The alarm clock hadn't gone off; the sun was 3-hours from brightening the day; and Stanley couldn't sleep. It was 3:00 am and Stanley knew he wouldn't get back to sleep. Why not just start his day early like he had so many times before? His head was filled with thoughts of what he could do to get his business back on track. He might as well do some work since he couldn't sleep.
Stanley owned an engineering consulting firm. His firm worked with municipalities on improving their wastewater treatment plants. His business had been on a roller coaster ride since he started it 10-years earlier. He thought that running a small business was supposed to get easier once you got past the 5-year survival mark; but Stanley couldn't seem to get the momentum he needed to make a decent profit. His best year was the $1,000,000 year 3-years ago; and he felt like that was a fluke. His firm of four engineers seemed like they couldn't break the million-dollar mark. Stanley was now wondering where he would get his next $100,000 design contract.
The thought that woke him up that night was figuring out a new way to beat a large competitor who was gobbling up most of the small municipalities in his state. He prided himself on being the engineer for the small towns. The big companies didn't even take notice of these rural municipalities until Stanley demonstrated there was a lot of work in these places. He now realized that he had prepared the market for his competition; and was getting killed! It was settled, Stanley couldn’t sleep anyway. He was going to figure out a solution before his company crashed and burned.
Stanley entered his dark and quiet office and turned on the lights. Silence. He was the only one in early that morning. Didn't anyone else care that their firm was dying? Why weren't his employees as concerned about his business as he was? Why was he the only one coming in to work early? Stanley guessed that his talented team of engineers could find a job with one of the large corporate firms whenever they wanted. They'd probably get better benefits and compensation anyway. Why would they care if HIS company failed?
Stanley got busy that morning writing down reasons why his company was better than the large corporate firms. He developed a list of ten key differentiation points that he felt would be compelling to any rural municipality that needed to upgrade their wastewater treatment plant. Around 8:30 am, he heard activity at the front door of their office suite. His tardy employees were just showing up to work. He thought, 'Why should they show up early? We don’t have that much work. Still, why am I doing all the work to save my company? Don't they want to help at all?'
Sara, Stanley's administrative assistant, peaked through Stanley's cracked door and asked if he had a moment to talk.
Stanley smiled and said, "Come on in."
Sara closed the door behind her and started, "Stanley, I know that you've been worried lately. And I think I have an idea."
Stanley worked hard to pretend things were going well, but apparently he had failed, "We need a few more design contracts, but we've been here before. I think I have some great ideas."
Sara smiled, "That's great Stanley. Did you want to hear my idea?"
"Of course. What's your idea?"
"My sister knows a guy that helps business owners. I was wondering if he may be able to help our company?"
Stanley smiled, "Thank you, Sara, for thinking about our company. But I doubt that any business consultant will understand the wastewater treatment industry. This is a very specialized market."
Sara persisted, "This guy is a coach, not a consultant. His name is Coach Russ. I don't think he knows anything about wastewater; but I think he will be able to help you."
"What do you mean? Help me?"
"I know that you've been working long hours. I get emails from you at 4:00 am some days. I also know that you're worried about selling more projects to keep us busy. Maybe he could help you work less."
Stanley felt like there was no way Sara could understand why he was working so hard, couldn't sleep, or what he was thinking about. But he also knew that this conversation wouldn't end until he agreed to see this 'Coach Russ'.
"I'll tell you what. I'm not sure Coach Russ can help, but I'd be glad to talk with him. What's his number?"
It was another early morning, and Coach Russ was willing to meet Stanley at a coffee shop at 6:30 am. Stanley thought, 'there's no way he wanted to waste precious work time talking with Russ and he needed to get his morning coffee anyway, so why not?'
Stanley didn't have time for chit-chat and was a very blunt man.
After Russ and Stanley found a table, he asked, "So, Sara tells me you can help me with our wastewater consulting firm. Can you tell me the firms that you have helped like mine?"
Russ knew where the conversation was headed. He needed to make an immediate course correction, "I know nothing about wastewater treatment, Stanley. I was told that you’re working too hard and are having trouble sleeping."
"Are you some kind of psychotherapist for business owners? I don't need a therapist, I need more paying customers."
Russ ignored the 'therapist comment' and asked, "What is it that you're doing to keep customers from buying from you?"
Stanley felt like he had a fight on his hands. But it was clear that 'Coach Russ' didn't understand the wastewater treatment industry, so he needed to set Russ straight.
"Look. I'm sure you're good at what you do. But the wastewater treatment business is different than most businesses."
Russ asked, "In what way?"
"First of all, we don't sell a product. We sell a service. Secondly, our service is only needed when a municipality wants to upgrade their wastewater treatment plant. Thirdly, treatment plant upgrades are funded by a combination of local taxes, utility rates and government grants."
Russ interrupted, "I asked how your industry is DIFFERENT than others. You've told me some details about your market. I appreciate the education. However, nothing that you have said indicates that your business is DIFFERENT than others I've helped."
Stanley was incredulous, "You're kidding me! How many other businesses have to deal with all of the complexity as ours?"
"Stanley, you're clearly an intelligent man. And you understand your industry. However, the fact that you are working so hard, you're worried, losing sleep, and not keeping up with your competition says that you can use my help."
Stanley reacted, "I'm working so hard because my company will fail if I don't bust my ass to get us more work. And it doesn't help when my staff doesn't give a damn about my company. It's all on me!"
Russ offered, "What if I could show you a way to engage your staff more completely; and find ways to beat your competition?"
"I'd love it. But I don't think you can get me there. I just need to make it through this bad time. I've done it before, and I can do it now."
"I'll tell you what. I'll offer you weekly coaching for the next two months. My rates are quite modest at only $1,000 per month. If you haven't made noticeable progress toward success, sleeping through the night and engaging your employees, I'll refund you my fee."
Stanley wasn't convinced Russ could help, but he felt like he'd could give it a try for only $2,000, "Okay. I'll do your deal... get the paperwork to Sara and let me know when we meet."
Russ met with Stanley in his office each Monday morning at 7:00 am. They felt like this time could give Stanley a good start to his work week. It was a side benefit that no employees would be in the office early to overhear their conversations.
The first formal coaching session took a much different tone than their debate in the coffee shop.
Russ started the session, "What do you feel has held you back from the success you've desired all of these years?"
At first Stanley felt a little annoyed, but then responded, "I really don't know. I thought we had a great offering for rural municipalities with our service. Then competition started winning deals in ‘our market’. We haven't been able to reclaim our competitive edge.”
Russ asked, "You indicated that you found 10-ways to beat your competition in a recent email. Tell me more about that."
"I wrote down ten ways that we're better than the large corporate consulting giants in our industry. I was hoping to get this list printed and sent to rural municipalities and have them decide to use us instead of working with these large firms."
"When you’ve lost to your competition, what did your customers say was the reason?"
"They felt our firm was too small to handle complicated design work. But I've come up with 10-reasons why a small firm is preferable to a large firm."
"What do your customers say about the 10-reasons you've come up with?"
Stanley said, "Well, I haven't told them, yet. I was going to send out a direct-mail flyer with our 10-reasons highlighted so that they get the message."
"What do YOU normally do with flyers from vendors?"
"I never read them. Sara, usually throws them in the trash before they get to me... or I throw them in the trash."
"What would happen if you called a municipality that selected one of the large firms and asked him or her about your ten reasons?"
"They will rationalize why those reasons were not important; and they would’ve still gone with the larger firm for the reasons they've already told me."
Russ felt like their conversation was too focused on actions and not on thoughts, so he changed the subject, "What staff member is responsible for sales and marketing for your firm?"
Stanley was quick with a response, "You see, we have a very technical service; and my administrative staff doesn't understand it enough to talk about it with sophisticated customers. And my engineers are terrible at talking with anyone outside of their cubical. I've been handling sales and marketing for the company. It's my job to sell."
Russ saw the problem that Stanley couldn't see because he was too close to it. The company was struggling in SALES; and the business owner was the SALESPERSON.
Russ offered, "How much time do you spend in a typical day dedicated to selling?"
"I spend most of my time selling. I'd say about 80%."
"How many prospective clients have you called in the last month?"
"A few, I guess. I left voice messages mostly."
"How many sales have you made this year?"
"That's the problem I'm facing. I thought you could help me close more design contracts for our firm."
Russ asked, "If a salesperson was as successful as you over the past few years, how much money would you have paid him?"
Stanley felt a little embarrassed, "I suppose he wouldn't have made much money at all, given our terrible sales results."
"How much money do you make from your firm, Stanley?"
Stanley offered, "I make $100,000 per year in salary, but take an additional $20,000 in equity draws when the firm is making a profit."
"So, you make $100,000 per year; 80% of which you claim is dedicated to selling. You also claim that if an employed salesperson did the same job, he wouldn't make much money at all. Do you see where I'm going with this?"
Stanley chuckled, "Are you saying I should fire myself as my own sales representative?"
Russ was serious, "Yes. That's exactly what I'm saying."
Stanley didn't know whether to feel insulted or not, "If I'm not the salesperson, who else will sell engineering design contracts for my firm?"
Russ explained that a dedicated sales professional could do much better if he or she were trained. He also explained to Stanley that his competition had full-time salespeople who were dedicating 100% of their time to selling; and there was no way he could compete without the same level of effort.
In the weeks that followed, Stanley took Russ’s advice. He called many of the municipalities and presented them with his 10-ideas of why his firm was better than the larger firms. He followed Coach Russ’s advice not to try to criticize their decision to go with his competition.
After his discussions, he found out that the reason he was getting beat by larger firms was that they dedicated salespeople to spend time with decision makers. When the competition happened, they felt more comfortable picking the larger firms. The reason that decision makers in these municipalities felt the job was too complicated was that they were convinced by salespeople from the larger firms. At first, they didn’t believe this sales pitch. But when they saw the owner of the smaller firm, Stanley, was doing all his own selling, they became concerned that Stanley’s engineering firm was just too small.
Stanley took to heart the advice of his prospective customers and his new business coach. He hired two dedicated sales executives and trained them on how to communicate his ten benefit points that he had worked on before he met Russ. His new salespeople didn’t understand the engineering details of wastewater treatment. So, Stanley paired engineers with each salesperson to handle any technical questions that came up.
Over several coaching sessions with Coach Russ, Stanley learned that he needed to stop doing the work in his firm; and instead, direct his staff to do the work. Something remarkable happened. His staff started showing up early for work and was even taking work home.
Change didn't happen overnight, but Stanley learned to train and then trust his employees to execute on sales. Within 6-months, Stanley's firm secured $250,000 in design contracts and had an additional $1,000,000 in prospective contracts they hoped to close in the next year. Because of his investments in staffing, Stanley’s firm experienced a slight financial loss in this initial phase of growth. However, he was encouraged with the sizable backlog that his new sales team had created.
Something more amazing happened with Stanley. He was able to sleep at night, take vacations with his family and know that his business would operate well without his direct involvement. He couldn't believe that before he met Coach Russ, he was frantically trying to keep his business afloat, when what he really needed was to delegate his business success to others. How could his thoughts about delegating to staff cloud his ability to succeed? He was so glad that 'Coach Russ' helped him replace his stinking thinking with positive thoughts about how his staff was more capable than he was to execute different roles within his business.
There are three basic lessons that I was trying to convey with this story:
Getting outside your head;
Industry isn’t everything; and
Get Out of Your Head
Stanley had been in business for 10-years and yet, he still saw his business as HIS baby. He would see a problem and immediately think he was the only one who could fix the problem.
From the outside, this is viewed by employees and even customers as narcissistic behavior. On the inside of the business owner’s mind, they have trouble believing that anyone else cares or can fix their problems.
It’s like a quarterback who takes the ball and has trouble passing it down the field to a receiver or handing it off to a running back. The option is an offensive play where a quarterback and running back run around one side of their offense. The quarterback has the option of handing the ball off to the running back who is running behind him or continuing to run with the ball. It is the nature of most immature quarterbacks to keep the ball. Only the star quarterbacks who make it to the pros realize they need to rely on other players on their team.
In the case of the small business owner, he doesn’t feel he has professional grade employees in many cases, and so he is constantly doing the work and his employees have nothing to do. This and the lie that it will cost too much to hire additional employees keeps the small business owner from growing and may even result in crashing the company.
Think about it. If Stanley had gone ahead with his plan of his direct mailer, he would have missed the mark of why his customers weren’t buying from him and his company would have failed.
Industry Isn’t Everything
I owned an Energy Service Company or ESCo. An ESCo is a company that creates energy and operational cost savings projects for its customers such that the savings resulting from the project pay for cost of the project. We had a sophisticated sales process that involved preliminary engineering and solution development. Many business consultants tried to sell business consulting services to me, and I refused because I was convinced, they had no clue about our marketplace. I eventually relented and hired a few consultants for individual components of my business; like sales, marketing, or organizational advice.
An interesting dynamic would take place as I hired these consultants for my ESCo. They would do a lot of work for a lot of money, and I would throw away at least 50% of the work they did for me. While this may seem like a waste. The 50% of the work that I would keep in combination with the conversations we’d have to develop that 50% were worth 200% of what they charged me.
Even though these consultants had no clue about my industry, they gave me perspective about my industry that I would never have gotten on my own.
When I got my coaching certification, I discovered how you could give only the valuable part of the consulting relationship by giving industry experts an outside view of their industry. While my experience is in running an energy efficiency company (an ESCo), I now coach restaurant owners, engineering firms, law firms, dog walkers, acupuncturists, realtors, small manufacturers, insurance brokerages, event planners, accountants and so many other diverse small business owners.
Once each of these business owners gains my outside perspective of their business, the light goes on. They immediately understand how to do things differently with their business. I’d love to take all the credit. However, all I’m doing is shining a light on something they couldn’t see from inside their business and inside their industry.
Here are the objections that often come up.
"I can't afford to hire more people." Depending on the phase of business growth, this objection may be true. In Stanley’s case, he had accumulated some profit from ten years of being in business. He could easily afford a $100,000 investment in someone who would dedicate more of their time to selling. Especially, when his customers are telling him that’s the reason, they’re not buying from him.
“I tried to hire someone, and they failed.” This means that the business owner either made a bad hire; or gave someone a job and then didn’t train them; or wouldn’t allow them to do the job they were hired for. Past failure is often not an indicator of future success. However, this past failure can build strong mindset blocks that are hard to overcome.
“No one can do the job as good as me.” Once Stanley got out of his own head and realized that he was an overpaid salesperson, he could quantity the value he could get by hiring people who were dedicated to selling.
While it’s easy for me to write about how obvious this is in a fictional story. This empowerment piece is one of the toughest obstacles to overcome with a small business owner.
Empowerment is not a mechanism that ALWAYS works. It’s important to understand that a business is comprised of managers and employees. Both elements are “people”. People need to be led, trained, motivated; and then trusted and empowered. If you try to empower an uncapable person, you will be DISAPPOINTED.
In our story, Stanley happened to make two good hires of salespeople. He then had the foresight to know that these two salespeople wouldn’t have the technical knowledge to cover technical discussions with his customers. So, he paired up his engineers with salespeople to create a strong sales team. Stanley could have just as easily made a mistake in the people he hired to sell, or mismanaged them, or failed to assign engineers… but then we wouldn’t have a happy ending to the story. And I LOVE happy endings.
That’s it for our story and lesson today. I hope you’ve learned a few things from Stanley’s story. If you’d like to learn more about me or my business coaching practice, I invite you to check us out at www.mmbizcoach.com.