According to Gladwell, time and again, great entrepreneurs have separated themselves by their willingness to take tremendous risks early on … to bank everything on a calculated, yet unproven, business venture.

Gladwell goes on to explain that there is usually a watershed moment that catapults the would-be entrepreneur from respected capitalist to corporate magnate. This is the moment where years of risk and investment give way to tremendous return and growth.

Example: Early on in his career, Time Warner entrepreneur Ted Turner was willing to bank his family’s entire war chest on a small UHF channel in Atlanta. His family had built its wealth via a southern billboard business. Most of the advisers Turner turned to told him the move was insane. They insisted he wouldn’t only lose his investment, delving into an industry he knew little about, he’d also ruin the family’s billboard business in the process.

Oddly enough, Turner’s ace in the hole turned out to be the family billboard business. After investing in the TV station, he used every vacant billboard his family’s company had to advertise and promote the station. So rather than losing money on excess resources, he was gaining tremendous publicity for his new business venture – a move that eventually helped the station boost ratings, advertising rates and profits.

This was one of several watershed moments for Turner, based on his willingness to take risks that may have seemed insane to the casual observer, but were actually based on a brilliant business strategy.

Gladwell also shares the story of John Paulson – a Wall Street investor who spent several months and countless resources researching the housing market. Most assumed Paulson was wasting his time, trying to pinpoint when and how the market would go bust rather than simply investing as the bubble continue to grow. Meanwhile, one of Paulson’s researchers identified the high risk of tens of thousands of subprime mortgage loans being doled out by major financial institutions.

Armed with that info – info no one besides Paulson really had the numbers to double down on – Paulson began investing in credit default swaps, allowing him to collect the insurance on home loans investors defaulted on.

Result: As a result of his willingness to take what seemed like an insane risk, based on solid numbers, Paulson turned an investment of millions into tens of billions of dollars.

The key difference between the success stories and those would-be entrepreneurs who eventually went on to make their mark and those fell by the wayside:

• The ability and ambition to do the research, understand the numbers and identify a correlation or anomaly and exploit it, and
• Having the capital reserves to fail every now and again between major successes. Not every new venture is a winner. But if you can pile up a few major successes along the way, then the unfortunate failures wind up paying for themselves.

Source: “How Entrepreneurs Really Succeed,” by Malcolm Gladwell, New Yorker.

In retrospect, it’s easy to see how market deregulation and the smoke-and-mirrors derivative market could only lead to financial ruin.

All of which is why right now, given the clear and present danger the country’s financial situation is in, we may be staring down the barrel of yet another recession.

Consider these significant signs:

• The debt ceiling deal was stalled until the 11th hour, at which point both parties agreed to a deal neither completely believed was beneficial for the country.
• The ever-widening divide between political parties has never been more apparent or substantial. Even minor bills wind up in limbo for months, as both sides of the aisle vote strictly based upon party lines. It feels more like the Jets and the Sharks than Washington politics.
• As a result of that divide, the country’s credit rating has dropped below AAA for the first time in history. Standard & Poor’s, the lone institution that downgraded the U.S., provided this explanation: “the gulf between the political parties has reduced our confidence in the government’s ability to manage its finances.”
• Like falling dominoes, now Fannie Mae, Freddie Mac and all U.S. backed debt has been downgraded by Standard & Poor’s as well.
• Meanwhile, gas prices are rising to unprecedented rates, unemployment continues to linger around 9%, the housing market still hasn’t recovered from the first recession, and 82% of Americans now disapprove of the job the U.S. government is doing.

Could this crisis of leadership send us spiraling straight into a second recession? All of the elements for such a storm are in place.

The question is: Can the government learn from past mistakes and pick up the pieces before it’s too late?

Congress is once again pushing national data breach laws that will assign a bigger burden on companies to respond after customer data is compromised. Here’s what they have in store this time around.

After several large data breaches involving companies like Epsilon, Citigroup and Sony, Representative Mary Bono Mack (R-Cal.) drafted a bill to protect both consumers and companies from e-commerce data breaches, The Hill reports.

The bill would require companies to alert the Federal Trade Commission (FTC) and their customers within 48 hours if any personal information is pilfered. Fail to report a breach and the FTC will levy fines.

How can you prevent these fines? The law grants exception to companies if they’ve got financial fraud preventions in place.

One big issue: Companies may fear handing over detailed information to consumers about their security failures. Full disclosure can deal a body blow to a company’s reputation.

Also, critics claim that the bill doesn’t guarantee there won’t be anymore security breaches.

But it’ll likely win lawmakers votes from consumers.

Just saying.

The iPad has become a popular tool for some businesses, especially those with highly mobile employees who need an easy way to send and receive data on the go. Research group Forrester estimates that about half the iPads sold are being used for work in some capacity, CIO.com reports.

That’s not to say that the primarily consumer-targeted tablet device doesn’t come with question marks for businesses. Here are three concerns that may keep some companies from supporting the iPad:

1. ROI – Apps specifically meant for business use are still being developed and companies are still figuring out the best ways to use tablets, so at this stage, it may be tough to convince finance folks that the money spent on iPads will pay off.
2. Security – Experts say the new version of the iPad has made security improvements, but some businesses have yet to trust a company known primarily for consumer products when it comes to protecting business data.
3. Bandwidth – Versions of the iPad can connect to both WiFi and cellular networks, both of which present problems for businesses. Organizations in some areas may not trust their cellular connections enough to rely on them for critical data transfers. And some firms may find they need to add wireless access points to accommodate a new set of devices.

The U.S. Chamber of Commerce just released its list of states that are the most — and least — business friendly.

The C of C’s report, “The Impact of State Employment Policies on Job Growth,” calls on states to reduce regulations the Chamber says are preventing employers from hiring workers. To underscore its point, the organization lists the best and worst states for business, in terms of regulation and employment laws.

The best

(in alphabetical order)

• Alabama
• Florida
• Georgia
• Idaho
• Kansas
• Mississippi
• North Carolina
• North Dakota
• Oklahoma
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Virginia

The worst

• California
• Connecticut
• Hawaii
• Illinois
• Maine
• Massachusetts
• Michigan
• Montana
• Nevada
• New Jersey
• New York
• Oregon
• Pennsylvania
• Washington
• Wisconsin

The Chamber’s report goes on to detail the effects of labor issues like minimum wage and litigation and enforcement on businesses. Reviews of individual states’ policies are also included. The Chamber maintains that relaxing some regs and employment laws would lead to the creation of 750,000 new jobs and 50,000 new businesses in the space of a year.

Communications columnist Carmine Gallo realized something interesting during the course of watching HBO’s The Promise (a documentary about the making of Bruce Springsteen’s Darkness on the Edge of Town album).

Specifically, he noticed Bruce Springsteen and Steve Jobs shared the same general philosophy when they were young men on their way up.

In his book The Innovation Secrets of Steve Jobs, Gallo shared seven principles (based on Jobs’ own words, as well as interviews with his close friends and business associates) that allowed Jobs to excel where others have failed, and, ultimately, reach new heights.

Those principles soon made their way around the web and back again, as bloggers and business writers worldwide posted, then reposted them time and time again.

To Gallo’s surprise, it turns out four of those principles apply equally to Springsteen’s success (as well as any other ambitious exec who hopes to achieve great things):

1. Do what you love: Springsteen never doubted he was in the right business. After his first two albums flopped in every market outside of the northeast United States, the rumor was Columbia was ready to drop Springsteen. But The Boss dug in, put every ounce of passion into his work, and several months later, he released Born to Run - the seminal rock and roll album that would launch him into the stratosphere. He’s never veered from his passion, or embarrassed himself by delving into other industries where he really had no place. Thirty-five years after Born to Run was released, most critics still consider Springsteen one of rock’s living legends.
2. Put a dent in the universe: Springsteen once said of his parents, “What they didn’t understand was, I wanted everything!” Bruce was never satisfied or complacent with just being “good enough.” He released album after critically-acclaimed album. He had ridiculously high standards for himself and his band (Perhaps even more ridiculous considering they eclipsed those standards). He put on four-hour shows, only agreeing to leave the stage when he had nothing left to give. He raised the bar on the concert experience as we know it. He donated millions to charities, worked tirelessly on behalf of worthwhile causes, and returned time and again to support his beloved Asbury Park.
3. Obsess over the customer experience: Springsteen scrutinizes every nuance and detail of his songs and his live act. For years, he’d spend hours at soundcheck, personally ensuring the acoustics were spot-on in every section of the arena. He spent months in the studio, trying to perfect the song “Born to Run.” He spent countless hours working with Clarence Clemons to get the saxophone solo on “Jungleland” exactly the way he wanted it. The results always reflected the effort.
4. Eliminate the clutter: Springsteen originally wrote and recorded more than 70 tracks during the sessions for Darkness on the Edge of Town. In the end, he shelved more than 60 of them, narrowing it down to the 10 tracks that fit the story he was trying to tell, even if that meant leaving some of the pop-heavy hits off the album. Darkness never yielded any number one hits, but three decades later, it’s still considered one of the most powerful, relevant and complete rock records ever made.

Source: “What Steve Jobs and Bruce Springsteen Can Teach Entrepreneurs,” by Carmine Gallo, Forbes Magazine, 1/28/11.

So what are the best business apps for the iPad? The folks over at NetworkWorld have come up with a list of the 15 essential apps for business.

Many of us who use the gadget to get work done have found discovered that its the convenience of unified communications that makes the iPad so useful

Having a web browser, e-mail client, instant messaging and video conferencing capabilities and social networking software all integrated in one, lightweight, lightening fast unit is indispensable if you’re trying to work on the go.

And mostly it’s apps that give you these capabilities.

Just recently, a stranger watching me use my iPad in an airport asked me “What do you find you use it for?” To which I had to reply, “Almost everything.”

These business app recommendations from NetworkWorld pretty much get rid of that “almost.”

1. Nursing home/Child care: Nearly 11% of these employees report some incident of anxiety and/or depression. In Nursing homes, employees are constantly dealing with death, as well as elderly patients who require constant attention just to handle day-to-day activities. What’s worse (especially in the case of children) is that a lot of the people employees encounter in these professions are unwilling or incapable of expressing gratitude for the constant hard work and dedication employees put in.
2. Food service: A close second with 10% of employees reporting episodes of depression (15% among females). Food service requires fast-paced hours, dealing with tremendous criticism, and the possibility you may work long hours with very little compensation. It’s also a profession where you’re constantly critiqued. Even if you are having a bad day, letting it show could have a major impact on your take-home pay.
3. Social workers: Dealing with hard luck cases isn’t easy. Add on top of that the fact that a lot of people you deal with lie and manipulate in order to conceal what’s really going on in their lives. Social workers deal with a lot of cases that end with tragic consequences. That’s tremendous weight to deal with on a daily basis, especially in this economy.
4. Healthcare workers: Death, dismemberment, loss, pain – these are daily occurrences in the healthcare field. Not only that, but delivering grim news to patients and being there to see the reaction, or tending to those who are deathly afraid of hospitals, doctors or medical procedures.
5. Artists, entertainers and writers: It’s been said that 95% of actors look forward to a wonderful career as bartenders or waiters. These are professions where rejection is a guarantee, success is rare, and compensation is slight. Some people believe as type-A personalities, most artists are wired for depression. But the lifestyle itself doesn’t lend itself to constant happiness either, which is why 7% of artists, writers and entertainers have reported episodes of depression.
6. Teachers: The work doesn’t stop when that school bell rings. You’re constantly embroiled in the lives of your students, you’re most likely at odds with the administration or the school district, and as the demands grow, the rewards seem to plateau. Add on top of that a classroom full of unruly students and it’s no mystery why teachers experience so much stress.
7. Administrative staff: We’ve all heard the expression “!@#$ rolls downhill.” That’s literally the case for administrative staff, who are depended on to respond to every little problem and handle every situation, while often being blamed by upper management when something’s missed. The compensation isn’t great, nor is the level of respect. In fact, the only thing that is great (in many cases) is the extremely demanding workload.
8. Maintenance workers: No one calls the maintenance man to tell him what a good job he’s doing. In fact, these pros are only called when something goes wrong, which means the people they deal with on a daily basis are angry, impatient and demanding. On top of which, maintenance workers are entrusted with all the dirty jobs no one else would dare attempt. That should earn them the ultimate respect, but more often than not, it only causes others to view them as “blue collar joes,” who they can talk down to on a regular basis.
9. Financial advisors: If you’re good, the rewards may be great, but so is the stress that comes with it. High-profile people are entrusting you with their money, which – more often than not – is their most prized possession. They don’t care about economic collapses or fluctuations, all they want to see is positive returns … now.
10. Salespeople: Every day is a new challenge in sales. You’re only as good as your last paycheck, and if you have an off week, you may not be able to pay your rent that month. There’s daily rejection, constant pressure, and the eventual realization that the cycle never ends. Now that’s stress.

Note: A quick glance at this list reveals a lot of professions and situations that lend themselves to depression are associated much more with the people these professionals come into contact with on a daily basis than the profession itself. Being in the people business may not be all it’s cooked up to be, in other words. But if it’s a byproduct of the career you’ve chosen, you may want to look into strategies for minimizing the level of stress you contend with.

Source: “10 Careers With High Rates of Depression,” Health.com

• Bill Gates (Microsoft): Gates scored a 1590 on his SATs, then packed his bags for Harvard, where he and partner Paul Allen approached the manufacturers of an early microcomputer, claiming they had written a specific code/language that was only compatible with that computer. Gates and Allen hadn’t actually written the code yet, nor did they even own a version of the computer in question. But they were ambitious, and they knew they had the know-how to make it happen. So they pitched the CEO and the company accepted their offer to write code. Gates dropped out of Harvard to pursue his dream and two years later Microsoft was born. It should be noted Gates is no longer the actual CEO of Microsoft, but he is the largest shareholder.
• Michael Dell (Dell Computers): Michael Dell had an interest in computers and how they work from an early age. By the time he got to college, he’d found a way to transform that interest into a business. He offered to upgrade students’ computers from his dorm room, a side business which he eventually parlayed into a full-time job, selling personal computers from a condo he lived in. He continued to build that business, adding different products and services until it evolved into the Dell we know today.
• Larry Page and Sergey Brin (Google): Like a lot of ambitious undergrads, Page and Brin used their college curriculum as a way to pursue career paths that interested them. As part of a joint project, they created a search engine that analyzed the relationship between web sites. That school project formed the early basis of Google – a search engine that would eventually revolutionize the internet and make Page and Brin household names.
• Mark Zuckerberg (Facebook): Zuckerberg knew there was a registry of student photos updated every year via Harvard’s database. He used that data to create a site of his own that gave students an opportunity to rate one another based on looks alone. Despite the hot water that escapade landed him in, Zuckerberg knew he’d tap into something. So he kept at it, fine-tuning his idea based on the idea of putting the college experience online in pictures. Six years later, that idea has ballooned into Facebook – easily the most popular of all social networking sites.At 26,  Zuckerberg, the reluctant “face” of Facebook, is an icon, a CEO, and the subject of a major motion picture (The Social Network), which is set to release this fall.

Can you think of any other well-known CEOs that got their start with a small side project? Feel free to share your thoughts in the comments section below.

Source: “4 Lessons from Billionaire College Entrepreneurs,” by Michael Deane, Investopedia, 7/6/10.

After decades of providing business tips and advice to others, Buffett was asked what the best piece of advice he’d ever received was. Surprisingly, the answer had nothing to do with business … at least not directly.

Buffett cited his father, who he credits with teaching him the power of “unconditional love.”

“The biggest lesson I got is the power of unconditional love,” Buffett explained. “If you offer that to your child you’re 90% of the way home. If every parent out there can extend that to their child at a very young age – it’s going to make for a better human being.”

Buffett couldn’t recall exactly what the worst advice he’d ever received was. But he did share this gem of wisdom he once received from close friend (and one-time business partner) Tom Murphy:

“Never forget, you can tell a guy to go to hell tomorrow … You don’t give up the right. So just keep your mouth shut today and see if you feel the same way tomorrow.”

Source: “Warren Buffett Interview: The Best Life Advice I’d Ever Received,” The Huffington Post, 7/8/10.

1. The Pulse of Commerce Index (PCI): PCI measures the amount of diesel fuel being purchased at truck stops around the country. The amount of goods carried by these trucks and the frequency of routes give economists a sense of how robust business is flowing.
   The good news: the PCI jumped 3.1% between April and May – the largest one-month increase since 1999.
2. Service sector shipments: The service sector measures the amount of scrap and waste material hauled off by trains every month. This statistic is always relevant because it reflects the rate of production in several industries, most notably manufacturing.
   The good news: Waste and scrap shipments hit their highest rate in 16 years last month, a solid indication businesses are ramping up production.
3. Electric output: The Edison Electric Institute monitors how much electricity the corporate sector uses every week.
   The good news: Usage for the first week in June was up nearly 11% from the same week in 2009, a sign of more employees, higher productivity and increased work hours.

What do you think? Are these all signs of a rebounding economy, or simply a reflection of businesses fighting an uphill battle to boost production and staff, despite ailing revenues?

Feel free to share your thoughts in the comments section below.

Source: “These Below-the-Radar Indicators May Signal Growth,”
by David Bogoslaw, BusinessWeek, 6/15/10.

The poll, which was conducted as part of the biannual Regus BusinessTracker study, included responses from more than 15,000 companies across a broad range of industries. Among the findings:

• 7% more companies are now reporting profits than were six months ago
• 12% more companies experiencing a boost in revenues rather than a decline
• 59% of large businesses advocate the importance of tax breaks for consumers and consumer spending
• the overall decline in revenues is most prevalent in the manufacturing industry, and
• the overall increase in revenues were most prevalent in the IT industry.

Despite the survey’s overall optimistic tone, when business execs were asked point blank when they expected a full economic recovery, the majority responded that they didn’t feel the economy would make a full recovery until December.

When execs were asked the same question six months ago, they believed a full recovery was possible by July.

What do you think of the survey’s findings? Agree? Disagree?

Feel free to share your thoughts in the comments section below.

Source: “Revenues Rising but Slowdown in Pace of Growth,” Industry Week, 5/5/10.

These come from Norm Brodsky, who specializes in small start-ups and weird ideas:

1. Get lost. That is, try spending less time at your business, not more. The main reasons:

• Stepping back gives you a better perspective on what’s going on in your business.
• You’re forced to train and delegate, and people under you are forced to learn and do.
• Investors are impressed by companies that don’t rely on one person to do everything. Mortality is a killer, if you know what we mean.

2. Do less marketing. In Brodsky’s experience, most companies spend too much time and resources on marketing fluff like slick brochures, which make your company look like every other company. Don’t be afraid to make your marketing materials look spartan and downscale. The basic look tells people you’re all business.

3. Drug test. Drugs are everywhere, and employees who use drugs are a drain on your company. Plus, drug testing makes your company more attractive to insurers, which can lead to lower rates.

4. Don’t pay commissions. That doesn’t mean you shouldn’t lay out incentives for your salespeople. It just means that straight commissions tend to separate your sales staff from the rest of your employees and give salespeople an excuse to run roughshod over other departments like billing and operations. Brodsky’s recommendation: a salary plus a three-part bonus tied to the success of the salesperson, the team, and the company.

5. Don’t hire employee referrals. Conventional wisdom says referrals are the cheap, easy way to hire. Here’s the problem — actually, two problems if the referral doesn’t work out:

1. Good employees resent that a slacker got hired on someone else’s say-so.
2. If the referral gets canned, there are almost always hard feelings with the person who made the referral.

Adapted from “Norm Brodsky’s 5 Most Contorversial Business Ideas.”

In a recent BusinessWeek interview, business expert David G. Thompson cited these seven traits as common practices among the top 5% of today’s high-growth companies:

1. The ability to deliver unique and exceptional value to customers: Top companies know how to differentiate themselves from the competition in such a way that customers associate the brand with superior value and service.
2. The foresight to target a high-growth market: Netflix revolutionized the video rental industry by identifying a need other major rental companies weren’t capitalizing on. The company expanded its reach by allowing members to stream movies online, and eventually, stream them directly to their TV. PriceLine has pinpointed a similar need in the travel industry, and its profits continue to soar as a result.
3. Having customers not only buy, but also sell for them: More than 70% of Amazon’s rising profits last year came from product suggestions — recommendations made based on either past buying history or customers suggesting products for one another based on common interest. The best companies are set up in such a way that customers become advocates, sometimes even earning incentives for recommending the business to
   friends and colleagues.
4. Leveraging alliances to break into new markets: Fast-growing companies forge strategic partnerships with other companies that can help them target new demographics, regions, or industries. Smart partnerships also allow companies to offer more products and services to their customers. Consider, for example, the partnership between Apple and AT&T to market the iPhone. It created a win-win for both companies, where exclusive demand drove subscription rates and profits sky high.
5. A business plan based on reinvesting profits and paying off debt: The most successful companies pay off their long-term debt as quickly as possible. This keeps their credit in line, while allowing them to reinvest profits and perhaps even borrow more, if there’s a plan for rapid expansion. The company may grow incrementally at first, but if there’s a solid business plan in place, there’s a potential for profits to boom and remain consistent.
6. Inside/Outside management teams: These companies split management focus and responsibilities based on internal operations and external factors. Specific managers focus on customer needs, industry trends, market changes, and business growth, while others keep their eye on improving internal operations, production, and morale.
7. Create a diverse group of top-level managers with different backgrounds and perspectives: Successful corporations fill their boards with business leaders, customers, industry experts, and others who have a vested interest in the company, but different perspectives on how (and why) to achieve success.

What do you think? Is Thomson’s assessment on the mark? Are there any keys that he missed?

Feel free to share your thoughts in the comments section below.

Source: “The 7 Essentials of High-Growth Companies,” by David Thomson, BusinessWeek.com

Or will it make its way into the business world with legitimate time and money-saving uses? Here’s what we’ve gleaned from the expert chat:

For nearly a decade, there have been rumors that “tablet” computers are the wave of the future, the cutting edge of where users want to be. But none of those prognositcations or premonitions have been realized. The iPad will carry some of that baggage.
But workers who now turn to their smartphones for many routine business tasks understand the limitations of a small, pocket-held device have become apparent.
So when analysts say the iPad is the intermediate device between the laptop and the smartphone, they’re actually saying it fixes some of the problems with both.

Other potential business uses:
•    Conference room tool for notetaking and collaboration
•    Repository for reference books, tables and charts by engineers, lawyers and accountants
•    Tool for acquiring and using business and audiobooks
•    Portable unit for IT managers to access servers and computers remotely using apps already developed for the iPhone, but this time with a much bigger screen for their work
•    Health care workers ability to chart patient information, access references or testing schedules without the kiosks or stations necessary with a laptop computer
•    Dynamic collaboration on documents using newly designed iWorks suite docs app
•    Built-in drawing tools that allow workers to create sketches of proposed plans or processes
•    “Show and Tell” features allow small scale presentations in meetings with co-workers or clients
•    As a tool for workers in the field who need to enter data easily and quickly without having to open and power up a laptop, and
•    Project management could be made more efficient and dynamic, especially if SaaS project management tools that use Web 2.0 technologies are used.

The survey, conducted by Pricewaterhouse Coopers, showed a 16% leap in CEO confidence between last year and this year, including 31% of CEOs who said they were “extremely confident” about their business prospects this year.

A similar poll, conducted as part of Forbes 2010 Small Business Owners’ Outlook Survey, revealed:

• 64% of CEOs plan to invest more aggressively this year
• 50% definitely plan to invest in growth and expansion
• 46% hope to pursue new or different revenue streams, and
• 41% plan to add to their staff

All of which is good news, but may be offset to some degree by the following:

• 80% of CEOs plan on continuing to seek out ways to cut costs over the next three years, and
• 25% said they plan to make additional staff cuts.

The sense of cautious optimism is mostly due to two outstanding fears most CEOs share:

1. The global economy will slip back into a downward spiral, resulting in an economic meltdown worse than the one we’ve already seen, and/or
2. Over-regulation will make it nearly impossible for companies to grow or diversify at the rate they otherwise could.

Which side of the fence do you fall on? Will the economy be back on track by the end of this year, or are the latest regulations and bipartisan politics forcing us into an even deeper hole?

Feel free to share your thoughts in the comments section below.

Source: “CEO Confidence Rebounds With Global Economy, Davos Survey Show,” by Simon Kennedy, Bloomberg.

Warren Buffett is one of the most successful entrepreneurs of all time. Here are three priceless sales takeaways from his keynote address at Berkshire Hathaway’s 2009 shareholder’s meeting:

1. “If you need to use a computer or a calculator to figure it out, you probably shouldn’t buy it.” A lot of sales organizations are rethinking their message and peppering prospects with charts and graphs that demonstrate long-term ROI. But most prospects just want a plain-English explanation of how you can help them cut costs or increase profits. Break it down. Keep it simple — it’s the only way to keep buyers engaged.
2. “You don’t want to be in a position where someone can pull the rug out from under you (or where you pull it out from under yourself).” Competitors are more aggressive than ever right now, eager for any chance to swoop in and steal away your buyers. Be sure salespeople maintain regular contact with customers, so issues are resolved quickly and they’re the first to know when someone else is trying to steal a customer’s business away.
3. “You’re not there to change people.” The selling process should always be less about your products and services, and more about the buyer’s needs. Find out where the pain is, and offer solutions that alleviate that pain. Remember, it’s a buyer’s market. And most buyers are inclined to do business with the salesperson who best understands their needs and can help them overcome their challenges.

So what do you think? Is Buffett on target or preaching old-school tactics in a shifting market? Share your thoughts in the Comments Box below.

Source: “A Back to Basics Weekend With Warren Buffett,” by Andrew Ross Sorkin, New York Times

1. Gas: We all remember the dog days of $4 a gallon. It wasn’t a pleasant time. But it forced people (and companies) to consider other options like carpooling, public transportation and telecommuting. For that reason an increased gas tax could become a very real possibility, with the government claiming it’s a tax consumers can avoid if they minimize their gas usage.
2. Online: With so many consumers doing their shopping online these days, the notion of adding an “online sales tax” has been proposed several times. It’s a dicey proposition, as there’s so much to regulate, and it could end up having a negative overall impact for online retailers, but it’s another “avoidable” tax a lot of taxpayers wouldn’t be subject to. The catch: As online shopping continues to gain popularity, the return from this type of tax would increase substantially.
3. Energy: Energy taxes are being sold to the public under the guise that “we’re all in this together.” In other words, we can all help make things better by contributing just a little bit more. Meanwhile, individual taxpayers and businesses can minimize the blow by taking measures to cut down on electricity and other energy sources.
4. Alcohol and tobacco: “Sin taxes” are the easiest for politicians to sell because they’re levied against people who choose to spend money on vices. Proponents of such taxes actually help make the argument by telling those affected by them, “If you don’t like it, quit.”
5. Corporate: The unemployment rate is brimming, and that means a ton of unemployment insurance claims, the majority of which are funded by business taxes. In order to keep replenishing that pot, the government could end up imposing additional “unemployment” taxes on businesses. It’s a bait-and-switch tactic that ultimately penalizes consumers, who wind up paying for the increases via lower wages and other cuts.

So what do you think? Would you consider any of these cuts a worthwhile alternative to increasing taxes on everyone? Are there any areas we missed here? We’d love to read what you think in the comments section below.

Source: “8 Sneaky Ways to Raise Taxes,” by Rick Newman, U.S. News and World Report, 2/2/10

1. Provide a promise, not a product: The legend goes that Walt Disney was sitting on a bench watching his daughters ride a carousel when he came up with the concept for Disney World. He noticed amusement parks and state fairs were always littered and poorly organized, and the employees were generally rude and resentful.
   His wife once asked, “Why do you want to build an amusement park? They’re so dirty.” To which Walt replied, “That’s the point. Mine won’t be.” From day one, Disney has focused on “the experience” as a key component to increasing the value of its parks.
2. Always exceed customers’ expectations: One of the reasons the Disney tradition stands the test of time is that Walt Disney was more critical of his creations than anyone else could ever possibly be. He was a relentless perfectionist with a keen eye for detail, often forcing projects to go over budget and past deadline because he wasn’t satisfied with the finished product.
3. Pursue your passion, and the money will follow: Walt Disney went bankrupt more than once, leveraging everything he had in terms of assets in order to build his studio, his films and his dreams. The more profit one project yielded, the bigger the next would be. His vision was constantly growing, and he used whatever capital he had to allow that vision to evolve. His films and theme parks were labors of love, built to revolutionize an industry, rather than maximize profits.
4. Stay true to your company’s mission and values: Walt Disney was famous for saying, “I hope that we never lose sight of one thing – that it was all started by a mouse.”
   Decades later, Mickey Mouse is still the crown jewel of the Disney franchise, representing all the good will and imagination Disney represents. He’s also a constant reminder that the company has strong roots and it embraces American values.
5. Differentiate your offer: Every facet of Disney’s operation is unique. Employees are called “associates,” visitors are called “guests,” creative designers are called “Imagineers.” And that’s just the beginning. The experience of being at a Disney theme park or staying at a Disney resort is all about creating a dream vacation – one where the attention to detail and personal service is just as memorable as the attractions themselves.
6. Lead by example and delegate: Walt Disney was the artist who originally sketched Mickey Mouse, as well as several of the other iconic Disney characters. He even voiced several characters and provided the inspiration for a lot Disney’s animated classics. But as he built a studio and then an empire, he hired reliable men and women who understood his vision and trusted them to translate that vision to others. By the time Walt broke ground on Disney World, he hadn’t drawn a character for decades, nor was he a daily fixture at creative meetings. He built a strong foundation and developed self-reliant managers who embraced his vision. That allowed him to turn his attention to even bigger dreams, while the company and its employees continued to prosper.
7. Defy convention: So much about Walt Disney’s rise was about bucking the odds and ignoring the critics, whether it was show biz insiders telling him no one would ever sit still for a feature-length animated film, or others saying Walt was crazy for buying acres and acres of murky swampland in central Florida, Disney always trusted his instincts first. Einstein once said, “Great spirits have always encountered violent opposition from mediocre minds.” Walt Disney was a perfect example.
8. Leave behind something to grow: According to one historian, “The true measure of a man’s greatness is what he’s left behind to grow.” Disney World didn’t even open its gates until nearly five years after Walt Disney’s death. And yet, the tradition continues to evolve, almost 45 years later. While Disney has diversified in a number of ways, it’s still the company that started with a mouse. Perhaps Walt himself put it best: “Disney Land is something that will never be finished, something I can keep ‘plussing’ and adding to. I just finished a live-action picture. It’s gone. I can’t touch it. I want something live, something that will grow. The park is that.”

Select quotes taken from The Quotable Walt Disney

Offering cash as an incentive isn’t exactly revolutionary, but several well-known banks have latched onto it recently because customers are just now receiving their holiday shopping bills and they’re eager for a slight monetary boost to start the new year.

Among the cash incentives banks are currently promoting:

• Capital One is offering a $200 bonus to any customer who opens a Rewards Checking account through Feburary 28th
• J.P. Morgan Chase is offering $125 to anyone who opens a checking account by January 15th, and
• Bank of America is offering $100 to anyone who opens a checking account before February 28th.

Offering cash as an incentive is usually a bait-and-switch tactic used to lock buyers into a long-term deal that maximizes the company’s potential for making money. The incentives banks are currently offering are no exception:

• To qualify for the Capital One and Chase promotions, customers need to set up direct deposit.
• To qualify for the Bank of America promotion, customers need to maintain a minimum checking account balance of $500.

Both of these terms were put in place to maximize the amount of money the banks hope to make by keeping these customers (e.g., direct deposit increases the chances a customer will stay with a bank for a prolonged period of time, etc.).

In fact, banks are so careful about protecting their investment that cash-incentive applicants have to pass an entire screening process, which includes credit and background checks. Only then can they be “approved” for an account (and the incentive that comes with it).

The takeaway: Cash incentives have tremendous potential for drawing new customers. But they could end up causing a major backlash if sales and service reps aren’t completely upfront about the terms and conditions attached to the deal. More importantly, companies need to take precautions to ensure they’re offering cash rewards to reliable customers who are sure to provide the company with a substantial return on investment long term. In other words, the odds need to be set up so that the house always wins in the end.

Can you think of any arguments for cash incentives? Against? Do you have any personal experience with receiving cash incentives as a customer? Feel free to share your feedback in the comments section below.

Source: “Banks Try to Lure New Customers with Cash,” by Aleksandra Todorova, Smartmoney.com, 1/8/2010