The Devil in the Details: Why Strong Branding Works

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From Brand to Bustle: A New Course in Maeva’s Community Business Series


I’m thrilled to be compiling my tips and tricks on business branding into a new Community Business Series Course premiering Aug. 21st at Maeva’s Coffee. From Brand to Bustle: Building a Business People Want was inspired by the frequent questions asked in my Business Plan Basics course. This course addresses the biggest area of neglect I have seen while helping dozens of small businesses clients succeed. If you’re ready to hone your business’ identity and craft a dynamic marketing plan to find your best customers, join us! $27 Pre-registration ends this Monday, Aug. 1st, at midnight, $45 before Aug. 19th.

During a recent meeting, my copy editor made the observation on how all Chinese take out businesses- small town, metropolitan, west coast to east coast- look the same. From the chop stick wrappers, the collection of decorations, signage...even down to the 90’s clip art on the menu. We had a good laugh about there being a mythical warehouse somewhere through which you could order “One Complete Chinese Restaurant” but really, doesn’t every industry have its share of cliche?

For example, how many coffee shop logos have a coffee cup in them? It’s easy for new business owners to rely on long-standing industry standards or to copy someone else when it comes to creating a brand. A business’ brand sends a message to its market, setting expectations on the sort of quality, price, and service they are likely to receive by stepping through its doors. Plugging your name into a Vistaprint template and ordering up 5,000 cheap cards is really the entrepreneur’s version of another cheap Chinese takeout restaurant. Lazy branding tells potential clients to expect average quality at a cheap price point.

 

On the opposite end of the spectrum, St. Louis’ most respected independent coffee shops- Sump, Blueprint, and Rise to name a few-  all have resisted the temptation to include some version of a little steaming clipart cup in their logo. None of these shops have a name that features the word “coffee” or makes use of cute coffee-related word play. By the name and logo alone, we are setup to expect something original.

 

With everything demanding your attention as you start or run a business, you may be tempted to put your brand on the backburner. When it comes to reducing risk of failure, your brand is the most important aspect of your business. Here’s why:

 

 

Targeted Brands Attract the Best Customers

Choosing to depart from industry norms attracts a different type of customer: one who is willing to pay you what you’re worth (or more) because they anticipate your product or service will match the attention you’ve given to your brand overall. These are customers who don’t lowball you, who aren’t attracted by BOGO sales, and who crave the type of service or product that will inspire them to create loyal relationships with your business.

 

Honest Brands Build Relationships

With strong branding, growth becomes less about selling and more about building a relationship. Weaker brands have to shout, beg, and undersell themselves to attract attention. Businesses with weak brands attract customers are only interested in what sort of deal they can find.

 

By creating a brand that draws quality clients, you rely less on “Now 25% OFF!” Facebook Adverts and more on natural, honest relationships. Strong brands know their client base and organically grow a deeper connection with their market. As an entrepreneur with a honest brand, you have freedom to focus on your business without having to run sales that cut into your profit, spend money on wasteful advertising, or beg for attention.

 

Timeless Brands Create Longevity and Lower Upkeep Costs

Every time another pallet wood bar is installed in the St. Louis area, I die a little inside. If you think that’s harsh, check out this article on Industrial Chic design from NPR.

You cannot build a lasting brand on an existing trend.

It’s ok to be inspired by other amazing brands- but directly copying core elements from industry or current design trends makes your business dull and dated. Fresh or timeless branding interests dedicated clients for the long term and naturally attracts enough attention provide steady growth over several decades. Dropping thousands of dollars to rebrand and remodel every ten years is only something large corporations can afford. As a small business owner, you will find that a brand woven with original fibers will have superior longevity and cost far less to maintain.

 

A Business You Inspire Inspires You

Building a targeted, honest brand unique to your business will play a critical role in your personal success as a small business owner. Creating a brand you love will motivate you to own it, share it, and to be enthusiastic about your business even during the rough days you’ll face.

Maeva’s Coffee does not embody every element of my own style or personality, but there is an immense pride and happiness from having co-created such a beautiful place. After 2+ years of operation, I still find myself falling in love with her just as I had at the start. That feeling is one that stays with me through unexpected equipment repairs, staff changes, and the hectic pace of a high volume shop. Without that connection to the brand, I would’ve quit many 80 hour-work-weeks ago and would not have made it to the point where she is successful and strong without my constant attention.

 

If you are starting a business and want to see it making money, or your current business now has become stagnant, you need to take a closer look at the strength of your brand.

The course I will be teaching in late August covers the how-tos of all of the above, plus the logistics of putting it into practice by creating a targeted low-to-no cost marketing plan. It is specifically designed for small business owners and aspiring entrepreneurs, with a class size is limited to 10. Because I adore helping small businesses in my hometown, I always stick around for as long as you want after to discuss the specifics of your situation.  Check out the details here!

 

Neighborhood Wealth Beyond Capital

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Alton Main Street recently hosted a networking event for creative entrepreneurs in the area. The event providing an exhilarating look into the hearts and minds of our community on the topics of growth and revitalization in our area. While connecting with local entrepreneurs, self-employed artisans, and part-time small business warriors the theme of financial hurdles was prevalent throughout the evening. Growth, it was stated, was often slowed or stalled due to lack of capital.  While banks, crowd funding, and donor/investor support were offered as solutions, even if those solutions are able to be obtained often they take a large investment of time before funds become available. This post will show you the basics of how you can build your business and add to your brand using low or no-capital wealth you already have.

Our definition of ‘wealth’ often misleads us into believing we only deal in numbers relating to monetary gains and losses. However, when we start to think of ‘wealth’ as any soluble resource, you will find that your wealth and the wealth of your venture is more than the sum of your debts and assets in the bank. Your wealth includes your skills, your knowledge, your goods, your time, and your character. Our personal economies are rich in raw material- and the moment we set out to use these materials, turning them into financial capital or other goods, services, or skills- we become entrepreneurs with deep roots in our community economy.

You- as an artist or small business owner- have at your disposal, right now, a dynamic “account” of non-capital based wealth you can use to augment your business. With a little ingenuity, you may find yourself using your raw resources well enough that your business will grow organically without the capital fertilization of that bank loan.

 

Step One: What do you want?

Think beyond financial capital to your actual end-goal. Typically, you’d be using extra cash to accentuate your business in some way. This could be hiring a designer to create a solid branding image, creating or revamping a website, upgrading your equipment, making a change to your product packaging, or hiring a someone to help lighten your workload.  

After making a list of the areas you’d like to expand or improve upon in your business, you’ll have a direction to work towards in your exchange of wealth.

 

Step Two: What do you have?

Non-financial assets. Do you own or rent a space? If that space isn’t used 24/7, a little out-of-the-box thinking might reveal opportunities to exchange your non-use times to other entrepreneurs and artisans. Space might include not just the inside of your establishment but your parking lot, lawn, or patio. Do you provide a service? That service can be exchanged for other services you might not otherwise be able to afford. Make a list that includes physical assets (space, waste supplies, materials), intellectual assets (industry know-how, event or cross branding ideas), and skills (physical labor or your services). Now you have a clear vision of what you can offer.

 

Step Three: Create Wealth.

Having a list on paper or in the back of your head will make it easier to find opportunities in your day-to-day business transactions to create wealth. Remember that your clients or customers are just as valuable in the creation of the community economy as other artisans or small business owners. When ‘wealth’ is exchanged locally, every avenue creates a stronger community microeconomy.

 

 

 

Here is an illustration of a multi-level wealth exchange that has been taking place at The Milton Schoolhouse in the last few months***:

 

As for our involvement, you can see that we’ve exchanged space (in the form of the community garden facilitated by our awesome neighbor Clifford Clark and student Dana Wynn) and about 10-20 gallons of waste coffee grounds from Maeva’s. In the short term, neither of these will produce any capital for either The Milton Schoolhouse or Maeva’s but neither of these resources are costing us any capital either. By trading coffee grounds to Senior Services Plus, we’re investing in the production of worms and compost our neighbors will need for the community garden in our back lot. The better the community garden is, the more produce it will be able to provide for our neighborhood and for Maeva’s Coffee to sell, fresh and delicious, in the form of our seasonally crafted quiche. Working with Senior Services Plus and our neighbors on the community garden strengthens the bond between us and the folks they are able to reach; thus allowing us to introduce more potential coffee lovers to our little schoolhouse coffee shop.

 

Raw non-capital wealth, when exchanged, creates trust and support among existing neighborhood businesses, artisans, and residents. Strong community bonds encourage the creation of new ventures and the expansion of current participants, growing our community’s micro-economy without financial debt.

 

 

Momentum is building in Alton for the creation of good venues of exchange- Farmer’s Markets, Garage Sales, the Holiday Bazaar at the local high school… Challenge yourself to think beyond “shopping local” and into “exchanging local”. Money may be a part of creating wealth, but it doesn't have to 100% of the transaction. Goods, space, skills, and services can all be turned into financial capital as well as other goods, skills, etc. that will enrich your venture.

This coming Tuesday, Maeva’s Coffee will be hosting Market! Market!, an experimental community market. This event will be an uncurated exchange of wealth. If you’re an artist, crafter, lover of antiques, gardener, stuff seller, vintage lover, or have a service to exchange, you are welcome to join us on Tuesday 17th. For $10, we will set out a table and give you our space and wifi to sell your art, wares, produce, services, or stuff. Or, simply join us by walking around and exchanging your money, skills, or services with your friends and neighbors.

For more information and to reserve a table at Market! Market! click here. 

 

 

***Please remember that most barter is taxable and should be reported in your financials. Make sure you check the state and city laws in your area to determine whether the exchanges you make in your business practices are subject to taxation. Plus, in bartering with nonprofits, your exchange can often be written off as a donation to offset profit- bonus! Talk to your accountant or legal advisor for more information regarding your specific arrangements.

 

 

 

 

 

 

 

Working Yourself Out of Your Business

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When we dream of beginning our own business, we envision the freedom of having creative control over our lives. We imagine working on our terms, spending days doing what we love and working for our dream rather than someone else’s. We get excited about the beginning and look forward to its success, imagining the years ahead in which we will be happily making a living doing something we love.

Thinking about retirement or selling a business at the start sounds terribly unromantic. However, when we plan for the eventual transition of ownership a business will undergo from the beginning, we create a business with a strong investment value and a structure that will live beyond its creator. This article is not about crafting an exit strategy, but implementing a framework that will allow a business to become a legacy.

Unlike most coffee house owners, it has never been my ambition to own a coffee shop. Our patrons often ask why we have built Maeva’s and I know they are looking for that beautiful story in which a life-long dream has blossomed into success. The reality is I knew nothing about coffee when we decided to undertake this venture. My passions do not lie in owning or operating food service businesses like the grand restaurateurs that dazzle me in every city I visit. We built Maeva’s because it was a sound investment; because The Milton Schoolhouse needed a business with heavy foot traffic to support our other start ups and our neighborhood needed a gathering place to grow.

As Maeva’s continues to blossom, I already look forward to new ventures beyond this beautiful shop. From the beginning, my business partner and I have had a plan to transition Maeva’s to a new owner (or to a full time operations manager) within five years- allowing us the time to dedicate to new ventures in our community. Whether you are hoping to start and sell your business quickly or wish to be involved for decades, one of the greatest things you can do to ensure the longevity of your work is to make your operation attractive to its next owner and do everything you can to enable their success.

 

 

Paperwork

This is an essential part of creating a seamless transition to an Operations Manager or new owner. When someone buys a franchise, they are given months of training and hundreds of pages of information outlining everything from sales techniques to pricing strategies to safety processes. If you’ve built your business from scratch, you know the ins and outs of how you make decisions for your company- but does anyone else? The pieces listed below are essential for not only selling your business but peace of mind if you were ever to face a crisis in which you were required to be on hiatus from its operation:

 

Employee Handbook:

This is a personal manual outlining the expectations and general rules of conduct for staff. Each staff member should be briefed on this manual and sign a written statement of their understanding. This manual should cover your company’s sexual harassment policy, dress code, any employee benefits, job expectations, and other general conduct policy. Keep signed records of any modifications you make to your manual to show that staff have been briefed on evolving policies. Don’t forget a signed release of name/voice/and likeness if you intend on using photos that include your staff for promotional purposes. If any financials, recipes, trade secrets, etc. are available to your staff, a signed statement of confidentiality should also be included.

While there is no law regulating the requirement of an employee handbook, having a clear handbook of policies can provide some legal protection in unemployment and workman’s comp cases.

Most corporate handbooks are available online. Instead of starting from scratch, find handbooks from companies in similar industries to your own and use them as a template for your business’ handbook.

 

Process Manual:

This manual should be essential information available to staff and managers. It’s exactly what the name implies; a detailed outline for every possible thing someone may have to do in the general care and maintenance of the shop. The Maeva’s Coffee Process Manual includes stated methods for sanitizing the ice bin, how often food is ordered and in what quantity, technical manuals for trouble shooting our equipment, maps for emergency water/electrical shut offs, and basic shop troubleshooting. Include MSDS sheets for any chemicals used in your operation and the appropriate response for potential accidents. Check this link if you are unsure whether or not your chemicals require MSDS sheets to be made readily available to your staff.

 

Operations Manual:

This manual is private information, reserved for an operations manager or owner. It should include account information for each of your suppliers, up to date material cost sheets, contacts for subcontractors or people you often work with in your local business network, hiring and termination guidelines, information on scheduling and payroll, as well as contracts and outstanding leases. This manual may also include trade secrets such as exclusive food and beverage recipes.

 

Brand Management Manual:

This manual may be reserved for an operations manager or released to the entire staff depending upon the openness of your business structure. It should be a brief description of your company’s history and influences, the core principles of what you represent, and guidelines for how that brand is kept fresh. Our brand management manual outlines how often and when seasonal specials are released, how often and what types of events are hosted in the shop, and information on how and what to post on our Facebook, Instagram, and Website.

 

You should also have your tax records, annual P&L and Balance Sheets, any past or current business plans, and staff files in order as well.

 

Having a Strong Internal Culture

Creating a culture of internal collaboration will keep your business from becoming stale. When you hire staff who work together and cultivate an environment that encourages communication, new ideas and better processes will become a constant in your business. Staff you are able to trust and who can facilitate projects without constant management are a valuable resource when a business undergoes a change of ownership. A strong culture can easy the rockiness of leadership change and prevent your company’s growth from stalling. Whether your business is six months or sixteen years old, vivacity, clarity, and strength in a business’ culture will make your business attractive to prospective buyers and increase the chance of its survival once you are gone.

 

Becoming Unnecessary

The start-up phase is thrilling. As an owner, you have your hands in everything. You and your first few staff wear a thousand hats, taking on responsibilities defined by necessity and circumstance, not necessarily skill. There will be a point in your company’s growth where and honest evaluation will show that you do not have the talent in your current team to grow further. It can be a difficult situation to face but at some point in your wild success you will no longer be able to wear all of the hats.

Accounting is my weakness. It’s taken me twenty months of operation to admit it, but as much as I want to be able to do everything for Maeva’s, the day to day numbers don’t come naturally to me. Accounting is stressful; it’s something I dread. I put it off and cripple my ability to calculate decisions when I can’t readily access current data. This year, I’m resolving to hire a local accountant to handle our books so that I can concentrate on strengthening our business in the ways for which I have a true talent. You can’t be an expert in everything; use your energy to be a better expert in areas in which you naturally excel and hire an expert to take care of your weaknesses.

This stage in your business’ growth may be just as difficult for staff. Bringing in outside help to evolve your business can create friction among veteran staff who may view it as intimidating or insulting to their efforts. Our first autumn of operation, Maeva’s was growing faster than our infrastructure could handle. Our lead barista was appointed as a stop-gap Operations Manager to help manage ordering, scheduling, and shop duties. The position was set out at the start as a temporary one and she disliked the responsibility overall. And yet, when it was time to hire an actual Operations Manager- her feelings were mixed. Going back to her position as lead barista sounded as much a relief as a demotion and our shop dynamic was never the same

Just as an owner should understand if not be able to perform all aspects of a business, there should be an outline, if not a staff member trained, to perform the vital processes the owner oversees. If you intend on selling your business through traditional avenues rather than coaching someone to operate it in your stead, make sure you not only have a process manual in place but have trained your staff in how to take care of each of your responsibilities.

 

Instilling a Vision Beyond Yourself

The first time a business changes hands it takes an incredible risk in failing due to loss of direction. Great companies are built by great leaders; you’ve worked to instill your passion in your work and your staff. Corporate examples abound- Apple’s struggle with the loss of Steve Jobs or Starbucks bringing back Howard Shultz after the company was on the verge of failure. Small companies face the same challenge.

Create a vision for your company and coach your staff to follow that vision- not you. The vision of your business should be a permanent, core reason for its existence, the foundational value supporting every decision made during its life. Maeva’s vision is to bring quality coffee and revolutionary community to our neighborhood. The strategy for achieving this beyond my time of leading her is highly entrepreneurial; I seek to create a culture of collaborative staff, teach them how to listen to the needs of our community, and give them the confidence and power to make decisions regarding those needs.

 

 

Like every small business, Maeva’s Coffee has been a deeply personal venture. More than just time and money, she is a product of the talents and personalities of its owners, staff, and the community she serves. It’s my responsibility and privilege to do everything possible to ensure whomever comes after me steps into a strong culture and every available resource to take her beyond my own abilities. This duty guides my current operating decisions but also insures her financial stability and success- ultimately allowing her to fund the creation of new ventures in our community.

 

Creating a Culture from Nothing

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“Success is a science; if you have the conditions, you get the result.” Oscar Wilde

 

In my “Business Plan Basics” course, I emphasize the importance of building an overarching plan to help you reduce your risk in starting a small business. I firmly stand by that, with enough foresight and honest assessment, you can reduce your start-up’s risk of failure to nearly nothing.

My other two businesses, and most of my clients, have been sole-proprietorship with, at most, a single employee. Opening Maeva’s Coffee, and currently leading 7 full time and 2 part time staff, has given me a LOT of perspective on where I got lucky…and what I would have done differently.

The most unanticipated challenge we faced opening Maeva’s was how to create a business culture out of nothing. “Business culture” in this case is comprised of the overall attributes and standards celebrated by your business and projected to your client base. The owner of a new business with even a handful of staff faces a huge challenge: how to cultivate a culture among your staff that strongly reinforces your brand when your business hasn’t even begun to operate.  

 

 

When Hiring a Fresh Team of Employees

The most uncertain thing about creating a new team of staff is how they will mesh. Finding the right people to help you establish your business’s culture is more complicated than just finding a reliable and competent employee. It’s about hiring an ambassador for your company.

Here's what we did right:

Define who you want to work with: As a small business owner, you’re going to be working many hours with whomever you hire. Before reviewing applicants, set out a basic framework for what matters to you and what doesn’t matter to you. Stick to it! Never hire someone out of pity- your brother-in-law or college roommate might be a nice person who just needs a little help, but if he doesn't fit your exact requirements for your dream staff, don’t open that can of worms! Don’t do it! Run!

This was my thought process in hiring our first round of staff:

Things that didn’t matter:  Race/Religion/Sexual Orientation or Identity/Outward Appearance but variety in these aspects did.  I knew the people I hire would be essential in ultimately creating the client base of the shop. Coffee shops are naturally a congregating grounds for all types of people, and I didn’t want to hire a staff that lacked diversity. As Maeva’s launched herself into an unknown market, I wanted everyone who walked through that door to feel welcome and find someone they could identify with.

Things that did matter: I purposefully pulled applicants that had a wide variety of interests and hobbies. My hope was, again, to hire a diverse staff that would be welcoming and have something in common with everyone who walked through our doors. I looked for people who seemed interesting, quirky, and lively on their applications. More than previous employment in food service or coffee, I looked for dynamic people who would be an integral part of the overall experience our customers would have when they visited the shop. Our first round of applicants listed interests like “Music”, “Table Top Games”, “Raising Bees”, “Permaculture”, “Engineering”, and “Reading Tarot”.

In general, I also looked for people who seemed slightly nervous (which I see as a sign of eagerness), who smiled easily, and who walked/gestured/spoke with humble self-confidence.

 

Time- We left ourselves plenty of time to find the right people, interviewing several weeks prior to the opening of our shop. This helped us honestly review how we thought each person would work behind our bar and with other candidates. We ended up conducting a secondary round of interviews because we didn’t find four candidates we thought would work well together and compliment each other the way we wanted in the first round. 

Time also allowed us to have plenty of training and a mock opening before we opened to the public- essential investments in representing our brand to our clients when we opened the doors.

 

Involvement- Before opening, we had two previously trained and accomplished baristas who we knew would be essential to our start. These two were invited to participate in interviews and have a say in selecting the other hired staff. I appreciated the perspective the two brought with them, having previously worked in similar coffee shops.

 

Being Upfront- All of our employees have been told upfront, “Hey, you have thirty days as a trial in the shop. You might be an awesome employee, but if for some reason you just aren’t meshing with our other staff or customers- we’re going to let you go. No hard feelings.” Has it helped? Very much! Partings are always difficult, but many of our staff who have moved on from our shop still come back to visit.

 

 

What we did wrong:

Organization/Structure- Our shop lacked clear structure in staff hierarchy from the very start- a problem that wasn’t solved until well into our second year of operation. By the time Maeva’s opened, I was exhausted from the final pushes of construction and the seemingly endless behind-the-scenes unknowns of operating my first brick-and-mortar business. My  lack of food service and management experience compounded the issue and, without clear structure, staff began to split into factions over who had the final say on everything from drink recipes to cleaning processes. Vicious fights exploded over whether basic cleaning lists violated the free-spirited nature of our brand. As baristas tried to outperform one another, making drinks by different recipes and creating a situation in which it was impossible to calculate costs, customers began to side with certain baristas over who made drinks better than whom- creating a hurtful environment when they would walk in and express their disappointment that “so-and-so wasn’t working today.” It was chaos.

This was an uncomfortable reality of our start up. From the first time I issued a written reprimand to a staff member for not attending to basic cleaning tasks to our latest tip sharing system, processes have slowly emerged.

As an entrepreneur with an enormous independent streak in my personality, I naturally resist framework and organization. But structures- like standardized drink recipes and cleaning lists- provide clear outlines for basic operating expectations. This has allowed staff to settle into a rhythm of workflow, knowing what is expected of them and what they can expect from their teammates. When the day to day becomes a well-oiled machine, staff aren’t spending time bitching about each other not taking out the trash or stocking cups. They’re spending time learning their craft, creating together, and investing in relationships with our clients.

 

Navigating The Honeymoon Period

The first three months of employment are essential to imprinting your culture on a new employee; but, in Illinois you only have 30 working days until you become responsible for unemployment insurance as an employer. That’s not much time!

This has been my biggest challenge in growing as a leader. Here’s what I’ve been learning in hindsight:


Be direct with staff: New staff need a lot of direction in your processes, which can be a challenge if you’re still trying to put it together. For example, our dress code is just about as minimal you can get and still keep in alignment with the health code. It  vaguely reads

As for clothing, for safety reasons, no shorts or short skirts (above the knee) are allowed. Hand jewelry is not allowed (Madison County Health Department).

Clothing must be:

inoffensive

clean and free of odor

tidy; not ripped, dirty, or damaged

Branded tshirts (printed or embroidered) may not be allowed during special events, holiday hours, or catered events. Open toed shoes are not allowed on shift.

Wear clothing that makes you feel good, is easy to work in, and accentuates the style of the shop.  

Facial hair, tattoos, piercings, etc. are permitted as long as they don’t interfere with the health, safety, or brand of our shop. Hair longer than shoulder length should be tied to prevent contamination of food or beverages.

I purposefully left a lot open to interpretation because I had gone out of my way to hire staff members with their own sense of style. I wanted staff who felt their appearance wasn’t regulated beyond their own self-confidence, who knew their expression was something I appreciated. Our dress code has worked well to create an individualistic, inviting atmosphere in our shop. On occasion though, someone wears something that just doesn’t flow with the shop.

You think it’d be easy as a leader to just say, “Hey, that outfit isn’t up to par with who we are here- please don’t wear it again”. I was so nervous to approach staff, especially if there wasn’t anything technically wrong with an article of clothing...it just didn’t fit our brand. Two years has taught me to take ownership of my brand. When I review the handbook with new hires, I’ve found stating to them- right off the bat- that I have the final say in what is worn at the shop makes it much easier to approach possible brand conflicts later.

If you have something to say, just say it. You are responsible for your brand and your staff will appreciate your directness.

 

Be honest with yourself: In general, I like and I’m able to work well with most people. In a less formal workplace like Maeva’s, you get to know your folks quickly. I know their aspirations, their home situations, their car troubles, their roommates, their romantic interests…and more than once, sympathy and compassion have kept me from not addressing a staff member's poor behavior even though I knew it was hurting our culture.

Be honest with yourself and remember your responsibility to the longevity of your business as well as crafting a good environment for your staff as a whole. Err on the side of being overly critical in the first thirty days of employment and let people go if you have any thoughts of finding someone better for your staff. Ultimately, trust your instincts.

 

 

Take time to cultivate new staff: New staff members are tingling with excitement in the first weeks of employment. They are sensitive to criticism, eager to do well, and on top of day-to-day processes. Evaluate their overall presence, work ethic, and maturity. Do they fill their time with movement? Can they naturally prioritize which tasks are most important?

During our first year of operation, I had my hands so full with keeping the business operating that I did not invest enough time in new hires. Our current lead barista will laughingly admit to making pretty bad drinks for a couple of weeks, having been thrown quickly onto shift with catch-as-catch-can training. Now, people hired as baristas are trained 25+ hours on the espresso machine and drink making, required to pass a base level of standards set out by our tip share system, and need the approval of two trained baristas and either Joel or myself before being put on full shifts. Even at that, they won’t be given the opportunity to work full solo shifts for several months after hiring.

Set aside funds to account for extra payroll when hiring new staff. Pay the extra hours to have them trained by your best staff and take the time to schedule yourself around in the first few weeks to observe them yourself. Invest in new staff upfront before making a long term commitment.

 

 

Allowing Culture to Evolve

Maeva’s Coffee has been operating for just under two years and I still feel like our business culture is rapidly evolving. In any given day, first time visitors can represent up to 20% of our customers. Without direct competition for the goods and atmosphere we provide to our community, our culture is very broad. Our recurring customers continually define our brand.

 

Know When to Say ‘No’: Congratulations- your business is so beloved by its community that now everyone has a suggestion on what they’d like to see it do. A common tragedy of new business owners is their desire to please everyone, which can lead to costly expenditures, over extension, and decrease of quality.

Two things I’ve said ‘no’ to in our operation at Maeva’s: We don't have sandwiches/meals and we don’t host live music.  Every week, I receive several requests for these things that people often expect in a cafe. Could I accommodate these things? Sandwiches would require equipment and kitchen storage, more staff, and would direct our attention away from our true focus: coffee. I’ve decided it isn’t a good option for us. And live music? Well, Maeva’s is a small place. As a musician myself, I know how inherently egotistical cafe musicians are, turning up the music beyond the point of comfortable conversation. I’d rather Maeva’s be a reliable environment for refuge, connection, work, and solitude. Making our shop a place of escape was central to our plan from the beginning.

It certainly isn’t easy to look at customers every day and say, “We don’t have sandwiches, but we *do* have…”. Know who you are and don’t be pressured into being something you aren’t. If your community is clamoring for a service you don’t provide that isn’t a perfect fit for your business model, save it for another start-up.

 

Know When to Say “Yes”: We opened Maeva’s Coffee in a community that hadn’t had a true quality coffee shop in a decade. The first year of operation was a balancing act of offering caramel white mocha frappes with whip cream and sauce- knowing that our end goal was to cultivate a culinary love of quality coffee in our community.

Knowing when and how to evolve your business is vital to your long term success. Find where your current market and your future ambitions intersect and watch for ways to draw those two into alignment.

It is your responsibility to continue your education in your field to anticipate trends and desires of your customer base. Subscriptions to trade magazines or frequent participation in online forums will keep your thoughts fresh. I’m fortunate to employ at least one truly fanatical coffee lover on my staff who actively reads coffee industry literature and participates often on forums, interacting with baristas and experts from around the world. He spends about an hour a week informing me on all things coffee, from scientific discoveries, menu trends, to emerging extraction methods and economics. I’ve taken on the responsibility for continuing my education in food culture via Feast Magazine, Instagram, and field trips to ethnic markets in St. Louis to merge coffee and food trends for menu advancement at Maeva’s. This constant attention to progress has made way for a phenomenal success if our privately developed and handcrafted drink specials. We’ve also seen a blossoming demand for pour overs, unique single origin special roasts, and unflavored beverages in more traditional sizes.

 

 

I’ll be writing more on how to evolve your brand and strengthen your existing culture soon. You might also find this blog on leadership vs. management or our process of collaborating with staff through open communication helpful.

 

Leaders not Managers; Staff not Employees

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After a recent termination, a former member of our staff at Maeva’s Coffee took to a public facebook group to voice her displeasure. One comment in particular caught my attention because it so acutely illustrated the fundamental differences between my role as an entrepreneur who happens to own a small service business versus that of a typical business owner or corporate franchise manager.  


A member of the Facebook group had asked how to contact the manager of the shop and the following comment was made:

 

I’m sure the comment was meant to be derogatory in some way, but the truth is when I saw it I couldn’t help but feel very pleased. In those few words, the entire essence of my role in the owning and operating Maeva’s Coffee couldn’t have been better defined.

 

It’s true: we don’t have a manager. I am not a manager. I will never be one.

 

I don’t have any desire to manage people. I’ve never felt a rush of power or greatness in directing people to do menial tasks. A manager tells you to empty the trash. Writes little notes to remind you to make sure the restroom is clean at the end of the night. Scolds you for forgetting to clock in. Walks in and tells you to restock the bakery display case; put stock away; get this soup order to table 4.

It’s good to be clear and honest with direction and structure, especially at the very beginning of employment. I’ve no problems giving direction in the shop when it is needed. However, if a staff member is still in need of basic direction after a few weeks of employment, they are not the people I want on my team.  

Part of this comes from a fundamental difference between the way I view my staff relative to myself. When I sign paychecks, I don’t think of the money going out as payment to an inferior. Tax and technical aspects aside, the expectations I have for my staff are equivalent to any subcontractor we might hire for the shop. Much like the electrician agrees to fix an outlet, each one of my staff has made an agreement to perform certain tasks in exchange for a cut of the gross revenue of Maeva’s Coffee. Some of these are skilled tasks; such as pulling beautiful shots of espresso, akin to an electrician who has cultivated trade skills to replace fixtures and safely managing wiring. Some tasks are unskilled; like taking out the trash, keeping tables clean, and mopping the floor. All expectations are made clear on the onset of hiring.

When a staff member fails to meet these requirements, it is much like an electrician who leaves wires live and uncapped inside of your drywall. Would you be expected to be happy with a professional service performed in such a manner? Absolutely not.

There are places for people who need mothering and managing- but it was never my ambition to spend my own time and funds to create such a place.

I don’t want employees who mindlessly do the least amount of work in exchange for small hourly wage. That relationship is not one on which to build a thriving and successful independent local business. A lackluster attitude is a slow poison; nothing will sap your personal energy, cause inertia in the passion of your business’ culture, and harm your connection with clients more quickly.

I want staff who attend to the trivial tasks necessary for our shop’s well being because they want to be genuinely involved in its growth and evolution. I want collaboration; I want an ebb and flow of passion, commitment, and creation. Pride and a sense of direct contribution to our success is displayed in work ethic; the motivation behind an action is as important as the action itself. A staff member who restocks product for the following shift out a kindness and responsibility to their coworkers rather than because ‘someone told them to’ means hunting down and hiring people who have an natural sense of solidarity. Don’t be afraid to terminate a new hire who shows up to just ‘do a job’.

 

We all define our own roles in the minds of others by our actions, words, and by how we react to the behavior of those around us. We teach others how they are able to treat us.

 

I refuse to be a manager. As someone who has the privilege of choosing with whom I work, I refuse to have staff that need constant managing.

I am an entrepreneur; a leader with many irons in the fire and no time to babysit. If you are exasperated with the amount of time you spend managing your staff, here are some suggestions on how you can stop managing and start leading your team in your small business:

 

Be Clear in Your Expectations;

Get the basics settled. Clearly outline what your expectations are in your staff handbook and stand firmly by the disciplinary actions outlined when responsibilities are neglected. Stop giving second, third, and fourth chances. If you need to start over by hiring new staff to create a culture of respect, get to it.

 

Grow Experts:

Give staff a personal reason to be invested in your business. Be hyper aware of their interests and talents. Create ways for each person’s unique abilities to enrich your business. You can do this by sponsoring continuing education in your industry and creating ways to reward the pursuit of knowledge. Hire staff to use their talents for your business or create time in your schedule for them to use them. For example, if you have an amateur videographer on staff, allow them to create interesting staff profiles to use in your social media campaigns or product stills for your website.

 

Hand Over Essential Tasks:

You’ve hired people you can trust to do the basics, now allow them to help you run your business better. I’ve put certain staff in charge of choosing upcoming guest espresso features, training new employees, or keeping the dry storage inventory in order. Because they aren’t paying attention to a million things like me, and, in many ways have more expertise than I do, they do a better job at it than I could. I appreciate their investment and they appreciate having input on the business they work in every day.

 

Expect Professionalism:

Expect the best from your staff. Allow them to represent your business in trade shows, industry gatherings, competitions, etc. and they’ll bring the pride back to your day-to-day operation.

 

Listen As An Equal:

Creating open dialogue with your staff is essential. Recognize and move beyond your own insecurities when they trust you enough to bring an issue to you. Don’t be offended at anything; listen to them as equals.

 

Model Your Expectations:

Never ask anyone to do something you wouldn’t or don’t do. When I’m working on shift, if a staff member asks me to grab something from the stock room or clean up a mess that’s just happened while their own hands are full, I model the same positive, quick, and helpful response that I expect when I ask them to do similar things. Again, even though many decisions are ultimately left to me, I hire people I respect and treat as equals. No one would ever be able to say I don’t clean the restrooms or do as many dishes as anyone else on shift.

 

 

If you’re feeling overwhelmed, know your business needs an overhaul but aren’t sure how to stop managing and start leading, you don’t have to do it alone. I’ll be posting more in-depth ways to specifically craft your business culture soon. If you’re still feeling overwhelmed, let’s meet for a cup of coffee and talk! 

 

 

Strength through Staff Collaboration

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Maeva’s culture of collaboration began out of necessity. My business partner, Joel, and myself decided to launch a coffee house knowing absolutely nothing about the coffee industry. Neither of us had experience in working in, much less running, a coffee shop.

Coffee is much like beer or wine; it’s dynamic. The more I know about the industry the more I’m convinced the knowledge to be had is infinite. Most coffee shop owners have worked as baristas for years, perhaps moved into operations management, or branched into roasting and opened a shop to showcase their product. Our start-up process included much external collaboration and guidance, but this article is going to focus on how the necessity of internal collaboration at our start has grown into an integral part of our continuing success at Maeva’s.

Maeva’s Coffee needed someone who knew first hand what made a successful coffee shop. I was fortunate to find this knowledge in my sister, Hannah. She had worked in a variety of shop styles in the coffee industry and agreed that, if we were to build a shop, she would transfer her studies to a SIUE and be full time staff through our launch. I wouldn’t have even considered investing in this business without someone like Hannah on board for our launch.

Hannah joined the team full time just a few weeks prior to its launch. The shop was in its final stages of construction and it was time to choose the essential product offerings of our business. Hannah navigated us in the selection of the exclusive Maeva’s blend now used for our beverages, brand of flavored syrups, what types of flavored syrups, placement of appliances, and workflow of the counter. She guided me in what choices were worth the expense (an in-counter pitcher rinser, homemade whip canisters, and sanitizer tablets over sanitizer fluid) and kept me from spending money on things we didn’t need or that wouldn’t have been appropriate for our specific type of shop.

I didn’t see it at the time, but this process was making regular collaboration a standard habit for me as the operator/leader of the shop. Harvard Business Review may tout internal collaboration as the vital element of success for tech and corporate cultures, but cultivating this practice in your small business will have an equally profound affect on your personal level of stress and ability to create amazing work relationships between you and your staff. Making collaboration a foundational part of your business culture will exponentially create growth and secure the longevity of the investment you have made in building your business.   

 

Creating Communication

Your staff may be unaccustomed to having an input on the choices being made for your business. You won’t be able to trust their feedback is honest and unbiased if an open flow of communication hasn’t already been created.

You should already be practicing individual reviews with your staff on a thirty day, ninety day, and quarterly basis. Start structuring these reviews to solicit feedback from your employees. When it is time to conduct a review, put it on the schedule a week or two in advance. Mention to your staff that there are changes you’re considering about the business- menu changes or operation hours- and you’d like them to give you their observations. This will frame the review as a dialogue beyond the individual performance of a staff member and prepares them for a discussion. During the review, first discuss all of the updates in overall practices or improvements/accolades on their performance. When you are done giving them information, change the direction of the conversation to them giving you information and don’t go back. Ask questions, listen carefully, don’t interject, and thank them for their ideas. They are, after all, giving you ground level suggestions on how to improve your business. Be thankful for the feedback!

Creating work relationships with freely flowing communication will take daily cultivation. Asking small questions (“What do you think of those new filters?”) and listening/responding to the answer will reinforce to your staff how much you value their opinion and give them the confidence to independently make decisions when you collaborate on bigger tasks. If you are starting from nothing, start small and be sincere. Your staff will feel manipulated and resentful if you pretend you desire input but never act on the information they give you.

 

Creating a Place Safe for Conflict

If communication is open and working well between staff and yourself, you are going to experience conflict. Feedback isn’t always positive. However, navigating negative feedback well will reinforce the openness of your relationship and allow for greater trust during collaboration.

You may get negative feedback on staff to staff relationships (link) that frustrate you with their pettiness or pile more work on your plate. You may get negative feedback on a product you try that just isn’t selling or a new process that isn’t working. Or, you may get negative feedback on yourself.

If you are doing well at creating communication, steel yourself. At times, my staff have offered up difficult criticism or use the openness of our relationship to vent. We’ve disagreed over disciplinary actions; I’ve been confronted with accusations of favoritism and the bled over of my personal problems into our work environment.  Handling these moments with compassion, grace, and humility….not becoming defensive or angry...sounds like common sense advice but is not easy in the heat of the moment. If you are a good leader, they already respect you and are coming from a place of frustration, not attack. By having the courage to talk to you, they are seeking resolution in a relationship they see as  worth the effort to improve.

Being open and creating an environment safe for criticism will keep your reputation intact. When staff know they are able to respectfully bring problems to you and you have a track record of responding by creating solutions, they are less inclined to vent their frustrations to other staff. Staff who do try to create dissonance through gossip will find themselves unable to easily sway others when your openness to receiving feedback and finding resolutions is known.

 

Growing Collaboration

With a solid foundation for communication, collaboration can now begin. Take time to ask yourself these questions:

What is something you do you not enjoy doing in your business? What tasks are you not good at in your business? What talents or industry interests do each of your staff have? What would you like to start doing or add to your business that you don’t have time for?

Using your answers, look for ways to use them directly for collaboration. Last summer, my answers would’ve looked something like this:  

I do not enjoy straightening and keeping track of the dry storage area. I’m terrible at remembering to order non-weekly materials, like paper cups, in time for them to arrive before we’re out. I have one staff member who loves learning about coffee and has a thoughtful tasting palate and two staff members who are excellent at photography/videography. I’d like to make progress in our drink menu and find more ways to introduce new brewing methods and more traditional beverages to our community.

In the last six months, I’ve delegated the organization of the stock room to a staff member who enjoys organizing things. I’ve been working with other staff to make a plan for creating dynamic material for our Instagram and website. We’ve invested in a new grinder with a second hopper and I’ve put our lead barista in charge of finding and ordering coffees to feature to our customer base. He also works independently with our kitchen manager to create specialty garnishes to pair with these beautiful coffees. The french press, clever dripper, gibraltar, and traditional macchiato are being ordered with more enthusiasm than I ever expected in a community that is new to the craft coffee scene. All of these things have been accomplished with minimal direction and time from myself.

 

 

 

At Maeva’s, I am part of a powerful team of people who are all genuinely invested in the goal of bringing quality coffee and a welcoming atmosphere to our community in the best way possible. Our staff have been solely responsible for countless ideas that have become standard practices in our shop. Our staff have discovered how to cut cheesecakes without messing up the toppings using a knife warmed in hot water, a super efficient way of stacking bar chairs for nightly cleaning, and a shorthand numbering system for tables that we all use to keep track of drinks and quiche during rushes. If they have an idea of where to put stock for more efficient workflow, they don’t ask me- they know they’re welcome to just try it and see how it goes. I can’t count the number of times I’ve walked in on shift and said to myself, “Holy shit. I never thought of doing this like that.” Because we have a culture of collaboration, we are able to respond faster to our community’s feedback- designing seasonal specials around the interests and palates of our customers. The events we host are unusual and original- a reflection of our staff’s own diverse interests. Even operation decisions, such as not switching to winter operation hours this year and the election of a non-profit to support through our events, have been determined solely by our staff.

This process is essential to the vitality and longevity of our business, and a prevention against the cancer of staleness. As long as I continue to hire enthusiastic and diverse staff whose talents and interests are different than my own, and I continually work to collaborate with them, Maeva’s will continue to be a fresh and dynamic presence in our community.  

 

 

 

Maeva's Coffee: A Chess-Inspired Tip Share System

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“I’ll be on shift with (long term employee) and she’ll disappear for thirty or forty minutes. I’ll be left by myself without any back up. I just don’t think splitting tips equally is fair.”

 

 

“When I’m on shift with (new employee) she just hasn’t been here long enough to really have things down. I have to work harder to make up for it.”

 

 

“When I’m on shift with (fellow employees), they don’t even try to know what specialty coffees we have or answer the weird questions. They just refer the customer to me- and I’m in the middle of making drinks. It’s stressful.”

 

I’ve made it a practice to periodically sit down with our staff individually just to get a feel for how things are going. Taking time out to speak to staff and creating an open dialogue at Maeva’s has been essential to our growth- read here (link) if you would like to know more about creating a collaborative environment in our shop.

Working with people you enjoy in a positive environment is worth it's weight in gold, but being among friends is a double edged sword: small issues have a habit of festering, and none of them wanted to risk creating confrontation in a predominantly positive environment. When half of my small staff expressed unhappiness in their work relationship with other staff, it fell on me to resolve the issues my staff couldn’t with each other.

The issues presented appeared to be training or policy related.  I took the opportunity to meet with our staff on an individual basis again and remind them of the responsibilities that had been falling by the wayside. When verbal communication failed to create a real result, I issued written warnings for offenses and suspended one of our staff members for a week in accordance to our written policies.

Our best-performing staff became increasingly frustrated, as did I. I have always felt my role at Maeva's should be one of a leader and not a manager (link).

 

“We have to do something they pay attention to- it needs to be about money.”

 

 

As disgruntled staff increasingly took longer to complete basic care and maintenance tasks in the shop, our payroll began to climb. My business partner suggested cutting all wages down to minimum ($8.25 in Illinois) as a wake-up call and to set up some system for re-earning their current wage rates ($8.50-9.75; augmented by tips).  However, he is not the day-to-day operating of the shop and his solution put me on the front line of managing a foreseeable disaster. There had to be a better solution that didn’t involve me mitigating an all-out mutiny in the wake of this “let them eat cake” resolution.

I continued to search for a solution after exhausting the options outlined in our employee handbook. Two of our senior employees suggested tip sharing as a way to ease the stress of the knowledge and experience gap between veteran employees and new hires. I began to toy with the idea of creating a tip sharing system which would also work to refocus energy away from negative behaviors and reinforce the efforts of staff who truly invested themselves into our business.  All of our employees are paid above minimum wage, allowing us the freedom to create and experiment with a system with these goals.

I needed to create a system to distribute tips that also fit the following criteria:

  • Based on completely objective achievements

  • Valued book knowledge and actionable skills equally

  • Emphasized continued learning and allowed growth over long-term employment

  • Fairly distributed tips based on time spent on shift

  • Incentivized new employees to learn quickly, allowing them to catch up to veteran employees

One weekend, I puzzled over a game an acquaintance was playing on Chess.com. It occurred to me how optimistically Chess.com ranks new players at a 1000 level strength out of 3000 point scale. You have to start somewhere, they’ve chosen 1000. As you play more games, your rating deviation is lowered and your resulting level more accurately describes your strength as a player. I began to write out how the Gliko chess ranking system could be adapted to tip sharing. Admittedly, the result looks far from the original, but understanding the Glicko system led to a fair and elegantly simple tip sharing method.

Nine weeks after our staff first voiced their discontent we held a full staff meeting implementing our new tip sharing system. These are my observations after three weeks.

 

 

The new system pays 50% of the tips based solely on hours worked in the shop and 50% on weighted rank. Our staff voted that tips would be distributed weekly. When they are available in the shop, the spreadsheet above is also published to ensure transparency.

The first set of numbers disperse half of the total weekly tips among staff per hour.

The second half is dispersed via weight, with total distribution the end. (Note: Justin was a new hire this week and hadn’t yet entered the ranking system- receiving only tips based for his weekly hours in shop and the nominal residual points entered in the ranking system to track seniority).

The second set of numbers show distribution of tips based on ranking weight, which is determined by the following:

 

Calculating weekly tips takes little effort. The spreadsheets are interlinked so the only values I need to update are the hours each staff member has worked and the total amount of tips being distributed. All of the equations have been built in.

One of the most difficult tasks in creating this system was assigning a point value to different skill levels. With the written/knowledge based exams, I have weighted what information is most important by placing it the lowest exam levels where tests have a higher point value. The first two levels of exams have very little to do with coffee and place an emphasis on directly applicable food safety practices for our business. They include questions such as:

“What temperature do you heat a quiche to before serving it to a customer?”

“How do you know when to change the sanitizer water in the dish sink?”

“At what temperature should the milk be stored?”

 

The higher level exams dive into the science and history of our industry, encouraging employees to cultivate a solid foundation of knowledge furthering their ability to passionately communicate to our customer base and add to the collective growth of our community’s love for coffee. However, it’s more important to me that our staff isn’t inadvertently giving someone food poisoning than their ability to locate Bali on a map- so lower level tests have a higher point value than higher level tests.

Knowledge isn’t everything. The ten yellow levels are all written exams and comprise 1,190 of available point value. The remaining points are predominantly skill based. Latte art, speed, ability to use a variety of coffee brewing equipment, and the thoughtful cultivation of palate- among other skills- are also weighted into the system. I had hoped to make a system that would be similar to the Gliko chess ranking in which 3000 would be a maximum point allowance, but I did add some categories for obtaining points that may accumulate beyond this.

Some points continually accumulate (i.e. hours spent in shop or tasting entries) while others are only available at certain intervals (i.e. speed testing occurs quarterly).

In the short time we’ve had it in place, I love these three things about this tip sharing system:

 

It’s completely objective. You either know something or can do something…or you don’t. There is absolute transparency in what you are getting points for and what you can do to improve your score (and therefore your share of the tip pool). There are no subjective points assigned, which takes all of the pressure off of me to evaluate which of our staff are pulling what degree of weight and how that should be rewarded.

With the exception of the speed testing, none of these skills are directly competitive. No one is being pitted against each other. Ideally, everyone would be 10th level ultra baristas, in which case all tips would be distributed equally with only hours worked per week in shop accounted for in difference.

 

Tracking of tips. Before this, only credit card tips were tracked and, even at that, I didn’t have an easy way of doing so unless I went into each day’s worth of reports via our POS system. Since both credit card and cash tips are pooled together and dispersed, I now know how much our employees are making per hour. This week, our least trained staff member made $11.27/hr and our highest trained staff member made $13.40/h with an average wage of $12.34/hr in shop. This information, as it is collected and averaged over time, will be useful to me as an owner when hiring new staff down the road.

 

Staff are in control of their wage. With this system, our staff is given a method for improving their skill level, directly affecting their pay in both the short and long term.

As our staff become more knowledgeable, efficient, and skilled they are going to be able to build deeper relationships with our community, attract a wider range of folks into the shop, and accommodate a greater volume of orders in a speedy manner. Logically, this would lead to greater appreciation for our staff’s ability to craft amazing coffee and a greater pool of tips. To put it simply- you want more money per hour? Know more and serve customers better.

 

Small business is all about being able to custom tailor everything. I’ve read a dozen books about listening and responding to the desires of your customer base, but the last few months have been an exciting challenge of reflecting on the needs of our staff and strengthening our business from within as we continue to grow.

The results: this system was initially met with skepticism and became the catalyst to  losing one of our long-term staff members. However, I’ve been approached independently by half of our current staff who have expressed relief at the decreased level of stress in the shop. When laying out the tip system to one of our new hires, he commented, “I’ve never worked anywhere that actually gave you a reason to learn- this is so awesome!” This overwhelmingly positive reaction was enough affirmation for me to believe that, even if it needed to be altered in small ways in the future, we’re on to something.

 

 

Stay tuned! I promise a six-month review later this year after more time has lapsed.

 

 

ARCHIVE: Competition is a Waste of Energy

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This article was originally published on February 27th, 2014 and may reflect a different time in our business cycle at The Milton Schoolhouse.

Disclaimer: The views on this blog are solely my own observations written in a spirit of good natured humor and general love of this city I now call home.

Milton's newest small business- Happy Camper Grooming- is a full service pet grooming salon that opened in January. Doug and Leslie, having already established themselves in this area four years prior to relocating, brought with them a large and faithful client base. As we built out their room downstairs, we watched a red brick house on Milton road become the new home for another established grooming business.

One night as we feverishly worked to get Happy Camper's space ready for their first clients I remember asking if they were in any way concerned about the dog grooming facility down the road. Doug looked amused- "Noooo. There are plenty of dogs around here. More than we could possibly groom. The people who use us tend to fall in love with us and stick around- that's enough for us."

How lovely! I was so glad to hear the world of dog grooming wasn't as cuthroat and full of spiteful sabotage as the massage business. Our own Bobbi dealt with ridiculous backlash from her previous employer when she decided to venture out on her own- which caused an unnecessary amount of stress for a business centered around destressing. 

Silly me. As it turns out, Happy Camper's calmly confident views on competition were to be an exception to the rule. Soon after the new grooming facility opened down the road, Happy Camper had a full day of dogs belong to a "new" client cancel on them. After a few other red flags, we traced the number of the person who had booked and canceled. All signs pointed to someone suspiciously involved with said grooming company previously alluded to in this blog. Not 100% positive, but somewhere around the same odds as the sun rising on Friday. 

Doug seemed unsurprised. Shrugging, he told me it was common- and it's happened before. I suppose it's a bit of a common practice. "I look on the positive side," he said, "it's a day off."

I'm not sure what kind of a person you have to be to "book" appointments with another similar business and cancel them...so the other business looses income for an entire day. I mean, honestly, do you think that one day will actually make or break a business? What are you trying to accomplish?

My mother always says, "Never attribute to malice what may be ignorance." With that spirit, perhaps some folks really haven't discovered what competition is in Alton at this present time. Let me lean in and whisper something to you:

If you own a local business in Alton, your competition isn't any other local business. Your competition is the lack of small business as a whole in our community. 

What the heck does that mean? That means the ratio of local business choices in our community to potential clients is so low that it doesn't matter (at this point) what type of small business you are in- you aren't competing against another business for clients. You're competing against your own branding to attract clients from a non-client base.

 

Let's look at the General Cycle of Business and Gentrification*:

Step One: Low property values/taxes inspire artists and hip small businesses to start up

Step Two: Small businesses create an area attractive to tourism, property values rise, the most trendy businesses leave as more "upper class" businesses are established (young edgy artists can't really afford to pay high rent- so they move to another low value area)

Step Three: Corporate Moves In (Starbucks, Chipotle, etc), property values max

Step Four: Area becomes less trendy. Tourism declines. Property values plateau

Step Five: Decline. People and Corporate move to the new trendy areas. Buildings left empty. Property value declines

Repeat to Step One.

*There's got to be a real name for this...I've mentioned this before in this blog here.

 

 

Okay. So we're at Step One. I love Step One. Step One is the most exciting step...and the most profitable if you're looking to begin a small business. 

Alton is a glorious untapped market. As a business, your energies should be put toward converting clients from non-users (they aren't accustomed to having your service/business around) to faithful users (wondering how they ever lived with a stinky dog before you existed). It doesn't matter if your business is dog grooming, massage, comic books, or knitted topiaries- if you have a product/service and awesome branding, this town is your oyster! You have the hard task of educating, creating, and growing your market.... but after that your location should be busting with clients. The competition for anything here is far from saturated- you shouldn't be wasting your minutes calling to another business to play silly games. You should be calling your mother about those manners she forgot to mention to you in your early years. 

Let's focus on a positive example of a type of business who has this figured out around here: The local CSAs and independent farmers. You don't see these folks flinging dirty looks and cucumbers at each other on Saturdays at 9th and Piasa. These independent farm owners- who grow very similar product and use similar outlets to sell these products- are working together to educate and grow the Alton market for local food as a whole. They've gotten together to talk about how to grow Alton Farmer's Market, promote residential chicken keeping, throw around ideas for beginning a small grocery to sell local food, partner with restaurants, etc. etc. etc. Because of this, they've been able to get people who never considered local food genuinely excited about this new concept and these businesses in their hometown. The Alton Farmer's Market just announced it was moving to a larger venue this year- indicating their collective work to grow a market for local food in Alton is succeeding. 

How could this apply to another business? Well, no one is safe here so let's talk about Maeva's- the coffee shop we will be opening in June. How would I feel if someone else opened up a coffee shop in Godfrey, or East Alton, or even downtown Alton? Wouldn't I feel a little like I didn't want them in my sandbox? Get off my swing set! That's my slide!

No. I promise you I would not and absolutely will not when this happens. 

And I hope whoever opens up another coffee shop around this area would feel the same way. Should we be throwing out advertisements poo-pooing the other businness' prices? Or write snarky comments about each other's scones on Facebook? 

Or... just possibly...just maybe...we should get together and seek to promote our community's love of coffee as a whole? Maybe we could co-sponsor a coffee fest, or co-host classes, or just get together as coffee shop owners and talk about what we see in business as a whole. 

Why the heck would anyone be so nice in business? Because there are only so many things you can control to make a business successful. If another coffee shop opened up, our locations would be wildly different (out of our control), our pricing would likely be comparable, our products (if they chose to be a true quality coffee shop) would likely be on the same level. It's much like the farmers in our region- there are only so many ways to grow so many vegetables in this climate and be profitable. 

The only thing left in our control to distinguish the two shops would be atmosphere (which is naturally going to be different shop to shop), branding, and service. Honestly,  Maeva's isn't going to have any business-to-business competition in Alton unless this town turns into Portland OR- where there's an independent coffee shop on every corner. This isn't because Maeva's is necessarily going to be "so much more fabulous" than any hypothetical future shop- but because:

- there are enough components to naturally make us and any other shop different (and thus attract different types of people)

and

- there are plenty of customers to go around

Here are two big things you can do to improve your business if you feel it's on uneasy ground in this area. 

1) Plan a way to work with your competition (...if they are nice folks. If not, send them this blog so they might realize you aren't in competition with them). This could be dog groomers planning to co-sponsor an adoption event. Screen printing companies putting together a coalition celebrating their art and hosting holiday pop-up shops like Cherokee Street Print League. Or restaurants getting together for things like the Taste of Alton event.

2) Focus on making your business the best it can be. Whether you have competition or not, you should want your business to be awesome anyway. Don't look at similar businesses as a threat- look at them as motivation to improve your own. If you aren't really creative or you're afraid you can't quite see how to make your business shine, you can hire me or another marketing/design company to consult with you on how to strengthen your brand and reach this untapped market we've been talking about. 

3) And, if you simply feel you must call another business to carry out nefarious plans, heck, use someone else's phone. And maybe a nom de plume.....like "Black Cobra" or "Nannette D'Avingnon" or "Steven Seagull". 

ACRHIVE: Shooting Yourself in the Foot- Reflections on the Banking Industry

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his article was originally published on January 28th 2014 and may reflect a different time in our business cycle at The Milton Schoolhouse.

In April 2013, Joel and I made the decision to move our business banking from Chase to Carrollton. In hindsight I’m sheepish to admit the most influential reason for choosing Carrollton was how strongly it has promoted itself as a hometown, small business oriented establishment. “Enjoy a long term relationship with a seasoned banker”, their website proclaims, “You don’t have to repeatedly start from scratch with new bankers….We follow through on our promises, do what’s right.”

We were tired of being lead around from banker to banker by Chase, and decided it was time to support a local business with our business. Last spring we met with one of their bankers in Springfield, IL seeking a business line of credit. Unfortunately in the banking realm, most of our work here has been completed with cash and without debt- so our business had no credit of which to speak. I was told if I locked $15,000 of our funds into a CD at their bank, they would give us a very low interest line of credit of the same amount to build credit for our business. That way, when we looked to expand, we’d have something to show as a basis of lending.

Then came Maeva’s Coffee. After a year of research, planning, and market analysis (as well as an incredibly strong showing of support from our community- bravo!) it was time to put the plan into action. While we had the means to self-fund the coffee shop, we realized that in a service business- with vendors and planned future expansions- it was time to acquired credit for Maeva’s as well. On January 16th, Joel and I went into Carrollton with an extensive cost and market analysis of Maeva’s, looking to borrow in part or in whole our start up funds.

Our first problem was…well…our banker was no longer there. After purposefully establishing a relationship with a banker for our business, our banker had left the bank the week prior. The relationship we built with updates on our expansions last summer, the borrowing and paying back of funds, and the efforts to familiarize someone with the huge scope of our project and potential were lost. We met instead with the bank’s regional president and branch manager. They were cool to our plan, but I realized we had given them quite a bit of information. A decent sized business plan is difficult to review in the course of a single one-hour meeting. We left on “let’s look over it a little more and talk later” terms.

I left a message the next week- which was returned promptly by the regional president. I’m highly doubtful he read our research as he spent much of the call talking about how coffee shops were high risk as a whole, how he has a friend who was a “good seasoned” business man who failed in a coffee shop venture in Jacksonville, and how he felt obligated to inform me of the risk. All gleaning aside of whether his rather paternal poo-pooing would have happened had I been an older man, I was left shocked when he said that Carrollton would not loan us a single dollar unsecured. The great news was that, if I wanted to, I could take $60,000 of our own money and put it into a .4% CD- and then they could lend it back to me at 4-5%. Now, I may not be the brightest crayon in the box, but taking $60,000 out of a fund that is earning 9%, putting it into a .4% CD to borrow it back at 4% sounds like a pretty silly move.

I hung up the phone feeling irritated. Slightly betrayed I had so blindly believed this small bank was going to be different, somehow, than the larger bank we had worked with for three years. After relating our story to my close business friends, I had the terrifying realization that our experience was not an outlier- but a common secretive sign of a virulent problem in the traditional lending industry.

As heavy into the field of marketing as I am, I am keen to the signs of a business’ health reflected in their branding. I stress often to my clients that your marketing choices are meant to put your best face forward. While your advertising never shows the areas in which you are lacking, what it does show must be honest to be successful. If good marketing is essentially a reflection of the best part of yourself- Carrollton Bank has made a grave mistake in emphasizing their role in providing capital to small businesses. As we left their branch in Springfield, two well-printed posters of happy business customers endorsing Carrollton’s helpfulness were perched on displays near the door. The whole meeting felt much like showing up to a first date- only to realize the person you were meeting had used someone else’s photos for their Cupid.com profile. It is only a matter of time before other entrepreneurs who leave similar meetings, perplexed by the dual nature of the bank, discover they are not alone. Marketing that is not representative of your business operation is the first step to the gallows- and it’s a step traditional lenders appear to be making across the industry.

Unfortunately, the choice of traditional lenders to cut small business lending from their market is not a quick and painless death to choose. I predict a slow decline that takes its toll by putting a halt to start ups, inhibiting the expansion of current small businesses, and negatively affecting the job market for communities like Alton. Banks still maintain the advantage over crowd funding in their swiftness- and an advantage over alternative lending sources in their ability to borrow money at 0% from their depositors to lend out at attractively lower interest rates.

While banks have been tightening requirements for lending since 2008, small business owners still suffer in a lack of education to this change. Misinformation is to blame for part of this. When home town banks insist on making “small business friendly” the core of their brand and the reality of their practices do not align with their message, entrepreneurs faced with the already massive hurdles of beginning or maintaining a business walk away confused and discouraged. Meanwhile, institutions of higher education have turned a blind eye to this problem of capital. Like teaching dark room techniques in a world gone digital, universities continue to teach traditional funding as the primary form of financing a new venture. The truth is crippling to young and eager entrepreneurs- a good idea, a boot straps spirit, and a well-prepared business plan are no longer enough to acquire a loan in today’s America.  

I fully agree it is a bank’s choice to lend or not to lend, to make decisions best for their own business and clients. However, when a bank chooses to take no risk by lending only to “A-credit” small businesses- they are not only endangering the economic growth of a community, they are endangering the longevity of their own model. Offering to lend money only to those enterprises who do not need it inhibits growth on all fronts. Fortunately, the entrepreneurial spirit is a difficult one to kill. Inventors, business owners, and artists are seeking alternative forms of funding at a rapid rate- the industry of peer-to-peer lending is growing. It hasn’t yet reached the height to be a sole viable option for a typical brick and mortar start up, but the truth is that people are finding ways to profit from their talents and passions while cutting the bank out.

If smaller players in the banking industry wish to survive- or even become the new standard- in this environment change, they need to take advantage of their “home town” status. This means not broadly categorizing ventures into levels of risk and deciding whether or not to provide financing from the comfort of an office. They will need to hire bankers who behave more like investors or adventure capitalists, who can take a portion of the banks funds and discover how to grow these funds for their company. Small banks can no longer afford the “old boys”- they need people who will take the time to analyze each individual request, to consider all of the information presented, to visit the location and make an independent calculation. By hiring bankers at the ground level who are able to evaluate risk in a micro environment, banks like Carrollton can continue to grow.

It is disappointing to see them instead choose to wade in the wake of larger competitors over following the spirit of their marketing to make a real impact in the economic growth of their community. But, as Andrew Papageorge said, “Innovation is not absolutely necessary….but then neither is survival.”

This experience has been a very compelling one- so I don’t count it as a bad overall. Maeva’s Coffee has started construction on schedule and we are fortunate this has in no way affected our progress. However, it has reinforced to me the importance of taking small business into our own hands- together, as a community. Inspired by these events, I have begun to put together a class on crowd funding (using sources such as Kickstarter and Indigogo) to take place in Maeva’s this coming July. If you are an entrepreneur, small business owner, or artist, I want to give you the biggest round of applause. You aren’t alone. Our support comes from our neighbors, from our friends, and from our families- not from an industry that has become too blind to see how essential you are to their survival.