Elie Kochman on Business and Networking

If you pay attention to news from Toronto, you are likely to know about the various publicity problems that have been plaguing the Toronto Transit Commission, a.k.a. the TTC. A favored target of negative criticism for many years, their recent cost overrun with a street car line coupled with a fare increase, followed by major service disruptions, all paled to the recent images and videos of various employees not working when they should be – sleeping, grabbing coffee, or just plain being rude. Capping this is the fact that Adam Giambrone, the current chair of the TTC, is running for mayor in the 2010 elections.

The picture that triggered the controversy

In reality, not every employee of the TTC is rude or incompetent. In fact, most are pleasant and do their jobs well. Having been a rider for many years, however, I can relate to all the incidents reported in the news, and can think of my own stories of gross incompetence by a TTC employee. As a result, hearing about recorded incidents of such incompetence strikes a chord with me and other riders, who immediately sympathize with the rider who took the picture.

There are, as a result, many lessons to be learned from what is happening now with the TTC, which is the point of this article.

First Response

When an incident affecting the public perception of a company occurs, it is necessary to provide a response to the public in order to limit the potential harm that can occur as a result of the incident. Here’s what the TTC had to say about the sleeping collector agent:

ATU 113 Statement on picture of TTC Collector

TORONTO, Jan. 22 /CNW/ – The following statement is issued by Bob Kinnear, President of ATU Local 113, which represents Operating and Maintenance employees of the Toronto Transit Commission:

There have been many media enquires about a picture taken at 10:00 p.m. on January 9 of a TTC Collector described as “sleeping” in the booth. The TTC is conducting an enquiry on this and until this is completed the union will have no comment on the matter except this:

Whatever the outcome of the enquiry, it is very discouraging that the picture taker and, apparently, other customers, made no attempt to determine if there was anything wrong with this TTC employee. A simple knock on the glass might have determined if the Collector was, in fact, asleep, or whether he was unconscious as a result of some medical problem. The reports that passengers were laughing at him as they passed by the booth makes this even more disturbing.

The union will comment further at an appropriate time.

This response is problematic for several reasons – it places blame on the public for the actions of its own employees, and makes assumptions that no one did, in fact, try to wake the sleeping agent. I don’t know whether or not anyone did, but the first statement released should have started with something more along the lines of:

Sleeping on the job is not considered to be acceptable by the TTC except in extenuating circumstances. We are investigating the incident, and will keep the public notified of our progress.

What this statement does is not accept fault for what happened, but explain that if the story is in fact as described by the rider, action will be taken accordingly. This is the first part of response to an incident – making assurances about the internal policies regarding the behavior triggering the incident, and indicate that the incident is being investigated. Placing blame before the investigation is complete is unacceptable (in either direction).

Second Response

Within a little while, perhaps as a result of the bungled handling of the first incident, a video of a driver taking a 7 minute break during his bus route for use of the washroom and to get a coffee was posted on YouTube. This was quickly followed by several more videos and pictures of similar incidents.

This time, the response from the TTC was better:

A TTC bus operator has been suspended pending an investigation into the circumstances surrounding a video purportedly recording the operator taking a seven-minute washroom break and buying a coffee at a doughnut shop at 3:00 a.m. last Friday. As the matter is under investigation, Local 113 of the Amalgamated Transit Union will not be commenting on this incident or on any other matters that may bear on it.

Here, the action is directed against the employee. Granted, in this case, the driver in question was reported to have been verbally abusive to the rider, as well as allegedly making statements that the union would protect him. However, the union was learning from the first incident to not comment at length until more information is available.

Had this been the response to the first incident, perhaps there would not have been the level of public outrage, and perhaps the second incident would never have gained the level of attention that it saw.

Chain Reactions

The problem currently facing the TTC is actually quite difficult. While understanding what led to the current scenario is simple (a bungled first response followed by a second incident before the tumult over the first had died down), figuring out what to do now is much more difficult. This is the problem with chain reactions – once it has been started, breaking the chain is quite difficult.

This is the age of information freedom and social media. You need to act, not react, and you need to relate to the masses, not inform them. People expect interaction, not information. When something gets out of hand like this, you need to rein in control and start working to resolve the problem without letting it get worse in the process.

In the specific example covered in this article, the first thing to do is to make a very public announcement about a zero tolerance policy – if future incidents are reported, they will be dealt with immediately and severely. While this isn’t to mean that it’s blanket approval for a witch hunt, it needs to tell the employees that while discipline may have been lax in the past, it will no longer continue that way, and the union will not be able to protect them any longer from the result of gross misconduct.

Next, they need to look to the reactions to determine the root causes of the negative publicity. Fare hikes during the worst recession in decades is obviously an unpopular move, but if the result was better service, it might have been overlooked (not likely, but it’s possible there would have been less negative feedback). As such, they need to listen to the feedback and try to find some ways of visibly improving services.

The Lesson

What can be taken from all this is that when the public is against you, it’s more important to look at the source cause of the problem, rather than deal with the various symptoms as they appear. Failure to do so can result in the appearance of additional symptoms faster than you can deal with them, and get the public completely against anything you have to say, whether justified or not.

To anyone who thinks that I am referring to something they said or did, be aware that the incident triggering this article did not, in fact, involve me in any way. A story was told to me in which some of the topics in this article were brought up, and I therefore decided to write this.

It’s been a crazy week, and not just for me, but for many of the people with whom I have contact with on a daily basis. One of the common themes of this week made me think of a saying: Business is business.

Courtesy of T-KONI on Flickr.com

I suppose what that saying is to be interpreted as is that when it comes to business, it’s not about the people involved. What matters is the context and the content – the participants, however, can be swapped around without any implications (okay, maybe not, but you get the point). We’re told not to take such things personally – it’s about business.

In reality, few people can actually deal with business this way. At some level, there is still personality involved – and there needs to be. A motivated and driven person will interact differently than someone complacent. If you compare two such people in similar situations (professional of course) you will see them act differently. The personality of the people involved is what makes and breaks deals.

What this also means is that what is said in a professional environment will ultimately be taken personally. Whether that impacts the context is not relevant – regardless, it has had an effect on the two (or more) people involved and their ability to interact.

For this reason, it is crucial that despite the saying that business is business, one needs to be cognizant of the potential ramifications of the things they say, and how they might be perceived by someone else. This is the reason that we are also told to act like professionals – always be polite (even, or especially, when we don’t want to), always stick to the subject at hand (even if the person did talk about you at the water cooler last week), always give the benefit of the doubt.

I recently had my site added to Small Business on Alltop (scroll down to the bottom – I’m not the last site on the page, but close). This got me thinking about the concept of the site itself, and what it represents.

First, for those of you who don’t already know, Alltop is essentially an online magazine rack that displays the latest 5 posts from each magazine (a.k.a. website or blog) in the selection. Those sites are organized by category, and there are thousands available to choose from. You can make a custom page that includes those sites that you’re interested in from the selection available, so that you don’t have to keep searching for them.

In some sense, you might call Alltop a big RSS reader with twist – each feed has been manually reviewed to ensure that it fits within the scope of the site. Yes, you could build your own, and it might not even be that hard – but Alltop is already there, someone else’ responsibility to keep it working, and works really well!

What’s the revenue model? It’s actually quite simple – advertising. Alltop is ranked just over 2,700 according to Alexa globally, so they have more than enough traffic to make this a viable model. There are over 750 topics, each with its own page with available advertising. On the Small Business page, for example, there are 2 large advertising blocks currently populated. A quick look at their advertising page reveals that they accept two sizes of ads, but no pricing information.

Unfortunately, at the moment you’re limited to seeing sites that have been already approved for Alltop in your personalized page. However, you can always submit another site for consideration, and the current selection is quite diverse.

The one other feature that seems to be missing is the ability to search for a particular site. For example, despite the fact that the title of my blog is listed as “Elie Kochman on Business and Networking”, searching for Elie does not turn up any results.

All in all, a great website, with a couple of additional features that may eventually make their way into the site.

A while back, I wrote an article about Managing Accounts Receivable, focusing on management from the perspective of growth of a business. In today’s article, I’m going to discuss collections and getting paid for the work you’ve done.

In order to give yourself the best possible chance of being able to collect, you need to ensure that you have a clearly worded contract, in which it is outlined what you are to deliver to the client, the amount to be paid by the client, and how and when that money is due. In case of dispute, such a document will play a crucial role in determining whether or not you can collect your money.

Assuming you have such a document, and the client is not making the proper payments, you should attempt to open communication by asking the client, politely, why the payments have not been made.

It may be an honest error (in one case, the client had assumed an invoice I sent him had been copied to his bookkeeper, when in fact it hadn’t been). In that case, the question regarding payment can be quickly resolved.

It might be an issue of timing – the client was deferring payment for cash flow reasons, and had forgotten to inform me that the payment would be late.

It could be related to cash flow and ability to pay – the client might not have the funds to pay the invoice, and is embarrassed to discuss it. In that case, by opening conversation, you can work out an alternate payment schedule to ensure you get paid.

Last, it could be that the client has no intention of paying. If this is the case, regardless of the reason, you need to look to other options other than merely talking to the client. (You also need to get rid of the client – read my article Firing Customers for more information on that topic.)

First, you can choose to write off the money owed as a loss. While this doesn’t regain any of your money, it does keep you from having to pay taxes on that money, which at least keeps you ahead of any future expenses on that particular account.

Second, you can hand over the funds to a collections agency. The cost here is usually a percentage of the money recouped by the agency, often as high as 50% of the money paid. Going this route is often not worthwhile to small businesses, as it generates very negative views of your business in the eyes of potential clients.

Third, you can sue the client. Here in Ontario, if it’s a relatively small amount (as of this writing, the maximum is $25,000), then you can sue them in Small Claims Court, and you don’t need a lawyer. In this case, you may be given the option of seizing the assets of the client to pay for the amount owed. However, the amount of effort involved is significant, although the direct cost is not, since the client may be ordered to pay the court expenses if you win the case.

Whatever option you choose, and each case needs to be handled on its own, you need to remember to always act professionally, and to assume that every document and e-mail that you handle may end up one day in court. If you treat the client with respect, and give them alternatives to defaulting on payment, you may find it easier to get your invoices paid.

Several months ago, I wrote an article The Customer is Always Right… Sometimes in which I discussed many of the reasons a business should be listening and obeying its customers, even when it seems to go contrary to what the business stands for. However, there are times when not only is it inappropriate to listen to the customer, you should also get rid of that customer as fast as possible.

The first example is where you sell a product, and on occasion, will be asked for a refund. While you need to have a clear refund policy, you also need to know when to give in and issue the refund anyhow. A customer who won’t be happy, and is out of pocket because of your business (whether reasonable or not) is capable of generating a lot of negative attention for your business. Issuing the refund to get the customer to leave you alone will often not only rid you of an annoying customer, but also generate positive feedback for good customer service.

OK, so the first example wasn’t really about firing customers, but about having good customer service. Here’s another example.

If you do work for a customer, and they don’t pay – get rid of them if you can. A good customer who can’t pay will be upfront with you about their situation, and try to arrange alternate payment schedules. A bad customer will keep taking work, thereby driving up their balance, and not mention that they cannot pay the bill. The problem with such customers is that many of them try to justify their position and explain that they don’t actually owe you the money. In other cases, they will ask for special treatment to get their bill reduced.

It is not in your best interests to do either. When you are out of pocket on a customer, and realize that you will have difficulty collecting, you need to stop. You need to stop working for the client, you need to stop arguing with them (and yes, such situations usually end up with grudge matches, often held through long sequences of e-mails) and you need to just issue a notice that payment is due.

Be polite. Tell the client that you will not be doing any more work for them until full payment is received. Give the client any outstanding material of theirs that they may not have (for example, if you’ve collected data as part of the project, send them the data – even if that’s not part of the contract). Tell them when you expect payment by.Tell them what’s going to happen if they don’t pay (for example, I’ll sue you for the shirt off your back!).

Here’s another example where it’s wise to get rid of a customer.

Sometimes the issue is not that the client can’t or won’t pay, but that the work being done does not match the work requested originally. In that case, if discussing with the client to resolve the differences doesn’t improve the situation, you may want to stop the project. If you do, then you can try referring them to someone else who can better serve their needs. As an example, if you run a business doing SEO and SEM work, but the project turns out to be website development, then you may want to refer them to a web development business.

Sure, you may lose the project as a result, even the parts that were your forte, but at the end of the day, you’ll have less aggravation as a result.

Jason Clegg is an entrepreneur with over 5 years of experience building business and marketing on the web. He manages a full service Internet Marketing firm and writes about entrepreneurship and business topics at www.JasonClegg.com.

If you know absolutely nothing or very little about marketing your business online, I’m here to help.  I’ve spent the past 6 years studying online marketing methods for small business owners and, frankly, I know what works.  The truth is lots of stuff works.  There are endless opportunities for bringing more people to your website.

Fortunately for you, I’m not going to waste your time in this guest post.  I am going to focus on just one tactic that you can start today and do absolutely free (or very cheaply) if you do it right.

As Elie has already pointed out on this blog, personal branding is absolutely critical for today’s small business owner.  In the online world, you create trust through one primary means – content.

Blogs are a testament to this fact.  Look around you.  Anyone and everyone is blogging.  Why?  It’s simple: Blogging helps you control your personal brand and builds more credibility with your existing and your potential clientèle.

But everybody’s blogging.  (I hope this includes you, of course!)

The strategy I want you to follow is sort of like blogging but, in some ways, even better.  It’s called article marketing.

Article marketing allows you to build a higher degree of trust and credibility by leveraging the already existing power and authority of very large content websites.

My absolute favorite is EzineArticles.com — this is the best of the best because they have a great relationship with Google and a very clear system for evaluating and publishing only the best content.

How to Start Article Marketing

In the steps that follow, I’m going to show you exactly how you can make use of EzineArticles.com to build your personal or business brand.  And here’s the good news — it’s not going to cost you a dime.

Step One – Setup Your Free Account

Go to EzineArticles.com and start your free account.  You don’t have to pay anything to submit content to their website.  You just have to follow the rules.

Step Two – Write an Article for Your Niche

If you’re selling dog training products, write an article about that.  If you’re a Public Relations expert, write an article about that.  Whatever it is that you do, create some content.  Just be sure that your article is 100% new and unique and is at least 400 words long.

Step Three – Publish Your Article at EZA

The process for submitting articles is easy.  Just login and click “Submit New Article.”  Then copy-and-paste your content into the fields.  Choose a category, add a brief summary, and voila!

Oh, just one more thing.  Be absolutely sure you make the most of that box they call the “Resource Box.”  This is where you’re going to include a little info about you and/or your business.  More importantly, this is where you get to include a link to your website.

Hit submit and you’re done.  The article reviewers will take a look at your submission and your article should be live within a few days.  If you have to make changes, they’ll let you know exactly what to change so you’re not left in the dark.

(NOTE: The *really* quick method for doing this is to hire someone to write your articles for you.  You can even pay a full service firm to submit too.)

Why Articles Are So Effective

Using EzineArticles.com is great because their articles rank high in Google.  These days it’s pretty tough to position a new website without using strategies like this to drive traffic.  In some cases, it’s basically impossible in the short-term.

But the greatest value you will take away from this process is an increased level of credibility.  By the time surfers click through to your website, they will have already established a relationship with you.  The chances of these visitors making a purchase or initiating contact on your website are much higher.

Give it a try.  I’m not saying article marketing is going to transform your business overnight, but it is without a doubt one of the fastest ways to get more exposure for yourself and your brand online!

If you are developing a new product or service, you’ve probably wondered a bit about this topic (and if not, you should have). How do you protect your ideas, especially from the people who work with or for you?

Before I go any further, I must point out that I am not a lawyer, and can only comment based on my experiences and information collected over the last few years. This is not to be construed as legal advice.

When you start working on a new idea, there are two reasons you want to protect your idea:

1. Maybe someone has thought of this idea before, and you might be infringing on their rights.
2. Maybe you’re the first to think of this idea, and therefore you want to protect your own rights.

In regard to the first concern, a few hours searching online can usually turn up any potential competitors. This research therefore serves multiple purposes – besides for telling you whether or not someone will sue you if you try implementing you idea, it also tells you something about your competition and the market.

In regard to the second concern, there are again two reasons to patent your idea:

1. You want to make sure that if your idea is unique, no one can copy you.
2. You want to make sure that your employees don’t go off and create an identical product on their own.
3. If you seek investments, potential investors want to hear that you’ve protected your rights.

In the software industry, however, a patent and copyright provide very limited real protection. While it would protect you from someone creating an exact duplicate of your product, it would not protect you from someone creating a similar product. Likewise, since much of the new software is about re-0rganizing existing technology, there is little that is left to protect, since the existing technologies do not belong to you.

The second item in the list, however, is actually fairly easy to deal with. An IP Waiver is a document which you can have your employees sign, which basically restricts them from using the idea for their own benefit. It can also be attached to a Non-Disclosure Agreement, also known as an NDA. Such a document prevents anyone from sharing information acquired from you that is not available elsewhere.

None of these documents is fool-proof, but they are necessary. You can get the pair of documents (the IP Waiver and NDA) drafted up for your company for under $500. If you get big enough, however, to be capable of suing someone for violating one of those documents, you are not likely to have the time to actually sue them. If you don’t have those documents, however, then talking to an investor will quickly teach you why they’re required – because if one of your employees leaves, what’s stopping them from starting a competing company with what they learned at your expense?

Frankly, I was expecting something a bit more sophisticated.

As the leader of a business, whether it’s just you and your goldfish, or you and 100 employees, it can be lonely at the top. After all, you’re the one who’s put in more hours, taken more risk, than anyone else around you. You may have more at stake in your business than anyone else. You have a limited ability to communicate with those around you.

In such an environment, how do you stay motivated, how do you push yourself to keep going?

It’s not where you come from, but where you’re going that matters.

To stay motivated, you need to focus on the goal, not on where you came from. Sure, there are lessons to be learned from the past, but they won’t keep you on the road, and they won’t get you to your goal.

When I was a teen, I went hiking with my father in the White Mountains in New Hampshire one summer. After climbing to one peak, we decided to cut short the hike because of the time, and headed down to complete the hike. When reaching the bottom, we followed the trail, reading occasionally from the trail guide for the landmarks we should be seeing.

After hiking for a while, we reached what seemed to be a dried riverbed, which was not on the description of the trail. There was a sign, however, pointing into the woods, indicating a ski trail. Although the ski trail appeared to be non-existent, we looked at the map, estimated that we were about 3 miles from the road, and figured we would take the chance and hike through the woods.

Needless to say, that was a bad choice. The road curved near where we were, and rather than being 3 miles from the road, we were about 6 miles out. The result was that we had to spend the night in the woods (this is black bear country) until morning, before we were able to continue to reach the road.

What kept us moving forward, however, was that we didn’t focus on the past. Sure, we should not have left the trail. We should have read the guide more carefully, and would have realized that we were actually supposed to hike along the riverbed (the mile markers were incorrect). But that would not have gotten us out of the woods.

In order to succeed, you must look forward toward your goal. As long as you know where you’re going, you can find the strength and motivation to get there.

This week’s feature article is about a great business resource that I use time and time again – SCORE. The basic description of SCORE comes from their site:

SCORE, the “Counselors of America’s Small Business Owners”, is a national association dedicated to helping small business owners form and grow their businesses.

Unfortunately, their own description of themselves falls well short of reality, although it is everything that they claim to be, but also so much more.

I first came across the site when browsing through the Answers pages on LinkedIn where it would be listed on occasion as a resource for small business owners. After that, I started noticing references to the site on a variety of websites I frequent, and decided to check it out. My delay in looking at the site stemmed from the fact that I am in Canada, and the organization is clearly an American organization.

I was delighted to find that, while I could not take advantage of the various counseling and coaching opportunities (extra for all you American readers), there were still many resources that I could make use of.

The one feature that I found most useful, however, was the resource section, which includes dozens of document templates, from business plans to sales forecasts, balance sheets to board of advisor drafts. There are also dozens of podcasts on a variety of topics, and I’ve started listening to them as often as I have time. For days when you need some extra motivation? Check out their success stories.

All in all, this site provides many excellent resources for small business owners, regardless of whether or not you are able to make use of the advising facilities offered.

In any endeavor, it is of critical importance that you be able to communicate clearly, and that you exercise that ability as often as needed. There are two parts to good communication, and either without the other can lead to avoidable problems.

The first component is the ability to clearly express ideas, concerns, requests, or questions. While this skill is needed in both the oral and written form, it is possible to develop one without the other, and have it suffice.

The second component is the ability to deliver communiques as often as necessary, and to be available to receive and respond to such communiques when needed. Within an organization, this extends to knowing who to send a particular request or piece of information to. The chain of command needs to be known, and each link in the chain must be able to access the surrounding links whenever needed.

Where these two components become particularly important is when the various people communicating are not located in close proximity to one another. The more difficult it is to establish a line of communication (point two), the more important it is that what communication does occur be particularly clear. As the clarity of communiques decreases, the frequency of communiques, or, more particularly, the ability to request clarification, must increase.

I have witnessed one business suffer because of a failure in this area – with an absentee decision maker, the chain of command began to fail. While everyone in the business knew who made certain decisions, they were unable to communicate with him easily, and often significant amounts of time were lost just waiting for a response. Additionally, some of the communiques were difficult to understand, leading to mixed messages being sent, and many people in the business unclear as to their duties and responsibilities.

If you want to ensure that this doesn’t happen to your business, ensure that you know who is ultimately responsible for each segment of the business. Next, ensure that all communiques issued are clear and sufficiently verbose to avoid mixed messages. No, you don’t need an essay to explain each decision, but don’t assume that “sure, okay” means the same thing to the person reading it as it does to you.