Quality Control | The Barefoot Spirit

7 Ways to Reduce Your Need for Capital

Michael Houlihan & Bonnie Harvey — Wed, 11 Nov 2015 17:28:09 +0000

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.

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

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Making Mistakes Right

Michael Houlihan & Bonnie Harvey — Thu, 01 Dec 2011 22:06:06 +0000

Everybody makes mistakes, so why not take advantage of them? If your company culture does not give permission to make mistakes, your staff will hide them.

They’ll want to ‘fix’ it fast and hope you never find out. They may be the only ones who know how to fix it, and they, or someone else, are likely to make the same mistake again. Here are some tips on how to turn mistakes into assets.

1) Give your staff permission to make mistakes – as long as they follow up in the right ways. All hidden mistakes hurt your bottom line and customer service because you don’t improve.

2) Don’t blame or complain about the other company when they make a mistake. Do all you can do on your end to prevent it from reoccurring in the future.

3) Make a big deal about discovering a glitch or a loophole, oversight or misread. Share with your staff your enthusiasm of discovery and the rewards it will bring to your company’s efficiency.

4) Have the staffer who made or discovered the mistake describe how it happened. Then discuss what is needed to prevent its reoccurrence. Once they realize you think its better to analyze than hide, they’ll view mistakes more positively.

5) Acknowledge the person who discovered the mistake. Make him a company hero for improving the business and customer service. This sends a reinforcing message of permission to the rest of your staff to do the same.

6) Identify all the documents that need to be amended to prevent mistakes in the future (contract clauses, policies, procedures, labels, job descriptions, checklists, signage, or sign off sheets). Then immediately make the required revisions.

7) Require everyone involved to sign off on the new policies, procedures and other documents. Include these as part of all future training. If the mistake involved a customer or vendor, tell them exactly how you have implemented changes to prevent a reoccurrence. They will see your company as more of a partner rather than an adversary.

Evolution and improvement are the natural rewards of learning from our mistakes. We are all in a constant state of improvement. We can anticipate and avoid many mistakes through education and experience. So, when they do occur, let’s make mistakes right. With an insightful attitude, your company’s next mistake can improve your business!

Who We Are

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

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The 8 Principles of Successful Outsourcing

Michael Houlihan & Bonnie Harvey — Sun, 10 Jul 2011 10:58:29 +0000

For the most part, there is usually no shortage of products. There is, however, a big shortage of Purchase Orders. Why tie up precious dollars in bricks and mortar when you really need to spend them on marketing and merchandising? It’s possible, and in many cases preferable, to outsource as much production and services as you can. This gives you the time and funds required to control quality, give good customer service, and focus on the real challenge, sales. Here are some tips for effective outsourcing:

Look for businesses that specialize in one or more aspects of your products production. They are either already an outsource service, or they are a business like yours that invested in facilities and needs the income you offer. (Many businesses focus on production and then try to sell their products; you can do it the other way around.) Reduce your investment risk and focus on sales.
Write your own contract. He who writes, wins. Craft a contract that pays for finished, quality products, and not time or equipment. This way you do not pay for their mistakes or downtime. This eliminates the potential disaster of producing an inferior product yourself, and either trying to sell it or losing the money it cost to produce.
Hire a cop. Even though you only pay for finished quality produces, you still need a manager on-site to monitor production. Make sure your production manager thoroughly understands the job they are inspecting. Excellent prospects can be found in the industry you need to monitor.
Alter your product and packaging to be more efficient for the producer and their facilities. Clearly identify their constraints, equipment limitations, and profit centers. Your supplier generally will be happy to work with your producer. Bring them together at an early stage to help you make the process more productive for all involved.
Don’t waste a perfectly good mistake. Make mistakes right. Start a checklist. Every time your outsourced service or producer (or even your own people or suppliers) foul up, write it down. Now, see what documents you can improve, like contracts, checklists, signoff sheets, labeling, or outlines of operations. With each mistake, you’ll just get better!
Renegotiate your contract often. As you grow, you will experience volume buying and selling opportunities that may impact production, storage and shipping. Ideally, get your producer to hold inventory at no charge for a negotiated period of time to achieve efficiencies of scale in material purchasing.
Be efficient. Work with your producer’s schedule. Make full use of your production day or shift. Get the best prices by being flexible and have all your materials lined up for last-minute shipping. Just-in-time production will save you on storage costs and ultimately reduce your cost of materials.
Look for every opportunity to outsource. Every time there is an opening in your staff, ask yourself these questions: Can this job be outsourced? Can I reorganize my business so I don’t need that position? What other aspects of the total remaining job functions can be outsourced? Your most valuable staff have good oversight skills, understand quality control, and excel at sales and customer service.

Outsourcing can free up you and your limited capital to focus on Quality Control, Sales, and Customer Service. These are three of the most important elements of success. This is what your customer really buys. Instead of being stuck with less than perfect products you produced and now have to sell, consider outsourcing, and pay only for quality.

Who We Are

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

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