Archive for the ‘Business’ Category

5 lessons from our first season

Author: Robin Browne

I’m writing this because I just read a great post on the Open Heroines blog called I Pledge to Write – that reminded me how important it is to write (and how much I love doing it).

We recently wrapped up our first season as Puresteam Auto Spa owners and it went very well, according to many measures.

Here are 5 key things we learned from our first season.

1) The best marketing is solving a customer’s problem. We turned clients with whom we had issues into Puresteam evangelists by solving their problems quickly and with no hassle.

2) Students are great, except when they’re students again. If you hire students, and you operate in September, you have to hire a lot of them part-time in September to ensure you’re covered.

3) Hire a Big Data person (even for little data) or become one. We hired a guy to do our payroll and I handled everything else like tracking revenue and expenses. The payroll guy was well worth the $50/month.

We didn’t hire anyone to set up a business intelligence system with the result being we have lots of data – but little intelligence.

We have the data partly thanks to having chosen to have only one bank account. That made it easy to download all the transactions which I then imported into MoneyDance financial software on my ancient MacBook. MoneyDance let’s me tag transactions with categories so I can figure out how much we made, and how much we spent on different things. However, we don’t have our own system to track things like what times of day or week were most popular, who our clients are, where they’re from, how they found us or whether they were happy with the service.

4) Make sure you have a system that easily captures customer email addresses. Communicating with your clients is key to success, whether it’s to thank them for their business or ask them how can you improve yours. As a franchise, we have to use certain tools supplied by the parent company. Much to our dismay, the booking software the company uses, Setster, doesn’t have an email export function that allows us to easily build a customer email list: we have to copy and paste each one from Setster to whatever database program we choose.

5) Don’t only define success by how much money you make. We came out almost exactly even for our first season. Our revenue matched our expenses including payments on our debt from buying the business. This is good considering most businesses lose money in their first year and take 2-5 years to become profitable. But there were many other benefits beyond the numbers.

We learned a ton about how to buy and run a business. We showed our sons an alternative to looking for a job: creating them. And we created a company that has become a community partner for causes about which we care deeply.

We also employed five young people, 1 Nigerian Canadian guy, 1 Vietnamese Canadian guy, and 3 Muslim women, two who wear Hijabs. Considering the vast majority of our clients are men, having the 3 ladies on staff was breaking down stereotypes everyday.

Not bad for our first kick at the can.

Following the advice of most of the business books I’ve read, I sought to build a team of advisors for our business, some paid, some not.

I started by asking a friend of ours who worked for many years doing business development with a large software company. In his case, “business development” meant buying up small companies and, to do that, he got very good at evaluating their value. He told me some key things to confirm before buying the auto spa like: Do they have any debt? Do they have the trademark rights? Can they provide at least three years of financial records, preferably ones that have been audited by an independent accountant?

The next people I brought in were a lawyer and an accountant – who have both paid for themselves with their advice. I was referred to them by a friend who works in high tech and is a master networker. He’s a member of the Ottawa chapter of an international networking group called TiE. So is the accountant.

One of the first decisions our lawyer advised us on was whether to structure our company as a sole proprietorship or a corporation. I figured creating a corporation was expensive and took a long time – and it was getting close to opening. However, I had also heard that a corporation offered better tax saving opportunities than a sole proprietorship. I was right about the tax thing and it’s very simple. As a sole proprietorship, you get taxed on the money you make at your personal tax rate, around 35% in my case. However, our corporation only pays half that –  the corporate tax rate of around 16%. Our lawyer also told me it would cost about $1500 to incorporate and take two days. And with that, ConsciousImages Inc. was born.

Our accountant told us about the HST we have to collect from customers and give to the government. But he also told us that we get to submit how much we paid in HST as part of our own expenses, like supplies, and claim that against what we collected from customers  (kind of like tax deductions). And he told us to get registered right away so we could claim the HST we paid on the price of the business.

The lawyer and accountant aren’t cheap. But you get what you pay for and together they will save us thousands of dollars.

Next, there was the issue of payroll: could I do it myself to save some money or did we need to hire someone? One of the other franchisees referred me to his payroll guy who I hired after a 15 minute chat about EI, CPP, and taxes – and after he told me he would only charge $50 a month.

We’ve been open a month and things are going great! One thing is already clear however: one of the next team members we will need is an IT specialist. We’ll need her to set up and train us on the equipment we’ll need to capture and use the Big Data relevant to our company. Things like: what times of day/week/season are busiest? What part of the city do most of our customers come from? How did find they find out about us? What are our most popular packages? Are there any generalizations we can see with problem customers?

Time to replace my ancient MacBook!

With any business, you want hire employees that get along. That’s why one of the number one things on every employer’s mind during interviews is: will this person be a good fit for the team? This could not be more true for our business since it requires just two employees who spend the entire day together in and around a canopy the size of a one-car garage. If they don’t get along, the days will be very long for both of them, and could lead to high turnover.

So it’s in our interest to hire people who will get along really well. But how do we do that? We can’t do it by trial and error. We need to nail it the first time to avoid work interruptions due to people leaving.

One of the other franchisees said they look for employees who have the right attitude and are team players – and that has worked for them.

For us, having the right attitude means having an environmental consciousness that recognizes that we’re not trying to save the planet -we’re trying to save ourselves. We also want folks who want to work for a company that does business in a way that respects people – whether they’re customers, employees or suppliers. If all our employees share these values, that’s a good basis for a good relationship.

One of the key ways to get employees is to place a Help Wanted Ad. The trick to attracting the right kind of people is placing the right kind of ad. That means ensuring your ad clearly reflects your business’ values. Here’s part of our ad that we put on the Ottawa edition of Ebay-owned Kijiji (the first was free and the second one we paid $30 for better visibility):

Puresteam Auto Spa is hiring! Do you want to keep our planet a place we can (and want to) live? Would you enjoy working in a team of two, with minimal supervision? If so, lets talk! We want people who care about the environment and are friendly, reliable and punctual, among other things.

It seems to have worked because we got only three responses – and hired two of them! Our interviews were really just to quickly meet the people and let them see that we’re real (and really nice ;)).

We have one returning employee who is great. We had a meeting so she could meet the new hire she’ll be working with and they got along beautifully. Looks like we’re off to a good start!

People. Planet. Profit.

Author: Robin Browne

As you can see, I changed the name of my blog to Social Biz: People. Planet. Profit. Here’s why…

A few months ago I had lunch with a business colleague and we ended up talking about a lot more than business. Trump had happened so, me being me and my colleague being a white guy with an Indian wife, we got on to the subject of racism. He had seen the Indian caste system up close and how deeply ingrained it was and he worried that “all these “isms” would never go away.”

I thought for a moment then said that I thought they would never go away as long as we have a dominant economic system that rewards them. Trump is the ultimate example of our current system rewarding nasty behaviour. Slavery was another. But if we change that system so it rewards humane behaviour, I think they will begin to fade.

So, following Gandhi’s “be the change you want to see” philosophy, we are looking at buying a business and plan to run it in a way that puts people and the planet before profits. The business is an environmentally-friendly car wash service – but more on that in upcoming posts.

One of our first challenges is to market the biz in a way that respects people. You may not be surprised that this wasn’t a worry that kept early ad men up at night. I never saw the wildly popular TV show, Mad Men, about sleazy ad execs, but reading about the history of advertising in Tim Wu’s “The Attention Merchants“, I learned that one of the first things that kept them up was trying to come up with even grander bogus health benefit claims to sell more snake oil (literally). They kept selling bundles of oil based on bogus claims until both the public and the government got wise to them. They were forced to stop it but apparently not everyone learned their lesson. In 2010, “Yogurt maker Dannon paid $56 million US to settle charges…over claims that the probiotic bacteria in its yogurt could aid regularity and prevent colds or flu.” In 2012, Health Canada told the maker of Cold-Fx to stop labelling its product with the claim that it “Stops Cold or Flu in its Tracks.”, saying the only approved claim for the product was that it “helps reduce the frequency, severity and duration of cold and flu symptoms by boosting the immune system.”

So, we have to make sure our claims are true and not misleading. This is especially true of the “environmentally-friendly” claim as it will be one of the key points distinguishing us from the competition.

Then there’s the challenge of getting the right people to see the ad. The obvious choice is Google so we can attract people already searching the web for a car wash. However, that means working with a company that, although it appears to have behaved relatively benignly since it began in 1998, has a disturbing amount of power its leaders could use to do really bad things if they wanted to (see trailer for Tom Hanks’ new movie The Circle for an example). A key part of their power is that they’re the only real choice for search advertising.

So we have little choice but to go with Google, which isn’t good, but we have search marketing which past advertisers didn’t and that is good – sort of. Search advertising lets us target our ads to people searching for car washes. In fact, it lets us target people within a certain radius searching for car washes. Our concern, however, is avoiding the “creepy Google effect” I sometimes experience when I get ads for things I don’t remember searching for. We want our ads shown only to people, near by, who have demonstrated their interest by searching online for a car wash.

So we’ll start our social business journey by aiming to have ads that are effective, honest and not annoying – and that might be all we need to distinguish ourselves from the competition.

This is a story about why it’s so important to take action on ideas: because it’s not about the success of the idea. It’s about what you learn through trying to achieve that success.

People take interest when you take action

There are a couple of university radio stations in our town and one of them has a long-running show focussing on local people who are making things happen.

We know the hosts so I emailed them about SpellWizards and they asked to interview us. Now, neither of my boys had ever been interviewed on the radio before and were apprehensive at first. However, after explaining that the fear they were feeling was “good” fear, I convinced them to go for it.

Preparation is key to success

Next, the host emailed us questions to which we wrote answers, in plain language – just the way the boys talk. Then we practiced with mommy playing host. Then we practiced again – and again.
I’m still trying to get the audio file of the interview to post so you can judge the result for yourself, but we think they did pretty good! Although they had their answers in their hands (an advantage radio has over TV), they didn’t sound like they were reading and they even felt confident enough to ad lib bits!

Lessons learned

What the boys learned from this:
1) Take action and people will take interest.
2) Being well prepared is key to overcoming the fear of failure.
3) How radio interviews work.

Let the learning continue!