admin / April 4, 2023

Top Goal for Small Businesses: The Eight Most Important Checkup Questions for 2021

Are you happy with your business this year? What are you going to do differently? How can you hire the right people to support your vision? Sadly, many small business owners do not spend enough time planning for the future. It’s quite understandable. Managers must keep pace with the daily demands of their businesses, including payroll, taxes, product/service delivery, and customer expectations.Fortunately, the end of the year is the perfect time for a comprehensive evaluation of your company. Your business needs a checkup. Most people can relate to a checkup with their local doctor, depending on their background and personality characteristics (age, sex, family medical history). The doctor will conduct a variety of tests, including blood, vision, heart, and hearing.In fact, one element like an individual’s weight is not the only indicator of overall good health. Likewise, small businesses could benefit from a good checkup too. Successful entrepreneurs think strategically when engaged in a hostile, global environment.After 27 years of managing projects and conducting over 100 organizational evaluations of business organizations, I realize that both large and small organizations struggle in implementing their operations effectively. This article examines how small businesses need to conduct an effective checkup of their organizations.Welcome to the New Normal! Yet, nearly a year after this pandemic, the full impact on the U.S. economy is unclear. According to recent studies, more than four million Americans have left the workforce, and nearly 10 million are now unemployed compared with last February.In fact, the number of unemployed people continues to rise. According to a business study conducted between March 28 and April 4, 2020, small businesses have been heavily damaged by the lockdowns due to Covid-19.In an analysis of more than 5,800 small businesses (reaching a network of 4.6 million small businesses), the research highlighted the damage caused by the pandemic. The results showed evident damage of the pandemic. At this juncture, 43% of businesses had temporarily closed, and nearly all of these closures were due to COVID-19.Respondents stated that they had temporarily closed, largely pointed to reductions in demand and employee health concerns as the reasons for closure. In fact, the businesses, on average, reported having reduced their active employment by 39% since January.All industries have been impacted. However, retail, arts and entertainment, personal services, food services, and hospitality businesses showed significant employment declines exceeding 50%. Some businesses hope for assistance from the government.According to a Babson’s Goldman Sachs report, 88% of U.S. small business owners have already exhausted their Paycheck Protection Program (PPP) loan; the Small Business Association gave these loans specifically to help businesses keep their workforce employed during the pandemic. These loans were helpful.Yet, these successes do not diminish the fact that more than 32% of PPP loan recipients already have laid off employees or cut wages. In fact, Forty-three percent of Black small business owners reported that their businesses’ cash reserves would be depleted by year’s end due to Covid-19.Today’s small businesses and entrepreneurs must retool themselves, given the potential impacts of Covid-19 have the necessary capacity to change their way of thinking because of their passion. However, small businesses must be willing to evaluate their current operations and make the required changes.For example, customers have largely gone online to purchase services due to the lockdowns. If a business does not have an online presence now, this company does not exist. Internet pioneer and CEO of PSINet Bill Schrader explains the significant of online visibility: “Almost overnight, the Internet’s gone from a technical wonder to a business must.”With the appropriate diagnosis of an organization, a business can develop more sustainable success. Thus, the right checkup is critical.Below are some critical questions to help you conduct your own self-checkup:

Do you have a clear vision for your business? What is it?

Do you know why your customers buy from you and why others do not buy from you?

What results are you getting from your marketing? Do you have an effective online presence on the web?

Are you collecting data or the right kind of data on your customers and competitors?

Are you keeping pace with your industry trends? If so, what are the key trends?

How are you measuring results (i.e., key performance indicators like cash flow and revenue)?

What are your key competitors’ marketing strategies?

Have you evaluated your strengths and weaknesses (i.e., SWOT Analysis)?

In summary, successful global businesses, like IBM and Google, have continuous systems in place to evaluate their performance. Let’s call this process an organizational checkup.Small businesses that want to succeed in this global and technological climate must be able to conduct this self-evaluation or checkup. This article demonstrated the relevancy of a good checkup to help improve a business by asking probing questions. In many cases, small businesses do not have to take on this organizational checkup along.There are various organizations like the Small Business Administration and local universities that can assist in this process. Have you conducted a checkup for your business this year? It’s not too late. Start the new year with a healthy business checkup.© 2021 by D. D. Green

admin / April 4, 2023

Seven Strategies to Save Your Small Business

With the imminent passage of another mega-stimulus package of nearly a trillion dollars, one thing is for sure: If you are one of the 58.6 million people who work for, run, or own a small business – there won’t be anything in it for you. And that’s a real problem; not just for you, but for our entire economy.

Small businesses (those that employ fewer than 500 people) account for 99.7% of all employers in this country and collectively contribute more than half of nonfarm private GDP. Small businesses employ nearly half of all private sector employees and create almost 80% of all new jobs. With nearly 23 million small businesses located in almost every neighborhood in the United States, it is small businesses, not the behemoths being bailed out, who are the true backbone of the U.S. economy.

While it seems unlikely that the powers-that-be will shift their focus from those with the most lobbying muscle anytime soon, whether you own a Mom-and-Pop neighborhood shop or manage a mid-market multinational, the following advice should help you remain solvent (and perhaps even prosper) as the economy continues to struggle over the next few years.

1. Become Commander in Cheap. Those companies that prove best able to survive – and thrive – when times are tough tend to have the same thing in common: They live by the mantra that Cash is King. Whether you are the CEO of a major multinational, or the sole owner of a small store in the suburbs, if you have not already done so you need to take immediate and complete control of your cash. Before you even finish the rest of this article, fire off a memo that imposes a complete moratorium on all future spending. Nothing goes out – not a nickel – without your name on it.

Lest you think this exercise will result in saving nothing more than a few pennies here and there, consider this. In 1921 the business journal Administration reported the case of a particularly penurious executive who spent an evening sorting through the waste-basket of a randomly selected employee. In the course of his perusal he came across, among other precious items, a dozen discarded clips. Big deal you say? Well, our economical executive extrapolated, if every one of the 47,000 persons in the company were to waste just one of these thirty-five cent clips per day, “in a year enough money would be wasted to buy a big twin-six Packard car.” At twelve clips each, the $197,400 he discovered in 1921 would still be a significant amount today (let alone in its equivalent of $2.3 million in 2009 dollars). Far from being an anomaly, in my ten years of working with organizations of every size I have come to discover a nearly universal truth: for every eight employees, the average organization wastes at least the equivalent of one employee’s annual wages every year.

And before you start to worry about how little time you already have without adding President of Penny Pinching to your title, let me offer a consolation. I have worked with some of the biggest, most sophisticated, most far-flung companies on the planet – and I can assure you that no matter how large or complex your small business may be, a simple process can be developed that lets you see every cent being spent in less than an hour a day. Even if you have multiple departments, divisions, locations, and managers, you can create a remotely accessible spreadsheet (complete with a column for your yea or nay), to stay fully connected to your cash. And if you really want to get creative (while at the same time proving to your employees how serious you are about waste management), drop me an email and I’ll send you directions on how to set up a simple system you can use for free.

2. Squeeze Water from a Stone. In addition to the considerable gains to be had from controlling costs, you can likewise dramatically improve profitability by taking a singular and deliberative approach to maximizing margins, controlling overhead, adopting more sophisticated pricing strategies, and more aggressively managing your cash flow.

Maximizing margins is one of the most often overlooked, and yet most financially rewarding practices a small business can engage in. Think of your Cost of Goods (or Services) Sold as the number of holes in the bucket you carry your profits home in. The higher your COGS/COS, the more it’s like trying to carry water home in a sieve. Plugging the holes allows you to keep more of what you bring in. By getting aggressive and dissecting each of the constituent elements of your per-unit costs – line-by-line, item-by-item – you will be surprised at the savings you can find; even if you re-repeat the process every few months. As a consequence of the multiplier effect, squeezing pennies out of a repetitive process, or single digit percentages from big-ticket services, can dramatically change your variable costs. Somewhat paradoxically, when business is slow it may also be to your advantage to consider actually increasing your COS/COGS. By shifting fixed Service, General and Administrative (SG&A) expenses to a more variable-cost structure when production is low, you may be better able to control costs while decreasing overhead commitments.

Controlling overhead by aggressively reducing your Service, General and Administrative costs can similarly – and profoundly – improve your bottom-line. SG&A creep is an insidious phenomenon that may well be the leading cause of business death in the United States. Think of it as corporate cholesterol. When times are good, businesses tend to develop expensive tastes and incur costs that tend to be too rich for a healthy diet; things your company doesn’t really need and that are not good for you anyway. These rich delicacies range from redundant newspaper subscriptions and professional memberships on one end of the scale, to the executive perks and labor concessions that have killed entire American industries on the other. In tough times you need to use the equivalent of a prescription strength corporate statin and rid yourself of those nasty plaques that are gumming up the works, reducing your monetary efficiency, and hardening your financial arteries. Your new standing orders have to be that everything not essential to your short- and medium-term success has got to go – stat.

Pricing strategies are one of the most often overlooked sources of free money in the small business universe. While most companies tend to take what amounts to a Ouija Board approach to determining prices, more sophisticated pricing strategies based on data you likely already possess can increase your income significantly, and literally overnight. While beyond the scope of this brief article, understanding the buying patterns of your customers can show you how raising the price of this item by just a nickel, and that one by fifty dollars, will help you actually gain customers while leaving less money on the table – and putting it in your pocket, where it belongs.

Cash flow management is another essential piece of the puzzle in your efforts to wring moisture out of marble. The Cash Conversion Cycle – a concept too often ignored by all but the biggest boys on the block – is another way to substantially improve profits without making even one additional sale. That said, if concepts like Days In Inventory (DII), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO) sound like Latin, you need to have a serious sit-down with your accountant – or, if you prefer, drop me an email and I will send you a plain English explanation. Either way, this is not one of those things you should leave to your bean counters to figure out. Cash flow decisions are a strategic, and not simply a technical or financial decision; and the decisions you do make regarding your cash management can save (or cost) you quite a bit.

While most business leaders focus obsessively on sales, surprisingly few give sufficient attention to how much of what is brought in is actually kept. Dissecting the sources of your costs and improving your internal practices can return considerable dividends, even for the most conscientious of companies.

Whatever your eventual decisions on how to best manage, reduce, and structure your internal expenses and cash flow, it is important that you make an informed decision based, if possible, on the advice of an external objective expert. As well intentioned as you or they may be, the proximity to the problem usually makes it unlikely that someone inside the organization will see the sources of significant scleroses that had, by definition, previously gone unnoticed. The minimal costs of having an expert diagnose your operations and benchmark your financials against others can payback dividends – sometimes in just a few days.

3. Focus on the Few: What Vilfredo Pareto first proved at the turn of the twentieth century is just as true today: 80% of effects tend to come from 20% of causes. What does this mean for you? As mountains of research have consistently shown, most of your profits tend to come from a minority of your customers, services, and employees. Your mission (should you choose to accept it), is to find and capitalize on those hidden treasures. Which customers should you be lavishing attention on – and which should you be inflating fees for until they either become profitable, or decide to help another firm lose money? Contrary to popular belief, not all customers are created equal. Can you identify those who are the most profitable (and understand how to get more of them), versus those who demand an inordinate amount of your time, attention, and overhead costs for what proves to be an inequitable return? And what about your employees? Who are the shining stars – and who are the black holes you might be better off without? By strategically relocating your poorest performers to the competition you may be doing yourself a significant service.

The strategy of separating the best from the rest applies equally to every aspect of your organization: distribution channels, product lines, and even your overall strategy. In every company, no matter how small and simple or large and layered, focusing on the “critical few” will help you begin to turn things around almost overnight. When you focus like a laser beam on those things that matter most, you will be astounded at how quickly your bottom-line improves. Your strategy for success: forget the rest, focus on the best. By ruthlessly ridding yourself of everything that doesn’t get you closer to your goal you’ll have plenty of time to look for rainbows after the storm has passed.

4. Draw Deeper and from Different Wells. Consider your core competencies. Is there something your company does exceptionally well? I hope so. Now consider a question you might need to read more than once: What is it you do that enables you to do what you do so well? Huh? In other words, What is it your company does (invoice processing, call center operations, equipment repair, etc.) that supports your ability to succeed in your primary line of business?

Whatever your business, there is bound to be something collateral that you do well to support your success. So here is the big question: Is there some way you can capitalize on these collateral capabilities to create an adjunctive or alternative revenue stream? If your answer is no, keep looking. In my experience, even the corner quickie mart does something in support of their primary business that would be valued by someone else. Think B2B, B2C, or LMNOP. There has got to be something you can do with what you already have to bring in a few more bucks.

And while you are looking, also consider those with whom you are already doing business. Vendors, suppliers, colleagues and customers can all be conduits to additional income. Pick their brains, conduct a survey, read tea leaves if you have to. Assume there is more business to be done and money to be made and assign yourself and everyone who works with you the responsibility of finding it. Sales are not just for salespeople; the best representatives of your company are you and the other folks who are actually doing the work.

5. Partner Up for Profit. There is an old psychological experiment they used to have students do. The Professor would send his students to the mall with the simple instruction to think the way they would if they were paranoid. What would you think about the woman who handed you that hot dog, or the guy helping you on with that new coat? The reason we don’t do this experiment anymore? Within just a few minutes, most people start to actually become paranoid – some, dangerously so. Don’t believe me? Please do – and don’t try it yourself.

The moral of the story? If you think paranoid, you become paranoid. But if you think partnering . . . Partnership opportunities abound in modern business, but all too often are ignored. Here are a few for you to consider as you put your company back on track:

Big companies call it co-opetition; you can call it what you like. By partnering up with others (even those you might otherwise consider competitors) you can realize opportunities that might not otherwise exist.

Consider the example of Larry’s Liquor Locker (a small business I just made up). By partnering with the stores owned by Harry, Mary, and Gary, can our old pal Larry increase his purchasing power? Of course he can. And while the combined economies of scale these partners realize will advantage all, who is really hurt? Sure, the supplier may have to make concessions – but our little consortium of liquor store owners are all better off. Buying cooperatives and barter agreements have been around for thousands of years. Isn’t it about time your small business formed its own?

Speaking of partners, the one’s you should turn to first are those you already have. If you have not already done so, you need to change the relationship with your employees from one of boss/worker to professionals whose interests are fully aligned. You need to remind everyone you work with that all the sales in the world won’t do any good if your per-sales profits are not what they should be. You must instill an ownership mindset in everyone in your organization so everyone you work with, from the custodian to the CFO, treat your company as if it were their own – because, truth be told, it is.

6. Share the Pain. When it comes to financial difficulties, stoicism is highly overrated. The owners and managers of small businesses typically wait way too long before they finally admit they may be in trouble. At your first indication times are getting tough you should do yourself a favor and sit down with several of your key constituencies. It may be painful, but believe me – it will pay dividends in the long run.

First and foremost, you should talk to your family and friends. You are going to be under inordinate stress as you attempt to navigate the challenges you will doubtless encounter as you navigate the turbulent times that lie ahead. Asking for the support, patience, – and perhaps a little space – from the people who are closest to you will provide much needed mental maneuvering room.

Once the family and friends are taken care of, you need to have a conversation with the company. Whether you have one employee or several hundred, you, the Big Kahuna, need to be the one to look them in the eye. Don’t hesitate to let them know that times are tough, and just how tough they are. Even if you’re not a fan of open-book management, you should take the time to quantify just how the company is doing. Describing your status on a scale of one to whatever, with clear descriptions of each of the anchoring ends (1 is Bankrupt, 10 is Big Bonuses for Everyone – and we’re at a 3) will give you the ability to quickly and clearly communicate just how dire things are. Continual updates will also allow you, and everyone else in the company, to track continued progress toward your goals. Is it possible that some folks will be frightened, and some may head for the hills? Yup. And good riddance to those who do.

The final groups you should consider meeting with when things start to really get rough are your vendors and customers. If you need their patience, if you would both benefit from alternative accommodations, ask. It is always better to prearrange changes to your relationship than to spring it on them when there is no longer any choice. If you have been wowing your customers with the intangible aspects of your services all along, you’ll be amazed at how forgiving they will be.

As the economy continues to decline your vendors may also be increasingly receptive to forbearance agreements and alternative payment arrangements, particularly when they help ensure your continued solvency. In this economy you should remember that your vendors are likely to be as interested in keeping business (and keeping their business in business) as you are. Which brings us to your next new rule: All vendor agreements are renegotiable. Do not take even long-time agreements for granted. As anyone who has ever bought a rug at a Middle Eastern bazaar can tell you, the price is never the price. If you’re not good at negotiating, get good – fast. It will end up saving you a fortune.

7. Ask for Help. Managers and owners of small businesses too often suffer in silence, even as the walls come tumbling down around them. Do yourself and your business a big favor and don’t wait until the Huns are coming over the hill before you seek out help. With the hundreds of hucksters that always seem to be waiting in the wings to bilk business owners, I can appreciate the hesitance that often comes in finding someone to guide you through troubling times. But in the same way crooked lawyers, car dealers and doctors don’t stop us from suing Buicks for malpractice, when your business is in dire straits (or any other rock band), you need to get professional help. In addition to having capabilities you may not posses internally, external experts have an advantage of perspective the people in your organization are unlikely to posses.

While I can’t speak for others (and at the risk of sounding self-promoting), over the past ten years I have never yet encountered a company that hasn’t been amazed (and mortified) to discover how much money they have been leaving on the table and flushing down the drain. The minimal cost of a competent professional could be the best investment you will ever make. So do yourself a favor and don’t be afraid to ask for help. Even if there is nothing more that can be done, at least you won’t have to end up second-guessing yourself sometime down the road.

admin / April 4, 2023

12 Good Reasons Why You Should Aggressively Seek Publicity For Your Small Business

It’s unfortunate but true that many small businesses have the attitude of “just leave me alone and let me do my thing.” They do not seek or welcome attention from any outsiders, especially if the outsiders are the media, the government, or some kind of consumer or advocacy group. It’s the classic head-in-the-sand approach: “Maybe if I ignore them, maybe they’ll go away.” Perhaps there was a time when the marketplace would tolerate this kind of fiercely independent attitude. But that time is past.Today’s marketplace is no longer merely competitive, it is hyper competitive! The shelves and racks of our stores and malls are loaded with dozens of “me too” products. Bankers now sell insurance and insurance salespeople now offer CDs. A single “mega-dealer” might carry a dozen or more car brands, and literally hundreds of models of automobiles and trucks on a single square block lot. It seems like every major interchange along the interstate now has to have at least two sprawling truck stops catty-corner from one another, with one or two fast food joints thrown in nearby. Did you ever expect to see the day when hospitals would advertise on billboards and television, like soft drinks or fast food joints?A recurring theme you will encounter again and again in my books — because I think it’s that important! — is that in this complex competitive milieu it’s critical for you, as a small business to differentiate yourself in as many was as possible from your competitors. Positive publicity is one of the most powerful, and yet under utilized promotional tools available to small businesses and organizations to help accomplish that goal. Why should my small business, agency, or group seek out positive coverage in the media? Is it really worth all the time and hassle? Here are a dozen very good reasons why you should be generating as much favorable publicity for your business, agency, or group as you can:1. It is simply a smart dollars and cents investment in your business’ or organization’s future (read that as survival). Whether you measure your “profit” in terms of dollars left over after expenses are paid or in terms of more contributions, more members, or more clients served, promoting your business’ or organization’s name and activities is no longer an optional “it would be nice if” task; it’s critical to your survival!Every positive article or photo published in the daily newspaper, every favorable one-minute clip on the early evening news, every complimentary mention in some specialty newsletter or magazine is FREE! Sure, it may cost a little bit of staff time, some duplicating and postage expense. But it did not cost you anywhere near the big bucks that the same number of column inches in the newspaper or the same amount of airtime on the TV news would have cost if you’d paid for it like advertising.For example, a half-page ad, which is about the same amount of newspaper space as a good sized feature story, will likely cost $500 to $600 in a small town daily, perhaps $1,500 in a newspaper in a medium-size market, and as much as $3,000 or $5,000 in a large metropolitan newspaper. If you had to pay for a one-minute story on the TV late evening news like an ad, it would run you $200 to $250 in a small market, $500 to $1,000 or more in a medium market, and $2,500 to $4,000 in a large urban market.State and local tourism promotion agencies generally spend most of their budgets on writing and sending out their own news releases and on bringing in travel writers and editors for what are called “familiarization tours” (known as “fams”) to generate articles and feature stories about the state or local area’s attractions.Yes, they do run paid ads from time-to-time in selected media, but this is generally only a fraction of their over all promotional budget. A state tourism agency I’m familiar with did a cost vs. return analysis on their publicity efforts. Over the years, the bureau kept records of the articles and TV features that appeared as a result of its efforts; it estimated that there had been about a 4 to 1 benefit to cost ratio. In other words, if the tourism bureau had paid for the “free” editorial space and airtime it had received, like advertising, it would have cost four times as much as it had spent on the news releases, media kits, and “fam” tours. That’s not a bad return on investment.2. You get much more “bang for the buck” in terms of audience attention with editorial coverage. This is a kind of corollary to number 1, the opposite side of the same coin; only here the focus is on audience attention rather than on dollars spent. What I’m suggesting is that on an inch-for-inch basis (using print media) or a minute-for-minute basis (using electronic media), you will get far more reader or viewer attention from free editorial space or time than you will from an equal amount of paid ad space or time. In other words, they — whoever it is you’re trying to reach — will be much more likely to actually see, and even more importantly, pay attention to your message if you are able to deliver it through a positive mention in the newspaper or on a TV newscast than they are through paid ads in the same media.Just think for a moment about how you read newspapers and magazines, or how you watch television or listen to the radio. If you’re like most people, you read most of the articles (or at least the headlines) in the newspaper but at the same time, skip over the ads. That is, unless you’re specifically looking for something. For example, you need tires so you look for an ad from someone who is having a tire sale; you’ve been thinking you need a new sport coat and you notice your favorite shop has announced its new spring arrivals; only then do you notice the ads. Or you watch the TV news stories with interest but pick up the paper and read a few paragraphs or carry on a conversation with your spouse or go to the kitchen (or bathroom) or just hit the mute button during the commercials! Sound familiar?I know of a small manufacturer of a specialty garden tool who has tried display ads in various gardening magazines, but finds he gets two, three or more times the number of responses results, in terms of inquiries or actual orders, from just one mention in one of those same magazines’ new products columns.3. It’s just good sense to build your “bank account of goodwill” with the media and the community. If it’s true we’ve moved into a new era of competitiveness in the economic marketplace, perhaps it’s only slightly less true to say that we’re also entering a new era of contentiousness in our organizational and personal relationships. Individuals and organizations seem willing to sue one another at the drop of a hat. Advocacy and special interest groups, with their “in your face” confrontational approach to everything, sprout with the ease of dandelions. The Internet has become easily the world’s most powerful word-of-mouth medium (read that as “rumor mill’), where anyone can say just about anything about anyone else, and often does. Legislators promulgate laws that run to 1,000 and more pages. And regulatory agencies issue voluminous and highly technical manuals of rules and regulations on practically a daily basis. And, of course, the media seem to delight in reporting corporate scandals and controversial issues.What seems to be emerging is a new expectation of corporate and institutional accountability on the part of the public. Perhaps it’s the long-term fallout from Watergate, Three Mile Island, and, more recently, Enron and Worldcomm, in which there was a perception that the politicians or corporations involved were less than open and honest in their dealings with the public and the media. This perception contrasts especially with the public’s highly favorable attitude toward Johnson & Johnson after that company’s enlightened handling of the Tylenol tampering case in 1982.It seems clear that if it hasn’t happened already, we are certainly nearing the end of the time when even small local businesses or organizations can get away with a “just leave me alone to do my thing” attitude toward the community and the media.Sooner or later, every business is likely to need something from the community: a zoning change to put up a new building, a variance on a sign ordinance, a city (or county or state) economic development grant (or loan guarantee) to create more jobs, a long-term lease to use city property for storage purposes, permission for a new curb cut, or an extension to a street or alley to improve access to its property.All these “needs” involve an approval process that almost invariably includes a public hearing, with the opportunity for interested or affected parties to have their say. Very often that “say” takes the form of virulent and totally unexpected opposition.Now, I’m not suggesting that a regular program of positive publicity for your business will guarantee that you’ll never be faced with neighborhood opposition to your request to rezone a piece of property so that you can build an addition to your building or that some local advocacy group will never issue a critical statement to the media finding fault with one of your policies or procedures.However, what I do suggest very strongly is that a diligently conducted publicity program that regularly generates favorable coverage in the media is like building a bank account of goodwill with the community, the media, local government and even regulators. Even if it can’t altogether head off any given controversy – and, anyway, how would you ever know if it did? – it may well mean that you’ll at least get less hostile, and perhaps even favorable, treatment in the media, which in turn means less harsh treatment in the court of public opinion.4. You simply have a right to more media coverage. As a business or organization that involves people and interacts with the community, you simply have a right to more space or airtime than you are probably now receiving. It’s part of the fundamental openness of the democratic process. The fact is, most businesses or organizations do not get their fair share of media coverage; usually because they haven’t bothered to tell the media about the interesting and legitimately newsworthy things they’re doing.When I was a newspaper reporter, I always looked forward to doing feature articles on local businesses for the traditional year-end special section — we called ours the “progress edition.” I was constantly amazed at the many fascinating and previously untold story ideas I discovered in virtually every business or organization I visited. When I would tell the folks at the business, “This is a great story! How come you never told anyone about it?” they would look at me disbelievingly and answer, “Gee, we never thought anyone was interested.”I think it may be one of those “can’t see the forest for the trees” things. As a business or organization that is involved in its activities on a day-today basis, there doesn’t seem to be anything unusual or noteworthy about those activities. You take for granted that if you’re familiar with your activities, everyone else is as well. But the fact is, most small businesses and organizations have many reasons for sending out a news release, a topic we’ll explore much more fully in the following chapter.5. It’s free! For often capital-poor small business start-ups, the free publicity that is available through the media may be the only way they can afford to reach the public. Charles A. Hillestad, who, with his wife, is the owner of the Queen Anne Inn, says he used “audacious” public relations to help launch their ten-room bed and breakfast operation near downtown Denver, Colorado, according to an article in Marketing News.Hillestad was able to generate mentions of his inn in such prestigious publications as the New York Times, as well as in Inc., Elle, and Bridal Guide magazines. Among the various “tricks” he used to generate free publicity was sending articles about the inn to magazines outside of the travel industry. For example, by customizing articles to the specific editorial approach of each magazine, like focusing on the inn’s antiques for an antiques magazine, or sharing some of the inn’s recipes with a food publication.6. It’s more believable (and more memorable). Even if your business can afford to and does use paid advertising as a promotional tool, you should still make the maximum possible use of publicity. Why? Because people simply have more faith in what they read in the editorial columns of a newspaper or magazine and in what they hear from TV or radio commentators than they have in paid advertising.News is more believable than ads. Everyone “knows” that ads are mostly fluff and hype (read that as exaggerations, if not outright lies). And everyone “knows” that if you read it in the newspaper or see it on TV the news that somebody has (more or less) checked it out and that, therefore, it’s (more or less) “the truth.” Now, I recognize that both of those statements are gross over-simplifications, but I would also suggest that it’s a pretty accurate of our general reaction to news and ads.What’s more, news articles are generally more memorable. My friends Xochi (pronounced so-chee) and Mitch Pannell opened their flower and gift shop several years ago. Just as their grand opening date neared and they were eagerly anticipating the arrival of their inventory, UPS went on strike. With their opening just days away and their shelves virtually empty of gift items, Xochi called the local newspaper, who came and took a picture of the couple looking anxiously out the front window of their store hoping to see a UPS truck. The photo ran on the newspaper’s business page under a headline that said “Where’s UPS?” What is interesting about this little anecdote is that now, years later, people still mention that photo.7. You can definitely “sell” with publicity. Sales pitches are by no means limited to paid advertising. I return to the tourism agencies, and, by extension, the entire hospitality industry, mentioned earlier, as a classic example of what I mean. Just look at how effectively they have used positive publicity as their primary sales tool over the years. Make no mistake about it, all those rah-rah feature articles about fun places to go in a travel magazine, and all those favorable restaurant reviews in a newspaper are most certainly selling you on those spots as somewhere you should visit.What’s more sales-oriented than a direct-mail catalog? Most generally it’s nothing but ad-like pitches for some company’s products, right? But take a look at the Patagonia catalog, a highly successful outdoor clothing and equipment mail-order house. You’ll find page after page of “articles” written by staff members and customers about their adventure trips where they used their Patagonia clothing and equipment, rather than the more conventional photos or drawings accompanied by a description of the product and the price. Patagonia catalogs are avidly read and jealously guarded, more like a treasured magazine than just another mail order catalog.8. Publicity can even generate revenue. More than one organization has successfully converted its free-distribution newsletter, originally published as a public relations or promotional tool, into paid subscriptions. This has been a particularly successful approach in the health and fitness industry.
In addition, there is always the possibility of putting together a collection of articles you’ve generated and originally distributed as news releases to generate free publicity into a pamphlet or booklet and marketing it. For example, this might work well for a how-to business, such as a hardware store or home center. Finally, sometimes you can even get paid for writing an article for a magazine or journal, especially if you have some unique expertise to offer (see item 12 below).9. Regular exposure in the media legitimizes your business. As mentioned earlier, there is a subtle but nonetheless very real perception people have that if something’s in the paper or on TV it must be important. The media themselves foster and promote this attitude because it makes their role seem more important, more indispensable. If your name shows up regularly in a positive way in the media, it helps pave the way for when your business goes to see the bank for an expansion loan. Regular mentions in the media say to the community, “We’re here to stay. We’re neighbors contributing to the economic well being of the community. We’re not some fly-by-night outfit that’s here today and gone tomorrow.” Regular mentions of your business and its people adds to your prestige, your credibility, your stature.10. It can help you recruit good employees. You might think this item ought to be included under the last one, but actually it deserves stand-alone status because it’s going to become increasingly important in the years ahead. Changing demographics and life-styles suggest that there will be increasing shortages of skilled and experienced workers in many fields.So, when you run your ads in the classified section or post a job to an online job bulletin board for the people you need to hire in order to expand and grow, what’s their reaction going to be? Are they going to recall reading and hearing positive things about your firm and therefore think, “Yeah, that’d be a good place to work. You can get ahead there; they always seem to be promoting people. They seem to be interested in their employees. Wasn’t there something in the paper about a new training program they just aalunched?” Or is their reaction going to be something like, “Why would I want to work there? I’ve never heard of them.”11. You can do it yourself. If you don’t have a background in marketing and promotional work, successfully generating favorable exposure through news releases is easier to accomplish on a do-it-yourself basis than through paid advertising. A paid ad campaign, especially if it involves a highly competitive marketplace and extensive use of mass media (particularly TV), requires a good deal of sophistication to be effective. With publicity, you can “dash off” a basic news release and still get the attention to a reporter or editor.12. You can become a media “source.” Finally, it’s simply a good idea to develop relationships with the media in the same way that it’s a good idea to develop other kinds of friendships in the community. Today’s buzzword for this is “networking.” The fact is, writers and reporters are always on the lookout for “sources,” especially at the local level. For most reporters, especially at the local level, nine out of ten of their “sources” are people in various specialized fields whom they have come to know and trust and whom they call on for background information to help them understand a complex issue they’re reporting on. In many case, a “source” is quoted directly, thus giving yet another positive plug to the business or organization the source is affiliated with. But, even you’re not quoted directly in the story, think of the important influence you could have on how the media reports information vital to your field.Publicity is free or very low in cost, especially by contrast to paid advertising. Publicity is a very powerful promotional tool, perhaps even more powerful than advertising. Your competition is probably not utilizing publicity as a major part of its promotional program, since so few small businesses do. And publicity is relatively easy to accomplish, in fact, with the right approach, the media will very likely do most of the work for you. With all these advantages, how can you not take a good look at implementing a more proactive publicity program?