Wednesday, August 29, 2007

Hire staff or add a partner

This post is for all the mompreneurs who are expanding faster than they know what do! Nicole of Westcoast Baby writes: As our business has been rapidly expanding, we need to hire staff to help out. I was wondering if you brought on family or friends as employees and how you feel about this.

Hiring family or friends can be a double-edged sword. On the plus side, you know them. You know their strengths, have a clear understanding of their skill set, and enter with a level of trust established. But on the flip side, what if they perform poorly on the job? It can be more difficult to approach your sister or best friend than it is someone you don’t have a lengthy history with. And if things don’t go well this could damage your relationship long-term.

I can tell you that I have had a positive experience regarding the involvement of family at Robeez. In 1999, my brother joined the company as one of my business partners. Later, my husband joined Robeez as a sales rep.

When hiring your first employee(s), you need to consider the skill set you require. Right now, you are probably doing a little bit of everything from developing your website to packaging boxes. Do need to hire someone that packs and ships orders so you can focus on business planning? Or do you need some help with marketing? Perhaps a freelancer would be more appropriate than an employee. Take a look at your budget and your own strengths to determine what will work best.

Beyond the skills your new employee brings to the table, their personality will also have a impact on your company. The most important thing I can say about hiring employees: take the time to find the best fit. In a fast, growing entrepreneurial company, everyone needs to be a team player. Look for someone who isn’t afraid to jump into a wide variety of projects. Early on, I had an employee who was hired for marketing and customer service but if it was a busy day in packaging and we needed to get orders out, she was back there stuffing shoes and taping boxes.

From my experience, these are the key areas to focus on when hiring your first employees are communication and values. What values are important to them? They should be similar to your own. How do they treat coworkers? How do you expect them to treat customers? It’s important that whoever you hire, they need to complement you and your partner’s personalities.

And the second half of Nicole’s comment: You had mentioned that you brought on your brother and a third party to help with Robeez growth, was this complicated? We are currently a partnership but are interested in taking on a silent third party? Any advice?

I believe you need to equate adding a partner to your business to getting married. It is essential that you have the same vision for the future. Don’t enter into an agreement lightly. Be sure to involve legal counsel and draft a shareholders agreement to ensure everyone’s interests are protected.

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Wednesday, August 22, 2007

Crafty advice

The following question comes from Joanne, co-founder of Krafty Kidz Creations, a collection of handmade children’s craft kits. Here’s her situation:

We just started in April this year, testing the waters to see what response we would get. The response has been huge and now I'm very intimidated. We too, don't have a lot of money and resources to get our business running at a higher capacity.

I have heard there are grants for women entrepreneurs but I can't find any information on them, except from sites that want a $400 registration fee to provide the information. Do you know what grants there are or where I can find the information without paying a fee?

I’m sorry to say I haven’t heard of any grant programs. I came across this thread on the subject.

I think you are going to need to look for other avenues of financing. I know this can be intimidating at first, so I encourage you to carefully consider where you want your business to go. I’ve mentioned them before: Women’s Enterprise Centre has a fantastic set of resources for women entrepreneurs.

And her question continues below:
Also, to date we haven't been purchasing our supplies from a wholesaler but from local discount stores instead. We don't have the volume to purchase from wholesalers. We have been told there is a minimum purchase of $500-$1500 depending on the wholesaler. Do you know of a way around this minimum volume?

There are few options I can recommend here:

  • Shop around – There are likely a number of wholesalers providing craft materials in your region. I recommend contacting a number of different providers to find the products, prices, and financing that will work best for your business.
  • Appeal to their softer side – Sometimes it just takes a little more background for the wholesaler to know you are committed. Talk to them, show your product, and explain your future plans. If they’re smart about customer service and you’re close to the minimum, they’ll get you now as customers before you grow.
  • Find a partner – Network with other small businesses that need similar materials; perhaps a scrap booking company or a preschool. Partnering with another company allows you both to meet the minimums.
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Tuesday, August 21, 2007

Starting off on the right foot

So you have a great business idea. You can see it clearly in your mind. Your gut tells you people are going to love it but you don’t know where to start. This is the point where many would-be entrepreneurs get stalled.

Here’s a recent email from an Arizona mom: I have a great idea for a soft book toy that I would like your advice on. What were your first resources in regards to the business aspect(s) of your product? What books do you recommend for someone like me? I am curious about patent, research, design, marketing, legalities, and understanding the pre-production phase by taking a look at how you achieved this?

Overwhelmed? You’re not alone. When I first started Robeez, I knew I would need to glean all the information I could in order to make the most of my business. In my opinion educating yourself is the best place to start.

  1. Entrepreneurship courses – Whether through a local college, adult education program, or online school, there are a wide range of courses available for entrepreneurs just starting out. I took a local night school course on starting a small business. Following that, I took a six-week course on entrepreneurship. These courses touched on all different components of business from sales and marketing to patents and legal issues. (These courses can be a great networking opportunity too. The instructor of my entrepreneurship course later became one of my Robeez business partners.)
  2. Network – Their products or services likely differ from yours but there are similar learnings when starting a small business, no matter the industry. I recommend two networking avenues that were successful for me: A) Business contacts – I spoke with other vendors at tradeshows, store owners, and suppliers to learn more about the industry and to get ideas for how to manage Robeez. B) Business networking group – This could take place online or in-person. Find a group that meets on a regular basis to share ideas, gain advice, and learn best practices. One of the groups, I’ve mentioned before, FWE, is a great example.
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Monday, August 13, 2007

Building your business’s reputation

In the early days of Robeez, I remember telling people about my home-based business and getting puzzled looks in return. When you first your business, especially a home-based business, you need to build credibility. And this can take time. Here’s an email from a mom facing this challenge:

So this is my dilemma: My husband and I really need some business partners but our business is an at home based business and everyone is so leery of them, thinking they are "pyramid schemes.” Any advice on how to get the word our about the business and have people take a look at it?

My first question would be: why do you feel you need another business partner? Are you looking to share the workload or find financing? If you are looking to share the workload, you may want to consider hiring someone part-time or on a contract basis. Consider your skill set (and your husband’s) to determine where you need help. For example, I had experience in financial management but not in sales. So I hired a sales rep to increase distribution of Robeez.

If you are trying to find financing, you may need to consider other options. See my post “Finding the Money to Get Started” for more on this subject. I added two partners to the Robeez business in 1999, five years after I started. The business had reached a point where I could no longer manage it by myself. (Annual revenues were around $500,000.) I had about two or three full-time employees and a handful of sales reps but I needed to share the leadership responsibilities.

It’s difficult to recommend the best way to build your business without knowing more but here are a few more general tips I’ve learned over the years:

  • Generate referrals through word of mouth – Provide happy customers with a means to refer your business such as a referral bonus or personal thank you.
  • Find a mentor in your industry who can give you support – Find a local expert in your field who can offer their advice or experiences.
  • Join a local networking group for your industry – Talking with people who are having similar experiences often provides clarity. For example, I am a member of FWE, a group for entrepreneurial women.
  • Market yourself – See everyone as a potential customer. Always present yourself in a credible way. Voicemails, emails, anything you’re consumer “touches” is a reflection on your business.

I could write a book of all the tips I have. The more specific the question, the better I can answer it. Keep on writing. And don’t worry if you don’t see your answer posted yet. I take the question in the order they are received and will respond as soon as I can.

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