For those of you who have been readers of my blog over some or all of the last three years, a compilation of my posts is now available in an eBook. The book tile is The Real Business 101: Lessons From the Trenches. It’s available from the Kindle Store for $.99 (http://www.amazon.com/dp/B00F7NC1ZW) or via the Smashwords site (https://www.smashwords.com/books/view/357842) for free for a limited time for all other eReaders. If you read it and like it I’d appreciate an online review on either site. Thanks!
I got an email from Tumblr today reminding me that it’s the third anniversary of my blog. It’s hard to believe that three years have passed since my first post. I’ve now done 124 posts and my blog has been read in 34 countries as well as all over the US. That’s pretty amazing to me and a testimony to the power of blogging. I have had posts reprinted in three magazines (that I know of), one on a regular basis.
Some long time readers may recall that my original idea was to write a book of business tips I’ve learned from some great mentors (and some painful mistakes) and my blog was a way to eat the elephant one bite at a time. I’ve received two offers from book publishers to print my blog, but only if I would agree to go on a 1-1.5 year book tour. As I’m still way too busy for that I respectfully declined the offers and now plan to self publish electronically via Smashwords (www.smashwords.com), a platform that works on the Kindle, Nook, iPad, and any other electronic reader.
Keep your eyes open for an announcement on that in the near future. In the meantime, thanks for reading my blog and special thanks to those who have commented or emailed me. I am running low on things to say after 124 posts so I won’t be posting as often in the future but any time I think of something I haven’t addressed I will do a new post. If there are any topics I haven’t addressed that you would like to see me do a post on just let me know.
Thanks for spending all or even just part of the journey with me. It’s been fun.
Most businesspeople don’t need to be told to cultivate relationships with their customers, especially their top customers; however, most business owners and managers I talk to aren’t proactive in managing supplier relationships. Why should you cultivate relationships with your suppliers? After all, you are buying from them so why should you romance them?
Well, the answer is simple. Your top suppliers can significantly enhance your profitability…if they want to. How can they do this? One of the most important ways is getting you product to sell when their products are in short supply. Yes, for the last several years the weak economy hasn’t caused many products to be in short supply. However, throughout my career I have seen many times when products were in short supply, or even on allocation. If you have a strong relationship with your key suppliers they can get you products to sell even when they are in short supply. Also, suppliers (if they want to) can do other things for you such as rebates, extended payment terms, and provide you with marketing support funds. Are you starting to get my drift?
How can you manage supplier relationships? Here are some of the things I have done over the years:
· Quarterly meetings. In our company we meet with our key vendors quarterly to discuss how our purchases stack up versus the previous quarter and the previous year to date. We discuss opportunities to increase our purchases and come up with action plans to make them happen. This is also a good forum for suppliers to have access to our top executives and pitch new products, discuss any declines in purchases of some of their products, and get feedback on their marketing programs. You should never meet with a key supplier for quarterly meeting without meeting with your team beforehand to discuss what is going to be said and who is going to play what role. Also, after the meeting you and your executive team should discuss what happened at the meeting and whether your objectives were achieved.
· Get to know the C level people at each of your key suppliers. When you know the CEO, COO, CFO, etc. you can get favors that lower-level people within the supplier’s organization don’t have the authority to grant. I once also got the CFO of a supplier of mine to loan my company $2 million to buy a competitor. I pitched the CFO on how buying the competitor would cause us to buy more from their company. I don’t think he would have agreed had I not entertained him at The Masters golf tournament the previous year.
· Entertain your key suppliers. As mentioned above, I have taken many key suppliers to prestigious events such as the U.S. Open golf tournament, The Masters, highly rated private golf clubs, to dinner and to shows, etc. Not only do you build important relationships with your key suppliers but as most of your competitors who buy from the same suppliers don’t entertain them you stand out in a class of your own. This comes in very handy when you need a favor.
· Don’t take the last nickel off the table. I have seen too many suppliers “beat their suppliers up” for the last nickel in each and every negotiation. That is pennywise and pound foolish. Someday you may need a favor from that supplier and that will be their time to get even. In fact, when negotiating a large deal, I ask the supplier if they are still making money on the deal. I explain that I want them to make money when dealing with us because I know that we won’t have a good, long-term relationship if they aren’t making money off of us.
· Discount your bills. Throughout my career I have made it my practice to take prompt pay discounts. Not only does this add substantially to your bottom line, but when you need a favor from a supplier or when you need an especially good price, your chances of success are much higher if you pay your bills early rather than late.
· Buy strategically. A lot of business owners I know don’t give much thought as to why they buy from certain suppliers. A mentor of mine once told me that he buys from two types of suppliers: those who can help him and those who can hurt him. The former is rather obvious but the latter type of supplier may need some explanation. Depending upon your business, there may be some suppliers you aren’t particularly fond of but if you don’t buy from them they will sell your customers direct or sell one of your competitors when you don’t want that particular competitor to have that product line. Think about your reasons from buying from each supplier and deal with them accordingly.
· Pursue suppliers you want to buy from but who won’t sell to you. In my business, building products distribution, there are a fair number of exclusive relationships. When a supplier who I want to buy from won’t sell me I have often spent several years “pursuing” a vendor I really need to round out my product offering. We make it a point to contact each supplier who presently is offering exclusive to one of our competitors, at least once a year. Sometimes we find that they have “fallen out of love” with one of our competitors and they finally accept our overture. If you have a supplier you want to buy from but they are selling someone else, don’t accept this as being “carved in stone” and pursue them over the long term. When we have done so we have ended up buying from that supplier more often than not.
If you aren’t already cultivating your relationship with your key suppliers, and suppliers you want to do business with, I hope this has made you think about adopting a new attitude towards your suppliers. If you have any other ideas on how to cultivate supplier relationships I know that my readers and I would like to hear from you.
Copyright 2013 by Jim Sobeck. All rights reserved. This information may be reproduced as long as full credit is given to the author.
It has been said that if you want something done, ask a busy man to do it. That’s because most busy people (if they are successful) have created a system that allows them to be more productive than the average person despite being very busy. As I am CEO of a nine location building products distribution business, CEO of a real estate holding company, on the boards of four for profit companies and one nonprofit organization people frequently ask me how I get so much done. Below are my top ten productivity tips:
1. “To- do” list. I don’t use a standard to-do list. After reading First Things First by Stephen Covey I created a four grid spreadsheet that I use as my time planner. The four grids are important and urgent, important but not urgent, not important and urgent, and not important and not urgent. I update the spreadsheet every day before I leave the office so I begin the following day organized and ready to go. I also look hard at the spreadsheet every day for things that I can delete or delegate. Also, by reviewing it every evening before leaving the office I’m not surprised to see my tasks for the next day.
2. Work first on the “important and urgent” tasks. Sometimes it’s tempting to knock off some small easy tasks from your to-do list but if you want to be highly productive you need to force yourself to complete several items from the important and urgent quadrant each day before you complete any of the easy tasks.
3. Set deadlines and start dates for tasks. Once you have done that track them using the Outlook Task feature so that you don’t forget due dates. Once I put the due date for a task into Outlook I don’t have to remember it. It pops up when I need to begin working on the task.
4. Follow-up on the things you delegate before they are due. If you wait for a project to be delivered to you on the assigned due date you may end up disappointed because the person you delegate it to may have forgotten about it. I typically send a reminder halfway between the date I assigned a task and the due date to make sure that the task hasn’t been forgotten.
5. Handle things only once. I don’t get a lot of paper mail anymore but if I need to respond to something I get in the mail I try to respond to it immediately. If I can’t I set up a task in Outlook and scan the paper into my computer and then file it in my “to be responded to” Outlook file folder. With emails I need to respond to I do the same thing as above.
6. Block out time on your calendar to do key tasks. If you have a major project to do block out some time on your calendar and when that time arrives, turn off your phone, close your door (if you have one) and buckle down on completing the task as soon as possible.
7. Document everything. I don’t rely on my memory. After meetings I send an email to all the participants documenting what was discussed. That way if there is ever a disagreement about what was discussed in the meeting there is a written record to review. I do this even for phone calls if what was discussed is important.
8. Disable your emails from popping up in Outlook and on your smart phone. Before I did this I would be working on something and an email popping up would distract me because I would, many times, respond quickly to the new email instead of finishing that which I was working on.
9. Avoid paper files. I scan all important documents into my laptop computer so that no matter where I am in the world, if our attorney, accountant, insurance broker, etc. needs an important document I can forward it immediately rather than rooting through a file cabinet.
10. Have an agenda for meetings. If you are chairing a meeting provide an agenda ahead of time so that people can be prepared and so you can stay on schedule. Meetings without an agenda tend to wander aimlessly and accomplish very little. If you aren’t chairing the meeting ask for an agenda and don’t go to the meeting unless you get an agenda. Your time is valuable… don’t waste it on a meeting without an agenda.
Some of you may be wondering, “What’s an autodidact?” For those of you not familiar with the word, an autodidact is a self-taught person. Why should you be an autodidact? Well, there are many reasons.
First, I have found that most of us in business didn’t study business in school. For example, I was a government/pre-law major in college. I thought I wanted to be a lawyer ever since I watched Perry Mason on TV as a child. However, in my junior year of college a guy who was a few years ahead of me in high school graduated from law school and was hired as an assistant district attorney in my home county at a starting salary of $17,500. As I would have to pay for three years of law school myself and as, at that time, the cost was going to be around $30,000 I decided that I wasn’t going to work and borrow $30,000 to make $17,500 a year to start. I got into sales and never looked back. However, as I didn’t have a business education I had to learn about business if I wanted to move out of sales into management. I decided to learn on my own. I read books on business, I subscribed to business magazines such as Forbes and Fortune, I started reading The Wall Street Journal daily, I listened to business and sales tapes in my car while driving around my sales territory, and I went to seminars and conventions. I have never stopped doing these things.
Second, the business world changes at a rapid pace. If you’re going to succeed in business you need to be either an autodidact or have the time and money to continue to take graduate courses at a university. If you aren’t growing, you’re dying. I know a lot of people my age who haven’t read a business book since college. Some of these people ask me how I am able to blog on so many topics, and the answer is: because I’m in autodidact. There is no finish line.
Third, it will help you succeed in the business world if you stay on top of changes in the industry in which you make your living. If you can converse with customers on topics related to their business, or better yet, inform them of changes in their industry with which they are not yet familiar, that will endear you to your customers. Customers want to buy from people and companies that are progressive and changing with the times, not companies that are trying to hold back the tides. Being an autodidact is good for business.
Fourth, if you’re in management, being a lifelong learner will help you attract and keep top people. Sharp people don’t want to work for a dinosaur. I’m almost 60 years old now and when I interview bright young people it’s palpable how surprised they are that I can converse on so many topics of the day. I remember when I was younger and interviewed with a person that is my present age and I couldn’t wait for the interview to end because there was no way I was going to work for this guy.
Fifth, it will help you in your dealings with lenders. About two years ago, our current lender assigned a new banker to our account. At our first meeting I did a PowerPoint presentation of over 50 slides on our business. I showed the new banker where our business was in the past, where we were then, and where we were going. At the end of the presentation he told me it was the single best presentation he had ever gotten from a client. Shortly thereafter he increased our credit line. If you’re a business owner and you rely on a sharp CFO to do presentations to your banker, you’re making a mistake. If the banker thinks that the CFO is the brains of the operation, not you, you may find your loan being called in the future.
In closing, my favorite Bible passage is about being a lifelong learner. If you’re not familiar with it, it is Ecclesiastes 11:6 and it states, “In the morning sow your seed, and at evening withhold not your hand, for you do not know which will prosper, this or that, or whether both alike will be good.” In other words, don’t stop learning as you grow older. It may be things you learned later in life that will make you successful rather than things you learned while you are in school.
Are you an autodidact? If not, I hope you will be shortly.
A former coworker commented on one of my recent blog posts and asked if I would do a post on tips on interviewing for a new job. She said that her nephew was having trouble getting a job and she wanted a few tips. So, here is some advice on interviewing:
· Dress slightly better than the job for which you are interviewing. Try to find out how people dress for the position for which you are interviewing and dress slightly better than normal. I say slightly better because you don’t want to show up for an interview for a forklift operator position dressed in a suit. Conversely, you don’t want to show up for a job in a big company’s accounting department dressed in blue jeans and work boots. You also don’t want to show up the person you are interviewing with.
· Arrive 15 minutes early for the interview. This will allow for getting lost or being stuck in traffic. You have no idea how many times people show up late for an interview with me. Remember, you never get a second chance to make a first impression. Make sure your first impression is good by being early.
· Make sure your shoes are polished. I see many people show up for interviews dressed nicely but wearing scuffed or dirty shoes. My father used to say that getting all dressed up but wearing unpolished shoes was like driving a brand-new Cadillac with dirty hubcaps. I agree.
· Make sure your fingernails are trimmed and clean. Men should make sure that their nails are evenly trimmed and that there is no dirt under their nails. Women should also refrain from extremely long fingernails and those painted with unusual designs. Such fingernails give the impression that you don’t work hard.
· Your clothes should be clean and pressed. I frequently interview people who are wearing clothes that look like they were slept in. Make sure your clothes are impeccably clean and not wrinkled.
· Bring a copy of your resume. Sometimes the interviewer can’t immediately access a copy of your resume so bring on with you. Make sure it is printed on high-quality paper.
· References. Try to get references from former employers on their letterhead and bring copies with you to give to the person you are interviewing with. A handful of references from well-respected companies will definitely make you stand out.
· Transcripts. If you’re a college graduate, bring a copy of your transcripts with you to share with the person interviewing you. (If your transcripts aren’t good, forget this tip.)
· Background checks. Most companies will check your criminal record, your credit, and your driving record. If there are any negatives in any of these areas explain them to the interviewer so he or she doesn’t see them on your background check without any explanation from you.
· Drug tests. Most employers also require a pre-employment drug screen. If you aren’t certain that you can pass a drug screen don’t bother interviewing until you can.
· Research the company you’re interviewing with. In the Internet age there is no excuse for not researching the company you want to work for. There is a plethora of information on companies of all size on the Internet. Simply Google the company and then take notes. Mention some of the things you learned during the interview. That will impress the interviewer.
· Clean up your social media. If there are pictures of you doing bong hits, passed out, or doing anything else embarrassing, get such things off of your social media sites. Almost all employers will do a Google search of your name which in most cases will lead them to your social media sites.
· Your email address. If your email address is something like email@example.com, change it to something more businesslike. You know what I mean.
· Ask for the job. At the end of the interview, if you are interested in the job, ask for it. A lot of employers are suckers for people who “ask for the order”.
· Offer to work for free. In our current slow growth economy, if you offer to work for free for a short period of time (provided you can afford to do so) this may separate you from the other job candidates as the prospective employer will get a “free look” at you in a work environment.
· Send a thank you note. I estimate that less than 10% of the people I interview send me even a thank you email, much less a written thank you note. A written thank you note is another thing that will set you apart from the pack.
If you’re looking for a job try the above tips and I guarantee they will help you. Do you have any tips I missed? If so, please share them with me and my readers.
My recent post on how we were scammed generated the greatest response of any of my blog posts in the almost 3 years since I started my Biz 101 blog. Part of the overwhelming response was due to ProSales magazine reprinting my blog post. I received emails and calls from across the US and Canada. Most of the responses were to share stories of how the respondents had been scanned too. I had no idea how widespread organized scams of building material companies were. One scam that I heard about from several different people involved a group in Montréal that stole over $30 million worth of building materials, mainly from companies in the US. Another caller told me that the company that scammed us ripped them off as well. He told me that the FBI has identified over 745 companies in 31 states that were scammed by the same company that fooled us. I must say that I was flabbergasted as to how widespread this illegal activity has been.
As I mentioned in my previous post, we now will not sell to any company outside of our normal trading area unless we get a wire transfer or a certified check prior to releasing the materials. Since putting this policy in place about two weeks ago this policy has saved us from being scammed twice.
The most recent scam attempt was an email I got from someone who had visited our website and gave me a long list of products to get priced for delivery to Brooklyn, NY. Being that I used to cover Brooklyn when I was with Owens Corning in the 70s I’m well aware that the products this person told me were hard to find in Brooklyn were, in fact, readily available at numerous sites in the New York City area. I responded to his email request by stating that we would need a wire transfer or a certified check prior to shipment. His response was, “Forget it”. I’m surprised he even responded.
I hope those reading this post have, by now, learned to be extremely vigilant about selling to companies you don’t know. I wish I had read a post like my two previous posts prior to learning these lessons the hard way.
Copyright 2013 by Jim Sobeck. All rights reserved. This information may be reproduced as long as full credit is given to the author.
When our middle child, Thomas, graduated from Georgia Tech a few years ago his first job was with a multi-billion dollar a year company. As I worked for a similar company early in my career and was fairly successful Thomas asked me for some tips on how to get ahead in a big company. Over the years several friends asked me for similar advice for their children. Below is what I told Thomas and what I still say today.
- Arrive at least 15 minutes earlier than required and stay at least 15 minutes later than you have to. Establish a reputation as a hard worker quickly.
- When someone asks for a volunteer in a meeting, especially for a dirty job, raise your hand. Most people just do enough to get by and look down at their shoes when volunteers are being solicited for dirty jobs.
- Hitch your wagon to a star. By this I mean if it becomes apparent that someone in your division is a superstar and is above you on the org chart, let him or her know that you want to continue to work with them as they move up. Conversely, if you end up working with someone whose career is about to implode try to get a transfer away from that person as soon as possible.
- Dress for the job you want, not the job you have. However, don’t out dress your boss. If your boss dresses like a slob and you look like you stepped off of the cover of GQ he will try to get you fired.
- Always go to work with freshly shined shoes. A lot of young people right out of college wear cheap shoes, and to make it worse, wear them to work all scuffed up. By a few pairs of good shoes, put cedar shoe trees in them nightly so that the leather doesn’t wrinkle, and wear a freshly polished pair every day. Also get a travel shoe shine kit and take it out of town with you on business trips. That way if your shoes get scuffed you can polish them in your hotel room.
- Don’t talk much in meetings when you’re first starting out. Listen, take notes, and only speak when your opinion is solicited. No one likes to hear a loud mouth right out of college who thinks he already knows it all.
- This also applies to day-to-day interactions. Listen much more than you talk. People respond very well to other people who at least consider their point of view. Before you share your opinions, or even facts, about an issue, listen to others, really consider their point of view and then, if appropriate, offer your opinion.
- Under promise and over deliver. If you’re asked when you can have a project done, add about 25% to your estimate and then if you deliver on time people think you’re early.
- Seek a mentor. Once you see who the superstars are that are one or two rungs above you, ask one of them to mentor you. Most people are flattered to be asked to be a mentor and you will learn a lot of things the easy way.
- Take good notes in meetings. There’s nothing worse taking bad notes and ending up doing the wrong thing and then having to start all over again.
- Have a good follow-up system and put every single task you need to do in it. Don’t ever be late with anything - be it a report, memo, or anything.
This advice has been helpful to Thomas (who is now an analyst for a huge corporation) and many others. If you, or someone you know, works for a large company give these tips a try and let me know how they work for you.
Copyright 2013 by Jim Sobeck. All rights reserved. This information may be reproduced as long as full credit is given to the author.
I find it ironic that after doing a post less than a month ago on how to avoid business scams our company was the victim of a scam not described in my recent post. I share the details with you to perhaps save your company from a similar fate.
The scam began back in March when one of our outside salespeople received a fax from a company in a state in which we do not do business, asking for a quotation. Our salesperson faxed back pricing and, low and behold, received a purchase order without ever talking to the “customer” or negotiating the price. I was not informed of this as I would have definitely smelled a rat. No contractor buys something without at least a little haggling about the price. And no one I know does business with a new company solely via fax. Had I been informed of this at that time I would have killed the deal immediately. However, the downside of having nine locations is that I don’t know everything that is going on at each of our branches.
Our salesperson got this new “customer” to fax in a completed credit application. Our credit manager faxed out credit reference forms to the three companies they listed as references and promptly got an extremely positive response from all three. This was warning sign number two. It normally takes several attempts to get a credit reference to complete our credit check form. When all three companies responded quickly, and with glowing reports on this prospective new customer, another red flag should have gone up. Again, I wasn’t informed of this. (It now appears all three “credit references” were fake companies with fax numbers set up by the scammer.)
Our credit manager also pulled a D&B report on this company and, while it only had sparse information on this company, there was nothing negative about them and the D&B report said that they average paying their bills only two days past the due date. Based on their credit references and the D&B report our credit manager set them up with a $5000 credit line and this new “customer” made a $3000 purchase at a much higher than average gross margin. Red flag number three.
Less than a month later, and before the initial purchase was due, the customer faxed in another request for quotation. Our salesperson, thinking he had lucked into a sheep he could fleece, put an even higher gross margin on his second quote and, to his surprise, he received another PO via fax. His quotation was for almost $20,000 this time, at a 44% gross margin, in an industry where gross margins in the 20’s are the norm. As this purchase would be over the customer’s $5000 credit line, our salesperson spoke with our credit manager who, based on the previous false information obtained during the initial credit check, increased their credit line, and approved the sale.
When the initial purchase wasn’t paid in 30 days our automated system sent a nice letter asking if the payment had been overlooked. At 45 days, our automated system sent a slightly more pointed letter asking for payment. At 60 days, our credit manager called this customer only to find that the phone line had been disconnected. At that point she did a Google search on their company name and found multiple companies complaining about having been scammed by this company. At that point her stomach sank and she informed me that it looked like we had been the victim of a scam.
We have since filed a complaint with the police department in the town listed on their credit application. The police told us that the FBI is involved as this company scammed over 30 companies out of over $3 million in merchandise. Our cost of the merchandise we lost in this scam is almost $13,000. Yes, there is some chance that the FBI will find these people and recover our merchandise, but I’m not very hopeful of that.
We now have a new policy in our policy and procedures manual. It basically states that no one is to sell an out-of-town company unless we receive payment via wire transfer or a certified check, prior to our shipping the materials. I hope that by sharing this embarrassing episode it will save even one of you from the same painful experience.
Are you aware of any other scams that I can share with my readers?
How to Hire, Manage, and Retain Millennials
“Millennials” are employees of aged 18 to 34 years old. For us baby boomers managers many of us have a hard time relating to millennials. I hear managers my age (58) constantly lament that, “they don’t make them like they used to”. Well, of course they don’t, times change and so do people. I have had an easier time relating to millennials than most people my age because I was CEO of a software company for 15 years.
When I was first entering the job market in the late 70s it wasn’t unusual to work for one company your entire career. That is no longer the case. Research has shown that millennials’ average stay a company is two to five years. Company loyalty is not the strong suit of most millennials. Why is that? Well, it’s my observation that millennials aren’t loyal to their companies because their companies aren’t loyal to them. The turbulent economy of the last several years has resulted in mass layoffs, restructurings, pay cuts, benefit cuts, and other things that don’t engender loyalty in employees.
So, how do you motivate and retain millennials so that your investment in their training isn’t wasted? Here are some things that have worked for me:
* Training and conferences. Millennials are more loyal to their profession than to their employer. However, if you help your millennial employees stay on top of their profession by sending them to conferences and training classes it will help you retain them.
* The latest technology. If you allow your millennial employees to upgrade the computer hardware and software they use when working for you to the latest and greatest it will improve your ability to retain them. Nothing turns a millennial off more than to make them use outdated technology. Conversely, if you allow them to constantly upgrade and work with the latest technology your chances of retaining them are increased significantly.
* Flexible work hours. Unless absolutely necessary, don’t hold millennials to rigid work hours. Manage results, not technique. If they want to come in late and stay late, as long as it doesn’t inconvenience coworkers or customers, why not?
* Working from home. If your millennials have tasks they can be done from home, let them work from home occasionally. Married millennials generally are in marriages were both the husband and wife work and if you allow your employees to work from home on occasion so they can watch a sick child or be there to let the cable repair man in, that will help endear them to you.
* Dress code. Don’t require millennials to adhere to a 1950s dress code. That doesn’t mean that they should be allowed to come to work slovenly but if you allow them to dress casually and comfortably not only will they stay with you longer but you will probably get more productivity from them.
* Bringing pets to work. This may not work in a doctor’s office but our daughter works at an advertising agency where employees are allowed to bring their pets to work on Fridays. When our oldest son was first out of college he worked at a software company that allowed their employees to bring pets to work every day. If it won’t disrupt your workplace too much, consider allowing pets to be brought to work.
* Fun work environment. A lot of companies now have foosball machines, pool tables, Ping-Pong tables, and the like available for employees to use on breaks or as stress relievers. Again, if your business is a law firm, this may not be right for you but it may work for many other types of companies.
* Drinks, snacks, and meals. A lot of software companies on the West Coast started the trend of providing free drinks, snacks, and meals as a way to keep employees at work instead of going out for lunch or leaving early for dinner. If you can afford it, this is a great way to retain millennials.
These are just a few ideas to help you attract and retain millennials. What else has worked for you?