Valuing Ownership

Pick the right tool for the job

It’s Your Business, Own the Solution

I work with companies that want to shop for software or hardware and will ask for me “to just figure it out, I don’t understand any of that stuff.”  Be very careful about that approach in your own business.  A vendor, no matter how diligent, will never understand your business or your needs completely.  Some won’t even try.  I know that I want to solve your problem in the best way that I can, but I don’t understand all of your needs, your business strategy or what’s important to you.  I will do my very best but I can only ever understand what I understand.  The problem from my standpoint as the vendor is that I may unwittingly give you the wrong solution for your problem because I didn’t understand everything and you didn’t understand the technology.  There has to be a better solution…there is a better solution.
Technology is very confusing and intimidating to a lot of people.  Don’t let that keep you from understanding what someone is doing to your business, or making sure that someone in your business understands.  If you have a team, this is a great opportunity to assign a process or product owner.  Assign someone who understands your business…someone inside of your business.  That person needs to understand what’s important to your business and what you’re trying to accomplish.  They don’t need to understand the technology, they need to be able to ask what the outcomes, costs and guarantees will be.  Your vendor is then responsible for answering those questions and being able to align your objectives with the solutions that are available and explaining the options in a way that you can understand.  When the explanation isn’t clear, ask again and keep asking until it is clear.  If the vendor is really a partner, as we are all hoping they will be, they won’t mind. I can tell you that I prefer it.  I’d rather make sure that you help in deciding what is best for your business and that you are comfortable with the answer.
Of course, that product owner may very well be you.  Then you need to understand your objectives.  Regardless of who it is, here are some questions that the product owner needs to be able to answer:
  • What are we trying to solve?  What is the problem?  What capability do you need?  You need to be able to articulate this in a way that it’s clear what the business objective is.  At the end of the day, what do you need to be able to do?  Answering these simple questions will go a long way toward getting the right solution.
  • What’s it worth to the business? Many small business owners, often cash starved, want to make the cheapest most expedient decision.  Sometimes, that’s the right decision.  Know what it’s worth and the outcome of it breaking.  Cheaper software and hardware will often fail more often or more readily. Support may not be as good.  Being able to answer the question of the value to your business will help you decide what kind of investment you need to make.
  • What’s required to support it? You need to know the cost of support.  There may be a very powerful, but technical solution to your problem.  If you aren’t technically inclined then the cute, less technical solution but less feature rich option may be for you.  If you’re going to have to constantly pay someone to help you then it may not be worth it.  Know the value of your own time and your team’s time and try to get an understanding and a feel for how much care and feeding any solution will take.  Sometimes, you just need something that works, even if it doesn’t have all the bells and whistles.
While there are always other questions that can be asked, just being able to define these three things will go a long way to finding the right solution whether it’s a computer, a printer or the latest gadget.  Ever seen a fancy smartphone that does everything but wash the dishes but you can’t figure out how to make a phone call on it?  Maybe something is simpler rather than call your 8 year old to help you every time you need to listen to your voicemail.

Eight Great Small Business Podcasts

Podcast Player RecommendationsI love listening to podcasts.  Like many of you, there just aren’t enough hours in the day.  Podcasts allow me an opportunity to multitask while still learning and keeping up to date.  These days, it’s how I get most of my news.  I talked more about podcasts and their benefits in an earlier posts, so, I’m not going to focus on that here.  I want to spend this time looking at some podcasts that I have found, or that others have recommended.  My hope is that if you already listen to podcasts, I might be able to give you a few ideas of new podcasts to consider.  If you don’t listen now, maybe I can expose you to what’s out there and maybe I can provide you with a good starting point.
I’m going to go over eight of the podcasts that either I have enjoyed and learned from.  Being that time is always limited, I go back and forth keeping some podcasts, trying new ones and stopping a few that no longer seem to apply to me.  I expect this list to be somewhat dynamic.  This is a growing and changing landscape.  If you have any that you have found, please let me know so that I can let others know.
  1. The $100 MBA – Many podcasts are used to draw and create audiences into an ecosystem in hopes of eventually demonstrating enough value that your audience will buy some of your paid products.  This is actually a model that I like quite a bit.  We all want more customers, why not provide value and grow your following while trying to show potential and current customers what you can do to help them.  This podcast is no exception.  This is a podcast that provides quick business lessons from Omar Zenhom and guest teachers.  Omar has a background in education and structures each episode as a lesson.  They are quick, practical and have great value, regardless of your business model.  Their site, and its information, often make me wish I’d spent $100 on my MBA rather than what I did spend.
  2. Eventual Millionaire – Jamie Tardy, the host, started by wanting to explore traits that make millionaires successful.  She does this through interviews with various millionaires from different business models.  She covers all sorts of millionaires from all sorts of models and explores their habits and thinking that make them successful, ending each episode with actionable advice from the interviewee.  It’s interesting to explore the similarities and differences across the spectrum of her guests.  There are a few she has had on a few times and the differences and changes over time can be interesting as well to see what we can all learn as they grow.
  3. Marketplace – While not strictly a small business podcast, I find Marketplace a great overview of the economy and news related to the economy.  It’s a fairly quick podcast that can keep you up to date on the day’s happenings.  Every business owner needs to keep an eye on their surroundings and growing trends without the biased views all too common in many media outlets.  I find this fairly non-biased and the finance and economy focus help to keep awareness on what’s going on more broadly.
  4. Smart Passive Income – Hosted by a very likable Pat Flynn, who has built quite the brand for himself in the on-line space, Pat covers lifestyles, marketing and business models for small businesses.  Largely focused on the on-line space, he does have some lessons that apply more broadly.  If you’re looking for an on-line presences, definitely a great resource.  Another benefit to SPI is that it can help to introduce you to other resources in that space.
  5. Entrepreneur on Fire – A lot of great business lessons in here.  It’s a lot of content, which can be good and bad.  If you’re running on limited time, then that can be challenging. If you’re in the car a lot then it’s great.  In fact, that’s part of why John Lee Dumas started it.  He was driving a lot and found that he didn’t have enough content, so he wanted to create something that worked for people with his lifestyle.
  6. HBR Ideacast – From the Harvard Business Review, this is a cover of the latest research and trends in management. Some great ideas and information, though it doesn’t have quite the personality you see in other podcasts.  Terrific if you want facts and data.
  7. BizChix – Largely focused on women in business, this podcast does a great job of exploring the unique challenges and opportunities for women in business.  Natalie does a nice job of inspiring, exploring and challenging a variety of businesses and opportunities including successes, failure, pivots and often her own challenges as a business person, mom and wife.  There are even a number of lessons for those of us who are not of the fairer sex.
  8. Manager Tools – This is a great podcast for small and large business managers alike.  They do a great job of exploring the challenges of managers and giving direct, actionable advice with the rationale.  They bring lots of experience and repeatable guidance on many business challenges.
This is a constantly changing landscape with new resources.  These should be enough to get anyone started on listening to podcasts to keep themselves up to date on business and management advice. There are so many resources out there.  What do you listen to?  What have you found helpful?

FCC Issues Cyber Security Recommendations for Small Business

Protect Your Data

Protect Your Business From the Bad Guys

Great to see. The FCC has released a series of ten cybersecurity tips for small businesses. These days, businesses of all sizes are able to compete even against much larger businesses. They can do this because there are a variety of resources and business models available to them that were often only available to, or practical for, much larger companies. You can lease infrastructure, tools and systems that you once would have had to be much bigger to even think about.  You can get software and other automation that has the same functionality as a big business. You can outsource functions giving your business much more reach.  The opportunities are almost endless.

With great opportunity also comes risk. It doesn’t have to be huge risk, but it’s risk nonetheless. At any given time your business, no matter what kind it is, could be handling reams of confidential customer data.  Credit card numbers, personal information, potentially harmful information.  Things that wouldn’t be good for you or your customers if it got out or was in the wrong hands.  Large companies spend millions on security, encryption and many others tools to help them protect customer data and their own infrastructures and, as we have seen from Target, Sony, Home Depot and many others there is no shortage of corporate hacks.  Even with their vast resources and expertise, they have difficulty protecting these data.  Your business might not be quite the target that they are, but…

It turns out that large businesses aren’t the only ones. In fact, small businesses are common targets and are less likely to take the necessary precautions. They often don’t have the expertise or resources to protect themselves. Yet, in the case of a breach a small business could find themself on the bad end of a lawsuit, need to pay for monitoring for exposed customer information or even cover credit card losses.

As small business owners, we need to protect ourselves and our customers. Enter the FCC with a set of recommendations to help you protect your business from hackers and other bad guys. Let’s go through those recommendations now and what you can do to protect your business. Maybe we will even throw a few others in there for good measure.

1. Train your employees in security procedures – Many breaches are facilitated by poor adherence to simple security practices. Just by educating our employees, and ourselves, we can help keep those mistakes to a minimum. These practices need to be enforced and employees need to know how important these are. Here are a few of the basic practices that you can adopt and train your employees on to keep safe:

  • Keep passwords secure – It seems like we have passwords for everything these days. With different requirements, reset timelines and any number of other barriers we have to pick all sorts of passwords. It can become impossible to remember them. Your employees should be discouraged from writing passwords down, especially in open spaces (how many office cleaners, contractors and clients go through your office?). Passwords should not be common words. One technique is to use a passphrase and replace common letters with symbols. An easy to remember phrase can become difficult to hack or guess. Here are some techniques for secure passwords. There are applications out there that will store your password (for example, Avast includes one in their upgraded packages that allow you to store your passwords with one master password. It’s a double edged sword. It’s good to not write them down, but not so good to have them all exposed at once. Rather than give you the generic answer of making up ridiculous 32 character passwords that are unique for every site, changed every 30 days and completely random…which would be very secure since even you couldn’t get into your accounts, I’ll recommend you do what’s necessary to make it practical, difficult to hack but manageable.
  • Use Encrypted Connections – When entering a password or other private information into a website, make sure to use a URL (the thing in the top of the browser starting with http or, in this case, https) and the padlock indicating it is secure. Otherwise, your data is going over in clear text and someone can listen in.
  • Protect Customer Information – Establisch policies for protecting customer or client information. It should be locked up when not in use with limited access to only those who need it to do their jobs. Don’t save data you don’t need and make sure not to write down credit card and other key financial information.
  • Follow Your Mobile Action Plan – We’ll go into more detail below, but any employee who accesses company information on a mobile device, including emails and texts, needs to follow your mobile action plan whether using a company device or their own. This includes phones, tablets and laptops or any other device that they can carry out of the office.


2. Protect information, computers and networks from cyber attacks – Keep your operating system up to date with security patches. Make sure to do the same with the web browsers and any firewall or anti-virus software that you use. Run regular antivirus scans. Also make sure the software that you use scans for malware (bad stuff that brings up ads, tracks you, etc.)  Set-up your company computers so that the antivirus runs automatically and prevent employees from disabling it.  By the way, be careful about mandating the antivirus scan at a particular time, especially if you have a sales force.  I worked with one company that forced a scan every Wednesday at 1pm EST regardless of what it was doing.  More than once they would be demonstrating software to us and the computer would come to a screeching halt as the mandatory anti-virus scan took off on its merry way.

3. Provide firewall security for your Internet connection – Firewalls are software that protect your network from illicit traffic in or out of your computer or network. Think of it as a software padlock on your computer network. This can be software that’s on your computer itself or on the part where your network talks to the Internet or both. It’s designed to identify and block suspicious network traffic. These days, many anti-virus software applications come with firewall software. I’ve personally used ZoneAlarm. They have free and paid versions, depending on what features you need. If you travel, I’d recommend both a hardware driven firewall on your network in your office or home office that all your computers can sit behind as well as one on your laptop so that it is protected out of the office. Hotel, airport and other public networks are open and the bad guys can sniff out your private information or find their way into your computer (I was once able to sift through someone’s hard drive without any hacking whatsoever – I found it completely by accident). The firewall software on your computer helps keep you better protected. Windows now comes with a firewall as well, which is generally pretty good, though I find it tougher to navigate when I want to make a change. I’ve found ZoneAlarm very easy to navigate, though it’s sometimes too easy to allow an intrusion that you didn’t want. Overall, it’s good though. Firewall software can create a hassle when trying to connect to wireless printers, scanners and other devices that you legitimately want to connect to. You can either hire an expert or work your way through to fixing it. Often the internet can help you.

4. Create a mobile device action plan – In addition to them ruining family meal times, many of us couldn’t run our businesses without our mobile devices. They are how we stay in touch, write emails, review documents and sometimes even give presentations. They’re incredibly convenient. We can now take our businesses with us wherever we go. Our employees are constantly contactable and clients can reach us anywhere at any time…come to think of it, maybe they’re not that great… Of course, that convenience isn’t just ours. This also means that thieves can share in your convenience. Sometimes, it’s not even thieves, we do it to ourselves, as US Healthworks and others have found when laptops were left behind inadvertently. How many times have you been at the airport and heard the page for Mr. or Ms. Jones to come back and reclaim their laptop? I wonder what data was on it that would have exposed their company. It’s all too easy to leave a phone, tablet or laptop behind. Here is some general guidance that your mobile policy should follow:

  • Apply Liberally – This policy should apply to any device with company data (including email and text) that can be easily carried out of the office. This includes, but, as my attorney would have me say, is not limited to, phones, tablets, laptops, phablets, watches or any other mobile device that can be lost, stolen or left behind outside of the office.
  • Follow the basics – Every device should be protected by a password or passcode. If you can turn on your device and access the information without a password or PIN, then it’s not secure.  Enforce having a password or PIN (depending on the device).
  • Encrypt the Data – Did you know that if your hard drive or other storage isn’t encrypted, that thieves can usually pull out the storage device and read your files even without a password? This isn’t so easy on phones and tablets, but can be done. Encryption scrambles the contents so that without the right stuff when reading the storage, it’s useless (kind of like my handwritten notes, I’m the only one who can read them – sometimes.)
  • Be Able to Remotely Wipe – Most email platforms these days will allow an Administrator to remotely wipe a device that has been lost or stolen.  This means that, literally, with the push of a button, the device is wiped of data. When you implement an email system, make sure that it has this capability. Then, make sure every employee who has company email on their phone understands that you can and will wipe their device if it is lost or stolen. It’s good practice to have them sign something to make it traceable and crystal clear. Require them to report a lost or stolen device as well. If they do lose one, then you should remotely wipe their device, which will usually wipe their entire device of both company and personal data. It actually protects them too, but many people feel a bit like Big Brother is watching. This is one of the best protections for you, your business, your customers and even your employee. Do it as soon as you learn of the device missing by the way. This only works if the device is on the internet. Often, without extra software, this will not work on laptops by the way. A laptop is a fully functional mobile computer.
Keep your data secure

An Administrator Can Wipe a Device of Sensitive Data












  • Limit Access – Only employees who need to have mobile access should have it. Don’t allow someone who doesn’t need it to carry around company information. If nothing else, let them have their time off.


5. Make backup copies of important business data and information – This is a great recommendation for business continuity.  Losing the wrong data could wipe out your business. As with so many of these recommendations, there’s more behind it. Here are a few things to know:

  • No Backup Scheme is Perfect – You will likely lose some data. It’s often the most current (and therefore most painful). Just know that going in and do everything you can to keep that risk to a minimum.
  • Backup Offsite – On-site backup is fine too, but if your office burns down or the thieves take off with your backups too, this just isn’t helpful. There are a number of afforable, reliable off-site solutions out there. Some of the ones that I have used include Dropbox, Carbonite and Backblaze. Make sure that they store your data using encryption (you’ll see that a lot related to security.) This is where many will object to Dropbox, which isn’t truly a file backup system.  It’s designed to allow file sharing. I count it because it makes copies of your files offsite. They are technically encrypted but there’s a catch. Encryption works by scrambling data in a set way that requires a “key” (like with a lock) to descramble the data. In order to share data across multiple devices and users like Dropbox, that key needs to be on every device and with every user using that data. So, it’s encrypted but more easily exposed.
  • Keep Versions to Avoid Backing up Bad Data – Make sure that any software you use allows you to get files that have been deleted from the set along with older versions of files. Sometimes, if a hard drive is going bad, it may corrupt the data. The system doesn’t know that and can back up the corrupted data. When you go back to use the backup, it’s not usable. Make sure you can get at older versions and deleted files for a period of time. This is a common feature and helps give you a bit of insurance for lost data in your backup.
  • Back it all Up – If you use multiple devices or have office-wide storage (often on a device called a NAS or Network Attached Storage) where files are stored on a centralized computer or hard drive, make sure you are backing those up too. Some software will do that and some will not. Make sure it’s all backed up. Of course, they’ll charge you more for a plan that backs up NAS, external drives, etc.
  • Test Your Backups – It is way too easy to back stuff up and forget about it, until you need something and realize that you never actually turned it on, it failed three years ago or what have you. Once a quarter, pick a newer file and an older file and try to restore them and make sure they are there and work as you expect. If you backup multiple devices or computers, try a couple from each computer. You want to test this before you need it. It’s worth the time.
  • Automate It – Whatever you do, don’t try to save money by creating some scheme where you copy files periodically or something like that. You’ll get busy and forget and the last backup will be from three years ago.


6. Control physical access to your computers and create user accounts for each employee – Lock up your offices when not in use, have the computers lock themselves after a period of time and password protect all of them. Each user should have their own account and password to anything that they need access to. I’ll add a couple more to this. Don’t give someone access to something that they don’t need to access. If you do have centralized file storage, like we talked about above, then limit access to those who need it. This not only protects the files but reduces the chance of accidental deletion or changes. One last one that I’ll add, and many hate this. Limit Administrator privileges. These are the privileges that allow a user to install things on their computer. Every user should have their access limited to what is necessary to access files and applications, which should usually be more limited access. If they may some day have the need to install software, then create a separate administrator account with a different password. This includes you! This keeps viruses, malware and other applications from installing stuff on your computer (they borrow the user’s privileges). My clients have paid me more money than they should have to uninstall browser search bars, random applications and other stuff that they accidentally installed on their computer. This stuff is often collecting data about the users. Yet the client insisted that the users needed Administrator privileges. It’s more of a hassle but much more secure. Think about how often you need to install something. It’s not all that often and you can take the time to login as another user to do it.

7. Secure your Wi-Fi networks – I can’t tell you how many times I have been traveling and been able to tap into a company’s wi-fi network to check my email. Just got right on. It’s not a big leap from there to get into their network. That also means the network isn’t encrypted (there’s that word again) and a talented hacker can “sniff” the network traffic to siphon off data, passwords and other harmful information. Here’s some specific advice:

  • Encrypt It – Your wi-fi network, if you even have to have one, should be password protected and encrypted (see a pattern yet?). As a small business, I’d recommend at least WPA-2 encryption (it’s an option on smaller routers.) There are better encryption schemes out there, but you very well may not be investing in the equipment to use those encryption schemes.
  • Change the Name – Every wireless network has a name called an SSID (Service Set Identifier if you care). Don’t make the name something obvious like “Smith and Jones Attorneys Come Steal our Data”. Make it something that’s not so easy to pick up. In fact, it’s often possible to hide the SSID so that it doesn’t show up on a list of networks. This makes connecting the first time a bit more difficult but if you’re willing to learn how to do that, it’s a small bit of extra security. Please note, this is not a security feature by itself. You can find these networks if you know how. It does help keep random people or devices from connecting.
  • Caution for the Guest Network – Many routers come with a guest network option. This is a great convenience for customers and clients. Make sure that it’s completely segregated from your internal network and that it can only reach the Internet. Password protect this too, even if you post the password in your office. This keeps your neighbors from using up your bandwidth. You may even want to change the password periodically. It will get out.
  • Test It – Using a device that has never used your internal wireless network (or that you have caused to “forget” the network) try to log in and connect to anything and see what happens. If it’s set-up correctly, it should ask for a password that you wouldn’t have if you didn’t run the company. Maybe even have a fried to try to break-in for you.

8. Employ best practices on payment cards – If you accept credit cards, then you need to be very careful about how you protect that information. There is a whole industry dedicated to being Payment Card Industry (PCI) compliant. These are the rules set down by the credit card companies to reduce breaches. If you don’t follow them, you can lose your ability to process credit cards and can even be on the hook for any losses. There are lots of resources and expertise out there and it’s worth seeking some out if you handle a lot of credit cards or have unique needs, or just want to be diligent. Here’s a good overview for small business compliance with PCI. In the meantime, here are a few high-level recommendations:

  • Follow the Rules – Know the rules and follow them. It’s as simple as that. There are a number of free and paid resources out there. If you handle credit cards, it’s worth getting the expertise to help.
  • Isolate Processing – Limit the places where you process cards. Try to dedicate a computer or get a dedicated terminal for processing cards. Don’t surf the internet and process cards on the same computer.
    * Use a secure connection – Never, ever, ever send a credit card number of an unencrypted connection. For websites, this means that the URL (the www address) starts with https and you should see a lock or other indication of a secure connection in your browser. For example, here’s what Chrome looks like: Google chrome scurity indicationYes, even Google uses a secure connection. Internet Explorer should show something like this:Internet Explorer Security Indication
  • Shift the Blame – I use this heading jokingly, but leave some of the compliance to the experts. You can hire companies like Stripe or Braintree to process cards. You or your customer will still need to enter the number into a secure site, but they’ll handle storage of the card and processing. It’s worth the cost. This then lowers your liability because you then fall to a lower level of PCI compliance. Definitely shop around, the level of service and costs vary wildly. Many of these are negotiable depending on your amount of business and any other relationships you may have with the institution (many banks will process as well).

9. Limit employee access to data and information, limit authority to install software – I actually already covered a lot of this up above but it’s worth reiterating. Don’t give someone access or privileges that they don’t need to do their job. Also, limit everyone’s (including yours) ability to install software. If they need to, give them a separate administrator account to do so that they only use for that purpose.

10. Passwords and authentication – I’m always torn here. I know what the official guidance is and I struggle to tell folks that it’s all realistic. In short, you need to pick sufficiently long and complex passwords to make them tough to guess, protect them from prying eyes and change them regularly, ideally every three months. That’s all well and good. The challenge comes in that we all have so many passwords these days that they become very difficult to keep track of. I’m practical enough to know that sometimes it can’t be avoided. Below are some practical recommendations. Do your best to stick with what I said above, sufficiently complex, change them occasionally and protect them.

  • Avoid Common Passwords, even as part of your password – According to Gizmodo here are some of the most common passwords that we see: 123456, password, qwerty(the top right hand row of the keyboard), football, etc. In general, try to avoid words at all. Consider a phrase, or the letters from a phrase in odd combinations and with special characters. For example: iHcp@55wptKsu! for “I hate complicate password policies that keep showing up!” Phrases are more complex and once you have them down, they are easier to remember.
  • Don’t Use Date of Birth, Social Security Numbers, etc – Don’t use numbers that someone can guess from you. You’d be amazed at what they can dig up.
  • Don’t Share Your Password – Don’t share it with everyone and everyone in the office needs to have their own accounts with their own passwords.
  • Consider MultiFactor Authentication for Key Systems – These are becoming more common. This is a scheme where you use more than just a password to sign into your account. Common versions use an automated phone call or text message with a unique code that you enter or a FOB (a small device) with a constantly changing number that you input. They are designed so that if your password is lost or stolen, then your account is still secure.
Improve security with multi-factor authentication

GMail Can Have Two Factor Authentication

It’s great to see more attention being paid to small businesses and their security. Small businesses are increasingly becoming exposed to hacks and other intrusions. We have a responsibility to our clients, customers and employees to keep all our data secure. This is a great list with a lot of great advice. I’d like to add a few other things to it. I think they’ll help make things even more secure and provide you with some good structure for your business.

A Few Extra Recommendations

11. Know Your PII – PII is Personal Identifiable Information. It’s information that someone can use to impersonate another person or use to find out more about them. Common elements are dates of birth, social security numbers but even things like addresses can be a risk in the wrong hands. Know what PII your firm handles, educate your employees about PII and make sure that you have measures in place to protect it.

12. Be Careful What You Install – Ever install something and suddenly you have a browser toolbar or something else that you didn’t expect? Get that off of there! If you didn’t want it, then get rid of it. You have no idea what it may be tracking or what other mischief it may be up to. Be very careful.  Here’s a great article on some things to avoid or do.

Avoid Installing Junk Software

An Example of a Legit Package that Installs Stuff You Don’t Want

13. Hold Your Vendors Accountable – If you hire anyone to work with your data or your clients’ data, hold them to the same standards that you use. Make it part of any contract. They are just as responsible as you are and, maybe more importantly, since they are working on your behalf, they may cause you to have some liability risk for their actions as well.

14. Document Your Policies – Write it all down. This will help you to make sure that you and your team (including vendors) understand your procedures and that you can stay consistent and improve them over time. Provide everyone with copies of the procedures and hold employees accountable for following them.

15. Stay Educated – Keep yourself up to date on what’s going on in the tech industry and security. It seems like once a week a new story is coming out about how we might be at risk. Just like you do with your chosen area of expertise, stay up to date. If you aren’t inclined technically, enlist the help of someone who does understand Internet security and who can help you out. You want to understand what is being done in your business at all times.


Stay Safe Out There

Security is everyone’s responsibility. There is no perfect system, but with some diligence and well-considered policies and procedures, we can hope to improve our chances of being protected.

Balancing IT Complexity and the Technology Benefits

Frustration with IT Solutions

Photo Courtesy of Kay Kim

I recently read an article by Don Williams on the IT Complexity Paradox and its impact on small business owners. The gist of it is that the rising complexity of and reliance on software and hardware for most businesses has created complexities that many business owners are not prepared for.

Before you invest in new IT solutions, ensure that you understand why you are investing. It is all too easy to invest in a sexy new solution that looks great only to realize later that it adds no value to your business, or worse yet it ends up costing you money.  Business owners end up spending more time managing their new solutions and now can’t manage their business, produce new products or sell more. Don’t start with the solution.  Start with the problem.  What are you trying to do with this solution?  Does it make your employees or your business more productive? Does it create new revenue channels or make processes available that you couldn’t do before?  Like any other investment decision, what is the impact to your bottom line?

Modern solutions are often very complex with great features…or great looking features. Many of them solve problems in amazing ways. But before you sign, understand why you are buying them and what it means to what you’re trying to achieve. It’s very easy with some of the complexity of some of these solutions to underestimate the upkeep required or the ongoing investment or the support costs. Most business owners are experts in their areas of business  and not technical areas. Don’t become dazzled or overwhelmed. Follow my decision making model and make sure that you have considered why you are doing this and what it means long term.

If it isn’t good for your business then don’t invest. If you don’t understand it, then don’t invest. No one knows your business and your needs like you do. It’s an amazing time to be a small business owner. Opportunities abound to help open doors for small businesses and make opportunities and processes available that were once only available to big businesses. With such awesome opportunities also come risks. Make sure you have evaluated these as well.

The complexities of today’s IT solutions can be daunting for small businesses.  Start with the basics – know your problem.  Evaluate if you are fixing that problem and what new challenges you are creating.  If you can’t define those, then you probably shouldn’t be considering that solution.

Know Your Measures

Measure your business for success

Clearly Define Your Successes and Opportunities

Motley Fool recently published a really interesting article, entitled “Tyranny of the Calendar” on using annual returns as a measure of money management success.  They effectively argued that the focus on one year returns provided a slanted view and that even the best money managers could look much worse (or even better) using such a narrow focus.
For example, to borrow from Motley Fool, Warren Buffet can be made to look much worse a money manager than we all know him to be. By that measure, if he is “the most successful investor of the 20th century” as Wikipedia tells us (and I read it on the internet, so it must be true then he’s a good measure.  Since 1964, Warren Buffet has beat the S&P Index by over a million percent.  I’ll take those odds any day.  If you look at near-term returns, he looks about like a coin toss.
Warren Buffet Success Using time measures from Motley fool
This started me thinking, do we suffer from this in business? I would argue that often we do. Of course, we need benchmarks and comparisons can be useful, but it’s always important to understand our measuring stick.  Use the wrong measure and suddenly our performance can be much worse, or much better than it actually is.  Annual comparisons can be helpful, as can comparisons with your competitors or adjacent companies.  At the same time, know the differences and be able to build them into your forecasts.  If you sell umbrellas and there was record rainfall this year, then maybe you didn’t get quite the growth you expected.
Similarly, the wrong measures can often hide important facets like cash flow problems, inventory, declining sales, inability to keep up with demand or any number of measures that could sink your business if you’re not careful.  This is why we want to take a look at our business holistically.  Know what has changed, the impact it has had and use that to project the impact for other changes.
We often use these measures because the accountants do.  Every quarter and year we have to do our books in order to do our taxes.  This drives a whole business cycle.  “Earnings season” even affects big businesses, probably more so, to make short term decisions often while sacrificing long-term decisions. Thankfully, as much as we may be tempted to do so, as small business owners, we don’t have to suffer from that.  We will do taxes, but we don’t often have shareholders to please and if we do, we likely can speak to them personally and aren’t trying to manage the market reaction to announcements.  That should help us to plan further out and make decisions that are best for the business as a whole and not just for the current or next quarter.
Your measuring stick can make a huge difference in how we view our business and our success.  Make sure that you know the limitations and perspective of how you are measuring your business so that you make decisions that are best for your business and not skewed by the lens through which you are viewing the world.  Otherwise, even a million percent won’t look successful.

Custom Solutions – Know What They Are

Custom Solutions

Beware the Easy Sounding Custom Solution

Custom Solution – Sounds Sexy but Know the Risks

As I’ve talked about finding solutions to business problems, I’ve talked a lot about selecting “off the shelf products“, sometimes called COTS for Commercial Off the Shelf. These are products that someone has built and markets for a particular problem or opportunity. There are other users out there and other customers, or at least the company selling it is hoping for that to happen. You are paying for something that you can observe, touch, feel, taste (ewww) etc. Sometimes, you may have an opportunity or business problem or even idea that someone else hasn’t yet conceived of or built a solution for yet. That’s what we are going to discuss next.

When you think about a custom solution, there are basically two options: build it yourself or hire someone to build it for you. Most of my experience in this area involves software. Many of the same concepts and ideas should apply to other custom products and services, but if you’re thinking about going in that direction with something else, I recommend consulting an expert in that area. Having someone build something for you, or even doing it yourself, has tremendous opportunity, but it also has a lot of risks you need to consider and if you’re not an expert (and I assume you aren’t or you wouldn’t be reading this) you will want some expertise to help you.

This post will cover some of the highlights. I’m going to dive into more specifics afterwards. Much of this fits with my decision making methodology:

  1. Define your problem/opportunity
  2. Measure the problem/opportunity
  3. Define your requirements
  4. Shop for opportunities
  5. Decide on the best option

Some Things Are the Same

In fact, everything up through defining the requirements is exactly the same and is even more critical for customized solutions. It’s way too easy to fall in love with an ill defined idea without thinking through all the pieces and parts. These steps are critical. Unlike buying off the shelf where you can observe if the product meets your requirements, a vendor can promise you anything because the product doesn’t exist. In software, we call that vaporware. Don’t cut yourself any slack either. We all tend to oversimplify the problem and then assume it’s easily solved. It’s usually not until we get into the guts of the problem that we realize the complexity and realize just how hard it is to solve or create. Just like any vendor, we are trying to sell ourselves on a solution. Only now we are both the seller and the buyer – we are perfect for each other! Well…at least until we have to actually build and implement the thing. Then reality becomes our challenge.


Some Things Are Very Different

The problem, its measurement and the requirements are all critical parts of assessing the viability of doing this without a starting product. I use problem here, but the same idea works if we are trying to make something better or create something new. For simplicity, I lump it all as solving something. That something can also be an improvement.

With our requirements in hand, we need to consider options. There are two basic options.

1. Do it yourself – Do you and your business have the talent to meet your requirements? You will need to assess that and what you give up to do it. Be very careful here. Even if you can do it, consider whether you should do it. This is probably my biggest failing. Of course I can do that! Who would do it better? Think about the opportunity cost, what you will be giving up in order for you or your team to do it. Your time, your team’s time are all worth something. I’ve never seen an organization with a shortage of work and something will not be getting done while you are creating your new solution. Always assume that it will take longer than expected and consider from there the cost of work that isn’t getting done. One thing to ask yourself – if you can do it, why haven’t you already? That may answer whether you should continue down this path.
2. Hire someone to do it – We live in a day where there are any number of contractors out there who are waiting to do work. There are any number of places to look like eLance, oDesk, local businesses or on the web. It can be a challenge to find competent contractors. They are out there, but you will want to be very deliberate about it. Be careful to avoid grabbing the first or cheapest. Many before you have done just that and have paid the price. Make sure that they understand your needs and your problem. Be very careful if they don’t ask a lot of questions or if they can’t explain the problem back to you. They should be very interested in the requirements and should be willing to provide some sort of prototyping. Consider hiring them for a smaller, cheaper and faster trial project that you both agree on.

Be Careful of the Sexy Parts

Regardless of how you do it, building something of your own can be very exciting. Often, they turn into new products in their own right, even though you started by trying to solve your own business problem. This can open up a whole new world of opportunity and even revenue. For example, Post-Its were developed out of an effort to develop a new superadhesive. Then it became a product in its own right. You never know where these endeavors will end up.

At the same time, a custom solution takes time, attention and money. Don’t assume that because you hired someone that you are off the hook with nothing to do until delivery. You will still have to plan time to manage the partner and test the software. You still have plenty to do. Don’t leave it to them or it likely won’t turn out well. You want well documented requirements. In software, for example, I have learned that contract developers will build you exactly what you ask for, whether that’s what you wanted or not. Requirements are critical and must be clear, concise and complete. Once those requirements are documented and handed over, you should go over them with the partner in detail and be ready for any questions they have. You also want resources to regularly test what they’re building for you and provide clear feedback on what is good and what is bad.

These are all reasons to make sure you are committed to custom building. Any future changes, enhancements or support will be on your dime and make take longer than with an off the shelf product. Also, anything that integrates with the custom solution will drive more cost if you ever change the architecture. Sometimes, this is all worth it, but know and consider what you’re getting into and plan accordingly. In an off the shelf solution, you can often negotiate those costs into the contract.

This is just a primer. I’m going to dive into more detail into the different options over the next few weeks. There’s enough there that you will want to be able to consider the options and what they mean. In the meantime, let us known if you’ve ever implemented any custom solutions and how it worked out for you.

Making Your Decision

(Note: This is the continuation of a series of articles on solving business problems/take advantage of business opportunities. I’ve used this methodology in sourcing, but the same methodology can work when you’re trying to decide between multiple options of any sort.)

Making That Final Decision

From our last post, we figured out how long we are willing to wait and what we can afford for our solution.  We can use that combined with the amount of savings or extra profit we can get with our new project. Let’s get to work further cutting down our options.

I’m going to continue to use some round numbers as an example.
Let’s say that you’ve determined that this project should save $100 a year. (Or warn and extra $100 in profit, the math works either way.  Just make sure you’re dealing in profit and not revenue.)  You are willing to take a loss for two years, but want to be positive by the end of year three. Let’s sharpen our pencils and get to work. For now, I’m going to assume that you’ve done all your homework and that you feel good about these numbers.  I’m going to urge you again, though to make sure you have a sharp pencil and have researched them.

Determine Costs

For each of your options, you want to thoroughly research and determine realistic implementation costs and realistic on-going costs.  As part of the on-going costs, make sure you consider upkeep or replacement, which you may want to spread out over a number of years to keep the numbers manageable. You’ll also want a realistic timeline for implementation. If you’re buying an off the shelf solution, then try to talk to others who have implemented it and gotten their experiences. If it’s a custom solution, either built by you or someone else, take your timeline estimates and then add at least 25% to them.
Going on with our example, let’s say that you determine a realistic timeline to implement is 6 months and implementation costs will run you $150, with an annual cost of $50 that starts after implementation.
Over the three year timeframe you decided we will save (or make) $250. That’s from two years at $100 each and the six months after implementation.  Over the same three year period, we will pay  $275.  That comes from $150 for the implementation costs plus $50 each for two years and $25 for the six months after implantation. This means that we will not be cash positive at the end of year three. Now what?

What if We Can’t Afford It?

We have a few options.
  1. Scrap that solution – This would often be my recommendation. Cost estimates are usually optimistic and that means that what we just went through is a best case scenario. You determined that you needed to be in the black in three years and you won’t be. Honor that.  Take a look at your other options.
  2. Renegotiate costs – Can you get some of the costs down?  Now that you know the costs, go back to the vendor, project team, etc and have them look again. Can they spread out the implementation costs further?  Can they lower the maintenance costs?  Don’t accept vague promises. You have bottom lines and can walk away. Doing nothing is almost always an option. Keep that on the table.
  3. Reexamine Your Bottom Lines – Warning!  Be very careful. This is why I have you do this examination before looking at your solutions. It’s way too easy to give just a little. You’re working with a bunch of estimates. They can always be worse and are only rarely better.  Cash flow is critical to smaller businesses. Before you change your bottom lines, look at other options or change the cost basis (for real, don’t just change assumptions).  If you are going to give in and change your bottom lines, do yourself a favor, answer a few tough questions first. These tough questions are designed to help protect you from a cash crunch. If you don’t have solid answers for all of these questions then don’t do this. If you have solid answers, then write them down for when you need them. Murphy is alive and well and something will go wrong. Be prepared for it.
    1. Where is that money coming from? What aren’t you going to do in order to lay for it?  Know this up front!
    2. What will you do if the implementing timeline is longer than planned and you have to wait longer for the benefit?
    3. What will you do if the benefit isn’t as expected and you save less (or make less)?
    4. What will you do if you have to scrap the whole project?
Go through this exercise with each of your remaining options. Odds are that you will scrap at least one of the options because of costs. You may scrap all of them and determine that the project isn’t worth doing. That’s okay. This is the best time to scrap a project.  Do not keep anything on your list if it exceeds your bottom lines. If you change your bottom lines for one option, then you change them for all of them.
With each of the remaining projects, you should now have a payback period. You also have a scoring for all of them. For the scoring, remember that all of your remaining options (except do nothing, which you should hang onto as long as possible because it can be the right option) meet your minimu requirements. The lower your score so far, the getter.


Let’s keep that scoring model going.  Here’s what I recommend for scoring your options
  1. 1 Point for payback that is better than your bottom line
  2. 2 points for payback that is at your bottom line
  3. 5 points for payback that is worse than your bottom line (even though I tell people to take them off the list, some still,leave them on. Maybe this will kill the option.
Add up all your scores. If you have one that is clearly way below the others, consider that one first. If you have a few within a few points, then take a look at the qualitative parts. Think about their references, risks, extra benefits, ease of relationship and anything else that makes you feel better or worse about that option.  This might even be a good time to pit a couple of vendors against each other.  Have them negotiate against each other and see who comes out on top. It’s a good place to know what you want.

Wrapping It Up

Hopefully, this has been helpful. It sounds simple but as you start breaking it down, it clearly isn’t.
We started with defining our problem (not the solution, just the problem.)   While I call it a problem, it just as easily could be a new business opportunity, product, line of business,etc.  Then we defined the benefits of solving that problem.  What can we save or earn if we can implement and how will we know…with numbers.
With the problem in hand, we then defined what would be required to solve it (or implement the new business).  Remember that’s the what and not the how. We don’t want to define the problem yet. We want to leave our options open.
From there, we then shopped the marketplace for what was out there. For now, we are just dealing with off the shelf solutions that we can buy/build and implement. Custom solutions are similar but have some different considerations and, maybe more importantly, some additional risks.  We then compare our options to what our solution must do in order to be successful. We scrap anything that doesn’t meet our needs. Then we look at the remaining solutions and gauge any bells and whistles that we would like but don’t have to have.
Then we started thinking about our bottom lines. We know what we can save, but how much are we willing to spend. You could just as easily do this before shopping. Might even be better to do it that way. How long can you put up with being in the red when you consider the time to pay back implementation costs?  Then, using those numbers, we compare that to each option and calculate a payback time. If it’s in our limit, then good. If not, then too bad. Off the list.
With that, we can pick a solution, pit vendors against each other and come up with a final answer.
In coming articles, we will look at custom solutions, ways to streamline our process and some other considerations. Thanks for your time!

Using a Simple Concept to Be More Productive

Learning Never Stops

Photo Courtesy of John LeMasney

Using Just in Time Learning to Help Advance as a Business Owner

Some time ago, I learned about a concept that I think every small business owner and entrepreneur should know about. When you run a small business, it seems there is a never ending list of things to learn. We like to pretend that we have our arms around everything, while inside, we know that this constantly changing world and often our marketplace is driving us to need to learn something new.

As I see it, we should be constantly investing in ourselves, so it’s not much of a problem that there are new things to learn. We want to constantly keep our brains engaged, ready for new ideas and looking for opportunities.  At the same time, how do we know what to learn and how to grow?  How do we avoid being overwhelmed?  Business owners often have little extra time today, how can we take some of that precious time and spend it on learning?  Wow.  Incredible.

Often, I’m not sure it matters what we try to learn, until there is a problem we need to solve or a door we need to open.  Thankfully, there is more information available today, and that information is more easily accessible, than at any other time in history.  It is now easier than ever before to learn to solve that problem, or where to turn for a solution, than any of us have ever known. We can hunt down the resources and the knowledge more readily and almost as the problem hits us. Not knowing is not a stumbling block.

Aside from the Internet itself, which has over 4 billion pages, we have resources like online courses, Udemy, and any number of customer courses and blogs where we can learn information that once might have required years of study and thousands of dollars of tuition.  There are even resources like the $100 MBA offering valuable business courses for a very reasonable price (which you can guess).

This is a huge benefit to the business owner or entrepreneur looking to strike out and crush that new opportunity or solve that business problem. Even if is not a subject that you can learn on your own directly, you can get enough information to know where to look and to avoid being cheated or get the best resources available when you strike out to look for help.

Don’t let now knowing get in your way. Manufacturing has had, for years now, just in time supply chains where they minimized waste by ordering raw materials and other resources right as they needed them. Do the same with education and other knowledge. The resources are available. Not knowing isn’t a reason. You can learn as you need the knowledge.

Judging the Money

Finding the Money

You Want to Know Where the Money Is

Figuring Out the Financials of Your Solution

So now we’ve held it off long enough. We have a list of options that match our requirements. We’ve racked, stacked and scored it.  We can’t hold off any longer.  We need to look at the money now.

When we started the process we decided how much solving our problem would save us or earn us. That’s our starting point.  It’s a waste to pay any more than that. We do not want to lose money.


When we build any case we make assumptions. It’s a good idea to keep track of those assumptions. Things like “if the solution delivers as expected”, “if we can reduce headcount”, (headcount has this strange way of not going down at the rate predicted) all need to be written down and considered. I always recommend looking at conservative assumptions. Don’t plan on the best case. It doesn’t tend to happen. There’s something you forgot or something that you didn’t expect.  Plan on a realistically conservative plan.

This leaves you some leeway.  As a simple example, if you decide that successfully solving meeting your business plan will save you $100/month (just to keep the math easy) and the solution will cost you $90/month. That’s a 10% margin for error.  Often, not enough I’m afraid.

Margin for Error 

I’ve often used this methodology in software but it works well in other cases. When you think about what a safe margin is, you want to consider the complexity of what you’re implementing. As an example, say you’ve decided to try a process improvement exercise.  It’s not going to cost you much and the risk is minimal. Then I’d say to accept a tight margin. Be willing to take that 10% margin (or maybe less).

If, on the other hand, you’re investing in a new machine, software or something tangible that has to be designed, built, installed and then implemented, I recommend being very careful about accepting a tight margin. Often, your assumptions about manpower, timing, customization and any number of other variables are off and the project will cost more than you expected.  That margin gets eaten away very quickly. For these projects, I often recommend a 25% margin or more for contingencies.

One-time versus on-going costs 

When you look at these large projects, you need to consider two different buckets of costs.

  • One time costs – these are the costs to implement the project. They are upfront purchasing costs, infrastructure, etc that you will need to pay for once and maybe never again.
  • On-going costs – These costs are the on going costs, which can usually be estimated on an annual basis. They include licensing costs, time to manage what you’re putting into place, upgrade costs, etc. These are important costs to consider. It’s worth doing as much research as possible. Here are some questions to consider getting answers to, ideally from current customers, if possible.  These may not apply in every scenario, but before you give up, think long and hard about what unexpected or ongoing costs you may incur.
    • How much time does it take to manage?  For many solutions, hardware, machinery and software someone has to manage them. This might be time to test them, coordinate with the vendor or maintainer, etc.  This all takes time and that’s money you need to plan for.
    • What are annual maintenance costs? No matter what it is, there are costs to maintain it. You need to plan for those costs and for the downtime where you may actually be worse off during that time than you were before you implemented the solution.
    • What unexpected costs have they had? Almost everything you buy has unexpected costs associated with it. Try to figure out what those have been or can be. Of course, then they won’t be unexpected for you, but you get the idea.
    • What’s the lifespan?  Whenever you buy something, it will need replacement at some point.  This might be decades or minutes. Try to have some idea of what that might be.

Doing your homework will give you an idea of how much margin you should need and what you should plan. Make sure you know both of these costs going in and have seriously considered each of them.  These will help you plan and make an educated solution about a decision.

Considering Costs 


It may be worth taking a loss on the upfront costs for a period of time if the annual savings is enticing enough.  You need to consider how long a payback period you need before considering how much you can spend. If you can’t afford any negative cash flow, then you probably want to make sure that your solution pays for itself in the first year.

More often, though, the upfront costs will need to be carried for a period of time while you pay them off with the savings. This is again where your margin comes in. Any project delay is more time that you have to pay for that loss. The bills still come due even though the solution isn’t in place yet.

That can be a useful negotiating strategy, trying to move some of the costs to later in the project so that you pay out the cash closer to when you’ll have the benefit. Say, for example, if you can get the seller to agree to 10% up front with the balance paid off later. The more money you move to later in the project the better off you are in a few ways. First, it helps protect you because it inspires delivery by the vendor. It also moves your cash outlay closer to implementation. No matter what, though, make sure you have that money on time. Many vendors will stop work if you can’t pay. That means you have no solution, you’re out the money you already paid and if you get the money later, you’ll take even more delay as the vendor gets their resources together and they get momentum again. Projects that stop never start back up where they left off. You always lose time.

Calculating Your Spend and the Benefit


You want to calculate how long it will take to pay off your upfront savings. Here are some simple calculations to do in order to figure that out.

  1. Determine how much you will save/make per year. For this, simply subtract your planned benefit from your planned annual costs.

For example, you expect your solution to cost $100 per year and you will make or save $200 per year. (Think about your assumptions again because any wrong assumptions will come out of the difference). That means y expect to make or save a total of $100 per year additional.

  1. Calculate your upfront costs.

Example, our solution is going to cost $500 to implement.

  • Now divide your costs by the annual benefit.

So we take the $500 upfront costs and divide by the $100 per year. This means we effectively won’t make any extra money for five years.

As any good MBA student will tell you, I’ve left a few important parts out of this simple math. There are fancy formulas and if you write me, I can help you with those, but I wanted to keep it easy for you. There are some things to consider though.

  • This depends on our assumptions. I can’t stress enough that you are trying to predict the future. Are you willing to bet five years of good investment on that predicted future?  I often wouldn’t unless my predictions were very conservative or the benefit was so big that I had to consider it.
  • Time value of money This is a fancy business term that mean that the $500 you spend today on implementing your solution is not worth the same $500 you will save over five years. So, your payback is actually longer than five years (using our example). As time marches on, money is worth less. Like I said, fancy formulas exist to predict how much less but for now, I think it’s worth thinking about a one of your conditions.

I recommend thinking through some conditions before looking at the financials on any solution. Here are some questions to ask yourself –

  • How long am I willing to tie up my money?  How quickly do I need to pay it back?  How long can you go without the money that you’re investing on the front end and what happens if it takes longer?
  • What are my assumptions?  Write them down. Know what you’re thinking.  This helps you assess risk. Any time you hear yourself or someone else saying something like “if this happens” then that’s an assumption.
  • How much risk am I willing to take?  How much margin do I want?  I recommend never pursuing a plan that has little room for error. There will be error and that margin will get eaten up.

As you think through these questions, next we will take the answers and look at our solutions.


Posts in this Series

  1. Overview of Methodology to Solve Business Problems
  2. Identifying Your Problem or Opportunity
  3. Measuring Your Problem
  4. Defining What Your Solution Needs to Have
  5. Shopping for Your Solution
  6. Ranking Your Solutions
  7. Judging the Money

How Disney Dropped the Ball

Good Process is Good Service

Don’t Frustrate Your Customers

What we can learn from it

To start with, my family and I are big Disney fans. We enjoy their theme parks, products, experiences and happily recommend them. My wife is a travel agent and loves to sell Walt Disney world travel and help her clients experience them. I set this up because of the rest of this piece comes from a place of disappointment and sadness.

Last week, Disney had one of their periodic sales, which are usually great deals. This one involved free dining when you buy certain packages during certain times. Disney, like many hotels and airlines, follows a practice of revenue management and uses these sales to keep up occupancy during slower times.  That may be a good future topic actually because there are some things to learn there too.  For Disney, it apparently works because these sales often sell off their inventory very quickly, so travel agents jump on them quickly.  The sale was rumored but not announced.  That’s okay, make sure those paying attention get the benefits.

The problem here occurs in the way Disney’s infrastructure, or operational decisions, I’m not sure which played out. A good overview is here but some of the outcomes involved hours of busy signals on the travel agent phone lines  (not hold, busy signals – insane), crashing web pages and web pages that dropped reservations during the booking flow. At the same time, there are rumors of the bookings opening to certain travel agents early and the phones being turned off to benefit the lines to the public. Again, I don’t know these to be true but, as I’ll explain in a minute, facts are irrelevant.

So, why could this have happened and why would people think this is the case?  Disney’s travel agent site actually is one of the worst I have seen. It’s slow, has poor functionality and often crashes during high volume times.  It drives more calls to their call center. I can’t quite understand that thinking as servers have to be cheaper than call center folks but that’s their decision.  So, to some level that piece is expectation but the busy signals are weird. Since Disney actually makes less money per sale from a travel agent sale than for a direct sale, at least theoretically since they don’t have to pay commission  (if a travel agent charges you for booking things like Disney and cruises they are actually making money twice as they also get commission too. That’s why using a travel agent for these can make a lot of sense because you should be able to benefit from their expertise for no additional cost.)

So what can sense small business owners learn from all this?

  • Be Prepared for Your Own Plan – If you are going to offer a sale, special,  new service or any other big change or benefit, make sure that you and your business infrastructure are ready for it. I’ve seen sales crash Web sites or inventory to sell out so quickly that it looks like you never really offered anything, etc. These can actually have a negative effect on your brand and lose longer term business as potential customers are angry and going elsewhere, feeling cheated because you weren’t ready.
  • Don’t lose sight of your partners – Through its action or inaction, Disney now has upset travel agents so much they are blogging about the experience. That blog is now being forwarded to clients as explanation. All of this has a deleterious effect on their brand. Disney’s brand will survive but how many of us have brands that could survive such press?
  • Don’t forget your regular customers – When you run sales and specials, make sure you remember your regular customers. They will continue to bring you business and revenue during the high times, cutting down the need for sales. You need them. Make sure you have thought through responses to them, including them when appropriate,  etc.
Sales, specials, press and other big events can be a great opportunity to draw in traffic and business. To get the benefits you want, you need to ensure that you have the infrastructure, plans and communications in place in advance. Otherwise, the law unintended consequences may take hold and cause more harm than good.  Disney will survive and the travelers that don’t book away this one time (who will likely still go later) will have a great time and will forget about this wrinkle. For the rest of us, how many small businesses would survive so well?