Management | The Barefoot Spirit

What Business Should I Go Into?

Michael Houlihan & Bonnie Harvey — Thu, 20 Sep 2018 17:00:31 +0000

Discovering Business Opportunities in Problems

We are often approached by young folks who ask us, “What business should I go into?” – as if there was the realm of all possibilities. We assume by this question that these folks have not decided to “follow their passion.” So we talk with them about how most business opportunities present themselves as solutions to problems they are personally experiencing.

“Why hasn’t anyone done this yet?” might be their first reaction. And this is where many wantrepreneurs stop. They don’t do the research to find out why. Perhaps someone else did think about it but was unable to make a profit or get it into circulation. Many great ideas are collecting dust in warehouses somewhere because they may have solved the problem, but they were unable to solve the distribution challenges.

Many young folks spend too much time perfecting their product while grossly underestimating what it will take to get it in the marketplace. They tend to take distribution management for granted. Their idea is so good, it will distribute itself! Not!

The Challenges of Selling Online

Many think that they can “just sell it online, avoid the middleman and go directly to the customer.” They might, but then they face several challenges that are generally overlooked:

First, they are making their idea and the market for it highly public before they have amassed even a small war chest to protect their idea. This opens the door to copycats who already enjoy a war chest and already have secured access to the bricks and mortar stores. They can achieve instant market penetration and outlast you in court.

Second, online sales are a race to the bottom price-wise. The first thing your customer will do is check for a lower price. Never mind that yours is the original, and never mind that yours is of high quality. They can’t physically feel it and compare it to others in a tactile way. They must buy on picture only and so price becomes the major differentiator.

Third, because you are selling onesies and twosies, direct to consumer, you will never get a big check for a massive volume from a major retailer. So you won’t be able to compete with competitors who will benefit from quantity discounts for substantial purchases.

The good news is that anybody can sell online. The bad news is that your risk of failure is much greater.

So, our answer to “What business should I go into?”

“Choose one that you can achieve distribution with.” We strongly advise a careful study of the distribution system for your great idea, even before you finish it. Why waste your time if you can’t get it to market?

We suggest you engage someone who has already successfully navigated the distribution system for your kind of product. You may be surprised to hear what they might have done differently, now that they know what was required.

A distribution advisor can save you tons of money, time, and anguish. They don’t cost, they pay!

As advisors ourselves in this critical area of business success, we caution against growing faster than you can support the cost of sales. We advise our clients to test out distribution for their great idea in a small area to discover what they really will be required to do in a larger area. That education will determine their strategy for success. And isn’t that the whole idea? Not just coming up with a great solution, but actually getting it out there and keeping it out there?

So, go into a business for which you understand the distribution. Then you can solve a problem, and we can all thank you by buying it!

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 sales@thebarefootspirit.com.

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10 Questions Our Clients Ask

Michael Houlihan & Bonnie Harvey — Thu, 17 May 2018 17:49:57 +0000

Our clients come to us because of our credentials as the founders of the largest wine brand in the world. They want to know how we began (in our laundry room), how we were financed (we assumed a debt which we traded for wine and bottling services), and how we overcame the challenges of personnel management (we paid for performance).

All that and more is covered in our New York Times’ Best Seller, The Barefoot Spirit, How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. It contains the lessons we learned told in a humorous business adventure story. It answers the top 10 questions start-ups and business owners need to know on their way to success.

And we are really excited to announce that we are currently recording it in an audio book! Like the paperback, it will be fun. Instead of having someone read it to you, we have engaged a live troupe of actors who will dramatically act it out for you. You will enjoy the unique format and learn from their interactions. We will be releasing it in the fall!

So, here’s the short list of a few of our favorite answers to the question – “How do I…”:

1. Start a business without financing?

Trade for goods and services
Use your buyers as banker by offering quantity discounts for cash
Use your supplies as bankers by earning extended credit and terms
Pay for performance rather than for attendance
Use the assets you already have, such as a spare room, family members, or contracted services

2. Start a business with no experience in the industry?

Ask a lot of questions
Work for someone who is already doing what you want to do
Talk to everyone who will be working with your product or service
Use your suppliers and vendors as teachers

3. Find, hire, train, and keep good people?

Look for hustle and integrity
Overkill on orientation
Give them appreciation and time off
Pay for performance

4. Get my product to the market?

Start in a small area to learn your lessons
Offer samples, tastings, etc.
Ask the buyers what they need
Get the reputation, even in a small area, of being a “Hot Mover!”

5. Give my brand a soul?

Identify what your brand offers its users that they love
Identify what your brand and your company stand for beside the mercantile product you are selling
Work with your community on your shared goals
Be inclusive and earth-friendly
Treat your people right

6. Build a brand without advertising?

Donate your products or services to community fundraisers
Build brand advocates who will sing your praises to all they know
Attend farmers’ markets or other social events where your customers can be found
Do many in-store demos

7. Think outside the box?

Put yourself in the other guy’s shoes in every position of responsibility
Meet regularly with everyone on your staff, with your suppliers and your buyers and ask them what their challenges and goals are
Be open to new ideas, especially those that seem to be contrary to your own
Practice “Know-the-Need” instead of “Need-to-Know”

8. Get the most out of my people?

Use performance-based compensation and share the wealth
Share information freely; share your goals, challenges, and opportunities
Give employees your respect by asking for their feedback and advice
Acknowledge their successes in writing and copy the entire staff

9. Use outsourced services?

Communicate your needs clearly and in writing
Pay only if your project has been completed to your specs
Oversee their work on your project to assure quality control
Look for long term relationships

10. Sell my business?

Talk with a business broker who recently was involved in a sale or purchase of a business like yours
Put your peanut in front of the elephant
Work towards the metrics required to become an acquisition target and ultimately monetize the brand equity you are building
Organize your filing system according to your future acquirer’s due diligence

As advisors, we help our clients identify and move toward their goals. We learn about their business, their challenges, and their opportunities. Then we meet with them regularly to help them stay on track. They get the many benefits of our 20 years growing the Barefoot Wine brand. We learned a lot of lessons – most of them the hard way!

You too can benefit from the knowledge we gained without having to go through the time, mental anguish, and money that it took us. Think of it as saving $300,000 or more on mistakes and 3 years or more in wasted efforts. Here is to your success!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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5 Ways to Deal with Frustration

Michael Houlihan & Bonnie Harvey — Thu, 01 Mar 2018 18:00:54 +0000

We have all been there, the place where we feel stuck, the place where our work seems to be stopped, the place where we just want to scream, “Dang it!” and tear our hair out. Entrepreneurs spend a lot of time in that place. It’s called Frustration. One thing we learned about frustration is that it can be blinding. It can blind you to alternatives and solutions that you can’t see when all you’re seeing is red!

So much of entrepreneurship is just a grind. You have to get through a period where you seem to be putting out a lot of energy and money for very little return. It’s like trying to move the Queen Mary with your hand. You could push for years before you finally overcome the inertia and it begins to move. This type of frustration is ongoing for most startups. It goes with the territory and is to be expected.

But there is another kind of frustration, one that can seem to visit us daily. It usually occurs when we are working with compliance, authority, or some other kind of legal paperwork. Their one-size-fits-all approach to regulation and management can be especially frustrating, especially when you don’t have all the information they require. Or when the agencies you need that information from shunt you around to other agencies that are even less helpful. The hours and days and even weeks can go by before these fine administrative folks get back to you – if they do at all. And meanwhile, you’re up against a deadline.

What to do? Here’s our 5 tips you can use to overcome frustration:

Take a Short Break. Do something else that you can accomplish in a reasonably short period of time. Do something that provides immediate results. This will empower you and remind you that you are effective and encourage you to get back to the “beast” – later.
Take a Walk. Go outside. Get some fresh air. Get some exercise. But get away from that screen and that phone! Walking will give you some perspective and clear your mind if only for a little while. Nature demonstrates balance and functionality. Colors will cheer you up.
Escalate. Ask a supervising official at the agency you are dealing with for help. Tell them what you’ve been going through. Recount the steps you’ve taken so far, and to no avail. Ask them what you’re doing wrong and what advice they can give you. Tell them you’re frustrated. You might luck out and get someone with compassion who can actually help!
Get an Extension. If at all possible, ask for an extension on the deadline based on your inability to collect the required data from other agencies. Give it up for a while. You will come back fresh. You will be much more likely to make progress once you take the blinders off and have a chance to see the big picture. You’ll be much more objective and receptive to suggestions. Sometimes just the time you’ve committed alone can turn tenacity into stubbornness which can only add to your frustration.
Be Open to a New Approach. Go back to the beginning and look at the path you’ve taken so far. Is there another path you could take? Is there something you missed? Remember, frustration is caused by not making progress over extended periods of time. This time go at it in short bursts instead of the marathon approach. You can ease your frustration with shorter time periods devoted to your goal.

Frustration happens! But we can mitigate our frustration by recognizing where and when we are exacerbating it ourselves. We can take steps to manage it, save a few hairs, and a few vocal cords!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Jim Canfield Updates Famous Executive Handbook CEO Tools 2.0

Michael Houlihan & Bonnie Harvey — Wed, 24 Jan 2018 18:00:37 +0000

CEO Tools 2.0, A System to Think, Manage, and Lead Like a CEO was released earlier this month. The famous tool box for CEO’s by Kraig Kramer’s has been brilliantly updated by Jim Canfield, an expert at identifying, simplifying, and communicating the tactics and strategies CEO’s rely on to make the best decisions possible. The book is filled with easy to understand charts, info graphs, and process maps that update, outline, and improve classic management principles. It includes several new tools backed up by thoughtful case studies that will give any CEO the edge in this competitive market. We are thrilled to have our business chosen for the final case study. This is a great handbook, tool box, and must read for any CEO interested in understanding and using the latest CEO Tools available. Highly recommended!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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The 3 Core Competencies Entrepreneurs Must Master to Succeed

Michael Houlihan & Bonnie Harvey — Thu, 30 Mar 2017 17:00:04 +0000

We see too many entrepreneurs falling in love with their products and kidding themselves into believing that their idea itself is all they need to make them a screaming success. Warehouses are filled with great commercial products that never got to store shelves. Founders of promising start-ups wind up working for their investors, or worse, close their doors. All hopes are dashed and they are back living with mom. Why? Because they failed to master the three core competencies of any successful business.

Cash Flow Management. You’ve got to pay your bills! And when you can’t? You have obvious two choices. Go out of business, or raise more capital. But that comes with a price; diluted stock or loss of control. So many companies try to get financing to pay for staff without sales. They may be financed and even refinanced before they make enough sales to support their overhead. In other words, they are top heavy and reliant on multiple rounds of new investment to stay afloat. One different solution is to make sales a priority, sell in a small territory, service the heck out of it, and use the proceeds to finance growth. Another solution is to identify and forge strategic alliances with your vendors and your buyers. Vendors who trust you will extend your credit and terms to help you make ends meet, especially when they believe their business will grow if you succeed. Buyers will pay in cash for volume discounts which also help you pay the bills.
Personnel Management. You’ve got to get some help! And it ain’t easy! Probably the most important skill successful entrepreneurs have learned in their years of experience is how to hire the right people. But even if you hire well, you still have to train, incentivize, and encourage your people to do their best. It’s a tall order, but absolutely necessary. Just discovering and implementing a productive compensation system can take years of trial and error. We suggest you start with bonuses for sales, growth, and profitability. Get everybody to agree on exactly what the metrics are and how their jobs can contribute. Then offer a quarterly bonus to everyone, regardless of their job, to put them all on the same team. This builds a positive company culture.
Distribution Management. You’ve got to get your product to market! This requires satisfying several levels of distribution before it gets to your ultimate customer. This is perhaps the most important skill set new product producers overlook. They tend to focus on production and think, if their product is good enough and priced right, it will sell. But you will run into distributers who want to know what the strategic advantage is of carrying your product. Their sales managers want to know how you will help them make their numbers. Their salespeople want to know what the incentive is. The retailer wants to know how fast it turns, and his clerk wants to know why he should stock it on the shelf. Nobody but your end-user customer cares about quality or price. Everyone has their own requirements and you’d better satisfy them or you simply won’t make it to market. Distribution is more important that your product because nobody can buy it if it isn’t there!

These 3 core competencies may vary from business to business, but they generally fall in to these basic proficiencies. Master them and your great idea will be much more likely to succeed.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Is It Time to Make Up or Break Up With Your Management Team?

Michael Houlihan & Bonnie Harvey — Thu, 23 Feb 2017 20:57:04 +0000

This Valentine’s week, as you examine significant relationships in your life, take a close look at your company’s management team. Are the views of those operating your business still in line with your company vision and mission?

“As a company grows, a shift can occur as the owner transitions from exercising a lot of control and begins to delegate to management,” says business consultant Beatrice Chestnut of The Chestnut Group and author of The 9 Types of Leadership. “If managers have different personality styles and world views than the founder, a misalignment can occur between the original vision and the management team’s priorities.”

Organizations evolve, and that process is a natural part of growth, adds Brad Deutser, president of Deutser, LLC, a consulting firm that advises leaders and organizations during times of transition, growth and crisis.

“The highest-performing organizations are those that grow from the inside out. When organizations are anchored by a strong culture, they are more effective at scaling and driving performance of their people and business.”

To read the complete article, please visit American Express Open Forum

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Sales Should Be Taught In School

Michael Houlihan & Bonnie Harvey — Thu, 05 Jan 2017 18:00:21 +0000

In the past few years we’ve spoken at over 40 schools that teach entrepreneurship. Only one of them teaches Sales – not sales forecasting, not sales management, and not sales analysis, but real, “get out of my office,” to “I’ll take two truckloads,” Sales!

As a society, have we gotten so focused on technology, engineering, production, and the next shiny ball that we have forgotten how all the goods and services that give us such a great standard of living get to us? It’s through sales!

Without sales, nothing happens: no engineering, no tech, no production, no salaries. Nothing. Zilch. So how did we get to a place where we think we can teach, of all things, Entrepreneurship, without teaching Sales?

We think it’s because, as a society, we look down on salespeople, and anything that seems ‘salesy.’ From the classic Music Man to a myriad of films like “Used Cars,” salespeople are depicted as devious, cut throat, sleazy types who will take advantage of you, trick you, and saddle you with something you don’t need and can’t afford. They are regularly portrayed as low lifers who couldn’t get a decent job. So why teach Sales to an entrepreneur? Certainly, they can find someone else, less educated, to tend to that tawdry task.

The one school we visited that did teach Sales including prospecting, qualifying, communications, opening and closing, was the University of Wisconsin at Whitewater. When we asked why they taught Sales, they responded, “One of our benefactors, a very successful entrepreneur, asked in a curriculum meeting on entrepreneurship classes, why they didn’t teach Sales?” They couldn’t give a good reason, so they began teaching Sales.

Like that benefactor, we also believe you can’t teach Entrepreneurship without a providing a solid foundation in Sales. More than 80% of the great ideas that fail do so because their startup companies could not achieve a positive cash flow before the investors pulled the plug! In other words, they couldn’t make more in sales than it cost them to be in business.

We like to say, “The day after the launch, the business plan takes a back seat to the cash flow report.”

We also believe that all companies are made up of just two divisions: Sales and Sales Support – where everybody, and we mean everybody, who is not in Sales, is working to support Sales. Sales is your paycheck, your security, and your reputation. Who wants to hire someone from a bankrupt company? So, let’s rethink where sales should rank in the scheme of things. Any successful entrepreneur will put it near the top.

A couple years ago we spoke at the Norwegian Technological Institute in Trondheim to predominantly Engineering students with dreams of starting their own businesses. The main question we got from them was, “What other courses should I take to prepare myself to sell my products and innovations?” Our answer would have been Sales – if they taught it, but they did not. So instead, we recommended the basis for excellent Sale skills – the Liberal Arts, also known as Liberal Studies or The Humanities. You know, communications, social studies, cultural studies, critical thinking, psychology, philosophy, history and literature. Sure, you can teach the tactical skills of Sales, but first you have to master the art of relationship building.

Now does this sound like a low-lifer’s profession? On the contrary, this sounds like a profession that requires a high level of education, plus respect and understanding for fellow human beings. Let’s put Sales back on the pedestal where it rightly belongs. And let’s teach Sales in our schools. When it comes to entrepreneurial success, Sales cure all ills.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Crowd Sourcing Can Give Startups a False Sense of Security

Michael Houlihan & Bonnie Harvey — Thu, 28 Apr 2016 17:00:30 +0000

A day doesn’t pass without news of a new startup that has raised more than they asked for. Yes, Crowd Funding is a viable alternative to Banks and VC’s, but it comes with some subtle dangers!

Some businesses can’t raise funds any other way. The Banks and VC’s won’t touch them. But if the Crowd likes their idea, Bam! – they get funded. It seems so democratic, so what’s the problem?

Here are some hidden dangers to Crowd Funding that are becoming more apparent to the startups and the Crowd alike:

Experience. The Crowd lacks the sales and distribution experience that the Banks and the VC’s have painfully learned from poor investments in great ideas. The Crowd may love the concept, and envision one in every household, but the Crowd generally doesn’t know how to get it to market, run the business, or achieve positive cash flow. Typically, inexperienced startups will write a business plan and get the Crowd to fund it, while experienced business owners know that it’s the cash flow report that leads the business, not the business plan.
False Security. The Bank and the VC’s will grill the startup about exactly how the product will get to market and stay there. They will demand a cash flow plan that takes into consideration much more than the merits of the concept itself. Because of the sheer numbers of the Crowd, both the startup and the Crowd itself believe a great idea will be sought out by the market and sales become an afterthought.
Management. The Crowd tends to focus on the product and not so much the management of the company. When the Crowd is provided with a sample product in return for their investment, they believe that the startup will be able to manufacture and distribute the product in the future. In reality, it’s the management of the startup that will determine the success or failure of the product.
Popular Misconceptions. The Crowd tends to simplify the sales process. They go online or to the store and “everything” is there every day. Their judgement about success in the marketplace is based on what they see from their side of the screen and their side of the retail shelf – as consumers, not as producers. If they don’t see it, they think it hasn’t been done. It may have been done but never made it to their store. This simplistic and popular misconception is reinforced when the Crowd has a positive response to the startup’s offering.
Timing. The time between the offering and the actual availability of the product is almost always much longer than expected. The startup discovers the hard way that the costs and time of production and distribution are much greater than they anticipated. This tends to slow them down. Meanwhile, because of all the publicity, companies with more resources and better access to the market can jump on their great idea and be first to market, leaving the startup in the dust. In some cases the startup’s idea becomes outdated by the time it hits the market.

Startups can get a false sense of security after a successful Crowd Funding. It can deaden their ears to unwelcomed news – such as, it’s not so much about the idea, as it is about the management, delivery, and achieving a positive cash flow. It’s not about launching the business or how much is raised. It’s about whether the startup did the homework required for the time to market and true cost of sales – even if the Crowd gives you twice what you asked.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Millennials Want a Positive Company Culture

Michael Houlihan & Bonnie Harvey — Thu, 14 May 2015 17:00:33 +0000

Seems like every week there’s a new report out on Millennials. The latest one from the management consulting firm Accenture is an eye opener. 60% of the 2015 grads in the survey said they would take a pay cut to work for a company that had a “positive social atmosphere.”

Sure, 70% of all those responding also said they were being subsidized by their parents, and perhaps that’s why they have the luxury of making such a choice. But we still find it interesting that what we call “positive company culture” is the deciding factor for so many young people today.

An analysis of the Census data by the Pew Research Center showed that Millennials now account for the largest share of the US work force. So, if you are an employer, you’d better take positive company culture seriously if you want to attract and keep the largest and fastest growing segment of potential employees.

So what does a positive company culture look like?

Fun. That’s right, just plain fun. Fun titles, fun events, and fun environment. The ability to laugh at yourself and not take yourself too seriously. Working in teams that are highly collaborative with clear goals and celebrations for accomplishing them. Colorful work spaces, with natural light, and playful graphics.

Respect. Staff is recognized for outstanding performance with public acknowledgement. New team members receive mentoring to help them achieve their goals. Staff is viewed as an asset, not as a cost. The company practices know-the-need instead of need-to-know so challenges are shared and everyone brainstorms solutions.

Philanthropy. A company that stands for more than the mercantile value of its goods and services. A company to be proud of, to tweet about, and to share its good deeds with a social network of friends. A company that is making a difference in the environment, society, health and education. A company that is committed to a better world, not just a better product. A company that matches employees’ charitable donations.

Flex-hours. A company that allows more time to live life outside of work. Deadline-based timetables rather than strict work schedules. Financial rewards for performance rather than attendance. Allowing for working at home as much as possible. Minimizing commute hours and maximizing remote production.

Family. Smaller companies over larger ones. Knowing the owners. Integrity and stability. A feeling of kinship. A tribe, a team, a support group that has your back and your best interests at heart. Basically, a friendly group you look forward to working with during the majority of your waking hours.

Success in business requires personnel management with a positive company culture, and this is essential if you intend to build a team of Millennials to power your company.

And what happens when their parents can’t subsidize them anymore? Think they’ll settle for less in the workplace – just to make a few more bucks? Soon enough your competition will woo them with higher salaries and a positive company culture. So now is the time to get in front of the curve and attract the folks you need to build your company and more importantly, keep them.

After all, shouldn’t work be fun? Isn’t that when we all do our best anyway? Isn’t that the fertile ground for the best solutions and disruptive ideas? And aren’t challenges and respect the basis of company loyalty? With the right people in the right environment your company will be more likely to hit its numbers and be able provide those increased salaries when mom and dad pull the plug.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Customer Relationship Management Magazine

Michael Houlihan & Bonnie Harvey — Wed, 29 Oct 2014 02:41:20 +0000

We had an article written about us by Robert Cohen in Customer Relationship Management.

To view the article, please visit Customer Relationship Management Magazine

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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