Happy Veterans Day, everybody! Today, November 11, 2015, it is our honor and our pleasure to speak at the first annual Vets Rock event at Mohegan Sun in Connecticut. What would we share at this keynote event with more than 100 veteran-owned businesses that would be of the greatest value to them? What lessons have we learned, often the hard way, in our own business experience that they could use to improve their own businesses – tomorrow?
Of all the challenges aspiring, launch and growth-phase entrepreneurs face, the top has to be capital, or should we say the lack of it. The key to success of any business is simply making more money than it costs you to stay in business. So we decided to share how to reduce the need for capital in the first place.
Here are 7 tips that worked for us:
- Discover Your Hidden Assets. What do you already bring to the table, and what can you find if you look with expectant eyes? Discover how you can repurpose something you have for something you need. Be resourceful. Solve problems creatively. We used a door for a desk and a laundry room for an office.
- Identify and Work With Your Strategic Allies. Those who succeed if you succeed are your strategic allies. Learn how your products or service benefit your customers, suppliers, and the community. Find a small company you can work with that is poised to grow, and grow with them. We provided a small company called Trader Joe’s with a fun California product and together we spread across the country.
- Use Your Suppliers and Buyers as Bankers. Treat your suppliers like business partners. Enter into long-term contracts so they can see a future with you. Keep them up to date on your progress, challenges and opportunities. Notify them in advance when you will be late on a payment, and show them how you will get current. Then ask for extended credit to expand your business and increase your purchases from them. We offered our buyers quantity discounts for cash.
- Pay for Performance. Discover the metrics that demonstrate sales, growth, and profitability, then reward your people for achieving those goals. Keep the bonus period short term, such as every month or every quarter to keep the goals active and achievable in their minds. We matched our people’s 401K either 50%, 100%, or 150% based on quarterly achievement.
- Outsource (Locally) Everything but Sales, Quality Control, and Accounting. Don’t invest in a ton of bricks and mortar or other overhead that require monthly payments whether you have sales or not. Try for just-in-time production and avoid holding large inventories. We outsourced production but held our producers to a set of quality specifications in a contract.
- Reduce Turnover. The #1 hidden cost in any business is turnover. It can result in the loss of your company knowledge, supplier relationships, and even customers. The key is to hire, orient, train, and compensate properly. If you are paying your people right, the producers can’t afford to leave and the non-producers can’t afford to stay.
- Reduce Your Cost of Advertising. Think about your customers as belonging to a community which is interested in more than your product. That community has needs and cause-based groups that work to satisfy those needs, such education, conservation, human rights, and support of the arts. By supporting community fundraisers and non-profits , we gave their members a social reason to buy our products.
These 7 tips can help anyone who runs a business, and we are happy to give back to our vets by sharing these lessons with them today, Veterans Day, 2015.
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.
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