The Street Smart MBA: 10 proven strategies for driving business success

235 Pages·2013·5.91 MB·English

by  Steve Babitsky

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Contents
About the Authors ������������������������������������������������������������������������������������������vii
Introduction �����������������������������������������������������������������������������������������������������ix
Summary of Summaries �������������������������������������������������������������������������������xv
Chapter 1: Step 1: Build a Superb Brand1
Chapter 2: Step 2: Grow and Tap Your Network 23
Chapter 3: Step 3: Develop Products Customers Love 37
Chapter 4: Step 4: Sell Your Products and Services Cost Effectively 57
Chapter 5: Step 5: Control Your Costs and Increase Your Productivity 97
Chapter 6: Step 6: Take Charge 113
Chapter 7: Recruit, Motivate, and Retain a Superior Workforce 143
Chapter 8: Deal with Customer Complaints Head-On 167
Chapter 9: Manage Yourself 181
Chapter 10: Become a Better Negotiator 197
Index 213
Introduction
When I was eight years old, my family and I moved from a tenement that we
shared with extended family members to a low-income housing project in the
Lower East Side of New York City To give you a sense of the place, every day
I came home I had to make a potential life or death decision: how to get to
my family’s apartment on the twelfth floor The problem with taking the
elevator was that you never knew which drug addict, robber, or homicidal
maniac was going to jump on at the last minute, giving you no chance of
escape I could take the stairs and have a better chance of escape, but I would
still have to run the gauntlet of homeless people, cat-sized rats, heroin addicts,
and assorted violent criminals to get home
Let me give more of a flavor One day when I was 11 or 12 years old, I was
mugged at knifepoint I handed over all my money and the muggers left Being
mugged was such a common occurrence in my neighborhood that I did not
even bother to tell my parents
I resolved early on in my life that I was going to work hard not only to escape
the poverty of my childhood but later to be able to offer my own kids a better
life than I had growing up I wanted to control my own destiny and that of my
family, so I left the projects and went to law school After a few years spent
working for other lawyers, I decided that the best way for me to succeed was
to start and run my own law firm Then, while I was still running my law firm,
I resolved to diversify my income and do something different, so I started
SEAK, Inc (wwwseakcom) SEAK is a continuing education, training,
consulting, and publishing business that I founded in 1980 and continue to run
with my family Despite my lack of formal business training or business degrees,
the two successful businesses I started and run have provided independence
and financial security for me and my family for more than 30 years
In 1992 I hired my business partner, Jim, and I quickly found that Jim and I saw
eye to eye on the fundamentals of running a business—so much so that we
are writing this book together We both believe in executing the highest
quality work, focusing on the customer like a laser beam, thinking long term,
treating people fairly, having fun, not borrowing money freely, and not betting
x Introduction
the farm or trying to defy the laws of gravity or common sense Get-rich-
quick schemes, living beyond our means, aggressive accounting, and creative
financing are as repugnant to Jim as they are to me We became a great team
in no time
* * *
The worldwide economic meltdown that started in 2008 happened in part
because the leaders of the financial world and the top-ranking executives of
big businesses in our country and others, many of whom have MBAs from top
universities, seemed to have forgotten the basic tenets of good business
These well-intentioned, Ivy League trained geniuses were taught “sophisticated”
business concepts that closely mirrored a sample curriculum from a leading
business school’s website, which claims that its MBA students will gain an in-
depth understanding of their vision, values, motivations, and definitions of
success; understand a framework for developing an integrated life plan;
develop a language to communicate their life plan with those who are
important to them; and reflect on entrepreneurial life Remember, we do not
have MBAs What we have is a 30-plus-year track record of running successful
businesses that are profitable year in and year out We have little time for
“reflecting,” “developing languages,” or worrying about our “vision” And in
today’s super-charged and high-speed business world, who really does? It is
time to throw away your MBA—or save $150,000 and two years of your life
by not getting one in the first place—and learn how to run a profitable
business from experienced and successful businesspeople who pride
themselves on their rock-solid ethics and practices
Borrowing heavily, being financed by incomprehensible financial instruments,
buying on margin, ignoring real profits and the needs of customers, being
dependent on bankers, listening to economists who are no more accurate
than fortune tellers and who have never run a business—these practices have
failed dramatically and will, we hope, become things of the past Businesspeople
responsible for making critical business decisions can no longer afford to rely
on business books with mice looking for cheese, fables with obscure lessons,
hokey manifestos, lessons from businesses that have gone bankrupt, case
studies from 30 years ago, feel-good bromides and general drivel These so-
called business innovators got us into the ongoing economic crisis in the first
place Sensible and time-proven, successful business strategies will get us out
of it
Businesspeople need a practical, down-to-earth, realistic, and easy-to-
understand book that explicitly shows them how to seize control of their
own financial futures—and our goal is that The Street Smart MBA will be that
resource for you Our over 50 combined years of in-the-trenches business
Introduction xi
experience have allowed us to organize and teach what we have learned about
how to succeed in business into ten easy steps They are:
• Step 1: Build a Superb Brand
How do you develop a strong brand that will turn your
customers into a highly motivated, no-cost sales force,
allowing you to employ premium pricing, and building value in
your brand and business?
• Step 2: Grow and Tap Your Network
How do you obtain priceless assistance for your business
without paying a dime for it?
• Step 3: Develop Products Customers Love
How do you identify, evaluate, and develop ideas for new
products and services?
• Step 4: Sell Your Products and Services Cost Effectively
How do you maximize your sales revenue while keeping your
marketing costs under control?
• Step 5: Control Your Costs and Increase Your Productivity
How will spending less and running your business more
efficiently help you improve your bottom line?
• Step 6: Take Charge
How can you keep focused on making money and managing
risk?
• Step 7: Recruit, Motivate, and Retain a Superior Workforce
How do you get maximum productivity out of your staff
while at the same time treat people well?
• Step 8: Deal With Customer Complaints Head-On
How do you turn your critics into fans?
• Step 9: Manage Yourself
How can you improve your business’ bottom line by better
managing yourself?
• Step 10: Become a Better Negotiator
How can you improve your business’ bottom line by refining
your negotiating skills?
xii Introduction
The Street Smart MBA teaches you how to be independent and self-reliant;
carry little or no debt; develop and retain inexpensive and loyal labor; market
your products in a cost effective and safe manner; build long-term relationships;
mitigate risk; meet and exceed the needs, interests, desires, and passions of
your customers; build a world-class brand; and make a profit each and every
year Why? Because the fact of the matter is that the vast majority of new
businesses fail Those that survive do so because their management is able to
learn from its mistakes In the more than 30 years we have spent running our
business, Jim and I have made innumerable mistakes and have learned from
each and every one of them Our real-world experience from the school of
hard knocks has been the best possible business education we could have
hoped for, and we would not trade our experiences for an MBA from any
school in the world After all, a person’s true business education only begins
after one leaves college and graduate school, which is why we will only teach
you business concepts that have been tested and proven in the field Our
techniques represent business reality, not academic theory
Our goal is for The Street Smart MBA to help you avoid the mistakes we have
made and teach you how to implement the techniques and insights that have
helped make our business successful Quite simply, we will teach you the
practical, real-world lessons that it took us more than 30 years to learn We
have written The Street Smart MBA so that those who own or help manage a
business or business unit will be able to immediately apply our numerous
bottom-line suggestions to increase sales and decrease costs
We have read many business books that focus on game theory, regression
analysis, heavy quantitative analysis, and other supposedly high-level concepts
The problem we found with such abstract “approaches” is that they make
many of these books torturously boring, often incomprehensible, and
therefore ultimately useless We were never trained to talk like an MBAer,
and we have no desire to You will not find any charts, graphs, or differential
equations in this book What you will find instead are practical, easy-to-
understand, simply explained, and proven strategies for business success
Furthermore, we break each of the strategies we are discussing down into its
own concise and easy-to-understand chapter Each strategy is tangible and is
reinforced with one or more real-world examples of how it works and why,
and each chapter begins with a brief executive summary
Jim and I also like to have fun Trying things out, working through problems,
and inventing new products are remarkably stimulating processes for us We
enjoy needling each other in our frequent, frank debates on to how to proceed
with a variety of business matters Humor is memorable, so we have decided
to include our own experiences in this book to give you a flavor of the funny
and memorable comments and occurrences that actually happened We hope
Introduction xiii
that you find The Street Smart MBA to be refreshingly easy to read, understand,
and apply
Summary of Summaries
Chapter 1� Build a Superb Brand
Build your brand through an intense focus on quality�
The most effective marketing tool your business will have is word-of-mouth
marketing Focus intensely on the quality of your products and you will reap
great benefits from positive word of mouth Think long term When in doubt,
do whatever it takes to protect the quality of your brand
Turn down business that risks damaging your brand�
Knowing when and how to turn down work can substantially help you build
your brand and your business Be very careful about accepting work outside
of your sandbox, work that you do not have the time to do properly, or work
that would otherwise damage your brand Do not get into lines of business
that will likely dilute and possibly tarnish your brand
Define and reinforce your brand with a well thought out tagline�
A tagline gives you the opportunity to define your brand Choose it carefully,
as your tagline will have an important effect on both your brand and your
bottom line
Treat your customers with respect and do not jerk them around�
An easy and feel-good way to help your business succeed is to build a rock-
solid brand by treating your customers right The nice thing about treating
people right is that it is usually within your power to do so So, how do we
treat our customers right? By figuring out what we hate when we are
customers and making sure that we do not repeat these mistakes We also
note how we like to be treated and attempt to emulate that wherever and
whenever possible You will build very effective and valuable word of mouth if
you do not jerk your customers around
xvi Summary of Summaries
Chapter 2� Grow and Tap Your Network
Give a heads up and do favors�
Giving colleagues a heads up is an effective way to foster and build long-term
business relationships It costs you nothing but a few moments of your time
The recipients will be happy to reciprocate and provide you with similar help
Send a gift�
We have found that sending an unexpected gift can be extremely effective in
building and solidifying relationships To be most effective, the gift should be
both thoughtfully selected and arrive unexpected (eg, not in December) We
also have found that targeted charitable donations can make a very favorable
impression as well In any event, there is little to lose from this technique, as
giving gifts, even token ones, is a pleasure, and supporting charities is the right
thing to do
Mentor
Mentoring young people is an enjoyable way to pass along your experience
and knowledge It also can be—and often is—invaluable in their later success
and your later success The people that you mentor will never forget your
help and guidance When the opportunity presents itself, the people you have
mentored will be more than happy to help you and your business with good
will, referrals, and new business
Don’t be afraid to ask for help�
There are both right ways and wrong ways to ask for help When done
correctly, asking for help can cement relationships and provide you with
tremendous benefits that may be impossible to obtain in other ways On the
other hand, asking for help in the wrong way is a surefire way to destroy
relationships
Chapter 3� Develop Products Customers
Love
Listen to your customers�
It is extremely risky to develop new products without first researching what
your customers want and how much they are willing to pay for what they
want If you want to pinpoint what new products you should develop and
what new products you should avoid, listen to your customers Use surveys
and ask open-ended questions Perhaps most important, pay particular