The Entrepreneur's Opportunity

This is an old joke, but I have always loved the way it summarizes the entrepreneur's challenge - by focusing the small business strategy on the simple question of outcompeting.

Two hunters were out in the woods one day when they heard the snarl of a grizzly bear. One hunter began to run, while the second stopped to put on his running shoes. "What's the point of that?" asked the first hunter. "Do you really think you can outrun a grizzly?"

"No," said the second hunter, straightening up. "I only have to outrun you."

On that optimistic note, please accept my best wishes for Christmas and the holidays.

Look for (much) more activity on this blog in the New Year!

The Power of Options

I was talking recently to an insurance agent who specializes in working with high-income professionals and entrepreneurs. He’s quite selective and does very well, making sure that prospects understand his expectations and ways of doing things before he takes them on as clients.

Even so, however, he agrees that entrepreneurs can be a tough sell. He lives by two rules:

1) Full disclosure: He makes sure clients understand what he sells, why he sells them, and where his income comes from. And he makes sure that he personally owns every product that he sells. If it’s not good enough for him, it’s not good enough for his clients.

2) Options: Once he understands his client’s needs, he researches them diligently and presents three or four different ways the entrepreneur can achieve his or her objectives. That gives him a chance to educate his clients by going through the alternatives, and, presumably, gives the entrepreneur a comfortable feeling of having some control in the process.

You can frame the planner’s conclusion:

“To get an entrepreneur to buy anything, you have to have full disclosure and options.”

This just in: New strategies needed!

This just in. IT solutions vendors and resellers targeting SMEs need different tactics and messages than those commonly used to sell to big business.

That’s the unsurprising (but always relevant) conclusion of a new report by ConnectITnews.com, which recently published an article on the latest market research from London, Ont.-based Info-Tech Research Group.

After surveying how 4,000 companies buy technology, Info-Tech’s Indaba division found “a shift in the balance of power in terms of who is actually making the decisions," according to Ed Daugevietis, Information-Tech’s senior analyst for network technology.

The firm found that at companies with 200 or more employees, specialized IT executives made 55% of technology purchasing decisions. But below 200 employees, “there was a stark difference in behavior," said Daugevietis. In small firms with fewer than 40 employees, 80% of technology purchasing decisions were made by non-IT executives.

The proportion of decisions made by IT specialists rises with the number of employees. At companies with 41 to 100 employees, 30% of buying decisions are made by IT management; in companies with 101 to 200 employees, IT managers make 45% per cent of decisions to purchase.

At smaller firms, buying decisions tend to be made less by teams and more by individuals. "Not only is IT not making the decisions, but they are not even in the room," said Daugevietis. “They are frozen out.”

To read the whole article, click here.

Does your company know who makes the decisions to buy your product? If it’s an entrepreneur – not formally trained in your industry, and already making way too many decisions every day - are you communicating to them properly?

A few hints for vendors in this category:

* Drop the jargon now. Focus on benefits and problem-solving, not on technological bells and whistles.
* Do your own survey to find out who’s buying your products and services. Once you've analyzed the results, get them into the hands of your marketers, salesfolk and customer service reps fast.
* Invite end-users to a focus group. Get to know how they think. What language do they use to describe your product and the needs it serves? Again, share the results with your field staff, whose job it is to communicate with these people.

How not to create a small business report

Since I spent so much time last week critiquing the ads in the Financial Post’s Special Report on Small Business, I thought it might be interesting to review the editorial content as well. What does it tell us about the state of small business in Canada today?

Here, according to the Post, are the key issues facing small business:

Pg. 1: Rising fuel prices. Hmm… the story itself says business optimism is nearing all-time highs. It even concludes that high energy prices have “just become part of doing business in today’s global marketplace.” (Yawn-inducing cliché alert.) They put this story on the front page?

Pg 1: Tips for taking advantage of the strong Loonie. Ya gotta love this sentence: “According to one expert, Canadian small businesses tend to be less exposed to currency fluctuations than larger ones because many, particularly service-oriented businesses such as barbershops and snow-removal contractors, do not deal in global markets.”

2. Looking for early-stage “angel” investors. Quote: “The challenge is to maintain the energy, cohesion and motivation that they’ve created while accreting.”

2. Tapping private equity (mainly for entrepreneurs looking to get out).

So far I would say this material would appeal to about 1% of the entrepreneurs in Canada. But let’s keep going.

3. SME survey results indicate entrepreneurs want more startup help from government and feel they spend too much time finding new customers. Plus: few small businesses have document-management strategies!

4. The infamous article on cross-border shipping entitled “Customs broker helps slow border tie-ups.” The bottom line: invest in compliance systems. Who do they think will read this bilge?

5. Managing the dynamics of a family business. An OK story addressing real-life problems many entrepreneurs will identify with. Marred by a reference to a “recent” CFIB study that came out a year and a half ago.

8. “Where to start on IT solutions for your startup.” A random review of business technologies, from integrated information systems to instant messaging and Skype. A conversation starter for absolute newbies.

9. How to keep hackers and computer viruses out of your information systems. This story might have attracted readers if the writer had described the problem before prescribing all these solutions. Journalism is like sales: Pain first, solution second.

10. “Moms make good entrepreneurs.” It’s an American story from the NY Times News Service. Too bad the Post didn’t think it worth talking to Canadian women entrepreneurs for this section.

11. “Don’t stress about time,” a story on time management. This would be very useful if it contained time-management tips. Instead, it’s about how entrepreneurs should manage their time better, but often don't. Another gem from the NY Times News Service.

12. A bootstrap marketing story on networking and word of mouth. A good topic, though too theoretical: don't they know that entrepreneurs want short, punchy ideas they can use?
Note: In the second paragraph a business prof advises entrepreneurs to “fling themselves into a crowd and start making noise.” No wonder (see pg. 3) they're spending too much time finding new customers.

12. A story on international trade courses offered by the Forum for International Trade Training. Useful but dullll.

14. “Making a success of a family affair.” I thought this back-page story might be the exciting profile of a dynamic Canadian entrepreneur that I expect in sections like this. Except that the story was written in New York about a Portland, Oregon company and reprinted from London’s Financial Times.

CONCLUSION: Small business is an exciting, dynamic force in Canada for innovation and growth. The Post's tribute to Small Business Week misses everything.

(Maybe I shouldn’t have been so hard on the advertisers, since the editors themselves were barely trying.)

More small-biz reports, more bad ads

The Globe and Mail published its “Report on Small Business” today – yet another newspaper supplement designed to cash in on Small Business Week.

What’s interesting is that the Globe also has a quarterly magazine called Report on Small Business. So consistent branding is obviously not a priority for them.

The Globe section contains most of the ads from the National Post supplement that I blogged about yesterday also. But there are some new ones too, so I’ll critique those later on this week. But once again Rogers rules the whole section with its splashy (and well executed) two-page spread.

I feel guilty saying nice things about Rogers since I worked there for a time. But they clearly spotted the opportunity. Perhaps they knew that the banks and tech companies would approach these small business sections with a ho-hum, got-to-be-there-but-don't-want-to-spend-much-time-thinking-about-it attitude. So they spent some money, demonstrated some real energy, and stole the show.

Your takeaway for today: If you're not going to advertise with enthusiasm and creativity, why advertise at all?

Staples gets down to business

Roger Pierce and Andrew Patricio of Toronto-based BizLaunch have just announced an alliance with Staples Business Depot that will see them holding free small business seminars in Staples stores on weeknights across the GTA.

If they get the turnout they're looking for, Staples and BizLaunch hope to extend the program to more stores across Canada.

Congrats to Andrew and Roger, who have been working very hard to promote small business through their courses for the past few It’s also a good deal for Staples, which is showing it’s serious about helping its customers succeed. Small business owners are eager for information and contacts. But they don't particularly want to get their education from books or extended courses, and they're tired of networking events where they just get hit on from every direction.

“Almost one million Canadians will start a small business during the next year,” says Roger Pierce. “There’s a huge thirst for small business learning and these in-store seminars will make it easy for entrepreneurs to get it.”

BizLaunch's topics include Your Business Plan in 10 Easy Steps, How to Market Your Business on the Internet, and How to Sell Like a Pro. Not brain exactly brain surgery - but it's exactly the solid, practical info most business owners need.

You’ll find the seminar schedule here. Courses start Oct. 10 and run through Nov. 30 on weekday evenings (7-8:30 pm) at 13 GTA Staples stores. Best of all, according to the press release, “Seminar attendees also receive money-saving product offers and a chance to win prizes.”

If you're trying to understand and influence the small business market, check out the schedule And get thee to a Staples store.

Screw the Portage Trail

For today's key insights into the febrile minds of Canadian entrepreneurs, I present this hard-scrabbling evidence.

These pics come from an online photo album that Toronto entrepreneur Michel Neray (www.EssentialMessage.com) created of his recent canoe trip in the Ottawa Valley. I refer not so much to Brent and Stuart (I don't know them) but to the picture at right.

"Screw the portage trail" could stand as the timeless motto of entrepreneurs across Canada. Sure, the portage trail is likely easier, and undoubtedly safer. But it's also longer, and likely dull. If the point of a canoe trip is to be on the water, entrepreneurs want to spend as much time as they can on the water.

Impatient? Yes - though most entrepreneur would prefer to be labelled focussed.

The natural entrepreneurial inclination is to climb the rock, haul up the canoe, and get on with it. And not just because they like to work. Because they are more goal-focussed than most people. They see the big picture, and are eager to bring it about.

Or as Michel puts it in his album:

For more tripping pictures (you can also see how they lost a paddle and improvised a new one out of sticks, which is of course another another fine entrepreneurial metaphor), click here.

"I'm just a bad employee"

Nathan Kaiser is Seattle entrepreneur who interviews Internet entrepreneurs for his website, nPost.com. It's a great place to catch up on interviews with young, cutting-edge entrepreneurs and study how they think and act. Tremendous insights to be gained.

Consider these comments from Leonard Brody, the Vancouver-based CEO and Founder of NowPublic. He does one of the best jobs I've seen in explaining how an entrepreneur's life differs from that of a standard corporate manager/employee.

"This is my fifth company. Frankly, there's no divine inspirational moment. I'm just a bad employee. I don't answer to people particularly well and I tend to be a much higher level thinker so where my thoughts are typically fifty thousand feet in the air, it's very difficult I think, when you're working in a larger organization to be creative.

"... Twelve years after starting my first company I realized that have a job is quite luxurious. You show up there's a desk and a phone. There's lunch. You don't have to worry about who is keeping the lights on. You do your job, you work and typically you go home and the stresses of work, while you may carry little bits of task-related things you have to do, the overall direction and strategy and vision is not really in your hands. There is an element of peace of mind you've got that you wouldn't have if you were an entrepreneur.

"The luxury that you trade off for that is having to deal with other people's politics and the organizational problems. It is an intense ride being an entrepreneur. I think most people underestimate that. I think they think it's the easiest thing in the world. It's a wonderful thing to work for yourself and there's no stress. Stress is ten times what it would be in the workforce, but I wouldn't have it any other way."

Read the complete interview here.

What do entrepreneurs want? Help.

Dave Free thought he had a service that marketing-oriented business owners would kill for: "an inexpensive, do-it-yourself system to collect customer feedback, generate referrals and stay in touch with their customers." It was a way to ensure their customers are happy and get them talking to their friends. And according to Free, testing showed users received substantial benefits, at low cost.

Funny thing, though. "As we've met with business owners in person or attracted them to our website, it has become clear that most of them don't want to be taught how to use the tool. They don't have time. They would much prefer to pay for a service."

Like many marketers before him, Free overestimated business owners' interest in learning new processes - even if it helps them save money. Time is their most precious commodity - and on their endless list of things to do, learning to use your service ranks, oh, somewhere about nowhere.

The ironically-named Free is now revamping his pricing model to cover the additional service his company must provide. "Some small businesses may balk, but I am now convinced that there are more small businesses looking for a fillet on the platter (complete with a wedge of lemon) than those interested in buying a fishing pole--even if it comes with a fly-tying kit."

Very interesting post from the front lines of small business marketing. Read the whole post here.
(Thanks to Dean Jones for the heads-up.)

Keep it Simple!

I had a fascinating discussion today with a very frustrated vendor who targets small business.

They have a complex but very useful robust service for small business, and it’s very well priced. I can't imagine any business not getting its money’s worth, and much more, from their product.

Unfortunately, the prospects aren’t buying. Even though these services have been carefully targeted to the real needs of small business , the business owners remain skeptical and uninvolved.

I can't say much more due to client confidentiality, but I think there are three problems here, all of which are commonly encountered in selling to small business.

1) The client is trying to do too much. Its offer is bold and feature-rich. It’s like a VCR with too many buttons; I think the average entrepreneur has trouble taking it all in at first glance. And as we’ve said in this space before, even the best offers rarely get a second glance.

2) The client is trying to change behaviors. To take advantage of these services, most small business owners will have to change the way they view many of the functions they normally do. They’ll have to accept new, more sophisticated processes. While most of them need to make these changes, marketers (especially to small business) should never underestimate the difficulty of change.

3) The client is moving too fast. They need to start small and win the market’s trust before they can expect to sell complex integrated services. The solutions they're selling are valid, but they're not on the prospects’ priority list just yet. Keep it simple: Getting a few early wins would go a long way toward creating value for their prospects and thus build the trust needed to move them to the next level.

Entrepreneurs are no dummies. They know successful change is hard to achieve. Unless you make your offer bite-size and (relatively) risk-free, they're likely to take a pass.

That may be a mistake in the long run. But most entrepreneurs have enough on their plate dealing with short-term problems to worry about the long run.

How are entrepreneurs changing society?

Thinking about this subject on the dock at the cottage this weekend, I came come up with a list of five Canadian entrepreneurs who are changing society today.

In no particular order:

* Former eBay president Jeff Skoll was an early shareholder and the first employee of the online auction giant. Not only did the Montreal-born engineer help change the way the world buys and sells, but his Jeff Skoll Foundation now seeds social-entrepreneurship projects around the world, giving low-income societies the tools and motivation to help themselves.

* Energy Savings Income Fund is probably the largest business in Canada ever founded, built and owned by a woman. Rebecca MacDonald has sweated bullets and survived infuriating government policy reversals to give consumers a new way to save money on utility costs – and provide an exciting new role model for Canadian women.

* Jimmy Pattison, the former Vancouver car dealer, runs a mammoth personal empire that’s involved in advertising and publishing, supermarkets, real estate, transportation distribution – and still owns more than a dozen auto dealerships. It’s Canada’s third largest private corporation, and he says he’s not leaving it to his children – so I suspect he may emerge as one of Canada’s largest philanthropists.

Best of all, when Vancouver’s Expo86 went off the rails more than 20 years ago, Pattison took more than a year away from his business to whip it into shape. At a crucial time, Jimmy Pattison bailed out Canada

* Mike Lazaridis combined his boyhood love of radio and computers and developed the always-on wireless email device now known as the BlackBerry. He’s had a lot of help from his co-CEO, but it was Lazaridis' vision and curiosity that created Research in Motion and changed the way business communicates.

* Moving from BlackBerries to cranberries, there's Martin Le Moine, founder of Quebec-based Fruit d'Or, North America's first large-scale organic cranberry producer. Developed out of a hobby farm intended for Le Moine’s “retirement,” Fruit d'Or supplies dried and frozen cranberries and blueberries to food processors for use in trail mixes, drinks, cereals, granola and nutrition bars. He’s leading awareness of the health benefits of cranberries, and creating jobs in rural areas that need all the employment they can get. "I wanted to do something good," he told PROFIT Magazine this spring when Fruit d’Or was named Canada’s third fastest-growing company, "not just grow cranberries for the sake of growing cranberries."

Why do entrepreneurs matter? They're building Canada’s 21st century economy, they're changing lives and doing good. And their impact has never been greater.

What is an Entrepreneur?

"An entrepreneur is not necessarily a risk taker, but a risk reducer. Each day at work, the entrepreneur seeks to make decisions to increase the longevity of the business and diminish the risk.

"And yet, herein lies a paradox. For an entrepreneur, lack of growth (and uncertainty) is like death. When things start becoming too predictable, the challenge ebbs away. It is then time for a new dream, a new vision."

Rajesh Jain (founder of India's first portal and its first web services company).


"An entrepreneur to me just means someone who thinks out of the box and they’re on a different beam. 1 + 1 doesn’t equal 2. 1 + 1 equals 5 to them, somehow.”

Michael Crooke, President & CEO, Patagonia, Inc.

No humor please, we're business owners

I saw this piece of direct mail today from Bell promoting their Sympatico High Speed Unplugged Internet Service. It's not directly targeted at CEOs and entrepreneurs, but at travellers who will pay $45 a month (and up) to connect to the Net from offices, homes and airport lounges across the country.
Which means business owners are a big part of the target market.

In my previous post (below or here), when I advised marketers to "use humour sparingly," I wasn't thinking of animated beavers specifically. But I should have been.

To paraphrase and repeat: When marketing to CEOs, no cartoon beavers.

How to reach the CEO

I was talking recently with a prospective client who was keen to target CEOs. And while I tend to think of myself as the “entrepreneur” guy, in truth, I have been writing for CEOs for 25 years.

Not only the CEOs of entrepreneurial companies, but of big businesses as well. My education in journalism came at the Financial Times of Canada, the weekly business tabloid that aimed at top corporate decision-makers.

In six years I went from temporary summer replacement to managing editor (the guy who runs the newsroom). The reason? With a lot of patient coaching from terrific editors such as David Tafler, Paul Nowack, Terry Corcoran and Ron Blunn, I figured out what it takes to engage the CEO.

Here’s what I had pounded into my head every week about catching the attention of CEOs:

* Offer them an advantage. Call it a benefit if you must, but these are competitive people. They prefer solutions that do more than just help them – they want products, services and information that put them ahead of the other guys.

* Keep it relevant. You have to be as focused as they are. As soon as you appear to wander or go off track, CEOs will turn the page, change the channel, or start looking at their watch.

* Be timely. When they need you, they need you now. If you get to them a day late, you've lost the sale.

* Be specific. Don’t just say your solution can boost the bottom line. Explain quickly and exactly what your product or service does and how it will help them.

* Use clear and simple examples. Don’t expect them to connect the dots for you or reach the conclusion you want. Spell it out.

* Use humour sparingly. If they don't find it funny, they’ll think you're wasting their time. And there’s no worse sin than that.

(Click here for my tribute to Ron Blunn, one of my editors at the Times, who passed away in June at the age of 56.)

Direct Mail that almost worked

Direct mail is a lost art. As consumers, we’ve come to recognize time-wasting ad material even when it comes in a sealed envelope, and we automatically file it where it can do the least harm.

But then there’s this DM package that arrived in my mailbox a few weeks ago from Bell Canada. It begged to be opened. When you looked at the transparent back of the envelope, you could see this 5x7" "Open for Business" sign, just like you might find at a quality stationery store.

You tear the envelope open and it’s exactly what you thought – a very cool “Open for Business” sign on heavy, glossy stock. High quality and tough enough to put on your office door or in the front window of your store.

The back of the card offers this pitch: “Visit www.bell.ca/open to log in with your enclosed Preferred Business I.D. now!”

That’s not exactly a strong benefit statement. But the “Open” card is so cool that you're ready to give Bell the benefit of the doubt. So you actually look at the color brochure that came with the sign. Although the headline is vague (“We’re Open for Your Business 24/7!”), the thematic link to the sign is so strong that I went ahead and opened the four-page brochure.

Alas, this is where it all breaks down. You get a two-page spread about – well, something. It has product demos that have something to do with a BlackBerry, it offers opinion polls from Canadian business people, a Solution Generator (“for a customized wireless recommendation”), and BizNews articles that offer “the expert opinion and newsworthy information you want to know.”

So, I guess it’s some sort of website. Does it have a name? A brand? Apparently not.

The marketing bumph calls it, variously, www.bell.ca/open (which strikes me as an address, not a name); “one valuable resource for everything you need” regarding wireless solutions; “one convenient and easily accessible place”; “access to instant information for all aspects of your business”; and, “the site.”

The d-m guys got the concept right. They created a must-open package that arrests the attention of business owners. But boy did the product copywriters let them down.

Still, everyone who got the package also received their very own “Preferred Business I.D.” password that provides “open access” to the site. There’s nothing entrepreneurs like better than feeling like a VIP, so maybe some of them went to the site just to see what preferred benefits were on offer.

But if they did, they were proceeding on curiosity, not in search of a product or benefit. Which means that while Bell might get them to go where it wanted, these visitors are ready to bail at the first sign of a hard sell – or any evidence that they're not as special as they’ve been led to believe.

Will Bell be up to the challenge? Is Donald Trump’s hair colour real? Check out our next post for the gruesome details.

Marketers' biggest mistake

What's the worst mistake big-business people make when marketing to small business?

Warrillow & Co., a Toronto-based company that researches the small business market on behalf of bigger clients, asked that question of Gary Slack, chairman & "Chief Experience Officer" of Chicago-based Slack Barshinger, an integrated marketing agency focussed on business-to-business. Slack Barshinger was BtoB magazine’s 2006 Midsize Agency of the Year, and the Business Marketing Association’s 2006 Agency of the Year.

Warrillow: "What’s the biggest mistake you see enterprise companies make when they target small businesses?"

Slack: "I think the biggest mistake we see enterprise firms make is assuming they understand the needs, challenges and mindset of their small-business customers and prospects. We still too commonly encounter marketers who try to arrive at the answers to critical questions by arguing them out around conference tables rather than doing the research required to really understand the marketplace.

"On top of that, we also see enterprise companies sometimes make the mistake of assuming that small companies are the same as their own company – for example, large, bureaucratic, territorial and slow to act. They don’t sufficiently appreciate how quickly decisions can be made at a smaller company, assuming you have reached the right person or persons with the right message.

"Last but not least, we’ve also found that enterprise firms sometimes make blanket assumptions about the SMB buying process related to their product or service... assumptions that may prove incorrect. In the chaotic world of SMB life, job descriptions cover a fraction of what an individual actually does, and research is needed to truly understand all the potential players who might be involved in a purchasing decision, what information those individuals will seek, their various pain points, and what steps they will follow in their firm’s buying cycle."

In my opinion, the trouble with researching small business habits is that they're so different. A focus group of 10 people couldn't begin to cover the broad spectrum of possible small business attitudes and behaviours. Yet quantitative research is so limited in terms of covering multiple options and open-ended behaviours and attitudes.

So what's a marketer to do? Cover off multiple options: one-on-one research and experience, small-group interviews, and quantitative surveys. The hard part, though, it to synthesize the information and convey the resulting intelligence and insights to everyone in your marketing, product development and executive teams who needs to understand these markets.

Fortunately, technology has come up with unique new solutions for that. Internal blogs and wikis are great ways of recording, sharing and understanding an ongoing wave of information. And you can control access to any participants you wish.

I know, I know. Something new to research. But don't worry. Blogs and wikis are easy to learn, simple to use and easy to set up, yet cost next to nothing.

And they're a great way to ensure that your hard-earned research gets understood and gets used.

For more of Warrillow's interview with Slack, click here.

Keep it short, Stupid!

There's a saying in marketing that long copy is better-read than short copy - if its value message is sufficently compelling.

Does this rule apply to small busines owners? Probably not.

Consider the entrepreneur I met with today. We were talking about getting phone and e-mail messages through to business prospects, and his view was this: "I never write or read long e-mails."

I was shocked. He really ignores e-mails of more than a couple of pragraphs? Yep, he said, although he admitted that missives from family and friends might get through his screen - but not business contacts.

And isn't he worried about missing something important? Hasn't this practice come back to bite him? His response to both questions: "No."

But then, he said, most of his e-mail comes from other entrepreneurs and people who are used to working with them. So they follow pretty much the same philosophy as he does.

In small business, brevity is the soul of profit. How quickly does your messgae get across?

Can small business use your site?

Internet “usabilty” expert Jakob Nielsen is puzzled.

In an e-mail newsletter article today, he writes about business to business websites – and why they're so hard to use.

“User testing shows that business-to-business websites have substantially lower usability than mainstream consumer sites,” says Nielsen. “If they want to convert more prospects into leads, B2B sites should follow more guidelines and make it easier for prospects to research their offerings.”

Nielsen says many B2B sites are “stuck in the 1990s” in their attitude to the user experience. They emphasize internally focused design and fail to answer customers' main questions.

“These sites haven't realized that the Web has reversed the company-customer relationship,” says Nielsen. “Most online interactions are demand-driven: you either give people what they want or watch as they abandon your site for the competition's.”

In Nielsen’s user tests, B2B sites earned a mere 58% success rate (measured as the percentage of that time users accomplished their tasks on a site). Mainstream websites had a success rate of 66%.

Here’s the puzzle. “Considering that there's immensely more money at stake for B2B than for business-to-consumer," says Nielsen, "it's astounding that B2B sites offer a much worse user experience.”

For pete's sake, put the customer first.

For Nielsen's full details, click here.

Interested in usability issues? Canada now has its own usability blogger: Dmitry Buterin of Bonasource. He's actually pretty good (so you'd better hope he doesn't find your site). Click here for his blog, Blinking VCR.

Move your prospects forward, faster

I have a professional services client in Toronto that is very interested in the entrepreneurial market, so I have been working with them to help them understand better how to identify and work with growth entrepreneurs.

Yesterday we held a session with one of Canada’s top growth leaders as he candidly outlined some of the problems he has faced in his business.

One of his comments should be of immense interest to anyone selling services and systems to small business.

Every entrepreneur in a growing business faces a conflict between trying to develop the staff that has been with the company for a long time, and bringing in more experienced professionals who really know how to do the job. Essentially, the conflict is the business’s need for greater professionalism vs the entrepreneur’s sense of loyalty to the people who have helped the company grow – but may no longer be the best people to help it grow further.

This entrepreneur admitted he was very slow to resolve that conflict. In the end, there was no doubt – without more professional management, his company was doomed. He took the plunge and brought in new people with the skills he needed. Some of his long-serving colleagues accepted reassignment; others accepted severance.

Most services companies targeting small business are selling professionalism. But not all entrepreneurs are ready to buy. Like yesterday’s guest speaker, many put it off for years. This suggests that there is a huge opportunity to sell more professional services to more entrepreneurial companies earlier – if you can help the leaders deal with their natural reluctance to upset the delicate balance of people and skills they have set up in their businesses.

How can you get loyalty-minded entrepreneurs to move forward faster?

Acknowledging their dilemma is one step. Explaining how other entrepreneurial clients have successfully solved this problem would be another. Paint a picture of what success looks like – and why so many more people – staff, customers, other stakeholders – will be better off in the long run.

Review your experience and ransack your client list to identify success stories of how you have helped other entrepreneurial firms grow stronger and faster by establishing more effective processes. Ask satisfied past clients if you can refer prospects to them for a personal discussion on how to manage such tricky transitions.

Entrepreneurs distrust experts who promise them the moon. Like everyone else, they tend to drag their feet when change is painful. But they are willing to listen – and act – if you have compelling evidence and testimonials proving that short-term pain will produce sustained long-term gain.

The client company will be stronger for it. And so will yours.

Entrepreneur Reality Check

While looking for something else (as always), I ran across a great post on how an entrepreneur’s strengths become weaknesses – written by entrepreneur Thomas J. Leonard for all the long-suffering spouses of entrepreneurs.

It’s a great way to study both the common characteristics of entrepreneurs, as well as their needs (and thus your opportunities to help them).

The post, “The Top 10 Great Qualities of the Entrepreneur that Cause the Most Problems,” dates back to 1996, but it is none the worse for that. The species hasn’t evolved much since then.

Here’s my summary.
1. Can't focus, lots of ideas, runs in circles.
The entrepreneur's currency is ideas, often a flood of ideas. Encourage MORE ideas, don't try to pin them down.
2. Not good with details.
Suggest they give up even trying. Sure, this may create a mess, but challenge the entrepreneur to solve the mess as if the mess was a new business! (Entrepreneurs are like kids; it's good to divert them.)
3. Feel odd, different, alone, strange.
Entrepreneurs are simply wired differently and they SHOULD feel this way, because it's TRUE and there is nothing wrong with it. If you can help the entrepreneur relish their unique, contrary, leading edge ways, you'll help them feel better about themselves, which will increase the flow of ideas and success.
4. Good at starting businesses, bad at running them.
Help the entrepreneur to set a "sell date" right now, so they know they're getting out and when! This relieves some of the pressure and also forces the entrepreneur to create a salable company vs. one that is just a monument to their ego.
5. Chaos reigns in the company.
Creation is messy! A solution is to help the entrepreneur create fully automated and foolproof systems, usually managed by outside contractors or vendors who are not IN the business day to day.
6. They fail. And fail again.
Just as a kid has to fall when learning to ride a bike, so do entrepreneurs fail as they learn how to be successful.
7. They exaggerate and are too optimistic.
Entrepreneurs are so far out in front of the rest of us that they NEED to exaggerate how well things are going, in order to keep the faith -- hey it's lonely out in front (or in left field).
8. Always at the edge financially.
Get the entrepreneur to direct this energy into creating a healthy savings account instead of leveraging so much.
9. Family of the entrepreneur suffers.
You didn't just marry a man or woman, you married an ENTREPRENEUR! Develop your own strong interests and let your husband/wife do their own thing. You'll always be #2 (well, maybe #1 and a half). You can have a great marriage if you get this.
10. Sales dip.
Take this as an invitation for the entrepreneur to get back to selling, where they usually shine.

I agree with most of these, though No. 9 seems excessively harsh. What do you think?

For the original post, see http://topten.org/public/AA/AA3.html

The entrepreneur's favourite knowledge tool

Enterprise Toronto, the municipal agency dedicated to new business development, recently polled its visitors (most of them are presumably business owners or aspiring so) about their principal sources of small business knowledge.

I was pretty surprised at the one-sided nature of the result. I guess I shouldn't have been, but in blogs one is supposed to be truthful.

The major source of small business knowledge cited by 41.5% of the 106 respondents was…


(a few blank lines to build the tension and give you time to guess)


(a few more blank lines to further build the tension and give you time to change your guess)


The major source of small business knowledge cited by 41.5% of respondents was… the Internet!

I have known for a long time that entrepreneurs are wary of books and magazines and formal instruction, and that they prefer the school-of-hard-knocks wisdom they can derive from discussions with experienced business people. But I was surprised to see the Internet run away with it all.

The actual results:
What is your major source for small business knowledge?

The Internet – 44 (41.5%)
On the Job Experience – 24 (22.6%)
Books - 13 (12.26%)
Seminars – 13 (12.26%)
Other Entrepreneurs – 6 (5.7%)
School – 5 (4.7%)
Audio/Video Programs – 1 (0.94%)

Obviously these aren’t the only sources entrepreneurs use – but merely the distribution of their preferred methods. With just over 100 respondents, this is clearly not a scientific sample. But I think the results are important.

(Although I wish they hadn't included "On the Job Experience" as an option. That's a different kind of knowledge, and it's one which everyone has and gains more of daily, so I think it diminished the results for some of the other sources of info.)

So why did the Net win so big? With the flexibility of Google and other search tools, the Net’s round-the-clock availability, and the sheer depth of (mostly free!) business, management, market and financial information online, the Internet is a tool almost made to order for entrepreneurs. The question is: what are they looking up, and why? **

Follow-Up: How are your customers using the Internet? And how can you use digital technologies to reach them when they are using their favourite mode of business research?

(**Of course, there is also the matter of sample bias. You would expect the results of an online survey to reflect the fact that all respondents, by definition, already use the Net for business purposes. I think the same bias accounts for the relatively high ranking of the fourth result, Seminars, since ET puts on lots of workshops and seminars, for beginners and experienced entrepreneurs alike.)

Luck, or something like it

I was talking to a Canadian entrepreneur recently who has a fabulous view on luck.

In the past 10 years he has seen one business partnership crumble, then another partner die. His office has been flooded out, at great expense. And as most of his revenues come from U.S. customers, the rise of the Canadian dollar has been nearly lethal.

Yet he still considers himself a lucky man.

Typical entrepreneurial megalomania? Hardly. He’s just figured out where success comes from.

Here’s how he sees it. In baseball, you get three strikes and you're out. But in business you can keep swinging as long as you want – so long as you’re standing at home plate. Take enough pitches and eventually you’ll get one you can hit out of the park.

So despite tragedy, floods and cash-flow crunches (and a nightmare insurance claim), this entrepreneur considers himself lucky because nothing has ever knocked him off home plate for long. That’s why his motto is: “The secret of success in business is staying in business.”

And by the way – he and his company have been hitting a bunch of home runs lately. No one deserves it more.

How to sell to Entrepreneurs, part deux

Last month I offered five characteristics of growth entrepreneurs, and speculated on what they may mean to marketers. If you haven't read that post, scroll down two posts or click here before reading on.

Growth companies are a huge potential market, fiercely loyal and ready to buy. To help you tap this growing market, here are five more attributes of successful entrepreneurs and growth firms - with a few clues about how you can use that information to sell to them.

6) An abiding personal interest in their products or industry helps most growth entrepreneurs persevere and succeed. Tip: Sell with passion. Entrepreneurs expect you to be as excited about your product as they are about theirs.

7) Growth firms pour most of their profits back into the business. However successful these businesses are, many remain cash-poor for years. Tip: When they question your price they're not being "cheap" - they have legitimate cash-flow concerns. To make the sale, acknowledge those concerns and address this need.

8) Growth firms think and operate globally. For them, borders are opportunities, not obstacles. Result: They need solutions that will work around the world.

9) These firms are keen to keep growing. That means their needs are always changing. And it means your products and services must be able to serve these customers all along their growth path.

10) These companies are on missions. Many of today’s top growth entrepreneurs truly believe their products and services can make the world a better place. Tip: To connect with these entrepreneurs, your business brand should stand for something, too.

If you want to add to this list, or if you have questions about any of these characteristics, please leave a comment below. Or e-mail me at rick(at)rickspence.ca

What do women entrepreneurs want?

According to a recent survey by RBC Financial Group, personal priorities are more important than money in motivating women to start their own businesses.

Just 23% of women polled said getting wealthy was a prime motivator for owning their own business. The comparable figure for men was 36%.

By contrast, 63% of women said they wanted a more flexible working schedule. (Editor's note: What were they thinking?)

According to Kris Depencier, RBC's national manager for small business, "for a large portion of these women, building a business is not only a labour of love, but also a way to balance work and family obligations."

The survey found other differences between men and women entrepreneurs:

* Currently, more women (73%) were first-time business owners than men (65%);
* Women are more likely to employ a spouse or child in the business (59% of women vs 47% of men).

Men and women described surprisingly similar frustrations when asked about their key problems in launching and running a business. Their three main challenges:

* finding customers (57% women/56% men);
* keeping a steady workload (37% women/38% men);
* and working long hours (34% each). (Editor's note: See previous editor's note.)

In my experience, people who get into their own business to gain more control over their time are like a kid who joins the army to get some peace and quiet.

Marketer's takeaway: How can you help entrepreneurs find more time in their schedules? How can you help them make the most of the spare hours they find to themselves?

Or better still: how can you help them land more customers?
Chant that like a mantra and you will always have the entrepreneur's ear.

How to sell to Entrepreneurs

My study of the 2005 list of Canada’s Fastest-Growing Companies, published by PROFIT Magazine, helped me identify 10 common characteristics of fast-growth companies. These commonalities also suggest appropriate tactics for marketing to these firms.

1) These companies are founded on innovation. They present new solutions to their markets, not business as usual. If you are offering products and solutions that are new and improved, they’d better be genuine improvements, because these firms have invested in innovation - and expect you to do so as well.

2) These firms offer real value in the marketplace: new solutions, better service, lower prices. How else does a new business break into today’s crowded markets? Since these emerging companies create so much value for their clients, they expect value from their suppliers in return. They are most receptive to marketers who also put value and customer benefit first.

3) Most of these companies succeed through productive partnerships with other organizations. These companies understand win-win, and they expect you to, too.

4) Their founders have leveraged personal relationships to get where they are today. They are innovative dealmakers. And they expect no less from you.

5) Being an emerging business doesn’t mean you lack experience; many of these entrepreneurs brought years of industry experience to the table. Expect entrepreneurial clients to combine small-biz focus and agility with big-business discipline and toughness.

The next 5 points? Just click here.

The spouse at the centre of the storm

If you think entrepreneurs are a tough breed to figure out, imagine being married to one.

The life of an entrepreneurial wife (or husband) can be filled with tension, uncertainty, hard work and loneliness. That’s all forgotten when the business succeeds and they start buying the brand-name scotch, but it’s a tiring, roller-coaster ride while it lasts.

Remind me to tell you about the roundtable I held at PROFIT Magazine a few years ago, when we gathered some wives of local young entrepreneurs to spill the beans on what life at the centre of the whirlwind is really like. It’s not as easy as it looks.

In the meantime, Laura Bailey of Crain's Detroit Business magazine wrote a story in November 2003 on the hectic lives of entrepreneurs’ spouses. The story itself is beyond the pay wall here, but it makes some great points:

* Robert Dube, owner of Oak Park-based Image One Corp., and his wife, Emily, are so busy they have to schedule a special weekly lunch to discuss family issues.

* "It's almost like there's a third party in your marriage,'' said Melanie Zauel, whose husband, Brian, co-owns Wixom-based Cornerstone Engineering, a full-service architectural firm that today has 19 employees. "Sometimes all of his energy is used up in work, and there isn't anything left for the rest of the family.''

(Not that she’s complaining. "I wouldn't want to be married to somebody who is miserable because he is working for somebody else,'' she added. )

* Work-life balance is one of the biggest concerns for entrepreneurs, and often it's up to the spouse to keep that harmony.

* Another issue that entrepreneurs grapple with is finances. Money provides ammunition for fights in any marriage, but for entrepreneurs it's worse.

"There's not a person in the (Young Entrepreneurs Organization) that does not have their house and personal assets on the line,'' said Tom Nardone, president of Isdera Corp… YEO is a support group and networking organization for entrepreneurs under age 40 with $1 million or more in annual revenue, and Nardone said work-family balance is the group's biggest issue.

* And don't think the husbands of business owners get off easy. “I maybe do some things (around the house) that some of my friends don't do,'' such as more laundry or evenly dividing the household chores, said David Cattermole, senior design engineer for Troy-based Compunetics Inc. He is married to Laura Cattermole, founder of Farmington-based IT staffing company RemTech Business Solutions. For example, he cooks and she washes or vice versa.
"We're a team,'' says David.

The Entrepreneur’s Family

I just drove back from Kingston, where I MC’d the second of four regional “Global Traders” events for the Ontario government.

The awards ceremony featured some fantastic comments from the winning entrepreneurs. Spurred on by my challenge to share some of the secrets of their exporting success, they talked a lot (we finished 20 minutes late), but offered great advice and made some memorable points.

I taped them on my handy pocket recorder, so I will blog about them when I have time. But I wanted to share one highlight with you.

This is from memory, so it may not be word for word, but one of the winners simply nailed the paradox of the busy, often selfish life of the typical entrepreneur. “You have to have a really supportive family to back you up,” he said, “or no family at all.”

Ouch!

Stark, but true.

Entrepreneurial paranoia

I mentioned in my MC remarks at Global Traders yesterday that entrepreneurs can be a suspicious, cynical lot. That’s quite ironic, in a way, since many of them tend to be so idealistic and positive in their everyday outlook.

But it could be a necessary learned defence. Idealistic entrepreneurs realize early on that few other business people are as committed as they are to creating value or building long-term relationships. They learn to view others with suspicion as their default mode.

It may also be tied up with entrepreneurial ego.

Note this recent entry by Waterloo, Ont. entrepreneur Jim Estill in his CEO Blog.

“This brings me to a topic I discuss often - filtering.

“Just because something is in print (or on the Internet) does not make it true. I am very wary of ulterior motives. I am also aware that I need to accept others' opinions just as ideas and filter them. Accept the ones I like and reject or modify the ones I do not.”

So that’s one entrepreneur’s worldview. Listen. Filter. Reject or Modify.
And watch for ulterior motives.

An entrepreneur’s most precious resource

Why, someone asked me today, do marketers need to pay special attention to the needs of business owners? What makes small business different from standard business markets?

Luckily, I was able to illustrate this need by recounting a conversation I’d had just an hour before.

We were at the Ontario Global Traders awards in Barrie, where I was working my passage as emcee of the luncheon. In the morning, however, I attended the related Export 360 forum, where various speakers offered their advice to prospective global traders. One of them even mentioned an “export-readiness” quiz that rookie exporters could take online to determine whether their company is well enough prepared to sell its goods or services abroad.

“And it only takes 45 minutes,” she said. As if that was a good thing.

That struck me as a long time, so I leaned over to the entrepreneur who was sitting beside me and asked, “Would you spend 45 minutes filling out an online questionnaire?”

I’ve known this man for 10 years. He’s a genial, low-key guy. But his eyes were blazing as he spat out, “Never!”

He went on to note that most entrepreneurs don't have 45 minutes to eat lunch, let alone spend that time filling out an online quiz. He seemed quite offended as he added, “Who do they think their market is?”

I agree with him. Savvy marketers to entrepreneurs would show much more respect for their prospects’ time.

Most entrepreneurs would kill to find a 45-minute hole in their schedule – so they're not about to spend that time taking a quiz. Sure, they might learn something useful about their business and its export-readiness – but that’s a pretty vague payback when you balance it against all the other opportunities entrepreneurs would happily chase if they had more time.

A 45-minute quiz may work for a large organization loaded with expert analysts whose jobs involve acquiring intelligence. But for busy entrepreneurs and their multitasking workforce, this goes to the bottom of the priority list, somewhere ahead of buying new tea towels but just behind alphabetizing their business-card collections.

As my friend sort-of said, “Know your market.” And remember that time is an entrepreneur’s most precious resource.

Centre court, Second row

I was invited this week to a basketball game with a very successful Canadian entrepreneur who owns season’s tickets to the Raptors. I was flabbergasted when we reached the seats – centre court, second row. We were so close that if this had been a Leafs’ hockey game, our seats would have been on the ice.

My friend is very proud of his seats, but also slightly embarrassed. They cost a lot of money, but he insists they are his only indulgence; there aren't many other things he wants or needs to buy (he drives a Toyota Prius to save money on gas).

In fact, he says he has turned down seats in the front row (apparently they cost $300 more each, per game, than those in Row 2). He couldn’t justify the cost. (Note: He could afford it. Just couldn't justify it.)

I think there are a few instructive notes to take from this experience, for anyone targetting entrepreneurs as a market:

* Entrepreneurs are price sensitive (okay, cheap). They know the cost of everything and the value of everything.

* They don’t hesitate to indulge themselves when they wish to. The sky’s almost the limit.

* Successful entrepreneurs are often embarrassed about their wealth and the things it can buy them. But beyond their homes and one or two indulgences, their needs really are few. To them, business is definitely about competing and winning, but once their basic needs (and highest indulgences) are met, the monetary rewards are secondary.

* If you're marketing to entrepreneurs, they probably don't have a budget (unlike corporate customers) for what you are selling. But if you can convince them they need your product or service, they’ll find the money.

* If they come presold, as my friend with his b-ball tickets, price is not a problem: the sky is almost the limit.

* Few entrepreneurs have to justify their buying decisions to any outsider. But they do have to justify it to themselves.

My friend also commented on the many other entrepreneurs he sees at Raptors games. It’s as if, competitive by nature, the best way for them to wind down is by coming to see other high-level professionals compete. Adrenalin: the best way to finish your day.

(As you might expect, my friend plays recreational basketball. And he hates to lose.)

Small business folks "more motivated and excited" - and frustrated

Bill Sweetman, a Toronto-based Web marketer who recently became VP of Internet Strategy at MacLaren McCann Direct & Interactive, was interviewed last week on OneDegree.com, a terrific Canadian site for information on the e-economy.

As part of the discussion, he had some interesting insights on the difference between small business clients and big businesses:

One Degree: Who needs a bigger kick in the ass to get on the Net advertising bandwagon - big advertisers or small businesses?

Sweetman: Neither.

The small business folks, God bless them, are more motivated in and excited about advertising online, however they tend to have unrealistic expectations and not enough budget to do things effectively. In the worst cases, they think of Internet marketing as a cheap or free alternative to doing anything else, and then are frustrated when it doesn’t live up to their unrealistic expectations.

The big advertisers, on the other hand, have got plenty of budget and want to “do stuff online” but many are still skittish about re-directing an appropriate portion (based on reach) of their budget to a medium they don’t fully understand.

Small or large, I’m not blaming the advertisers because the responsibility rests with us Internet marketers (whether we are freelancers, at boutiques, or working at large agencies) to help our clients understand and then capitalize on the potential of this medium.”

This fits with a lot of evidence I’ve seen that small businesses are quicker and more eager to innovate than most bigger businesses – even if the entrepreneurs don't have as much available cash with which to explore new media and opportunities.

For the rest of the interview, go here.

Another bad ad

I’m a big believer in creative flexibility. If you have a great idea, throw out the old rules. But if you don't know what you’re doing, you might as well follow the rules, because your message is likely to get lost otherwise.

For instance, I believe in headlines. Whether you’re designing an ad or a newspaper page, you need headlines to attract easily distracted readers. If you have a big idea and/or an arresting visual (say, the World Trade Center collapsing), maybe you can get away without a headline. But if your main image is like the one at left, better get a good headline. You need all the help you can get.

The ad at left appeared in the March issue of Fast Company. Capital One is targeting small business owners looking to tame their company finances. So where is the dramatic, benefit-oriented headline? It was deemed expendable, probably because the art director was so tickled with the cartoon.

Here’s the 411. Entrepreneurs want solutions. They don't want cartoons. They don't like cartoons. In my experience (and I once published a Dagwood/Mr. Dithers cartoon on the cover of PROFIT Magazine, but only once), business owners view cartons as kids’ stuff, not serious business. Plus, this is a complex cartoon with no central focus and no caption. Only readers with lots of time on their hands are going to sit down and try to figure out what it all means. When’s the last time you heard a busy entrepreneur say, “I’ve got nothing to do. Think I’ll spend an hour analyzing illustrations in this magazine.”

Worse, anyone who does study this cartoon finds the company being depicted is totally inept, its workers unprofessional at best, and likely suicidal. Few entrepreneurs find anything funny about unprofessional behavior. So if Capital One is expecting its prospects to identify with poor Alonzo, I think they're going to be disappointed.

Below the picture is the “sell” copy. It seems to have nothing to do with the cartoon. “Are your business finances turning out to be a big headache?” Alonzo’s problem is that his workers are building a substandard house and killing each other.

I could see this cartoon possibly working for an ad for a skills-training company, but it has no place in a serious financial ad.

The rest of the copy, about online account servicing, free year-end summaries and a rewards program, is good enough, I guess, but flat and uninteresting. It probably doesn't matter, since any entrepreneurs who stuck around to read the copy are going to find their heads hurting from trying to match the pitch with the cartoon, so they’re unlikely to last till the end.

The call to action? Buried at the tail end of a dense paragraph of low-contrast, hard-to-read body copy. No bold type for the URL, not even a “www” to help it stand out as a Web-based resource. Just a mess.

And don't get me started on the branded “Small Business Solutions” tagline. People with big dreams rarely like to be associated with such a demeaning word. (See my Jan. 10 post, Don’t call them “Small Business”.)

Takeaways: If you’re creating ads aimed at business owners, have a clear message. Help entrepreneurs solve their problems. Use headlines to attract attention. Keep your message simple. Don't monkey around with inappropriate humour (your audience takes itself very seriously). Use simple text devices (boldface, anyone?) to make your key messages stand out.

Note how Capital One put its own tagline [What’s in your wallet?] in bold instead of its key pitch, or its URL or phone number. Selling is about the customer’s needs, not yours.

Today's Hottest Buttons

What problems most bedevil Canada’s entrepreneurs? Here are the results of a recent survey of “mid-cap” business owners by COMPAS, for Roynat Capital, conducted in January 2006.



I’m actually surprised to see these entrepreneurs so concerned about financing. This is an issue that seemed to have gone away for a while; certainly, it is no longer the national political issue it was a few years ago.

This looks like a warning to the banks, especially for when they come back to Ottawa for permission to merge. Plus, it’s a sign that all the new private capital now being directed to buyout funds and mezzanine funding isn't getting where it needs to go.

Meanwhile, there’s lots of food for thought here for marketers trying to make entrepreneurs’ lives easier. How can you help them deal more effectively with staff issues (hiring, training, motivating, retaining)?

How can your products or services level the playing field, and enable entrepreneurial firms to compete with bigger organizations?

And how can you help them sell more?

These are the hot buttons your market will respond to.

(You can find the survey summary here. )

No more pencils, no more books

School's out next week and the kids are demanding attention.
So Selling to Small Business is going into reruns till March 21.

How do reruns work? Simple. You scroll down and read the posts you haven't seen before.

As always, send your comments or suggestions to rick (a) rickspence.ca

And if you have time, check out our links to the left. Lots of good learning there.

Rick

Segmenting your market

What keeps entrepreneurs awake at night?

Before answering that question, you have to know which part of the small business market you're targeting. It's Marketing 101: this market is so huge and so variegated that anything you can do to segment your preferred audience (young entreprenurs, female business owners, manufacturers, startups in Manitoba, etc.) will result in finer targeting and produce better results.

Case in point: A January 2006 Industry Canada study of financing for young entrepreneurs.

Here are the "Perceived Obstacles to Business Growth and Development" identified by the study. As you will see, it found significant differences between young entrepreneurs and older ones.

Problems Facing Young Entrepreneurs

Finding Qualified Labour: 40%
Obtaining Financing: 39%
Instability of Demand: 25%
Levels of Taxation: 23%
Low Profitability: 19%
Government Regulations: 19%
Equipment Renewal: 13%
Managerial Skills: 11%

Problems Facing Older Business Owners
Levels of Taxation: 40%
Finding Qualified Labour: 38%
Low Profitability: 34%
Instability of Demand: 33%
Government Regulations: 29%
Obtaining Financing: 23%
Equipment Renewal: 17%
Managerial Skills: 6%

If you're targeting younger entrepreneurs, for instance, you wouldn't worry so much about taxation or high taxes. You might, however, focus on financing solutions. One thing is clear: both demographics are equally concerned about finding good help.

Why do young entrepreneurs matter? Well, apart fom the possibility of them being good customers for the next 30 yars or so, they are stepping up to the plate now and starting or buying businsses as more and more baby-boomer entrepreneurs look for a change or outright retirement. This is a market you need to know.

How tech fails medium-sized business

Does the tech industry understand the medium-sized business market? Not according to Dan Mclean, editor-in-chief of ITWorldCanada.com, in a story published March 2 in The Globe & Mail.

“When it comes to information technology designed to suit their specific computing needs, mid-sized companies in Canada are on the outside looking in,” Mclean writes.

When businesses with between 100 and 499 employees look for tech solutions, what do they find? “These days they're typically scaled-down versions of large-business IT hardware, software and services, or scaled-up small-business products,” he writes.

The problem, says analyst John Sloan of Info-Tech in London, Ont., is that the IT needs of a mid-sized company can be every bit as complex as those of a much larger firm. But they have fewer people to support and manage it. That means mid-sized firms need products that have big-business function at a small-business price.

According to Sloan, two-thirds of a mid-sized business’s IT spending goes to maintenance and management. Anything that reduces the need for operational support “is likely to get a good hard look by a medium-sized business customer. Gains in efficiency and productivity are golden for customers in the mid-market.”

Medium-sized businesses are big IT spenders. On average, says Mclean, they spend more than $1 million a year on IT.

Lise Dellazizzo, VP of IT for Ipsos Reid Corp., calls medium business "the most significant revenue-generating engine in Canada when it comes to IT spending." Large businesses may spend more per capita, but the mid-sized market has greater volume. Canada has nearly seven times as many mid-sized companies as large companies.

As Mclean concludes, this is a market worth figuring out.

See the original story (until it slips behind the pay curtain) here.

The long drawn-out agony of giving up control

One of the big problems facing entrepreneurs is control.

When they found their business, entrepreneurs are in complete control. They have to be: they can't allow a free-thinking employee or supplier to undermine thier vision or the standards they are trying to create.

Some people dismiss entrepreneurs as “control freaks,” but they are this way for good reason. Just as a watchful she-bear will fight for her cubs, entrepreneur will take few chances that would endanger their business. When you take your eye off the business, danger is always close by.

(Recall 15 years ago when Magna founder Frank Stronach started dabbling in restaurants and politics -- his auto-parts company started to crumble. It was only when Frank returned to put his personal stamp on the business again that it recovered.)

Over time, then, entrepreneurs must battle hard to find systems that allow them to give up control without sacrificing quality, standards or culture.

In an article written a few years ago for PROFIT Magazine’s website, Markham, Ont. entrepreneur Aaron Moscoe, co-founder of a corporate-giftware firm called The Promotional Specialists, described his efforts to let go. Here are a few excerpts that speak to the difficulty of letting go – and the incredible opportunity that creates for suppliers and other potential partners who can win an entrepreneur’s trust.

"Having built this business personally, [my partner and I] like to have things done our way - and who better to do it exactly that way than ourselves? The problem is that there are too many accounts to manage to allow us the time to plan and manage our business properly. Like many small business entrepreneurs we have tried to just work harder. After a while you learn that there is not too much of this or that, but too few of you.

"Hiring others to do jobs that you handled previously is tough because it means relinquishing some control. (Rick’s note: the suggestion here is that relinquishing control is bad. I am sure Aaron has gotten over that notion now, and recognized that delegating is an essential skill – but it’s a hard concept for many to accept]. While you can train employees, you also need to trust them and to realize the various ways they can add value to your business, even if it is by doing things differently.

"Perhaps the most important way to grow is to realize that you must inevitably rely on others. Whether employees, suppliers, couriers, financiers, or key clients, it is dramatically important to choose those strategic partners carefully.”

You can read the rest of the story here, but here's the main point: When you sell services to entrepreneurs, they may be cautious, skeptical, even hostile, because they are being asked to entrust their business to your systems, your standards.

Once you recognize that pitching your product is much like asking new parents to entrust your baby to their care, you will better understand that your primary job is not to sell your services to entrepreneurs, but to win their trust. If you can do that, the rest gets much easier.

There are no quick wins in this market. As Moscoe concludes, “Partnerships must be mutually beneficial in the long run if they are to last. Accordingly, it is crucial to work with partners who value the contribution that your partnership brings to them.”

If you're listening, that's the sound of an entrepreneur demanding respect.

Countdown to Report on Small Business

The Globe and Mail plans to publish four issues of its new magazine, Report on Small Business, this year. (I think there were just two last year.)

I have concerns about the title (see previous post), but if you’re interested, there's still time to get in on the first issue. The ad deadline for the April 12 issue is March 7.

Here are the rest of the dates this year (cribbed from the Globe’s site here)

Issue date: June 22 Sales close: May 11
Issue date: Sept. 26 Sales close: Aug. 11
Issue date: Nov. 22 Sales close: Oct. 20

Curiously, the Globe’s website doesn't have much information on this new publication. (They also still refer to it as a “special report” rather than an ongoing magazine.) The editor is Noel Hulsman, a marathon runner who was formerly editor of BC Business.

Small is Beautiful. Powerful, too

Why should you care about Selling to Small Business? Because small and medium-sized businesses are an important growing force.

According to the government of Canada:

* Small businesses are much more adaptable and adopt new technologies and processes more quickly than large firms

* Businesses with fewer than 50 employees account for 95% of all companies in Canada.

* SMEs generated 43% of Canada’s private sector GDP in 1998.

* The number of self-employed Canadians has nearly doubled since 1980, to 2.4 million.

* In 2002, small businesses (under 100 employees) accounted for 20% of Canada’s total exports.

As they say, there is nothing small about small business.

Feel free to leave a comment or e-mail me if you want more information on any of these factoids.

A bad ad that redeems itself beautifully

So, what are the results of “Results-Driven Advice?”

Looks to me like you’re left tottering uncertainly, facing almost certain ruin if you tip back even a bit.

But according to this ad from Grant Thornton in the latest issue of PROFIT Magazine, what this picture represents is “Perfect balance… achieved through working hard, having fun and always giving great client service.”

Maybe. But to me balance is a chair with four feet on the ground, not two.

The other problem with this ad is the incredibly tenuous link to the client benefit. The image and the “balance” theme have nothing to do with Grant Thornton.

The payoff line is this: “The financial advisory service that fits us? Grant Thornton. Their insights and guidance help us sit pretty and considering we’re in the office furniture business, that's a very good thing.”

The key, then, is the incredibly lame pun about “sitting pretty.”

One more problem: While it’s a sound idea to use real entrepreneurs and their testimonials in ads (because entrepreneurs only really trust each other), you need to follow through. For instance, while Jim Mills (pictured above) and his company, Office Interiors, seem to be real (and Halifax-based, no less), the URL they provide, www.officeinteriors.ca/, isn’t working. Here is the screen that URL served up on Sunday night.
(Monday night update: The company's website was back in business when I checked again tonight.)

So what redeems this ad? Grant Thornton’s respect for its entrepreneurial prospect – and his or her ego. The action step in the lower text box is to call or e-mail GT’s CEO, Alex MacBeath, through a toll-free number or what appears to be his actual e-mail address.

This is classy. We’re not sending you to a website or an $8-an-hour call centre clerk. Speak to the boss, CEO to CEO. Because you’re worth it.

I bet that’ll do more to make the phone ring than the smug guy in the unsafe stool.

YOUR TAKEAWAY: Treat entrepreneurial clients as important individuals. Because in their world, they're the boss. And they expect to be treated as such.

Weaknesses? Maybe a few.

Entrepreneurs often have healthy egos, but they can still admit to shortcomings.

Here, courtesy of PROFITguide.com, is a listing of self-diagnosed strengths and weaknesses compiled from entrepreneurs on the 2001 PROFIT100 list of Canada's Fastest-Growing Companies.

I thought it might help you better understand the complex, often contradictory personalities of successful entrepreneurs. You may even detect a few patterns. Enjoy!

1. What do you consider your key personal strength in business?
Thanks to many years of working with some great companies and great bosses, I would suggest that my greatest strength is vision. Put a stake in the ground and shoot for it.
What's your biggest weakness? Lack of attention to detail.

2. STRENGTH: My attention to detail. Plus, I'm paranoid.
WEAKNESS: I'm not sure. That's probably my weakness.

3. STRENGTH: I'm good at vision — what needs to be done — and action-oriented to do it.
WEAKNESS: Impatience.

4. STRENGTH: I hope my key strength is the ability to create and maintain a teamwork environment.
WEAKNESS: Probably the biggest weakness, and something I'm working on very hard, is the ability to delegate more.

5.STRENGTH: The ability to hire good people.
WEAKNESS: I'm probably a bit soft, a bit lax. I don't think I'm a tough enough manager.

6. STRENGTH: Feisty, creative, aware. I'm an opportunist.
WEAKNESS: Inability to say no. No to anything.

7. STRENGTH: Entrepreneurial nature — I find a way to make things work.
WEAKNESS: I don't pay enough attention to fine detail, I'm more attracted to the possibilities than the details of implementation. Luckily, I know that and we hire accordingly.

8. STRENGTH: The ability to keep multiple balls up in the air. The very thing that you were critiqued for in school, which was the fact that you were thinking about 12 things at once, is the very thing that keeps you sharp in business.
WEAKNESS: I'd genuinely like to have better listening skills.

9. STRENGTH: I don't have any. I guess it's it would be delegating. Not thinking I can do it all. Knowing my limitations.
WEAKNESS: My biggest weakness would be probably lack of general business experience.

10. STRENGTH: I have a pretty sound technical knowledge of the field that we're in.
WEAKNESS: I'm not formally educated in business. I had to pick it up on the fly.

11. STRENGTH: Vision.
WEAKNESS: Staying focussed.

12. STRENGTH: I'm left and right brain — I'm good creatively and technically.
WEAKNESS: I'm always looking for compromise. Sometimes I should hit the table with my fist.

What Entrepreneurs Want, part 3

Some of my posts mentioning the solitude and problems of entrepreneurs - especially the lack of peer contact - might make you conclude that these are needy and vulnerable people. Nothing could be farther from the truth. Entrepreneurs crave respect and understanding like everyone else, but they can go without both for long periods of time, driven by their vision and their instincts for the best way of serving their niche.

But once in a while, they like to be stroked and to have their work confirmed by others.

This was reaffirmed for me again yesterday in two e-mails I received in response to a speech I gave Wednesday night on Lessons from Canada's Emerging Growth Companies (click here for a summary). My presentation to a group called Future Leaders involved analyzing some of the trends in entrepreneurial growth (as divined from PROFIT Magazine's PROFIT 100 research) and documenting some of the unique tactics and strategies that have fuelled their success.

My goal with such presentations is to show entrepreneurs how other companies are striving and succeeding, and give them specific tactics they can put into practice right away. But sometimes I forget how important it is just to be heard talking about success in tough times.

Here's a snippet from one of the unsolicited e-mails I received the other day:

"Just wanted to drop you a quick note to let you know that I really enjoyed your presentation... It was extremely interesting and inspirational."

You might think that entrepreneurs would be the last people to need inspiration. But you'd be wrong.

The other e-mail:

"Thanks for the speech on Wednesday. Some days any encouragement is appreciated. As a manufacturing guy, I really appreciated that I’m not the only one in this province who still thinks making stuff is a good business and finding that you can still manufacture and make the hot [PROFIT 100] list is nice ... despite the money guys telling everyone out there that manufacturing in Ontario is dead and the dumbest possible thing you can do."

I don't believe entrepreneurs are generally insecure. But if they're to put all their energy and resources into a business venture, they certainly need a strong dose of confidence. And confidence is a fragile thing.

Marketer's Takeaway: You can't go wrong by celebrating the instincts and accomplishments of entrepreneurs. It doesn't have to be the major theme of your conversation with this market, but it must underlie everything you say and do.

As the writer said, "Some days any encouragement is appreciated."

RBC's four-star ad

Regular readers will be pleased to learn that I’ve found an ad targeting small business that I actually like.

The fact that it appears opposite my new column in the Feb.-March issue of MoneySense is just a coincidence.

It’s an ad for RBC Royal Bank, part of its mysterious series of ads whose photos include people standing in front of a shoulder-high billboard with the word “FIRST”. (I always thought “First” was part of Bank of Montreal’s branding, so I am still confused by its use by the Royal.)

The ad starts with a great headline: “After his business burned down, Steve Booy not only found out who his friends were. He discovered who his bank was.”

The body copy goes on to explain that when Steve’s Automotive Repair in Woodstock, Ont., went up in flames, all his financial records were lost. Kindly waiving an immediate loan payment, an RBC account manager sat down with Steve to discuss the future. (“Without financial records,” RBC says, “some banks might not have talked to Steve.”) But RBC “was flexible, finding a financial solution that recognized his specific circumstances.”

The result? “Today, an expanded Steve’s Automotive is a state-of-the-art nine-bay facility,” “well-equipped, Steve says, with fire extinguishers.”

There you have it. An ad that tells a believable, human story. Like all great stories, form the first ancient myths to Star Wars, it comes complete with a problem, a hero (that creative banker) and a happy ending.

Plus, the tale is told simply and efficiently, to match entrepreneurs’ attention spans – using just enough details to make it credible, and even a grin-worthy punch line.

And at the end, of course, comes the call to action that every ad should have (but many don’t): “To find out what RBC Royal Bank can do to put your business first, call 1-800 ROYAL 2-0, or visit www.rbcroyalbank.com/business-first”

Note the subtle reinforcement of the “first” branding, and the ease of the contact tools offered: a toll-free number that’s easy to remember, and a URL that’s easy to type.

The ad itself speaks to the loneliness and vulnerability that applies to most entrepreneurs (and which I have discussed in numerous posts, including the one immediately preceding this one). RBC depicts an entrepreneur at his lowest point, and describes how it stood by him. That kind of security, that kind of relationship, is exactly what most entrepreneurs want.

This ad works because it speaks entrepreneurs’ language, it understands their needs without overstating them, it’s grounded in reality, and it offers a clear and genuine benefit. I give it four stars.

PLUS: In promoting this apparently true story (you can visit http://www.stevesauto.ca), RBC’s ad does one more thing – it raises expectations.

It ups the ante. It dares other bankers – within the Royal or its many competitors – to do for their clients what Steve’s account manager did for him. This could come back to haunt RBC – can its bankers work such magic all the time? (Especially given that many credit-watchers say the banks are set to tighten up on credit as the Canadian economy peaks.)

In the meantime, setting the bar so high makes a great testimonial for RBC – and a nice shot of confidence (and bargaining power) for entrepreneurs across the country.

Full disclosure: I do most of my personal banking at the Royal, mainly because my dad worked there all his life. But if you think that kind of thing influences my writing, you haven’t been reading my stuff very long.

Be a peer, not a pal

Friends are fine. Families have their place. But there's nothing like people you hardly know.

At least, that’s how my friend Aaron sees it. A seasoned entrepreneur, he is an enthusiastic participant in Entrepreneurs’ Organization, the international forum that allows full-time entrepreneurs to meet monthly with local peers from non-competing organizations to share ideas, contacts and best practices. (And, mainly, to reassure each other that the hell they go through every day is normal.)

“Most entrepreneurs don't know other entrepreneurs, unless they're customers or suppliers, or family or friends,” says Aaron. These are useful, even valuable contacts, but they're not the best people to pour out your heart if you want to talk about the pressure the bank’s putting on you, the new problems with your sales force, or your spouse’s growing resentment of your long hours at work.

That’s why entrepreneurs join groups such as Presidents’ Organization, Entrepreneurs’ Organization, CAFÉ, Innovators Alliance, and so on – to share the burden. Unloading with trusted colleagues who understand what you're going through relieves some of the loneliness and the burden. And chances are good that some of them will have gone through what you're experiencing, and will be able to offer useful advice.

Remember, corporate executives have a ready-made audience of peers, mentors and friends – usually all in the same company - for blowing off steam and seeking counsel. Entrepreneurs are in a different space entirely. Which is why they appreciate marketers who understand their real needs.

Bonus thoughts - Let's consider the implications of the lonely-at-the-top, no-one-to-confide-in life of an entrepreneur:

Nobody to bounce ideas off of: So keep your offers simple. Offer lots of easy-to-read info and context on your website for those who need to dig deep.

Overloaded, working too much: Respect their time. Keep policies and paperwork to a minimum.

Fear of making mistakes: Take away some of the risk. (Offer free trials, extended warranties, money-back guarantees).

Need for solutions: Be a peer, not a pal.

Mars and Venus and Small Business

A few posts back (on January 10, if you want to look it up in the “January” archives on the right) I blogged about the phrase “small business.” I suggested that while it is a useful description of a category, you should not use it when addressing people who run small businesses – because one of the meanings of “small” is inconsequential. I even went back to my experience 15 years ago at PROFIT magazine, which we renamed from the previous title, Small Business, for that reason.

As you may know, another magazine recently went through a similar name change. In 2004, Small Business Canada renamed itself Enterprise – probably for the same reason we changed Small Business. Because many readers don’t identify with the term, and few advertisers like to pay to reach markets that are apparently inconsequential.

Anyway, a friend of mine who is familiar with that magazine was saying yesterday that she thought the name change was a good idea: “Because men will never buy anything with the word ‘small’ in it.”

I hadn’t realized this phenomenon was gender-based, but maybe it is. “Call it, ‘Huge Business,’” advised my friend. “Or ‘Fast-Growing Business’. Men will buy anything that’s big.”

It’s a different perspective from mine, but the result is pretty much the same. Keep “small business” for internal use. “Business owners” sounds much more flattering.

Even consequential.

Is Anybody Home??

That’s the question asked by a reader of this blog after visiting Hewlett-Packard Canada’s website.

As an entrepreneur, he was reading up on printers at HP’s sub-site dedicated to small and medium-sized business. On this page HP offers an ambitious slogan: “No one understands you like HP.”

Well, let’s see.

From the page at http://www.hp.ca/portal/biztown/colour_printing_centre/printing_imaging.php, he clicked on what looked like an interesting link under "Solve Business Problems" called "Success Stories".That click took him to HP’s U.S. site. But what the heck, he figured, a success story is a success story.

Except that the graphic box entitled "Printing solutions success stories for Small & Medium Business" offered this stark message: "None currently available. Please check back."

HP has hundreds of customer success stories on its site. But apparently not one deals with printers in small-business environments. That seems pretty strange when printers and imaging constitute HP’s most profitable division.

What would it take, my correspondent wondered, for HP to talk to a couple of its millions of printer users to see how they’re faring, and post a story or two on its website? “Hell,” said our reader, “they could give me a call.”

What would it take for HP to show its small-biz customers some respect? Especially when it likes to tell business owners that “No one understands you like HP.”

MORAL: If you talk the talk, walk the walk.

Entrepreneurship - Act of Faith

Australian entrepreneur Yaro Starak runs several Internet-based businesses, as well as a thoughtful blog at http://www.entrepreneurs-journey.com
He wrote recently about the passion entrepreneurs have for their businesses, comparing it to religious faith. It’s essential reading for anyone who wants to understand how business owners tick. You can read the whole post here, or my condensed version below:

"I have a few friends that I meet with regularly who share my passion for business… For some their business enjoys the majority of their daily headspace, even surpassing the time contemplating sex (yes, these are male friends). Business has become a part of who they are…

Business provides an entrepreneur with purpose. When times are tough faith keeps an entrepreneur working long after other people would have given up. While blind faith is not a good thing, certainly strong faith and courage of conviction are vital for any business person to carry on despite whatever obstacles are thrown at them.

Business provides an entrepreneur with meaning. An enlightened entrepreneur works towards building something that enhances many people’s lives. By creating a business that employs people, provides helpful products or services and creates prosperity for many, the sum effect is an expansion of positivity…

When business people get together they share the faith. Entrepreneurs discuss commerce, opportunities and advise each other on the best course of action in a given situation. It’s as if there are a set of rules, some written, some intuitively understood that are guiding these people. When entrepreneurs network they call on their collective understanding and knowledge to help each other and create something greater than the sum of the parts. It’s as if they are divinely inspired."

I think Yaro's right about how entrepreneurs getting together and discussing commerce is really an act of shared faith.

The best entrepreneurs I know are extremely generous about sharing ideas, connections and resources with fellow keepers of the flame. I think they see society as a closed loop. By helping you they believe they are helping themselves by supporting the greater ecosystem – even if they never see you again.

Of course, the other reason they help each other is because they don't believe anyone else will.
Which is a huge opportunity for marketers who understand it.