You have to be a little bit crazy to start a new business. Sometimes failure has nothing valuable to teach you – except that failure stinks. And small businesses actually enjoy advantages over the big guys.
These are precepts from small business guru Barry Moltz, an author, speaker, consultant and host of Business Insanity Talk Radio.
Moltz, who likes to challenge conventional wisdom, is author of BAM! Delivering Customer Service in a Self-Service World and the upcoming Small Town Rules: How Small and Big Brands Can Profit in a Connected Economy (with Becky McCray), among other titles.
He shared his sometimes unorthodox business tips, all of them applicable to travel agencies, with Travel Market Report.
What is the focus of your new book, Small Town Rules?
Moltz: It’s called Small Town Rules because in this world, where everyone is connected, we’re all living in a small town. Small town businesses create relationships. They take advantage of being local. People do want to buy locally.
You need to play that up: ‘I’m here when you need me. I’m not just an 800 number.’ Given the choice, people these days would rather buy locally – something that has a short supply chain.
The shift toward social media has played up personal relationships. Even large companies are trying to appear small these days. Big brands are trying to appear small.
What is your advice regarding customer service?
Moltz: You have to train your employees and make sure they know what good customer service is. You need a manifesto – here is our level of service. Employees need to know what you are committed to it. This is the first step.
The second is that everyone in the organization should be connected. If Joe makes a mistake, Mary is responsible too. There is no passing the buck. No matter how well you have served customers over the years, they remember either the last or the peak transaction you had with them.
You say social media makes good customer service even more important. Why?
Moltz: Because it has become so easy to express your displeasure about a service experience publicly. We’re posting our experiences on Yelp, TripAdvisor, Facebook for all to see. So it’s no longer just between you and the client.
The tagline for your consultancy is ‘Getting Small Businesses Unstuck.’ What are signs that a business is stuck?
Moltz: When you run out of passion, your business just doesn’t get you up and out of bed in the morning. Cash flow and sales are down. Your employees keep turning over. You can’t find new clients. A lot revolves around sales, people and money.
How do you advise people to get their business unstuck.
Moltz: Sales and growing your business are very different now than they were just a few years ago. It’s more about creating relationships.
Creating relationships these days often involves social media and email, but because of all the noise out there, it takes persistence to get your message across.
People are always willing to pay for value. You have to find those people who are willing to pay for what you are willing to offer.
How can a small business such as a travel agency protect itself against forces beyond its control, such as economic cycles?
Moltz: You have to plan for the good and bad times; you never know where the economy is going. Small entrepreneurs often experience both feast and famine. You have to plan for this.
I tell clients they should have multiple sources of income and types of customers. Don’t just have one specialty, as some sectors will be up while others are down. In travel, you can have periods where business travel falls off but leisure travel remains relatively strong. Have a diversified portfolio of customers.
It’s often said that we learn from our failures in business, but you say that sometimes this isn’t true.
Moltz: Sometimes failure just stinks and there is nothing to learn from it. It wasn’t your fault. Don’t wallow in the failure – or waste time trying to fix it when you can’t. Sometimes you have to let go.
Every time you take another chance, you’ve moved on.
You wrote a book called You Need to be a Little Crazy: The Truth About Starting and Growing Your Business. Why do you have to be little nuts to start a new business?
Moltz: Because the vast majority of new businesses do not work. Within a year most are gone. So starting one is really not rational.
It’s not enough to do it just because you think you can make money. The only reason to start a new business is that you have such a strong passion for it that you have no choice. You’re not choosing it, it’s choosing you.
Is this a good or bad time to start a business?
Moltz: There are some good things and some challenges in starting a business right now. Because unemployment is high, it’s easy to get good people. But there’s not a lot of financing capital available. Again, it picks you, you don’t pick it.
See related story “Lessons in Resourcefulness, Creativity from Small Town U.S.A.,” July 14, 2011)