What does it take?

Hugs are Free

On Facebook today, I saw a post that listed out why to not NOT start a Start-up.  Everyone has an excuse:  I’m too old.  I’m too young.  I don’t have enough knowledge.  I know too much.  My parents will kill me.  I’m a new parent.  The list goes on and on.  I want to share a few stories that should help you put most of your fears and excuses away.  Most are from the Small Business Naked show, but this first one is just about Tim.  Never met him, but maybe one day we can get him on the show. 

Lots of people want to start a business.  You might be one of those, and I hope that you are, because you are who this book is written for.  There are many reasons why people want to start a business: freedom in their schedule, financial freedom, to do something but, but there are lots of reasons why most never start a business:  fear, lack of knowledge, analysis paralysis, etc.  But I believe fear is the number one reason why people don’t take the leap.  It is because of the unknown.  But if we shed light onto how others have done it, it starts to become a little less scary.  Lots of people with harder stories, or adversities have stared businesses.  If we hear about how others have overcome adversity, then it encourages us to take the leap.  If he or she did it, than I certainly can do it, we think to ourselves. 

Tim lives in Albuquerque, NM and started a restaurant called Tim’s Place where they serve breakfast, lunch, and hugs.  Tim is amazing, because he is the only restaurant owner in America that has Down’s syndrome.  With the help of his parents, he opened his restaurant in October of 2010.   According to his website, Timsplace.com, Tim has served up 63,248 hugs as of writing this.  In high school, Tim had experienced working in a Red Robin, where the management had documented that revenue increased while time was in the restaurant helping customers smile.  After graduating, he went on to Eastern New Mexico University and graduated in 2008 with certificates in Food Service, Office Skills and Restaurant Hosting.  After a little world travel with his parents, he decided to open his own restaurant and realize his dream.  Now Tim is not only a successful entrepreneur, but he is also a public speaker that has given over 75 talks and has been featured on The View, CBS Evening News / Sunday Morning, America Online, ABC News, NBC Today Show, NBC Nightly News, National Public Radio, CNN News, and has been featured in People Magazine.

I am pretty sure Tim did not start his business with the idea to revolutionize the restaurant industry or with a big 50 page business plan.  He always wanted to open a restaurant to make a difference in people’s lives. They serve hugs for goodness sakes…HUGS!  How beautiful is that?  What a point of difference.  Tim gets lots of help from his staff.  He has cooks, a general manager, and servers.  He is willing to pitch in wherever he is needed, but he gets to focus on the one thing that makes his business concept unique:  loving people, and making sure everyone know they are special. 

Doughnut Barron

If you have ever been to Portland, you have no doubt heard of a little doughnut shop called Voodoo Doughnuts.  It was started by two friends that just wanted to start a business and have fun doing it.  Kenneth “Cat Daddy” Pogson and Tres Shannon were introduced to each other by their moms, and quickly became best of friends.  They brainstormed ideas and decided to start a doughnut shop in downtown Portland, OR, but it had a twist, they would have creative doughnuts with crazy toppings.  They didn’t know how to make doughnuts, so they went and took lessons from pastry chefs.  They never borrowed a dollar, have remained an all cash business ever since day one, and they keep things simple:  the sell doughnuts, coffee, and soda.

Johnny and I caught up with Tres after they open their first non-Portland store in Denver, CO.  In the busy season, they can have over 250 employees working around the clock, as their stores are open 24 hours a day.  Much of their business comes from college traffic and in the evenings after party revelers have had their fill from the bars, but you would be hard pressed to find a time when there is not a line in their stores.  If you go, know that you will have to get your pink box to go, as they have no tables to sit down at.  If you think you have to have something for everyone in your new business, understand that it is be better to be known for one thing, than not be remembered for anything. 

If you want to hear the full story of Voodoo as told by Tres, check out Small Business Naked episode #11, but know that we have an explicit rating on iTunes for a reason.  When we interviewed Tres, it was 11 am, and he was drinking straight vodka…let’s just say it was a VERY interesting and entertaining conversation.

Cutting Grass

Some people wait until they have business experience, and others just go do.  My good friend Johnny Erbert started cutting grass at the age of 12 so he could afford some of the finer things in life.  He saw lots of his friends getting cool clothes and toys, and had parents that said if he wanted those things, that he had to earn the money for them, so he started cutting neighbors’ grass.  He kept getting more and more customers that were further and further away from his house, and so his dad helped him outfit a bike that could pull a trailer to widen his servicing area.  He kept expanding, and eventually had to purchase a pick-up truck, and hire someone that could drive it, as he wasn’t quite old enough to have a license.  Fast forward 30 some-odd years, and Johnny now has arguably the largest lawn cutting service in the Denver Metro area.  He has over 20 trucks and works all around the city.  I have known Johnny for over 12 years now, and am still in awe of the organization that he has built on the notion of doing one thing well:  cutting grass.  Unlike most lawn services that will trim trees, pull weeds, prune bushes, etc, Johnny has said no to all those line extensions so that he can say yes to what they do really well.  Not only does he limit the kinds of services he offers, but he also limits customers by the size of yard.  Johnny and his team are very efficient, and know that they need to focus on smaller yards.  This way, they can mow every lawn with the same kind of mower and have good predictability. 

If you talk to Johnny, you understand quickly how focused he is on the customer experience.  They promise their customers “We show up!” and follow it up with a relentless commitment to answering their phones, correcting any problems that come up, and doing whatever it takes to make every situation right.  Erbert Lawns is a great example of a business that is simple but hugely successful.  What kind of simple business could you start that focuses on the customer competes with GREAT customer service? 

Solve a Problem

In 1998, Joy Gendusa started a little business called PostcardMania.  Today they are one of the largest direct mail and marketing businesses in the nation.  When Joy started the business, she was doing graphic design for small businesses; designing logos, flyers, and postcards.  She decided to do some marketing of her business and contacted a postcard printing company that would print her cards.  When she received her proof, she realized that the company had added their name and phone number on her cards, and if she wanted it removed, she would have to pay the company extra.  Infuriated by this, Joy decided that she could gang print cards for other people, offer a turn-key solution for designing, printing, and mailing, and do so with better customer service.  With the use of a credit card, she went out selling her services, and when she filled a print run, she was able to print all the cards at a discount.  At first she outsourced all aspects of the business except the graphic design, which she did herself, but eventually she was able to bring things in-house and save even more money.  By bootstrapping her business, she was able to keep her start-up costs low, and grow as there was need.   

Today, Joy and her team of over 200 employees print more than 10 million postcards per month, and have expanded their services to include website creation, email follow-up campaigns, pay-per-click management, and other direct mail services.  Joy does a great job at marketing her business by sharing her knowledge of marketing with her customers openly. It has been this commitment to offer high value to her customers that has helped build loyalty and grow her business year after year, through good economic environments and bad.  That, and they also send out over 170,000 postcards per week…they really do practice what they preach!  If you want to hear our interview with Joy from a few years ago, check it out at SmallBusinessNaked.com.

Strategery

Is it really important to be strategic when running a small business, most definitely?  As a small business you have fewer resources, and personally you have more on the line.  The idea is to get more from less. 

I love to think of small business as a game, but it’s better than a game because there are very few “rules” that you have to follow.  If you play a board game you have a rule book of do’s and don’ts, just to make sure everyone is playing evenly.  In cards, you only get so many cards and you have to go only when it’s your turn.  In sports, there are boundaries and consequences.  Not so, when you are growing a business. 

Of course you have to pay your taxes, and not do anything illegal.  When you really think about it, it’s the best game in the world because you’re only limited by your imagination and your resourcefulness.  Unless you’re in a highly regulated industry like mortgage banking, fire arms, or securities, you can change the rules; the rules being, the generally accepted norms of your industry. 

Let’s take dentistry.  I was talking to my sister yesterday, and she was complaining that she can never get a Friday appointment with her dentist.  I told her, “It’s because none of them (dentists, that is) work on Fridays, they all take it off.”  The joke is they all go golfing, and I am not convinced that it’s not far from the truth.  If I were a dentist, I would open my practice from Thursday to Monday and charge a premium, this way people wouldn’t need to take time off of work to go to the dentist.  This is being strategic. 

What about car repair?  Why is it that most of them are only open Monday through Friday from 9 to 5?  If I opened a car repair place, I would have extended hours, working on cars at night so they would be ready the next day, guarantee the turnaround time and give a free loaner car to every customer.  We’d record the work we do by putting camera’s in each repair bay, and allowing customers to watch the repairs happen by logging into our website.  Do you think this would command a premium, I do.  Some would call this being innovative or resourceful, but I would say its strategery (not the kind President Bush talks about). 

Once I was in a little coffee shop in Monterey California and they had this great little contraption on the bar. It was a long thin board that held individual coffee filters and when you ordered your coffee and told them what flavor you wanted (and they had a ton of flavors), they would grind the beans, put the beans into a filter and pour hot water over the grounds.  Every cup was fresh and made to order.  No expensive machines and no wasted coffee to throw away.  This was being strategic and if I’m not mistaken they charged a premium and it was worth it. 

What could you do to be strategic, to change the rules, to stand out and to command more revenue?  Being strategic doesn’t cost money; it saves money by using its resources to the fullest and maximizing returns.  Do you have what it takes?