Does FaceBook Actually Help Your Business?

Ok, I joined Facebook last week. I now have 131 friends that I can share my family pictures with, and more importantly, share the important facets of my life...like "I'm sitting on a airplane going to Cincinnati," or "I'm freezing at my son's soccer game," etc.

So far, I've caught up with some college friends, a few former high school teammates, some clients and prospects, a high school girlfriend and I now know when everyone leaves town for vacation or gets the flu.

The problem is that I found out most of these things at the office.....when I should have been actually working to make a profit for my business.

As any business owner will attest, employee focus is one of the most difficult challenges in helping employees become successful. Social networking (even though I use and love) is yet another distraction for many workers.

I'm now on Facebook, LinkedIn and Twitter, all great tools, but here is the question: When are these tools helping me serve my customers and pay the company bills (the real reason we all work) and when are they sapping my productivity?

It's a tough question and a question all business owners will soon need to answer. Some businesses are banning Facebook from their company computers. Others are waiting to see how these tools flesh themselves out in future. I'm not sure there is a right or wrong answer, we're all trying to learn and adapt to these social networking sites.

Now, since many have handheld, Blackberry-type devices, even if you ban Facebook from your company computers, employees are still within reach.

Could there be a day when cell phones and Blackberry devices are also banned from the office? It is happening in colleges.

When deciding to allow employees access, I think it comes down to the question I posed earlier: Does the employee's participation during business hours help your company reach its goals? Don't know the answer? You'd better start thinking about it because businesses of all sizes will soon have a big decision to make.

--Ron Ameln, SBM

St. Louis' Slow Economic Recovery And Small Business

Dave Nicklaus from the Post-Dispatch had an interesting article today (10-25) about the area's history of slow economic recoveries. The expert he interviewed for the story, Jack Strauss of Saint Louis University, believes the St. Louis economy is so sluggish during recoveries because of its dearth of small, fast-growing businesses. This seems to make sense. After all, it's small business that usually creates the new jobs and pulls communities out of economic rough patches.
It's no secret that studies have shown St. Louis has a low rate of business startups and lacks an entrepreneurial culture.
It's too late to turn around for this economic downturn, but there are some things the region can do before the next downturn. Here's three things we can do today:
1. Get Our Leaders Onboard. It starts at the top. Stop with the condescending talk about how important small companies are and start putting your money where your mouth is. This goes for RCGA (quit spending money to lure businesses from other regions) and use it to help our own homegrown firms prosper. There are many successful small firms that can become future Fortune 1,000 firms, but only with support. This goes for civic progress, state and local politicians and communities as well. Do our leaders realize that 95% of area companies have less than 20 employees?
2. Change The Mindset of Area Lenders. There are MANY area lenders that won't even talk to an entrepreneur unless his business has $5 million in revenue. Interesting...didn't Build-A-Bear, Enterprise, World Wide Technology, Pangea Group, Scottrade, etc., all start out with much less in revenues? I'm not asking to take risky loans, I'm saying maybe you should think outside the box when it comes to funding area companies. Maybe more programs like the St. Louis Business Development Fund (pooling many lenders together to lesson the risks) would help. Listen...if we as a region don't nurture some of these smaller firms, where will the bank's find these $5 million companies to lend to 5 years from now? Oh, right, we'll have RCGA steal one from Cleveland!
3. Change The Mindset In St. Louis. This is a tough task for a town that wants to know where everyone went to high school. I know this used to be a corporate town and people here just flat out don't like to take risks. Well, that's part of the problem. This is a risk-reward society. The ones that take the most risk get the greatest rewards. We've got to start embracing new ideas and take a chance every now and then. In some towns, an entrepreneur who failed at a business is seen as experienced. In St. Louis, that entrepreneur is seen as "no good," "washed up," a "failure." If we're going to encourage more entrepreneurship in the region, that mindset has got to change.
--Ron Ameln, SBM

BBJ: The Only Economic Indicator I Need

Back in the mid-90s I went out to speak to a group of individuals attending a Businesspersons Between Jobs (BBJ) meeting. BBJ has been around for years as a resource for those displaced from their jobs and looking for a new beginning. I spoke about starting a business. At the time our economy was booming and there were about 20 of us in a school gymnasium.
A few months ago I went back to speak on the same topic. There were 22o and another 50 or so standing in the back. There are many gauges for the success of the economy as we start to head out of this recession. Thankfully, most of those numbers are looking good.
The number I'll focus on is the weekly attendee list of BBJ. Until we get that number back down in the 20-50 range, we won't fully recover.
--Ron Ameln, SBM

Business Is Always About The Fundamentals

I remember the late Bill Walsh, former coach and executive with the San Francisco 49ers talking about the latest offenses in the NFL. He said, people have the "West Coast Offense, the Run-And-Shoot, the Power-I, but at the end of the day, it's the team that blocks and tackles better that always wins. Those fancy offenses are great, but you must block and tackle better than the opposing team to win, regardless of your fancy offense."
I try and keep this in mind as I hear businesses and their plans for social networking. Sometimes, I think they forget about blocking and tackling. Now, I'm not saying don't get on Facebook and Twitter and all of that. I'm involved in them. I'm just saying that your business success will come down to business basics and fundamentals. Facebook isn't going to help you get those.
In the early-to mid-1990s there were local businesses that slashed marketing budgets because with the advent of the Internet, they could pull clients in from all over the world, or so they were told. They were told they didn't need the old ways of branding, marketing and prospecting. One photographer stopped marketing and spent thousands on a website. Well, so did thousands of other photographers. The business never came.
For most businesses, the Internet has been an invaluable resource and efficiency tool. However, if you had problems selling your services before the web, you usually had the same problems after. It wasn't a cure all by any means.
It's blocking and tackling. The hype about social networking is great and it is here to stay. Just don't ignore what it takes to be successful. Sometimes, when times are tough, we search for the quick fix. Maybe we should revisit the fundamentals of business.
-Ron Ameln, SBM

Speeding Up The Economic Recovery

I just listened to an interview of Fred Smith, Founder of FedEx, concerning the economy. He's optimistic as his company has seen an increase in all business sectors the past few months. Our company has also seen this uptick.

The economic numbers are starting to perk up, and most economists agree that we are now in positive territory and the greatest economic downturn since the Great Depression is over. Now, it's time for a slow recovery. The question is: How can we speed this recovery?

Historically, consumer spending and small businesses have fueled recoveries. Hopefully, consumers will start spending.

As far as small businesses, you can count on their help only if we can get liquidity into the marketplace. Tight lending has caused many businesses to stop growth plans and others from starting businesses at all. Home equity lines were always an entrepreneur's ticket to living the American Dream. Well, tight credit and a depressed housing market have made this one of the most difficult times for small business owners.

If small business is going to play a role in this recovery, more credit is a must.

--Ron Ameln, SBM

Twitter: Sucking Everyone Into The Next Web Bubble

Remember the days when VC companies would hand millions of dollars to young, hot-shot web gurus. It was a strange time, back then. The VCs were always so proud of themselves: "This company isn't making money, but its burn rate isn't that bad." Wow, what a great investment. My client's not losing that much money.
Most of those companies never made money (were never going to make money) and crashed and along with the tech bubble. You'd think everyone would learn a valuable lesson. Apparently not.
I just finished reading a St. Louis Post-Dispatch article by Tim Barker about a visit by Jack Dorsey, one of the founders of Twitter. Dorsey came to St. Louis as a guest of Webster University. According to the article, he answered questions for an audience of 1,000. Benjamin Akande, dean of Webster's school of business and technology, compared him to Johannes Gutenberg (printing press inventor) and Alexander Graham Bell (telephone creator).
I should seem ironic that a business school would honor Dorsey and a company that has never made a dime in profit. I say "should."
Twitter continues to struggle to find a way to be profitable. "Just wait," say the VCs that just pumped $50 million more into the firm. I'm not as confident. Dorsey and his staff thought they'd be making a profit last year. Didn't happen. They've yet to successful implement their mythical business plan.
Yet, VCs fall all over him and he's honored by 1,000 teary-eyed followers (sort of like the Beattles, without the hit singles).
Don't get me wrong. I like Twitter, use Twitter and would love to see Dorsey and Twitter become a success. But my definition of business success is making a profit. I'd like to see a profit before we start comparing Twitter to the printing press and the telephone.
And, of course, Dorsey discussed a new application that would be out soon. Sounds like the old tech companies that always stayed one step in front of the VCs by promising a new application. (When it looked like money was drying up, there was always a new application.)
It's easy to see why VCs get sucked into these companies. Just like the 1,000 guests that came to hear Dorsey, they get sucked in with the sexiness of the service.
If we can learn anything from the tech bubble, it should be investing in profitable companies.
--Ron Ameln, SBM

When It Comes To Sales, Persistence Is Key

Have you ever heard the expression, “90% of success is just showing up.” It amazes me as I talk with clients and others in the business community how reluctant salespeople are to actually sell. Here are some statistics I find fascinating. When I look at these numbers, the ones that pop out to me first are: 1.) 2% of sales are made on the first contact with a prospect., and 2.) 80% of sales are made between the fifth and twelfth contact with a prospect.

• 48% of sales people never follow up with their prospects.
• 25% of sales people make a second contact with their prospect and then they stop.
• 12% of sales people make three contacts with their prospect and then they stop.
• Only 10% of sales people make more than three contacts with their prospects.
• 2% of sales are made on the first contact with a prospect.
• 3% of sales are made on the second contact with a prospect.
• 5% of sales are made on the third contact with a prospect.
• 10% of sales are made on the fourth contact with a prospect.
• 80% of sales are made between the fifth and twelfth contact with a prospect.

--Ron Ameln, SBM