Chapter 14 Make your meetings amount to something

Do you find yourself attending more and more company meetings?

Do you feel that most of these meetings are: A - generally productive, B - a complete waste of time or, C - perhaps a little of both?

Most of us have attended great meetings and horrible ones. How can we do a better job in deciding which meetings to attend, whether to send a subordinate, or if it can be skipped entirely? Sometimes you have no choice and your presence is mandatory.

I run a monthly CEO meeting at which the people who attend say they enjoy themselves, learn a lot and find it a valuable use of their time. So what am I doing right?

On the other hand, I have been to meetings where two hours pass slowly and with absolutely nothing accomplished.

Here are some suggestions for having better meetings.

Have a stated purpose. The meeting must have a worthwhile, stated purpose. Set realistic goals. Reviewing sales, costs, human resource issues, strategies, new product development, major issues, weekly update, opportunities or any other worthy purpose for gathering people together. Everyone there should know what that purpose is.

Only Invite the right people. Who really needs to be at this meeting and who doesn't need to be present? Who is in the loop and needs to know, and who can add to the meeting's purpose with background, input, suggestions, options and/or solutions?

Have an agenda. Having a meeting without an agenda is generally just a BS session. Have a specific time set for the meeting to start and end, and stick to it. Have specific times set for each agenda item.

Start on time. You will get the behavior you tolerate, so if you traditionally start late, expect to start later and later. A good way to eliminate this tardiness is to lock the door and whoever is not there at the stated start time misses the meeting.

Calculate the true cost of the meeting. Do you know how much it will cost to gather your entire staff or a department for a 45-minute meeting? You have to pay all who attend, and they aren't doing what they would normally be doing. In no way am I suggesting you shouldn't have purposeful meetings. These meetings should be well thought out and purposeful, have the right people and keep costs in check.

Know in advance what you expect to get out of the meeting. Determine what has to happen to make it a success, and push for that result.

Be in control of your meeting. You or someone should moderate/facilitate the flow of the meeting. It is critical that everyone -- yes, everyone -- be on time. No one should leave early unless a true emergency arises. Everyone should be allowed to participate equally, to speak freely with no repercussions. No one should be allowed to ramble or go on off-topic tangents. The key is to focus on the purpose and the problem -- the solutions will come.

Turn off all distractions including cell phones.

Allow five-minute bathroom breaks for long meetings.

Recap. At the end of the meeting, summarize what was accomplished and who will do what by when as follow-up action steps. Set the date and time for follow up meetings.

Keep the number of meetings to a minimum.

What about traveling for meetings and the time and expenses involved for transportation, including airfare, hotels, meals and other expenses?

Is it really necessary to gather in person for this meeting, or can it be an Internet-based meeting?

More and more businesses are using Citrix Go to Meeting, Skype, Google + and other technology to meet virtually.

Networking MeetUps are meetings, too!

The ever popular MeetUp. com has grown in popularity and has meetings on just about anything you can think of. Some present good opportunities to network and learn, others not so much.

How do you decide where to spend your time? Starting a MeetUp group costs about $144 year, and its success may be killing the concept. There are too many overlapping business MeetUp groups, and attendance cannibalization is taking place. Too many choices offered may lead to people might conclude that they just won't go to any of them.

I know one person who is always in meetings. It makes me wonder what he can accomplish in his business. When he isn't traveling to meetings, he's in meetings in town.

Beginning this month, I will be running our SCORE member and executive committee meetings as chapter chairman. Wish me success!

If you email me, I promise to get back to you (between meetings!)

Chapter 15

Creating quality is hard ... but worth it

Published: Monday, June 9, 2014 at 1:00 a.m.

If you are over 40, you probably remember the story of the ill-fated Sony Betamax recording technology.

Sony was the undisputed king of the electronics hill decades ago, with its Trinitron televisions and Walkman portable music players (forerunner to the iPod and other MP3 players).

Sony created a concept it called time-shifting: Its Betamax equipment, for the first time, gave people the ability to record a TV program and watch it later. Betamax boasted two hours of recording on a tape cartridge. This was all well and good until Panasonic upped the game with six hours of recording using its VHS tapes.

It was widely agreed that Betamax was a superior recording technology compared with VHS. To remain competitive, Betamax sold a contraption called a stacker. The stacker held four cartridges, giving it an eight-hour recording capability. There was only one problem: The stacker didn't work very well -- it jammed often and didn't always eject. Customer complaints rolled in.

According to Sony's product manager at the time, Bob Theis, "We were arrogant in how we dealt with those customer complaints."

And we all know how that turned out.

Theis, a local SCORE mentor who lives in the Sarasota area, said he learned an important lesson, one he applied after he bought a 100-year-old company in Syracuse, New York, called JR Clancy. This company supplied everything used backstage in theaters and auditoriums, such as customized rigging and lighting.

It had significant problems shipping orders that were correct, complete and fast.

"We were missing on five out of six cylinders, and it was costing us a huge amount of money," Theis said. "Customers would call and complain -- it was frustrating."

He decided to use a quality standard, known as ISO -- the French acronym for International Organization for Standardization -- to improve the company's performance. The particular standard Clancy used, ISO 9000, took the company 18 months to implement at a cost of approximately $250,000.

Theis feels it was well worth it.

"We had quality problems, we needed a framework," he said. "We needed discipline, and it gives you that as well."

Clancy began by identifying and writing down all company procedures and processes. Then it studied them to determine which worked well, what needed to be improved and if there were some things that were unnecessary and could be weeded out.

Theis spent two months in the field, visiting customer's job sites, dealers and installers, asking "What do you guys really need?" The answer that came back was, "You guys have to be on time, you have to be complete with your order, and the order has to be correct."

Clancy decided to treat its dealers, installers, its own employees and even its employees' families as partners.

The company took as its goal and motto "Make Our Partners Successful," or MOPS.

Clancy measured its performance on time, completeness correctness. "We became obsessive about tracking those metrics," Theis said.

Another important metric was partner satisfaction.

Clancy measured this with feedback from field visits and questionnaires, and the company did everything it could to make its partners successful.

"We turned over every process in our company, and we went deep-dive into it," Theis said. "We looked at everything from how we address people when they call in to how we ship the box and what the box is going to look like when we ship it out. Every detail of our operations was defined.

"Could you get by with something less? Sure you could, but we wanted to have absolutely everybody, every function, included in this. And to do that, you need the top management to be the real driving force."

Theis developed a program he called The Extraordinary Guarantee, which essentially said: "We are 100 percent committed to the on-time, complete and correct shipment of your equipment. If you feel we have not met this commitment in any way and that has caused you to spend additional time or money, then please attach a note with a brief explanation and deduct your cost from this invoice when you send in your payment."

That guarantee was printed at the bottom of each invoice, on price sheets and in emails that were sent out to all of Clancy's dealer partners.

"We had a logo made, and we marketed based on it," Theis said. Of course, someone would immediately contact the customer to resolve the situation if a problem did occur.

"Our sales, our profits, our backlog exploded. We were on 'Inc.' magazine's List of Fastest Growing Companies two years in a row, and I'm certain that the sale of my company in 2011 was helped because we were now a quality company."

Are you aware that your small business may be able to protect its business trade name from misuse by others?

Can you and should you use "TM," for trademark, for your product or service? When can you use the "R" in the circle?

In our small business podcast series, "Been There, Done That!," I interviewed local patent attorney and licensed engineer Joseph Long in his area of expertise. Here are some excerpts.

Q: What are the different types of intellectual property?

A: There are four basic types: copyright, trademark, patents and trade secrets.

Copyrights are rights and original works and creative expressions held by their creator. Ideas and discoveries aren't generally protected by copyrights, but the way in which they are expressed may be.

Trademarks are names or designs that identify a product or a service as being from a particular provider; examples might be McDonald's or Ford Mustang.

Patents protect ideas or inventions. The rights are held by the inventor, and the rights are to prevent others from making, using, selling, or importing the invention.

Trade secrets are generally confidential information controlled by the owner for their benefit. A popular example is the formula for Coca Cola.

Q: How should a business protect its copyright interests?

A: A work is protected under copyright the moment that it's created and fixed in a tangible form. Examples of tangible work may be drawings, physical models, graphic designs, written text, photographs, videos, or computer code. In general, registration of copyrights is completely voluntary; however, you have to register your copyright with the government if you wish to bring a lawsuit for copyright infringement.

Generally, only the author or creator of a work has a rightful claim to its copyright. An important exception to this is a notion of works made for hire. When a work is made for hire, an employer is considered the author, even if an employee actually created the work.

Employment, contractor agreements, or contracts, generally including explicit agreement that works created as part of a work for hire are the rights of the employer. A business should seek to retain the copyrights to all materials generated in relation to its products or services through such agreements.

Q: How should a business protect its trademarks?

A: Rights in a mark can be established simply based on using the mark in commerce without having to register it. However, like copyrights, federal trademark registration can provide numerous legal advantages.

When you merely claim the rights to a mark, you can mark it with a symbol "TM," often applied as a superscript. This is a designation to put the public on notice or to alert the public that one is claiming ownership of the mark.

Regardless of whether you'd ever file an application, you can use this TM designation. You can only use the federal register trademark symbol, which is a capital R in a circle, after the United States Patent and Trademark Office has actually registered the mark.

Registration is achieved by filing an application and going through a small procedure. The purpose of a trademark is to prevent an unapproved source from providing a good or service in a way that might confuse the consumers as to who the actual source is.

Accordingly, a business that's operating with a trademark should always seek to protect the inappropriate use of the mark by others to retain its value.

Q: What types of things can be patented?

A: Generally, anything that anyone conceives can be patented. It can be any useful process, machine, manufacture or composition of matter.

A process can be any act or method, a machine is fairly obvious, a manufacture refers to any articles that are made, and a composition of matter generally relates to chemical compositions or mixtures. These categories taken together include pretty much everything that can be made by man or any processes for making any products. A process or method can include a method implemented on a machine.

Such a machine may include a computer, and this is generally the basis for claiming inventions that may be implemented using computer software, or instructions executing on a computing machine. Abstract ideas and laws of nature are generally not afforded patent protection.

Q: Could you explain the difference between a design patent and a utility patent.

A: A design patent generally covers the physical appearance or the form of a product, while a utility patent covers what the product actually does. These are two different types of patents.

Design patents can be very limited in their value at times, simply because competitors can get around infringing. A competitor might get away with infringing a design patent by simply making something look a little different, whereas a well-drafted utility patent or claim will spell out exactly what it is that a thing does.

Then anything, no matter what it looks like or how it's made, falling within that definition of what is being usefully done will infringe the patent. This generally provides stronger and more valuable protection.

You may hear this podcast in its entirety -- No. 13, on intellectual property at at centreofinfluence.org

Chapter 17

So you think you want a partner? Ask this first

Published: Monday, June 23, 2014 at 1:00 a.m.

Should you consider having a partner in a new or existing business?

“Choose a partner with the same diligence you should use in choosing a spouse — mutual admiration, trust and compatibility, with the big emphasis on trust.” -- Bob Bertelsbeck, SCORE mentor

“Articulating a valuation methodology or buyout action clause is key...” -- Bob Melberth

Will that partner have strengths that you lack? Is the prospective partner a friend or relative? Have they been in the same or a similar business/industry? Perhaps a competitor wants to merge with or acquire your company or idea. Is this a good idea? Have you had a partner before?

Are you still married?

These are some of the questions you should ask if you are considering taking on a partner.

What percentage of partnerships break up? The numbers are worse than the marriage success rate.

I've had four partners over a 30-year period, and fortunately all four of these businesses were successful, although three partnerships ended in various degrees of disharmony. The success ratio from real-world statistics is an estimated 40 percent.

If you take a close look, you probably do not need a partner. You may need to hire the knowledge base you lack (employees, consultants, mentors or counselors, etc.).

The pros

Let's look at a few of the reasons to have a partner. A partner can act as a sounding board for decision making .A partner may share in capitalizing the business. A partner may share the workload. A partner may have strengths you don't have. A partner can be there to celebrate victories or commiserate over defeats. A partner may have important relationships and contacts for your business.

The cons

Now, some reasons NOT to have a partner. A partner may not work as hard as you do. A partner may not agree with you. A partner may not have the strengths you thought he or she had. A partner may not be there for the long haul. A partner may decide to leave and may take your employees and compete with you. Separation from a partner can be costly.

Review with your attorney the options for what structure your company should take. Regardless of the form of organization (C or S Corp, LLC or other), what percentage of the business should you own? What about 50-50? or 51-49? (You want the 51 percent, right?)

Fifty/fifty can lead to a stalemate. Control is the operative decision. When push comes to shove, who will have the final say?

Who will be in charge of day-to-day decisions? What happens when you don't agree? What happens when either you or your partner wants out? What happens when your partner leaves with your customers and tries to compete with you? Do you have an agreement called a covenant not to compete? Will you spend untold dollars and court time enforcing a violation?

My advice

My personal advice is this: Avoid a partner if at all possible. The odds of success are not in your favor.

If you already have a partner, make sure you have clear, understandable agreements and consider having a buy-sell agreement using insurance proceeds to fund a death benefit and transfer shares or units.

Communicate, communicate, communicate with your partner, accurately and often.

Talk through problems, be flexible, be empathetic, agree to disagree, and set procedures on how to resolve problems. Be honest with each other, discuss personal goals and objectives up-front, and update changes as often as needed.

The most important takeaways for you are these:

Know who you are partnering with, have a written agreement, know how you will end the partnership before you begin, have a buy-sell agreement, communicate accurately and often, and agree to binding arbitration if it becomes necessary.

And remember, the first half of the word partner is "part," so don't be surprised if this happens.

Chapter 18

When should you scale your company?

Published: Monday, June 30, 2014 at 1:00 a.m.

With the stock market setting records and the economy sending some positive signals (finally!), an entrepreneur's thoughts can easily turn to ideas of growing their business.

It's a reasonable consideration in today's business climate -- but is it really a good idea for you? We all know the rule: Just because you can do something does not mean you should!

Is your company scalable? How can you know? And is now the right time?

The word scale, in discussing the scalability of a company, means that the underlying business model offers the potential for economic growth. We'll refer to scaling in this context as growing a business beyond the initial unit.

There are many factors to consider when assessing scalability of your company. Here are some thoughts and questions on when and how to approach scaling your business.

Age of the company: Business age is certainly a factor. A relatively young, immature company may or may not be scalable, and the cost to discover which it is might be high. Unless you have previously scaled another business successfully, it may not be a good to consider scaling at this stage.

Management talent: Do you have a solid, reliable management team in place, with excess human capital? Many small businesses do not. Is it only you? Scaling a business might require you to take your eye off one ball and focus on another one. Can you do this without losing your momentum?

Organizational skills: Are you well organized, with everything running smoothly in your business? You don't want to scale during turmoil. If you left for a month's vacation, would everything run like clockwork or would your business become a shambles?

Mindset to grow: Why do you want to expand? Are you of a right mindset to scale?

Assuming you are doing well financially and everything in your business is running great, know your why. Why are you going to do this?

Life can be a lot easier managing one business than many. Scaling a business is typically akin to starting a new business. The big difference is that you already have a playbook for success (franchise-like). Hopefully, you do have this all written down in your policy and procedures manual.

Finances: If your company has successfully navigated the growing-pains stage, is profitable and has the management talent, and you have the organizational skills and the right mindset to grow, do you also have the money to scale?

Do not bet the farm on a new location. What if you are wrong about the new location and you have to start feeding the new venue from the profits of your stable business? Now you have two problems.

Get a map: Have you done market research on your competition and their locations? Get a map and place markers where you are located, where your competition is located and where you want to locate.

Are the demographics and psychographics different from your primary business? Will you charge differently at this new location? Why will this be a good location for you?

Do you expect to attract new customers from this geography? How many customers will you need and how soon will you need them to break even?

Is the new location nearby, across town, or in another city, state or country? Near is generally better than far from a management perspective of command and control. If you have to travel to visit the new location, how long will it take you to get there? Do you have to fly and, if so, did you budget for travel, airfare and hotels?

Overhead: Will you be amortizing (spreading out) your overhead across the new unit(s)?

This can make your prime location more profitable. Will you allocate your salary and management teams, and what basis will you use to compute these? Will it be 50 percent, based on time, based on sales volume, or some other metric?

It's time to call in your accountant if you haven't already discussed your expansion plans.

Do you want to place this new location under a different entity, such as an LLC? If so, it's time to call your attorney.

Cannibalization: Will you be attracting new customers or just providing another convenient location for your current customers? Will you be cannibalizing sales from your primary location to your new location?

Will it be worth it? I have successfully scaled many businesses and thought it to be the most fun and the most financially rewarding aspect to owning a small business.

There have been other times when I resisted the temptation to scale and did just fine with one location, where I could concentrate and devote all of my time and effort without worrying about travel issues.

Many business owners succeed in building an empire. Many more fail miserably at scaling and jeopardize their initial business in the process.

Here's a useful tip from our local carpenter: "Measure twice, cut once."