December 2021

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Our Favorite Blogs of 2021

December 30, 2021/in Featured Stories /by Brandon Wyson

The year 2021 was bittersweet for most. But as this annum’s final hours dip into memory, let us remember those high moments that made this year special. And to supplement that high, in 2021 the Kapitus blog has also been host to a content overhaul with new articles every week. As our first calendar year of new content comes to a close, it brings us great joy to curate and collect our favorite blogs of the year. This landmark year gave way to several series and deep-dive pieces, all of which are featured here on the Kapitus blog. Be sure to keep a close eye on the Kapitus blog this upcoming year for more blogs and articles written by Kapitus’s finest.

How Independent Grocers can Compete with Amazon by Vince Calio

Taking on Amazon is no easy task, but independent grocers aren’t helpless against Amazon and Whole Foods’s meteoric rise. This article lays out practical, manageable tactics for independent grocers to stay competitive in a market of big players. This blog made our favorites list for highlighting unique and genuinely inventive ideas facing a type of small business owner that already need all the help they can get.

Shipping Unboxed: How to Reduce Shipping Prices by Brandon Wyson

The first article in Kapitus’s “Shipping Unboxed” series, “How to Reduce Shipping Prices,” attempts to tackle the impossible: saving on postage. Every small business with an ecommerce arm knows the woes that come with managing your own shipping operations. Taking advantage of some new-age tricks, though, small businesses can save some money and time by following the tips in this blog.

Small Business Acquisitions and How to Finance Them by Vince Calio

Small business owners are in the position to acquire fellow businesses more often then you may think. This blog goes in deep on the particulars of the how and why of small business acquisitions with the aim of giving small business owners the tools and knowledge to determine if any kind of acquisition is right for them. From projecting gross income to creating new mission statements, this article leaves no acquisition-based stone unturned. With quotes from experts like Kapitus’s own Chief Revenue Officer Joshua Jones, this detail-oriented how-to shows the steps to acquisition success in a clean, and digestible format.

How to Create a Culture of Open Communication in Your Workplace by Brandon Wyson

2021 was a year of many small business “firsts.” The ever-adaptive COVID-era small business must jump through flaming hoops and balance miles above the ground just to break even. In such fast-moving times, employees and management can sometimes lose touch and breed dangerous “us versus them” mentalities. This article defines an “open communication workplace” and details universal strategies for making your staff more involved and comfortable in the office. Whether in-person or remote, these tips set the groundwork for making a work environment where employees and managers work together rather than as two groups.

How SBA Loan Forgiveness Works by Vince Calio

While we can’t promise you red tape-cutting scissors, “How SBA Loan Forgiveness Works” is a to-the-numbers guide on ensuring small business owners can get what they are entitled to. Many holders of SBA loans may have recourse to seek loan forgiveness but given that the application process for an SBA loan is already a crash course in legalese, those cases where a business owner may be due forgiveness may not be entirely clear. This article works out the essential cases of when and where SBA loans may be eligible for forgiveness. Especially in 2021, small business owners that could see loan forgiveness ought not miss out.

Best Low-Cost Methods for Creating a Stellar Customer Experience by Brandon Wyson

Small businesses already have a leg-up on their corporate counterparts when it comes to inviting, personal experiences with customers. Small businesses, then, have even more to gain by investing in their customer experience. Investing, however, doesn’t have to hurt your bottom line. This article details several low-cost (and often free) methods to make your small business more memorable and positively associated for your customers. As for both brick-and-mortar as well as ecommerce companies, positive customer experiences make the difference between simply doing business and making a genuine connection.

As Pandemic Nears End, Conditions may be Right for Equipment Financing by Vince Calio

While this title may not have aged well when it first published in Q3 2021, the information within is still top-notch. This data and research-driven article explains in crisp detail exactly what business owners interested in equipment financing ought to know before signing the dotted line. With quoted information from industry experts, this piece is an information gold mine on the who, when, and how of modern equipment financing. Even though we’re still not out of the COVID woods yet, the astute observations in this blog make it a key resource for small business owners seeking equipment financing.

How Boutique Hotels can Harness Post-Pandemic Momentum by Brandon Wyson

Once again, while the “post-pandemic” is still not upon us, this comprehensive review of timely boutique hotel best practices still rings true now that safe vacationing can be a reality for some travelers. Methods for attracting guests like the “alternative getaway” approach and harnessing the power of app-based booking services like Airbnb and Vrbo are just a sample of tips for boutique hotel owners to step up their outreach and “book-ability” in 2022. The hospitality industry is still not reaching pre-pandemic levels of event and stay bookings, so as occupancy still threatens to lag, boutique hotels ought to take advantage of every tip and trick in the book to pull the eye of would-be travelers.

How to Survive Negative Cash Flo w by Vince Calio

One of the ultimate small business diagnostics, this article plays out the most common scenarios for negative cash flows in small businesses as well inventive fixes. Considering 2021 was the year of the flattened cash flow for small businesses, there could be a multitude of reasons even healthy small businesses may be in the red more often than they would like. While every small business is unique, this comprehensive blog makes small business owners probe their distribution lines in ways that may not have thought of.

How the Pandemic has Changed the Construction Industry by Brandon Wyson

A powerful story of industry strength and resiliency came from construction in 2021. Several swift and targeted industry changes throughout the pandemic have even led to growth in the construction industry while several other fields consider downsizing. One of the most stunning changes in the past year of construction is the wide adoption of off-site and modular construction. A match made in stockyard heaven, off-site and modular building allowed construction companies to both adhere to COVID-19 safety guidelines and keep to existing deadlines; often, this method also saved companies money. New technology like virtual reality tours and remote building inspections have been accepted at-large in construction, first as a necessary precaution, now as a viable alternative. The construction industry became a visionary exemplar of adaptability and versatility during the pandemic and has shown no signs of stopping in 2022.

How Businesses can Counter the Threat of Deepfakes

December 29, 2021/in Featured Stories, Operations /by Brandon Wyson

The Internet age united the world with a universal language of twitters and pings. The benefits of our new interconnected society are too plentiful to count, but there is also a decrepit underworld of cybercriminals and cybervandals who use that interconnectedness to spread misinformation. Cyber criminals thrive in anonymity and often take their greatest pride when robbing people of their own. As the Internet becomes more intertwined with our way of life, it is becoming clear that digital attacks on a person’s character can be just as damaging as those done in the real world. Deepfakes are near-perfect digital recreations of faces, often manipulated into compromising positions or saying words the speaker never actually said. This type of mimicking technology has become increasingly convincing since its relatively recent inception. As a result, it is imperative that people and businesses targeted by deepfakes immediately act. Misinformation at the expense of your business can be costly and reputation-shattering if not properly quelled.

Types of Deepfakes and Preventions

The most popular deepfakes often put words in the mouth of celebrities or politicians, but those aren’t nearly as malicious or dangerous as fakes that target businesses. While celebrities have massive platforms to dismantle the slings and arrows of outrageous cyber ruffians, small businesses have to fight much harder to recover.

Social Engineering

Advanced deepfakes can mimic voices well enough that there are several documented cases of employees, or even executives, being fooled into sharing private information with cybercriminals. These types of fakes tend to happen over phone calls and don’t need the sophisticated face-replicating tech. These attacks are called social engineering which is an umbrella term for any kind of manipulation done to gain personal or sensitive information. Social engineering deepfakes take advantage of peoples’ inherent willingness to trust caller ID and the voices of people they know.

Preventions: Social engineering deepfake attacks are so successful because most people don’t expect them. Since social engineering attacks target employees or anyone who may hold sensitive information like passwords or routing numbers, the most effective way to snuff out these attacks is training. Teach your employees the telltale signs of social engineering: brief calls asking very specifically for those passwords or routing numbers.

Another tactic is to develop a failsafe or codeword system for private company information. Make a system where at least two employees must approve the sharing of private passwords or sensitive information. Social engineering attacks thrive on off-the-cuff conversation. If the target of a social engineering attack brings another employee into the conversation, it’s likely someone will realize something about the caller is off.

Viral Misinformation

Being that deepfakes are near-perfect imitations, those who may want to do your business harm or have a bit of fun at your expense may use your image or the image of someone close to your business to spread misinformation. This misinformation can come in the form of doctored video or audio clips posted to social media with the intent to harm your business’s reputation.

Preventions: While it is impossible to prevent cyber hooligans from creating deepfakes, it should be every business’s prerogative to create a quick-acting crisis response plan. Every second is precious when countering misinformation; it’s very common for the initial misinformation to overshadow delayed corrections from businesses. The objective of these deepfakes, beyond general chaos, is to sway public opinion. Sway favor back into your court by aggressively and poignantly dismantling the authenticity of the deepfake video or audio.

If the deepfake is a video impersonating one of your employees, make sure that employee is involved with these efforts. Tail the doctored video or audio relentlessly and post in its comments or adjacent pages proof of its falsehood, whether that be your own video debunking their claims or a written response. While deepfakes are near-perfect, the uncanny valley is still present: look for breaks in lighting or odd pixilation on or around the face. These little signs are common on cheaper deepfakes and can be their easy undoing in your business’s response.

Extortion

The most devious cyber hooligans may turn criminal and use their deepfake tools for criminal extortion of your business. Deepfake extortion generally entails cyber criminals creating a doctored video of a public figure, in this case, someone important to your business. Then, the cyber criminal will often send the video to you, the business, asking for ransom. If you don’t give in to their demands, they will post the video, often pornographic or displaying absurd violence, to the Internet.

Preventions and Containment: Giving into the criminal’s demands is not an option. Collapsing before extortion is especially dangerous, as it will likely mark your business as an easy target for future cyber criminals. First, notify the police. Extortion is a crime, and in several states, malicious deepfakes are too. As for protecting your business’s brand and image, be as transparent as possible about the nature of the extortion. Act quickly and develop a public statement about the deepfake extortion before the cyber criminal posts it if possible. Beating the post will do a major hit to its credibility.

If the salacious video ever goes live, address it directly. Ignoring the deepfake, however heinous, will only go to damage your business, as consumers who see the deepfake but don’t hear an adequate rebuttal from your business may believe that either you aren’t aware of it, or even worse: that it’s real.

Technology’s Climb and Integrity’s Tumble

The AI technology that manufactures deepfakes is strengthening every day. There is absolutely nothing we, or anyone, can do to slow their development, so it ought to be the prerogative of every business to learn the warning signs and develop a clear plan of response. Safeguards like multiple employee sign offs for money transfers or password releases is a good measure to implement already, but it can be equally critical to your company’s deepfake defense.

Beyond these steps, there is unfortunately little businesses can do to meaningfully prevent deepfake attacks. As time moves on, however, and deepfakes become even more common, we may see a silver lining. People will hopefully learn to ask themselves when watching something wildly out of character or too good to be true “is this a deepfake?” And at that point, businesses may be fighting less of an uphill battle when responding to defamatory deepfakes.

Does Your Website Make You Susceptible to an ADA Lawsuit?

December 28, 2021/in Featured Stories, Operations /by Vince Calio

Most small business owners know that their physical stores or offices must be compliant with the Americans with Disabilities Act of 1990 (after all, they’ve had more than 30 years to learn and comply with the law), but did you know that despite your efforts, you may still be susceptible to an ADA lawsuit?

That’s because the ADA itself obviously predates the advent of the internet, and therefore no one is really sure how much legal liability risk you’re carrying as it relates to your website..

Gil vs. Winn Dixie

When the 11th Circuit Appellate court ruled in April that the ADA does not entirely apply to websites in

A lawsuit against Winn Dixie placed renewed emphasis on whether websites need to be ADA compliant.

the Gil v. Winn Dixie case, it gave some short-term clarity on the issue. However, while the court ruled in favor of the business, the case generally put a renewed spotlight on the ambiguous subject of whether business websites should be required to accommodate people with physical and mental impairments.

In Gil v Winn Dixie, a customer sued the grocery chain because its website did not accommodate visually impaired people, and therefore treated disabled people as “second class shoppers,” according to the plaintiff’s affidavit. In short, the plaintiff, Mr. Gil, claimed that he was given less preferable treatment than non-disabled customers.

The 11th Circuit court, which covers Alabama, Georgia and Florida, ultimately ruled that Winn Dixie’s website did not fall under “places of public accommodation” under Title III of the law, and therefore its website is not required to be accessible to impaired or disabled people, even though its brick-and-mortar stores do need to be ADA compliant.

Jury Still Out, Despite Decision

It’s important to note, however, that the judges’ decision in the case was somewhat narrow in its scope. Although they ruled in Winn Dixie’s favor, they did so largely because the company’s website is not a point-of-sale. The judges noted in their decision that there was nothing to prevent Mr. Gil from making transactions at any of Winn Dixie’s physical stores, which are ADA compliant.

Legal experts have pointed out that if the website were a point-of-sale and disabled people could not conduct transactions on it (i.e., the customer had to renew and pay for a prescription on its site), the decision may have been different. So if your business has a website in which customers can make purchases, you may still face legal liability risk if your site is inaccessible.

Why the Case Matters

In recent years, website accessibility lawsuits have skyrocketed as the legal community continues to wrestle with the issue of whether websites should be ADA compliant.

According to a study from UsableNet, the number of ADA-related digital lawsuits climbed to 3,550 in the US in 2020, up from 2,314 in 2018. Gil v Winn Dixie, however, was one of the few cases that made it to the Appellate Court, and while the court’s ruling ultimately favored businesses, it also puts a renewed spotlight on how companies – especially small businesses that may not be able to afford costly legal battles – should take steps to avoid sometimes-frivolous ADA lawsuits by making their websites accessible to people with disabilities.

Last year, the 116th session of Congress ended up voting against the Online Accessibility Act which would have amended the ADA to include requirements to make websites accessible, but with a new Presidential administration and the fact that Senate Democrats now hold a slim majority, the issue could be taken up again shortly.

What are the Current Laws?

ADA requirements for physical stores and offices have been around for nearly three decades and are well-known, but – barring legislation from Congress – the question of how the ADA applies to websites is still murky.

In 2010, the US Dept. of Justice passed the Americans with Disabilities Act Standards for Accessible Design, mandating that electronic and information technology, such as websites, be accessible to those with disabilities such as the visually and hearing-impaired. The act does not, however, cite specific steps companies need to take to make their websites accessible.

Today, many companies use the Worldwide Web Consortium’s (W3C) Web Content Accessibility Guidelines (WCAG) version 2.1 as a guide to making sure their sites are up to standard. While WCAG is not a legal document, W3C is an international community of web developers that is respected around the globe.

Avoiding an ADA lawsuit

While the issue is still ambiguous, if you’re a small business owner, it’s probably best to err on the side of caution when it comes to your website, lest you find yourself having to pay exorbitant legal fees in order to fend off a lawsuit.

If you’re concerned about your website and are seeking to make it ADA compliant, you may wish to consult with an attorney. There are also plenty of software packages out there that can assist you in making sure your site is accessible to those with disabilities.

Screen readers for your website can help you avoid a costly ADA lawsuit.

The first thing you may wish to do is invest in a screen reader for your site. A screen reader is a software program that allows blind or visually impaired individuals to read the text that is displayed on a computer screen via a speech synthesizer or a pad that will translate text on the screen into braille. Many of these software packages are available online and are free.

Following WCAG

Additionally, your best bet is to carefully read WCAG 2.1 and make sure that your website follows its guidelines. You may wish to do this with an attorney. There are 4 basic principles to WCAG. A website must be:

Perceivable – Your website must be perceivable in terms of touch, sound, and sight. This is where a screen reader would most likely come in handy.
Operable – A user, regardless of their disability, must have ways to operate and browse your site. For instance, someone with motor difficulties should be able to use a keyboard instead of a mouse.
Understandable – Your website must use clear terms, simple instructions, and be able to explain complex issues.
Robust – Your website must use recognized standards, such as clean TML or CSS language so that users do not have to rely on additional technology besides their computer to use your website.

Other Suggestions

Aside from the four principles stated, there are other actions to take to follow WCAG 2.1. On your site, you should make sure to:

Create alt tags for all images, video and audio files so that users with disabilities can read or hear alternative descriptions of your content.
Create transcripts for video and audio content so that hearing-impaired users can easily access your content.
Offer customers alternatives when they run into input errors. If a user is having difficulty navigating your site because of their disability, it is your responsibility to offer recommendations on other ways to navigate to the content they are looking for.

While making sure your website is accessible to all users will take time and energy, it is an exercise worth undertaking. First, it will enable you to avoid a costly lawsuit. Second, showing the world that you’re empathetic to people with disabilities, and making your site accessible will improve your public image. Third, it could even increase your customer base to include more people with disabilities.

Unprecedented Challenges Make SMB Owners say Good Riddance to 2021

December 22, 2021/in Operations /by Vince Calio

It’s doubtful that you can find a single SMB owner in America who can say that 2021 wasn’t a crazy year filled with unique challenges. Indeed, ongoing safety concerns with the COVID-19 pandemic, the challenge of retaining employees during “the Great Resignation” and inflation and supply chain disruptions threatened the very survival of small businesses.

So what were the biggest challenges small businesses faced in a year full of challenges? For some everyday small business owners, it was adjusting to the new normal, and for others, it was hiring and retaining staff. Still, others said staying focused amidst the social noise and political divisions resulting from the pandemic were their biggest obstacles.

Marketing During the Pandemic

For Holly C., marketing manager at Plumbing Lab, digital marketing during the pandemic was the biggest challenge of 2021.

Holly C., social media manager at Plumbing Lab in Albuquerque, NM, said adjusting the company’s marketing techniques while much of the public was sheltering in place due to the pandemic turned out to be a huge challenge.

“During this pandemic plagued year, I feel small businesses have flourished a lot with digital means, but standing out and spreading the word about your business have been the most difficult,” she said. “Due to the presence of so much noise in the digital space, it has been very hard to spread the word about your business as the competition is global thus using location-specific hashtags has become of utmost importance.”

Joe Richard, founder of Getpixie, said his company was “lagging behind in reaching out to people” due to new paradigms created by the pandemic, and getting the word out about his company was the biggest challenge.

“We were lagging behind in reaching out to people,” said Richard. “Some new ways that were devised to have a stronger market presence were to rely more on eCommerce and also to focus more on visual media like creating videos to go with the content in order to improve consumer engagement and create a loyal community of followers who would also be willing to give feedback.”

Fighting Online Fatigue

For Sam Davis at Sticker Crypt, marketing became difficult in 2021 as consumers were fighting “online fatigue.”

For Sam Davis, owner of Sticker Crypt, reinventing the marketing wheel became the challenge of 2021 as the pandemic forced most people to work online. As a result, it became difficult to reach potential customers online because they were so fatigued by looking at the internet, emails and Zoom calls all day.

“As content developers, we’ve really had to rethink how we’re going to get our content in front of eyes that are willing to consume,” said Davis. “Consumption of video content is at an all-time high, but the popular platforms (e.g., TikTok and Instagram) don’t necessarily translate to search engine placement. So, this year it’s been a balancing act of developing perpetual content (e.g., blogs, YouTube) alongside ephemeral content (TikTok and other social media) to engage users and cultivate fans of our brand. It’s a rough place to be in – but we’re making it work.”

Staying Focused During Crazy Times

Nat Noone, CEO of New Wave Soda and Paige Arnof-Fenn, CEO of Mavens & Moguls, said their biggest challenge this year was sticking to their company’s missions and goals despite all of the outside noise brought about by the pandemic.

“I think our biggest challenge for 2021 was creating a balance in our business between adapting to an ever-changing environment (new covid strains, supply chain issues, freight increases) and staying true to our business plan by not being distracted by recent events,” said Noone.

“For example, to open the year we built out our 2021 business plan and company goals, and one month in we were told we will no longer have domestic can supply due to an aluminum shortage…We did what we called ‘gentle nudges’ towards changing directions with whatever the latest news was. It’s challenged our team to be more nimble/flexible throughout the year versus hard-charging towards a new fixed plan.”

Arnof-Fenn said that as an entrepreneur, her biggest challenge was staying mentally sharp despite all of the distractions in society.

“There is so much noise out there with the latest variant, social media, 24/7 news, climate change, etc., that for my clients and me, staying focused with all the distractions that we are bombarded with on a daily basis. So, my top tip is to learn to give yourself permission to say no. Whether it means passing on joining another committee, delegating to someone on your team to attend the event, sleeping in (no to an alarm clock), meditating, taking a walk, or just turning off my phone and computer.”

Safety and Health Concerns

Greg Hermann, a partner at Hermann and Hermann, said keeping everyone safe from COVID-19 was the biggest challenge in 2021.

For Gregory Hermann, managing partner at law firm Hermann and Hermann, the biggest challenge was adjusting to the office environment for COVID-19 in order to keep everyone safe.

“Our law firm, much like everyone else in 2021, has had to change the way we operate to keep our team and clients safe from Covid19,” said Hermann. “Much of our daily interactions before Covid were face-to-face, which is not possible because of Covid19. Our law firm has overcome this by using video and phone calls to meet clients. We have also allowed team members to work remotely and in hybrid work models if possible.

“Another change we have made is offering anyone in our office, like team members, clients, or vendors, a mask when entering. Our law firm also has hand sanitizer stations throughout the office and set up directions to avoid people from coming into contact with one another in high-traffic areas. Thankfully, these changes have kept our team members and clients safe during the pandemic.”

Staffing Challenges

The Great Resignation continues to cause hardship for companies big and small seeking to hire and retain workers, and small business owners are still feeling the brunt of that.

“The Great Resignation” forced Creative Kitchen to become creative in their hiring, said Christina Russo, marketing director.

“As a business, we’ve always relied on our dedicated core team of freelance researchers and writers to supply the content for our community-oriented site,” said Christina Russo, marketing director at Creative Kitchen. “But the pandemic nearly put paid to that completely, as almost all of our freelance staff needed to find salaried, full-time jobs to support their families…As well as offering our freelance staff above market rates, we now offer them a share of the profit of the site if they stay with us for more than six months, which is paid as a monthly stipend. It’s helped us to keep our contributors and has actually increased our profitability.”

Justina Cerra Lucas, founder of 218 Creative Marketing Consultancy, said she had to rethink her firm’s business model because the contractors and freelancers she relied on left to begin their own businesses during the “Great Resignation.”

“Because of this, client projects weren’t executed to our standards and took excessively long to complete,” she said. “In order to overcome this major challenge, I took a step back to evaluate our business model. The end result was a redesigned package structure that eliminates the need for us to rely on outside contractors or freelancers. Our clients absolutely love the new structure, pricing is more affordable and the projects are now even more profitable for us.”

Hybrid Work Blues

Of all the small business owners Kapitus contacted for this article, the biggest challenge of 2021 seemed to be moving to a hybrid/remote work environment. The problems with these new models ranged from technology issues to keeping staff motivated while working from home.

Eden Chang, co-founder of PeopleFinderFree, said managing a hybrid workforce was the most daunting challenge of 2021.

“I discovered that managing both in-office and remote teams is a job that requires a significant amount of emotional intelligence, as it’s all about the ability to successfully build interpersonal connections and maintain them,” said Eden Chang, co-founder of PeopleFinderFree.

“And with ‘The Great Resignation’ proving to be something many companies have had to be cautious of this year, this meant making an effort to connect with each staff member on a more individual level through frequent dialogue as well as through employee surveys.”

For Tomek Mlodzki, CEO of PhotoAiD, switching to a hybrid work environment meant regularly holding group activities outside the office to give his employees a sense of belonging.

“As human beings, we need to socialize, and while some may appreciate remote work, others prefer to spend a couple of hours from the office, hence the adaptation to a hybrid format,” he said. “But more social activities outside the office have helped a lot. If we can’t meet in the office, why not outside?”

Supply Chain Disruptions

As the switch for the economy was suddenly turned back on in 2021, companies that laid off or furloughed workers during the pandemic had difficulty keeping up with sudden customer demand for goods and services. Therefore, many SMB owners cited dealing with supply chain disruptions as their biggest challenge this year.

“The pandemic has really put a restriction on our supply chain and our ability to get product in our warehouse,” said John Wu, CEO of Gryphon Connect. “This forced us to have backorders on our product and limited our ability to provide a great customer experience for our customers. This has been largely out of our control and has been very frustrating for our team. We hope that these issues get better going into 2022.”

“Having to turn away customers because not having a small rubber seal sure did force us to be creative,” said Scott Kilmer, CEO of Car Windshields. “First, we began reusing parts that could be salvaged which were surprising because they did the job just as good as new ones would.

“Second, we started using smaller companies with good quality products and things have been on the rise. We didn’t suffer from human resources and that was a relief.”

Supply chain disruptions caused massive headaches for Jeff Moriarty at Gem Art.

The supply chain disruption also affected the shipping and delivery of products, as orders got delayed and backlogged due to supply shortages and heavy demand, said Jeff Moriarty, marketing manager at Chicago-based Moriarty’s Gem Art.

“This year, packages that normally took 2-4 business days are now taking over a week to be delivered,” said Moriarty. “Because of this, we had to increase all of our prices slightly and ship everything priority and express. This way we could be assured that packages are delivered on a timely basis for our customers. We are hoping that shipping problems are resolved in 2022.”

Let’s Hope for a Better 2022

The ongoing effects of the pandemic, supply chain issues and difficulties in hiring and retaining crucial employees made 2021 one of the most difficult years on record for small business owners, and many are waiting to sip champagne at midnight on New Year’s Eve and bid goiod riddance to 2021 and usher in what will hopefully be a year of improved conditions.

Ways Small Businesses Can Respond to Negative Reviews

December 14, 2021/in Featured Stories, Sales and Marketing /by Vince Calio

Getting a bad review for your business can be insanely irritating, especially given how hard you’ve worked to make your business perfect. So, what do you do when Yelp, Google or social media notifies you of a customer complaint about your business?

When you do get a negative review, it’s certainly important to watch your temper and not shoot back an angry response, because that will just make matters worse, nor can you afford to ignore it, as a survey from Trustpilot found that 89% of consumers worldwide read reviews online before they buy a product. Responding to reviews also lets the world know that you value every customer and don’t take them for granted.

“Always respond to negative queries,” said Todd Ramlin, manager at small business Cable Compare. “The story has two sides to it, and your business’ version needs to be heard. Even if it is just to apologize. We get it wrong from time to time. In some cases, customers may be willing to change their minds and perhaps remove the review. Reach out to them offline, make things right by them. Change their last memory of your business.”

What Type of Negative Review?

Getting a negative review of your business, however, doesn’t have to leave you stranded between a rock and a hard place. When you get a bad review, the first thing you need to do is determine what type of review it is, as they usually come in three types of flavors:

The Enraged Review– In this type of negative review, the customer simply hurls insults and
Sometimes negative reviews are just filled with vitriol and make little sense.

makes little sense. For example, you can see an enraged review in the actual Yelp review below of a restaurant in Brooklyn, New York called Roberta’s. In this review, the customer complains about not being seated after the restaurant closed, and then goes on a diatribe about how she’s going to hold a grudge. This type of review is difficult to respond to, as there often won’t be any rational points to address with the customer.
The Angry-but-Legitimate Review – This type of negative review also may include some well-placed
Sometimes you’ll get an angry review from a customer with a legitimate gripe.

insults, but it may be over a legitimate gripe with your business. Perhaps your company didn’t serve your customer as well as it should have? In this case, the customer complains that no one from the fencing company got back to them after the initial consultation. This is most likely one of the easier negative reviews to respond to, as you can specifically address the complaint in an apologetic tone.
The Factually Wrong Review – Some negative reviews are simply factually wrong and unfair to your business. In this case, a customer of a boutique hotel accuses the valet parking attendants of damaging her
Sometimes you’ll get an angry review that isn’t factually correct.

car. In this case, the hotel owner expresses sorrow over the damage to the car but explains that after an investigation that the hotel was not responsible for it.

Make Sure the Review is Real

As we all know, the world is full of dishonest people, and as a result, you may get negative reviews from supposed customers. These customers, however, may be competitors or people who hold a grudge against your business. These types of fake reviews are more numerous than you may imagine.

“I’ve woken up to 3 fake reviews in one morning,” said Nathan Smith, manager at Falconer Removal. If it isn’t real and they aren’t a customer we’ve worked with, I will persist in contacting that person until the review is removed, on some occasions they’ve actually changed the review to 5 stars after hearing our story.”

If you do get a review that you think is fake, check out the reviewer’s profile to see if he or she has given similarly worded reviews of other businesses; look for specifics in the review – a genuine reviewer will often have a specific complaint and have detailed knowledge of your business, and finally, look for repeated mentions of a specific brand other than yours. If you believe a review is fake, alert the administrator of the review site and respond to the review anyway.

Use Honey, Not Vinegar

Every day small business owners whom we contacted said that regardless of whether the customer is right or wrong in their review, it’s always best to respond to them in a soft, and if necessary, conciliatory tone.

“It’s important to be understanding and use a soft tone of voice, as this helps keep people from getting very angry because you aren’t matching their energy,” said Harrison Baron, CEO of Growth Generators.

“Apologize; regardless of who is wrong in the situation – it’s easy to apologize and take the blame. Once the customer understands they aren’t wrong, even if they might have been, it now allows you to move forward with a solution. Then do what you can to make the situation right, and if your company did mess up, it’s easy to send something edible or buy them lunch on Doordash – that makes a world of difference to the customer. They may even take down their review.”

Clyde Steuber, marketing manager at Independent Fashion Bloggers, said that the old adage that “the customer is always right” should still apply, even if they’re wrong.

“From my point of view, you have to treat the customer as if he is right – even if he is not and the facts they shared are not true. Depending on the type of business you have, you can offer discounts, vouchers and/or upgrade the customers loyalty program. I would also recommend contacting the client again and ask if he used what you offered and if he’s satisfied. If you get a positive response, you can kindly ask him to change his review.”

Correct Them Without Arguing

In some cases, negative reviews are not factually correct or don’t provide accurate information. For example, in a review on Yelp of a local Tex-Mex restaurant in New Jersey, a customer complains that his flank steak was well done when he wanted it cooked medium rare. The owner of the restaurant, in a polite voice, corrected him by pointing out that first, a flank steak is about a quarter of an inch thick, meaning that it’s so thin that it’s nearly impossible to cook it medium rare, and second, he got it as a to-go order so the steak kept cooking even after it was taken off the grill. The exchange ended there.

Other business owners caution against losing your cool when this happens, and still try to respond to the review with a gentle voice and offer some perk as a consolatory gesture.

“Bad reviews are unavoidable in the corporate world as you cannot make every customer satisfied with your services,” said Ryan Nieman, CEO at Solitaire. “Sometimes, it’s the expectation a customer has that prompts them to give a bad review. Regardless of the reasons, we try to provide complete support to the customer to make amends for our service.

“We try to fact check, by confirming the customer reviews through the help of a survey, which clarifies the reason for their dissatisfaction. If the customer ensures cooperation, we reward them with complimentary gifts and discounts on their next purchase. We do not lose our cool or present ourselves void of etiquette and courtesy, reflecting on the entire company.”

Carsen Schaefer, founder and CEO of SaaS company Trust, said it’s important not to get defensive when a customer is wrong and instead, show empathy.

“If the customer has a valid point, it’s important to admit that you’re wrong and that you didn’t provide the right quality of service, that your product missed the mark or something else,” said Schaefer. “Own up to your mistakes and offer at least one way to solve their problem. On the other hand, if the customer isn’t right, it’s important to show that you understand their point of view. Don’t get defensive and try to correct them right away. Instead, tell them that you can resolve their problem and point them to the right person for their problem or offer them to contact you privately to resolve the issue.”

Limit Engagement With “Crazy People”

Some people are just angry at life and will leave negative reviews that make little sense (such as the one about Roberta’s restaurant above) and just express blind rage rather than constructive criticism. Small business owners said that when this happens, it’s important to limit your engagement

Stefanie Siclot, SEO supervisor at Growth Rocket, said it’s important to let other people see that the customer is wrong in your response to them.

“What we do is fact-check first and really check if that customer is really our customer or just someone who wants to destroy our business. [Once we figure that out] then that’s what we comment on so it would have an impression to other users that the negative comment or review is not valid,” she said.

“Another strategy is by giving complimentary service or product just in case the experience is really the fault of our business and with that – hopefully – it will have an impression to viewers that we try to amend our mistake.”

Respond to Positive Reviews

Sometimes small business owners get so caught up in how to respond to negative reviews that they forget to respond to the positive ones as. When you’re responding to positive reviews, you should respond quickly (within 24 hours); keep it short, express gratitude to the customer and even ask how you can improve their customer experience. Responding to positive reviews will let the public know that you appreciate each individual client.

In all, while responding to reviews is time consuming, you should recognize that doing so is a crucial part of managing your company’s public reputation. It shouldn’t take that long and personalizes your business in that you are showing the public that every customer is important.

How to Survive Negative Cash Flow

December 13, 2021/in Featured Stories, Operations /by Vince Calio

No matter how successful your small business is, you’re going to have periods in which sales may be down, customers may be slow to pay or orders aren’t getting fulfilled due to inventory problems, resulting in your monthly expenses being greater than your monthly revenue. These are just some of the scenarios that may lead to a negative cash flow.

If you are experiencing negative cash flow, how long can your business survive? Unfortunately, there isn’t a one-size-fits-all answer to this, because a negative cash flow may be the result of several factors.

Why are you in the Red?

The first question you need to answer is why exactly your business is in the red. Once you’ve identified the reason, you can consider different solutions to help you get back to being cash flow positive.

Some of the reasons your small business may be in the red include:

You’re waiting for invoices to be paid – You may have a strong accounts receivable portfolio, but that won’t do you much good until customers settle the bills that they owe you.
You have too much inventory – You may have over-anticipated demand for certain products and as a result, bought more inventory than you can afford.
Sales are slow – Your gross revenue may not be where you want it to be, perhaps due to supply shortages and the continued rippling effects of the COVID-19 pandemic.
You’re waiting to launch a new product – You may have invested heavily in the research and marketing for a new product or service that you haven’t begun to sell yet.
Your overhead/operating expenses are too high – Your overhead/operating expenses include payroll, rent and utility payments, internet access bills, etc. There may be areas in your overhead for which you are paying too much and need to reexamine.
You’re carrying too much debt – Financing is crucial to the growth of many small businesses and there are many lending options out there, but those regular installment payments of that debt may have gotten the best of you

Figure Out a Timeline

When your business is in the red, it’s going to be a stressful and time-sensitive situation. First, how long can you afford to stay there?

You can figure this out by using a very simple equation – take the amount you have in cash reserves and credit, and divide that by how much money you are losing every month. For example, if you owe $6,000 every month and you have a total of $60,000 in reserves, credit and borrowings from friends or family, then you can afford to operate for 10 more months.

If you have a bright spot on the horizon, such as a due date for a big invoice or the launch of a new product, then you may have multiple solutions available to you. Additionally, if you’re in the red because sales are slow, then you would have 10 months to figure out how to make your business profitable again by adjusting your prices or figuring out ways to cut overhead.

Re-examine Your Products/Prices

If you’re struggling with a negative cash flow because of weak sales, then you may have to take a hard look at the prices of your products or services It could be that your sales margin – the price of your product minus the cost of producing your product – may be too low, thus indicating a need to adjust the price of your product.

Perhaps you need to come up with a plan to reinvent your business. Think about the way you’re promoting your product or service and whether you are reaching the right market. For example, an expensive, gourmet restaurant probably won’t succeed in a middle- or low-income neighborhood no matter how good the food is. Does your product or service represent the same mismatch with the market you’re trying to sell to?

Perhaps you’re not sufficiently engaging your market with tools such as digital advertising or email marketing. It also could be that you aren’t advertising your products or services as well as you should be, be it on social media, through your website or otherwise on the internet. Are you targeting the correct market with the right product? If not, you may consider changing your products or services or marketing approach.

Reduce Overhead

Just like you need to be careful not to live above your means when it comes to your personal finances, you need to make sure your business expenses are not more than you can afford. Closely examine what you are spending money on every month and eliminate non-vital expenses.

For example, you may want to switch to another office if your rent is too high, or you may have to perform the unpleasant task of furloughing or letting go of employees to reduce costs. Hiring freelancers instead of full-time employees and cutting down on the amount of office supplies will also reduce operating costs.

Work With Creditors

If your business is carrying too much debt and the monthly payments are causing your business to experience a negative cash flow, then you should work with your creditors to reduce monthly payments.

If you are using outside vendors for services such as marketing, public relations or accounting services, you may want to put your relationships with them on hold for the time being.

Borrowing may be an Option

If your cash flow is negative because you need to pay your vendors or if customers are slow to pay their invoices, certain forms of financing such as purchase order financing or invoice factoring may help you get to the end of that timeline. Both forms of financing may put the funds in your hands, not add to your liabilities and keep you from going under.

If your company has a history of strong revenue streams but is currently experiencing a negative cash flow because you’ve poured money into the research, development and marketing of a new product and you are waiting for the product to be launched, then revenue-based financing may be an option you want to consider.

Don’t Declare Bankruptcy Just Yet

Bankruptcy is a painful and legally complex solution that you should generally try to avoid. If you find yourself with a negative cash flow, don’t panic just yet, because it probably isn’t going to last forever. Closely examine the reasons your business is in the red and come up with solutions on how to fix them.

Be cost-efficient with your overhead expenses, rethink your products and prices and determine if there are financing solutions for you. Doing so can give your business a consistently strong cash flow moving forward and put it in a position to be more successful in the future.

The Benefits of Business Lines of Credit

December 10, 2021/in Featured Stories, Financing /by Vince Calio

For small business owners that have ongoing business expenses and uneven cash flows, a business line of credit may be the most convenient and useful financing method in your toolbox.

Too often, however, small business owners confuse a business line of credit and a business credit card and end up paying a higher interest rate on revolving debt as a result.

What is a Business Line of Credit?

A business line of credit is typically an unsecured line of credit that can be granted to a small business by either a bank or an alternative lender. The line of credit has a predetermined limit set by the lender (and it’s typically higher than a business credit card) based on the risk you present as a borrower, and like a business credit card, can be used to address any expense that arises for your business.

Unlike other types of typical small business loans, with a business line of credit, there is no lump-sum disbursement of funds that requires a subsequent monthly payment, and you don’t have to specify to the lender exactly what you intend to use the funds for.

Also, similar to a credit card, your debt will be revolving, and interest will be accrued only on the amount that you have borrowed. The line of credit typically is subject to a periodic review and renewal, often annually..

Business Line of Credit vs. Business Credit Card

While both a business line of credit and a business credit card are forms of revolving debt that are typically used for short-term funding needs, the main differences between them are the interest rate and what they generally are used for.

A business credit card can charge more than 20% APR for purchases, and an even higher rate for cash advances. The rate for a business line of credit usually ranges between 10% to 15%, and the rate will still be the same when you use the line of credit for cash.

What are Each Used for?

A business line of credit and a credit card may also be used for different reasons. Lines of credit are sometimes used by seasonal small businesses that need funds to cover operating expenses during slow periods of the year, such as payroll; or when it has an unexpected expense. Small businesses can also use their lines of credit to gain access to funds without having the hassle or expense of applying for a loan, and the repayment terms are often more flexible than with business credit cards.

On the other hand, a small business credit card will come in handy for smaller purchases that you typically wouldn’t use your line of credit for, such as when you have to pick up the tab for a business meal or need to buy a new inkjet printer for the office and don’t wish to make a trip to the bank to withdraw the funds. A credit card also often offers perks such as cash back offers or travel miles that a line of credit would not.

Once again, be warned that business credit cards typically offer a lower credit limit than a business line of credit and are more expensive.

What is a Secured vs. Unsecured Line of Credit?

An unsecured line of credit is not guaranteed by collateral. Typically, it will carry a higher interest rate than a secured line of credit because the lender is taking on greater risk than with a secured line of credit. It is usually granted to businesses that have been in operation for several years and have consistently strong annual revenues.

With a secured line of credit, you will usually be granted a larger spending limit because it is guaranteed by physical assets, which lenders prefer. Some banks, however, may ask that your personal assets be used to secure your line of credit, while alternative lenders typically just ask for your business assets. A lender may also require that you secure your line of credit if you require a limit of more than $100,000.

How Do You Qualify for a Line of Credit?

Business lines of credit are generally more difficult to obtain than business credit cards. Typically, small business owners that have a FICO score of at least 650 and have been in business for at least two years with annual revenue of at least $180,000 will qualify for a business line of credit, but those terms will vary depending on which lender you are doing business with. Alternative lenders often will have less stringent requirements.

Small businesses that don’t qualify for a business line of credit because they don’t have a long history in business or a profit margin that’s too low may find a business credit card to be useful, and there are plenty of them out there that offer perks and cashback rewards.

In general, however, a business line of credit can be a great reward for small business owners that have worked hard to establish their businesses over time.

Two sit in foreground while one lurks in the background.

How to Transfer Ownership in an Existing Business

December 9, 2021/in Operations /by Brandon Wyson

While small business owners are well known for their attention to detail when crafting their initial business plans, almost no business is built with plans for transferring ownership. While the steps to building a strong business are often intuitive to an owner, transferring that ownership to new custodians isn’t nearly as cut-and-dry. No matter if for retirement or new horizons, transferring your business must be handled as deftly as when it was first acquired or created. There are several nuances to business ownership transfer that may not be immediately apparent even to the savviest business owner; but if missed, this could spell catastrophe later. The most effective transfers are seamless and well-managed. Follow this guide to learn the types of business transfers and the steps between first meetings and passing on the keys.

Types of Business Transfers

Outright Sale

An outright sale is as simple as business transfers can be. An outright sale means that an interested party and a business owner make an agreement to fully transfer ownership of the business after a signed agreement and often an exchange of capital or stock. Importantly, outright sales traditionally mean that the former business owner then has absolutely no influence on the future of the business; for this reason, outright sales are often a great choice for retirees or underperforming businesses of which the owners would like to wash their hands.

Gradual Sale

A gradual sale is a financing agreement between a business owner and an interested party where daily operations of the business in question are transferred over to the new party while the owner receives some income from their former business for a predetermined amount of time. Gradual sales agreements often have far less capital or stock exchange on the actual day of sale but tend to pay out more to the former owner than lump sums from outright sales. Gradual sales are great options for would-be buyers who don’t have the liquid for an outright sale but see promise in the business they are acquiring.

Lease Agreement

In business lease agreements, the former business owner still owns their business while the signing party runs day to day operations and makes regular payments to that owner. Lease agreements are great for business owners that cannot run daily operations but aren’t certain if they want to sell their business outright. Unlike a gradual sale which ends with the original owner no longer owning the business, that isn’t necessarily the case with lease agreements. Depending on the terms of a lease agreement, former owners may petition to reinstate their ownership if they are unhappy with the new custodians.

Transfer by Bequest or Gift

Business owners can name someone to receive their business in their will or before they die as a gift. For businesses transferred by bequest, all business assets beyond $5 million are subject to tax. There are tax implications with transfers and bequests – and the Biden administration is aiming for significant changes to exemption limits and tax rates so be sure to fully research and understand the tax consequences of passing along your business as a gift.

Transfer Checklist

Consult an Attorney

Before talking numbers with any potential buyers, or moving forward with gifting your business, it is highly recommended that business owners talk to an attorney regarding their succession plan. A company transfer is as much a legal process as a business process. Attorneys are acutely aware of regulatory requirements for business transfers (which can vary wildly between states) and can be a lifesaver when drafting your agreements.

Seek a Business Valuation

Seek out a 3rd party valuation firm before talking to any buyers. Even if you do not go through with a sale, having a relevant valuation of your business can be supremely helpful for future financing or structure changes.

Beyond the valuation itself, be sure to consider the full extent of your business’s “Goodwill” which includes the value of your assets, your current customer base, as well as your existing reputation. These figures ought to all be included when determining an asking price for your business.

Prepare Your Purchase Agreement

Your Purchase Agreement is a legally binding contract that includes all elements of your impending sale. It is essential that if you have not already spoken to an attorney that you do at this point. Be certain that your Purchase Agreement touches on these concepts:

Description of Your Business: It may sound superfluous, but superfluous-ness is unavoidable in legal documents. You must state in certain terms what your business wholly is. Your business includes its location, products or services rendered, management structure, target customers, distribution strategies, financial history, as well as certification that you have the legal authority to sell your business, i.e., notarized deed or articles of incorporation.

Details of the Sale: This section will specify if the business transfer is via outright sale, gradual sale, lease, or potentially gift or bequest. Beyond the basic terms of the sale, this section should also list in concrete terms exactly what assets, like machinery, real estate, and staff, will be transferred in addition to the business itself.

Covenants: Depending on the type of agreement you strike with potential buyers, you, the business owner, may be responsible for certain financial obligations like existing loans, outstanding tax requirements, or any employee-related financial duties like benefits or salaries. Covenants also include any non-compete clauses, non-disclosure agreements, or indemnification agreements made alongside your transfer.

Inform Vendors, Customers, Employees, and the IRS

It is a well-respected professional courtesy to notify all of your contacting businesses and even customers about your impending change of ownership. While it is simply a kind gesture of thanks to your former customers and welcoming the new ownership, contacting vendors and suppliers is likely more important, as existing contracts will need to be amended to reflect your business’s new ownership.

It is essential, however, that you fully brief your employees and the IRS about your business transfer. Any existing contracts with vendors or suppliers will very likely need to be amended because of your business’s new ownership, so be certain to send electronic or postal notices to those relevant businesses before you finalize the transfer. As for the IRS, be certain your EIN (Employee Identification Number) is properly terminated at the time of your business transfer. Even if the new owners plan to keep the name of your business the same, they must apply for a new one or use their existing EIN to operate.

Saying Goodbye to Your Business

Regardless of the reason for your exit, transferring ownership of your business is a monumental step, often signifying a new life chapter. Like the owners who run them, every business transfer is unique. While this general guide tunes into the key, universal steps in the transfer process, almost every industry has their own caveats. When wading your way through regulatory legalese, it never hurts to have an extra set of eyes overlooking your transfer. Keep trusted employees and close mentors in the loop of your transfer and you are much more likely to walk away with a satisfactory contract and deal.

Two people sit at counter stool and converse over coffee

Building Better OKRs for Your Small Business

December 8, 2021/in Business Productivity, Operations /by Brandon Wyson

Developing an Objective and Key Results plan, otherwise known as an OKR, is a well-accepted trend in bigger corporations but hasn’t caught on nearly as fiercely in the small business world. OKR plans are a lean and direct way to keep your business goals front and center, something that small businesses ought to do more. The 4th Annual Staples National Small Business Survey found that more than 80% of small business owners don’t keep track of their business goals. The same survey found that 77% of those same small business owners had yet to achieve their original vision for their small business. Any business owner knows that it isn’t enough just to want to grow your business. Growth comes with concrete plans and one of the best ways to develop those plans is with OKRs.

Elements of an OKR Plan

OKRs are metrics that encourage growth through alignment. The best OKRs probe at a business’s weak points and focus on them relentlessly.

Objectives: Your OKR’s “O” needs to be a concise but targeted plan of attack. Beyond general growth, what does your business want to do or become? Talk with your staff and do some introspection yourself about what you’d like to see change in your business five, or ten years down the line. The best “O”s are snappy phrases like “Maximize Digital Sales” or “Revamp the Customer Experience.”

Key Results: Key results must be tangible changes you hope to achieve because of your new objective. In the case of the “Maximize Digital Sales” objective, some useful “KRs” could be: “Increase Sales from Company Website 30% Compared to Previous Year;” “Overhaul Website Appearance by the beginning of Q4;” or “Decrease Digital Storefront Bounce Rate by 30%.” As you can see, Key Results must be bound by a deadline and/or quantity. Without those measurements or deadlines, OKRs become a wish list rather than a company credo for growth. It’s much more manageable (and tangible) to increase sales by 30% rather than just generally increase sales.

Why Use OKRs?

Well-developed and pointed OKRs have the power to inspire and empower a workforce to make seemingly insurmountable change in your business. OKRs are a great exercise in, and means to normalize, talking about the future of your business. As inevitable as the future may be, talking about the distant future isn’t necessarily a common practice in small businesses. It’s enough work balancing each quarter; talking about five or even ten years is a luxury for many small businesses. By breaking down your major goals into smaller, manageable, and calculable OKRs, your business is actually setting itself up for major growth – maybe even growth you didn’t think was possible.

Building Better OKRs

Genuinely Share Plans with All Employees

OKRs aren’t meant to be presented to employees. OKRs should be developed alongside all staff members, as they’ll be just as responsible for making your plans produce results. Consider setting aside time for a series of meetings introducing what OKRs are and then asking employees to bring their own ideas into consideration. After your team puts together a meaningful OKR plan, set aside a regular time for meetings specifically discussing OKRs. These plans shouldn’t exist in the background. The only way OKRs can lead to actual growth is if your team is aligned and actively engaged with their goals.

Failure Isn’t Failure

Even if an OKR doesn’t hit its mark, learning how to post-mortem a missed OKR is another great way to realign your staff. A missed OKR is almost just as valuable as those reached because you can efficiently dissect exactly what didn’t work. Use the information learned from misses to inform future ORKs.

Failed OKRs cannot lead to retaliation in any capacity. By tying OKRs to retaliation, staff may grow to resent their plans. Don’t let OKRs become a source of employee stress. This is obviously easier said than done, but an important step to getting your employees onboard with OKRs is proving that the plans won’t be used against them.

Never Discuss OKRs in Performance Reviews

If your business does regular performance reviews, treat them as a separate entity from your Objective and Key Results. The quickest way to turn your employees against their OKRs are to, in even a tangential way, tie those results to compensation.

OKRs should encourage increased productivity and results, but full completion ought not be a certainty. The best OKRs are on the cusp of what is possible for a business and force employees and management to get creative to find solutions. Not every OKR will be a raving success and that needs to be part of the growth process as well. If employees are afraid failed OKRs will affect their compensation-determining performance reviews, they will grow to resent the goals that should inspire them.

OKRs Shouldn’t Add to Employee Load

OKRs aren’t meant to be new responsibilities or bullet points for employee job descriptions. Your Objectives and Key Results ought to encourage your team to do their same work but in the direction of your OKRs. Everything employees already do should be in some capacity already serving the overarching OKR meant to overhaul your business’s output. If OKRs are getting in the way of an employee’s work, something is likely wrong with the OKR or its implementation in the business.

Transparency Breeds Productivity

A beautiful byproduct of effective OKRs is transparency between staff and management. If management and staff are all working toward the same central goal, teams are more likely to be on the same page rather than silo themselves. Beyond your regular OKR meetings, consider making a public spreadsheet that clearly shows how close you and your team are to achieving your OKR’s goals.

Make sure communication lines are clean and clear, going from manager to employee and employee to manager. If OKRs are chosen for employees instead of letting employees develop them alongside management, those OKRs will uniformly be less effective than ones developed with employee input.

No Business is Too Small for OKRs

The ultimate goal of Objective and Key Result plans is to foster sustainable growth in your business. While corporate giants may have popularized OKRs, the results of OKRs will be beneficial to businesses of any size. The philosophy behind OKRs is to align staff and management to a goal that is only achievable through alignment, transparency, and continuous hard work; and that’s what small businesses are known for.

SMB Profile: Small Minnesota Manufacturer Plays to its Strengths, Recognizes Opportunities

December 3, 2021/in Featured Stories, Operations /by Vince Calio

For some small businesses, the key to success is all about marketing –through internet ads, social media and/or radio and television spots. For Minnesota-based Tjernlund Products, a manufacturer of HVAC products and now EV chargers for electric vehicles, the key has always been having strong distribution, as well as the ability to jump on economic trends before they escalate.

Tjernlund Products, which is 84 years old and has slightly fewer than 50 employees, is one of Amazon’s largest industrial suppliers and now the Midwest’s largest EV charger distributor, although that side of the business is still getting off the ground.

Andrew Tjernlund, owner of Tjernlund Products, says the key to success for small businesses is to “double down” on what they’re good at.

“My company’s a bit of a Frankenstein’s monster,” joked Andrew Tjernlund, owner. Tjernlund inherited the manufacturing company eight years ago, and in that time transformed its distribution capabilities so that the company now sells orders worth six figures directly to Amazon on a weekly basis. Tjernlund said revenues from the company’s HVAC business have remained steady despite the COVID-19 pandemic.

Last year the company recognized a gap in Amazon’s ability to distribute EV chargers for electric cars and decided to expand by taking advantage of its existing manufacturing capabilities and getting into the business of manufacturing car chargers.

All-in-all, because of the necessity of the products Tjernlund produces, the company has been able to weather the storm of the COVID-19 pandemic. “We sell needs, not wants, so we’ve had the same revenue for 35 years,” said Tjernlund. “In the financial crisis of 2008, we had the same kind of sales as we’ve had in boom times.”

Don’t Overlook Distribution

For Tjernlund Products, expanding on its manufacturing capabilities was key to its growth.

Distribution is basically the method in which a company puts its products into the hands of the right customers, and is an aspect of marketing that Tjernlund said is often overlooked. When he took over the company, he made it a point to focus on ways to modernize distribution.

“I think the hidden thing about marketing and sales is the distribution channel,” he said. “I mean, people focus on price – be it a low price or a premium price – people will also focus on promotion such as really good Facebook ads or really good endorsements and things like that, but to me, the distribution part is really underrated,” said Tjernlund.

“A lot of the success we’ve had is through our specific distribution channels, and we have had products that actually fit that customer base of that distribution channel and the nuances around that. With Amazon, a lot of the stuff that we sell is very oversized. For example, I sell four-by-six-foot white boards, and the only reason those work for eCommerce is because Amazon has crazy logistics costs in a good way – they are low.

“So, if I had to sell those myself, I’d have to charge $300 more than I normally would, but with Amazon, I can take advantage of their network. So, I think the distribution method or partner [method] is really kind of key from a marketing standpoint and is often overlooked by core marketers,” he added.

Recognize Opportunities; Expand on Your Strengths

For Tjernlund, getting into the EV charger market was a natural extension of the company’s strengths.

Tjernlund said that the company decided to get into the EV charger manufacturing business because Amazon sees electric cars as the future and sought a way to sell more EV chargers. He added that because his company’s strength is manufacturing products that use similar materials, it seemed like a natural extension of the business.

“I think there was a little bit of serendipity on getting into the EV charging business,” he said. “We have a really good relationship with Amazon, and we sell them hundreds of thousands of products. One of the things we noticed was that there was a selection gap with Amazon –they wanted access to more EV chargers. So we knew that if we got into that space, we could fulfill a need for one of our distribution partners,” said Tjernlund.

Go All Out With Expansion

Tjernlund emphasized that as a company, if you decide to expand, there’s no going halfway.

“You know, if you decide there’s an opportunity in a space to go all out, you do it,” he said. “We knew that we were already developing products within our manufacturing to support EV chargers, and that we were producing a bunch of accessory products that we were already manufacturing and that we already rented out space for. So once we decided to go into that space, we decided to use all of our different arms, including our distribution and manufacturing capabilities, and push those all in the same direction towards EV chargers.”

Taking it a Day at a Time

It’s no secret that today’s climate for small businesses is fraught with challenges – no one seems to be immune to inflation, supply chain disruptions and worker shortages, and Tjernlund is no different.

“We’ve definitely had to deal with today’s business challenges,” said Tjernlund. “We’re just taking it day-by-day. I wish I could say we were on the other side of it, but really, the challenges persist. We’ve had to deal with supply shortages, I mean, stuff I ordered in July I’m not going to get until March in terms of the EV chargers – they use the same kind of chips that the automakers use. We’ve had to raise salaries, especially in our warehouses, of up to 30% over the last six months,” he added.

Recognize Trends Early

Tjernlund said that the company made the wise decision to stock up on inventory when inflation just began to rise.

“We’ve done some price increases, I mean that’s the simplest thing to offset,” said Tjernlund. “But really, we’re trying to keep it as painless as possible. The one thing that we did do well was to recognize early that the supply shortage was going to happen, and that’s when we bulked up on raising wages for employees.

“We bought extra inventory, so even though prices had already gone up 30%, we bought a lot of inventory before it went up 90%, and so we are able to weather that fairly well rather than being an ostrich with our head in the sand. We decided to face it head on and face the dragon head on before it grows too big and it’s unconquerable.”

Double Down on Your Strengths

The advice Tjernlund has for other SMB owners – no matter how small – is to analyze what your company is good at and expand upon it.

“The biggest overall thing for small businesses is to play to their strengths,” he said. “Meaning, look at what you’re good at and try to double down on it. In our case, we were really good at distribution, so we tried to expand that into other sides of the business and we decided to get into a new space like EV chargers, and we used all of our capabilities to do that.”