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The One-Minute Layoff

watchWe have a friend who was recently let go from a company for whom he had worked for nearly twenty years. The entire conversation with his supervisor took less than a minute.

To clarify the situation, he was one of twenty or so people who lost his job that day at the local branch of a large company. This scenario was repeated over and over again at all the branches of that company as they responded to low earnings.

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So here’s our first question:

Why do corporations treat humans inhumanely?

In most businesses, people are the most precious asset. So why do corporations act like they’re not. And let’s be clear here – corporations don’t do anything. They can’t. It’s humans who treat humans like this.

It’s the managers within those companies who are doing this. It’s probably their managers, or their manager’s manager, who insists that it be done.

Managers within companies are being asked to do more and more with less and less. So some people get laid off. In many, if not most cases, they’re good employees who just happened to be in the wrong place at the wrong time.

They’re reasonable people who can understand that sometimes tough choices have to be made. They’ve cared for their employer; they expect their employer to give them the same respect.

Which leads to our next question:

Why do companies burn bridges?

We’re told from a young age that we shouldn’t burn bridges. We get upset when our employees fail to give us notice. We think we deserve that much respect.

Don’t our employees deserve respect too?

We also believe that you have to understand the bigg picture. These employees you’re letting go today may be your best candidates tomorrow – if you handle it properly.

These people may be customers, too. They may know people who are your customers. What are you doing to your reputation when you show no respect for your employees?

And what are you saying to the employees who remain? Aren’t you saying that people don’t matter? That the only thing that’s important is this quarter’s earnings?

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He deserved more

Doesn’t an employee who’s been with a company for nearly twenty years deserve more than a minute from his manager when he gets laid off? We think so!

We think he deserved a conversation at least twenty times that long! How about a minute for every year he devoted? Is that asking too much? We don’t think so!

We think he deserved a complete explanation about what was going on and why his position was being eliminated.

We think he deserved to be reassured that he hadn’t done anything wrong.

We think he deserved to know if it was possible that his position would be available again if the company turned things around.

We think he deserved his manager’s best guess about the likelihood of that happening.

We think he deserved to know what resources were available to him to find another job or career, even if the company wasn’t willing to pay for it.

We think he deserved a written letter of recommendation that he could use to find that next position.

We think he deserved to be thanked for all that he had done.

We think he deserved to be treated like a human being!

We think managing is a tough job. But don’t make it tougher by treating people inhumanely and burning bridges. Give them the respect they deserve. Otherwise, you’ll lose more in the long run, as a manager and as a human being. Oh, and one more thing, your company will lose even more than you do.

What do you think?

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Direct link to The Bigg Success Show audio file:
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If Elvis was an Entrepreneur

exitThe final chord was sung. The noise from the crowd became a roar. The lights came on. But there was still hope … still a chance that he might appear again. And then there was the voice, saying …

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Elvis has left the building.

You’re probably familiar with those famous words. It made us think:

Elvis always knew how he was leaving the building. If he was an entrepreneur, he would surely know how he was leaving the business.

Learning from the pros

Bankers and venture capitalists know at least two ways that they’re going to get their money back (plus the return they need) before they invest in our business. Shouldn’t we know at least one? It’s one of the lessons we can learn from these professionals.

Why you should know how you’ll exit

In 7 Habits of Highly Effective People, Stephen Covey taught us to begin with the end in mind. We should know how we’re getting out of our business before we get into it.

Know your exit. Elvis did. Professional investors do. Yet many entrepreneurs never think about it.

That may be a reason why studies show that a majority of entrepreneurs don’t expect their business to kick in any money for their retirement.

It’s crucial to consider your exit because small businesses are highly illiquid by nature. Unlike shares in a public company, there is no marketplace where you can go to sell it immediately.

Another reason to know your exit – perhaps a more important reason – is that it your exit should be one of the drivers of your business strategy. How you plan to get out affects everything from how you structure your business, where you get money from as well as a number of other things.

3 common exit strategies

  • Sell your business outright
    Just like selling a house or any other asset, you exit the business by giving up any claims to ownership in exchange for an agreed-upon price. On your way out, just say, “Thank you … thank you very much!”                   
  • Redirect cash flows
    Let’s say you invest $25,000 to start a business. Let’s also assume that you make $25,000 after-taxes in your first year in business (after fully compensating yourself for your time).

    Further, let’s stipulate that you don’t need that money for your existing business. Take that $25,000 out and invest it somewhere else.

    You invested $25,000 and you took out $25,000. Essentially, you have no money invested in the business. Yet you still own the business! Get your money out and say, “Thank you … thank you very much!”                     

  • Recapitalize
    You still own the business with this strategy as well. Let’s say that you invested $25,000 to start your business. You got your business started, built it up and are making money.

    You may be able to go to your banker and borrow against your business. Let’s say your banker agrees to a $25,000 loan which you can pay back from the cash flows of your business.

    It’s likely that you’ll need a good use for the money to get your banker’s okay. For example, maybe you have an opportunity to buy a piece of real estate that will house your company.

    In essence, you’ve cashed out of your business because you now have that original $25,000 invested somewhere else. Repeat this strategy over and over until you have enough money to fund the life of your dreams. That’s bigg success!

Thank you … thank you very much for reading our post today.

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Please join us next time when we ask some questions about work – life balance. Until then, here’s to your bigg success!

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00424-062509.mp3

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Shape Shifting Leads to Bigg Success

dog-shape-shifting.jpgLast time, we discussed the two ways to create wealth: other people’s money and other people’s labor (i.e. their time and talent). Historically, there’s been more focus on other people’s money as the lever to riches. Now, other people’s labor holds more promise.

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Today’s show extends that concept and is inspired by one of the characters from the HBO hit series, True Blood. Sam Merlotte, who owns the bar, is a shape-shifter. He can change forms – from human to dog and back.

So here’s a little behind the scenes here at Bigg Success: we often get asked how we get ideas for our shows. We’ve been thinking about this shape-shifting thing for some time as a possible fun topic. Then we saw a Harvard article about a new business strategy.

The words “a shape-shifting enterprise” leapt off the page. Voila … a show was born!

Back to the article – it discusses how many large companies are starting to outsource core activities in order to focus resources on solving customer problems.

The author postulates that the future value of companies will be the sum total of all their arrangements. Let’s emphasis that – using words we use more often here at Bigg Success – the future value of businesses, both large and small, will be in the total value of its relationships.

But a key thing to keep in mind is that businesses don’t have relationships; it’s the people in those businesses who have relationships.

You may have a relationship with a customer who has a problem. How many other customers like this customer have the same problem? With how many do you have relationships?

Once you’ve identified that, who in your network can best solve that problem? By becoming the customer’s go-to person (or company) – by delivering the right product or service at the right time for the right price, you’ll create value for your business.

The Harvard article we talked about references a Fortune article about how Chinese and Indian companies are structuring themselves. The answer: they’re positioning themselves to be shape-shifters!

Shape-shifting is a key for us, as entrepreneurs, to survive and thrive in all economic conditions. It extends well beyond outsourcing. It’s an even deeper relationship, which will create more opportunities for small businesses to work with large companies.

To become a shape-shifter:

Watch your operating leverage. The more fixed costs your business has relative to its total costs, the greater your degree of operating leverage. Just like with financial leverage, higher operating leverage can work against us if things take a downturn.

That’s one of the secrets to being able to be a shape-shifter. If you keep your fixed costs low, you can quickly maneuver your organization to take advantage of opportunities that may present themselves.

Seek out strategic alliances. Explore opportunities to collaborate or joint venture with other people and organizations. The do-it-all-yourself mindset is so yesterday. Focus on what you do best and work with people doing what they do best. This is another key to shape-shifting.

Work with anyone and everyone where it’s mutually beneficial, including your competitors. You may find ways to do more together than either of you can do on your own.

Sometimes you may take the lead; sometimes they may take it. You don’t care. You’re shape-shifting yourself to bigg success!

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We thank you so much for reading our post today. Please join us next time when we’re “getting to know you.” Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

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Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00417-061609.mp3

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A Costly Cost Cutting Measure

cutting_costs.jpgBigg Success is life on your own terms. Today, we’ll focus on one of the five elements of bigg success – money.

We’re all looking for more ways to save money. That’s understandable. However, we need to think about not just survival, but “surthrival.”

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Many business owners and managers, small and large, are cutting back on their advertising. This cost-cutting practice can be very costly in the long run.

Could not advertising cost you $1.5 million?

A McGraw-Hill study, about the recession in the early 1980s, found that companies that maintained or increased their advertising had sales 256% higher three years after the recession ended.

Think about that … two companies, each with a million dollars in sales go into a recession. The company that holds tight on its advertising, or perhaps even increases it, will do over $2.5 million within a few years after the recession ends if the second company, the one that cut its advertising, treads water.

Signaling the end of your business

A recent study by Ad-ology found that 56% of the people surveyed thought that retail stores that cut back on advertising must be struggling.

In other words, your advertising sends a “signal” to both your existing and potential customers. Just like a company cutting back on its dividend, you’re telling the public you don’t expect your future to be bright when you cut back on advertising.

The signal is so strong that 15% of the people surveyed thought it meant that the firm who cut back on its advertising wouldn’t be in business much longer.

The time – money trade-off

One of the other elements of bigg success is time. If you’re a regular here you’ve heard it before, but it bears repeating:

If you don’t have money, you have to spend time. It’s part of the price of bigg success.

So if you really feel the need to cut back on how much money you spend on advertising, it will pay to spend more time promoting your business.

That means networking

Depending on your business, you may primarily build relationships offline or online. However, you will probably be well-served to do both. Integration is one of the keys to success in business today.

If you have employees with down time, make good use of it. Tell them that you want to keep spreading the word so you all surthrive.

What you ask them to do will also depend upon your business. You may have them put out door knob hangers or give away free samples of your product. Perhaps they can make some phone calls or send e-mails to your list of customers.

Where to place your focus

We stated it subtly in that last sentence. We should emphasize it – focus on your existing customers to get the best return on your investment (of money and time).

Research has shown that it costs between five to eight times as much to get a new customer as it takes to keep an existing one. So, at the very least, make sure you’re communicating with your existing customers at least four to six 6 times a year.

Find out what their problems are. Find a solution – even if you can’t solve it directly, help them find the answer to build your relationship.

The most cost-effective way to grow your business

Building relationships with your best customers is the most cost-effective way to grow your business. When you can “wow” your customers, they will …

  • buy more
  • buy more often
  • tell others

Segment & tailor

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marylynnWhile we’re talking about your existing customers, can you segment them into smaller groups so you can tailor your communications more precisely?

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georgeI used to own a heating and cooling service company. We got our technicians to note the age of the furnace or air conditioner when they were in our customer’s home or business. Then we wrote a letter specifically to this group. We generated over $300 of sales for every letter we mailed!

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This highlights another point we alluded to earlier – get your staff involved. Help them understand how it not only makes their jobs more secure, it also means you continue to grow as a company so there will be more opportunities for everybody. That’s bigg success!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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Thanks so much for reading our post today. Please join us next time when we discuss what the underlying meaning of “I don’t have enough time.” Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00411-060809.mp3

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Mixing Work and Play

work-play.jpgFortune does a great job every year of compiling the 100 best places to work. They put out the list for 2009 a little while back. We found their top pick this year interesting.

NetApp, a data storage and management company, knocked Google out of the top spot for the first time in three years.

You can find a great video about NetApp on the Fortune site. NetApp invests time and money to create a culture where people want to work. The video shows people playing volleyball and working out in the company gym. It sure doesn’t look like work!

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They do more than encourage play time at work

NetApp has a program that pays employees to take time off to volunteer for something they’re passionate about. They’ve found that employees sometimes come together to work on a cause. So this program has helped build teamwork among their people.

You may be thinking …

“Well, this is great but it sure wouldn’t work in my business.”

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georgeI understand why someone might think that because it wouldn’t have worked in the businesses I was in before we started Bigg Success. Most of our people were in the field. We didn’t need a gym – the work was very physical so most of our employees got a great workout with their job. We were lucky to see most of our people for fifteen minutes a day. But the details of what NetApp does aren’t really important.

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marylynnYeah, it’s the idea behind what they’re doing at NetApp that we think is most interesting. Bigg success is life on your own terms. The leaders of the company are certainly doing that. They set out to build a great company by creating a great place to work. The founder says that they took a leap of faith and spent time and money to create this incredible environment for their employees.

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That’s three of the five elements of bigg success right there – growth, time and money! But they hit all five because they have found ways to let their employees play at work.

Now isn’t that an interesting idea? Work doesn’t have to be … work.

Something magical happens

In the interview, NetApp’s founder talks about energizing people. They think when people feel good – when they feel motivated – something magical happens.

That’s why we’re talking about them today. They are a great example of something that’s critical to living our lives on our own terms. It’s the bigg idea behind bigg success:

You create synergy between the five elements of bigg success by understanding the relationship between them and discovering ways to get them all working in sync.

Our lives are fuller when we’re able to do that.

We work to make money so we can afford to play. But what if you can work and play all at the same time. Isn’t that so much better?

What if you loved your work so much that it seemed like play? What if that work paid you enough to buy everything you really wanted?

NetApp took a leap of faith that’s paying off for them. Sure, they’re being affected by current economic conditions. But their market share has gone up in spite of it.

It can happen to you too. In your life. In your business.

Look for ways to blend the five elements for your benefit. That leads to bigg success!

Have you found ways to blend work and play?

You can share that with us by leaving a comment below, calling us at 888.455.BIGG or sending us an e-mail at bigginfo@biggsuccess.com.

Thanks so much for stopping by our site today.

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Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

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Bigg success is life on your own terms. Please join us next time as we discuss ramping up your savings one term at a time.

Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00370-041009.mp3

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