business success | The Age of the Customer

The Blasingame Translator for Small Businesses and Banks

Once upon a time, a storm caused two ships to sink in the same area. All on board were lost at sea, save one from each ship, and those poor souls were alive only because they swam to a small island nearby.

As luck would have it, the two men hauled themselves up on the beach at the same time and within sight of each other. But survivor’s elation soon became pensive as they realized that each spoke a language unknown to the other.

Immediately both men had the same unspoken thought, “I don’t know this man or the language he speaks, but if we’re going to survive, we have to find a way to communicate and work together.”

In many ways, this tale actually plays out every day. But instead of on the high seas, our story takes place in the marketplace. And instead of mythical shipwreck survivors, our real life players are small business owners and bankers.

Like the survivors in the first story, the excitement of the latter-day castaways about their future prospects turns pensive when they both realize that: 1) they need each other in order to be successful; and 2) they don’t speak each other’s language very well, if at all.

With so much common interest and so little mutual understanding, can these two create a successful survival story? Absolutely, but only if they have The Blasingame Official Translator for Bankers & Small Business Owners. Here are a few examples of how The Blasingame Translator works.

For small businesses to understand banker, they must:

Identify their banker as a success partner and their business’ best friend.
Stay close to their banker when things are going well, and even closer when things aren’t going so well.
Believe that an uninformed banker is a scared banker, and a scared banker cannot, and will not, behave like a partner.
Pay attention to what motivates and impresses a banker, like attention to detail.
Understand pertinent bank rules and regulations, so you don’t ask for something that can’t be done.
Reward banker loyalty with small business loyalty.

For bankers to speak small business, they must:

Understand Blasingame’s 1st Law of Small Business: Starting a small business is easy, operating a successful one is not.
Understand Blasingame’s 2nd Law of Small Business: It’s redundant to say, “undercapitalized small business.”
Understand Blasingame’s 3rd Law of Small Business: A small business is not a little big business.
Explain bank rules and regulations, and recommend services and products.
In the credit scoring process, always find a way to give small business owners credit for character, past performance and best efforts.
Reward small business loyalty with banker loyalty.

Write this on a rock … To avoid becoming marketplace castaways, small business owners and bankers must speak each other’s language.

Jim Blasingame is the author of the award-winning book, “The Age of the Customer: Prepare for the Moment of Relevance.”

Plan for success while operating for survival

Blasingame’s 2nd Law of Small Business states: It’s redundant to say “under-capitalized small business.”

Growing small businesses operate in the narrow danger zone between the leading edge and the bleeding edge of the marketplace. And since our capital reserves and options are limited, every small business CEO makes decisions every day that are at once as much about survival as success.

Photo courtesy of KSU

Here are four “operate for survival” things to do that will serve you well this year, followed by four “plan for success” ideas.

Cash used to be King, today it’s the Emperor. Ask employees to find and cut waste. Get them involved in reviewing operational processes and eliminate or tighten up inefficient ones. What’s their motivation? How about job security? Watch the pennies and the dollars will take care of themselves.
Stay close to accounts receivables and cash management. Many tasks can and should be delegated, but in a small business, whether you’re growing or just holding on, cash management is not one of them.
Declare war on excess inventory. Inventory is cash you can’t spend until a customer pays for it. Practice Just-In-Time (JIT) inventory management, not just-in-case.
Stay close to customers. This isn’t complicated: Ask customers what they want and then give it to them. We’re in the Age of the Customer – know your customers’ expectations.

Since opportunities will present themselves over the next year, here are four “plan for success” thoughts to consider as you take risks:

Eyes wide open. The marketplace we’re entering is going to look different than last year. That means opportunities – and threats – will look different, too.
Measure twice, cut once. Before taking a big growth step, apply the carpenter’s rule. Don’t scrimp on due diligence: check your assumptions, recheck your assumptions and then proceed with the best information you have, which might tell you to stop.
Mistakes are expensive. Can your capital picture support inevitable mistakes and/or surprises? Remember, there is a very fine line separating opportunity at the leading edge and the cash-eating bleeding edge.
Make your banker your partner. Keep him or her informed whether the news is good or bad – especially the bad. Remember this: An uninformed banker is a scared banker and no one ever got any help out of a scared banker.

Write this on a rock –Successful small business CEOs operate for survival while planning for success.

Don’t be stupid — eliminate barriers of customers to your small business

A while back, I needed to reach an acquaintance who worked in a local branch of one of the national banks. When I looked for the local number in the phone book, all I found was a toll-free number that connected me to a computer answering system. That’s right – a local business didn’t publish a local number in the phone book, and here’s the stupid part: The answering system didn’t offer an option to connect to any branch or person.

From this one encounter stemmed a powerful story and four equally powerful lessons I thought worth sharing to big and small businesses out there.

Lesson 1 – Don’t create barriers to customers and prospects.

If you have any, take them down NOW! I know you think you don’t, but in the name of efficiency and the advent of new technology, you might.

Undaunted, I called a local board member of that bank who gave me the local number (yes, they had one). When I called, I was told that my acquaintance, a loan officer, had recently been laid off.

“Why was he laid off?” I asked. Since the bank was losing money and, for the sake of the stock price the CEO needed to impress the stock analysts with his guidance on the next quarterly conference call. So an edict came down that almost 2,000 employees across the company would have to hit the bricks. Never mind how valuable they were, or what such cuts would ultimately do to the bank’s long-term ability to compete, “We’ve got to cut costs and the quickest way is to cut payroll.”

Lesson 2 – Quarterly goals are important for planning.

For a publicly traded company, quarterly guidance to stock analysts is a counter-intuitive and dangerous practice for long-term success. Small businesses have to remember that customers don’t buy based on quarterly schedules, so don’t let your quarterly pressure on sales people cost you lost business and, worse, lost relationships.

I learned later that even though my acquaintance was the top loan producer, he was the last one hired, and also the first to go. Now he’s no longer a payroll drain on this bank, but he is now kicking the backside of his former employer as a high-producer with a competitor.

Lesson 3 – In the 21st century, seniority doesn’t trump productivity.

Today, this bank is one of those that had to be bailed out by the government. The bank CEO, who allowed blind devotion to stock price undermine the tried-and-true management practices of building a strong team and taking care of customers, is now no longer a drag on that bank’s payroll.

How much business did this bank lose because of that phone answering strategy? What would have happened if this bank CEO had simply installed an answering system that made sure anyone who wanted to call a local branch could not only find that number easily, but quickly connect to a local person? The answer might be that the CEO would still have his job, and so would my friend and several hundred other former employees. Who knows? By simply adopting a customer-friendly phone system, this bank might have actually needed to hire more employees to handle all of the new business.

Lesson 4 – If you need more sales revenue, make sure your organization’s people, systems, and policies aren’t getting in the way

Recently, on my small business radio program The Small Business Advocate Show I talked about the potential dangers of quarterly policies with sales management expert and Brain Trust member, Skip Miller (m3learning.com), author of The Ultimate Sales Tool Kit. Take a few minutes to listen to what this smart guy has to say and be sure to leave your smart thoughts.