Category: Op-ED

To Franchise or Not to Franchise | Lydia Mehit

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So, you want to start a business and you’ve decided a franchise is for you.  There are a number of advantages to selecting a franchise.  Here are several of them.

  • It is a proven business model.
  • You have a pre-defined target market.
  • You have brand recognition because the product or service is already known.
  • The business methods and systems are already in place, all you have to do is follow them.
  • Training is provided for you and your management team.
  • Operations manual that details all of the job descriptions, processes, procedures, rules and requirements for operating the business is provided.
  • You receive on-the-job training at a working franchise.
  • The franchise team helps you open the business and gets you started on the right foot.

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You are Your Own Supercomputer | Peter Mehit

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computers1Many times when people think about starting a business, they cherish the idea of the freedom and control it would bring, but are often overcome by fear. ‘How will I find customers?’, ‘How do I find the money I need?’, ‘Will anyone really buy what I’m selling?’ are typical of the questions we run through our minds as a wave of fear spills over us leaving us grateful for the job we loathe.

Many of us believe ‘it takes money to make money’, yet many of the greatest success stories are people that had little or no money at the beginning of their journey. We convince ourselves that we need ever increasing amounts of education, but Bill Gates, the world’s richest man, didn’t complete college, Sir Richard Branson never went. Many of the businesses you pass by L.A. freeways are owned by people who possess only high school diplomas.

So what is it? What makes some people successful and others not? We believe it boils down to three main things:

They have a clear idea what they want to make or do to start their business.

They believe they can figure out anything.

They understand, actually or intuitively, how the mind works.

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Count Your Eaches | Peter Mehit

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question markIn the pursuit of multi-million dollar outsourcing contracts, the company I worked for required me to defend my financial projections.  The auditor who usually ran these reviews, was one of the kindest yet toughest auditors I’ve ever worked with. He’d always start with the same question, ‘What are the eaches?’ He wanted to know how many hours, square feet or cubic yards of something we had to sell to reach a specific revenue or profit goal. This experience taught me that looking at a business in terms of units made or sold provides critical clues about the viability of it.

Many projections and budgets lack any real precision. Typically, a desired revenue number is plucked from the air, or other suitable location, as a starting point. Some ‘standard’ percentage is applied to this number for cost of goods to arrive at gross profit, which then has some ‘standard’ expense number applied to it to determine at operating revenue and so on, all the way to the bottom line. If the profit number isn’t satisfying then lather, rinse, repeat.

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Gen X as a Target Customer – Part Two | Lydia Mehit

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Continuing our discussion of Generation X as our target consumer, we have gathered a variety of facts about our subjects and now need to use those facts to answer the following questions.

  1. Why do they buy?
  2. How do they buy?
  3. What do they buy?
  4. Where do they buy?
  5. Where do you find them?
  6. How do you reach them?

Let’s answer the questions using the information we’ve learned about Generation X.

Why do they buy? 

We know Generation X women are motivated by price when it comes to fashion.  We also know they spend more than the national average on apparel for children under 16.  We could conclude they are willing to spend more money on their children than themselves, at least in terms of fashionable clothing.

They also spend more then average on housing, furniture, major appliances, cars and trucks.  We might conclude that when it involves their family they are willing to spend more money.

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Generation X as a Target Customer | Lydia Mehit

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gen xMany business owners think that EVERYONE is their customer, so they create a coupon, find a monthly delivery system (a coupon magazine or coupon mailer) and hope for the best.  But understanding your target customer can give you insights into how to price, how to promote, how to utilize media and what special offers will appeal to them.

Is Generation X the most likely group of people to purchase your goods and services?

How would you know?  Start with your current customers.  What is the average age of the majority of your customers?  Who typically makes the largest purchase during an average visit? Who are return customers?

If you are not in business yet, look at the neighborhoods where you are thinking of locating your business.  What is the average age and income of the people in the immediate one mile radius?  Check out the three mile radius also.  If you have a retail business, the majority of your customers will be local to those areas.

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Songs of Innocence – The Real Reason Apple Users Should Be Upset | Peter Mehit

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bonoapple

As part of the roll out of the iPhone 6 and the Apple Watch, Apple announced that it was adding U2’s ‘Songs of Innocence’ to every Apple iTunes library automatically as a ‘gift’.  There was an immediate uproar from Appleland that became so raucous that eventually Apple created a page to tell people how to remove the album from their accounts (yes, there’s an app for that), culminating in Bono himself apologizing for the entire fiasco.

The main complaint of the Apple community was that, a) they didn’t want Apple deciding what takes up space on their iTunes account and, b) they hate U2.  There was a lot of counterpoint from Apple / U2 loyalists that thought Apple had done a good thing.  ‘If some gives you a gift, you say thank you.’  The response from the aggrieved was ‘If someone gives me something I don’t want, it’s not a gift.’

To be sure, the bundle fest that was the iPhone 6 launch was intended to be a slick cross marketing event.  A ‘free’ gift, it was not.  U2 were well compensated for the release rights of the album.  In addition, everyone that isn’t an Apple customer will pay for it.  Apple gave it away for marketing purposes.  The question is why would Apple want to spend hundreds of millions of dollars to do this.

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Howdy Partner Part 2 | Peter Mehit

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partnershipsBecky, a consultant, was telling us about a proposal she made a few years ago. The project was big and she needed help so she partnered with company that she had worked with before. They agreed to work as one company to reduce customer concerns about managing multiple contractors. At deal time the partner broke ranks trying to make a separate agreement. The customer declined to work with either company.

Trouble in partnerships generally comes from three things: Poor due diligence by the partners, mismanaged expectations and lack of defined roles and responsibilities.

When picking another company to partner with, you need to decide if they are a good fit with you. For example, a firm that is fastidious about quality will be driven crazy by a sloppy partner. If the firms have different ideas about client relations, there can be mixed messages that cause trouble and false crisis. You’ve decided the partner firm is qualified and shares a compatible management approach, but you also want to check for a cultural fit. Are the work methods compatible? If your company likes slow, steady progress will you be able to work with one that pulls all nighters to deliver a last minute product?

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Howdy Partner | Peter Mehit

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partnersA consultant we know was talking about a partner she was working with on a project. She thought that they agreed prior to an important client meeting that they would present themselves as a single company to minimize any client concerns. At the meeting the ‘partner’ grandstanded, establishing his separate identity and launching into something approximating a sales pitch. The client became confused and my consultant friend and her ‘partner’ lost the work.

We have partnered with several firms over the years and have had both negative and positive experiences. What we’ve learned is there are levels of partnership that reflect the level of commitment between the players. These levels also reflect the amount of trust between them as well. While have identified the levels as: ally, collaborator and partner.

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Time is of the Essence in Funding Deals | Peter Mehit

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‘timeTime is of the essence’ is a contract clause used when an action must occur by a certain time or the deal is in jeopardy, such as the buying and selling real estate. The reality is, when dealing with funding sources, that time is of the essence for the entire transaction.

I have seen deals that seemed rock solid, collapse. The reasons for their demise didn’t come from any unsolvable disagreement or lack of information. Looking back, I see that many of them just simply took too much time.

When an applicant applies to a bank, there is a flurry of activity. Applications are completed, appraisals ordered, interviews conducted. There is a lot of information gathering as the bank prepares the loan package for underwriting. Once the package goes behind the curtain, the wait begins. Occasionally, requests for information will come from underwriting. If underwriting likes the deal, they’ll defend it to a loan committee and the deal is, or is not, approved.

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I Hate Mandatory Comments | Peter Mehit

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I just renewed four domains with GoDaddy.  It was a perfectly forgettable transaction, just the way I want all transactions on the internet to be.  But a day later, a survey arrived.  Begging for just five minutes, I caved in and answered their questions.

The very first question violated my unspoken rule about surveys: Do not make it mandatory to explain why I gave you a rating.

GoDaddy CommentI rated them a 7.  I didn’t really want to go into it.  A 7 says, “You know, you’re just good enough. But I’d better deal you if something better came along.”  I think both GoDaddy and I understand that.  Conversation will only make things worse.  When I discovered the comment was mandatory, I wrote:

I gave you a rating.  Accept it.  I hate mandatory comments. They make me dislike the survey company for doing it, and GoDaddy by extension.

There were a few more questions.  It was really a three minute survey.  I liked them for that.  The final question asked me what GoDaddy could do to improve my customer experience.  Now if they had followed my rule and not forced me to have a comment, I would have ended the survey the way I end all surveys, with white space.  But to not leave a comment after having been forced to leave one, that’s just not symmetrical. So this is what I asked GoDaddy for:

1. Provide winning PowerBall numbers. Any size jackpot will do.
2. Arrange a date with Angelina Jolie. Brad can come.
3. Use ‘No One to Know’ by Path of Least Resistance as your theme song.
4. Get all the idiots in Washington D.C. to remember they’re supposed to be focused on us. You can do it. You lobby.
5. Stop objectifying women in your advertising.
6. Tell people when they rehearse a vine, it defeats the purpose.
7. Magically release all the domain names I really want.
8. Feature my company in your advertising.
9. (It’s Custom Business Planning and Solutions)
10. Get my upstairs neighbor to walk lighter.

I pressed ‘Submit’.  I was greeted with thanks from Blake Irving, CEO of GoDaddy:

GoDaddy Comments 2

 

We’ll see if they are really serious about improving my customer experience.