¶ Keys to Success and Failure in Business
Hey everybody , welcome back to another episode of big talk about small business . I'm here with my partner , Eric Howardton . It's always good to see you . What are you thinking about ?
this morning . I'm just thinking about how you and I prepped for this podcast . We did For about four minutes , maybe five , and I just think it was a really , really great idea .
Maybe it will help us be a little bit more directed , because we can't tend to go sideways sometimes .
I think this is going to be one of our better podcasts . Now I do too .
But we'll leave that up to the audience to determine our growing audience . It's great we're having more and more subscribers .
We are . It's really cool to see folks just I mean because doing podcasts , I mean actually you just have opportunity to hit people from places you would never expect .
Yeah , like in the Netherlands , they could be listening to us right now right .
Yeah , we had somebody from , I think , africa or something like that . Yeah , I saw them . I saw them on analytics as well , so that's cool , man .
It is cool , it's very cool , and this stuff is universal and we're getting really a lot of great questions in too , which is really neat .
We're going to be doing those in the next episode .
That'll be fun Some of these questions .
We've had some interesting ones . Oh man , no kidding , you have worked from Cincinnati .
that we were kind of talking about just before this , as we were doing our prep . I'm not sure we can even talk about that one on the air . We'll see .
We may have to do a little editing there , but so anyway , today I did want to talk about something that I think is very interesting , and what that is is my students in my small enterprise management class at the Walton College at the University of Arkansas at Fayetteville .
Okay , I think I got a look In Northwest Arkansas .
Yes , the Samham Walton College of Business , wonderful but which , by the way , just keeps getting better and better . It is it's a fantastic school . Our ratings keep going up . It's about every category . It is fun working for a growing , successful organization like the Walton College .
Well , I think it's like even like business right , Like you have great leaders there .
It is Like Mr Matt Waller and Britt and is Brandis is a great guy too . I mean we really have had some great deans , we really have , and so I'm proud to be there .
But anyway , in that class my students have to work with a small business , something privately held , doing less than 10 million a year in revenue , and then make their recommendations to the owners , identify issues that they find and then make their recommendations to the owners to increase revenue , increase profitability , increase the value of the enterprise and reduce
the risk for the owner . Nice .
And not strong for important bullet points .
They are . That's kind of sums it all up really so .
Do they go in ? Does that have to be in person ? I mean they go in and interview the owners and different people on team or what .
Yeah , they use a variety of tactics that we talk about Certainly going to the business , observing , talking with customers or clients , talking to the employees , surveying potential customers and clients , talking to the owners , getting all the financials .
That's one of the requirements is they have to get whatever financials these companies have , which in some cases are in horrible condition , which I'll be back to here Like just the financials themselves .
not that they're losing money , but they just have terrible record keeping .
Right . A lot of them are losing money too , by the way , right , but anyway , yeah , it's just fascinating to see . So they can use a variety of tactics . Sometimes they go to work there , sometimes they do it on the business that they have worked at . How long do ?
they study .
Well , it's a semester long project and then the last three weeks they all present . They either work individually or with another student . So I just had 30 some odd presentations in the last three weeks on these projects and I thought maybe it would be good to just talk about some of the sort of generalized findings . Yeah , I think that's cool .
It's always surprising when you see what businesses are making money and which ones aren't . To start , with .
So what are some common threads on that ? Who's making money ?
Very simple businesses that do one thing in a mature market . Okay , Better , good at it . I mean , if you look at , I mean it's amazing to me when you see companies like t-shirt companies and water delivery companies and people like that and they just make a whole lot of money . They're very simple business model .
Are they . They make a lot of revenue or profit , or both Both .
Really yeah . When I say making a lot of money , I'm talking profit , okay , yeah , and usually profitable like 30 to 40% of revenue . Some of these companies and you and I both know like 10% is sort of the norm in just about every industry Across the board , you know , if I was just to say where are you going to start .
Yeah , you know , 10% To have some benchmark . Is that like you're on your way to something , right ?
Exactly , but yeah , but anyway . So no , it's just seeing the particularly well . You said , what are the successful ones doing ? The other thing they're doing is they're doing a lot of marketing .
Really yeah , it's . That doesn't make any sense to me . But if you are not making much money , you should cut marketing first .
Oh , yeah , right , I'm sure you think that , so let's talk about those . I really wanted to focus on the people who aren't making money and what they're doing . Okay , lots of common themes come up . First one is absentee owners , or largely absentee owner . That is a recipe for disaster . Yeah , I go there once a week , I go there once a month .
I take two months and go away with my husband to the Himalayas or whenever . Not a good way to run a business . Okay , for the most part I can't . There was one company where the owners had evidently come up with a really good formula and they could get out of it for six weeks or more at a time .
Of all the companies that we saw , but the rest of them all had problems from that .
So I have to admit I have a little guilt with that . Currently , I don't think I'm , I'm not , I don't know what that gauge is . Yeah , absenteeism , right , you know , and I think that it's going to change my . My intention is I'm just being transparent with you so you can yell at me and I can get off my butt .
Be transparent .
I'm not going to yell at you , though , because I already think I know what you're going to say yeah , so , like right now , like I haven't been as engaged as I want to be because I got , you know , other things going on , got a lot of things going on .
Yeah , I got a lot going on , so the next year it's going to work out where I can be a lot more engaged . But I mean , at the same time , though I you just have to be a surgeon .
Right , you know , yeah , you've got to have good managers . I mean , you do that , yeah , you develop those people , true ? No , I do spend time with the people , yeah , and I think that's that's really the important thing .
Yeah , but you know , we try to run real businesses where we pay people decently and such , yeah , and we have companies that , you see , there's the owners and basically everybody else is treated like crap , gotcha . There's no real .
Yeah , that's another problem . They're not empowered , they're not led , they're not talked with , they're not , they're not got .
They have no idea how the company's performing or anything .
Gotcha . They have no plan , no vision laid out , nope , all that kind of stuff . So like when you say absentee , like I mean , just so the listeners can understand a little bit , and I'm also curious , like I mean , you mentioned being gone for a month , or are they like ?
I looked at you . I come here to Fayetteville once a month . Okay , that's one , got it , got it . The other model is I own it , but I just don't show up very often .
Because you just want . You just want to see a ROI of your investment .
Yeah , I'm just not that interested
¶ Issues With Disengagement, Marketing, and Accounting
in it . It's the conclusion in a lot of cases . They're not really passionate about it , gotcha , so they've sort of disengaged , like they've almost given up . It's like what do they call it ? The people who quit but still stay ? There was some sort of a term .
Like a lame duck or whatever .
No , there was some sort of a term that was real popular quiet quitting . It's like I'm there , I've quit mentally , though it's quiet quitting . I think , they're doing that on their own business .
You know , Do you think ? Have they been like owners that have owned the companies for quite some time and they're just phasing out ?
Some cases they inherited them . Some cases they started them with partners who bailed out . There's a variety of situations , but the bottom line is they're not paying attention to that business the way you have to . Yes , if you want to keep everything going , okay .
Yeah , because you have to , if nothing else , be driving some freaking sales man . You've got a campaign and you've got to . There's so much to do , but I mean , if you could just be a campaigner for that business , like you're out starting up the market , you're doing something that's positive for the business . Yeah , yeah , I can .
Okay , I feel a little bit better about myself .
But I've been there , like you , where I felt like I wasn't doing anything . Well , I was trying to do too many things and in some cases , I think my thoughts were correct . Yeah , I was trying to do too much , and that's really a very good job , but anyway .
So back on these companies , though not spending anything on marketing , the ones that are bleeding or going downhill . It's just a universal thing Just zero dollars , zero dollars in marketing and promotion , and they're sitting around talking about how bad the climate is and whatever .
So everybody else's fault government's fault , competitors' fault .
Yeah , you're doing absolutely freaking nothing . Wonder why you can't even do five social media posts a day .
So they don't even do like when we say nothing . It's not only are they not advertising , they only have somebody that's out doing development , speaking whatever it might take to promote that business .
Speaking social media posting . I don't care what it is , they're nothing .
Yeah , you can't do that . Passive , just waiting , oh God , just waiting for something to come out .
No , we believe word of mouth is the best form of advertising , but they're not talking to anybody . If they say word of mouth , it means we're doing absolutely nothing . That's what code word , word of mouth . We don't do anything for marketing .
Right , right , okay , and they probably aren't doing anything for their existing customer base either , like we're attention .
Well , customer service is bad , okay , a lot of times because again you go back to what's another common practice . So we already discussed single person management and nobody good works there , according to the owners . Okay , why ? Well , you don't pay anything , you have no benefits , why would anybody want to work there ?
Yeah , you don't share information , you don't share power . Yeah , so sure , then you have mediocre customer service . What do you expect ?
Okay , yeah , and all comes back around . Man , it's a everything works together in business , it all works together . And you know the other thing too , on the marketing side . Yeah , like I think that anybody could testify to this If you work with a company that is highly promotional and believes in marketing like it's exhilarating for the team man .
Of course it is . They feel like they're part of a winning team . Everybody knows who they are and what the company is .
Yeah , yeah , exactly , can you make a message out there ? You know you're making new people , people are talking about you and you feel good about working there , but it costs . You're doing activities with your fellow teammates to market .
Yeah , I mean , I think that's one of the things that , looking back in Spider-Land , that we did a lot well , just a lot of event marketing . You know we put on events and our team would work that event . You were an event in yourself the process .
He's going to a chair , you know . Yeah , you're dressed enough . Cornhole things , cornhole you decorated up Baggo .
I mean you did all kinds of stuff , yeah , but to get your team , but that's , I've never really thought about that . But your team can rottery and like people do things together and they go work hard together .
Yeah .
And in Well , that's a big part of it . Then it is , and it cycles back around .
It does . And then the other thing now that I just wanted to mention it's just their accounting sucks . I mean they either deliberately account poorly because they're trying to avoid paying taxes and they've got some businesses that bring in cash , or they're just completely incompetent but really bad accounting . You just see this theme over and over again .
You know . So I mean , my perspective is is don't play around with taxes . Yeah , exactly , it's like I've just never been
¶ Overcoming Business Challenges and Resistance
one . That's like like you , just don't mess with that crap , man .
Like it's not gonna . You don't want something to come bite you in the ass later . Dude , like you got enough shit . What do you think you're ?
doing . Well , okay , you got enough shit in business that keeps you up at night . The last thing you want to do , I agree , is have a worry about not doing that Like you know doing that right , sure , and check it in on it , but I mean like you're playing a dangerous game and you're really not getting . They'll shut you down .
The juice really isn't worth the squeeze at the end of the day , no On , whatever you might be skimming .
Yeah , I know , but you see this all the time and it certainly impacts the value of the business because then they've got no accurate financials . The value reflect be like hey , don't pay attention to that , because really I take out another 50 grand a year . Here's how I get it .
Yeah right , okay , yeah , try to match to a barrier .
Yeah , there's a lot of those conversations , but anyway , it was fascinating to see what a great job these students , yeah .
The other thing I guess I just wanted to say was the losers , the companies that were doing well , the owners resisted recommendations at a much higher rate than the successful company owners did , which you would think would be the opposite , like the successful people would think , hey , I've got everything under control , I know it all , it's doing great , but they're
more open than the ones that are losing money , yeah , to other thoughts , which is probably why they're losing . They go . You know what ?
I'm saying Tune in . I wonder . I have no idea . This is all fresh . If we did prep , we didn't talk about what you're gonna talk about here . But I wonder if the number one response of the losers is oh , we tried , that didn't work .
Hear that all the time . When it comes to marketing , we tried that once . It didn't work . We were in radio commercials for a week . Hey , we sent out an email once and didn't sell a single thing from it . I've heard people say that Did you , can't do that . I know .
You have to be sustained .
Rolentless Sustained drip , drip , drip , drip , hammer , hammer , hammer , hammer , hammer , hammer , hammer .
That's what I love about you . You taught me that so well . It works Rolentless and you still use the word relentless . You should use the word relentless about this show that we're doing right now . I know it's the great words , but it's so true Like you have to like that it's squeaky wheel gets the grease man .
You wanna be top of mind when they have a need Constantly .
People's needs change , but circumstances change and they need somebody else .
Whenever I suggest outbound email to a business owner client as a strategy . What do you think ?
the first response no , nobody opens that . I get that all the time . It's spam . I don't wanna spam nobody Bingo .
They all say that Okay and so , and then when you do it , there's always gonna be somebody that complains . But I always said to my people look , if 50 people bought and one person complains , who the hell are you gonna listen to ? Okay , the one who complains , you're out of your freaking mind , right ?
Dude , we learned so much about email marketing back in the day together . I'm telling you , I mean for real , like we . So the backstory to that is , as I was working with Mark right , working with you at Zwei White , now called Zwei Group Yep , we used to send when I started working there , like we were sending out so much direct mail .
Yes , dude , it was just so expensive and it works . Direct mail works .
It was the end of the direct mail era . It was .
Right there and we started getting into email marketing , which was at the beginning of the email marketing era Yep , and we ended up shutting down the entire expense line of direct mail , like within nine months . We absolutely eliminated it . That's right .
But then we learned so freaking much , I mean we had probably one of the most rigorous , freaking email marketing , it's true .
But it's the company Dude . It did Okay . You realize our revenue grew 60% over a two year period there , Really , which is how we get back on the ink list . That's great man . Okay , and we were emailing , just emailing this shit out of a man .
I remember , like the spreadsheet , so I would be managing of our email marketing for the week . It was intense , bro , like we were sending out two emails a day , or three , or three , yeah , and then we had a daily wire that we came up with , but it was just this constant engagement with the audience and , to your point , we'd have unsubscribers , yeah .
But you let them go . Man Right , we sold . We had a lot of problems with our products line at that point . It was not all great , but we sold a lot of stuff to people and it just slaying them , we saved that thing .
But anyway , yeah , a lot of people don't understand , like probability theory and the low response rate that you need across a lot of independent events to make that kind of marketing really pay off . But anyway , those were just some of the common sort of findings . The resistance to suggestions , I think , is absolutely fascinating .
So what you do is it seems to me like you would have a non-engaged owner of the business who doesn't really care about growing the business , which is just detrimental .
They're always more interested in sucking money out than they are investing in , to begin a reward .
They don't care about the people , they don't care about the community , they don't care about the industry , none of that . They have no great vision other than just sucking cash , and when they get opportunity to improve , of course they're going to be like I'm good , like I just don't have any energy .
What would you tell , if you could tell , an owner that's in that situation ?
what would you say ? Sell your business , get out of it . It's time to get out of it and do something different . What would you say ?
The same thing . It's like you're hurting people , man , when you're hurting yourself .
You put yourself in a state of limbo . You're not going to be happy there .
But what if they said that was a model of a source of income ? I'd say get a frigging job .
Hopefully you got some value there that's going to make it possible for you to . I saw one company .
I thought was very interesting too when you say that it was a grocery store that was owned by a family and let's just say they did like eight or 900,000 a year in sales , just like a small sort of community grocery store , and they made so little money out of it they made like 30 grand a year or 40 grand a year out of it the family member that was
running it , and they owned all their buildings and were not paying themselves rent . I'm like , guys , why don't you just sell your buildings , put the money in a CD and get five and a quarter percent on it , and you'll do better to not even show up every day .
Ok , sell all your inventory off , sell your buildings , or just say , keep your buildings and lease them out to somebody else . Yeah , there you go Make five grand a month and not go to work . I eat out . So anyway , people do sometimes have to make that choice . It's just not rational to carry on any longer .
You know , I wonder if , like the one of the hard things about all this business stuff and I mean , it's like we're all human right , and I think that we all struggle with the same things , we're all facing the same things it's just about how you it's really about , and I know you might hate this word , but it is how you it you overcome and adapt and
overcome . Yeah , it's how you respond to what's happening , because shit's gonna change man Absolutely . It's gonna change so much and I imagine these owners like if they've been in the business and it just starts changing on them . I mean , like I hear people talking all the time .
I've had like two conversations this week about AI and the fear , the looming fear , and it's how it's that man . You have to freaking engage with that bro , embrace it . You have to get on it . It's just like the internet . Sure , I mean , I remember you didn't need to embrace the internet .
No , when email came out , I was like I said to Fred White what do we need this for ? What do we need email for ? You know ? Yeah .
It's like we don't need it .
Yeah , god , what an idiot . Okay , yeah , no , you gotta engage with it , there's no question about it . You gotta be willing to learn , you gotta have an open enough mind . I mean the same thing with marketing . I mean you know everything's changing all the time . Yeah , you could do something . It works for a while and it just stops working .
Let's get into the marketing rabbit hole . I know that we talked about before this , as we prepped , that I had a couple of things I was wanting to talk about , but one of the other things we talked about talking about was marketing , and I think this fits better for this conversation . All right , let's talk about it . Yeah , let's talk about marketing .
Well , I mean , I think any company that wants to grow at a faster rate than the industry it's part of , or a new company that's not known , needs to be spending two or three times with the average firm that industry spends on marketing . That's what I think . Two to three times .
How are you gonna eat into the market share of the other guy if you don't do a lot more than they do , much less what they do , and think that that's gonna be your ticket to success ? I love it .
I love that . So another good .
¶ Marketing Budgets and the Value of Branding
I had another question for you , like if I looked at my top line revenue , what percentage of my top line revenue should I spend in marketing ? How do I determine my marketing budget ?
Depends on the business . That's why I say you need to look at the industry that you're part of .
They all have a norm . So what you're saying is so where do I go to find out what that norm is ?
Every industry is different . Like if you're in the architecture and engineering business , I'd send you this Y-group . They can tell you exactly what everybody spends . So go find a research group or a company . Professional societies , trade organizations . They're out there for restaurants . Can you check with your local chamber of commerce .
Maybe they're out there for every industry though , like car dealerships . You can find any of that information so go there , figure out what's the industry norm .
Average marketing expenditure .
Percentage of revenue , yeah , and then spend two or three times that . I got it . That's cool , that's a magic number , right . I like that . That's cool Because I mean , you know , there's just some businesses that have inherently higher or lower marketing costs associated with them .
Like , if you look at , like , the swimming pool contracting business , it's gonna have a really high percentage of revenue that goes to marketing , cause people generally only build one swimming pool .
It's true , you're always looking for a new customer , exactly .
So your marketing costs is just higher baked in , you know , in a business like that , versus one that gets repeaters and keeps them for a really long time .
And so what do you tell somebody that's like like hey , man , I'm already running this business . I don't have the money to invest in more marketing Like I'm cash ?
type let's help you figure out where we can find that money , because it's necessary . Okay , I mean , you're not gonna get a big fire if you don't pour starter fluid on it every once in a while , right ?
You know what I mean . Yeah , you have to do it .
You have to do it . That's the point of this conversation . Yeah With , tell the listeners you absolutely must do marketing .
You must , because you want your company to grow Right . Okay , not only do you want it to survive , you actually want it to grow Right . When it grows , as we were saying earlier , everybody feels optimistic . They feel like they're part of something that's motivational for them , that increases their opportunities . We've got to have good people .
Good people don't want to be chained to a business that's going nowhere , right , you know . They want to see it grow . So the growth and then that creates the value that you can cash in on at the end , because that's what buyers , in spite of what these friggin' financial jocks constantly talk about multiples of trailing EBIT Forget it .
This is a growth company . Nobody gives a shit about that . I swear I'd like to strangle a lot of the financial jocks that have been trained through esteemed colleges of business and the NBA programs . You don't understand . It's a fun . I mean . There's a lot of things that contribute to the value . First off , a rapidly growing company .
You've got to do projected EBIT and then , based on that revenue growth rate and then that present value , that back , that's going to give you a completely different number than history or where they are now . That's great for a steady state business .
Yeah , you can't value a company , a growth company , a growth company based on historical EBIT .
No , it's bullshit Anyway . So the revenue growth rate is where all the value is , which is what all entrepreneurs are generally .
That's the and so what you're saying is is to prom that revenue growth rate pump Right , you got to freaking market .
It takes capital maybe . Maybe you got to get outside capital . You got to borrow on your house or yeah , you got to take less out of the business , or some non-essential part of it's got to be carved off to pay the money , and so the next question then becomes how do you do that in the best manner possible ?
Well , you're the marketing consultant , yeah , so here's where I start getting a little pissed off when I get that question .
If I have a client that would you know in history that come to me and say , hey , we're doing some , we want to invest more in marketing , right , but what's the best way I can get my ROI , I would get really pissed off immediately because I don't know .
Right , and you're not going to know the ROI right away . No , you can't . He takes a long time of putting money into it . Yes , and let me tell you something else . That is exactly , though . Again , that's what ? But listen , eric , we want to make data-driven decisions .
Then you better do some shit that gets you data . Okay , I hear you , that's not long enough . You can't depend on it for very long . And let me tell you something else , because the second thing that would always piss me off is like well , you can't prove ROI if you do this porn . Here's the deal , man , I don't care what you do , Every like .
The thing that I'm trying to insane is we're not doing that again , because , A we don't believe that gave us good ROI and , B we can't measure what that was . And I would go absolutely insane , because there is no such thing as doing any form of marketing that did not drive some sort of result .
I can freaking go in to Hero's Coffee down the road and meet with you , and I see somebody else there that knows me . I just did my marketing . No , I know , and that could have more ROI on it than freaking 50,000 .
Was this bigger companies that you were dealing with that always wanted to do the same thing ? No , no , no , no , not at all Okay , so this is smaller , like privately .
It's everybody . Okay , it's a common thread , because they've been listening to way too many people that are marketing to you to sell a book or some sort of material . Or you're listening too much in school from folks that don't understand and haven't been out there and driven a business right and marketed and faced that .
Yeah .
And all the results should be data driven .
No , they can't be , they can't be and they shouldn't be the branding and all that . People don't really understand the value , what that does for you . If it's done right , oh yeah , dude , it's huge , it's huge .
It's huge , absolutely huge , like I mean I get , I get criticism like back in the day . You know what ? I'm gonna bust out the secret here White Spider , the success of that company , in my opinion , and have been there from day one was driven off of our vehicle wraps .
Dude , I don't believe it . You had a tremendous amount of brand recognition from that . Constantly . Everybody knew those cars that had Spire webs on them . Everybody did .
And number two was showing the hell up to events Right when everybody was at .
I both see . I totally believe that You're shaking hands , kissing babies . Man , listen , I could say much the same thing , though not that I ever got the kind of money out of it that you did White Spider in the end . But I could say the same thing about Mark's White Ink . We had black trucks when every single other provider drove white trucks .
We had great black signs with wooden posts that were we made it by hand and stuff like that . You have to get your brand on , man . It allowed us to charge more than anybody else for a half square foot Because you looked sharp , you had your brand on it .
People trust that man . It's a trust mark man . I mean , there's so much study behind that , and I mean , of course , the big brands know , familiarity breeds trust . Totally . It's just that simple and you look more polished , you look more reputable .
Right , what's that worth ?
in a lot of circles right , like buying stuff or whatever and I think at the end of the day , it's all relational right . Like you cannot like , your marketing is worth nothing if your relationship equity and vision of how important relationships are your reputation is in the market .
Like man , I probably lost more money than I ever made in my businesses by make goods Because I was held back and determined to never , ever , ever fail .
I was always the same way . Okay , I was always the same way . And when you find out , you got an employee who's arguing with somebody about two or 300 bucks or five or whatever . Like , dude , that's not the way I want you to do it . Give them what they want , give them their money back and then give them something else . That's right .
Okay , to make them feel good . It's like we're paying for your bill . Also , what would you like for dessert ?
That's right . And , by the way , let's go out and have coffee next week and let me buy or have lunch Right , so I can continue to talk to you , so you can regain your trust as fast as possible .
Yeah well , you're gonna get the trust by not always having something in it for yourself from their point of view , you know that . I mean , if you want to talk about selling , it starts out by not selling Exactly .
It's genuine and just giving a shit about somebody else's business , man Right . You know , one of the things I've always loved is , like you know , when thinking grow rich , look , I just like that man , I just think it's just , I just remember very little of it .
Napoleon Hill , we like to read it . My dad bought a copy for everybody in our family .
You got it . I mean , I've reread it all the time . I like to wrote down certain things , but what I love is is render your service first . Decide what you're gonna do Right , demonstrate . Render the damn service first , demonstrate . It's like don't go out and forecast everything and then go raise capital they know and do all these different things .
Render the service first , validate it . Yeah , render the service first .
If I'm trying to sell you something , I'm gonna provide that service and if you know , that's why I'm like money back guaranteed and all those things work , it's not because they're great gimmicks , it's because the person that's buying that product or service is getting the service first and then they shall pay Sure , if they find it valuable
¶ Importance of Marketing for Small Businesses
. You came up with a campaign a long time ago . You saw it like , I think Panera Bread did it . Pay is what you think we're worth .
Yeah , that's right .
Yeah , I forgot about that , but you're right you came in , you went and got a croissant or something Panera all day Probably did .
And you saw some sign Let us bread bowls of soup . Though it's like , would you like bread with that as a side order , I'm like I still don't understand , especially if it's like broccoli and cheese . Yeah , that's the one I get . That's it so bad ? Good .
My hand for me geez , I thought I was eating good when you ate that , just because it has broccoli , because it's not a steak sandwich or something . That's probably better for me Normally what I eat .
You need a dietitian like Asa , anyway , though . But yeah , you probably went and bought your broccoli and cheese soup bowl yeah , bread bowl Then came up with that idea . Well , no , they said you're like , how much is it ? And they're like pay , pay is what you think we're worth with . I forgot to say they didn't even prefer it .
And you came back in so excited , yeah , and you're like , let's do it . And I think we tried it . But I mean , but the thing is is like it's , that's what people , I mean that's what they want . They don't want to be ripped off , they don't want to have to . You take the guessing game out of that .
But anyway , I think that the going back to the whole ROI , I mean you have to go out , you have to market , you have to campaign and then you figure things out . And another thing I believe big in on marketing , because there's two different things there's marketing and there's advertising .
Right , there's a part of it marketing Right Subs Right .
Marketing's a bigger , bigger role , bigger umbrella , right , and I don't think a lot of small business owners understand that . They think it's just the promotion as well . Yeah , they think it , they . When you say marketing , they think just advertising . Right , we tried that and it doesn't work .
Yeah yeah , that doesn't work Right . The word of mouth is what we were like . I'm sorry , I'll just keep coming back . I've heard it so many times yeah .
Yeah , yeah . And so you need to invest , like if I was to advise somebody , or even with my businesses that you know and the that I got going on . I'm investing in the people Right To to communicate to the world .
Well , that's part of the marketing expense .
Right , yeah , Right . So I mean , I'm not really investing in advertising right now , Right ? No , I understand as much , yeah , but but I'm definitely investing in the marketing of the share , the people you know , yeah , and you know a lot of that . Well , it's , it's fun you have to have that .
It's fundamental . There's a lot of stuff you can do today with social media . It doesn't cost you anything . It doesn't cost you anything . I mean , if you're , if you're actively involved with your business and you want to really engage with it , okay , you can do so much for no cost , so much .
As a matter of fact , we build wise , other than the vehicle wraps . We had the zero dollar marketing budget for about 10 years , right , but the activity level was high , just crazy . Right , it was crazy .
That's part of marketing though .
Yeah , it's PR . Pr is part of marketing . I mean it relates to the protocol .
Well , pricing is part of marketing , absolutely . Product itself is part of marketing . There you go , it's all part of marketing . Get branding Everything falls under it .
It does , man , you know , and I think that small business owners short sell marketing and they don't . If you start up a new business and you don't have , like everybody knows , I got to have somebody that runs the shop or I got to have somebody that fixes that or does this , or got nobody in charge of marketing . No marketing .
Yeah , best thing Whatsoever it's , you cannot do it .
Blows my mind . It's nuts man . I was talking with a small business owner the other day . In fact it was the mom of one of my students who did his project on his mother's business and she wanted to talk to me afterward . Nice lady , yeah , she's . She owns a cleaning service and is based in St Louis and it serves realtors .
I asked her if she knew my cousin . She goes oh yeah , she's one of my clients . My cousin was the number one real estate agent in St Louis at one point . She's quite a successful seller . Her husband was a Cardinal baseball player which was a good lead in for it . It's some good clients , but anyway , so she's got . She's doing no marketing at all .
She's got a list . Well , I say none at all . She sends out an email about once every three weeks to a list of 4,000 agents , which is good that she's got that list . I said now why don't you start trying to send out like three a week ? Ok , one every three weeks . I mean , come on , send out three a week .
Three a week or three per month .
No three a week . That's three different stories of good things , bad things , what happened ? Relevant content yes , all stuff . All stories about stuff .
That's what I love about you man , like your relentlessness is tried and true , like you don't spam , because the thing is , spam is created whenever I send you an email and you have zero interest in it , right ? And then I send it to you again .
And again , and again , and again .
Yeah right , trying to get your attention , that's spam , right . But good marketing is when I send you content that you're interested in . That's helpful for you .
Right , you actually want to save it in some cases . Yeah . Yeah , it's true , you want to share it , you want to save it . Yeah , I mean , it's not that hard to do . Again , though , I think you've got to be engaged with your business .
If you're not mentally engaged with it , you don't see the successes , the failures , the testimonials , the things that went well or things that other providers are doing poorly .
You've just got to be intimately familiar with what's going on out there , and then the content's not that hard to create If you get in the habit , I think , of doing it at certain times during the week , like I write my Swigler article every Monday morning at 6 .
AM Really yeah , that's what you do Always .
It's like some people get up and I mean sure I've got to have a couple cups of coffee and some doughnut , A doughnut and some Lucky Strikes while I do it , but it's just the first thing I do .
And you think we get Lucky Strike to sponsor this podcast ? Oh no .
I think that's illegal . Oh , that's right , that's true . Cigarettes are cancerous and terrible for your health . There's no question about it . Yeah that's a bad idea yeah .
Terrible , but I mean so , like you have brought in that content , you have to be kind of back to the whole thing of a business , and not being engaged in the business Right , like I mean , it's so detrimental because you can't even understand what your customers are wanting , with the markets needing , you can't market , you can't do any of that stuff .
And I would say , though , that the good news is is that there's two things . You could turn the corner real quick and make a huge impact on the business .
If you're a business owner and you've found yourself being passive and not interested , losing passion , you've got to flip that switch , and you have the power to do that , or be of the power to go out and actively find somebody that will buy that business and get out for learning .
Yeah , exactly it should be one of those two things Total , I think , yeah , yeah , I totally agree with that .
Yeah , because a healthy , sustained business is actually really attractive to another person that's wanting to get something off the ground and rolling . I mean , you got such a good springboard there .
¶ Buying Companies for Entrepreneurship and Innovation
Well , that was a big theme of my class this year in small enterprise management is buying a company is a viable gateway to entrepreneurship and fixing it . Yeah , because there's so many tired ass owner , there's so many tired baby boomer owners . There's going to be a huge turnover in privately held companies because the baby boomers are dying off and getting out .
Dude , you can get in . Man , if you could get in and you're just marketing minded , you could freaking blow that thing up .
I'm telling you well , we've got our buddy , richard Scott . Yeah , you know , this is what he does . This is what he does , man . Yeah , that's part of it .
You just buy these companies and you put better marketing in place and do some things to get the people reengaged , and it's not that hard to be successful you know , it really is a constant engagement , though . And another thing I was just thinking when you were talking it's like this business here , this podcast videos , is a separate company , right ?
That we buy services from here at Big Talk about small business , right ? So ? And this is a service that your company provides to a lot of other people doing podcasts . Correct , by being a customer of your own business . That's exactly the point . Don't you learn so much . It's like I'm buying glasses for mid-century modern glasswarecom .
Yeah , because I want to see what happens . Yes , I can go through the process and see what's good and what's bad . Yeah , and it's fascinating . Yeah , you know it's totally the point , man .
Yeah , I mean . That's why I'm wondering . I mean , like it all circles back around , but it keeps you engaged in understanding where the problems are Right , you know , and then being able to also understand the value of it .
Yeah , you know , and then how can we build products and services in the podcast videos business that can help minding your problems that we're having stickiness with ? Exactly , they have a better podcast we actually what was cool ?
I think it's such a great tactic , yeah , and a quick testimonial to it is we have Parker , who's been on our show before that works for podcast videos , sitting down here giving us ideas about how to improve our podcast , right .
That's great . Think about it . He does that for clients too , Exactly Okay . That's super valuable Because he's engaged with the business . It provides a higher level of service . That's right To the customer . That's right the employee does . Yeah , it's a beautiful thing it had . We now have a beautiful podcast and developing that relationship .
Now it breaks down the barriers and you're not .
You don't have that customer nervousness and scared to lose money , right , or a client thing , but you rather have two folks that have developed a relationship from day one so that we can flush through a lot of these inefficiencies or stumbling blocks that me and you might be having Right , and then you can plow that to all our customer base .
Exactly that's the idea . Right there You're the test model . Yeah , I had these clients once . I was fascinated with this . They were based in Boston , architects and engineers , and they did a lot of work on malls . They did tenant build outs for new spaces for mall tenants .
They rented a space in a mall that they designed and they opened up a candy store and went through the build out process for their candy store and then they had their employees , including owners , take turns working there so they could see from the perspective of a mall tenant what issues they had . I thought that is freaking brilliant .
It is brilliant , you know ? Yeah , instead of fighting against your clients because you don't understand the problem , the one yes , it is such an easy thing to do . I mean like in it's so valuable , like that puts you ahead of your competition , what it helps you understand how to market the value proposition in your marketing .
Wouldn't you love to be selling work to a mall client when you know that's what your firm does and you could tell them about that ? Yeah , I'm a mall mall yeah . Yeah tenet myself yeah .
And what I found , and we can help you avoid that . That's how we're better than our competition .
And yeah , nobody else could make that claim . I would be like shit . I want to deal with this guy . He knows what we're going through .
Exactly , okay , exactly .
And instead of like the construction industry Right , which just continuously ignores the complaints of every customer on the freaking plant , the thing you gotta realize with them is they have enjoyed a situation or demand exceed supply for so long because we have inadequately trained supply of construction workers , craftsmen , laborers , whatever .
There's just not enough of them out there , so they've always been in this excess demand which allows them to be horrible and still be in business . You know there's no . I mean , I was in that industry myself . It is just absolutely . I'm sorry people , it is a horrible business and you will almost never get what you want and what you're paying for .
Okay , let me just say , or on time , or without them screwing up six other things . When they do whatever their chore is inside the project , they'll go over budget over time yeah . Cut through the last guy's work , screw up the floors with their granite , whatever .
Dude , that is . That is an area , I'm sorry to say , like I've actually been thinking about it more when we talk about AI and all that stuff .
Like that's an industry that's gonna get rocked with AI and all that type of stuff and there's gonna be a lot of casualty in that as far as , like , people being able to depend on that as a source of income and it's gonna get kind of ugly . Man , I don't like that . But at the same time , you can embrace it , you can evolve with it .
You have to evolve with that technology rules .
Construction companies don't invest in anything other than tools and equipment . Okay , they don't want to do that , it's not ? I mean , I'm predicting they don't want to invest . They're not very investment oriented , the majority of them .
I'm making a painful prediction that that's gonna be . It's gonna be a there's gonna be a lot of folks that aren't gonna be able to rely on what you're talking about because of this new technology advancement and all that industry .
On the other hand , some no AI is gonna take the place of some carpenter out there in the field finishing out a house . Somebody's gonna have to do that , yeah , I know , but , man , I agree .
I think that's gonna be a long time , but there will be a day that we're like because of the inadequacies , inadequacies , inadequacies . Don't you think that you got it yeah , did I say that right ? You said it right . Yeah , and the inefficiencies and the ineffectiveness , what that ?
Those voids right there is what drives people with the technological know-how and the engineering and the robotics . They look at that and go what ? Go mine , yeah , it's true . And if the but if the industry doesn't start making changes , you know robots that could work 24 hours a day .
you know They'll find ways to build frames in an assembly process to get them shipped . In a way they're gonna advance the logistics to get
¶ Importance of Customer Engagement in Business
things there .
Sure , yeah , there's definitely ways to do stuff better , especially if you start getting into modular .
Oh dude , this is gonna . Well , I mean , everything can be modular . Yeah , Custom modulation .
Right , right . That's his how to do it . Modulation part two . Custom modular modularization .
Great minds . But I mean , I'm just being I've been thinking about that a lot lately Like it's just one of those areas , that where people are gonna start getting .
No , I'm sure , I'm sure , but yeah , anyway , I don't know how we ended up on that , I don't know .
I mean , they're just getting pissed off because people don't engage with their business , it's true , and stay with what's going on . I mean , I think , another good thing on all that topic over the rest of the time . Yeah , we are okay .
But another thing on that there was an event that happened that really demonstrated the passivity , the tiredness of a lot of small business owners . What was that ?
COVID . Yeah , when COVID came around no kidding the ones that responded to it and the ones that didn't Dude it- was like , I mean , it was house cleaning .
Yeah , it's true , so many people that were not engaged were forced to quit , whereas today it's kind of come back in . Historically , it happens , you have so many people that are not engaged that don't quit , and it just lingers on .
Yeah , a little cleansing process . It was Getting out the bad it was yeah .
But , the ones that survived that dude ? They freaking raked .
Yeah well , and they're better businesses today for it because of some of the practices they adopted . You know , I mean we could talk about restaurants all day . I'm sorry , I'll be critical of them . A lot of them did not respond . If you want to talk about COVID , I mean that was the best place to look .
Oh , yeah , for sure , I think . I mean I remember during that time though , going by tropical smoothie here and I bumped into the owner and I was like you know , it's kind of like right early on I was like man . I'm sorry that , you know . I mean this is tough right . I'm just sorry that you're having to deal with this .
And he looks at me and goes like dude , we are busier , I'm making you know we're doing more business right now than like act three to five acts . God love them . That's great to hear , I know , but he was like man , I'm just , you know , I got involved . I mean I stayed open , figured out the way to do this and we're just killing it .
Yeah well they're smart .
We went in a new restaurant last night in Fayette , velomnucket and mentioned the name restaurant slash brew pub and the service was so bad my wife and I sat down at the bar okay , that was not completely full and it had most of the seats full In the bartenders , three never once looked our way , acknowledged us , served three different people who walked up to the
bar , never cleaned up the stuff that was in front of us and said hey , we'll be with you in a minute . We sat there for somewhere between 10 and 15 minutes and got up and left . You just can't do it , okay , I mean , they couldn't even say hey , I'm sorry I'm slim right now , but I'll take care of that While they pick up the stuff in front of you .
They simply ignored us . Can't do that in that business . I mean , I will never go back there again .
There's certain businesses . Every business has certain things that you just cannot do . Yeah . Like if you're an engineer , you cannot make mistakes and put your seal on that Right . In the restaurant business you cannot cannot have fantastic , superb , excellent customer service . I know Relentlessly .
This was so bad , it was remarkable , and my wife's ex-husband's friend is the one who opened it . Yeah , and he told us to go there because the food is good , yeah , and she immediately told him what our experience was there .
Yeah , he relayed that to the owner , who said he was there and saw us and saw us leave , okay , and offered some excuses about new people , okay , which I don't wanna hear . Yeah , train them . You should be back behind the bar on yourself . You're sweating man , okay , and anyway , and offered to give us a free meal , but we're not gonna go back .
Yeah , I'm blaming you . You know you blew one shot . You blew it , that's right . You know that's the way it is today . It's like when you go to New York or somewhere . I was in New York last week for a board meeting there and the restaurant service quality is so high and the food quality so high . But you know why ?
Because it's like there's so much competition there and the customers are gonna be so picky , yeah , yeah , if so many choices , that if you don't do an outstanding job , that's right , you're done for . Yeah , you know that's right . So , anyway , it's all good stuff . The good news is , with all this , loads of room for improvement .
Absolutely Every single business that you look at there's loads of room for improvement . So if you're listeners out there , you need to take a good hard look at yourself . Maybe you need to pay some people to be customers of your business , or you need to be one yourself To the end . Tune into the market and what they're telling you .
And another thing if you're a listener and you've always wanted to start your own business , if you just come in with a big bag of give a crap and engagement and attention and dive in like that I mean there's a lot of people You'll probably be successful .
Yeah , you know . Yeah , you will prevail and just do that long enough . Exactly , yeah , don't give in to the failures great mantra that we see unlinked in every day . I had one LinkedIn post I clipped . I took the name of the person out of it . But failure is great . We should be celebrating failure . I'm like no , I completely disagree with this guy .
Okay , let's give a participation trophy to everybody too . That builds strong character . Can't do that , you know ?
So do that . Yeah , so the opportunities abound , opportunities , everything .
It's actually encouraging conversation because it reminds me like , at the end of the day it's sorry about that cliche , but it's really not that hard right , it is not that complicated , it is not some sort of sophisticated in a Harvard pro forma calculation with 20,000 years of research behind it , in 2000 degrees , in a state of genius and IQ that only five people
have . That's what I think a lot of people block themselves from . You know , if you have something inside your being that says I want to own my own business , I want to go do this , I want to solve that problem , right , you don't do it .
Go do it , do it . That's the best way to figure out if you're gonna solve the problem or not .
Yeah , and have confidence that it doesn't require all these things . It just requires relentless attention , focus , engagement . I mean everything you got , yeah , but that's the hard part . That's why a lot of people get so tired , but then a lot of times they get in business by accident .
You don't know why a lot of these people that like these owners they're like a lot of them , they inherited the businesses or they got divorced .
We had some divorced spouses who got depressed .
Right , a lot of things happen . Yeah , it's not for everybody , it's not you know , but also the horror stories of it are a lot of times have nothing to do with just being an entrepreneur Right and have been entrepreneurs , so you can't look at those case studies ?
No , you can't . It may be that they just screwed up because they never had what it took .
Right , or maybe they just didn't think that marketing was important . Yeah , except they got into plumbing and it was just about doing good plumbing Just doing good plumbing Just doing good plumbing .
Word of mouth , word of mouth . Yeah , whereas the dudes with the toilet seats , the raps where it looks like they're sitting on the toilet as they drive , they get all the attention . They do get attention . I use one of those guys no . Yeah . I do . That's the way his vans look Mm-hmm , you know .
But I'll tell you what I got old plumbers I could call who don't call you back . Yes , or spend a week before they get there . These guys , I can call them and they show up . It's all right , it's you know ? So who am I gonna call the owner ? I call the owner , who's probably in his 70s and still involved and owns all kinds of stuff .
Does not need to be doing this . He loves it . Yeah , it's called life . Yeah , exactly , it's like , well , I don't know anything else to do , I'm just gonna keep going , you know . Yeah . But he's got a successful business . I'll tell you that he's got his son involved with it and they're really growing it .
I mean , it's a lot bigger than I realized when I started asking him questions , when I as he's out there digging in my yard to fix a sewer line , you know Right .
Good for him , man .
Yeah , and I mean the guy's fantastic . Not only is he happy doing what he's doing Okay , he's built this great company that's far bigger and has tons of value in it because of the assets they own and the revenue it generates , but he's also really good at what he does .
We had this problem where the city was trying to tell us our sewer was broken on and it was our responsibility to fix it . But it was broken in their street and he just argued with them and argued with them and got all his equipment out there and proved to him that the problem was under the street , nice , and they had to fix it .
It's great and it saved me somewhere between eight and $12,000 . It's awesome . Okay , who am I gonna call that guy ? It's because he cares . He cares . If I text him at 630 on Saturday , he's gonna respond by 635 . It's fantastic .
I love it . It's called having purpose in your work . Yeah , and you know what I'm here to say . It's okay to have your work as part , or even a large part , of your purpose in living and being alive .
It is , it's okay , it's okay , it's good . Yeah , it's not work versus life , no .
We've been taught way too much . All these other things are more or so important , but really , if you can find purpose in your work Right , and that's like I love that Right .
Or it's fun . We could talk about purpose versus passion . Some people say it's gotta be purpose over passion , but you know what Passion goes a long way too . It's a good sort of help If you're just interested in the subject . I mean , I like motorcycles , you know .
I'm not necessarily saying that it's the most noble endeavor to sell motorcycles , although I do think they help a lot of people , sure , but I love them , yeah , so it's not hard for me , it's okay . Okay , I think about it a lot . What can I say , dude , it's passionate .
You know , yeah , it's fun to be interested , it keeps you going in life Like it's . Like I can't imagine . Not , I can't imagine at this point in my career doing something that like I'm not passionate about doing , and when I start getting into a space where I'm just not happy about something , time to get out .
Yeah .
Or time to change your role .
Right , yeah , well , that's what I did with the building and construction business and that eventually my wife basically abdicated and , instead of delegated a lot of stuff , that landed on her plate , yeah , and she finally got sick of it too .
Yeah , but yeah , when the time when you start thinking that it's time to get out , it's okay , it's okay , you don't have to do something for the rest of your life , yeah , you know . Yeah , do something different . Here you go .
All right .
Good man , good talk . Same here , and this has been another episode of Big Talk About Small Business , so check us out at wwwbigtalkaboutsmallbusinesscom . Sign up for the podcast , so subscription .
Yep , subscribe on YouTube .
Yep , youtube , or those are fun things , man , it just helps , it does . We need subscribers to be able to continue to do this , because at some point we're gonna have to get some sponsors . But fortunately my rich uncle Eric over here , there's bankroll on this , bankroll on this operation for now .
No , no , no , no , it's true , no , but anyway , take care everybody , and if you do have questions , send them in to Eric or myself . We like that here . And what is our email address ?
It's info at bigtalkaboutsmallbusinesscom Great and you can go to the website too . We have a form on there . You can just submit through the form . Yeah , we love that . Super simple . We love that we're doing this . Why do we do this ? Why don't we spend the time every week ?
Because we actually enjoy having these conversations , we do , and helping other people out , right , and so if you have a question , it would be really cool . You know , when we got some lined up , right , but send more in because at some point we're just gonna read off questions in our podcast episodes , the tougher they are the better .
Love it . Throw us your real hardball here . That's it .
I like it . It feels good , right . That's why we're doing it . Yeah , so I'm not being passionate about something . No , that's why Help other people in business .
It's why I teach . It's the most rewarding stuff ever , as you know , with the feedback we get from our listeners . Yeah , it is so rewarding . It is really cool Seeing them be successful , just like my students . Yeah , exactly man . All right , eric . Thanks a lot everyone and we'll see you next week on Big Talk About Small Business .
All right guys . Thanks a lot . Thanks for tuning in to this episode of Big Talk About Small Business . If you have any questions or ideas for upcoming shows , be sure to head over to our website , wwwbigtalkaboutsmallbusinesscom and click on the Ask the Host button .
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