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How to Run a Thriving Business

Strategies for Success & Satisfaction

Publication Date November 2004
Edition 1
ISBN 9781413301045
Pages 384 pp
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Description

How do you run a business that not only brings in the money, but provides satisfaction and personal growth as well? Nobody can answer that question better than Ralph Warner, who co-founded Nolo in 1971 .

With How to Run a Thriving Business, you'll discover the business philosophy and nuts-and-bolts advice that have let Warner thrive during three decades at the helm of a small business that began in the corner of a bedroom and now employs 100 people.

How to Run a Thriving Business breaks it all down with 17 ideas, including:

  • don't work long hours
  • choose a business you care about
  • embrace your best competitors
  • get and keep a competitive edge
  • innovate now and forever
  • market your business creatively
  • target your customers
  • react quickly to bad news

How to Run a Thriving Business is the perfect read for anyone who's interested in starting a new venture, and for those who could use an infusion of practical advice to get back on track with an existing business.

Table of Contents

Introduction

1. Build a Meaningful Business

  • How a Tiny Business Took on the Texas Legal Establishment
  • How to Make Your Business Meaningful

2. Choose a Business You Care About

  • Plan for the Long Haul
  • How to Stay Interested in Your Business
  • Fire Yourself/Hire Yourself

3. Understand How You Make a Profit

  • Never Be Vague About Money
  • Getting a Quick Plan on Paper

4. Start on a Shoestring

  • Why Small Is Better
  • Spending Money Wisely

5. Get and Keep a Competitive Edge

  • Convincing Customers That You're Special: An Overview
  • What Makes Your Business Special?
  • Keeping Ahead of the Competition

6. Innovate Now and Forever

  • Invention
  • Copying
  • Serendipity
  • A Case Study in How Good Ideas Surface
  • Making Innovation a Continuous Process

7. Target Your Customers

  • Be Specific
  • Go After Both Novice and Experienced Customers
  • Don't Forget Your Current Customers

8. Market Your Business Creatively

  • What Advertising Can-and Can't-Do
  • Other Downsides of Advertising
  • Marketing to Your Target Audience

9. Hire and Keep Good People

  • Don't Hire Casually
  • Don't Hire Problem Employees
  • How to Hire Top People
  • Keeping the Great People You Hire

10. Drive a Modest Car

  • Drive a Modest Car
  • Lead, Don't Dominate
  • Credit Is Cheap-Spread It Around
  • Don't Become Lazy

11. Don't Work Overlong Hours

  • The Importance of a Sane Schedule
  • Planning to Work Less and Make More

12. Learn to Live With Luck

  • The Perils of Good Luck
  • Coping With Bad Luck

13. Pay Your Bills Early

  • The Benefits of Paying Bills Early
  • What to Do When You Must Pay Late

14. Embrace Your Best Competitors

  • Why It Makes Sense to Cooperate With Your Competitors
  • Your Competitors Are Your Natural Friends
  • Your Competitors Can Be a Source of Business
  • Working for Your Competitors
  • Your Competitors Will Help Define Your Reputation
  • If You Can't Say Something Nice …

15. Don't Buy a Franchise

  • Franchises That Are Good Deals
  • The Problems with Franchises
  • Evaluating a Franchise

16. Sell Services, Not Goods

  • You Can Keep Start-Up Costs Low
  • You Can Keep Marketing Costs Low
  • You Can Set Prices at Profitable Levels
  • Retail and Other Nonservice Businesses That Work

17. React Quickly to Bad News

  • Act Quickly on Bad News
  • Fix the Problem, Change Direction, or Quit
  • How to Cut Expenses

Index

Sample Content

  • Chapter 1: Build a Meaningful Business

Introduction

On June 16, 1997, I walked out of my office on Nolo's second floor editorial area to see a group of editors gathered around Steve Elias, Nolo's associate publisher. Steve was holding a single sheet of paper. My curiosity piqued, I joined the others and was just in time to hear him read:

"The Unauthorized Practice of Law Committee [of the State of Texas] has received information that you may have engaged in activities which constitute the unauthorized practice of law #133; you are requested to provide the undersigned investigation with a written response to the foregoing description of your activities within ten days."

Although the rest of the letter was full of similar muddy legalese, one thing was clear -- the legal establishment of the State of Texas had begun legal proceedings against Nolo, which if successful could lead to our books and software being banned from sale in America's second most populous state -- an action that would almost surely lead to lawyers of other states also attempting to suppress our publications.

How a Tiny Business Took on the Texas Legal Establishment

Given the freedom of press protection of the U.S. Constitution's First Amendment, how could Texas even contemplate banning self-help legal books and software? Unfortunately, the organization behind the Supreme Court's letter, the Texas Unauthorized Practice of Law Committee (UPLC), had a ready answer. Their legal strategy was to categorize Nolo and -- we later learned -- several other self-help law publishers, as unlicensed charlatans bent on providing Texas consumers with bogus legal information. Thus categorized, our books and software fell under the provisions of Section 81.102, of the Texas Government Code, a Depression-era law that prohibited the practice of law by unlicensed individuals. Since even the U.S. Supreme Court had found that a state's ability to protect its citizens by adopting professional licensing laws could trump free speech claims, Nolo was clearly in for the fight of its life.

My first thought was to pull all of our employees together and as calmly as possible explain the serious threat we suddenly faced -- before rumors of impending legal disaster in Texas could race through Nolo's headquarters. But before I could step towards the intercom, Steve said "I see this as a great opportunity to spread the word about how Americans really do have the right to access their laws without lawyer intervention. Nolo has been given a golden opportunity to play offense."

As I looked at the Nolo editors gathered around Steve, and saw they were smiling and nodding, I relaxed. Nolo staffers, fully grounded in our "Law for All" mission, were not panicked by the Texas attack. Although there would be a need to promptly explain the dangers we faced to all Noloids, clearly a crisis meeting wasn't required.

Fortunately, when all of Nolo's 80 employees understood what the Texas legal establishment was trying to do, most were similarly optimistic. And it wasn't simply an effort to put their heads in the sand. Like virtually everyone who has been long associated with America's legal system, Noloids knew that being "right" isn't necessarily enough. A well-heeled opponent like the State of Texas can wear down any small business with a long legal battle and millions of dollars in legal bills with the result that even a favorable judgment may only be a Pyrrhic victory.

But Noloids also knew from prior run-ins with lawyer trade groups that fighting back was the best way to spread the word about our little company and its core mission to make America's legal system more accessible, affordable, and democratic. Indeed, way back in 1971 then tiny Nolo achieved its first marketing success after the president of a prestigious California bar group warned that using Charles "Ed" Sherman's Do Your Own Divorce in California was akin to ingesting poisoned Tylenol.

Our initial conclusion that the Texas legal establishment was serious about banning our publications was confirmed in the spring of 1998 when we were instructed to appear at a closed-door hearing before the Texas UPLC in Dallas. This was to be our official chance to respond to charges that selling our books and software amounted to the unauthorized practice of law.

But before I tell you how our battle with the Texas legal establishment played out, let me go back a few years to briefly explain how Nolo's deeply embedded culture of standing up for the legal consumer developed. In 1971, Charles "Ed" Sherman and I founded Nolo after spending several years as legal aid lawyers in the Bay Area. Working for a federally funded, community-based legal assistance program in the late 1960s, we were tasked with providing legal help to thousands of low-income people, most of whom had never previously met a lawyer. As you might guess, helping the legally disenfranchised was an exhilarating experience for a couple of middle class guys still in their mid-twenties. But unfortunately our years as legal aid lawyers were marred by one huge unhappy reality; every day we turned away scores of people with serious legal problems because their modest, working-class incomes rendered them ineligible for free legal help.

To truncate a much longer story, after several years of referring thousands of these working poor citizens to local lawyers we knew they couldn't possibly afford, we sensed an entrepreneurial opportunity. Starting with Ed's breakthrough How to Do Your Own Divorce in California, we founded Nolo to provide self-help legal alternatives to the millions of average Americans priced out of our legal system by the profession's high fees.

Over the almost 27 years from Nolo's founding to our brush with Texas, Nolo deliberately hired and trained people who shared this populist vision. Toni Ihara, Steve Elias, Mary Randolph, Linda Hanger, and many, many more Noloids joined our company drawn by our core commitment to building a profit-making enterprise that was at the same time committed to making our legal system more accessible and democratic.

Among the many ways we built this idea of legal reform into our corporate business, a few stand out. Most important, symbolically, we added the phrase "Law for All" to the word Nolo as our official business identifier. Of more substantive significance, we encouraged our legal editors to testify at public and legislative hearings advocating a more democratic legal system, and for many years devoted roughly a third of our free newspaper, The Nolo News, to legal reform issues such as rewriting laws with plain English, tasking the courts with providing simple forms and instructions to the self-represented, and making courtrooms welcoming rather than intimidating for nonlawyers.

When our print publication was replaced by Nolo.com as the main way to communicate with our fast-growing constituency we included a prominent "Democracy Corner" section to continue our evangelism in favor of leveling the legal playing field for the self-represented. Finally, and probably most important to convincing our employees and knowledgeable customers that Nolo practiced what it preached, we used some of the profits generated by our bestselling titles to subsidize the niche publication self-help law books. Referring to these in house as "soul of Nolo" books, we did this much in the spirit of a pharmaceutical lab that spends time and money to find the cure to an obscure disease. Even though we knew any potential profit would be somewhere between tiny and nonexistent we also knew that the information was both badly needed and available nowhere else. To take just two examples, way back in the mid-1980's we published a title for grandparents who suddenly found themselves parenting their grandkids and were in need of a low-cost legal guardianship. And even earlier, we published another to help financially pressed stepparents who wanted to adopt their new spouses' children.

In short, when the Texas legal establishment challenged Nolo's continued ability to sell our publications in that state, we were psychologically and culturally ready to embrace the struggle. No question we were also sobered by the prospect of the high costs of fighting an organization with huge financial resources. And we were ever mindful that if we took a wrong legal step and lost our fight, the growing but still immature national self-help law movement would likely be set back by at least a decade. But despite all this we also couldn't help feeling excited. And why not -- without intending to, the Texas UPLC had handed Nolo a huge media canvas on which we hoped to paint a persuasive picture of how America's legal profession regularly conspired to place their own profit and privileges ahead of the right of all Americans to affordable legal access.

Enough history. Let's get back to the fight. As you might expect Nolo's immediate response to the UPLC summons was not to roll over and beg for mercy (as several other self-help law publishers did). Instead Nolo challenged the committee! Among other things, we promptly asked:

  • Had any Texas citizens had been harmed by Nolo's products?
  • Which of our hundreds of publications were being investigated? (We even sent the committee a catalogue and a pencil to ease their task of identifying the worst culprits.)
  • What were the names of the people on the UPL committee (theretofore kept secret)?
  • What procedures would be followed -- for example, could Nolo question witnesses?

When the UPL refused to address any of our requests, we immediately went public with the details of the proceedings, something that was all but unprecedented in the hush-hush world of unauthorized practice of law investigations.

Then, with the invaluable help of Austin civil liberties litigator Peter Kennedy, Nolo filed a lawsuit in the Supreme Court of Texas, challenging the secretive, inquisition-like investigatory procedures being followed by the UPLC and asking that the Supreme Court of Texas order the UPLC to disclose the requested information. The subsequent oral argument before the Texas high court was covered by dozens of news organizations.

Although the ensuing legal battle took two years and featured many more legal and technical twists and turns than are of interest here, four key factors -- all stemming from Nolo's commitment to building a meaningful business based on the idea of law for all -- were crucial to our eventual victory. (See www.nolo.com/texas/index.cfm for the full story.)

Unity of Purpose

First, as already mentioned, virtually everyone at Nolo was unified by our business's long-standing commitment to create a more democratic legal system. Also, our convictions had already been repeatedly tested over the years when state bar association officials attacked and criticized both the broad concept of self-representation and Nolo's growing arsenal of books and software (often claiming that a person who represents herself has a fool for a client). We had considerable experience in fighting back. For example, when several prominent attorneys, including the late Melvin Belli, claimed that filling out a simple check-the-boxes, fill-in-the-blanks legal form was akin to doing your own brain surgery, we responded by asking, "Does it really take three years of law school to confuse a hair cut with a major operation?"

Nolo also gained conviction by observing how trailblazers in other new fields acquired strength from the unfair attacks of established economic interests. For example, we studied how pioneers in the organic food business had turned the strident derision of the chemical and pesticide industries into a marketing bonanza. Similarly, it was easy to see that one of the biggest assets of auto safety experts, affordable funeral advocates, and low-carb food pioneers was the over-the-top attacks of the vested interests threatened by their new ideas.

Credibility

A second, huge Nolo asset was that many people in the media already knew and trusted us. When we sent out press releases explaining how the Texas legal establishment was trying to use an obscure law to ban our books, many reporters paid attention because we had long been a leader of the affordable legal access movement. Instead of having to convince them from scratch that our publications offered people of average means a reasonable alternative to $250-an-hour lawyers, we were able to quickly get them to focus on the details of how the Texas UPLC was primarily interested in protecting lawyers' economic turf. As a result, over 1,000 Texas and national media outlets covered our battle, including The Wall Street Journal, CNN, ABC News, The Chicago Tribune, and The L.A. Times. A major New York Times piece was even reprinted in the International Herald Tribune, which meant the story of how Texas lawyers threatened to gun down our small company went worldwide. And every time the Texas vs. Nolo story seemed to be getting stale, a member of the Texas UPLC could be counted on to revive it by saying something inflammatory. For example, panel chairman Mark Ticer told Time magazine that "Ninety-nine percent of the people we deal with [individuals and companies like Nolo charged with unauthorized practice of law] should be in jail." As Steve Elias said to me, "With an enemy like this, you almost don't need friends!"

Public Support

The third important element of Nolo's success was provided by many direct supporters. When we filed our lawsuit against the UPLC, Nolo was joined by both the Texas Library Association (representing the great majority of Texas librarians), and the prestigious American Association of Law Librarians. To say the least, the principled support of Nolo by these two highly respected librarian's groups added greatly to Nolo's assertion that our dispute really did raise fundamental issues of free speech, free press, and access to justice.

Loads of individual Americans, many of them influential, also supported Nolo. Their help took two broad forms. The first involved many hundreds and possibly thousands of people who, after hearing or reading about our story, contacted either the Texas UPLC, the Supreme Court of Texas, or the Texas Legislature on our behalf. Letters, faxes, and emails poured in to these organizations from consumers and businesspeople who had used our books as well as academics, librarians, and even some lawyers and judges who supported our right to publish them. In one example, Thomas D. Russell, Professor of Law and History at University of Texas Law School wrote, "The current attempt to shut down Nolo Press within Texas is a reprehensible and pitiable attempt by weak-minded lawyers who fear that they lose power and wealth when independent-minded Texans buy Nolo Press books and peer beneath the priestly robes of Texas lawyers." (See www.nolo.com/texas/Professor.html for the full text of Professor Russell's letter.)

Customer Support

The fourth key element in our struggle was a group of individual Texans, each of whom had successfully used our books or software (and in the process saved many thousands of dollars in legal fees). We needed individuals to join our lawsuit filed in Austin, Texas, so we sent invitations to 32 customers in that area. Remarkably, 28 said yes. Because such a large group of plaintiffs was simply too hard to manage on our limited budget, we eventually chose six. We included people who had used our materials to start businesses, make wills, and file for divorce. In sworn legal declarations, all these people responded to the UPLC's core charge that Nolo's publications somehow practiced law, by stating that they had no trouble telling the difference between a Texas lawyer and a Nolo book.

The evening before we filed our court papers, all of the plaintiffs gathered at our Austin law firm where Peter Kennedy reviewed the significant legal issues at stake. The atmosphere was earnest and electric. I stood and looked into the faces of the librarians and public-spirited Texans who had volunteered to join our lawsuit with no expectation of personal gain. Their sincere, unselfish gesture to protect access to the law struck me as an intensely patriotic stance and I was reminded of the many thousands of similar protest gatherings which had been held throughout American history from the town meetings that preceded the American Revolution, and the pre-Civil War period's abolitionist movement through struggles of the 1950s for civil rights. Shaking my head to clear it of the ghosts of patriots past, I thanked everyone for his or her principled support and asked each to say a few words about why they had volunteered without any compensation to join a highly controversial lawsuit against the Texas legal establishment. Almost to a person, the answer was that each believed that our little company -- and even more important the self-help law message we enunciated -- was a force for the good in the world. And if the lawyers of Texas thought they could drive us out of the state without a fight, they better think again.

The Finale

And now for the end of our drama. Instead of an Alamo-like showdown, it ended in a series of legal whimpers. In the summer of 1999, in the face of our lawsuit (and the legal maneuverings of several other self-help law publishers), the Texas legislature adopted House Bill 1507 which altered the state's UPL statute to state that the practice of law does not include "written materials, books, printed forms, Internet sites or similar media, as long as the items clearly indicate that they are not prepared by a person licensed to practice law in this state". Of course this had been our position from the start and our books and software had long carried a similar disclaimer.

But quibbles aside, the new law was great news. Not only was our two-year fight finally over, but it had ended on our terms. And although it had cost Nolo a small fortune, our books and software sales -- driven in large part by all the favorable publicity we received -- actually increased enough over the next few years to make us financially whole. And, in a bit of poetic justice, Texans, it turned out, became some of our best customers, purchasing more Nolo books and software than the citizens of any state, except our home state of California.

How to Make Your Business Meaningful

Enough about Nolo? Let's turn now to how you can make your business stronger by imbuing it with a positive purpose. For some businesses -- solar engineering, recycled lumber, or ethical investing -- altruism is built into the company's purpose. The challenge for these businesses is typically to deepen and broaden the sense of commitment by making sure employees, contractors, and even suppliers fully understand and buy into it.

If, as is more likely, your business doesn't come with a built-in sense of mission -- for example you're a lawyer, you run a restaurant, or you do landscaping -- it will be your job to create one. Fortunately, with a little creativity it isn't hard to align even the most prosaic of enterprises with a positive goal. Here are a few examples:

  • A coffee shop serves "fair trade" coffees while educating its customers that by so doing, it both serves a better cup of java and helps provide a living wage to desperately poor Central American coffee farmers.
  • A publisher of a financial newsletter provides a website to educate non-English speakers about sound personal money management practices.
  • An eyeglass shop develops a program with local homeless shelters to provide desperately needed glasses to the poorest among us.
  • A computer service and repair outfit develops a low-cost recycling program for old computers.

This list could easily run off the bottom of the page. For those who want to learn more about how to transform an everyday business into a meaningful one, I recommend True to Our Roots, Fermenting a Business Revolution, Paul Dolan (Bloomberg Press). Dolan, President of Fetzer Vineyards of Mendocino, California discusses how in the early 1990s Fetzer committed itself to beginning a highly controversial program of making wine from organically grown grapes.

Fast forward fifteen years and Fetzer's sustainable viticulture approach is now widely recognized, respected, and emulated. It turns out that growing grapes without heavy doses of chemical fertilizers is not only better for the land, better for the water, and better for the vineyard workers; it's also better for the taste of the wine. As has proved true in so many other businesses, Fetzer's commitment to serve the greater good also turned out to be very beneficial for its bottom line. It's cheaper to grow grapes organically, employees are healthier and happier, and new customers are attracted both to sustainable viticulture and better tasting wine.

If you are still wondering how you might best develop a sense of purpose for your enterprise and whether doing so would be worth the trouble, take a long walk and think about four concepts:

  • sustainability
  • education
  • service, and
  • excellence.

I suggest these four because experience has shown that countless businesses have successfully embraced one or more to deepen their sense of purpose. Let's take a moment to consider each.

Sustainability

In the words of Ernest Callenbach, author of Ecology: A Pocket Guide (University of California Press, 1998), from a human point of view, a sustainable society is one that satisfies its needs without diminishing the prospects of future generations. In our petroleum-centric, throwaway economy, any business that advances the idea of resource sustainability -- whether via solar or wind power, organic agriculture, "green" construction techniques, resource recycling, or in dozens of other ways -- is almost automatically a force for the good. This is especially true if, like Fetzer Vineyards, your business is able to successfully change from an old-style resources-be-damned paradigm to one that treats physical resources and human beings as nonexpendable.

Of course, in our highly wasteful world, winemaking is just one of thousands of business endeavors that can be transformed by the concept of sustainability. For example, the owner of a small local gardening service who shows customers how to grow beautiful plants with half the water and no chemical fertilizer makes a significant commitment to the betterment of all of our lives. And so does a printer who features recycled papers and nonchemical inks. Even an accountant who helps customers substantially reduce the amount of paper needed to prepare their tax returns makes a meaningful contribution.

Superior Service

A second way to imbue your business with a sense of purpose is to dedicate it to providing truly superior customer service. Since many small businesses at best provide spotty help to consumers, designing your operation so that it is accessible, responsive, cheerful, and competent will almost immediately set it apart. And for good reason, since by putting your patrons needs first, you have created a remarkable thing -- a business that is at the same time helpful and unselfish. Just as all of the world's religions and many of its other not-for-profit enterprises honestly attract people by emphasizing these virtues, so, too, can your small business.

Example 1: When prospective customers call Phil, a home repair contractor, the phone is picked up by an answering machine. Phil tries to return calls each evening but doesn't always succeed -- especially when he has had a long, frustrating day. When Phil finally does talk to callers it's often to tell them he's too busy to fit their job in. The result of Phil's poor call return policy is that he ends up not working for three out of every four people who call. That's really too bad since Phil frequently experiences periods when no one calls and he doesn't work.

Example 2: Now suppose that Phil realizes his business model is broken and decides to fix it by making customer service his first priority. To this end, Phil contacts five quality competitors and invites them to join in setting up a customer referral and support network. When a potential customer calls Phil or one of the other contractors during a busy time, she'll be referred to another member of the group who can more promptly fit the job in. And oh yes, because five contractors now work together they can now afford a part-time scheduler who will return every call within two hours.

It's easy to see how this approach allows Phil and the other home repair contractors to provide better service. And, of course, it follows that the satisfied customers are likely to recommend the contractors group to others, thereby creating new business. (See Chapter 8, Market Your Business Creatively, to better understand the principle of word-of-mouth marketing.)

Pleasing customers is one way of providing superior service. A second is to provide assistance to your community. By giving something back to your municipality (or to an electronic community, if yours is a Web-based business), your enterprise establishes an honest connection to real people that chain stores and out-of-town franchises can never achieve.

For example, Phil and his group of contractors can further elevate their service beyond promptly returning calls and responding to emergencies by committing to work with a local jobs center to help train a low-income minority apprentice -- a young person who would otherwise find it hard to learn contracting skills. By jointly mentoring an aspiring contractor in an on-the-job program, the six entrepreneurs could make a real difference in a young person's life. And assuming that they found appropriate ways to tell their customers about their program, chances are many would cheer them on.

Education

But as important as the concepts of sustainability and service are to building a meaningful business, a strong commitment to education normally offers the best way for most small businesses to instill a sense of honest purpose in their operations. Without being too corny about it, we tend to regard those who teach to be worthy of our respect -- and that goes for everything from teaching golf and cooking to woodworking and novel writing. Providing instruction taps into the almost universal human respect for knowledge and the ability to do things better.

Add to this respect for learning the fact that most Americans are inveterate self-helpers, anxious for information that will allow them to improve their own lives. It's easy to see why consumers are drawn to businesses that teach them useful skills. And lest you doubt this, think for a moment about the literally thousands of popular magazines, self-help books, and even TV and radio shows that prosper by instructing people how to better accomplish an almost infinite list of tasks, from fixing their cars or learning French, to making over their own bodies, finding a mate, or raising an obedient spaniel.

In short, virtually every business, including yours, has a chance to deepen its sense of mission and purpose by educating customers.

Example: Walter's Barbershop is a relatively new addition to the Main Street scene in a small mid-western city. Like all barbershops, Walter's cuts hair. But in an effort to set his business apart from at least its less fastidious competitors, Walter commits himself to maintaining a super-clean, uncluttered environment. In addition, he adopts a flexible staffing pattern backed by an easy-to-access reservation system so as to both reduce waiting time and accommodate as many customers as possible during busy periods.

So far so good, but several other barbershops in town have also thrown off their sleepy old ways. In short, although Walter's commitment to cleanliness and service is a definite marketing plus, it doesn't convincingly distinguish his business. To do that Walter decides to educate men about healthy hair care and effective remedies to reverse baldness. He does this by creating a little niche in his waiting area, complete with attractive information sheets explaining the pros and cons of different types of shampoos, conditioners, and dandruff treatments along with copies of reliable consumer testing reports and other comparative hair product data.

In addition, Walter provides up-to-date information about the advantages and disadvantages of all legitimate anti-baldness treatments and techniques along with material debunking the many hair growth scams. Finally, Walter provides a comprehensive list of reputable local doctors who treat hair loss, hair weave specialists, wigmakers, and other area businesses that help cancer patients and others cope with sudden baldness.

As mentioned, virtually every type of business can improve its relationship with their customers by providing access to life-enhancing information. But to really succeed by adopting an education-first approach, you'll need to capture the imaginations of all your business's key stakeholders, including its employees, contractors, suppliers, employees, and even any investors. With everyone on board, a good customer education program can create a sense of deep-seated pride that can greatly improve every aspect of your operation.

Example: Joe's Hardware occupied the corner of Main and Maple in downtown Riverview ever since Joe I opened it in 1946 after returning from service as a sergeant in Patton's 3rd Army during World War II. But in 2004, with more competition soon to come from a big box store planned for a commercial area ten miles away, Joe III clearly saw that the old store's relatively small physical size plus its lack of free parking doomed it to a marginal future. So Joe III decided to make a big move to a strip mall a half mile away, taking over the space vacated by a large chain drugstore. Not only was the new building's footprint double the size of the old one's, but it was surrounded by half an acre of free parking and came with an efficient loading dock, something the old store lacked. Nevertheless, Joe III worried that by abandoning his family's charming and much-loved downtown shop in favor of a more efficient, but far less sexy retail environment he risked losing many longtime customers.

To keep the loyalty of Joe's long-term customer base and hopefully to win back former customers who had gone elsewhere after becoming frustrated by the old store's lack of selection, Joe III decided to fundamentally change the way his business operated, by designing the new store around a strong educational component. This took two main forms. First, Joe's Hardware leased a small empty space next door to its new location and turned it into a classroom where it could hold free classes for do-it-yourselfers. Focused on practical subjects like pouring concrete, building decks, and replacing worn-out plumbing fixtures, Joe's self-help sessions would be taught by local contractors, manufacturers' reps, decorators, architects, and a couple of authors of self-help building guides, all of whom would accept modest fees in exchange for the highly desirable opportunity to market their own services, products, and publications.

Joe's Hardware's second teaching initiative was to hire a group of retired home repair and building contractors as senior clerks, each willing to work 10 to 15 hours per week for a reasonable wage. Eventually, Joe's stable of in-store experts included plumbers, electricians, carpenters, tile layers, and general contractors, each available to answer do-it-yourself questions and help patrons select merchandise. And to make it easy for customers to easily connect with the right expert, Joe's published a monthly schedule of their work times on its Internet site and in flyers.

Joe suspected that the occasional customer came to him for free advice and then tried to save a few dollars by buying from the big box store, but he quickly saw that this wasn't a significant economic threat. That's because in the first year after the move, both Joe's Hardware's gross revenue and net profit almost doubled as newly empowered customers purchased more and told their friends that almost any do-it-yourself home improvement job would go better with the help of the knowledgeable folks down at Joe's.

Excellence

Depending on the type of business you operate, excellence can be defined in many ways: highly accurate, relentlessly innovative, most accessible, or cleanest, for example. Arguably, a commitment to excellence should be a part of every enterprise, and that it isn't, by itself, a discrete way to do business. But I don't buy it. In my experience, because many, if not most, small businesses are run in a mediocre fashion, a true dedication to providing customers with the highest quality goods and services is a significant way to imbue it with purpose.

Or to put it more bluntly, the excellent business is almost always regarded by its customers as transcending its market niche. In my field of self-help law publishing for example, Nolo stands out not only because of our commitment to affordable legal access, but because our materials are clearly so much better and more helpful than those of our competitors. So much better, that over and over our customers tell us that they simply can't believe we can publish professional quality materials in a low-cost paperback format. And, of course, this isn't an accident -- Nolo consistently and consciously invests more time, energy, money, and commitment in its products than do others in the field.

You may ask whether is it really cost effective to spend the extra time, money, and effort to run a truly excellent enterprise when many if not most customers will be satisfied with "pretty good"? Or put another way, will your employees, customers, and the rest of the people in your network really value your business more highly because you consciously work to achieve the highest possible standard? The answer is a resounding yes -- especially in fields where there are lots of competitors.

Your commitment to excellence will also furnish everyone connected with your business with a sense of pride. Or put another way, in the world of small business where dirty windows, cluttered sales areas, and disinterested service is so often the norm, your commitment to consistently do better will quite properly be seen as something special. And it won't only be your customers who will respond positively. Employees, independent contractors, and others in your network will not only be proud of being associated with your excellent operation, but willing to contribute their enthusiastic support.

To see how a commitment to excellence can even transform a large industry, consider how relatively quickly and definitively Honda and Toyota achieved worldwide respect during the last quarter of the 20th century, based on their determination to make the most reliable, repair-free cars. The fact that in our new century these two excellently run companies have also embraced the concept of sustainability by introducing higher-mileage, less-polluting electric-gas hybrid vehicles has only deepened the esteem in which their many loyal customers hold them. And of course Honda's and Toyota's commitment to excellence means that people who work for these companies are not only proud of what they do but understand that it's up to them to be sure that the highest standards continue to be met.

Similarly, at Nolo, everyone in the building is proud of the fact that our people-oriented, plain-English legal materials are the most accurate and up to date, bar none. Thus when a customer writes or emails us a success story, whoever receives it typically forwards it to everyone. But instead of telling you more about how Nolo communicates its quality advantage to its customers and longtime media fans, let's focus on how a more typical small business might apply the concept of excellence to improve a key aspect of its operations.

Example: Cindy and her brother Abraham inherited the Ace Garage when their dad, Woody, died. Ace had been repairing cars in Lake Port for over fifty years. But like so many car repair shops, it looked its age. In the last decade of his life, Woody simply hadn't had the energy or inclination to make significant improvements.

Cindy and Abraham immediately agreed that big changes were needed if the garage was to provide a comfortable income over the next several decades. They focused first on cleaning up what they had to admit was a typically filthy garage. With the help of a team of professional cleaners and painters, Cindy, Abraham, and their employees cleaned and painted almost everything, from the service bays and office to the driveway and the roof. Even the gumball machine got a coat of new red paint. And it wasn't just the building that was scrubbed and shined -- enough new overalls were ordered so that every Ace employee would have a clean pair each morning. Not surprisingly, when the refurbished, new Ace reopened in mid-January, Cindy and Abraham received lots of praise, including even a picture of the garage and its striking new sign in the local paper. Best of all, business immediately increased almost 15%, with the result that they could project that the clean-up cost would be amortized in less than a year.

But Cindy and Abraham weren't done. They next set out to create a keep-it-clean culture at Ace. Instead of yelling at longtime employees when they reverted to their sloppy old ways, Cindy and Abraham demonstrated their personal commitment to cleanliness by adopting a Sunday clean-up strategy. If a mechanic fouled the floor or walls of his area during the week, or the oil an old clunker leaked on the driveway was still there Saturday evening, Cindy or Abraham would personally come in on Sunday to scrub and, if necessary repaint the offending area. As you might guess, it only took a couple of weeks of this gentle shaming before the garage was kept so clean Cindy and Abraham were free to find better ways to spend their day off.

Cindy and Abraham's next effort to distinguish their business was to install a small carwash unit in the back parking lot. Now, every car repaired by Ace was given a complimentary wash -- and for a small optional fee an inside cleaning. Not surprisingly, customers who brought in cars both broken and dirty were delighted to pick them up both repaired and scrubbed -- so pleased, in fact, that they frequently told their friends and relatives about Ace's superior service.

But running a clean repair garage wasn't Cindy and Abraham's only effort to improve Ace. Realizing that a few incompetently done repairs can alienate customers and drive up customer service costs, Ace began a campaign to improve its repair work. Mechanics were asked to refresh their skills through classes and seminars paid for by Ace that were designed to help them take maximum advantage of the new diagnostic machines Cindy and Abraham purchased with the help of a small bank loan. When one employee balked at learning "all the damn fool new technology" Cindy helped him find a job at a more traditional garage down the street. Although nothing was said about the reasons for the change, other Ace employees redoubled their efforts to maximize their skills.

To celebrate the end of their successful first year, Cindy and Abraham had a low-key staff holiday party at which they handed out red baseball caps with the number 55 (the age of the garage) on the front and the small words "ACE-Accuracy, Cleanliness & Excellence" embroidered just above the back adjustment strap. When many of their employees regularly wore their caps to work, the energetic duo knew they really had converted Ace into a garage with a mission.

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