Should I Scale my Business?

This is a question that I get very often. This question comes from small business owners, solopreneurs, and even owners of medium sized enterprises. At first glance it may seem like an easy question to answer, YES. Why wouldn’t someone want to grow their company, hire more employees, and create more revenue for the company.

This topic is mildly more complicated than the initial knee jerk reaction. It basically comes down to two influences; what are your motives/goals as an owner for the business? And the question of economies of scale.

Let’s first talk about motives and goals. A lot of people start a business to escape the rat race and develop some financial freedom. Often times business owners never expect to be in a place where they need to decide if they want to scale the business, typically they just expect to hopefully replace their income and live a bit happier. Unexpected success is quite common for this type of person as it takes a specific personality to quit their job and take the big leap. If you are in this position, you have to take a moment and set some goals, sit down with a piece of paper and identify why you started this business and what the ultimate goal is. Without identifying these facts you will be unhappy or chasing something that you do not even want. Identify if you simply want to make a certain income every year and remain in your current state. Satisfaction and having enough is something that not a lot of people are capable of accomplishing, there is certainly piece in being able to make this realization. On the flip side, if your business is doing well and has grown as much as it can with you, then it may be time to hire some more employees, reevaluate your plan, increase marketing, and scale the business.

Until you understand what your motives are and where you are going you are going to constantly feel in limbo with your current life even if you are making $10,000,000 per year. Every task, job, business, etc. needs to begin with the end in mind, “why are you doing this?”

The second thing you need to evaluate when deciding whether or not to scale the business is economies of scale. This basically means that as you grow profits may diminish. If you are profiting $100k per year and you hire another employee at $30k per year now your profit diminishes to $70k. What you have to consider is what sort of return will that employee bring you? Do they allow you to focus more on new business? Are they a sales representative that will add revenue to the bottom line?

With new infrastructure (employees, office space, building, computers, desks, etc) profits decrease. These capital expenditures need to be discussed by looking at your books or speaking with your accountant.

Bottom line is scaling a business is not for everybody and it may ultimately mean some short term losses in order to get to your finish line. Before you even consider scaling be sure to understand what your motives are and be sure to understanding the financial implications (good or bad).

There is always room for growth within an organization and it starts with evaluating every process.

5 Ways Science Can Help Your Business

Science can be a great tool to improve your business, as it allows you to get objective, quantifiable evidence that you can use to make evidence-based business decisions. Here are 5 ways you can use science to help your business:

  1. Survey your employees

A great way to get feedback from your employees is to just ask them. Surveys can be a great way for you to select the questions you are interested in, and then survey employees across your company to get both quantitative (i.e. ratings of agreement) and qualitative data (i.e. open-ended responses). This can help bring to light issues within your company you may not be aware of, which could differ by department—maybe the sales employees face a different set of issues than the human resources team. You can also make your surveys anonymous to get more honest feedback than you might from a face-to-face conversation. Overall, this technique can really give you a better idea of what is going on within your company.

  1. Survey your customers

If you are designing a new product, a great way to get feedback from your target audience is to survey existing customers. This can allow you to see what they might be interested in and what might determine whether they purchased your new product. In addition, you can conduct a product test with a focus group to get their opinions on different prototypes. Getting to know your audience through their ratings of likelihood to buy as well as candid feedback can be really helpful before launching your product into the public market. Qualtrics is a great tool to survey both employees and customers and easily analyze your data.

  1. Use psychometric tests when hiring

Job applications and interviews often don’t provide enough information about candidates to decide whether you want to hire them or not. The employees you bring into your work place directly contribute to your company’s culture and overall success, so having more information when hiring is extremely helpful. Using psychometric testing can be a great way to learn more about a candidate’s personality, work ethic, and potentially their long term success at your company. There are many different tests you can use, and it depends on what you are looking for in new hires, but one great resource is the Predictive Index, which is “an untimed, free-choice, stimulus-response tool that measures a person’s motivating drives and needs” that can be used to “hire candidates who are hardwired to be a great fit, to design teams that perform like magic, and to manage employees in a way that pushes them to perform at the top of their game.” Do keep in mind that no scale is perfect and it can never truly encapsulate a person—for this reason, interviews and ‘gut feelings’ are still very important.

  1. Run an experiment

Not sure what option will work best for a particular problem in your business? The best way to find out is to run an experiment, where you can compare multiple options and see the different results. You can then use basic analysis techniques to see if there are significant differences in outcomes between the two options, products, etc. For example, you could have sales associates use two different scripts at random for 100 times each and then compare the success rate for the different scripts.

  1. Research the psychology behind your industry

Every business is run by humans. Psychology allows us to better understand the human mind, what motivates us, and why people do the things they do. One way to improve your business is to research the psychology behind your particular industry. The sales process is very psychological, and different findings from the scientific literature can be leveraged to improve your business practices and increase success. Learning about the science of psychology can really help to improve your communication skills and the way you interact with your human customers. We are all people and we are all motivated by similar things.

Bonus tip: If any of these ideas sound appealing to you, but you aren’t sure how to properly implement them in your business, hire a scientific consultant to help you accomplish these goals and provide evidence-based solutions for your business. We at The Chalifour Consulting Group offer scientific consulting services, so feel free to reach out at info@consultingandsuccess.com.

Hiring – Ability vs. Personality

Managers have a lot to consider when hiring employees. Two of the most important aspects to consider are the candidates ability and personality skills. Employees have both soft skills (conscientiousness) and hard skills (general mental ability) in the workplace. Understanding the important skills that someone should have can be a crucial indicator in determining whether or not you believe they will have a high performance level. When looking to hire someone new, a manager should be looking for employees who can do the basics first, and then keep a smile on their face when things go wrong . Both traits are important to have, however, one may be more beneficial than the other.

First, you want to make sure the potential employee fits the mission of your company. Personality is so important whether the candidate has the skills to go along with it. You can teach someone technical skills but you can’t teach someone how to put a smile on their face. Friendly employees keep customers happy and satisfied and will most likely keep them a loyal customer. Kathrine Palju said, “it’s not about electronic or internet skills, it’s not about mechanics. It’s all about interpersonal relationships”. Being able to keep a conversation going and understanding what the customer wants can go a long way.

It is also important that managers and business owners are aware of what type of skills and personality traits their employees possess. In the future this could help managers with their weekly schedules so that they can have a balance of employees with general mental ability and conscientiousness. When managers are able to understand which employees have one or both traits, it can help decide where to place each employee and may help in a better execution of service.

All in all, it is preferred that an employee has both GMA and conscientiousness but it is understandable that this is often not the case. Being able to understand what stages these skills are important and how to find them in a person can really have an impact on the overall performance of a business.

Getting Creative

This past year, small business owners were especially impacted due to the COVID-19 pandemic. Many had to make the hard decision to shut their doors to keep themselves, their families, their employees, and the community safe. In doing this, owners were struggling with how they will pay rent, wages, and even their expenses.

Nevertheless, small business owners got creative and found ways to stay afloat when the odds were against them.

Small business owner of the City Room Cafe in Nashua, NH, Terry Wade, was just one of many affected by the pandemic. Last May, Terry closed her cafe doors to keep her employees and the community safe during a trying time. While she was closed, Terry made the most of her time thinking of new ways to adjust her business to the “new normal”. She decided this was the ideal time to renovate her cafe. She painted the walls, bought new tables and chairs, as well as new equipment for her kitchen. Not only did she renovate her cafe she also redesigned her menu and created a social media platform where she could stay connected with her customers during a difficult time. Terry was constantly updating the community on the renovation and when she was expecting to open her cafe again. Her customers were eager to be back and see the new changes. Terry was once again able to open her cafe doors in July and people were lining up to eat at their favorite breakfast spot!

Many small businesses like the City Room Cafe chose to get creative during a tough time. According to Kathy Gurchiek from SHRM, “43% of small businesses have started rethinking the way they do business since the coronavirus pandemic began, 32% have found a new way of delivering existing services, and 22% have asked employees to learn new skills to support changes in the business”. Below are a couple of ways for businesses to get creative:

  1. Social media. Many businesses are using social media to further promote their products and services. However, it’s not enough to simply create a social media presence. You need to create content that people care about. Think about the mission and values of your company and why people keep coming back. Then think of how you can use that to create content that people want to see.
  2. During a time when many people are working from home, social media has become ever so popular. Businesses can take advantage of this and create a platform where they can stay connected to their customers as well as new ones. A social media platform can regularly update customers and keep them hooked to the product or service they once enjoyed.
  3. Communication. During an uncertain time, staying connected with customers is extremely important. It’s so easy to think a business isn’t open during this time if they are not constantly letting their customers and the community know the hours and days they are open. Posting this once a week to a social media platform can increase the amount of customers you are getting.
  4. Digital platforms. For the businesses currently closed, digital platforms are a way to promote your product or service from home. For example, a yoga studio could provide live stream videos of their workouts for customers to join in on. The customer could pay for a monthly subscription and the business is still able to make money remotely. Another example would be a coffee shop that may not be getting as much business because of people working from home. Creating a digital platform where customers can buy your coffee beans, syrups, or teas would provide revenue for the business and the customers will benefit from it.

Thinking of creative ways to make money during this difficult time can be hard. However, many people in the community want to support their local businesses, so offering them a way too can be beneficial to both the customer and the business.

Passive Income

Passive Income is a term that is thrown around constantly and is often misunderstood by many. Passive Income is defined by Investopedia as “Earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved”.

Generally speaking I think it is understood to be money that a person makes while being uninvolved. Many people will say something like “I have this great stream of passive income where I am making money right now.” Meanwhile the individual is on the beach, on vacation, or involved in some activity that is more fun than working! Now that sounds pretty good if you ask me, making boat loads of money while sipping a corona on the beach, sign me up! But here is where the misunderstanding takes place.

To develop a solid stream of passive income takes an incredible amount of work, time, and often money. It falls under the same misbelief of get rich quick schemes or get rich over night seminars. But solid passive income is very possible and is enjoyed by millions of people every minute of the day so why not you? Whether you are a current business owner, employee, or dreamer it is possible to achieve the American dream which has become far more than simply a nice house with a white picket fence in the suburbs. Nowadays the American dream has become more about achieving wealth and becoming an every day millionaire.

Millionaire, you might be thinking “Craig, that is a big statement I don’t think I can ever become a millionaire like the people I see on TV.” Well fortunately those are not the millionaires that I am talking about, I am talking about the millionaires that are your neighbor and you do not even know they are millionaires. Millionaire is defined as having a net worth of one million dollars or greater. This dream is very attainable by just about everybody.

Many people, 32% of Americans, contribute to a 401K with every paycheck. And this number should be a lot higher considering 59% of Americans have access to a 401K. Well guess what I consider a 401K, passive income. While investing in the stock market you are making 7-10% on your investment every year, this means that you are making money even as you are sleeping. This is by far the simplest way to create passive income.

The more complex ways are to start a self sufficient business, buy real estate (Even owner occupied real estate is passive, as real estate appreciates at 3-5% on average), or some other enterprise. So no matter where you are in life you have an opportunity to create some stream of passive income even if you are not realizing that wealth today. However, in this blog post I want to specifically speak to business owners or prospective business owners.

My number one objective when working with new clients is business valuation. Business valuation is not exactly our specialty but I am talking about the term generally not about actually valuing your business. The entire point of starting a company, owning a company, operating a company is obviously to make money but more importantly to generate wealth. Your business should be the largest item on your balance sheet within your financial statement. Even if a business owner has no desire to sell you should be looking to make it worth more each an every day and thus more desirable to purchase.

Growing your businesses worth can be done through a multitude of ways; increasing sales or revenue, cutting costs, or increasing capacity by hiring more people. Although those aspects are incredibly important, the most important thing about a business valuation is how easy is it for someone to buy you and take over.

How easy is it for someone to buy you and take over, this is an ambiguous statement and what I mean is what systems do you have in place, what processes run your company, are these systems and processes commonly known, is one person largely responsible for more than 20% of your revenue, can the owner be removed from the business and it will run swimmingly?

These are the questions that you need to ask yourself as a business owner or as a prospective business owner looking to develop a business plan. The age old example of this is McDonalds, which we have talked about in our blog before. Every McDonalds has the same procedures, protocols, and manuals. This makes the business very desirable, as just about anybody can own and operate a McDonalds franchise. Your business needs to be more like McDonalds and thus making it more similar to passive income versus active income.

This means every position needs an employee manual, you need a proper succession strategy for every management member, proper CRM (To track past, present, and future clients), solid marketing plan, business plan, goals and plans for minimum 5 years out, and a process for all business operations.

This is why we stress the importance of processes because this allows for a higher valuation for the business, increases wealth on a daily basis, and creates a stream of passive income so that you can go start another business that follows that same model. Starting a business is hard work but the reward should not be working 80 hours a week making a million dollars a year but rather to create a business process that allows you to make a lot of money in a more passive nature while increasing valuation and personal wealth.

If you are a business owner or prospective business owner and you do not have this mindset it is time to change your frame. Begin to remove yourself from the business by creating processes. If you are knee deep in your business and find yourself putting our fires everyday, this process is going to take time but be patient as it will be worth it. As always if you have any questions or need help creating this structure give us a call.

Creating the Funnel

Everybody is an expert at something, well, almost everybody. If you really take a minute and look at your life, you are probably really good at one thing or a string of a few things. This is how solid businesses are formed, when people turn a skill, talent, or passion into a profession. Every single day new businesses are formed over 1700 to be exact. That is a lot of people trying to turn their skill, talent, or passion into a profession, unfortunately, just over 1600 fail every day.

Generally speaking just because you are good at something does not mean that it can sustain or replace your income. Being good at something is not enough, most of the time the talent people have is not being “good” at business. Being “good” at business is the crux of it all, it is a learned skill, a skill that some people pick up faster than others but it is the learned skill of business mixed with the passion and skillset of something else that leads to the 100 or so continuing businesses every day. This basically comes down to marketing because that is the first step of getting customers. Marketing is hard. You need customers to run a business without them you just have an office, idea, and skillset. No customers, no electricity.

There is an old marketing/advertising adage that goes something like “I will always spend a dollar if it will make me 2 dollars.” Now that makes perfect sense for the most part (most people in marketing/advertising are actually looking for a better return than that but it works for this example) wouldn’t you spend $100 if you are guaranteed a return of $200 or how about $1000 to make $2000 or better yet $100,000 to make $200,000. Well, yes of course you would but I think we all know that for the average joe that it is simply not that simple. Marketing and advertising are very difficult. There are many factors that play into this: who are your customers, how much do I have to spend, what to I do when someone is interested, how do I add value, how much is a fair price to charge, is my add attractive, and some much more.

I am not going to get into how to create the perfect marketing or ad campaign in this blog post but I will touch on the basics. If you are reading this blog you have probably heard of a funnel, as it pertains to marketing. Picture a funnel and it is large at the top and very narrow at the bottom. This is what your marketing campaign should look like. For example lets spend $100 on facebook advertising, maybe we get about 10-30 people to click on the ad that we have populated. This is the top of the funnel, from here we send them to a specific landing page tailored to their niche or what we targeted them for, they spend some time on the landing page and perhaps fill out the form for their contact information, maybe they fill out the survey we have which gives us even more information. Now we are reaching the bottom of the funnel where we have good qualified leads. This is the ultimate goal.

But again, easier said than done. Here are the basic steps listed below in order:

  1. Find an advertising platform (Google, Facebook, Bing, other social media)
  • Facebook is by far the cheapest and one of the most effective
  • All of these platforms are complicated and change quite frequently
  • I recommend taking a class or spending a few weeks learning if you are going to do this on your own
  1. Targeting
  • Who are your customers?
  • Ad platforms allow you to target exactly who you are looking for (Facebook is best for this)
  • You can target 40-50 year old, stay at home moms, interested in yoga & tennis, that live in Wyoming (really is no limit)
  • Be as specific as you need to be to make sure that you are wasting any marketing dollar

  1. Setup a landing page
  • This is crucial to the success of your ad
  • You can do this many ways, either on your own or by hiring a professional
  • Allows analytics on your visitors
  • Allows you to better optimize your ad

  1. Create free value add content
  • Give some value away for free in exchange for contact information
  • Video, PDF, brochure
  • Make sure it has enough value in it that they want to learn even more
  1. Watch the leads come in

This is the crux of setting up a solid marketing/advertising funnel. It is easier said than done and the most successful ad campaigns are done by people that are considered experts in the field. With that said, if you have the intellect you can become relatively proficient after 20-40 hours of learning how the ad platforms work.

Long gone are the days of cold calling. People do not want to talk to you, they want to find something on their own and make a decision. If they see something on the side of their screen then it was their idea not yours. Remember nobody likes to be sold something but everybody likes to buy something.

Creating a Culture of Positivity

The American work culture is something of true value. Consider the following statistics:

  • Average work week of 50 hours or 9.4 hours per day
    • Other countries work an average of 20% less hours
  • 88% of US Citizens are considered Upper Middle Class or Wealthy as compared to rest of world
  • Average Yearly Income in the US is $61,937
  • Only 15% of US workers are unhappy with their current Jobs
  • The US Remains the worlds richest company per capita controlling $105.99 Trillion or about 30% of the entire worlds net worth

America loves to work. More than any country in the world, we have absolutely no discerning lines between work life and personal life. I believe this issue stems from our desperate need for material items. As Americans we are wasteful and materialistic. Because of our need and our children’s need to have STUFF we need to make more money. It is a really interesting paradigm. You look at other cultures and they have sacred days, or long vacations, or maybe shortened work weeks, but Americans we maybe get a week vacation after our first full year working.

Now believe it or not I am actually not looking to change the American work culture. Because guess what I am American and I like working and I like STUFF. I am however a proponent of making the work atmosphere as positive and enjoyable as possible.

Becoming ranked as one of the best places to work by Fortune is by far one of the best things that can happen to a company and I guarantee that they are successful because of the positive culture that exists. For your curiosity I have included the top 10 for 2020 below:

  1. Hilton
  2. Ultimate Software
  3. Wegmans Food Markets
  4. Cisco
  5. Workday
  6. Salesforce
  7. Edward Jones
  8. Stryker
  9. American Express
  10. Kimpton Hotels & Restaurants

We need to create winning, happy, positive, high energy offices at all of our companies and the only way to do that is to create a culture of positivity. The act of being positive decreases cortisol and your brain begins producing serotonin creating a happy feeling, in addition, one feels calmer less anxious and more focused. Guess what that means in the workplace? More production and more money!

Easy enough right? Just create an office full of positivity… Well this is often easier said than done. At an office there are a multitude of factors that make the mere act of being positive very difficult such as deadlines, bosses, stress, and money to name a few. Nearly every aspect of our life that we stress about revolves around money which revolves around our job.

In order to create a culture of positivity and an office that people want to work at the change has to start at the top. The key for success with this process is to search for people doing good. I think far too often in our work culture employees are only noticed when they do something poorly, especially as a mid level employee. We need to reward and encourage positive behavior by catching people in the act of doing something good. It does not matter what exactly they are doing, catch somebody doing something good even if it is just changing the ink in the printer, somebody has to do it. If the boss starts this positive encouragement it will become contagious in the office. This is a grass roots culture change but if you want to succeed it starts small.

People screw up it happens and you criticizing them or publicly coming down on them is not going to change that fact. I am by no means saying that there should not be a level of accountability because I believe in a proper accountability process as well. I am saying, that you will see a greater response from your employees and your bottom line if you encourage a culture of positivity.

We work a lot as Americans but this does not mean that we have to be unhappy. Encourage positivity in the workplace and watch your company soar.

References:

How Americans View Their Jobs

America-Global Income

Median US Income

“8 Hour Work Day”

Worlds Wealth

Best Companies

How do I know when it is time to hire someone else?

In order to achieve scalable growth in a successful company you eventually need to hire more people. But how do you know when is the right time to hire someone or whether or not you actually can afford a new hire. This is a problem that arises in many small to medium sized companies. Sometimes, when we deal with family owned companies they toil with hiring people outside of the family as they have typically developed trust issues. Truth is as a business owner you have to decide what kind of company you want to have. If you really want to grow it then you need to hire experts in the field outside of your immediate network.

There is basically two schools of thought when it comes to hiring timeline. The first school says that you hire someone to grow your company. In this instance you may have a successful company but you want more growth so you want to hire another sales person or a new member to the marketing team. The purpose of this hire is to grow your business. If you add a commission only salesperson then there really is no risk but immense possible return (Remember it is all about payplans). People can grow your company but you have to make sure that you are not stretching yourself too thin.

The second school of thought is that you grow so fast and to a size that you almost cannot handle, you are eating and sleeping work. Because you are so busy you decide to hire someone to take the load off so that you can continue to grow. This one is generally more common among small businesses as you typically know that you can afford to hire someone else, you practically cannot afford not to. The questions sort of becomes “what came first, the chicken or the egg.

Basically, hire someone to help you grow or grow or hire someone because you physically cannot do anymore with the team you have. I would not say that there is a right answer here. I would say that if you are new to hiring people and recruiting people that the later of the two options is best. In the first situation you may not have tons of cash to throw around. You are doing well but hiring someone may be a little tight and you are really counting on the business they bring in to cover their salary. That is why the first one option could be a bit riskier. However, if you are experienced in recruiting or know somebody that would be perfect for the role and are sure they can perform, option one is the easier of the two.

Option 2 allows for significant cashflow coming in above and beyond your fixed costs. This means that you have plenty of cash to throw at a new hire and honestly as long as they do a half descent job it is helping your case. I do not want to get into cashflow management too much as that is a story for a different day.

Take a pen and a piece of paper and figure out where you are at in your business: Are you growing in work and cashflow is a non problem or are you making a descent living growing steadily but a couple thousand to a new hire might be tough? Once you know where you are you can develop a plan to see which option would be best for your situation.

Money is not the root of all growth – Right?

We met with a client this morning who has endured many trials and tribulations in their business and have persevered through them all only to find themselves in a situation where they think they need money to grow.

Sound familiar to anyone?

They have led their industry at one time with a superior product and exceptional service. What happened to them is a far too familiar scenario for many companies. They ran out of steam and more importantly ran out of money. They stopped moving and adjusting to the ebb and flow of business and the economy. They allowed their competitors to get an edge on them and the circumstances that followed caused debt and a non-existent pipeline of business. Now they find themselves in a situation where only one company comprises 50% of their business and many of their past customers have moved their loyalty to other vendors. They face an uphill battle but luckily, they are prepared to fight and take direction.

The old adage, “don’t let this happen to you applies”. I once read a great quote from the famous motivational sales trainer Zig Zigglar. He said that at one time his greatest form of exercise was to fill the bathtub, climb in, pull the plug and fight the current. Clearly a ridiculous exercise and certainly one that is grossly ineffective. I would submit that many business owners today are simply fighting the current rather than navigating the rocks.

The current Covid-19 pandemic is a great example of how people either succeed or fail. I have read countless stories about companies that have seen a need and filled that need rather that continue to try and conduct business as usual. Adjusting to the business climate and the economy is something that a company needs to be prepared for but more importantly, be ready to act and change. Keeping your eyes on what’s going on in your industry and even industries that you interact with on a regular basis is crucial for the success of your company.

In the wild the term survival of the fittest is ubiquitous. It is clear and obvious when you look at the natural world around us. Plants and animals adapt to their surroundings or they perish. They find ways to fend off predators or camouflage themselves as to not be seen. The essential and overriding thought is to survive, period. There is no difference in business. In the 1986 movie Heartbreak Ridge, Clint Eastwood as Gunny Highway says, “You’re Marines now. You adapt. You overcome. You improvise.

Let’s take some creative liberty here and rephrase that statement for business owners. “You own a business. You pay attention. You take action. You adjust. You succeed.

Personally speaking, my company started as a sign company and has morphed into a highly successful digital marketing and consulting firm. That didn’t happen surreptitiously or by chance, it happened through a diligent focus on supply and demand and filling that demand. It happened by paying attention to the needs of my customer base and giving them what they needed thereby allowing my company to grow and become malleable, flexible and progressive. Although I can’t stand the word progressive in a political context, I do believe that a progressive company is one that will stand the test of time, succeed and gain strength.

That strength is solely dependent on your ability to be a proactive business owner and by building a strong foundation one block at a time. It means a painstaking placement of the correct block and a block that, if necessary, can be replaced by a different block. Of course I am being metaphorical here and each block could represent a miscellaneous business practice such as a marketing strategy, a key personnel hire, a location change, a new compensation plan or any one of a myriad of steps that need to be taken to adjust and grow.

Change is eminent and the growth of your business is predicated on your ability, as the owner and leader of your company, to be watchful and to adapt. How will you be defined? How will your company grow? Will it remain stagnant?

“You own a business. You pay attention. You take action. You adjust. You succeed!

I want to make money, who cares about the people…

In high school I had a friend that would always so “It’s all about who you know”. This phrase was tossed around so frequently that it got annoying and I don’t think any of us truly understood the impact of that statement. But it is all too true in the business world today. You could have the greatest product idea in the world but if you don’t know anyone to market it, fund it, produce it, and sell it then you don’t have anything. On the flip side if you have an inferior product but you have 10 investors, your brother owns a marketing agency, and your fraternity brother is the President of a manufacturing company then you are probably going to make a solid run at a new product launch. Hence the statement “It’s all about who you know”. 

This is why relationships and networking are so important. Many people think of networking or business relationships as a one and done. Go to a networking event and make a sale or land a job, that is not the goal. An early mentor gave me some networking advice that consisted of two basic principles; 1. Meet People 2. Ask them to introduce you to 3 more people. 

The larger you can grow your network and build legitimate relationships with your network the more successful you will be. Don’t you want to be the person that always seems to “know a guy”. This is done through extensive networking and sometimes you don’t even realize you are networking. The absolute best networking event is your four year college career. 10-20 years after graduation you will likely know someone in management in about every industry. This is one of the reasons that I believe college is so important. 

The back side to developing relationships is, firstly, that it has to be reciprocal, offer to help someone in your network, or throw someone in your network a referral. Secondly, you can’t be afraid to ask. This is the same sort of fear that creeps into people as they are trying to ask for the business at the end of a sales pitch. You have a relationship why not use it, if you need expertise then leverage a relationship. The worst they can say is no but if they say yes be sure to reciprocate.