By Michael Sanibel

Fred Smith: Founder of FedEx

It isn’t often that a trade name becomes synonymous with the service provided by the company that created it. Like Xerox before it, the trademark FedEx has achieved common usage as a verb when people talk about shipping items out quickly. The man indirectly responsible for this familiarity is Fred Smith, the company’s founder and chairman.

Born in Mississippi, Smith attended Yale University, sharing lecture halls and cafeteria tables with two other future notables, George W. Bush and John Kerry. During his tenure at Yale, Smith wrote a paper that described his plan for an overnight delivery service. After graduation, he served in the Vietnam War, and while in service studied the logistics and supply systems used by the military. In the back of his mind was his college paper, which he hoped to turn into a reality after he left the service as a decorated veteran.

In 1970, he bought a majority stake in an aircraft maintenance contractor and founded Federal Express a year later. He had the benefit of a $4 million inheritance, but that was not nearly enough money to get his venture off the ground. He put together a business plan based on his paper, and made the rounds to investment banks in search of private investors to provide the capital he needed. He secured almost $100 million in equity funding for an idea that no one had ever before put into practice.

FedEx was the first company to successfully integrate air and ground shipments under an umbrella of an express delivery system. Smith also adopted the idea of a central hub that served as a clearing center for all traffic movements inside the system’s web.

If imitation is the sincerest form of flattery, then Fred Smith should feel extremely flattered. There is no shortage of express delivery companies that attempt to copy his term paper from long ago.

STEVE JOBS

It’s hard to say “Apple” without thinking of Steve Jobs. Like another early computer pioneer by the name of Gates, Jobs was a college dropout with a vision of how technology could be harnessed in ways never before thought possible. With his friend Steve Wozniak, they embarked on a mission to popularize the personal computer by recognizing and capitalizing on the commercial potential of the mouse-driven Graphical User Interface.

Much of Jobs’s success can be attributed to his legendary persistence and consummate skills of persuasion and salesmanship. When he was ousted from Apple by its board and the man he hired to run the company for him, Jobs didn’t miss a beat: he went on to found NeXT, a company specializing in the development of high-end computer platforms for the lucrative business market. He also bought George Lucas’s computer graphics division, which was renamed Pixar Animation Studios. He then contracted with Disney to produce and distribute several award-winning and commercially successful computer-animated feature films. When their contract reached its final year, Jobs and Disney CEO Michael Eisner were unable to negotiate a new deal, which was one of the factors that precipitated Eisner’s retirement from Disney. New Disney CEO Bob Iger decided to buy Pixar, making Jobs the largest individual shareholder of Disney stock.

Apple, now realizing what they’d lost in booting out its charismatic founder and visionary, bought NeXT, which meant the return of Jobs as the CEO of the company he had cofounded. After years of lackluster performance during his absence, Jobs wasted no time in recharging the atmosphere at Apple and challenging its employees to innovate. What followed were a series of big commercial successes, including the iMac, iPod, iTunes, and iPhone. It’s unlikely that any of this would have happened without the iconic leadership of Steve Jobs, named the most powerful person in business by Fortune Magazine in November 2007.

By Kendra Songer

With the word recession hanging in the air, small-business owners are a little nervous. They start poring over financials and questioning every decision and every purchase. But what exactly is the right response for a small business during uncertain economic times?

1. Relax. First, all recessions are temporary. Not only does the economy always recover, consumers continue spending even during down times. Many small businesses continue doing business, and some even grow during tough times.

2. Ask employees for help. Employees notice employers’ attitudes and actions even if nothing has been said. Having a frank discussion with employees will not only put a stop to any rumors, but it may generate helpful ideas as well. If the company is experiencing higher costs, then tell the employees and offer alternatives. To avoid layoffs, are they willing to cut back on hours? Are they willing to work in a tighter space so that the company can move to a smaller office? Employees may also be able to offer ideas on how to run their department more efficiently.

3. Make sure there’s enough cash flow. Everyone has heard this mantra, but it’s important enough to bear repeating. Cash flow can make or break a business. Make sure there is enough cash to pay expenses if revenue drops.

4. Increase the cash flow. This is easier for companies still in the black. The time to apply for loans or lines of credit is before a cash crunch. With interest rates dropping, try refinancing existing loans. A downturn in the economy can be a good time to try renegotiating with vendors. For those already suffering, it can be tempting to cut prices to keep money coming in; but be sure it won’t harm the business in the long term. Prices can always be lowered, but they are harder to raise.

5. Trim spending. Increase cash flow by cutting costs. Some solutions seem obvious—laying off employees, switching to subcontractors, outsourcing—but there are other options to consider. Cutting costs should be a temporary solution, so be sure that doing so won’t affect business in the long term (e.g., don’t cut costs on preventative maintenance of necessary equipment). If cutting costs is necessary, consider consolidating offices, dismissing underperforming workers, and so on.

6. Keep marketing. Many businesses cut advertising costs first, but advertising is needed to generate new clients. Reevaluate where the money is being spent. Cut where the results are few, and don’t forget to network. Networking is a great way to get the word out—just don’t be obnoxious.

7. Look for opportunities. This is a good time to find employees. Some great people are out of work or nervous about their companies’ futures. Look into sharing rent or equipment with other companies. Join a group advisory board to see how other small-business owners are handling the crunch.

8. Get tough with Accounts Receivable. Don’t let invoices go unpaid, and get tougher with nonpaying clients. Consider switching to online billing services. Know your customers—don’t extend credit to a company on the edge.

9. Beef up customer service. It’s easier to keep existing clients than it is to generate new ones. Practice customer loyalty: offer discounts, keep communication open, and don’t forget follow-up. When times are tough, customers may want to purchase in smaller quantities. Find ways to handle shorter runs or lead times. Can the product be broken up into smaller, more affordable pieces?

10. Be patient (and don’t panic). Making changes will improve the company, but it can take three to six months to see the effects. Running a successful business is as much about positive attitude and daily decisions as it is about the economy. Determination and hard work can help find creative solutions during tough times.

By Michael Greaney

Possibly the single most important rule of investing for any purpose is to stay away from things you know nothing about. As Peter Lynch observed in his investment manual, One Up on Wall Street, don’t invest in anything unless you’ve done your homework first—and be prepared to do plenty of it. The second rule is, don’t invest in anything you can’t control in any meaningful fashion.

Ordinarily, these rules dictate staying close to home and investing in your own business, since that is generally where you have the most control and thus can obtain the best information. Currently, the most widespread method of investing in your own business is through a sole proprietorship. For those who work in a corporation, the Employee Stock Ownership Plan (ESOP) has some advantages, although such an arrangement is what the law calls “beneficial ownership,” and does not generally convey any direct control over the investment, or even in many cases how much is invested. IRAs and 401(k)s also have certain advantages with respect to security, as well as substantial drawbacks when the issue is control.

Current economic and legal institutions, then, virtually mandate investment in publicly offered stocks and bonds in order to reach some degree of control over your assets and to reach your investment goals. There is also the issue that, having reached a level of “capital self-sufficiency” by following Andrew Carnegie’s advice of putting all your eggs in one basket and watching that basket very carefully, you will follow the prudent rule of taking whatever eggs may be overflowing and diversifying them to spread out your investment risk. For both of these goals, domestic and foreign exchanges offer a number of advantages as well as some serious drawbacks.

In almost all investments on the secondary market (as transactions on stock exchanges are called), minority shareholders have virtually no power, and thus, practically speaking, no meaningful control. For this reason, it is vitally important to keep a close watch on those economic and political factors that do have the power to have a significant impact on secondary markets for stocks and bonds.

If your goal is short-term investment for immediate gain, the current political and economic situation in the United States represents a unique opportunity to buy low with the expectation that, as they always have in the past, matters will improve immediately after the upcoming elections. Those with the liquidity to invest now have the possibility of seeing substantial gains in the short term.

If your goal is retirement or any other long-term objective, the foreign markets offer the opportunity to take advantage of rapid economic growth, particularly in Asia, and most particularly in China. Europe, while temporarily doing better than the United States, is tied too closely to the U.S. economy, and will eventually begin to decline unless serious steps at reform are taken. In addition, due to the decline in the dollar, European stocks are overpriced relative to those in the United States. While Asian stocks are also overpriced, they have the growth potential to offset the decline in the dollar, which Europe does not have.

Unless the United States soon adopts an economic and tax reform package along the lines suggested in Norman G. Kurland’s book Capital Homesteading for Every Citizen, there will be a continual decline in both the dollar and the domestic stock market, making the long-term investment potential more risky, and enhancing that of the Asian markets.

By: Keith Harmeyer

Some use it to create business empires, others use it to lead nations, and still others inspire entire civilizations to greatness. I believe, in fact, that this single skill is so critical that it is virtually impossible to succeed at anything without it—at least not in any meaningful way.

I’m not talking about positive thinking, assertiveness, negotiating skills, an improved vocabulary, appearance, education, or “the secret law of attraction.” All these things are great and might even contribute to success, but they’re of little value without the skill to which I’m referring.

So just what is this superpower, used every day by the world’s most successful people to achieve greatness? Simply, it is the ability to put yourself in the place of another.

Can it really be that easy? Just a mile’s walk in someone else’s shoes? Well, there’s a bit more to it than that. But if you can truly understand and appreciate a given situation from the other person’s point of view, there’s little that you can’t accomplish. In order to achieve almost any type of success—that is, to get something you want that you don’t have now—you must enlist the involvement of others. For example, if you’re in sales and want to achieve greater selling success, it is necessary for customers or clients to buy more from you. If you are interested in fast tracking your career, you’ll need the acknowledgment and recognition of the person or people to whom you report.

Corporate leaders take their businesses to new heights by understanding the needs of their customers, employees, and shareholders, and providing the value these groups demand. Politicians must speak to the desires and hopes of voters in order to get elected. Spiritual leaders touch the hearts of entire populations, inspiring great acts of sacrifice, responsibility, and charity.

Why not give it a try, and see what kinds of results you achieve?

By John Riddle

Stress in the workplace can lead to serious health problems, according to medical researchers. They estimate that 75 to 90 percent of all visits to primary-care physicians are for complaints and conditions that are in some way stress related. Every week, over 115 million people take some form of medication for stress-related symptoms. Regardless of your position within your company—vice president, secretary, data-entry clerk, or even CEO—you are at risk. Stress does not discriminate.

A survey by Northwestern National Life Insurance Company found that twice as many workers today consider their jobs “highly stressed,” compared with workers in 1990. The survey also found that about one-third of respondents seriously consider leaving their positions because they feel their jobs are too stressful. About one out of every seven workers will actually quit to escape the stress.

The official definition of stress is a condition that occurs in response to actual or anticipated difficulties in life. Stress at home is difficult enough to work through, but for millions of people who find their source of stress is at work, life can be a real nightmare. That stress, if left untreated, can lead to a wide range of medical problems, including high blood pressure, sleep disorders, and back pain. Additionally, stress can play a role in circulatory diseases such as coronary heart disease, sudden cardiac death, and strokes. It can increase your blood pressure, constrict your blood vessels, raise your cholesterol level, trigger arrhythmia, and speed up the rate at which your blood clots.

Even if your work is something you would normally enjoy, allowing different work elements to wear on you will wear you out. So if you are feeling stressed on the job, keep these tips in mind:

Manage your time Many people get stressed because they have trouble completing tasks on time. Look at your schedule and set your priorities. Know your own capacity, and don’t willingly take on more projects than you can reasonably complete.

Learn how to deal with conflicts When dealing with a difficult situation, keep your cool. Take a few minutes to calm down, and ask advice of people in your business who have successfully dealt with similar problems. Elevated tensions create stress.

Fit exercise into your daily routine Exercise is a great way to relieve stress, so take advantage of extra-long work breaks or the time between work and dinner to “get moving” before you get on with your evening.

Eat healthy Stop eating junk food and fast food for lunch and snacks at work. Your body will cope with stress a lot easier. Reach for a piece of fruit instead of that bag of chips.

Express your emotions Don’t keep your feelings bottled up. Talking to a friend or a coworker about your feelings is a great way to combat stress, but choose wisely—participating in workplace gossip may increase your stress, not release it!

By Jon Kenton

Making decisions is a fact of life. We make many every day—what to wear, eat, or watch on TV. Business-decision making is one of the key elements necessary to build and manage a successful business. Although these decisions tackle more heavyweight topics, they nonetheless must follow the same process as making everyday decisions. We must assemble all available facts, assess the situation, develop alternatives, and then choose one of them.

The ability to consistently make good and timely decisions is based significantly on the availability and accuracy of the data and information you have—a solid, up-to-date fact base. Business and competitive intelligence are two of the primary strands required by most businesses. Whether you have the staff and resources to have a permanent function or outsource to specialists as required, the benefits from gathering intelligence cannot be underestimated.

Business intelligence

Business intelligence is all about understanding as much as possible about the markets you focus on and the business and economic environments in which they operate. Before starting a new business or expanding into new markets, the creation of a business and marketing plan is necessary. A vital part of such a plan—business intelligence—helps to paint the opportunity picture. It also enables the construction of a model that can evaluate business outcomes based on potential changes in the environment. There are two main elements: target markets and environment.

Target Markets

Target markets are the definition, size, and growth of the market your products will serve. For them to be most useful, they should be divided into segments in order to identify which parts of them may be most attractive to your business. Take the automobile market, for example. It is subdivided into categories—compact, midsize, SUV, truck, sport, and so on, and there are other attributes such as economy and luxury. Each category or segment has its own specific attributes, for instance, 2WD/4WD, petrol/diesel/hybrid, manual/auto. For each combination, it is possible to identify how many units will be sold in a given period. Multiplying this by a price factor leads to the market size in dollars. No matter your business type, you can identify divisions and segments relevant to you, and will be able to associate unit and dollar volume estimates.

Environment

Every business is affected by environmental factors that it cannot necessarily control. These factors may positively or negatively have an impact on potential revenues and profits. The key here is to identify which elements will affect your business and how they interact with one another, as well as with internal factors that you can control. For example, if demand is less, should you lower prices to stimulate sales?

The environmental factors will be different for every business, and some will be more obvious than others. In the following examples, consider your environment and write down the factors that affect your business. Keeping a watch on them will let you plan better.

Interest rates Lower rates mean cheaper lending and more cash in your customers’ pockets, as well as cheaper borrowing costs for your business.
Exchange rates Foreign exchange rates can lead to a more or less healthy tourist trade, which is important for businesses such as hotels, restaurants or anybody catering to visitors.
Weather Rain illuminates leaks and is therefore good for the roofing business; not so good for golf courses. Extreme heat is great for AC companies and ice cream and cold drink sales.
Regulations Think of how tax changes might affect your business.

One of the most crucial environmental factors is the existence and activity of one’s competition. This leads us to our next topic.

Competitive intelligence

Simply put, competitive intelligence focuses on identifying and tracking all the other companies that offer the same or similar products and services as do you. When considering the competition, it is important to not ignore the “similar” category, as these represent valid alternatives, even if you don’t think so, that a potential customer of yours may choose. It is the information gathered from competitive intelligence that allows you to make decisions about positioning your product in the eyes of your customers to highlight why they should buy your product or service rather than one of the many others.
Does your product have distinctive features? Maybe it’s made from 100 percent recycled material (attractive to the “green conscious”) or is significantly faster, smaller, or lighter (all the better for portable items) than your closest competitor. If so, highlight these differences in your marketing materials and efforts, and make sure your potential customers can see the benefits and know they won’t be able to get the same anywhere else.

There are many questions that competitive intelligence aims to answer. Develop your own list. Here are a few to get you started:

•    How many competitors are there in the same geographical area as you?
•    What products do they have?
•    How do their products and services compare to yours in such areas as features, prices, and quality?
•    Does you market have seasonal dynamic pricing? If so when do your competitors change their prices, and how much do they change them?

When it comes to the bottom line, revenue and profits are generated based on a sound strategy and plan, and the many decisions that are made along the way. Good decisions mean good business. If you want to make good decisions, you need all the facts, so go out and collect some intelligence!

By Jon Kenton

Have you ever driven a car blindfolded? I hope not; it would be a crazy thing to do—right? How would you know where you were going? Where would you turn? What about other cars, stoplights, pedestrians?

With that harebrained notion in mind, have you ever tried to run a business without a plan? Great ideas abound, opportunity is out there, and motivation is rarely lacking. Good business plans, however, are rather scarce. Without a plan, how would you know where you were going? Which way will you turn at decision points? What about your competitors, cash flow, and customers? Having no plan at all is most definitely crazy.

To maximize business opportunity and success, it is essential to establish a clear set of goals and objectives. A well-defined plan, used as a touchstone, helps to stay focused on the ultimate goal. Once you go to the trouble of actually creating a plan, don’t pat yourself on the back, place it in a drawer, and go on to something else. Read the plan regularly—live it, breathe it, and keep it up-to-date. Regular reviews should be part of an overall strategic planning process. Take a hard look at your plan once per quarter. Ask yourself if you performed to expectations, and if not, why. If you came upon a “stoplight” in your path, make course corrections, revise the plan, and move on.

Many people avoid detailed planning, as they think it’s complex and too difficult to accomplish. It does take some effort, but it’s far less complex than you may think. Sure, major corporations have a huge staff with years of experience, and MBAs dedicated to planning, but it is still possible for every business—no matter what size—to have a comprehensive plan.

Your business may have specific needs that must be addressed. However, start with a solid foundation on which these specifics can be built. There’s a methodology that you can use and adapt called “6 Ps and an S.” Every business should plan around these seven fundamental elements.

Product The definition of the product or service your company makes and sells. Make sure you know what your product is. Write it down and define its extremes so you know what you do not or will not sell. Many companies fail because they try to do too much. Too many products and not enough customers is a bad recipe.

Place The market, segment, geography, and channels where your products are sold. Have you researched your market to find how big the opportunity is, and who else is already there? Identifying an untapped niche can be worth its weight in gold. If there are a lot of people already there, what will you do differently?

Position How you will position your product against your competitors and differentiate yourself in the marketplace. Once you have identified where you will play, make sure you know as much as you can about the other players. Then decide on your approach for combating them and showing your potential customers why they should buy from you and not your competition.

People Resources required to ensure optimal success of the business. Make sure you identify all the staff and resources you will need to keep the product flowing. Do you need special skills on your team? How many customers can you service or how many products can you ship, and with what head count? Plan your staffing growth based on specific business-level triggers. Plan for different scenarios. Which of them will generate more cash flow, and which more profit?

Price Financial analysis of costs, revenue, overheads and, ultimately, profit—the money stuff. All these are business fundamentals. Build realistic projections. Make sure you price to match your position. Think ahead and plan for where you may invest when the cash comes in faster, or cut when it doesn’t.

Promotion Choosing the optimal vehicles to promote your brand and products to your selected target audience. This is the marketing plan. Nobody will come knocking if he or she doesn’t know you exist. Allocate a specific budget. Think outside the box, and create a mixed portfolio of marketing options. Don’t be tempted to spend it all in one big advertising bang.

Service What services are required to support your product or generate extra revenue? Delivering product is only half the battle. How will you deal with questions, returns, and onsite repairs? For many offerings, it is possible to create service plans for your customers and have them pay. Consider whether you could generate extra revenue this way. It may also generate greater customer loyalty.

There is much thought and effort required to build your plan, but it is easier than you think. Use the 6Ps and an S to guide you, and you will have all the major bases covered. Think through each of the elements and be as comprehensive as you can. Once you have the plan, execute it, and remember to revisit it regularly and make changes as appropriate. The end result will prevent you from driving your company blindfolded.