(Note: this is a guest post by Megan Berry (my daughter), social media evangelist for Mobclix. It was originally posted on the mobclix blog.)

Avatar is a world-wide phenomenon and is currently the top grossing movie of all time*. How can you learn from its success and apply it to your own projects (even if they aren’t billion dollar movies).

1. Technology Matters. James Cameron first wrote Avatar in 1994, but he ended up tabling it until 2005 because he felt the technology wasn’t there yet. Figure out what your idea needs and how you can make it happen. If your current idea won’t work well, put it on hold and work on something else.
2. Love Your Idea. This movie finally came to fruition 15 years after Cameron’s initial idea. He didn’t just forget about it, he waited for his moment and made it happen. And now he’s very rich (er, richer).
3. Get Fans, Not Just Viewers(/Users). Avatar was so successful because you didn’t just go and think “good movie” and go to sleep. You wanted to tell everyone you knew about it. After watching this movie I immediately started telling my family and friends they had to see it. Now.
4. A Little Controversy is Good. Avatar’s a commentary on the war in Iraq. And our treatment of the environment. And a critique of the military. And advocates polytheism. And deals with racial issues. Or maybe none of the above, but it made you talk about it, didn’t it?
5. Make it Beautiful. Avatar is a cinematic masterpiece. It’s gorgeous. Don’t settle for less with your iPhone app. If your iPhone app is the best looking thing I’ve ever seen I’ll not only use it but share it with everyone I know.

*Okay, so this actually depends on whether or not you count inflation. In any case, it did very, very well.

One year ago I could read the writing on the wall. The retail channel was either dead or mortally wounded. Consumers’ buying habits had changed and product sales in brick and mortar stores were in a steep decline. I had the dubious pleasure of steering a once profitable sales channel into the ground.

During a period when retail sales reports were appalling and getting worse each week, Palo Alto Software chose to review every aspect of its retail channel plan. We didn’t expect to be able to fully rebound; we were hoping that we could find a way to slow the decline. We looked at every partnership, channel position, and retail decision. We challenged ourselves to make wholesale changes where necessary. We threw out all of our preconceived notions and started from scratch.

Was our software selling on-shelf in the right stores? Did our pricing model maximize revenue? Did we know where our customers were shopping? What was our competition’s strategy? Were retail sales in the process of dying off? Every aspect of our retail strategy was researched, challenged and weighed. Our start-from-scratch approach immediately brought glaring problems to the surface.

By asking the right questions, our management team was able to get a better understanding of the retail market. We were able to correct our mistakes and identify some very significant opportunities. A year later, Palo Alto Software has a thriving retail channel that continues to realize significant growth, month over month. Retail is not dead, it’s not wounded, it’s just changing!

In retail, the learning curve can be very steep and unforgiving.

Over the next couple of weeks I will be blogging about the lessons we learned in retail. Hopefully this series will challenge your business to take a fresh look at retail. It is a complicated, time-consuming sales channel, but the returns can be well worth the effort.

David Shear is the Channel Sales Manager at Palo Alto Software, where he oversees all academic, corporate, government and retail sales.  David came to Palo Alto Software from the banking industry where he was a regional and national sales manager for Indymac Bank, Optium Financial and Rainland Mortgage; David worked in correspondent and wholesale mortgages for over a decade.

Having attended University of Oregon’s Law School, David is quick to point out that while the Oregon Ducks are his first love, sales come in a close second.

(editor’s note: David’s status with UofO was incorrectly listed as being an Alum. This is completely a miss on ‘Chelle’s part and not a devious attempt on David’s. )

I just couldn’t resist sharing this. It’s called The Hierarchy of Digital Distractions, and it’s brilliant; and even better in full size, so you should click this link or on the picture to see the original. I got it from Ann Handley, @marketingprofs on Twitter. It’s from a site called Information is Beautiful, by David McCandless.

And it certainly depicts, way too accurately, the way digital distractions stack up for me.

(Image: by David McCandless, via Information is Beautiful)

Apple vs. Kindle vs. publishers, oh my. Do you know the background? It’s all over the web. And I posted here this week about how Apple and Amazon.com and Macmillan are wrapped up in an ebook battle. And it gets better. As I write this, Wednesday evening, the news is that Amazon gave in and put Macmillan back into the mix, but at higher prices. But I just checked the site and my favorite Macmillan book, Thomas Friedman’s Hot, Flat, and Crowded, is listed there as available through third parties only. So go figure.

I’m fascinated with all of this. Really, business strategy in action. Consider these questions, and ask yourself: if you were Steve Jobs, or Jeff Bezos, what would you do?

1. Does Apple Computer block the Kindle app on its new iPad? The iPad runs iPhone apps, and the Kindle iPhone app works great. But does that mean iPad users can buy Kindle books for their iPad for $9.95, while Apple’s iPad iBooks cost $14.99?

Apple can block the Kindle app, of course. But what will users say about that? Apple users tend to take Apple as some public resource. They’re incensed when Apple acts in its own business interest instead of the public good. Would cutting off the competition be worth the dark side mask?

2. Is Amazon.com seriously going to cut off its nose to spite its face? They took all Macmillan books off of Amazon.com because of a pricing and revenue share argument related to the iPad. But doesn’t that hurt the Amazon.com business proposition? Don’t we all go there to find the world’s largest inventory? And now they say they’re giving in, putting Macmillan back, and at the higher prices it demanded. What does that do for the Kindle pricing ceiling at $9.99? What happens to the $5 differential on iPad between a Kindle book and an iPad book?
3. Do publishers gain by fighting either format, or either channel? Now Macmillan books are playing second fiddle at Amazon.com. It’s hard to tell from here, but it’s been presented as Macmillan squaring off against Amazon.com for a larger share of the revenue. That’s a bold move. Would you do it? How would you feel if you were a Macmillan author?
4. What about Sony, or Barnes and Noble? These other ebook readers that were seriously planning to compete… are they just blown away? What can they do?
5. Does this mean ebooks are finally for real? I’ve liked ebooks for more than 10 years now, read them on an early Rocket ebook reader, on a PDA, on a Kindle, and on my iPhone, as well as on a number of laptops. Are they finally going to get to critical mass? That would be nice.
6. Do smart buyers wait for all of this to sort out? Remember the Sony Betamax format vs. VHS? You don’t want to invest on the losing side here, right? I finally bought Blue-ray HD after HD DVD lost the battle.

I’m enjoying the spectacle. I’ve got the Kindle, I’ve got the iPhone with the Kindle app on it, and I’ll probably buy an Apple iPad for its entertainment value, form factor, and long batterly life. For ebooks the iPhone Kindle app is still my favorite, so I’ll probably use the Kindle app on the iPad too, when I get it — if Apple doesn’t block it, that is. I don’t see how the bells and whistles of the new iBook reader can be worth the extra $5. But, since it’s not shipping for a few months anyhow, I’m going to wait and watch.

And I’m especially watching the strategy play out. Several of these big players can make bold decisions that will cut off competition and annoy the hell out of buyers. Is that the way it’s going to go?

(Image credit: from Mashable’s recent post on the eBook War)

(This is the fourth in a series of posts reviewing the fundamentals of planning, with an eye for how they’re changing over time. Part one was Form Follows Function. Part 2 was All Business Plans are Wrong. Part 3 was Cash Not Profits.)

I predict accountability is going to be an increasingly important issue as we head into this new decade. The old-fashioned tools of accountability, mainly physical presence, as in hours in the office, or days on the road, are fading. If for no other reasons, it’s because the world can’t continue to support needless commuting, an average of 51 minutes per day in the United States, and way worse in some of the larger cities in the developing world.

So what’s going to happen? We’re going to look increasingly for accountability as part of our real-world business planning process. The plan establishes the metric, and the regular plan review and tracking establish progress towards the metric.

It’s not just sales, costs, and expenses. It’s more metrics for more people, including lines of code, calls, blog posts, tweets, unique visitors, page views, minutes per call, presentations, proposals, emails processed, and so on.

Our tools will give us ever increasing metrics to use. I’m very biased about Email Center Pro, I admit, but if you’re curious you should look into the wealth of metrics it provides on team-managed emails and email addresses, like the sales@example.com or info@example.com. And everybody knows about Google and Web analytics, paid search, etc. And telephones and miles are completely trackable.

All of this becomes the concrete specific portion of the business plan, and it is then managed as part of the business planning process. That means that the plan lasts barely a month before results are reviewed. Managing the metrics is a multiple win when there’s regular review, because all the members of the team can easily look on together and see where things have to change. And why.

And that’s the future of planning: management.

I remember reading a book when I was young which made an attempt to predict the future and how we would be living today. Most of the changes had to do with technology–specifically along the lines of a popular TV show from the 1960s, The Jetsons. I remember the large picture telephones in one of the illustrations that were predicted to be in everyone’s home. And of course there were the gadgets and vehicles that were going to make our lives more convenient and enjoyable. While some of the things were a little “off” (don’t know if we’ll ever live in sky apartments; is it really necessary?), for the most part the representations have become a reality. And I must tell you, most of the developments that I see are pretty wonderful.

I think for most of us, technology is still a bit of a shady character that few want to fully embrace. Books, movies, and TV shows have mostly depicted technology and the future as a cold, soulless world. Some movies even depict the future as a world where technology “takes over” and enslaves the population in some manner. These dystopias do nothing to communicate all the good that technology provides. Technological advances in communication today allow us to connect with virtually anyone in the world instantaneously. For many of us, there is a negative knee-jerk reaction which comes with that. After all, who really wants to hear from that third-grade classmate? My belief is that the good far outweighs the bad.

In spite of our ambivalence, technology and improved communication trudges on. The Pew Research Center says that 74% of American adults now surf the Internet (do I really need to remind you of the ever-increasing Internet usage statistics?). People of all age groups, income ranges and education levels are shedding the fear of “Big Brother” and plugging in. And the prediction for the future–more of the same.

I had the opportunity to speak to a local engineering association. In the audience was an engineer who openly scoffed at the idea of using online sites to communicate and market his services. He knew of the massive number of people who had accepted the Internet as a way to get information quickly and to communicate; yet because of his skepticism, or fear, he has effectively rejected technology (If you can’t see the irony of an engineer rejecting technology, then I haven’t explained it right). But I don’t think he’s alone in his rejection. I think we all continue to hold technology at arm’s length.

Perhaps the best thing to do is to position technology in our lives as a partner rather than a rival–something that makes us more productive, while at the same time allows us to maintain a level of privacy. My guess is that social media sites will continue trying to give you a tremendous level of communication when you want it while shielding you from unwanted contact… in a sense keeping the good and shedding the bad. We’ll see. But in spite of the positioning, technology and improved communication march on, making inroads into every area of our lives. While I’d prefer that you welcome it and make it a partner in your life rather than have it forced upon you (see engineer…what are his options?), technology and improved communication will continue to become a bigger part of our lives.

I’m still amazed by the number of businesses that are “unplugged” today. Granted, I can understand the need for privacy on a personal level, but gaining clients has to do with visibility and promotion. Over time, it’s my estimation that businesses will simply have to plug in to compete. Having a website will be a starting point, along with a business license. Letting others know what you do in mass (social media, etc), will be a routine marketing activity. And the companies that will be the most successful are the ones who harness technology the most effectively.

How is your business, technology-wise? Are you online? Do you have a website? Maintain a blog? Use online advertising? Are you plugged in to the social media world? Have you integrated your offline marketing with online marketing? With all the numbers of people jumping online looking for products and services, is it time to set your business up so that they can find you easily? With the enhanced privacy features of a lot of online tools, is it time to jump on in? I think so…the water’s great!

Scott Campbell is the President of Impact Marketing, a results-oriented marketing coaching/consulting firm. They focus on helping small business grow using repeatable marketing processes…using mainly online tactics such as website development, search engine optimization, and social media. Their website is located at www.impactyourcompany.com

To be honest, I thought it was a joke; irony, perhaps, or sarcasm. But no, to my surprise, I clicked on Love Your Business More Than Your Family, a column on entrepreneur.com, and he’s serious. Author George Cloutier says:

Your cell phone is for keeping in touch with clients and sales managers in the field, not for taking calls from your spouse throughout the day about what groceries to pick up on the way home. Cutting out early to take your kids to baseball practice three times a week, or picking up your Aunt Tilly or Uncle Ned from the airport, are unacceptable interruptions to success.

You can keep doing these things and waste dozens of hours each week. Or you can focus on the financial future of your business and work all day, every day. You are the only person responsible for fixing your business and making it better, and that isn’t going to happen while you take 14 personal phone calls a day and attend local Cub Scout meetings three-times a week.

That is extremely bad advice. I have absolutely nothing against George Cloutier. I’m even a fellow columnist on the same entrepreneur.com site, where I do a column on business planning. But sheesh, how can I read that, and not write about it? What would Bob Sutton (author of the book on business a**holes) say about this?

How wrong is George’s advice? Well, there’s no way to list all that’s wrong with it, but here at least is just a brief start on that list:

1. It’s bad for your life. And business is to serve life, not life to serve business. Make no mistake about it; if you choose to “work all day, every day” do it purposely and knowingly, recognizing that you’re sacrificing your life for a business. Stay single and alone. Don’t ever have kids.
2. It’s bad for your business too. You don’t manage a business, manage a team, make decisions, and get through the long hard days without balancing your life. People eventually blow up when they try.
3. OK there are exceptions, but what if you aren’t one of them? What if you sacrifice everything and you don’t end up like Richard Branson, water skiing in the Caribbean with a naked model? Some totally obsessed people end up wealthy and happy; but obsession doesn’t create the success, and most of them are just lonely and full of regrets.

Am I exaggerating here? I should add that I’m not just quoting him out of context. He means it. He starts with an obsolete tale of an obsolete business school professor from about 40 years ago telling married students to give up because they couldn’t be married and successful. Here’s what he says about that:

He told them that a family would get in the way of their success, so there wasn’t much point in them taking his course. In the end he let them stay, of course, but he wasn’t kidding. That was his way of making an important point: If you’re going to be successful, you’ve got to love your business more than anything else–even your family.

And he finishes with this conclusion:

Often you will feel tremendous pressure to take time away from your business to devote to family matters. But in the end, the best thing you can do for them is to create the legacy of a business that is thriving and financially sound. When you’re retired, wealthy, and able to spend Valentine’s Day and other special occasions with your kids and grandkids at your winter home in Hilton Head, you’ll be glad you devoted so much of your time to your first love: your business.

Don’t believe him. I do hope that George is in Hilton Head with kids and grandkids. But if you or I follow his advice, we wouldn’t have anything at all to do on Valentine’s Day. Neither our kids nor our grandkids will be spending time with us. They’ll be with our ex-spouse and probably the step-parent who actually raised them. Skip the occasions, the practices, the parenting, and plan on being alone. And, unless you’re very unusual, regretting it. To paraphrase a line from Hello Dolly: “and on those cold winter nights, Horace, you can snuggle up to your cash register. It’s a little lumpy, but it rings.”

Life is way too short to lose to business. Bring business and life together, mind your balance, and be successful at both. That’s what entrepreneurship is really for.

(Image credit: by Loren Javier via Flickr cc)

So what are the ingredients of a successful presentation? What practical insights are there on how to improve your personal skills? What do you need to know to create presentations that not only get rave reviews, but also succeed in getting recommendations approved and vigorously supported?

In 30 years of teaching presentation effectiveness at one of Canada’s premier business schools, we’ve had a real life lab in what works, and what business owners, executives, and sales people really need. They told us they want a way to reduce the time required to prepare a presentation significantly. They want to know how to respond to challenges and objections from the audience; and, they want to stay in control of the situation and not have their meeting hijacked. And of course everyone wants to know how to control the nerves and fear of standing up to present.

This is a rich subject for discussion. Let’s start by looking at what we see are the biggest mistakes people make every day.

As a starting point, please realize that nobody wants to talk about your product or service! Your business is the most important thing to you, but your prospect’s or client’s business is the most important thing to her. A good rule of thumb is to talk a lot about them, and very little about you. Your audience wants to know one thing only: how is your product or service going to help me compete in a dynamic, cluttered, and puzzling market. So don’t tell them about how fast your widget processing speed is, tell them how much faster their product will get into customers’ hands and start pumping out cash.

Start your presentation with a promise of value. We feel so strongly about this we insist that all our clients begin their presentations with these exact words, “At the end of this meeting you will have…” Make it as relevant as you can.

A good trick is to find out what the audience’s biggest frustration is with your product or service category, and build a promise around solving it. You might say, “At the end of this meeting, you will have a proven solution to your inventory problem, which will increase stock turns by 14 percent.” Be focused. Be specific.

End your presentation with a clear request for meaningful action, and double your chances of getting a positive response by demonstrating that you have skin in the game too. This simply means that you will ask your audience to do something, and promise to do something meaningful in return.

Here’s how that might go: “Bob, I’m asking you to purchase twelve dozen of our gizmos for delivery by the end of the month, and in return I will provide our advanced training for the whole team a week before the stock is delivered.”

Simple rules that will make a real difference in how well your presentations and sales calls go: talk more about the customer than about your company; start with a promise; end with a clear “ask” and another promise.

Why does this work? Well, when we talk to heads of companies large and small and ask them what bugs them most about sales calls and supplier presentations, they tell us (and very frankly I might add): people who don’t understand their business; lengthy meetings with no clear outcome or value proposition for them; and no commitment by the supplier to contribute to success.

There’s an old sales guy motto you might recall right about now: the customer is always right. In this situation, it’s worth paying attention to.

Ken Burgin and Elizabeth Walker are the Marketing Masters (www.MarketingMasters.ca), a full-service marketing and advertising partnership that helps build busy businesses. Send your ideas on How to Thrive in Times Like These to liz@marketingmasters.ca or ken@marketingmasters.ca, or call 1-866-908-5720.

web: http://www.marketing,masters.ca
blog: http://thebuzzwithkenandliz.blogspot.com/

(Important: late-breaking news. Since this was posted earlier today, Amazon has reversed its position on this. Macmillan is back, but with its own pricing on the Kindle. This is important. Here’s a link.)

eBook wars, you say? On one hand, it’s about time. On the other, wow, this is strategy in action. And interesting spectacle too. That’s why in athletics the championship games are more interesting: two big winners squaring off.

Mashable led over the weekend with Apple vs. Amazon: The Great Ebook War Has Already Begun, a post by Ben Parr, whose work I like a lot. Posted Saturday, it’s about Amazon and Macmillan. It’s hard to tell who’s making the move on whom here, but the announcement was that Amazon.com was removing Macmillan books from its web store:

According to the New York Times, the reason the books were pulled was the iPad. Macmillan told Amazon that it wanted to change its pricing and compensation agreement, upping the price of some books from $9.99 to $15 and splitting sales 70/30, the same model Apple uses for the iPhone app store and its upcoming iBooks store. Amazon’s apparent response was to flex its muscle and pull countless Macmillan books off the virtual shelves.

Last Friday I posted how the competition is win-win for all sides. We get a choice: Kindle books, just text, for one price, or Apple iBook books (pizazz) for a higher price. You get to decide. Ah, the magic of commerce.

But with Amazon.com and Macmillan biting off each other’s noses, it’s not so clear. Ben Parr wrote:

That’s why Amazon decided to use its biggest weapon, Amazon.com itself, against Macmillan to send a message to every publisher: If you don’t play by its rules, then you can’t be in its store. While a publisher can likely survive without the Kindle, the same cannot be said for Amazon.com. Publishers simply cannot afford to leave the world’s largest online retailer.

Who wins? In this case, the losers are Amazon.com and Macmillan, and all Macmillan authors, and anybody who wants to buy their books. Amazon? Don’t we all go there because we can find all the books imaginable there? And now we don’t? Although you can still buy Thomas Friedman’s Hot, Flat, and Crowded on Amazon.com, you can’t do it directly. They list it as available from third-party sellers, even though it’s one of the most important books of the last year. And here’s some irony: Priceless, William Poundstone’s analysis of free and fair value and all, is another victim.

Remember the old days, when things like this were about giving customers what they want?

After 12 years with Palo Alto Software, Steve and his lovely wife Vie (who happens to be Palo Alto Software’s Controller and has been with the company for 15 years) are retiring.

Steve has been invaluable in the documentation department and I know they will feel his absence keenly. He’s also been  a strong blogger for me and his interesting and informative pieces will be missed.

Thank you, Steve, for all the fantastic work you’ve given the company, and the words you’ve given to this blog.

I can’t begin to tell you how much you’ll be missed.

Happy Retirement!

‘Chelle Parmele
Social Media Marketing Manager

Berry asks: Do your long-term loyal clients get the worst treatment? Do they pay the highest rates? Do you take them for granted? Do you give new customers better rates than existing customers?

Many pundits, organizations, governments, universities, authors, bloggers, and companies are proud to announce to one and all that “Their employees are their most valuable assets.” But is it really true? Do they really treat those employees as most valuable? Ask yourself the same questions, but substitute employees for clients and customers.

Do your long-term loyal employees get the worst treatment?

Do you take your long-term employees for granted? Do your long-term employees become invisible, competently doing those behind-the-scenes support roles so well that management just sort of assumes they will always be there? Do they perform their jobs so well that they are never considered for promotion or new opportunities? So necessary, yet so overlooked.

Do they get paid the highest salaries or the lowest? Have your people’s salaries kept pace with inflation and the cost of living?  Do your most senior employees have less spendable income now than when they were hired? In some companies, especially those teetering on the edge of the cash flow abyss, it is entirely possible that they are now in violation of Wage and Hour laws because Federal and State Minimum wage amounts jumped ahead of what some people make, especially as many companies chose to forgo employee raises in 2009.  That’s easy to test, for yourself: take the suspect salaries and compare them to the minimums.

Do you give new employees better salaries than existing employees? This one is prevalent in many businesses. It’s not that companies intentionally set out to short-change their long-term employees. It’s just that COL raises never keep pace with inflation, but new employees seek jobs with starting salaries commensurate with the current job market. The loyal, stable, current employee suddenly finds that the new hire, often in a lower tier in the organizational structure, is being paid more than they are, after putting in years of service building a successful company. And here’s a good test of that one: if you had to hire a new person to replace your existing one, would you have to pay more than their salary, or less?

Does it cost more to get a new employee or keep an existing one? Most companies know that the cost of losing an employee, and recruiting and training a new one, is very high. That’s in the business literature everywhere. Still, as a reminder, this is a paraphrase of a marketing axiom that it costs more to get a new customer than to keep an existing one. This can apply to employees as well. Remember, in this context, that there is the productivity lost when the employee is no longer present. Next come the costs for advertising, screening, interviewing and filling the position. Then there are the losses during training periods, where you have two people (trainee and trainer) working at less than peak performance. In some cases the company loses skills and knowledge that can never be reacquired.

Those loyal long-term employees can save you from Santayana’s Law of Repetitive Consequences, i.e., “Those who cannot remember the past are condemned to repeat it.” A “new” hot marketing program idea, for example, may turn out to be a complete waste of time and money … just like the last time it was tried … reinventing the flat tire, as it were … if there is no one left in the company who remembered when it flopped before.

Your long-term employees are the folks that helped you start up and grow your company to where it is today. They were key to the foundation of your venture, and now provide continuity between where you have been and where and what you plan to become.

Steve Lange

Senior Editor
Palo Alto Software

————————————–
A message from Palo Alto Software’s CEO  Sabrina Parsons: Steve is right! And the good thing is, as a long term employee who retires today,  Steve was a very welcome part of the team who will be missed. A message from Steve about retiring:

“What a long strange trip it’s been…” Ok, so I’m not part of the Grateful Dead –”I’m not dead yet. Too old to rock ‘n’ roll; too young to die.” — but I can certainly be one of the Grateful Retired.

Twelve years! That’s the longest I worked at any one job, and the longest I worked in any one industry. Whodathunkit.
Lots happened at Palo Alto during that time, and I traveled and learned as I participated in that journey.

Thanks to all of you for your friendship, your encouragement, and for laughing at my awful puns.

“Adventure’s out there!” — UP!

Steve

Measurement, metrics, and accountability are everything. Except when they aren’t.

Yes, I contradict myself. No, I don’t mind. Contradiction and paradox are reality in business as in life. As soon as you develop a general rule, you find exceptions.

And I have posted here both the magic of metrics, and do we undervalue marketing we can’t measure. Like the old folk song says, both sides now.

So with that in the background I read with relish Management by Imagination on the Harvard Business Review’s The Conversation blog. Here’s the lead:

The perception that good management is closely linked to good measurement runs deep. How often do you hear these old saws repeated: “If you can’t measure it, it doesn’t count”; “If you can’t measure it, you can’t manage it”; “If you can’t measure it, it won’t happen”? We like these sayings because they’re comforting. The act of measurement provides security; if we know enough about something to measure it we almost certainly have some control over it.

But however comforting it can be to stick with what we can measure, we run the risk of expunging something really important. What’s more, we won’t see what we’re missing because we don’t know what it is that we don’t know. By sticking simply to what we can measure, we come to imagine a small and constrained world in which we are prisoners of a “reality” that is in fact an edifice we’ve unknowingly constructed around ourselves.

The Harvard post goes on to question the more extreme exercises of metrics:

if you stick to measuring what you can already measure, you cannot create a future that is different than the past.

On the other hand, there’s no denying that the underlying mathematics of computing, as applied on the Web, are total luxury of measurement in today’s business world, especially when compared to what we all did as recently as the 1980s and early 1990s. Back then we’d spend the marketing money on ads and direct mail and such, and then hope for the best, waiting weeks and months to get at best a distorted view of results. Now we get clicks and conversions and return on investment almost instantly.

When I worked as a wire service journalist in the 1970s, the turn of a headline made a huge difference. So we crossed our fingers and hoped it would work. We’d find out the next day. Today the industry leaders like the Huffington Post test headlines, and adjust them, in real time.

Conclusion: I love the truth of case by case judgment of so much of real business. Know the rules, follow them when it makes sense, and break them when it makes sense. Paradox and contradiction are the spice of life. And good business.

Or, if you prefer, take this, straight from the Harvard blog, as a conclusion:

We need to get away from all those old sayings about measurement and management, and in that spirit I’d like to propose a new wisdom: “If you can’t imagine it, you will never create it.” The future is about imagination, not measurement. To imagine a future, one has to look beyond the measurable variables, beyond what can be proven with past data.

(Image credit: Vlue/Shutterstock)

“Startups and entrepreneurs will benefit immensely from the ability to create documents, spreadsheets and presentations on-the-go, allowing them to take their product pitches with them wherever they go. When they meet people at events, they can whip out their iPad and flip through their Keynote presentation right then and there.”

Read the rest of the article at ReadWriteStart

All of us plan for success in our businesses. That’s IS the goal after all. To be successful. But how exactly do you determine IF you have succeeded? Regardless if you are a start up or an established business, you need to establish, right up front, during your business planning process, what success will look like, and how you will measure it.

I was bemused, recently, over the various ways we measure success in our society.

We were watching a movie, Martian Child, with John Cusack and Bobby Coleman. Cusak’s character was trying to teach his adopted son to hit a baseball. As he explained “If you hit 3 out of 10 you’re a star. If you do just a little better, you’re a superstar!” That theme recurs in the film.

It was heartening in the film’s context. If we apply it to our daily lives, the little bit of wisdom can be freeing and encouraging. It gives us lots of room to try, to experiment, (and yes, to fail and try again), to learn, and to grow. We don’t have to be perfect the first time, or every time. 3 out of 10 and you can be a star. Heady stuff.

But that idea contrasts with so much else we hear.

“Nobody wants to be a 0, but everybody wants to be a 1, and there’s so little room in between.”
– Laurie Anderson, songwriter/singer.

In school if you were to get only 3 of 10, you’d not only get an F, but never get into college. Today you need to get all those advanced placement credits to get a 5.0 on a 4.0 grading scale. (And what kind of math does that teach, eh?)

And of course, if you’re a figure skating or ice dancing Olympian, you strive to be a 10. (And who can remember that very forgettable movie by the same number?)

We spend our lives searching for and nurturing love….unless you play tennis, in which case “love” is the dreaded lowest score.

And this relates to business how? By being realistic in your measure for success. Write your business plan, set your goals, establish your timelines and milestones.

Then review how you’ve done, run a plan vs. actual analysis. And adjust your plan as necessary, making decisions using real data.

If you converted 100% of your marketing leads into sales you’d be doing fantastically well. If you set your goal and measure of success as converting 100% of your leads, however, you’ll be both deluding yourself, and be very, very disappointed.

Be honest and set realistic goals for yourself. If you converted 3 out of 10 marketing leads you would be a star, and quite likely have a very successful business.

Steve Lange
Senior Editor (Retired)
Palo Alto Software

(Note: This is part 3 of my planning fundamentals review. Here are the links to Part 1: Form Follows Function and Part 2: All Business Plans are Wrong.)

Cash flow is the most important mystery you have to solve. Cash flow is the real heartbeat of business. And unfortunately, cash flow isn’t intuitive. It’s tricky.

We think in profits. It’s part of our culture. Take the sales and subtract the costs and expenses, and if the result is positive, then hooray, we’re okay.

Unfortunately, it doesn’t always work out that way. Because of  accounting rules, sales are sales we made for this month, and costs are what it cost us to produce what we sold this month, and expenses are what we incurred this month. But — and here’s the brutal mystery and trickery of it — we might have paid those costs and expenses months ago; and we might not get paid for those sales until months from now.

So we can easily be profitable and broke. Not intuitive, but it happens a lot. Most product businesses need to spend on building or buying the product, plus packaging, assembly, and distribution, long before they can sell it. And most business-to-business sales involve waiting months to get paid.

If we could only get the research to prove it, we’d find that a surprising percentage of businesses that go under are profitable when they do.

Managing the cash flow, planning on cash flow ups and downs, is one of the fundamental purposes of good business planning. You lay things out in order: how long you wait to get paid, how early you have to build, debt repayments and capital purchases that don’t show up in profit and loss. And good planning helps you anticipate problems in time to deal with them. Go to a bank with a good history and a plan showing cash flow hills and valleys, weeks or months in advance, and the bank loves you. Try it on Tuesday because you’re going to miss payroll on Friday, and you’re out of luck.

For a good visual on the mysteries of cash flow, go to the free cash flow calculator at bplans.com (shown in the illustration above) and use the sliders to watch what happens as you vary the wait to get paid and inventory assumptions, even without changing profitability. Watch how much faster the cash deficit grows when your sales grow fast and you don’t have an all-cash business.

You might also want to read my 10 critical rules for cash flow post. And just a could of weeks ago I saw a good collection of 6 Tips for Improving Your Cash Flow on the American Express OPEN Forum.

I’m not claiming there is a right or wrong way to organize your RSS feeds. I have reorganized my feeds a few times over the past 5 years and this is what works for me. In my opinion, the “right way” is the way that helps you get the information you need in a timely fashion.

What is a feed reader?

Not everyone may be familiar with feed readers, so let’s begin there. A feed reader is a piece of software that allows you to manage your RSS subscriptions. It will also periodically go out and check for updates, and if it finds them, adds the new entries to your reader. Readers look similar to email clients; in fact many email clients (such as Outlook) include the ability to read RSS feeds as well as email. Feed readers come in online only, desktop, and combination varieties. Some popular feed readers include Google Reader, Bloglines, and RSS Bandit.

When I first started using a feed reader, I used to organize my feeds by topic. As I began to follow more and more feeds, I struggled with getting information in a timely manner without spending hours reading all of those feeds. I decided to organize my feeds by how often I want to read them. This is influenced by 1) how often the feed is updated; 2) the urgency or relevance to my business; and 3) how actionable the typical items in that feed are.

How often the feed is updated – Some blog authors post once or more per day. I was finding that when I read a feed that had 10 or more new items, I tended to skim through them and feel like I didn’t have time to give them the attention they deserved.

Relevancy to my business – Early in my career, I was a software developer. I still follow bloggers who write about software development issues. But since that is not my primary focus, I need to prioritize those posts accordingly.

How actionable the items are – Some items are “nice to know”. Others I collect because they will be of interest to my customers. Others may be about events I want to attend, industry news, what my competitors are up to, etc.

Using this criteria, I organize my feeds by how frequently I feel I need to read them in order to get the information I need in a timely manner. Here is how my feeds are organized in my reader:

• Daily – These are typically blogs of people that I like to follow, who post fairly frequently about topics relevant to my business. For me, fairly frequently means three or more times per week. I also included Google alerts that I have set up in this category.
• Weekly – This category contains feeds of blogs I like, but don’t need to read every day. When I find a new blog to follow, I will typically put it in this category or the “someday” category until I am familiar enough with it to decide where it will live.
• Monthly – These are items that I want to be aware of. Typically, I will scan these items and maybe fully read one or two posts out of 10 in entirety.
• Someday – Things not directly related to my business. Maybe they occasionally post items I find interesting. Typically, I haven’t decided if I want to follow this blog yet, but I don’t want to lose track of it until I’ve read some more posts.

How much time to spend

Here is another trick I use. I used to set goals like “I will read my feeds for at least one hour a day”. Depending upon the last time I had read items in my reader, it would be easy for this one hour to double into two or more hours.
Now I set my goal as a maximum, rather than a minimum, amount of time that I will spend reading. For example, I may set my goal this way: “I can only spend 45 minutes today reading my feeds”.

This does a couple of things for me. It helps me decide what goes in (and what stays in) my daily category. I also use this goal to give myself permission to read items in other categories, once I’ve finished the Daily activities and as long as I don’t go over the 45 minutes.

One last note. I’m a big fan of David Allen’s Getting Things Done: The Art of Stress-Free Productivity. One of the big lessons I took away from David’s book is the importance of separating collecting from processing. Here is how this plays out in my feed reader. As I am reading, I will find things that I want to comment on, share with clients, or use as the starting point for a post of my own. Since I only have 45 minutes to collect items from my feed reader I must follow the rule of either doing it in two minutes or putting it into my collection system. Since I use Google Reader, I “star” items that I want to put in my collection system for processing at a later date.

RSS feed readers can be a powerful tool to help you collect and manage information to help you with your business. The system that I use may not work for you, but I hope that by sharing how I organize my feeds, you will see that it is possible to keep up with a large amount of information without it turning into a full time job.

Bill Brelsford is the owner of Rebar Business Builders. As an Authorized Duct Tape Marketing Coach, Bill works with professional service firms and independent professionals who want to spend less time chasing business and more time serving profitable customers.
phone: 913.962.9261
email: bill@rebarbusinessbuilders.com
web: http://www.RebarBusinessBuilders.com
blog: http://blog.rebarbusinessbuilders.com

There’s a sudden increase in what they’re now calling Boomerangers, according to MarketingCharts.com, in Young Adult ‘Boomerangers’ Head Home in Numbers:

More than one in 10 US parents with grown children say at least one of their adult sons or daughters has moved back home in the past year after living away, according to research by the Pew Research Center, which found that the recent recession has created a bumper crop of “boomerangers,” particularly between ages 18 and 34.

Why do we in the United States act like there’s something wrong with single adults living with their parents? That happens a lot in most other countries, and nobody thinks there’s anything wrong with it. Here, however, there’s stigma attached.

Why? Single people living alone vs. single people living with parents… who says one way is better than the other?

One thing most other cultures do better than ours is simple integration of generations. We separate generations. Kids with parents, teenagers with other teenagers, then college students, then single adults. Older people go into homes for older people.

Aside from the U.S., I’ve lived in Mexico, and I’ve lived in Austria. In both of those countries a lot of single adults end up living with their parents after college. It’s often a win-win situation.

Of all the “best of” blog posts I’ve seen this month, Bob Sutton’s Work Matters: The Best of 2009 posts is the best.

No coincidence, I suppose, that he writes very well and has a great blog, teaches at Stanford, and is author of several important books. But there are other great blogs around.

What I really like about Bob’s best list is that he goes month by month, specifies one particular post for each month, and — really nice touch — he also comments on the comments.

So his list is a great read. Bob writes about work matters, the whole no A**hole thread, and smart business.

Envelope #1

Outside note: Open in six months if the job is tougher than you thought

Contents: “If the job is getting tough, simply say that you are just getting up to speed, learning the systems you’ve inherited.”

Moving into an existing job always requires learning how things work. Whether they use Strunk’s Elements of Style, OpenSource servers, Generally Accepted Accounting Principles, or self-written Step-by-Step Operating Procedures, every business will adjust and modify that guide or program to best satisfy the needs of the company. No matter who in the company chose that system, you must claim that you, the new person, need time to learn how it works. Make sure you take that time.

Envelope #2

Outside note: Open in a year if the job is getting very stressful

Contents: “If you are getting really stressed by the job and upper management is breathing down your neck, blame everything on me.”

Using your predecessor as the scapegoat has a long and honored history. It is no less effective for having been used a gazillion times before. Your predecessor is not present to defend themselves, and blame is safely transferred offsite without collateral damage. No one present will gainsay you in the presence of higher management and risk blame backlash.

Envelope #3

Outside note: Open anytime after one year if you’re overwhelmed by the job, and your job performance/output can’t reach correspondence with chief level (CEO, CIO, CCBWO) denizen’s preconceived pet theories.

Contents: “Make out three new envelopes.”

Steve Lange
Senior Editor (Ret.)
Palo Alto Software

For several weeks she was emailing the surgeon’s office, trying to confirm the day and time of her procedure, pre-op appointments, preparatory instructions and the like. Irritatingly, the surgeon’s office never replied.

Finally, out of desperation, my sister-in-law called the surgeon’s office and was transferred to the Patient Contact Coordinator. When she told the Coordinator that she’d been emailing for weeks but had received no answer, the coordinator replied, “Oh, your emails went to the SPAM folder and were deleted. If you’re not in my Contacts List, emails are automatically listed as SPAM and deleted.”

“So, can I confirm my appointments and get my pre-op information?” asked sister-in-law.

“Sure. Just send me an email,” replied Patient Contact Coordinator.

Pause. Wait. Wait for it.

“Soooooo, do you want my email address to add to your Contacts List?” finally inquired exasperated sister-in-law.

“Huh?” responded the quick-on-the-uptake Coordinator.

“So that the email you just asked me to send you doesn’t get automatically sent to SPAM and deleted ….. again?”

“Uh … Oh … Yeah, I guess.”

To quote a sage, contemporary American icon: “D’oh!”

How does this surgeon ever stay in business if they never get new patients because new patient emails are summarily deleted because they are not in the Coordinator’s current patient Contacts List?

This office, or at least this Patient Contact Coordinator, could benefit from the advanced email management features of Email Center Pro.

Steve Lange
Senior Editor (Ret.)
Palo Alto Software

Producing animation for “the big screen, the small screen, and all the screens in between,” says its founder, Charlotte Rinderknecht.

Studio Kinate is a “concept to completion” studio whose artists use traditional hand-drawn animation to create its projects.

But it’s not just its unusual location and old-school style that set Kinate apart from other animation studios. “It is our process that makes us stand out. I believe in apprenticeship. The animations we produce rely on interns and apprentices working alongside veteran and senior animators,” Rinderknecht says.

Rinderknecht feels this is an important part of what makes her company special. “Our films not only engage audiences, they inspire a new generation of animators. Each and every Studio Kinate project includes the work of student, intern, and junior animators.” This, she says, is the key to creating relevant and progressive storytelling that resonates with young audiences.

While she had been involved in other businesses, it wasn’t until she decided to seek funding for Studio Kinate that she embarked upon writing her first business plan. “When I was looking for help, it was the reviews that made me turn to Business Plan Pro, because I had no idea where else to turn.”

“My business model is unusual, so people who were advising me had a hard time seeing the possibilities outside the norm,” Charlotte notes. Then she discovered the Business Success Coaching service, and found a coach who supported her vision and helped her achieve it. “My coach, Paul Gibson, was amazing. He helped me keep on goal and helped me with questions that were related more to my industry, that helped me understand how to write my plans. For instance, since my company produces animation for feature distribution, I need to build a plan for each of those projects. Paul was amazing and encouraging.”

Charlotte Rinderknecht

Charlotte considers any business plan a work in progress. “The business plan is a living document and should be revisited to help keep track of where you are going. I feel it is like a map, and you don’t just look at the map when you begin a journey. You need to review and plan new routes as you travel.” On her planning journey, she’s found the most challenging part to be crunching the numbers. “It takes considerable research and planning to develop the funding requirements of the studio. Business Plan Pro helps me get organized and walks me through the process. It also provides additional resources,” she says, which provided valuable assistance in finding the data she needed to complete her plan.

Studio Kinate is not just a business. Its productions include both traditional hand drawing techniques and innovative digital technology, says Charlotte, “because we believe the warmth and artistry of hand drawn animation is an art worth preserving for the next generation.” And since the animations are created by young animators sitting alongside seasoned professionals, viewers and creators alike benefit from the process.

And so does Charlotte. “I love watching people come together on a project. Working with young people and introducing them to veterans in the industry has been priceless. I love watching them work together to produce something that audiences will love. Don’t get me wrong, this is the scariest thing I’ve ever done, but it is also the most rewarding.”

“Being big egzpurt, I am.” Just because someone bruits themselves this way doesn’t mean you should simply take them at their word.

It saddens me that I have to be mistrusting of people, but as one of my favorite aphorisms says, “Just because you’re not paranoid, doesn’t mean they’re not after you.”

We start our businesses wanting to do what we like and know best.  However, that starting up also requires us to deal with many other facets of business which, all too often, we know nothing about.  So we hire consultants and soi-disant (self-styled) experts to help us over the rough spots.

When you hire those consultants your business is at risk, so do your due diligence.  Ask for references, and then call those references and ask as many questions as you can.  Take a few minutes to run an Internet search.  Don’t forget to search for negative reviews as well, and if you can, follow up with those folks as well.  Ask your friends and other professionals.  You can’t be too careful.

Yes, there are plenty of honest, trustworthy, efficient and competent consultants and experts out there, and they contribute immensely to the success of many businesses.

And there are lots of frauds as well.  In the 1990s I was peripherally involved for a short time with a particular company.  They were successful and popular, and wanted to expand and grow.  They hired a consultant who presented a long list of former clients.  He quickly convinced the owner to make him the general manager.  And the organization crashed within two years.

It turns out this expert’s long list of “clients” was a recounting of all the businesses who had hired and then fired him.  The employee who discovered and blew the whistle on this creative reframing of the expert consultant’s work experience was let go soon afterwards, and the company, ignoring the timely warning continued its death spiral.

In the end, the company owner woke up to the unhappy truth, and the “expert consultant” had one more former client to add to his list.  The company survived, barely, at the cost of the owner’s hard earned savings, and after a decade, has not, to my knowledge, recovered to its prior level of success.

Do do due diligence or you could be in deep doo-doo.

When you are in the midst of creating your business’ planning forecasts, do you use Guess, Estimate, Accurate and Precise interchangably? I don’t. I believe there are very distinct differences in these words — they are not synonymous. Here’s how I see them.

Guess: Pulled out of thin air. "Oh yeah, sure, no problem, easy-peazy! I can get all my darts into the target! Um — uh — er — which target was that?"

Estimate: Prediction of the future, based upon past results, or research.  "In my previous rounds I’ve hit the target. I’m improving. I think I have a 65% chance."

Accurate: The real data, the actual results — in a broad sense.  "I did hit the target."

Precise: Specific detail, categorization, analysis.  "I hit the bulls-eye once, the triple 20 once, and one dart hit the target, but outside the scoring rings. I need consistency."

When you are initially writing and then regularly reviewing your business’ operating plan think seriously about these concepts.

Guess: Leave these blue-sky, gross generalizations out. Venture Capitalists and investors can tell when you pulled these out of ……. thin air. If you run your business on guesses, guess what, you’re out of business.

Estimate: Do your research. Forecasting is more than guessing. It is grounded in past experience, sound market research and analysis. Cite your sources.

Accurate: Keep your records and use all your results. You can use the big picture, but it may not serve you well if your view is too broad. "The fewer the data points, the smoother the curve." But really, you want to see all the peaks and valleys so you can adjust your business activities and future planning to account for real-world variables.

Precise: Be honest here. Look closely. Continue to do your periodic scheduled reviews. Do your analysis thoroughly and completely, even if the conclusions may not be exactly what you wanted to find. If you throw out half of your data in order to reach correspondence with your estimates, you are neither accurate, precise, nor honest with yourself nor with everyone else participating in your business.

I have this unrelenting suspicion that people deeply, innately, in every fiber of ourselves need to be connected. Radical, I know.

I recently went back to Princeton for my college reunion and spent 48 hours either with people I hadn’t seen or spoken to in many years and yet because of Facebook and LinkedIn still felt oddly knowledgeable about, or with people I had actually never met but again felt oddly knowledgeable about through the sheer quantity and intensity of the virtual communications we shared. As inevitably strange situations and new sensations came and went at my reunion (because reunions are kind of wonderfully odd), I couldn’t escape constant little reminders of how the new technologies we’ve so quickly become immersed in, are playing a role not only in our need but also our ability to be connected.

While I was on campus, I gave a lecture on social media marketing (and giving a “lecture” at my alma mater was certainly odd for me in so many ways). We looked at the Susan Boyle phenomenon. Note that according to The Telegraph the episode of “Britain’s Got Talent” in which Susan Boyle debuted (it was the show’s season premiere) had was viewed on television by 11.8 million people. But in just a few days, the video of that same show on YouTube had generated more than 80 million views. That’s TV 11.8 million, YouTube 80 million. Anyone who grew up with television as the quintessential mass medium may need to take a moment just to absorb that fundamental shift.

And more and more people have a nagging suspicion that things like Susan’s YouTube video are stark examples that social media tools really are changing the way that we communicate, and wondering what to do about it.

I agree with this suspicion because I think such change is inevitable.

What we now call “social media” are just the latest in a long and continuing evolution of communication tools. From smoke signals to Morse code to radio to television, each new tool we invent changes the way we communicate.

If you imagine with me for a moment, communication tools shifting over time in four respects:

1. who sends the communication
2. who receives the communication
3. the ease of communication
4. what’s in the communication

we seemed to have had a long progression toward an ever increasing number of recipients from tools like Morse code (only a few people can send complex messages to a few other people, so presumably senders and recipients are chosen carefully as are the messages they send) to tools like television (once the infrastructure is built, a few people can send messages to massive quantities of people relatively easily and so senders are chosen carefully while the recipients not so much & the messages can be drivel or not).

Follow Maisha Walker on Twitter

But Social Media seems to have taken this progress on a new path where we are growing not just in the numbers of recipients but also of senders. Large numbers of people can now relatively easily reach large numbers of people, as if we are each our own publishing house.

But the tools go beyond that too. In the past large numbers of recipients meant one-directional messages — you could reach lots of people but they were passive recipients of your information. Now, these large numbers are also interactive. You can reach out to lots of people and every single one of them can immediately reach back. Instead of controlled, one-directional messaging, these tools enable a constantly evolving, living dialogue on a huge scale.

In it’s novelty, just the fact that the power to create large scale dialogue is in the hands of individual people is kind of amazing. As a business owner though, the fact that you can now communicate interactively and regularly with 10 or 1,000 times more people can seem overwhelming.

There is a middle ground.

In the 1970’s a sociologist named Mark Granovetter introduced a concept called “the strength of weak ties.” It is the idea that as we reach beyond our closest friends and families, we have “weak” but vitally important ties that connect us to other people and their networks and the important information and opportunities that those networks hold. It is far more often through the networks of our “weak ties” for example, that we get referrals for business and find opportunities for new jobs.

What’s amazing for small business owners about these new social media tools is that they are incredibly good at empowering individual people to efficiently and inexpensively maintain a far larger number of “weak ties”.

Half the battle of being a successful business is just making sure people remember your business and what you offer when it’s time to make a purchase or a referral. Through social media tools, a business can stay connected to a larger number of “weak ties” and the networks they belong to, have access to the information and opportunities in those networks, and do it better and faster.

By helping you maximize those weak ties Social Media Marketing provides small businesses with a powerful tool that doesn’t need an overwhelming amount of complexity to be useful. Its power is based on the simple human desire to be connected and the tools that now exist to enable you, as an individual to fill that desire.

Here are a few steps for how to maintain your sanity while using social media tools effectively.

1. Learn the differences, know what each tool is good for
   Each social media tool has its own personality, its own community of enthusiasts, its own speed and frequency. Take the time to learn them. Log on, create a personal profile and “lurk” for a while. Invite a few close friends and start to interact. Join groups that are of personal interest to you and watch how people share information. Learn first-hand how the tool is used by others before using it for your business.
2. Stay focused on your goals and know your audience
   While social media tools can reach millions of people as they did with the Susan Boyle video and for the Obama campaign, for most small businesses, reaching millions of people is just not the point. Don’t get sucked into the hype and forget that. Perhaps you need to find and build a few key relationships, or reach a few tens of thousands depending on the scale of your business. Figure out who & what you’re looking for and stay focused.
3. Don’t reinvent the wheel (yet)
   What’s already working for you? You don’t necessarily need to use social media in a completely different way if you’re not trying to reach a completely different audience. If you know what works with your audience now, start by figuring out how to achieve similar results but within the context of these new tools.
4. Don’t spread yourself too thin
   You don’t necessarily need to be active in all places at once. While Facebook, LinkedIn and Twitter are the hot spots of the moment, spend some time figuring out which ones will give you the greatest access to your audience and start there.
5. Don’t sweat it and don’t rush it
   Honestly everyone is still figuring out the best way to use social media tools. Heck, the sudden explosion of these tools themselves shows that people are still figuring out how best to use the Internet! Don’t give in to the feeling that you’ve missed the boat and rush into something that you’ll have to back pedal on later. Take the time to learn and do what’s right for you and your business.

Maisha Walker is the Founder & President of message medium, a 10-year old New York City Internet Strategy firm that focuses exclusively on Small Businesses. You can follow Maisha on Twitter or learn about her upcoming Web site and Internet Marketing Classes.

That is a scary question for lots, if not all businesses. We spend so much time focused on getting our businesses started, and then successfully running our businesses, that we give very little thought to disaster recovery planning. Really, planning for disaster sounds like we are betting on failure. Betting against ourselves. Yet we think nothing of getting health insurance and auto insurance and home insurance — betting against ourselves, betting that something bad is going to befall us.

So, why aren’t you betting against your business, as it were? Let’s change the view. Your disaster recovery plan is betting ON your business. You’re now going to bet that regardless of what disaster (natural or man-made) comes your way, you and your business are so successful that you are going to pull through and keep right on going.

Now, when I say disaster, do you immediately go to Hurricane Katrina? Mississippi River flooding? Santa Anna wind-fed wildfires? Yes, certainly you need to have your financials backed up off-site, maybe on a different server, or on some tape drives. Tax records for current and past years should be saved, and supplier and distributor contact information recorded somewhere besides your desktop computer.

But what about the small disasters? Last winter the Northeast states were frozen solid and without power after an ice storm. Here in Eugene in the heart of the Willamette Valley, three inches of new snow and temperatures in the low teens have almost locked up the city because only the skiers have snow tires and know how to drive in this stuff. The rest of us are a hazard. Just a simple thing that we so casually depend on – driving to work – can be a minor ‘disaster’ for our businesses.

Fifty years ago, if we were blanketed by an ice storm we didn’t expect every business in town to be open. We were all in the same boat and knew it. In today’s global Internet economy we expect everybody to be open, busy, and available to us 24 hours a day, 7 days a week. How are you going to handle your business needs in times of minor crisis?

As an example, several years ago a summer windstorm blew over many trees around our office which brought down all the power lines. No power to our building at all. No computers, no phones, no lights, no tech support, no customer care for several days. Yet our Internet sales from our off-site servers kept up with business. We ended up buying a portable generator to get just enough electricity to run our phone system to play a specially recorded a message for incoming calls explaining why we weren’t there and available to them.

Small businesses can be just as hard hit if a key employee has a car or bicycle crash and ends up in the hospital, uncommunicative, for days, or if all 3 or 4 employees get the flu at the same time. You don’t want your business operations to slam to a halt because people weren’t cross-trained or no one else knew procedures.

One step you can take is to institute a system of transparent communications in your company, so that incoming and outgoing email communications continue smoothly. With Email Center Pro, email management for businesses, you can manage all of your email queues from one location and efficiently route email from one mailbox to another and from one user to another. Email is securely saved off-site, and, in the absence of an employee, someone else in your company picks up the communications thread immediately.

What would you do to backstop your business if calamity should strike? Give some thought to protecting and recovering your company, your records, your business and your customers in the event of disasters, both large and small.

by Lindsey Enloe
Business Success Coach

Whether you are starting a new business or growing an existing business, this is not a game. It’s real life, everything is on the line, and there is no room for error. You walk onto the field each day, armed with a business plan as your playbook, and the motivation to succeed, but when you are in the middle of the play, who can help you see through to the end? A coach.

Nothing is more exhilarating than the anticipation of starting up a new business idea or growing a business to the next level — until the details and day-to-day challenges start to seem daunting. Business planning is a tornado of required actions mixed with emotions that can sometimes seem to whirl around at breakneck speed. One day you just want to get started, another day you might stare at a blank computer screen wondering what the point of a business plan is anyway. Still other days, the ideas start to seem overwhelming and it seems much easier just to give up. The problem is that you have this entrepreneurial spark that sits in the back of your head spinning yet another idea to create or grow. So how do you keep going? How do you see through to the finish line? How do you really get into the business game?

Any athlete who really wants to compete gets a coach. You can gather a strong team of advisers, but they won’t hold you accountable to a set plan of actions and goals. You can read every book on business there is, but the books can’t provide detailed feedback on your unique ideas. You can write a plan, but the plan itself doesn’t challenge you to push further than you thought possible. A coach can provide that extra set of eyes that can objectively see the holes or potential pitfalls or even the strengths that you haven’t yet considered.

We can’t always do it on our own with just pure will, even when we have a great idea. So many things can get in the way. Lack of knowledge on where to start; inability to manage time and resources; inability to identify challenges; or the inability to look objectively at an idea to which we’ve become very emotionally attached. This is where a coach steps in.

When you are tired, coaching can reignite passion. When you are unclear, coaching can dig deeper into your potential by clarifying values and purpose. When you are feeling overwhelmed, coaching can discover your strengths and mobilize your talents. When things are moving too slowly, coaching can provide the fuel needed to push you and your business back up to speed. When you are stuck behind barriers, coaching can help identify and clear the obstacles to success. When you have reached a stalemate, coaching can revitalize you and uncover new opportunities.

You may very well be a brilliant entrepreneur and business owner. If so, have you reached your full potential? Have you reached every one of your business and personal goals? Have you considered expansion? Have you considered a new business? Are you equipped with the tools to make it happen? Do you know all the right questions to ask? Have you aligned your team with the best that there is? The world’s best will seek help while answering these questions.

Just as coaching is used from little league to professional sports, it can help on all levels of business development, from conception to expansion, and in small to large ventures alike. You can set your pace faster, set your goals higher, achieve success and perform better. Everyone benefits from that bird’s-eye view, which is what a coach provides. People come to business coaches for a variety of reasons. You may need an expert who isn’t blinded by the industry or by too many years of staring at the same numbers. You may need the accountability created by reporting to your coach weekly after setting personal commitments. Many times we get bogged down in the day-to-day operations and forget that there is a much bigger picture to look at if we want to grow. With ever-changing markets, you may need a coach to bounce ideas around with, in order to grow through the challenging times. You may simply need to rediscover the passion that created your brilliant business idea in the first place. You may need guidance to find the proper people to support your business and advise you in proper strategy. Finally, you may be looking for greater profits or returns with less work. Anyone can hang a shingle and be open for customers, but it takes more than a name and idea to really own a business.

In the end, however, coaching is more than just the bottom line. Coaching can help you discover a life of balance that works for you, especially important since a business can, at times, take over every aspect of your life. It can guide you in making better decisions about life and business. It can help you find ways to get more done in less time, and overcome the many potential barriers to success. Coaching will help you set and attain goals in life and business, and then push you to become the person and business owner that even you didn’t think was possible. If you really want to be a player in the game of business, don’t sit on the side lines; don’t wish and dream. Get a coach and make it all reality.

I’m sure almost everyone is familiar with the story that Thomas Edison discovered 99 ways to NOT make a light bulb. That’s 99 no to reach 1 yes. The point here is that a negative result, proving something didn’t work or was not so, is just as valuable as a positive result. Sadly, scientific research has become so expensive, and so heavily subsidized/sponsored by corporations, that it has become the expected norm that every result must be a commercially marketable yes result.

That “always yes” attitude has come to shade the development and use of business plans as well. It’s gotten to where people think that every business plan has to show exorbitant profits and wild success. And to reach that end, all that they need to do is overestimate the financial tables a bit, or a lot, until the Profit and Loss and Balance Sheet show the desired results. This is a bad and dangerous tack, in my opinion.

For instance, we saw one plan for a tennis club with indoor court rentals. The financial tables looked good until we divided the rate per hour into the sales forecast. Seems those courts were rented continually, 28 hours a day, every day, 365 days a year. Not possible I’m afraid.

Or the mobile auto oil change business in a large mid-western city. Again, closer inspection of the sales forecast showed that the one worker was changing the oil in a car every 45 minutes, with no travel time between jobs, in all weather, every month of the year. Now, I’ve tried to change my oil in Illinois in January, outdoors, lying on my back in the snow and below-freezing temperatures. Let me tell you from experience that 45 minutes is painfully unrealistic.

Final example: there was the apartment rental company with five vice-presidents but no employees in the personnel forecast, and they never showed how or when they paid for the buildings they said they purchased.

These business plans all said YES in the financials — if you didn’t look too closely.

Now, I say that NO is an acceptable result from a business plan. A business plan for a start-up company that shows huge losses, or negative cash flow is an OK result. It tells you that the business as planned will fail. It tells you that some of your basic assumptions are wrong. It tells you that you are missing something immensely important.

And this is better than OK! Rather than starting up with unrealistic expectations and then hitting bottom in an excruciating crash, you can stop right now and reassess, before you make a financial commitment. Don’t ‘embellish’ the financials by boosting the sales forecast. Look at your market, your competition, your expenses, and everything about your plan and be realistic.

Honest reflection may tell you that this isn’t the business to start right now. Or, you might revise the plan and discover if you put some of those vice-presidents out on the production line, it reduces your costs of goods to a point where you really can make a modest profit on steady sales, without hockey-stick growth. After your revisions, you still might not make a profit until year three. But in going through this process, you may become convinced that the business is viable with adequate start-up funding and second-round investment.

NO is an acceptable result for a business plan if the plan exposed the flaws and showed the way to a realistic YES.

All of us know, or should know, that we need to save and safeguard our business records. When we start up it’s easy to hang on to every document, receipt, invoice, and business record. But after a few years we find that all these records we’ve been keeping are taking up more floor space in file cabinets than the work spaces for ourselves and our employees.

The good news is that we really don’t have to keep all those records forever. Yes, some we do need to keep forever. Some we keep only until the IRS has had their way with us. And some we need to keep for only a few years.

Determining which records need to be kept, and for how long, is a little harder. And properly disposing of temporary records is not as simple as just tossing the papers into the recycling bin.

Here is where the Records Retention Schedule comes into play. This document lists the types of records your business produces (financial, personnel, employee handbooks, contracts, operations, meeting minutes, policy statements, online privacy statements … the list can seem endless); identifies any legal requirements for how long the record must be kept and the requiring authority, such as the IRS or the Sarbanes-Oxley Act; will note how long the record is generally actively used in business operations; and may contain other information as well, such as noting that the records contain sensitive personal identifying data; and if microfilm or digitally scanned copies are acceptable legal alternatives to the paper document.

Search the Internet and you will find plenty of information about Records Retention Schedules and samples, such as this one kindly offered by Millennium Records Management. Remember, however, that a sample schedule is just a generalized representation of what one looks like. Your Records Retention Schedule will be tailored to your type of business, where you are located, in what state(s) and/or countries you do business, whether you are privately owned or trade shares on the stock market, are a public institution, hold government contracts, and a myriad other factors.

You will want to work with your accountant, legal counsel, and/or a professional records management company to develop and establish yours.

You implement the Records Retention Schedule officially so everyone in your company knows about it. This helps ensure that your vital records are actually kept in the first place. Later, say you have several file cabinets of Accounts Payable invoices. Your Retention Schedule says you need to keep these for 6 years, but experience shows you really only get into them for 3 years. Knowing this, you can free up your business/office floor space by transferring these records to secure off-site storage or an acceptable alternative storage media.

Once you have records that reach the end of their retention period you can dispose of them. But, as I said, you can’t simply toss them into the recycling can. You need to have an established process for their disposal. Yes, you have to create more documentation to get rid of old documents.

You will want to have the people who generated the records sign off that they no longer need the records. You should note that the records have reached the end of their retention period according to your established Records Retention Schedule, and check that their retention period has not been extended due to audits, litigation, etc.

You will want to certify when, how, and by whom, the documents were destroyed. This is easier today, than in the past, when I spent many hours hauling boxes down to a loading dock and feeding paper into a shredder next to a dumpster. In recent years mobile shredding companies have proliferated. They will drive their big truck-mounted confetti shredders to your business, haul your boxes to the truck, let you witness their destruction and give you a certificate of destruction.

Establishing, implementing, and following a Records Retention Schedule will go a long way to ensuring that your company keeps and maintains the vital records you need to continue in business. And, in a worst case scenario, should you be caught up in litigation or the like, prove that your records are kept and destroyed in a regularly occurring, established, approved, documented process, and not in a midnight burn out behind the barn in an amateurish attempt to avoid culpability and responsibility, or obstruct the legal process.

I was fascinated by the analysis of the Obama campaign. In many ways, Obama’s campaign and its success is a big, bright, “LCD sign” of the times. New media has come of age in a very public way.

Most people seem to agree that the campaign used a number of techniques to capture an audience and even inspire those traditionally lacking enthusiasm for politics. Some of my favorite attributes are:

Audacity – the fact that Obama wasn’t afraid to “redefine his target audience” and go after states like Indiana who this November voted for a Democrat for the first time in 44 years.

Mobilizing Large Numbers and doing it “Grass Roots” – unprecedented fundraising success by generating large numbers of small donations rather than small numbers of large donations to raise more than an estimated $600 million (McCain raised an estimated $250 million).

The Message Consistency – the message never wavered from the idea of being an “antidote” to the status quo.

But perhaps the most obvious and (to a techie like me) inspiring elements of witnessing this campaign was its focus on social technology to support and propel all of the other techniques.

The use of “new media”, from friend building on Friendster to the seemingly simple text message, proved to be a powerhouse for the campaign, as it extended the concept of “Team Obama” far beyond campaign headquarters literally into the hands of millions of Americans who voted and vocalized with their typing fingers.

For all the small business owners who couldn’t help wondering, wow – can I do that? My answer is Yes you can! (Sorry couldn’t help myself).

In taking a closer look, the technologies used form a rather familiar list:

• Official Web site: http://www.barakobama.com and http://my.barakobama.com
• Text messaging strategy – enabled via collecting phone numbers on a mass scale
• LinkedIn: http://www.linkedin.com/in/barackobama
• Flickr: http://www.flickr.com/photos/barackobamadotcom/
• Facebook: http://www.facebook.com/barackobama
• Twitter: http://twitter.com/BarackObama
• YouTube: http://www.youtube.com/user/BarackObamadotcom
• Meetup.com: http://barackobama.meetup.com/

The list reads like a “who’s who” of social media marketing.

But the real power in these technologies is understanding that the goal is not just to “set up” one tool or another, but to understand each tool’s potential. That potential in the Obama campaign was brought to fruition by:

• Having a consistent message
• Providing free and open access to “making a connection”
• *Always* keeping the tool up to date
• Providing pertinent digestible bytes of information that could be read, downloaded, passed on
• Leveraging the sheer quantity of enthusiasts and supporters on each tool to disperse messages almost instantly across an unbelievably wide, new network of venues and communities that hasn’t been seen since the invention of television.

Think about the leverage that a database of 948,000 people on MySpace and 3.1 million people on Facebook provides when you have a message to communicate (and consider that vs. McCain’s 221,000 on MySpace and 600,000 on Facebook).

As you think about your business and consider the challenge to build brand, generate buzz and stay on the radar as a small business owner with limited time and a limited budget, there are some very simple lessons to learn here:

1. Everybody needs a team. Whether you’re trying to build a team of millions of voters or a few thousand supporters of your business, build a team by building a venue for them to get involved. Even the simplest involvement can be powerful.
2. Email, the Web, and cellular technology have created an unprecedented venue for that involvement. Know who should be on your team and know the different ways they like to be involved.
3. Use wisely. Learn how these technologies work and learn by example how they can be leveraged to build a community of supporters for you.

This is an advantage that won’t last forever. As businesses gain competency in these techniques and learn to invest wisely, these techniques will slowly become standards rather than competitive advantages.

But it is possible for a growing small business to build a strategic, cost-effective and impactful social media campaign. As “Team Obama” has shown – yes, you can.

Maisha Walker is the Founder & President of message medium, a 10-year old New York City Internet Strategy firm that focuses exclusively on Small Businesses.  You can follow Maisha on Twitter or learn about her upcoming Web site and Internet Marketing Classes.

Last night we were talking about getting angel investment, and valuation, which is one of if not the most important points in the discussion. Valuation is essentially price.

Say you want to bring in $150,000 from an angel investor. The immediate question from the investor will be something like: “at what valuation?” Sometimes that’s called “pre-money valuation,” because the instant the deal happens the valuation will change into post-money valuation, which is always higher — because your company just got some new cash.

Your answer sets your deal equivalent of an asking price. If you say $500,000, then you’re offering the investor 30% of your company for $150,000. If you say $300,000, you’re offering 50%. If you say $1 million, then you’re only offering 15%.

Which leads to the question:

So how do I know? How do I set valuation appropriately? What is that based on? Is it some multiple of sales, or intellectual property, or what?

And that’s a good question, and very hard to answer. Sure, you want some compromise between what you want to give, as a percent of ownership in your company, and what investors would want to buy. Investors will simply say no if it’s not an attractive offer. But that’s still very vague.

• In the case of an existing business, with some history, you do have some formulas you can use. For a great site on that business interpretation of valuation, for existing busineses, I suggest bizequity.com, the zillo of small business.
• When we’re talking about startups, however, you don’t have history and you can’t really apply formulas based on sales, or revenue, or even intellectual property (although that could be more relevant).

So here’s my concrete suggestion:

1. Calculate starting costs. That’s two lists, the expenses you have to incur and the assets you have to have at the starting point — except cash. Leave that blank for a bit.  Add those all-except for cash assets to the starting costs, to get an amount, a number in dollars.  Click here for a lot more on that.  

   So, for example, in the illustration here, that would be about $40,000. Yes, I know it says $38,750, but this is just an estimated guess; always round up. You never guess just right.  

2. Calculate cash flow through the lean period at the beginning, before your sales cover your costs.  Make a good guess at how much money you need to cover the deficit spending to get you to an operational month-by-month break even level of cash. That’s where the cash requirement number in the illustration came from: it seemed like this company would need about $400,000 to survive from startup to break-even.  You can’t see much in the chart below, because it’s small, but it shows a projected 12 months of cash flow (in blue) with a minimum balance, a deficit (in red), of about $400,000.

   

3. That gives you a number. In this case, it’s $400,000. That’s what your cash flow shows you you’ll need to get to cash-flow break-even. In the last two months, the cash flow is positive, so the negative balance starts shrinking. With that estimate as a best guess, you go back into your startup costs calculation, and add in the cash required. It’s $400,000. You can see what that does to the startup costs worksheet in the next illustration here.
4. Having done that, you now know that you need about $500,000 from investors (again, technically it’s $458,750, but you’re using best-guess estimates, so round up.) Set that as the amount of investment you’re seeking. Then — and here it gets hard, to be sure — you need to decide how much of your company you’re going to offer to an investor in exchange for that $500,000.

5. Get some help here if you can. Ask somebody with experience in startups, or dealing with angel investors, or both. Ask an attorney you can trust, who should also be somebody with experience. The thing is, how much of your company you offer to investors is about a compromise between what you’d like — none, free money — and what will entice the investors to write checks.

   At this point a lot depends on your overall business offering, the cards your company brings to the table. Investors want as high return as possible, with as little risk, but in relation to return. How experienced is your team? How defensible is your product? How rich is the market? All these factors determine what kind of a deal will be acceptable to investors.

   • Let’s say, in this case, you’re new at startups, you have very little track record, and you want to attract an active angel investor as a partner. So maybe you set your initial valuation at $750K, meaning you’re offering to give away 2/3 of your ownership to get the money you need. You’re being realistic about what will attract an investor. You better really, really, like that investor, because he or she will essentially own your company. But this is a hypothetical case, and without a lot of experience and defensibility, that may be the best you can do.
   • Or maybe you’ve got better cards to play: you’ve got a team with startup experience, and a defensible new product, with some intellectual property, and it looks like an attractive market. That makes you able to set a stronger valuation, and maybe — we hope — still make it an attractive offer to investors. So maybe you say you’re valuing it at $1.5 million. You’re offering investors one third of your company for $500K.

So there’s a quick and (I hope) simple summary of how you set the initial (pre-money) valuation when you want to attract investment.