We recently had the honor of the opening keynote for the Alaska Small Business Development Center’s first annual Vitalize Alaska Conference. The conference was the brain child of Jon Bittner their new Executive Director. He wanted to encourage and inspire innovation and business development in the new frontier. Over 300 small and medium sized business owners attended.
The conference was held in Anchorage, Alaska’s largest city, but still under 300,000. The state is much bigger in area than Texas but lacks the infrastructure we take for granted in the lower 48. As you can imagine, the winters are harsh, and the people are stalwart.
While most of the rest of the country enjoys a booming economy, Alaska suffers from a recession, brought on by the collapse of oil prices in an oil producing state. Needless to say, they have to find a new path economically and so they are turning to entrepreneurship.
What could we possibly bring to the table that would help them in their challenge? What could we bring that would have a universal and positive impact on those folks who now face raising themselves up by their own bootstraps? We looked at our own bootstrap experience and discovered three practical lessons we could share:
1. Follow Your Opportunity …Passionately!
You often hear, “Follow your passion!” It seems to make sense on its face, since we all need that drive and tenacity that comes naturally when we follow our passion. But you can follow your passion right into the poor house if you are not fortunate enough to have a passion that is in great economic demand.
We followed our opportunity, passionately. The chances are greater that opportunities, not necessarily in your passion, will present themselves more often. We found we didn’t have to give up on our passions to seize the opportunity we were presented with. As a matter of fact, we found many creative ways to use and incorporate our passions into our mercantile business, not the least of which was Worthy Cause Marketing.
We saved a bundle on commercial advertising by supporting worthy causes we were passionate about. We wanted to give the members of those causes a social reason to discover, buy, and advocate our products. This can work in Alaska!
2. Use your Hidden Assets and Resources.
The VC’s have brainwashed most startups and small businesses into believing that the only way to success is secure a big investment, go through a burn rate, scale fast, and fail fast. If you are playing a numbers game, then you only need one unicorn in 10 if you expect a 10X return. Forbes, the SBA, and others all agree that still, today, 9 out of 10 new businesses fail. ‘Sounds like they are indeed failing fast.
But what if you don’t get a big investor and don’t have the luxury of a big burn rate? If you are like most of us, you don’t! So now we are talking cash flow management. And the secret to cash flow management is reducing your need for cash and growing slowly, but surely!
One hidden asset we had was our top supplier. Outside of product (wine), our biggest need was packaging materials (glass, corks, closures, labels and cartons). Because we were a low priced product with high volume, we would use more of these materials than any of our supply company’s other customers. We certainly let them know this, but we didn’t stop there.
We met with them quarterly to share our growth plans. We negotiated a long term contract. We let them know ahead of time when we couldn’t make our payments. And we gave them a catch up plan that would bring out account current. Over time, we were able to gain extended credit and terms that saved us from borrowing the money or worse, trading equity for it.
Treating your suppliers as partners to save money can work in Alaska!
3. Put Your Self in the Other Guy’s Shoes.
You hear this all the time. It basically the golden rule. But just how does that translate into practice in the business world? And why does it remove obstacles and speed the processes you rely upon?
We found 7 distinct people we had to sell in order to get our product to market. They each wanted something different. Surprisingly, most of them were interested in something else entirely beside “The best wine and the best price” (our slogan).
For instance, our own people wanted income, acknowledgement, time off, and a company that stood for more that its product. The ownership of our distributers wanted a strategic advantage with a powerful retailer who wanted our product. The distributer’s sales managers wanted to make their numbers. The sales people wanted to make their commissions. The retailers wanted a proven product with excellent customer service. The store clerks wanted to feel important, so they would recommend and reorder our products. Only the consumer really cared about the wine or the price!
But discovering and delivering what each person in the chain wanted (and not what we thought they wanted) was the key to our success. This can work in Alaska, or, for that matter, anywhere.
We admire the spirit of the Alaska, and hope these lessons help vitalize their recovery!
Who We Are
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.
To make inquiries for keynote speaking, trainings or consulting, please contact firstname.lastname@example.org.