THE REPORT BLOG

The Latest from a Leading Economist

I heard Jeff Thredgold speak this morning at the Chase Business Insight Seminar. Jeff is a rarity when it comes to economists - he not only sounds like he knows what he is speaking about but he is entertaining (meaning he didn't put the audience to sleep). His message: "we will get through this." Jeff compared this recession to previous recessions in the 70s through the 90s and, with some exception, this isn't the worst it has been when you look at unemployment rates and the decline in the GDP.

Jeff also shared a piece of advice that he claimed was the most important piece of advice he had to offer. Send your kids to college. Years ago, college grads made 25% more than kids who didn't go to college. Today that premium is 90%.

If you want to receive Jeff's newsletter, you can sign up to receive it free via email here.

Lowering Price Without Discounting

Today I had lunch with the owner of a successful catering company. One of the things we discussed was how his company is accepting smaller jobs than he would have considered taking on less than 12 months ago. While he certainly does not make the same profit as he does with larger jobs, at least he is still making a profit. More importantly, he looks at each engagement as an opportunity to drum up new business - either repeat business from the people who hired him who may give him bigger jobs in the future or from the event's attendees.

I think many of us are in similar positions where we might be taking on smaller projects that we would have turned down last year. That's ok. When it comes to driving revenue in a tough economy, in many cases taking smaller jobs is a better alternative to discounting.

How Can You Find Funding? Go to Entrepreneur Week

It’s hard to believe no one (i.e., me) thought of this sooner. This April 20 – 24, NY Report will be a media sponsor for New York City Entrepreneur Week. The goal of this program is to match budding entrepreneurs with experienced startup mentors, angel investors, and venture capitalists. Some of the participating mentors include Rod Underhill, founder of MP3.com; Jeff Stewart, founder of Mimeo and angel investor; Jim Anderson, Co-Founder of About.com & CTO of Dorthy.com; and Eduardo Saverin, Co-Founder of Facebook.com. One of the highlights of the program is a 21-company business plan competition with a full day of customized training developed exclusively for the select participants of the event.

I will be speaking at 10:30 am on Friday and am looking forward to hearing from other business owners as well. Visit www.nycentweek.com for more information.

Time to Take Your Foot Off the Gas?

I just spoke with a friend of mine who is in the magazine publishing business. He told me that he was expecting business to be off about 20%, but it is off 30%. So what is he doing about it? Well, he is actually taking it all in stride. Instead of sweating, he sees this as a great opportunity to work on the infrastructure of his business: a new website, buying a new building for his office (yes, he is outside of Manhattan), planning a webinar series, etc.

I find that quite cool and refreshing from the panic that you hear from the media.

It’s Not Your Fault, but It Is Your Problem

 We often experience a disconnect between being a customer and being a service provider. As customers, when a service provider – whether it is a fast food slinger or a financial advisor – we expect it to be made right. And made right quickly. We don’t have time to listen to excuses.  

How is it, that when we are on the other end of the mistake, we think our clients are interested in excuses? Even when our team doesn’t make a mistake, but our service has been compromised – snowstorm in Cleveland, lawyer never sent the contract, etc. ‑ and clients complain, we brand them “high-maintenance” or offer an explanation on why the mistake really wasn’t “our fault.” Our clients are no more interested in hearing an explanation than we are when the roles are reversed. Instead of justifying your service, let your service speak for itself by telling the customer, “we’ll fix it.” Then actually fix it. No matter what the expense to your company may be, the goodwill will come back in the form of revenue generated by a long-term customer relationship and referrals.

Lead by example and share this philosophy with your employees. That is just one of the simple, but game-changing tips John DiJulius provided at last night’s NY Report event, “Driving Incremental Revenue with Outstanding Service.” If you missed John’s fantastic presentation, we will be posting a webcast on nyreport.com soon.

 

What Employers Need to Know about the new COBRA Law

Individuals covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA), which provides continued health coverage to individuals who have lost their jobs (either due to job loss, relocation, etc), will get a big helping hand from the government in the form of a federal subsidy.

Effective February 17th, 2009, certain individuals eligible for continued medical coverage under COBRA or similar state laws will now receive a federal subsidy of 65% of their premiums. Only those who have lost their medical coverage due to involuntary termination from employment (other than for gross misconduct) between September 1st 2008 and December 31st 2009 are eligible for the subsidy.

For employers, the federal subsidy will cover only the costs actually payable by the employee and does not affect the employer’s contribution to the premium.  However, employers might need to contact employees who might be eligible for this program.

For more information on the subsidy, check out this great FAQ page set up by Klein Zelman Rothermel, LLP.

Using Twitter to Generate Revenue

Here’s an entrepreneur who got it right! Kogi Korean BBQ To-Go is a Los Angeles based vendor that sells $2 tacos filled with Korean BBQ out of a truck. Although the truck is always moving and sets up camp at various nighttime hotspots around LA, there is always a crowd of hungry fans eagerly waiting for their fusion tacos.

How do they do it? They simply use Twitter to send a message to their patrons telling them of the truck’s next location. An article from the Wall Street Journal states that the truck serves about 400 customers per night. Of course the food must be really good or there wouldn’t be a cult following behind it. But the owners of Kogi knew from the get-go that social networking will play a role in their business’ growth and have included having a person in charge of social networking in their marketing plan. For those interested, you can check out their Tweet here.

Here in NYC, the Rickshaw Dumpling Truck also uses Twitter to alert customers of its whereabouts, but they don’t seem to have the same hoopla surrounding them. Dumpling fans in the City can check out their Tweet here.

If anyone out there has used Twitter or any other social networking medium to generate revenue, I’d love to hear about it.

Erase “Great” from Your Vocabulary

If I had a dollar for every time I told an employee, “great job,” I’d probably have enough to go out and start a second business. But I’ve never stopped to think about what the words “great job” actually communicate. . . until Daria, our managing editor, called me out on it.

She learned a lot from the recent EO event, “Communication to be Heard and Remembered,” featuring Christina Harbridge, CEO of Allegory, a San Francisco based communications company. Her new found communications skills put me in check on this occasion.

In reality, telling someone they did a “great job” is pretty vague and impersonal. Christine suggested taking the phrase out of our vocabularies. To motivate our teams, we should use more descriptive language so that it is more meaningful to them and encourages the team to repeat or exceed the “job well done.”

Silence Isn’t Golden

Last week, our managing editor Daria attended a truly thought-provoking EO event, “Communication to be Heard and Remembered,” featuring Christina Harbridge, CEO of Allegory, a San Francisco based communications company. The next day, Daria and I spoke about what she took away from the program. One thing that we discussed really resonated with me. During her talk, Christina said, “Silence is not consent. Silence is silence.”

How many times have we, as business owners, stood in front of our team, passionately describing a new project only to be met with a table of people taking notes and not doing much else? I know I’ve walked out of such meetings feeling good and believing everyone was as on-board. This idea that silence is not consent had me wondering, how many incorrect assumptions have I made about my employees’ silence? And how many projects could have benefited from a little dissention once in a while?