Long-time friend of MANA Bob Reiss has graciously allowed Agency Sales magazine to serialize his book Bootstrapping 101: Tips to Build Your Business with Limited Cash and Free Outside Help, available now on Amazon.com. The book looks at surprisingly effective low-cost and no-cost ways to acquire the resources you need to run your company. Whether your company is an existing enterprise or a start up, a manufacturers’ representative company or a manufacturer, this book will introduce you to innovative ways to cut your costs and drive more of your income into bottom line profits.

This month continues the discussion of the four major areas to concentrate on for entrepreneurial success. Last month’s article covered attitude and financial, this month concludes the series with people and knowledge.

There is a lot of truth in the adage that a company is as good as the people working in it. Hiring quality people is a challenge for a start-up or existing small business. Usually because of your cash crunch, you can’t pay competitive salaries. The company probably has not proven its sustainability yet. The founder may be inexperienced. The company benefits don’t match corporate America’s, etc. So how do you get quality people to work for you?

Your passion and vision can be a great recruiting tool. They need to feel good about your integrity and believe they will be treated fairly and rewarded if they perform and the company prospers. As you grow and are successful and want to either go public or sell your company, be aware that the venture capitalists or acquiring company will give high credence to the quality of your employees. If they are subpar or show low motivation, it will reflect poorly on you as a leader.

Here are some of the people issues you should address:

1. Look to hire people different than yourself (can be smarter) who speak up and are curious. Incentivize them. Give them a sense of inclusion.
Don’t make the mistake of only hiring people who look like you and share your interests. You want bright people. If they are smarter than you, then the company will benefit and so will you. These are the people that will be at the forefront of your innovation initiatives.

2. Don’t try to do everything yourself. Delegate but with the authority that goes with it. You may know every facet of your business better than all of your employees.

However, to grow, you can’t do it all yourself. For many company founders, it is very difficult to give up some of their duties. Those that resist discover the hard way that they must do so to personally survive and for the business to move ahead. Where you do delegate, you must give the person responsible the authority to get the job done. Let them make some mistakes. It will allow them to grow and be a more educated and reliable employee.

3.  Credit employees’ successes. Tell them your expectations of them.
If you are going to criticize poor performance, then praise success. If you want your people to be responsible and grow, lay out in clear language what you expect of them. People appreciate knowing the rules of the game. They are more highly motivated when they do.

4   Promote teamwork, punish internal politics.
Your business is like a team. There is no “i” in team. Healthy egos are good as long as they further the team (company) goals and don’t undermine fellow workers. Human behavior being what it is, unhealthy politics seem to creep into the culture, particularly when the roster increases. You have to let it be clearly known that mutual respect and civility must prevail in your company. It will aid the motivation and innovation of all.

5.  Make sure customers’ expectations are met. Under commit and over perform.
The “Customer is King” must continually be reinforced. Pressure to meet quotas must not result in false customer promises to garner a quick sale. You always want happy customers and your people should be motivated to go the extra mile for them. Customers are people.

6.  Treat good suppliers like gold.
The article on suppliers spells out all the reasons why suppliers can affect the good health of your company. If you are the person who deals face-to-face with the supplier and another company department is acting in a way to hurt the relationship, you must take action. Don’t stand idly by and then blame someone else when the relationship deteriorates. A good example is if your finance department is not paying the bills on time, find out why and if it’s not a good reason, let them or your boss know it is not acceptable.

7.  You are judged by the company you keep. Align with quality partners.
This can mean licensors, top grade customers, your accountant, lawyer, marketing partners, etc. Your would-be customers may not know you well but know and respect your partners.

8.  Move quickly to fire people you are convinced are bad for your company.
When I interviewed the 27 entrepreneurs for my first book, I asked them all what actions they took in business that they regretted. The almost unanimous answer was they waited too long to fire the bad apples in the company. For most people, firing is an unpleasant task that brings on procrastination. First, everyone in the company usually knows the poor-performing person. If they are left to continue in the company, then it affects all employees as they begin to question why should they work so hard when that goof-off doesn’t, and we both get the same rewards. Before firing, I would put the person on notice that he/she is not performing to the company’s expectations and tell them in writing what they need to improve. Maybe additional training is required. If there is no improvement, you must fire the person. A bad employee contaminates the entire workplace.

9.  As the company grows, people’s roles change, including yours. Can you/they adapt, and what will you do with people who can’t? This includes partners.

Continued success breeds new challenges. This is one of them. At the outset of the company, the few employees do many functions, including each other’s. As it grows, people need to adapt to special roles, which they may not have the skill or knowledge to do well. New employees can be resented by the old guard. The company’s mission, emphasis, goals, and chemistry can change. Some people who were good workers can’t adapt to these changes. These kinds of people problems can be difficult to resolve. You, however, should look for them and when they appear, deal with them early on.

Knowledge

Knowledge truly is power. It lets you recognize opportunity and helps you pursue it. The more knowledge you possess about your industry, business in general, people, the environment, etc., the greater your chances of success. Knowledge and its growth apply to your employees also. Here are some knowledge thoughts to keep in mind.

1. Know what you don’t know.
Learning is much easier when you know what to learn. Also, in most cases your credibility is enhanced if you say, “I don’t know.” For many, it is not easy to do.

2.  Know your business: product, industry and competition. Knowledge rules.
Self-explanatory.

3.  Work on your listening as well as your communication skills.
Good listening is a skill that can be learned. You are already equipped with the ability to hear, a starting point. There are books and videos on the subject. I believe you truly have to want to listen. If you do, people will trust you more, you’ll learn more, and be a much more effective communicator which includes selling.

4.  Work on your sales skills and everyone else’s in your company.
Everyone should sell (as explored in the selling chapter). Persuasion is enhanced by knowledge of the person you are trying to sell, his/her company, goals, environment, motivations, etc. It is a learnable skill.

5.  Plan for tomorrow.
In planning your strategies, ask why should your prospective customer buy from you? Again your knowledge of the customer and the full ramifications and resources needed for your strategy will help ensure the success of your planning.

6.  Look for mentors and work hard at building the relationship.
The chapter on mentors explains how a mentor expedites your learning process and reduces the risk factor in the business.

7.  Working smart is as important as working hard.
In times past, outworking your competition usually insured success. It still works to a certain extent. However, there is more and generally smarter competition today. You, therefore, need to work smart.

8.  Keep learning. This is a lifetime mantra which should be part of your DNA. Think doctors. They must always enhance their knowledge of new medical breakthroughs and medicines. The obsolescence of their medical school learning is high. Their work is more life and death. Although if you stop learning, it could eventually be the death of your company.

Risk

We have not specifically focused on risk per se. Contrary to the portrayal of entrepreneurs in the media, they don’t love to take risks. I’ve never met one that jumped out of bed on a beautiful day and said, “Where can I find risk today?” They carefully measure it, try to avoid it as much as possible, share it, stage it, reduce it, and then face it if the risk/reward ratio looks good. However, most of the bootstrap tips offered here reduce risk. Costs that are variable, outsourcing, correct pricing, better selling, free ads, good suppliers, licensing and free quality advice are all risk reducers.

Final Thought

Don’t be intimidated about all the factors you have to deal with to run a successful business. You don’t have to excel at all of them. Try to keep some of the most important ones in the forefront. Maintain your passion, watch the cash, treat people with respect, keep learning, and most of all, don’t forget that the name of the game is to acquire customers and keep them satisfied. They will reward you with continuous business and give you the best advertising in the world at no charge: good word of mouth.

MANA welcomes your comments on this article. Write to us at [email protected].