resources | The Barefoot Spirit

Solve Business Problems with What You Have at Hand

Michael Houlihan & Bonnie Harvey — Thu, 11 Oct 2018 17:00:59 +0000

We recently had the opportunity to speak to the Aalto Fellows, a group of the top students from Aalto University in Finland. They were in Silicon Valley for the entrepreneurial tour and we caught up with them at Stanford University. What was most impressive about this group was that it was organized and financed by the students themselves! What better way to get a taste of true entrepreneurship?

We knew that by the time we spoke to them they had heard many entrepreneurial stories from some of the top companies in Silicon Valley. We knew that they had heard from many of the entrepreneurial academics about what it takes. And we also knew that they had heard from the VCs who “built” the Valley about what they look for in fundable projects. So, what were we going to tell them that was new and different, valuable and practical, memorable and applicable?

Most of the businesses they visited were wildly successful “unicorns” financed by VCs. They had plenty of assets and resources right from the start. Of course, they had to give up quite a bit of their equity to get their financing in the first place. And, of course, for every unicorn there were 19 failures that nobody ever talks about.

Is it possible to bootstrap your business when you’re under financed? Is that, in itself, a proving ground to learn how to solve business problems without tons of resources? We believe it is. It’s what happened to us and it can happen to anyone.

When you’re undercapitalized and running out of runway, you have no choice but to get creative, and you have no choice but to get resourceful. You must learn quickly how to communicate with your creditors in such a way that they will extend your credit and terms instead of putting you on a cash basis.

Sure, you can be resourceful, use a laundry room for an office and a door for a desk as we did. Sure, you can hire your family and make trades for goods and services as we did. But that only goes so far. Sooner or later you’re going to need some financial help. We found that help in our three key relationships.

Vendors

We looked at our accounts payables, and it didn’t take long to realize that in our business, the glass company had the most at stake. The more wine we sold, the more glass bottles they would get to sell us. That’s right, they would get to sell …and make more money! So they were a natural strategic ally …if we could just convince them that we were trustworthy.

We decided to meet with them on a quarterly basis and share our plans and challenges. We showed empathy for their concern that we would pay our bills on time. When our cash flow projection indicated that we were going to be late, we called them way in advance and alerted them. We offered a payment plan based on our receivables to bring our account current, and we always did!

They felt comfortable extending our credit and terms. They enabled us to expand nationally without having to raise outside funds. This is a clear example of how soft skills can earn you hard cash!

Employees

We looked to our employees to solve problems, develop innovations, and remain excited and loyal to our company. Rather than putting them on a need-to-know basis, we did just the opposite. We put them on a know-the-need basis. We figured they couldn’t help us if they didn’t know what our needs were.

Once we had a serious problem. The good news was that we had been authorized in a giant chain store in Florida. The bad news was that they put us, like all new products, on the bottom shelf (nobody looks down there). The scary news was that if we didn’t sell a hundred cases in 90 days, we would be out of the chain … FOREVER!

One of our people joked and said, “Well, we’re ’Barefoot,’ we’ll just go after the foot traffic!” “HaHa!” we laughed. But then somebody else said, “Wait a minute, that’s not such a crazy idea, why don’t we just put decal footprints down the wine aisle and turn them into our position on the bottom shelf?” We used those footprints all over the country. And that idea came from the receptionist!

Buyers

In our business, our buyers where the distributors and the retailers. The distributors wouldn’t buy unless the retailers would buy. The retailers wouldn’t buy unless their customers would buy. Most VC financed companies would earmark a large chunk of money for advertising to get the word out to bring the customers into the retailer stores.

We had no money for advertising. At first, we were scared that our product wouldn’t move fast enough for the retailers because nobody had ever heard of a brand called “Barefoot.” But then we got a call from a neighborhood group looking for cash donations for kids’ after-school park. We had no money, so we gave them product. We told them we hoped they would use it at their fundraiser and perhaps it would loosen up some checkbooks or they can auction it off for some slides and swings. Sales took off in their neighborhood.

We tried it in another neighborhood. It worked. We tried it in another city. It worked. In fact it worked so well, we took Barefoot Wines across the country without commercial advertising. Because we showed empathy for our customer, we gave them a social reason to buy our products.

Conclusion:

These techniques might not work for everybody. Every business is different. But there is a golden thread that weaves its way through all these examples and you can use it in your business. It can reduce your need for cash. It can reduce turnover and engage and empower your people. And it can bring you the customers you need to achieve a positive cash flow and beyond. That golden thread is empathy. The more you use it, the less money you’ll need!

We’re excited to announce that our new business audio book on this subject is soon to be released.

It will be unlike most business books that focus on companies that have a lot of resources. Instead, it will focus on the true story of the building of the Barefoot Wine brand which is a testimony to empathy and resourcefulness.
It will be unlike most business books that give you list after list in prescriptive text: the three things to do, the five things to never do, and the seven things your customer wants from you. Instead it, will be a series of stories designed to entertain and educate.
And it will be unlike most business audiobooks that have a narrator droning the story in your earbuds. Instead, the characters in the stories will be played by real actors, dramatically bringing the scenes to life as you jog or commute.

If this sounds like fun, you can find out more at www.barefootaudiobook.com

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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3 Ways to Get Your Vendors to Reduce Your Need for Cash

Michael Houlihan & Bonnie Harvey — Wed, 05 Sep 2018 23:05:22 +0000

When we talk to young startups these days, we repeatedly hear them asking for the same thing — cash.

It’s true that a certain amount of cash is necessary for any startup. But when we press them and ask if they have taken full advantage of their hidden resources, they look back with vacant stares. Most have never thought about using their hidden resources. Or worse, many don’t even know what their hidden resources might be or where to look for them.

Sure, we refer to them as “hidden” resources because they are not necessarily taught in school nor are they heralded by the entrepreneurial press. On the contrary, young people today are inundated with the idea that they can’t start a business unless they raise tons of cash. They are being told that they must borrow huge sums, take in large investors, or trade their equity for VC money. In fact, there’s an entire industry based on this premise.

To read the complete article, please visit The Business Journals

Who We Are

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

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Is Discovery Becoming a Lost Art?

Michael Houlihan & Bonnie Harvey — Thu, 13 Jul 2017 17:00:32 +0000

We met a student who said he couldn’t see the purpose in discovering solutions for himself with all the information technology he had at his fingertips. If the answer was there, why waste the time to go through the discovery process?

In these days of Googling and You Tubing, it’s easier than ever to find the answers. The speed of the internet certainly panders to our penchant for impatience. We want instant answers – and we get them fast. So, what could be wrong with that?

No longer do we have to stumble and bumble until we finally have the answer. No longer do we have to go through trial and error, research, or any reasoning process. We just get it on line. But did we miss something important by shortcutting the discovery process? Did we miss the principles behind the answer? Did we miss an opportunity to challenge our brains to learn a new principle?

Apparently, we have gotten to a point where we actually don’t want to learn the very principles that can equip us to discover the answers in our own way. In the name of efficiency, we become more dependent on these instant answer resources, and we are losing our ability to solve problems on our own. The internet – the source of all answers – has made us lazy.

Before these resources, folks had to use principles, experience, and trial and error to discover the answers and solutions. In that process of discovery, they learned how to apply principles in a variety of ways. One of those ways might solve the problem and yield the answer. But the process didn’t end there. Now the individual understood the principle behind the answer and could apply that principle to other challenges. They didn’t need an example for everything.

The temptation today for many students is to drop out of formal education and just try to learn everything they need on line. It may be everything they think they need, but is that really everything? We think not. We think they need to learn principles and apply those principles to discover answers and solutions for themselves. This is called problem solving, and it stimulates our brains to be more creative and question the results we find. This is a wider framework which can help solve problems as they occur. If this sounds like an ad for a classical education, it is!

Learning and applying principles to discover solutions gives us appreciation for this invaluable process. It also gives us a fundamental understanding that behind every answer, solution, or process there is a set of principles. We can then look for those principles, and add them to our problem-solving tool box to apply to the next applicable situation.

Sure, you can Google the answer and You Tube the process, but if you don’t look for and understand the underlying principles, you are destined to develop a “copy-and-paste” mentality. Your critical thinking facilities will atrophy and you will become dependent on technology for all your answers.

When you discover solutions on your own, you learn from your mistakes and successes. You force your brain to look at the situation from differ perspectives. You stimulate your intellect! So, students, stay in school, and learn the principles that will enable you to discover solutions for yourself! Don’t be a copycat. Be an independent thinker and come up with new ideas! Discover for yourself the joys of noodling out a solution to your challenge using creative thinking instead of limiting your ideas to what others have already said and done. Be resourceful, and realize that your greatest resource is the power of your own brain.

Who We Are

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

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It’s New Year’s … So Get Out Your Pruning Shears

Michael Houlihan & Bonnie Harvey — Thu, 22 Dec 2016 18:00:50 +0000

Pruning is an art form with a science behind it. Any good gardener knows that skillful and timely pruning increases the strength and yield of your plant. Pruning can determine the direction of growth and suppress disease. But ya gotta do it! Now is the time to take a good look at your business and sharpen those pruning shears.

When we were building the Barefoot Wine brand, we would sweat out the new year because that’s when the chain buyers and big box stores would cut out the “dead wood.” We knew that if our brand didn’t perform to their expectations, it could get discontinued. And well it should, since there was only so much shelf space. Buyers had to prune out the losers in order to make more room for the winners. Luckily we were rarely cut out of the sets because we were doing a lot of pruning of our own!

Every year we looked at our business with a pruner’s eye. What was growing and what was dead wood? What needed more support and what needed to go to make way for new growth? Then we made some strategic pruning decisions.

We started with what was working well and realized that with more mind share, encouragement, and support it would work a whole lot better. We also realized that mind share was limited, as were funds and time dedicated to oversight. So, this additional energy, focus, and attention had to come from somewhere. Then we looked at what wasn’t working, what wasn’t producing, and what was sucking our energy, and that’s where we pruned!

This is not to say that investing in the future is a bad idea if it doesn’t pay off immediately. On the contrary. You need to invest to see a return and sometimes that investment can be a multi-year investment. But that’s where the real skill comes in. What investments in people and initiatives have gone on too long and need to be cut? How do you know when is the right time to say good-bye?

Gardeners love the winter because without the leaves, the trees and shrubs show their true structure. It’s easier to see where they are naturally headed and what adjustments are required to help them along. Many businesses slow down at New Years and sometimes for several months thereafter, giving you an opportunity to examine your structure without all the day-to-day demand clouding your view. Now is the time to get in there and make some strategic cuts that will take you in the direction you want to go. Now is the time to channel energy from losing propositions into winning ones.

When you analyze your business this winter, consider these two basic pruning principles that worked for us:

Protect. Decide who and what could improve with more help, guidance, or support. Ask yourself how they have demonstrated their potential to grow, and what they have brought into fruition. Discover the budding opportunities. Are they scalable? Decide if they are worth additional support.
Prune. What is not producing well? Who and what are sapping your resources, thus reducing your ability to support who and what are working? Make cuts in order to channel your limited amount of time, energy, money, and focus into those people and those initiatives you want to protect and nurture.

Annual pruning is really the reallocation of your resources. There will be new growth in the spring. So, get ready for it now and reap the rewards in a few months!

Here’s to a more efficient, and thereby more prosperous, New Year!

Who We Are

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

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Startups Must Hire Employees with the Entrepreneurial Mentality

Michael Houlihan & Bonnie Harvey — Thu, 19 May 2016 17:00:08 +0000

Hiring people who are paid, whether or not they produce, has been the death of many startups. In the early days of growing your business with limited time, resources, and funds, you don’t want to hear, “I was there, pay me!” Paying for attendance, instead of performance, will quickly drain your budget and cause you to miss precious opportunities. You simply don’t have the luxury to pay people for attendance alone, even if you wanted to.

When you are looking to hire new employees, look for folks who are self-starters and problem solvers. Look for people who have worked on a project with a team, preferably as the team leader. Even better, look for experience operating a small business. In other words, look to hire people who think like an entrepreneur. These are the ones who have the mindset to think and act beyond their assigned duties and look at the whole picture.

One of the biggest challenges your startup faces is a clear definition of the jobs that are required to make it run successfully. When you start out, you simply don’t know what is required of you and your fledgling company to satisfy the needs of your clients. You find out as you go along. Likewise, your employees must be flexible and look for every opportunity to contribute, whether or not it is in their job description.

Just like a tennis player with knees bent, ready to spring into action in whatever direction required to return the ball, no matter where the ball comes from, your startup team has to be flexible and prepared to get the job done. They must also be looking for the ball! You can’t afford to have folks who don’t think sales is their responsibility. They have to have a financial interest in sales in order to understand the most important word to any startup, “urgency!” They have to know that somehow their income and job security is based on that next sale – and do all they can to make it happen, and keep it happening!

To reinforce this idea, you as the owner must be ready to take a smaller slice of a larger pie. You must be willing to share in the upside and offer quarterly bonuses based on sales, growth, and profitability. If you must pay guarantees or base salaries to salespeople, make it an advance on commissions. Do whatever you can to send the message that their income, security, bonuses, and benefits all come from sales.

When you hire entrepreneurial thinkers you have employees who are willing to bet their income on your success, folks who believe in what you are doing, and believe they can be instrumental at some level in making it happen. To support this idea, you must present them with a comprehensive orientation period, thorough training, and access to continued learning resources. Show them how they can best contribute to the needs and ultimate success of your company by investing their skills with the knowledge that they will benefit when the company grows and becomes more profitable.

Wouldn’t you rather have “investors” than “employees” anyway? Think of what it will do for your startup company culture! Think teamwork, focus, and commitment. Think of how it will reduce your need to supervise and micro-manage your people, allowing you the time and attention to focus on more pressing matters. We like to say, “In a startup there is no room for passengers. If you’re not steering, rowing, or bailing, you are swimming because you are no longer on board!”

Who We Are

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

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When Success Means Being Turned Down by the Bank

Michael Houlihan & Bonnie Harvey — Sun, 19 May 2013 17:13:49 +0000

By Ben Steverman

You’d think selling your wine brand to E&J Gallo would put you squarely on Easy Street. As accidental wine merchants Bonnie Harvey and Michael Houlihan found out, personal finance and entrepreneurship can make an awkward pair.

Before the mid-1980s, the married couple’s main experience with wine was drinking it. Then, while working as a consultant on office management to a wine maker without a brand of his own, Harvey learned that a winery owed her client a lot of money. She brought in Houlihan, a business consultant, who discovered that the indebted winery couldn’t pay cash — but could repay the debt with bulk wine and bottling services.

The couple developed a plan for the client to use those resources to set up a brand. When the client passed on the idea, Harvey and Houlihan took over the debt and launched Barefoot Wine in 1986. They sold the company for an undisclosed sum in 2005. Their book about the 20 years spent building the brand, “The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand,” will be published on May 21. Here are excerpts of their reflections on life and money.

Michael Houlihan: We like to say we fell backwards into the wine business. We didn’t know enough to realize what was involved.

Bonnie Harvey: Ignorance is bliss.

To read the complete interview, please visit Bloomberg News

Who We Are

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

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