Stretching Oneself

Owning a business isn’t about being comfortable.  It’s not a proposition for those who are happy or require a stable environment. It’s a constant balancing act of working ‘in the business’ while working ‘on’ the business.  You take risks with how fast you grow, what products to buy, who you hire.  You risk it all on the fact that your judgement was / is correct that it’s a viable enterprise.  It’s all about risk and learning and stretching yourself.

Stretching Yourself

As a business owner you’re constantly stretching yourself, growing to fit the business.  You learn about logistics and customer service and management.  You learn about leadership and legalese all in an attempt to keep the business on an even keel.  You balance personnel management with your cashflow and hope that you guess right.

It’s a constant exercise of stretching your mind and your boundaries, and if you aren’t ready to accept the fact that you have to learn and keep on learning, you likely will fail.

Too Thin

And somewhere along the way you’ll get tired and just want to stop.  Sometimes, it’s just a momentary lapse.  Sometimes, your life changes and you need to grow in a different way.  Sometimes though, you’re just in a funk.

They say that having a good support system is essential to reduce stress in your life.  And that’s true – I have a few friends who are business owners too and it’s sometimes good to just talk to them.  Not for news, or knowledge or tips – but just to grouse and bitch and whine about the things that we do that other non-owners just will never get.

There’s a flip side to this coin though.  You also need to get rid of the naysayers, the poisonous personalities in your life.  There are a lot of such individuals in the world.   Sometimes it’s just a matter of context (i.e. poisonous to you, not in general) but there are some individuals who just are deadly.  They don’t provide support, instead attempting to pull you down to their levels.  Their observations aren’t for your good but so that they’ll feel better.  Those kinds of people will drive you nuts, drain you of energy and potentially ruin your business and you if you let them.

Like predators sensing when their prey are weak, they’ll come out of the woodworks when you are exhausted more often than not and attempt to inject their brand of poison.  Sometimes, when you’re tired, sometimes it sticks and that’s a crying shame.

Learning to kick them out of your life is as much a business / life skill as any other skill you’ll need to learn.

(This post brought to you by musings on a blog post from the Business Rusch – Out! All of You)

Delegating Tasks, Not Responsibility

It’s strange, I’m sure I’ve written this post before but I can’t find it. Apologies if this is a repetition on something I’ve written before, it certainly seems a repetition in my head.

One of the first things I learnt when I started managing tasks (sometime in school, I can’t recall when); was that there is a difference between delegating a task and the delegation of responsibility.

Delegating Tasks

Grow big enough, or heck, deal with outside contractors and sooner or later you’ll end up delegating tasks and projects.  You have to if you want to grow a business.   There are only so many hours available in a day, and only so many projects that you can manage before you burn out or let something fall through the cracks.

Delegation is an interesting topic in of itself – you have to weigh both the existing skills of the individual involved (and potential skills you want to grow) as well as the task itself.  Some tasks require a degree of involvement and access to knowledge that is not viable to delegate to another (e.g. managing the accountant or lawyer); while others require such a ramp-up in skills (e.g. developing the marketing plan) that it often seems to be foolish to delegate but can, in the long-term, be worthwhile.

In all cases, when you delegate the task, you hopefully delegate the authority to complete the task.  That includes both the authority to commandeer resources as well as the knowledge / access to information the task needs to be completed.

Not Responsibility

This is where many of us stumble.  As business owners, we generally understand instinctively that everything that happens in the business is our responsibility.  As such, it’s really, really hard in many ways to delegate anything especially anything of substance.  Need someone to take out the trash? Sure, we can delegate that.  Need someone to negotiate the garbage collection contract? Uhh…

What sometimes happens then is that when we do get around to delegating, we do so completely – walking away from the entire task because otherwise, we micromanage.  Unfortunately, delegating the task often does not mean the final delegation of responsibility.  As the owners, it’s still our responsibility at the end of the day; even if we had no direct connection to the task.  If the garbage isn’t taken out and the place stinks, customers will blame us – not the staff member involved.

Tips & Tricks

So what do you do? I don’t know what you do, but here’s a few things I use:

  • SMART criteria for tasks / projects
  • Metrics – for on-going tasks & projects (e.g. number of orders shipped, number of games sold, etc)
  • Regular & scheduled check-in’s – These can range from meetings to regular reports
  • Unannounced / informal check-in’s
  • Parallel projects – doing the work yourself as well as delegating the job.  This is especially useful when you’re conducting a time sensitive project which you’d also like to use a teaching project.

The Big Boys Have Come to Play

One of the more interesting aspects about e-commerce is traffic generation, specifically search engine traffic generation.  There are basically two ways to gain traffic from a search engine:

  • Paid Listings
  • Organic Listings

Paid Listings

Paid listings are simple – you pay the search engine, they stick you in the search engine.  Most search engines use a blind auction method of placement – that is; you put in a bid maximum and the search engine decides who is on top / 2nd / 3rd.  There are additional complexities like page quality and the like, but at the end of the day, it’s all about who has the deeper pockets / is willing to take a higher loss.

Organic (Unpaid) Listings

Organic listings on the other hand are all driven by algorithms (with some manual updating).  There is an entire industry based on beating the system, pushing a particular website / page to the top of a search listing.  The individuals who are good at it make a lot of money doing this.

Over the last few years (most apparently in the last 3 years), there has been a trend by the search engines (Google in particular) to provide additional ‘weight’ to larger retailers.  As if they didn’t have enough of a headstart on us smaller retailers, many of these sites need only toss a product up on their site for it to list in the top page.

We’ve seen this in particular with Settlers of Catan.  We’ve gone from having a relatively high position for the keyword name (at least in Canada) to being dropped down and down and down.  It’s also reflect somewhat in our sales – we used to sell a ton of the game during Christmas, now we move a couple of copies a month.  It’s not a matter of price here – it’s a matter of position / visibility and with the big boys all beginning to stock the game, it’s become a not so great bestseller for us.

The Big Boys

This entire issue is compounded by the fact that attracting the general public to an online store is more difficult with other ‘generic’ advertising methods.  Newspaper advertising, banner advertising and the like is very expensive and generally not effective at all in our experience.  The cost for customer acquisition in this manner is prohibitive.  So, SEO worked for us but with the changes in the algorithm it’s become more and more difficult to achieve any form of ranking in the gateway products.

I guess it says something about the entire industry that what we used to consider ‘our’ games have now gone mass market, such that major retailers have started stocking these games.

Of course, some of this plays into the search engine’s overall plan.  If we can’t achieve rankings organically, we might have to advertise (paid listings) which obviously helps their bottomline, if not ours.

New Used Games: March 21st, 2013

“New” Used Games:

Axis and Allies (1986 Gamemaster Edition) – Used (Grade C)
Blokus – Used (Grade A)
Clash of the Gladiators – Used (Grade A)
Diplomacy (2nd Edition, 1982) – Used (Grade C)/a>
Dungeoneer 2nd Edition: Dragons of the Forsaken Desert – Used (Damage Grade B)
Dungeoneer 2nd Edition: Realm of the Ice Witch – Used (Damage Grade A)
Dungeoneer 2nd Edition: Tomb of the Lich Lord – Used (Damage Grade B)
Dungeoneer 2nd Edition: Vault of the Fiends – Used (Damage Grade B)
EcoFluxx – Used (Grade A)
Fire and Ice – Used (Grade A)
Fluxx (version 4) – Used (Grade A)
Fortress America (1986 GameMaster Edition) – Used (Grade C)
Fury of Dracula – Used (Grade A)
Gift Trap – Used (Grade A)
Mancala Solid Wood Folding Game – Used (Grade A)
Mille Bornes – Used (Opened)
Outburst II – Used (Grade A)
Quebec 1759 – Used (Grade A)
Shogun (1986 GameMaster Edition) – Used (Grade C)
Skip-Bo Deluxe – Used (Grade B)
Torres – Used (Grade A)
War of 1812 – Used (Grade B)
wordXchange – Used (Grade A)

Marketing – Target Markets

What’s a target market? It’s a group (or groups) of customer(s) that a business has decided to aim it’s products and marketing to.  This group can be as small (left-handed, redheads who walk with a limp) to as large (women) as you desire, though generally it’s a good idea to focus your marketing on a reasonable target market.  Part of the process of creating a business plan involves defining your target markets, preferably with an idea about the market size.

Why are Target Markets Important?

No non-commodity business or product can be the one thing that is required by all customers.  Sure, if you sell salt, you might be the monopoly (or heck, oxygen) and not worry about your target market; but for the rest of us, we have to define these markets so that we can structure our businesses to suit them.

Are you a discount store? Well, then you have to sacrifice personalised customer service (to some extent), location and aesthetics.  Maybe even stock levels.  Are you a B&M in a shopping centre? Your product line is going to be very different and have a higher focus on the general public than the discount store.  And so on.

By defining your target markets, you can then adjust your store to meet their expectations – everything from pricing to product mix to location.  By meeting all their needs, you create goodwill and brand loyalty because you are ‘their store’.  To them, it seems you are perfect – while to those outside of your target market, you might be mediocre at best.  Mediocrity means that converting these untargetted customers, these poor fits take a lot more effort (and dollars) than those who are already targetted.  In an e-commerce site, you can see this is in low conversion rates.  In a physical store, it’s during the sales process when you realise that you are putting in a ton of effort and still getting very few sales.

Apple does this really well – to their die-hard loyalists, they are perfect.  Beautiful products, seamless integration, good customer service and a status symbol all rolled into one.  To others, they are over-priced, control freaks that have created a cult.

The Untargetted

The hardest part of having a target market, of understanding who we are focusing on also means letting go of the idea that everyone should be our customers.  There are individuals, even groups of individuals, who we just can’t / won’t focus on.  Doing so might be a detriment to other customers (example – by some reports, Yu-Gi-Oh players can be a horrendous group to have in-store); while others just have products or needs that we can’t meet (example – a RPGer looking for 40 year old product).

At the end of the day, letting customers go is difficult.  We see the loss revenue, the loss opportunity and want to win their custom.  Yet, meeting these untargetted markets need can be more costly than its viable.   It could be a matter of timing (bringing in a new product line) or it could be a decision, but we have to remember why we chose to target the markets we did in the first place.  Learning to let go is a hard lesson to learn and one that most of us have to relearn on a regular basis.

Letting Go

Once you let go of these untargetted customers, realising they just aren’t going to buy from you, you can (or should) realise that there’s often space enough for your competitors.  If some customers won’t buy from you, perhaps they are better suited to your competitors? Perhaps you should point them in that direction..  It’ll keep them happy and leave you focused.

E-Commerce Site Structures – A Design Perspective

We recently had a discussion about changing some aspects of the site and numerous comments appeared with regard to what we should change (over and above our current discussion).  Part of that it seems is a misconception about what can/cannot be changed in terms of a site.  So I thought I’d see if I could clarify some points.

The Site As A Physical Store

Let’s assume the website is a physical store. If you think of a physical store, there are aspects of a store that come pre-set – the way the walls are set-up, the floor plan, the number of windows, the amount of storage space and where your electrical outlets are.  Other aspects are easier to change – paint and trim, the physical layout of the store – and others vary on a regular basis – the personnel, the games, etc.  Each of these features cost a varying amount to change.

The Walls & Floor Plan

Most e-commerce sites run off a main e-commerce system – a central program that runs everything.  We use Magento, others might use Shopify, Zen Cart, osCommerce, etc.  Each of these e-commerce systems have an in-built set of features, the floor plan and walls that make up the site. Among the many in-built features in any e-commerce system would be:

  • Order Management
  • Customer Information Management
  • Checkout Pages
  • Site Search
  • Reporting Tools

To change any of these systems in a significant manner, it would require specialised work; just like it would in a physical store.  Want to put in some new windows? You need a contractor to cut the hole in the wall, get the licenses sorted, make sure electricity & plumbing isn’t an issue (and hire the necessary contractors for that if it is), etc.  It’s a big change, and requires a lot of planning to make sure that it doesn’t destroy the store.

Store Layout & Colours

On top of that though, there are store layouts and colours.  You might have a barebones shop, but what you do to it – how many shelves you put in, what colours and trim are added, where each category of items is located – can make a huge difference.  Working smart, you can make even a horrible floor plan less horrible.

In terms of a website, your store layout translates to:

  • site design (colours, fonts, layout)
  • category pages and their layout
  • store information pages and their layout

These are ‘simpler’ to change.  You can dash a coat of paint on much easier than ripping a wall down; you can put a new font in rather than adjusting site search. It might still require specialised help, but mostly you could do it yourself.

Iterative Changes

When you look at the changes that happen on the site, you can see how each of these changes play out.  Some, like fixing Site Search require a lot of planning and a lot of funds – it’s not easy ripping out retaining walls, shifting plumbing and electrical outlets to make the store better.

Other changes are simpler and can be down with minimal external help – changing how our products are categorised, the skin (colours) and even the general layout can be much easier.   These can be less ‘planned’ and because in many cases we don’t need external contractors, can be changed much more often.

Lending In Canada

Over the last few years, at various times we’ve gone to the banks and looked at government grants or financing to help grow the business. It’s not that we need the money to survive, but capital (loans, etc) help us take risks to grow that we might not be able to / willing to do so without that back-up of additional capital.

In the last 6 years, the amount of external capital funding we’ve received through countless hours of applications and research? $0

Grants in Canada

I’ve mentioned before that unless one falls within very specific boudaries; receiving a grant is extremely unlikely.  The grants out there are created to either:

  • aid what is considered a disadvantaged class
  • provide employment and business growth for ‘high value’ businesses

E-commerce businesses and game stores do not fall into that category.  Instead, you need to be in a ‘sexy’ category to get a grant, which is why there are a ton of people chasing high tech dreams of social media / technological success and few actual e-commerce businesses.

Banks, They Are Not Your Friends

Perhaps its just an external point of view, but it seems banks in the US are much more willing to broker actual loans for businesses than Canadian banks.  Worst, what banks and the government want you to take loans out on or are willing to finance have very little to do with what is good for your business; but what is good for them.

As an example – it’s easier for me to get a loan to purchase a commercial warehouse than it is for me to get a loan to pay my rent.  In the first case, the bank feels they have an asset they can take in the event of a default; so they are happier to make the loan.  My ability to repay the loan is secondary in this sense and any inventory assets are not part of this equation.

Best Not Be Sensible

Another strange aspects of getting a loan from a bank is the need for personal assets.  More importantly, they desire personal assets that are not in RRSPs / TFSAs.  Both of those savings instruments are shielded by law from a loan guarantee; so even though it makes the most personal sense to conduct your investing / savings in those vehicles; if you need to see a bank for a loan it’s actually more sensible to have your funds in a non-secure account.

Dear Government…

Banks aren’t really here to help grow the economy.  Their goal is to make as much money as possible, which means reducing the total risk.  So, yes, even if a business is potentially worth investing in, if there aren’t any capital assets banks don’t want to deal with them.  Worst, in my view is the fact that our Canadian banks are happy to continue with the status quo since there just isn’t any competition for them.
This is where the government and government programs are supposed to come in.  Yet, there really aren’t any out there in Canada, or if there are, it’s nearly impossible to locate.  Changes in our tax rates, hiring credits (that appear, at best a year later) and super restrictive grants (e.g. the Get Youth Working Program) make great headlines, but do very little to stimulate business growth.

And we wonder why Canada is consistently behind the US and other countries in terms of innovation and business investment.