Huh? What’s a Capo d’ Astro Bar? Let me tell you a story.
A company that had been making pianos for many years hired a new marketing manager whose job was to “do his thing” to increase sales. He soon discovered that his company’s pianos were equal or better than the competitor’s in almost every way. Their prices were also comparable to the competition’s. But he also discovered that his company’s sales were well below that of the competition. After further investigation, he found that it cost his company almost twice as much to ship their pianos and that price difference was driving sales down.
He walked out into the shop and asked the long time shop foreman why it cost almost twice to ship their pianos. The old foreman answered, “That’s because our pianos weigh almost twice what everyone else’s weigh.” When he asked why that was, the answer was, “That’s because of our Capo d’ Astro Bar.”
Of course his next question was just the same as yours, “What’s a Capo d’ Astro Bar?” The foreman got one of those creeper dollies that most car repair shops use, put the Marketing Manager on it and wheeled him under one of the pianos. “See that heavy cast iron bar under there? That’s the Capo d’ Astro Bar and it weighs about 300 pounds.”
He went on, “Our Capo d’ Astro Bar keeps the frame from giving under the tension of the strings. It keeps our pianos in tune about five times longer than any other piano and it means that the customer can go about five times longer before he has to pay to have his piano re-tuned.” “No other company has anything like our Capo d’ Astro Bar,” he added.
That was the “ammunition” the new Marketing Manager needed. His new marketing campaign told customers about the Capo d’ Astro Bar and how it would save them money. Over the life of the piano it would save them hundreds of dollars in tune up charges and would more than make up for the initial extra shipping charges. Sales soared.
In the world of Marketing you will hear the term Unique Selling Proposition or USP. I prefer the term Capo d’ Astro Bar. In a strange way, it is easier to remember Capo d’ Astro Bar than Unique Selling Proposition.
So let me ask you again, “What’s your Capo d’ Astro Bar?” Look for whatever is unique and different about your product or service. If you don’t have one, think one up. Then use it to increase your sales.
Saturday, October 9, 2010
Thursday, September 30, 2010
Guerrilla Marketing Part 3
A few years ago I attended a business class at the local Adult Education campus and one of the guest speakers asked us a very provocative question. “How do you beat the competition?” The class offered, “Lower prices.” “Faster delivery.” “Better quality.” “Greater selection.” and “Friendlier service.” The lecturer then said, “Yes, those are all good answers but not the one I am looking for. The way to beat the competition is to change the rules - and then don’t tell them what the new rules are.”
At first this could sound like a superficial answer but it’s not. I have used that idea ever since in the guerrilla marketing that we do. Here’s one way.
Periodically we do an anonymous survey of our competition. (And we assume that they do the same thing to us.) We send out a request for quote and then compare their response to what ours would be for the same work. Of course we compare their prices with ours. We also compare several other things. We want to know how their promised delivery compares to ours. We compare how their response to a request for a quote compares to ours. And there is one other aspect we compare that I’ll talk about later.
The last time we conducted a survey, this is what we found. Some prices were lower than ours. That’s fine with us because we do not want to have the lowest prices in town. (That’s the worst way to compete.) Most of the delivery quotes - how soon a customer gets the finished product after he places the order - were about equal to ours.
Then we got to response time - how soon they got back to us with a quote. The fastest response was about ten days after we sent our request. Our policy is one that reflects the idea of changing the rules and not telling them what the new rules are. We respond to 90% of all requests within four hours; 100% within 24 hours. Why is this important? It’s a human trait. When we want something - whether it’s a new car or a new house or even a haircut - we want it now, not two weeks from now. With our four hour response time we frequently have quoted the customer, got the order, produced and shipped the product before our competition has even responded with a quote. Talk about changing the rules!
Now one of the last things that we compare between our competition and ourselves. When we send out the request for quote, we include a small mistake of some kind - a misspelled word, a broken line, something. When the competition responds, we look to see if they bring that to our attention. The competition never does; we always do. We are sure our customers appreciate that.
Change the rules and don’t tell them what the new rules are.
At first this could sound like a superficial answer but it’s not. I have used that idea ever since in the guerrilla marketing that we do. Here’s one way.
Periodically we do an anonymous survey of our competition. (And we assume that they do the same thing to us.) We send out a request for quote and then compare their response to what ours would be for the same work. Of course we compare their prices with ours. We also compare several other things. We want to know how their promised delivery compares to ours. We compare how their response to a request for a quote compares to ours. And there is one other aspect we compare that I’ll talk about later.
The last time we conducted a survey, this is what we found. Some prices were lower than ours. That’s fine with us because we do not want to have the lowest prices in town. (That’s the worst way to compete.) Most of the delivery quotes - how soon a customer gets the finished product after he places the order - were about equal to ours.
Then we got to response time - how soon they got back to us with a quote. The fastest response was about ten days after we sent our request. Our policy is one that reflects the idea of changing the rules and not telling them what the new rules are. We respond to 90% of all requests within four hours; 100% within 24 hours. Why is this important? It’s a human trait. When we want something - whether it’s a new car or a new house or even a haircut - we want it now, not two weeks from now. With our four hour response time we frequently have quoted the customer, got the order, produced and shipped the product before our competition has even responded with a quote. Talk about changing the rules!
Now one of the last things that we compare between our competition and ourselves. When we send out the request for quote, we include a small mistake of some kind - a misspelled word, a broken line, something. When the competition responds, we look to see if they bring that to our attention. The competition never does; we always do. We are sure our customers appreciate that.
Change the rules and don’t tell them what the new rules are.
Friday, September 17, 2010
What's Your Capo d' Astro Bar?
Huh? What’s a Capo d’ Astro Bar? Let me tell you a story.
A company that had been making pianos for many years hired a new marketing manager whose job was to “do his thing” to increase sales. He soon discovered that his company’s pianos were equal or better than the competitor’s in almost every way. Their prices were also comparable to the competition’s. But he also discovered that his company’s sales were well below that of the competition. After further investigation, he found that it cost his company almost twice as much to ship their pianos and that price difference was driving sales down.
He walked out into the shop and asked the long time shop foreman why it cost almost twice to ship their pianos. The old foreman answered, “That’s because our pianos weigh almost twice what everyone else’s weigh.” When he asked why that was, the answer was, “That’s because of our Capo d’ Astro Bar.”
Of course his next question was just the same as yours, “What’s a Capo d’ Astro Bar?” The foreman got one of those creeper dollies that most car repair shops use, put the Marketing Manager on it and wheeled him under one of the pianos. “See that heavy cast iron bar under there? That’s the Capo d’ Astro Bar and it weighs about 300 pounds.”
He went on, “Our Capo d’ Astro Bar keeps the frame from giving under the tension of the strings. It keeps our pianos in tune about five times longer than any other piano and it means that the customer can go about five times longer before he has to pay to have his piano re-tuned.” “No other company has anything like our Capo d’ Astro Bar,” he added.
That was the “ammunition” the new Marketing Manager needed. His new marketing campaign told customers about the Capo d’ Astro Bar and how it would save them money. Over the life of the piano it would save them hundreds of dollars in tune up charges and would more than make up for the initial extra shipping charges. Sales soared.
In the world of Marketing you will hear the term Unique Selling Proposition or USP. I prefer the term Capo d’ Astro Bar. In a strange way, it is easier to remember Capo d’ Astro Bar than Unique Selling Proposition.
So let me ask you again, “What’s your Capo d’ Astro Bar?” Look for whatever is unique and different about your product or service. If you don’t have one, think one up. Then use it to increase your sales.
A company that had been making pianos for many years hired a new marketing manager whose job was to “do his thing” to increase sales. He soon discovered that his company’s pianos were equal or better than the competitor’s in almost every way. Their prices were also comparable to the competition’s. But he also discovered that his company’s sales were well below that of the competition. After further investigation, he found that it cost his company almost twice as much to ship their pianos and that price difference was driving sales down.
He walked out into the shop and asked the long time shop foreman why it cost almost twice to ship their pianos. The old foreman answered, “That’s because our pianos weigh almost twice what everyone else’s weigh.” When he asked why that was, the answer was, “That’s because of our Capo d’ Astro Bar.”
Of course his next question was just the same as yours, “What’s a Capo d’ Astro Bar?” The foreman got one of those creeper dollies that most car repair shops use, put the Marketing Manager on it and wheeled him under one of the pianos. “See that heavy cast iron bar under there? That’s the Capo d’ Astro Bar and it weighs about 300 pounds.”
He went on, “Our Capo d’ Astro Bar keeps the frame from giving under the tension of the strings. It keeps our pianos in tune about five times longer than any other piano and it means that the customer can go about five times longer before he has to pay to have his piano re-tuned.” “No other company has anything like our Capo d’ Astro Bar,” he added.
That was the “ammunition” the new Marketing Manager needed. His new marketing campaign told customers about the Capo d’ Astro Bar and how it would save them money. Over the life of the piano it would save them hundreds of dollars in tune up charges and would more than make up for the initial extra shipping charges. Sales soared.
In the world of Marketing you will hear the term Unique Selling Proposition or USP. I prefer the term Capo d’ Astro Bar. In a strange way, it is easier to remember Capo d’ Astro Bar than Unique Selling Proposition.
So let me ask you again, “What’s your Capo d’ Astro Bar?” Look for whatever is unique and different about your product or service. If you don’t have one, think one up. Then use it to increase your sales.
Thursday, September 9, 2010
Some More About Guerrilla Marketing
I thought it might be useful to some readers to read about some specific examples of guerrilla marketing that have worked for my company. My company makes branding equipment and we receive frequent calls from customers asking for brochures or other information. Every time we mail out a catalog or brochure, we include a 10% discount coupon that is valid if the customer responds with an order within about two weeks. (The two week provision is another marketing ploy. We want them to place the order now, before they put the brochure aside and forget about it.)
Now comes the guerrilla marketing. We bought some off-the-shelf picture post cards of Santa Barbara. On the back, in my wife’s handwriting I had the cards printed in bright blue ink saying some cute remarks about Santa Barbara and adding, “Hope you can use that 10% coupon we sent you.” Then, about one week after we mailed the brochure to the customer we followed it up with the “handwritten” and hand addressed (by my wife in the exact same color ink) picture post card. The idea behind this was that no one can resist seeing who is sending them a picture post card from Santa Barbara - a city known around the world. And being “handwritten” and short, we felt reasonably certain that most of the cards got read. They must have been because that simple post card marketing idea increased our sales by about 50%.
Many of our sales come from quotes that we send to customers for their specific requirement. We used to convert about 1/3 of those quotes into sales. Then we tried what we called “our fishy letters.” We bought a bunch of squiggly plastic fish usually used as fishing lures. We put one of these fish into an envelope along with a sheet that had a big picture of a fish on it and read something like, “Something’s Fishy. We sent you a quote the other day and we never heard from you. We know it’s not because we don’t have the best prices and we know our quality is the best, yatta, yatta, yatta.” Here’s how that worked. No one could resist opening the envelope after they felt something squishy inside it. Once they opened the envelope, they read our cute letter and apparently got the message because that little marketing trick increased our sales from getting 1/3 of our quotes to getting 50% of them.
Here’s another guerrilla marketing idea I recently heard about. A real estate agent in the San Francisco area drives over the Golden Gate bridge every day on his way to and from his office. Every time he drives over the bridge he tries to position his car directly in front of a BMW or a Lexus or an Accura. When he gets to the toll booth, he pays for his toll and then he hands the attendant his business card and a second toll and tells the attendant to give his card to the driver of the BMW behind him. Of course the idea is that some day the driver of that expensive car may be in the market to buy some real estate and that they will have his business card. I have no idea how effective it is, but it sure sounds like a heck of an idea to me.
This what guerrilla marketing is all about. Do something different and clever. It does not have to be expensive; just different enough to attract attention or get a chuckle. Now think of something clever for your particular business and start increasing your sales.
Now comes the guerrilla marketing. We bought some off-the-shelf picture post cards of Santa Barbara. On the back, in my wife’s handwriting I had the cards printed in bright blue ink saying some cute remarks about Santa Barbara and adding, “Hope you can use that 10% coupon we sent you.” Then, about one week after we mailed the brochure to the customer we followed it up with the “handwritten” and hand addressed (by my wife in the exact same color ink) picture post card. The idea behind this was that no one can resist seeing who is sending them a picture post card from Santa Barbara - a city known around the world. And being “handwritten” and short, we felt reasonably certain that most of the cards got read. They must have been because that simple post card marketing idea increased our sales by about 50%.
Many of our sales come from quotes that we send to customers for their specific requirement. We used to convert about 1/3 of those quotes into sales. Then we tried what we called “our fishy letters.” We bought a bunch of squiggly plastic fish usually used as fishing lures. We put one of these fish into an envelope along with a sheet that had a big picture of a fish on it and read something like, “Something’s Fishy. We sent you a quote the other day and we never heard from you. We know it’s not because we don’t have the best prices and we know our quality is the best, yatta, yatta, yatta.” Here’s how that worked. No one could resist opening the envelope after they felt something squishy inside it. Once they opened the envelope, they read our cute letter and apparently got the message because that little marketing trick increased our sales from getting 1/3 of our quotes to getting 50% of them.
Here’s another guerrilla marketing idea I recently heard about. A real estate agent in the San Francisco area drives over the Golden Gate bridge every day on his way to and from his office. Every time he drives over the bridge he tries to position his car directly in front of a BMW or a Lexus or an Accura. When he gets to the toll booth, he pays for his toll and then he hands the attendant his business card and a second toll and tells the attendant to give his card to the driver of the BMW behind him. Of course the idea is that some day the driver of that expensive car may be in the market to buy some real estate and that they will have his business card. I have no idea how effective it is, but it sure sounds like a heck of an idea to me.
This what guerrilla marketing is all about. Do something different and clever. It does not have to be expensive; just different enough to attract attention or get a chuckle. Now think of something clever for your particular business and start increasing your sales.
Friday, September 3, 2010
Guerrilla Marketing and the Small Company
About twelve years ago a friend recommended that I look into using some guerrilla marketing ideas for my growing business. At the time, I had never heard the term and had no idea what it involved. Now I am a confirmed advocate of the results of guerrilla marketing. In the first few year after we started using guerilla marketing my company increased sales by an average of 250% per year and we attribute almost all of that success to our aggressive and creative guerrilla marketing. As far as I’m concerned, it’s the only way to go for a small business.
So what is guerrilla marketing and why are we so happy with its results? To answer that let’s first answer the question, “What is marketing?” The textbook definition of marketing is “all of the activities of a business required to produce, sell and deliver a quality product (or service) to the end user.” An even better definition is by Phillip Kotler in his book, Marketing Management where he says, “The aim of marketing is to make selling superfluous. The aim of marketing is to know the customer so well that the product fits him (exactly) and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.” Or, using a military analogy, Marketing is a strategic activity as opposed to Sales which is a tactical activity. Marketing concerns itself with the future while Sales is concerned with the “here and the now.” Marketing is concerned with advertising, production, cash flow, distribution, warehousing, product selection, targeting, positioning, market share and of course, sales.
Guerrilla marketing is concerned with all of the same things. The main difference between guerrilla marketing and conventional marketing is basically in the amount of money and creativity used in each activity. To put it simply (and perhaps a bit unfairly) conventional marketing solves a $1000 problem with a $2500 solution; guerrilla marketing solves a $5000 problem with a $500 solution. Guerrilla marketing replaces a lot of money with a little money, more creativity, a bit more time (yes I know time is money) and a lot more sweat. Any small business with limited assets – especially money – will find that guerrilla marketing is what they need to increase their sales.
Before we get into the specifics of guerrilla marketing, let’s take a look at today’s marketing/sales environment. I can’t believe that I am the only person who has spent 15-20 minutes on hold while repeatedly being told, “Your business is very important to us. Thank you for continuing to hold. A representative will be with you momentarily.”
We are now in a business environment where it is just short of a miracle when you get to talk to a real person or do not have to go through a menu of six or eight selections (none of which are what you need) before you get to talk to someone – and then that is the wrong person, the wrong department or a person who can’t answer your question. Here’s another situation. You want to have one of the basic services - telephone, gas, water, electricity - hooked up. You are told by the office, “We’ll have a man out there between 8AM and 5PM next Thursday.” Excuse me? Do you think I have nothing better to do than wait around a whole day for your man to get to my house? Increasingly we live in a more remote, less caring, less human-to-human business environment. The anonymity and “remoteness” of the Internet is not helping. At the same time, scams of all kinds are increasing so is it any wonder why our customers are increasingly suspicious and less trusting? Does that give you any guerrilla marketing ideas? Like, “Maybe if I were more responsive to my customers’ needs, my sales or my market share would increase?”
Thursday, August 26, 2010
Product Development and the Trouble with Engineers (a tongue in cheek observation)
The trouble with most engineers is that they don’t know when to stop. It’s been my experience that if you ask a typical engineer to design a product, let’s say a cell phone, he doesn’t just stop when he has the basic design finished. If you give him free rein to “do his thing” you will wind up with a phone that takes pictures, plays 15 games, is a calculator, a scheduler, a voice recorder, an alarm clock and checks your tire pressure, traces your family history, trims your toenails and opens beer cans - and includes an instruction manual that has 139 pages where the instructions on how to make a phone call is on page 117.
My philosophy of product design is to start with a basic design that I can produce and sell for an affordable price and which does the job - and only the job - for which it is intended. Later, depending on customer feed-back - and I can’t over-emphasize how important it is to listen to your customers - I will introduce an improved or “heavy duty” model. Of course these later variations will cost more and I will probably sell less of them but they will satisfy a more specialized need than our basic model. And while I’m at it, I will make sure that the heavy duty model uses as many components of the basic model as is practical.
Another reason for developing the “new and improved” model is that it frequently allows me to make a sale which I would have otherwise lost. And continuing to expand my product line gains me the reputation as the company that “has all the answers” and “has any product” that you want. This sort of reputation inevitably brings more business. There is still one other reason for expanding our line and it has to do with web site dynamics. The more products that you show on your site, especially if the names are similar or related, the higher (better) positioning you will achieve with the search engines that find you when people do a web search.
To illustrate, let’s assume I want to develop a coat hanger. I would probably start out with a very basic formed wire model that you get from every dry cleaner. I will make whatever tooling is necessary. Later, one of my biggest customers will come to me asking for a model that has a paper sleeve over it that can be imprinted with his advertising message. No problem. I will add whatever tooling is necessary to fabricate and apply the paper sleeve. I will probably even offer to do the printing on the sleeve.
A few months later another customer will request a plastic hanger instead of the common wire basic model. Again, no problem. We will add another production line, some new tooling, perhaps use a few components from the basic model and suddenly we have a new product to add to our line of coat hangers.
And then we may start to have some problems. Some of our customers begin to complain that the plastic hangers break too easily. So we get busy and re-engineer our design to come up with a “heavy duty, deluxe” model which costs more but holds more clothes and lasts five time as long. And we continue to produce the original plastic design because many of our customers understand and expect a certain limited life from our much less expensive original model.
This philosophy will work whether you are producing a product or offering a service. And it is especially important if you are starting a new business. Design and build a basic product (or service) and start selling it. The priority is to get your business off the ground; later you will introduce more and better products and services.
There is one situation where you may want to ignore my advice regarding offering just the basic product or service. When you are starting a business you will want to be in some way better, improved or faster than your competition. So when you are starting out, if you can offer the slightly better product or service that will give you an “edge” over the existing competition that is the time to do it. Be creative, there is always a way to improve on an existing product or service.
By the way, does anyone know where I can buy a cell phone that just makes phone calls?
Saturday, October 11, 2008
My First Luxury Cruise
My wife and I just got back from a cruise to Alaska. It was my first cruise and I had been looking forward to it for months. I was eager to see all the sights, the on-shore excursions, the marvelous food, the great entertainment and all the fancy amenities shown in the travel brochures.
The magnificent scenery of Alaska – especially being "up close and personal" with the Hubbard Glacier was a never-to-be-forgotten experience. We also enjoyed visiting the unique towns of Juneau, Sitka and Ketchican and the too-short visit to Victoria, British Columbia. I enjoyed the fishing trip out of Ketchican even though our party of four caught only one 15-pound silver salmon.
I must be getting old and crotchety because there were lots of things about the cruise that disappointed me.
First of all, the food. On our ship there were three places you could eat; the Lido Deck which was a cafeteria-style restaurant open 24 hours a day, the formal Vista dining room for dinners and the Pinnacle Grill for lunches and dinners for those willing to spend the $20 cover charge for dining there. The food and service in the Pinnacle Grill was simply great. In the Vista dining room, the service was fine but the food was somewhat skimpy and the quality was spotty. As for the 24-hour food on the Lido Deck, let me put it this way – I’ve had better at Denny’s. A little disappointing considering the cost of the cruise.
I was annoyed to find out at the end of the cruise that it cost us $2.88 per day ($23.04 for the eight-day cruise) for the bottled water that room service supplied unasked. For me that was a good example of being "nickel and dimed" to death. When you’re spending thousands of dollars for a trip like this, shouldn’t you expect them to furnish the water at no charge? Conversely, the cruise line should simply add the few bucks to their trip package up front price if they are working that close to the profit line.
But my biggest annoyance was being sold something everywhere we turned during the trip. There was an "art gallery" that aggressively promoted the sale of their various paintings under the ill-concealed guise of holding "How To Bid At An Art Auction" classes. There was a photographic studio that equally aggressively promoted color pictures taken of guests here and there during the trip by their cruise paparazzi. Then there was the highly-touted lecture on How To Save Money When Shopping Ashore which turned out to be an hour-long infomercial steering us toward several selected jewelry and knick-knack shops who (we discovered later) have paid the cruise line to be "sponsored" by them. ( I get enough of this kind of thing at home by phone almost every day. I really don’t need to be subjected to it on a cruise that is costing me big bucks.) Then, at almost every dinner we were subjected to walk-around vendors trying to sell us souvenir cruise line shot glasses of Bailey’s or creme de menthe or some other tschotke or another. Perhaps the most irritating incident concerned another so-called educational experience involving our captain. Here is a man who is in complete charge of a multi-million dollar, zillion-horsepower ship with about 1900 passengers and a crew of around 800 who is enlisted to teach us how to cook salmon – after all that’s the big thing when you’re in Alaska. I am sure the captain is well trained and well qualified as a sea captain. A showman he is not. A chef he is not. And then it turns out that this cooking lecture/demonstration is nothing more than an hour-long commercial trying to sell us an over-priced freeze-packed, direct-to-your-door package of salmon steaks and crab cakes. Irritating as hell and I haven’t even told you about the "end-of-season specials" in the ship’s gift shops, the charge of $12.00 for a half glass of cheap champagne while we were all on deck admiring the Hubbard Glacier or the half-price-package special by the ship’s spa and massage studio.
But I got some great shots of the glacier.
copyright 2008 by Paul Burri
The magnificent scenery of Alaska – especially being "up close and personal" with the Hubbard Glacier was a never-to-be-forgotten experience. We also enjoyed visiting the unique towns of Juneau, Sitka and Ketchican and the too-short visit to Victoria, British Columbia. I enjoyed the fishing trip out of Ketchican even though our party of four caught only one 15-pound silver salmon.
I must be getting old and crotchety because there were lots of things about the cruise that disappointed me.
First of all, the food. On our ship there were three places you could eat; the Lido Deck which was a cafeteria-style restaurant open 24 hours a day, the formal Vista dining room for dinners and the Pinnacle Grill for lunches and dinners for those willing to spend the $20 cover charge for dining there. The food and service in the Pinnacle Grill was simply great. In the Vista dining room, the service was fine but the food was somewhat skimpy and the quality was spotty. As for the 24-hour food on the Lido Deck, let me put it this way – I’ve had better at Denny’s. A little disappointing considering the cost of the cruise.
I was annoyed to find out at the end of the cruise that it cost us $2.88 per day ($23.04 for the eight-day cruise) for the bottled water that room service supplied unasked. For me that was a good example of being "nickel and dimed" to death. When you’re spending thousands of dollars for a trip like this, shouldn’t you expect them to furnish the water at no charge? Conversely, the cruise line should simply add the few bucks to their trip package up front price if they are working that close to the profit line.
But my biggest annoyance was being sold something everywhere we turned during the trip. There was an "art gallery" that aggressively promoted the sale of their various paintings under the ill-concealed guise of holding "How To Bid At An Art Auction" classes. There was a photographic studio that equally aggressively promoted color pictures taken of guests here and there during the trip by their cruise paparazzi. Then there was the highly-touted lecture on How To Save Money When Shopping Ashore which turned out to be an hour-long infomercial steering us toward several selected jewelry and knick-knack shops who (we discovered later) have paid the cruise line to be "sponsored" by them. ( I get enough of this kind of thing at home by phone almost every day. I really don’t need to be subjected to it on a cruise that is costing me big bucks.) Then, at almost every dinner we were subjected to walk-around vendors trying to sell us souvenir cruise line shot glasses of Bailey’s or creme de menthe or some other tschotke or another. Perhaps the most irritating incident concerned another so-called educational experience involving our captain. Here is a man who is in complete charge of a multi-million dollar, zillion-horsepower ship with about 1900 passengers and a crew of around 800 who is enlisted to teach us how to cook salmon – after all that’s the big thing when you’re in Alaska. I am sure the captain is well trained and well qualified as a sea captain. A showman he is not. A chef he is not. And then it turns out that this cooking lecture/demonstration is nothing more than an hour-long commercial trying to sell us an over-priced freeze-packed, direct-to-your-door package of salmon steaks and crab cakes. Irritating as hell and I haven’t even told you about the "end-of-season specials" in the ship’s gift shops, the charge of $12.00 for a half glass of cheap champagne while we were all on deck admiring the Hubbard Glacier or the half-price-package special by the ship’s spa and massage studio.
But I got some great shots of the glacier.
copyright 2008 by Paul Burri
Tuesday, August 19, 2008
Fiscal Responsibility and Due Diligence
Wikipedia, paraphrased, defines due diligence as performing the proper and adequate amount of investigation of private mergers and acquisitions concerning relevant areas of interest including - but not limited to - the financial, legal, labor, tax, environment and market/commercial situation of the company in question. In plain English this means that if you are thinking about entering into any kind of an agreement that concerns money you need to investigate it thoroughly and exercise good judgement based on what you learn. The term particularly applies, and is most commonly used, when you are buying or selling a business but it really applies to most other financial dealings as well. Whether you are buying or selling a house, signing a contract, hiring an employee, entering into a "partnership" arrangement of any kind, buying a life insurance policy or a new car, or even proposing marriage you should exercise due diligence so you know what you’re getting into.
On the subject of fiscal responsibility, Wikipedia is much more vague and almost all its definitions allude to balanced budgets, governmental spending and proper and responsible use of governmental funds. I would add that the idea of proper and responsible use of funds i.e., fiscal responsibility, applies to individuals, companies and various other organizations as well.
To continue, in my opinion, failure to perform due diligence in any arrangement concerning money, property or personal and/or corporate indebtedness would constitute fiscal irresponsibility. I remember being introduced to the concept of caveat emptor in high school economics class. To refresh your memory, caveat emptor means "let the buyer beware." It seems to me that, in general, we have abandoned that tenet in favor of preferring that the government and the courts protect us or rescue us in all cases whether or not we exercised good judgement. No one seems to want to accept responsibility for his or her own actions any more. (I am thinking of the all the people who bought homes they knew they couldn’t afford and now want the federal government to bail them out. Also the woman who collected millions from McDonalds after she placed hot coffee in her lap and was burned.)
If you fail to perform due diligence in any particular transaction, you have no one to blame but yourself. And be sure you know what due diligence entails. If, for example, you are contemplating joining with another company in a new venture, it is not enough to "feel good" about the people in that company. (Although that certainly is important.) Nor is it enough to call a few of their business references and ask superficial questions about say, "Do they pay their bills on time?" Nor is it enough to naively think that a call to their bank would get you much more information than a confirmation that they have been doing business with that bank for the past several years. Due diligence demands that you – at a minimum - ask for financial statements and recent income tax returns, financial information release authorizations to send to their bank(s) or other financial institutions and to their major creditors. And that you study them closely when you receive them. If you get positive answers from all those sources, you will probably end up with a mutually satisfying "partnership." If you don’t, it was time well spent and probably a lot of money saved.
© 2008 by Paul Burri
On the subject of fiscal responsibility, Wikipedia is much more vague and almost all its definitions allude to balanced budgets, governmental spending and proper and responsible use of governmental funds. I would add that the idea of proper and responsible use of funds i.e., fiscal responsibility, applies to individuals, companies and various other organizations as well.
To continue, in my opinion, failure to perform due diligence in any arrangement concerning money, property or personal and/or corporate indebtedness would constitute fiscal irresponsibility. I remember being introduced to the concept of caveat emptor in high school economics class. To refresh your memory, caveat emptor means "let the buyer beware." It seems to me that, in general, we have abandoned that tenet in favor of preferring that the government and the courts protect us or rescue us in all cases whether or not we exercised good judgement. No one seems to want to accept responsibility for his or her own actions any more. (I am thinking of the all the people who bought homes they knew they couldn’t afford and now want the federal government to bail them out. Also the woman who collected millions from McDonalds after she placed hot coffee in her lap and was burned.)
If you fail to perform due diligence in any particular transaction, you have no one to blame but yourself. And be sure you know what due diligence entails. If, for example, you are contemplating joining with another company in a new venture, it is not enough to "feel good" about the people in that company. (Although that certainly is important.) Nor is it enough to call a few of their business references and ask superficial questions about say, "Do they pay their bills on time?" Nor is it enough to naively think that a call to their bank would get you much more information than a confirmation that they have been doing business with that bank for the past several years. Due diligence demands that you – at a minimum - ask for financial statements and recent income tax returns, financial information release authorizations to send to their bank(s) or other financial institutions and to their major creditors. And that you study them closely when you receive them. If you get positive answers from all those sources, you will probably end up with a mutually satisfying "partnership." If you don’t, it was time well spent and probably a lot of money saved.
© 2008 by Paul Burri
Friday, August 8, 2008
Working With Key ratios
Uh oh, sounds like something that requires math skills. Well yes it does and if you can’t handle at least a little math you probably shouldn’t be in business. I’ll assume you can handle some math and I’ll try to be gentle with you.
You are getting periodic business financial statements every month and should be able to read and understand them. At the very least, you should be able to ask your bookkeeper or accountant intelligent questions about them. This is much more important than most small business owners seem to realize.
But beyond those standard and periodic statements, there is other information you can develop that will give you a good idea how your business is doing presently and will let you make predictions about the future.
Several of the businesses that I owned were based on quoting on almost all jobs. It worked like this. A customer would ask us to make a certain product to his specifications and the first thing he wanted to know was how much it was going to cost. We would create a quote based on our material, labor and other costs, add a profit and submit our bid. If our price was lower than the competition we would get the job. I think that there are many businesses that work this way – landscape contractors, construction contractors, machine shops, auto repair shops, anyone who does business with the government – you get the idea.
The key ratio that we used in those businesses was our Sales/Quote ratio. Each month we kept track of how many quotes we had submitted the prior month and also how many sales we had made in the current one. (Note that I am talking about the number of sales, not their dollar amount. Also, we assumed that there was about a month’s lag between our quote and getting the order.) Then we would divide the number of sales by the number of quotes. For example:
March sales = 350
February quotes = 760
Therefore: 350 ÷ 760 = .46
Which meant that we were getting orders from 46% of our quotes.
That could be good or bad depending on what industry you are in and how many competitors you have. In our case, we felt it was pretty good. We would have been pleased if it increased to say, 60%, but we would never want it to get to 100%. More on that later.
You might point out that we may have been getting orders from quotes generated in March and you would be right. But since we did this every month, we felt that any inaccuracies would average out over time and this gave us a reasonably accurate picture of our competitive position. It also gave us an idea what to expect in sales for each future month. If quotes were down in April, sales would probably be down in May.
Let’s look at what caused us to get only 46% of our quotes. One reason is that a competitor submitted a lower bid on that job. Another reason is that the price was simply too high for the customer and he just didn’t buy the product – whether from my company or the competition. Or the customer had another, more urgent need for something else. Or the customer used an alternate product to do his particular job. Or for any number of other reasons.
Now as to why we never wanted our Sales-to-Quote ratio to be 100%. That would mean, of course, that we were getting an order for every quote. It would also probably mean that our prices were too low and should be higher to generate more profit.
In whatever business you are in, you will be able to identify important ratios (or other numbers) that are relatively easy to generate that will give you a fairly accurate picture of how you are doing.
© 2008 by Paul Burri
You are getting periodic business financial statements every month and should be able to read and understand them. At the very least, you should be able to ask your bookkeeper or accountant intelligent questions about them. This is much more important than most small business owners seem to realize.
But beyond those standard and periodic statements, there is other information you can develop that will give you a good idea how your business is doing presently and will let you make predictions about the future.
Several of the businesses that I owned were based on quoting on almost all jobs. It worked like this. A customer would ask us to make a certain product to his specifications and the first thing he wanted to know was how much it was going to cost. We would create a quote based on our material, labor and other costs, add a profit and submit our bid. If our price was lower than the competition we would get the job. I think that there are many businesses that work this way – landscape contractors, construction contractors, machine shops, auto repair shops, anyone who does business with the government – you get the idea.
The key ratio that we used in those businesses was our Sales/Quote ratio. Each month we kept track of how many quotes we had submitted the prior month and also how many sales we had made in the current one. (Note that I am talking about the number of sales, not their dollar amount. Also, we assumed that there was about a month’s lag between our quote and getting the order.) Then we would divide the number of sales by the number of quotes. For example:
March sales = 350
February quotes = 760
Therefore: 350 ÷ 760 = .46
Which meant that we were getting orders from 46% of our quotes.
That could be good or bad depending on what industry you are in and how many competitors you have. In our case, we felt it was pretty good. We would have been pleased if it increased to say, 60%, but we would never want it to get to 100%. More on that later.
You might point out that we may have been getting orders from quotes generated in March and you would be right. But since we did this every month, we felt that any inaccuracies would average out over time and this gave us a reasonably accurate picture of our competitive position. It also gave us an idea what to expect in sales for each future month. If quotes were down in April, sales would probably be down in May.
Let’s look at what caused us to get only 46% of our quotes. One reason is that a competitor submitted a lower bid on that job. Another reason is that the price was simply too high for the customer and he just didn’t buy the product – whether from my company or the competition. Or the customer had another, more urgent need for something else. Or the customer used an alternate product to do his particular job. Or for any number of other reasons.
Now as to why we never wanted our Sales-to-Quote ratio to be 100%. That would mean, of course, that we were getting an order for every quote. It would also probably mean that our prices were too low and should be higher to generate more profit.
In whatever business you are in, you will be able to identify important ratios (or other numbers) that are relatively easy to generate that will give you a fairly accurate picture of how you are doing.
© 2008 by Paul Burri
Monday, July 21, 2008
Take My Advice
As some of my readers may know, I am a SCORE business counselor and I believe that I am a good one; certainly not because I know all the answers - which I don’t. (As a matter of fact I often tell my clients that only 90% of what I tell them is true; it’s up to them to figure out which is the other 10%.) My strength as a counselor is three-fold. First of all, I know what I don’t know. (You’d be surprised how many people don’t know what they don’t know.) Secondly, I am not afraid to say, "I don’t know." when that is the case. And thirdly, I have a personal network of friends and associates who usually know about whatever I don’t.
I just returned from a SCORE counseling session with one of my SCORE clients. It was a somewhat frustrating but not atypical session. The client came to me for advice and I was prepared to give it to her. Unfortunately she was the type of person who really wants to get the advice that confirms what she already believes. Therefore, any contrary opinion or advice is very likely to fall on deaf ears. I am always tempted to confront such people with, "Do you want the truth or do you want me to tell you what you already think is the truth?"
Too many people will insist they want to hear the truth but really don’t. So anything that you tell them will be a waste of your time – and theirs too. Here’s another example of that sort of thing.
You have a business selling a product or service. You get a call one day complaining about your product. Some people in that position will spend an inordinate amount of time denying that there’s a problem or defending the product. And maybe there is really nothing wrong and it’s just a crank call from a customer you can never satisfy. But what if there really is a problem? Wouldn’t it be a lot better to honestly admit it (if only to yourself) and start to work on a solution? Denying a problem when one really exists is just another way of not wanting to hear the truth just like refusing to listen to good advice.
A long time ago I realized that the world is made up of people who are knowledgeable and successful and people who will never be successful. Right then I made up my mind to associate with the successful people as much as possible. If I need medical advice, should I go to the doctor who was at the bottom of his graduating class in medical school? If I need business advice should I go to the guy who has had five business failures and not one successful one? And then, having gone to one of those successful people, should I heed his advice or ignore it? If I am feeling sick and my doctor prescribes some medication, would I throw the prescription away when I leave his office? Why pay for his advice and then ignore it?
Fortunately, a fair percentage of the clients we SCORE counselors talk to, listen to our advice and follow it. Those clients almost always succeed. Some clients we advise not to start a business because they’re not ready. If those clients listen to us, they don’t fail because they realize they need more experience or more capital or more knowledge before starting the business. Yes, not failing can also be a success.
© 2008 by Paul Burri
I just returned from a SCORE counseling session with one of my SCORE clients. It was a somewhat frustrating but not atypical session. The client came to me for advice and I was prepared to give it to her. Unfortunately she was the type of person who really wants to get the advice that confirms what she already believes. Therefore, any contrary opinion or advice is very likely to fall on deaf ears. I am always tempted to confront such people with, "Do you want the truth or do you want me to tell you what you already think is the truth?"
Too many people will insist they want to hear the truth but really don’t. So anything that you tell them will be a waste of your time – and theirs too. Here’s another example of that sort of thing.
You have a business selling a product or service. You get a call one day complaining about your product. Some people in that position will spend an inordinate amount of time denying that there’s a problem or defending the product. And maybe there is really nothing wrong and it’s just a crank call from a customer you can never satisfy. But what if there really is a problem? Wouldn’t it be a lot better to honestly admit it (if only to yourself) and start to work on a solution? Denying a problem when one really exists is just another way of not wanting to hear the truth just like refusing to listen to good advice.
A long time ago I realized that the world is made up of people who are knowledgeable and successful and people who will never be successful. Right then I made up my mind to associate with the successful people as much as possible. If I need medical advice, should I go to the doctor who was at the bottom of his graduating class in medical school? If I need business advice should I go to the guy who has had five business failures and not one successful one? And then, having gone to one of those successful people, should I heed his advice or ignore it? If I am feeling sick and my doctor prescribes some medication, would I throw the prescription away when I leave his office? Why pay for his advice and then ignore it?
Fortunately, a fair percentage of the clients we SCORE counselors talk to, listen to our advice and follow it. Those clients almost always succeed. Some clients we advise not to start a business because they’re not ready. If those clients listen to us, they don’t fail because they realize they need more experience or more capital or more knowledge before starting the business. Yes, not failing can also be a success.
© 2008 by Paul Burri
Thursday, July 17, 2008
Board of Advisors or Board of Directors?
I want to expand a little on a column I wrote some time ago about forming a board of directors for your small business. Let me preface my remarks by stating that I am not an attorney so the following remarks should not be taken as legal advice. You should always see an attorney for that.To quickly review, the idea of forming such a board was the best piece of business-related advice I ever got in my 55 years of owning or managing small businesses. Most small businesses tend to "go it alone" and only ask for advice and counsel when they get into some sort of serious trouble. Forming a board of directors of people who each "bring something to the table" prevents costly mistakes, provides guidance in unfamiliar territory, gives balanced and unbiased opinions and helps in making important business decisions.
Any business can form a board of advisors and all corporations must form a board of directors and elect a president, a secretary and a chief financial officer. The same person may hold any number of these offices. Most small, closely held corporations elect the husband as President, the wife as Chief Financial Officer and Rover, the family dog as the Secretary. (Yes, I’m being a little facetious.) These two or three people usually also serve as the board of directors. To me that is a big mistake. It is perfectly legal to have just a few close family members as officers of the company and essentially have them act as the governing board. But doing it that way loses the valuable advice and guidance that a "real" board will provide. It also exposes the owners to charges of operating a "shell" corporation.
Now the question is this. If your company is set up as a corporation, should you have a board of advisors or a board of directors which consists of just Mr and Mrs Owner? Most SCORE clients that I advise to form a board of directors hesitate because they are fearful of "losing control" of their company. They have heard numerous stories of CEO’s being fired by their boards and they don’t want that to happen to them. Do I need to fear losing control or being fired by my board? And additionally, why form a "real" board of directors (consisting of outside experts who can bring important experience and advice) when I can get the same advice from a board of advisors?
In a major corporation such as General Motors or IBM there are literally hundreds of thousands of stockholders. Collectively, these stockholders are the owners of the company. They elect the members of the board of directors whose major responsibility is to manage the affairs of the corporation (do you remember receiving a proxy vote in the mail every year?) and the board of directors elect (hire) the operating officers of the company – the CEO, the COO, the CFO, etc. whose job it is to run the company on a day-to-day basis. If at any time the board feels that any of the officers is not doing his/her job, they can vote to fire that person. So from time to time, you read in the paper that some board of directors fired their CEO.
This is what every small business owner remembers when I suggest his forming a board of directors. But in almost all cases of a small corporation, the owner/founder is the sole stockholder or owns the majority of the stock. That means that he is the one who elects (hires) the board of directors. Simply by having a meeting with himself (yes, I know it sounds dumb), he can dismiss his board as he pleases. Could his board meet and decide to fire him? Technically, yes. But then he in turn has the power to fire the entire board. Problem solved - because it wasn’t ever a problem to begin with. The point is that in a small, closely held corporation there is no practical reason to fear that the owner (read sole stockholder) can lose control of his company.
Now for the second question – why form a board of directors instead of a board of advisors? One of the reasons for forming a corporation is for the purpose of limited liability in the event of a lawsuit of some kind. This means that any judgement against the corporation stops at the assets of the corporation. No personal assets of the owners of the corporation will be at risk unless the litigant can "pierce the corporate veil" by claiming and proving that the corporation was not actually and legally operated as one. But having a "real" board of directors with regular meetings and minutes of actual board meetings will prevent that from happening. Walking into court with a stack of corporate record books will immediately refute any claims of operating a "shell" corporation and will protect its owner as intended.
Forming a board of directors or a board of advisors is your option. But do one or the other.
© 2008 by Paul Burri
Any business can form a board of advisors and all corporations must form a board of directors and elect a president, a secretary and a chief financial officer. The same person may hold any number of these offices. Most small, closely held corporations elect the husband as President, the wife as Chief Financial Officer and Rover, the family dog as the Secretary. (Yes, I’m being a little facetious.) These two or three people usually also serve as the board of directors. To me that is a big mistake. It is perfectly legal to have just a few close family members as officers of the company and essentially have them act as the governing board. But doing it that way loses the valuable advice and guidance that a "real" board will provide. It also exposes the owners to charges of operating a "shell" corporation.
Now the question is this. If your company is set up as a corporation, should you have a board of advisors or a board of directors which consists of just Mr and Mrs Owner? Most SCORE clients that I advise to form a board of directors hesitate because they are fearful of "losing control" of their company. They have heard numerous stories of CEO’s being fired by their boards and they don’t want that to happen to them. Do I need to fear losing control or being fired by my board? And additionally, why form a "real" board of directors (consisting of outside experts who can bring important experience and advice) when I can get the same advice from a board of advisors?
In a major corporation such as General Motors or IBM there are literally hundreds of thousands of stockholders. Collectively, these stockholders are the owners of the company. They elect the members of the board of directors whose major responsibility is to manage the affairs of the corporation (do you remember receiving a proxy vote in the mail every year?) and the board of directors elect (hire) the operating officers of the company – the CEO, the COO, the CFO, etc. whose job it is to run the company on a day-to-day basis. If at any time the board feels that any of the officers is not doing his/her job, they can vote to fire that person. So from time to time, you read in the paper that some board of directors fired their CEO.
This is what every small business owner remembers when I suggest his forming a board of directors. But in almost all cases of a small corporation, the owner/founder is the sole stockholder or owns the majority of the stock. That means that he is the one who elects (hires) the board of directors. Simply by having a meeting with himself (yes, I know it sounds dumb), he can dismiss his board as he pleases. Could his board meet and decide to fire him? Technically, yes. But then he in turn has the power to fire the entire board. Problem solved - because it wasn’t ever a problem to begin with. The point is that in a small, closely held corporation there is no practical reason to fear that the owner (read sole stockholder) can lose control of his company.
Now for the second question – why form a board of directors instead of a board of advisors? One of the reasons for forming a corporation is for the purpose of limited liability in the event of a lawsuit of some kind. This means that any judgement against the corporation stops at the assets of the corporation. No personal assets of the owners of the corporation will be at risk unless the litigant can "pierce the corporate veil" by claiming and proving that the corporation was not actually and legally operated as one. But having a "real" board of directors with regular meetings and minutes of actual board meetings will prevent that from happening. Walking into court with a stack of corporate record books will immediately refute any claims of operating a "shell" corporation and will protect its owner as intended.
Forming a board of directors or a board of advisors is your option. But do one or the other.
© 2008 by Paul Burri
Thursday, June 26, 2008
The Little Red Light Is On
I have a habit of always checking and double checking things. If someone tells me that, say, the library is open from 10AM till 5PM, I will probably call the library to verify that before I drive over there. It drives my wife crazy. She says that I never believe her. The truth is, I believe everybody but I usually check what they tell me. I’m sure it was President Ronald Reagan who (when referring to the Soviet Union) said, "Trust – but verify."
From long, sometimes painful experience I have found that frequently I am told things that range from being true to only half true, false, or a downright lie. Find yourself in a strange town and ask for directions and a large percentage of the time, someone will give you wrong directions rather than admit that they don’t know. Then I depend on that information and it ends up costing me time or expense – or both.
I remember going to my doctor and having him recommend a series of ultra-sound treatments for my injured ski knee. (He just happened to have one of those ultra-sound machines in his office.) I sat in one of the treatment rooms and in came a young technician wheeling a small stainless steel ultra-sound machine. It had a few dials, a power switch, a small hammer-shaped wand on an armored cable, a power cord and a little red light. She spread some petroleum jelly on my knee, flipped the power switch on, adjusted a few dials and began to gently massage my knee with the hammer thing. There was no pain, no vibration, no feeling of heat or cold and no sound (after all it was ultra-sound).
Ten minutes into the treatment I facetiously asked the technician, "I don’t hear anything, see anything and I don’t feel anything. How do we know whether this thing working?" I’m sure no one had ever asked her that before and she was a little confused by my question.
She thought about it for a long minute and finally she hesitantly replied, "Well, the little red light is on."
And I said, "Yes, I can see that but all it really tells us is that the red light is on. We still can’t be sure the machine is working can we?"
I didn’t pursue my questioning because it was clear that I was confusing the poor girl.
To be safe when you are given some information – especially when it is vital information – check it out. Just because the little red light is on does not verify that it’s working.
P.S. It did work and my knee felt much better after about four treatments.
451 words
© 2008 by Paul Burri
From long, sometimes painful experience I have found that frequently I am told things that range from being true to only half true, false, or a downright lie. Find yourself in a strange town and ask for directions and a large percentage of the time, someone will give you wrong directions rather than admit that they don’t know. Then I depend on that information and it ends up costing me time or expense – or both.
I remember going to my doctor and having him recommend a series of ultra-sound treatments for my injured ski knee. (He just happened to have one of those ultra-sound machines in his office.) I sat in one of the treatment rooms and in came a young technician wheeling a small stainless steel ultra-sound machine. It had a few dials, a power switch, a small hammer-shaped wand on an armored cable, a power cord and a little red light. She spread some petroleum jelly on my knee, flipped the power switch on, adjusted a few dials and began to gently massage my knee with the hammer thing. There was no pain, no vibration, no feeling of heat or cold and no sound (after all it was ultra-sound).
Ten minutes into the treatment I facetiously asked the technician, "I don’t hear anything, see anything and I don’t feel anything. How do we know whether this thing working?" I’m sure no one had ever asked her that before and she was a little confused by my question.
She thought about it for a long minute and finally she hesitantly replied, "Well, the little red light is on."
And I said, "Yes, I can see that but all it really tells us is that the red light is on. We still can’t be sure the machine is working can we?"
I didn’t pursue my questioning because it was clear that I was confusing the poor girl.
To be safe when you are given some information – especially when it is vital information – check it out. Just because the little red light is on does not verify that it’s working.
P.S. It did work and my knee felt much better after about four treatments.
451 words
© 2008 by Paul Burri
Tuesday, June 17, 2008
Learning to Ski (Part 2)
In my last column I described my introduction to skiing and how I was dumped off at ski school while my friend, an experienced skier, went off by herself to do her thing.
Several years went by and I now considered myself an intermediate level skier. I now was dating a new friend who had never skied but was willing to try it. I assured her that I could teach her everything she needed to know to get started. Wrong! Read on.
We drove to Mammoth Mountain and the next day, there we were on the slopes; me, the "expert" and she, the novice. I took her to a spot where there was a very short, gentle slope and taught her the rudiments of side-stepping up the "hill" and snow-plowing back down. She seemed to catch on quickly and I felt sure she was ready for the "bunny" slopes.
As you may know, to get to the top of even the bunny slopes, you need to take a chair lift. Riding a chair lift is easy. Getting on and off – not so much. Frequently skiers – and especially novices - will miss a chair and fall down. Then the lift operators will shut it down so they can help the person get into the next chair. This not life-threatening but it is embarrassing and the delay does not go far toward making friends of your fellow skiers.
My friend and I eased slowly over to the bunny slope chair lift where there was the usual line of skiers waiting to get on the lift. It usually takes about 20 minutes to get to the head of a chair lift line which I had expected. I intended to teach my friend how to get on the chair while we were waiting in line. I told her to watch each skier as they got into position to have the chair come around behind them and to simply sit down and let it take you away. It’s really is pretty easy once you know how. (Just like everything else in life. The part about "once you know how" is the tricky part.) By the time we got to the head of the line, I felt pretty confident that she knew how to do it. Wrong again.
We reached the head of the line and the operator motioned us to move to the pickup point to get the next chair. When it did, I got on but my friend fell down and they stopped the lift and helped her get on the next chair.
Riding to the top of the hill on a chair lift varies but in this case it was about ten minutes to the top. Suddenly I realized that it was during this ten minute ride that I had planned to explain to my friend how to get off the lift. But now she was about forty feet behind me on the next chair. So there I was turning in my chair shouting back instructions on how to get off. (Can you get the picture?)
We reached the top and you guessed it – she promptly fell down again getting off of her chair. Things were starting to get frosty and I don’t mean the weather.
Eventually we made it to the top of the bunny slope. To a novice skier, even the bunny slope looks terrifying but I expected that. I now pointed out a small tree that was about 50 feet down the gentle hill from where we were standing. I told her, "You ski down to that tree. Just go slowly, snow-plowing all the way and stop when you get there. Then I’ll ski down to you and we’ll take the next step."
And she said, "No, you ski down to the tree and catch me when I get there."
That makes emotional sense to a novice skier. Doing it her way there will be someone to catch her and save her. But the logic is wrong. If she did it my way and was to fall anywhere in between, I could easily ski down to pick her up. If I skied down first and she fell on the way, my skiing back uphill to help her would not be so easy.
It was a long, cold day. It was a long, cold weekend. And I don’t mean the weather.
Don’t try to teach a loved one to drive or to ski or to skydive. You’re just asking for trouble if you do.
© 2008 by Paul Burri
Several years went by and I now considered myself an intermediate level skier. I now was dating a new friend who had never skied but was willing to try it. I assured her that I could teach her everything she needed to know to get started. Wrong! Read on.
We drove to Mammoth Mountain and the next day, there we were on the slopes; me, the "expert" and she, the novice. I took her to a spot where there was a very short, gentle slope and taught her the rudiments of side-stepping up the "hill" and snow-plowing back down. She seemed to catch on quickly and I felt sure she was ready for the "bunny" slopes.
As you may know, to get to the top of even the bunny slopes, you need to take a chair lift. Riding a chair lift is easy. Getting on and off – not so much. Frequently skiers – and especially novices - will miss a chair and fall down. Then the lift operators will shut it down so they can help the person get into the next chair. This not life-threatening but it is embarrassing and the delay does not go far toward making friends of your fellow skiers.
My friend and I eased slowly over to the bunny slope chair lift where there was the usual line of skiers waiting to get on the lift. It usually takes about 20 minutes to get to the head of a chair lift line which I had expected. I intended to teach my friend how to get on the chair while we were waiting in line. I told her to watch each skier as they got into position to have the chair come around behind them and to simply sit down and let it take you away. It’s really is pretty easy once you know how. (Just like everything else in life. The part about "once you know how" is the tricky part.) By the time we got to the head of the line, I felt pretty confident that she knew how to do it. Wrong again.
We reached the head of the line and the operator motioned us to move to the pickup point to get the next chair. When it did, I got on but my friend fell down and they stopped the lift and helped her get on the next chair.
Riding to the top of the hill on a chair lift varies but in this case it was about ten minutes to the top. Suddenly I realized that it was during this ten minute ride that I had planned to explain to my friend how to get off the lift. But now she was about forty feet behind me on the next chair. So there I was turning in my chair shouting back instructions on how to get off. (Can you get the picture?)
We reached the top and you guessed it – she promptly fell down again getting off of her chair. Things were starting to get frosty and I don’t mean the weather.
Eventually we made it to the top of the bunny slope. To a novice skier, even the bunny slope looks terrifying but I expected that. I now pointed out a small tree that was about 50 feet down the gentle hill from where we were standing. I told her, "You ski down to that tree. Just go slowly, snow-plowing all the way and stop when you get there. Then I’ll ski down to you and we’ll take the next step."
And she said, "No, you ski down to the tree and catch me when I get there."
That makes emotional sense to a novice skier. Doing it her way there will be someone to catch her and save her. But the logic is wrong. If she did it my way and was to fall anywhere in between, I could easily ski down to pick her up. If I skied down first and she fell on the way, my skiing back uphill to help her would not be so easy.
It was a long, cold day. It was a long, cold weekend. And I don’t mean the weather.
Don’t try to teach a loved one to drive or to ski or to skydive. You’re just asking for trouble if you do.
© 2008 by Paul Burri
Saturday, May 24, 2008
Learning to Ski (Part 1)
Learning to Ski (Part 1)
During my dating days I met a woman who was an experienced skier. I had never even tried skiing. One day she suggested that we spend some time in the Mammoth Lakes area and do some skiing. When I confessed that I had never been on skis, she promised to show me the ropes. I have always been willing to try new things so I agreed.
She took me to a local ski shop and they fitted me with skis and poles and gloves and a mask and all the other paraphernalia I would need. The following day we drove to Mammoth arriving late in the afternoon.
The next morning we got out early and we went through all the rigmarole of renting a ski locker, buying lift tickets, buying ski school tickets for me, changing into ski clothes – it was a lot more complicated than I realized and she was a big help. (It was also a lot more expensive.)
Now we clump our way out the lodge (it’s sure hard to walk in those clumsy ski boots) and onto the bottom of the ski slopes. She helped me put my skis on. Then she pointed off to the left and said, "The ski school is over that way. I’ll meet you here around lunchtime." And suddenly she was gone. I stood there a little dazed, abandoned and feeling, "If she loved me, she wouldn’t leave me here like this all alone."
I struggled my way over to the ski school – falling 9 times in 120 feet - where there was a bunch of equally clueless skiing novices. As we went through the basics, I noticed that just beyond us was the bottom of a slope where skiers were ending their runs. I watched them with envy thinking, "Boy, I wish I could do that."
The school lasted all morning and most of us soon got the hang of it. And guess what?
Later that day I was skiing down that very slope and it was clear that she knew what she was doing when she sent me to ski school by myself. Trying to teach skiing to someone you care for can be a serious mistake. It will only result in "bloodshed" and the end of a beautiful friendship. I learned that a few years later when I tried to teach a new friend how to ski instead of sending her to ski school.
But that’s a whole other story.
© 2008 by Paul Burri
#103 for the week of May 26, 2008
During my dating days I met a woman who was an experienced skier. I had never even tried skiing. One day she suggested that we spend some time in the Mammoth Lakes area and do some skiing. When I confessed that I had never been on skis, she promised to show me the ropes. I have always been willing to try new things so I agreed.
She took me to a local ski shop and they fitted me with skis and poles and gloves and a mask and all the other paraphernalia I would need. The following day we drove to Mammoth arriving late in the afternoon.
The next morning we got out early and we went through all the rigmarole of renting a ski locker, buying lift tickets, buying ski school tickets for me, changing into ski clothes – it was a lot more complicated than I realized and she was a big help. (It was also a lot more expensive.)
Now we clump our way out the lodge (it’s sure hard to walk in those clumsy ski boots) and onto the bottom of the ski slopes. She helped me put my skis on. Then she pointed off to the left and said, "The ski school is over that way. I’ll meet you here around lunchtime." And suddenly she was gone. I stood there a little dazed, abandoned and feeling, "If she loved me, she wouldn’t leave me here like this all alone."
I struggled my way over to the ski school – falling 9 times in 120 feet - where there was a bunch of equally clueless skiing novices. As we went through the basics, I noticed that just beyond us was the bottom of a slope where skiers were ending their runs. I watched them with envy thinking, "Boy, I wish I could do that."
The school lasted all morning and most of us soon got the hang of it. And guess what?
Later that day I was skiing down that very slope and it was clear that she knew what she was doing when she sent me to ski school by myself. Trying to teach skiing to someone you care for can be a serious mistake. It will only result in "bloodshed" and the end of a beautiful friendship. I learned that a few years later when I tried to teach a new friend how to ski instead of sending her to ski school.
But that’s a whole other story.
© 2008 by Paul Burri
#103 for the week of May 26, 2008
Monday, May 19, 2008
Go After Sales When You’re Busy; Not When You’re Slow
From 1959 to 1975 I worked as the General Manager of a printed circuit manufacturing company. As in most small companies, I wore several hats, including that of Sales Manager. Those were very busy years undoubtedly caused by the Vietnam War. My Gal Friday was a very nice woman whose husband used to stop by occasionally to pick her up after work. Frequently he and I would chat for a few minutes until it was quitting time. He was the Sales Manager for a well-known chain saw manufacturer and so frequently we talked about sales techniques and procedures.
One afternoon at a time when we were extremely busy, he stopped in and he asked me, "How are sales?" I replied, "We are so busy I can hardly believe it."
Then he asked me, "What are you doing about sales?" I answered, "Doing about sales? We are so busy I can’t imagine how we are going to deliver all the work that we have. The last thing I need right now is more sales."
He answered with some wisdom that I have never forgotten. He said, "Wrong! This is when you need to go out and call on all your customers and their purchasing agents. They need you now and every door will be open to you. When things are slow, they will be inundated with salespeople and they won’t need you then. If you call on them now when they need you, they will remember you when things are slow and they will give you what little work they have then."
That piece of wisdom has worked for me ever since. But how do you handle more business when you already have more than you can handle? There are several ways to look at this "problem." (By the way, having too much business is what I call "good problems.")
First of all, always remember that you are selling the capacity to do work or to produce goods. Another way to say this is to say that you are selling your time, your expertise and your manufacturing capability. By the law of supply and demand, when supply becomes scarce, prices go up. To put it bluntly, this is the time to raise your prices because the supply of capacity is scarcer.
OK, you raise your prices and business still continues to come in. Now is the time to consider working your people overtime even if you need to pay premium wages. Or start a second or even a third shift so that you are using your facilities and equipment on a round-the-clock basis. Depending on your supervisory situation, this will probably mean that you will be putting in a lot more hours. (I didn’t say it would be easy.)
Another approach could be to "farm out" some work to some of your competitors. Of course sending work to competitors will risk having them try to steal some of your customers. But if you are careful about disguising who your customers are, you can make it difficult for that to happen. The other concern is that your competitors might charge you so much for doing the work that you make little or no profit on the job. But even if you make no profit on these "busy times" jobs, it will pay off in the future when things get slow. To repeat myself, your purchasing contacts will remember who it was that helped them during those busy times.
The moral of the story? Go after new business when you’re busy and then do whatever it takes to "deliver the goods." It will pay off when the slow times come.
© 2008 by Paul Burri
#102 for the week of May 19, 2008
One afternoon at a time when we were extremely busy, he stopped in and he asked me, "How are sales?" I replied, "We are so busy I can hardly believe it."
Then he asked me, "What are you doing about sales?" I answered, "Doing about sales? We are so busy I can’t imagine how we are going to deliver all the work that we have. The last thing I need right now is more sales."
He answered with some wisdom that I have never forgotten. He said, "Wrong! This is when you need to go out and call on all your customers and their purchasing agents. They need you now and every door will be open to you. When things are slow, they will be inundated with salespeople and they won’t need you then. If you call on them now when they need you, they will remember you when things are slow and they will give you what little work they have then."
That piece of wisdom has worked for me ever since. But how do you handle more business when you already have more than you can handle? There are several ways to look at this "problem." (By the way, having too much business is what I call "good problems.")
First of all, always remember that you are selling the capacity to do work or to produce goods. Another way to say this is to say that you are selling your time, your expertise and your manufacturing capability. By the law of supply and demand, when supply becomes scarce, prices go up. To put it bluntly, this is the time to raise your prices because the supply of capacity is scarcer.
OK, you raise your prices and business still continues to come in. Now is the time to consider working your people overtime even if you need to pay premium wages. Or start a second or even a third shift so that you are using your facilities and equipment on a round-the-clock basis. Depending on your supervisory situation, this will probably mean that you will be putting in a lot more hours. (I didn’t say it would be easy.)
Another approach could be to "farm out" some work to some of your competitors. Of course sending work to competitors will risk having them try to steal some of your customers. But if you are careful about disguising who your customers are, you can make it difficult for that to happen. The other concern is that your competitors might charge you so much for doing the work that you make little or no profit on the job. But even if you make no profit on these "busy times" jobs, it will pay off in the future when things get slow. To repeat myself, your purchasing contacts will remember who it was that helped them during those busy times.
The moral of the story? Go after new business when you’re busy and then do whatever it takes to "deliver the goods." It will pay off when the slow times come.
© 2008 by Paul Burri
#102 for the week of May 19, 2008
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