money:

Keeping up with the Joneses. This is probably the biggest problem that people face when it comes to financial issues. For every step of the ladder that you climb, you find there are people a step ahead. So you will continuously try to keep up and be more like them. It’s like a cat chasing its tail: you will keep going, but never feel like you have been successful at reaching what you are after.

Your odds are 7 billion to one. The planet’s population recently hit 7 billion people. Sure, you want to be the richest person in the world. But let’s be honest, there is only one richest person in the world, so out of 7 billion people you have a lot of competition to be number one. There is always going to be someone more successful and someone with a lot more money.

More financial success equals more financial stress. If you think about it, you can probably relate to this scenario right now, no matter where you are financially. The more you make, the more you buy, which means the more stuff you need to maintain. It becomes a circular trap. If you make more, you will need to maintain more, which will amount to a whole lot of stress and pressure to keep making more.

You have probably read a lot of articles in the past that pump you up to believe that, when it comes to financial success, the sky is the limit. That’s because the author probably knows it is what you want to hear. But the truth of the matter, after going over the reasons above of why it’s not possible, is that it’s a pursuit you should stop focusing so much on. You will get more enjoyment out of life when you take the focus off of making ‘enough’ money and put it on what you should be pursuing, which is happiness.

Being happy is about being content and satisfied. When you have that, you will not have the stress and the feeling that you are a rat on a wheel, just running and running, never reaching that financial destination you were after. Happiness comes from within, and the more you are grateful for what you have, and derive contentment and enjoyment from it, the more good things will come to you. So set your sites on the pursuit of happiness, rather than on making enough money. And don’t just say you want happiness. Define it, by thinking about what elements bring it to you. Know what it is, so that you can seek it out, recognize it, and be grateful once you have attained it.

Like Aristotle once said, “Happiness is the meaning and the purpose of life, the whole aim and end of human existence.”

SXSW Author’s Dinner With Sam Horn, Daniel Pink, Nilofer Merchant, Nir Eyal

SXSW 2015 was amazing (albeit a bit overwhelming).  After speaking about Profit First at the Austin convention center, my friend (and awesome author of the new book, Stand Out) Dorie Clark scheduled a dinner for some of the authors who were at SXSW.  Here are some selfie’s I was able to get:

Daniel Pink, author of Drive and To Sell Is Human, and me at SXSW.

Nilofer Merchant, author of The New How (and other great books) and I. Not sure why my camera was stuck on black & white, but of the three pics we took… all were black & white.

Nir Eyal, author of Hooked, and I hanging out at SXSW.

I fell in love with the book Tongue Fu! by Sam Horn the day I read it.  During the dinner I sat right next to Sam, and now have fallen in love with her. She is an amazing thought leader!

 

Dominate Sales With Old School “Face-to-Face”

I remember when people thought you were really crazy or strange if you dated or married someone you met online. Now people think it’s really strange if you meet someone by actually showing up somewhere in the flesh and shake hands and “do lunch.”

It’s the same thing with face-to-face sales. Everyone’s so busy tweeting, FaceBooking and meeting on LinkedIn that no one’s doing face-to-face sales, and man, are they missing out!

Actually getting to meet a live person you can do business with is like getting a home-cooked meal instead of a micro-waved mystery meal. Both will feed your stomach, but the real meal feeds your soul, your need for that personal touch. Face-to-face sales deals are the same way and some of us are starting to notice the trend of face-to-face sales numbers exploding because of their ability to influence people and close deals.

Other than the people who share your home or office, how often do you really meet new people, in person? Am I right? Since so few people do it, and they do it less and less, meeting someone new and being together face-to-face to talk business gives you a huge advantage over some blurry face on a flat screen television. Real people don’t have voices that echo, or drop out when you go through a “dead zone” on the way to the conference hall.

It makes sense. It’s Economics 101 — when a commodity becomes scarce, it increases in value. When basic face time with potential or existing customers dwindles, it becomes a scarce commodity, so its value increases. I don’t just mean monetarily. I mean in terms of social influence, trust and intimacy — all the things that have to be in place before you can make a sale. Skype is a good crutch in a pinch… but the experts assure me that getting a plane ticket and meeting the person still wins hands down over your one-inch high mug on a smartphone.

When we meet someone in person and shake their hand, see their smile, and get that solid gut feel about them, we build intimacy and trust. Which takes me back to the whole “dating” thing. Even when you meet someone online, the time comes, before you ‘seal the deal,” that you want to meet the person face-to-face before you go any farther. Business is no different. We do business with people we know, like and trust.

This is not a ploy by the hotel industry to get more people in their beds. Although they’re paying for some of the studies, like the Hilton Hotels’ study called “Why Face-to-Face Business Meetings Matter,” there are other studies too.

A new study by Oxford Economics, a global research firm, has shown that when companies cut their travel expenses and face-to-face time with potential customers, they’re cutting their own throat, er, profits, too.

The study showed that business travel directly leads to an increase in both corporate revenue and profits. For every dollar invested in business, travel companies gained $12.50 in added revenues and $3.80 in new profits. Try to make up that difference with tweets and FaceBook. Not going to happen.

It’s not just our cologne, the $100 we spent on teeth whiteners and the $50 lunches that convince people to buy more from people in face-to-face meetings. Psychologists and human behavioral experts all agree, we get more signals and information from people we experience in a three-dimensional realm — across the conference table, or at convention, or workshop or sales meeting — than we do in two dimensions via Skype.

There’s no better way to start a relationship, or close the deal on a sale, than doing it in person. That advice varies according to your industry of course, but stuff that requires personal interaction like coordination, consensus, timing and persuading others to do things, are better done in a group rather than on the company jumbo-tron.  If you’re negotiating important contracts, interviewing important people for important positions, or being empathetic and showing your million dollar customers you really do care, is best done face-to-face.